The government will invest Rs 69,575 crore towards increasing India’s quota in the International Monetary Fund (IMF) that will provide increased voting rights at the multilateral funding agency.
With the implementation of the long-pending quota reforms, four emerging nations — India, Brazil, China and Russia — would be, for the first time, among the 10 largest members of IMF.
In the Supplementary Demand of Grants moved by Finance Minister Arun Jaitley in Parliament today, the government has sought a grant of Rs 69,575.47 crore towards subscription to IMF for quota increase.
“After taking into account additional receipts of Rs 52,181.60 crore by issue of securities, monetising Rs 17,393.87 crore through India’s SDR holding with RBI and saving of Rs 2,618.94 crore available in the revenue section of the grant. This supplementary will not entail cash outgo,” as per the Supplementary Demands for Grants document.
Currently, India has voting rights of 2.34 per cent at the IMF, which has 188 members. In terms of quota, India has a share of 2.44 per cent.
Others in the top 10 largest members are the US, Japan, France, Germany, Italy and the UK.
Under the quota reforms, more than 6 per cent of quota shares would shift to dynamic emerging markets and developing countries. It would also mark the shift in shares from over-represented to under-represented IMF members.
The reforms, pending for many years, were approved by the US Congress in 2015. The 2010 Quota and Governance reforms were approved by the IMF’s Board of Governors in December 2010.
In January, the IMF had said the conditions for implementing its 14th General Quota Review, “which delivers historic and far-reaching changes to the governance and permanent capital of the Fund, have now been satisfied”.
“The reforms also increase the financial strength of the IMF, by doubling its permanent capital resources to SDR 477 billion (about USD 659 billion),” it had said.
The multilateral agency had also said that the reforms would reinforce its credibility, effectiveness and legitimacy.
Besides, the IMF Board would consist entirely of elected Executive Directors. This would do away with the category of appointed Executive Directors — currently members with the five largest quotas appoint an Executive Director.
(With agency inputs).