To help tide over the credit crisis, India can avail of loans worth $39 billion from the International Monetary Fund (IMF) and the World Bank, Planning Commission deputy chairman Montek Singh Ahluwalia told reporters late on Friday night.
India can borrow up to $30 billion (up five fold) from the IMF to infuse short-term liquidity through low conditional loans. This will have to be repaid within nine months. “But with reserves of $200 billion, we really don't need this,” Ahluwalia said.
India can borrow an additional $9 billion from the World Bank, $3 billion a year, for development infrastructure projects. This is part of the $100-billion kitty that the bank has made available. “We are saying they need to go further,” Ahluwalia said.
It's evident that the pressure for governance reforms at the IMF and the Bank is mounting. On the eve of the G20 summit on financial markets and the world economy, where heads of state and finance ministers have been invited, Prime Minister Manmohan Singh discussed geo-political issues with outgoing US President George W. Bush over dinner at the White House.
In a separate but concurrent dinner, Finance Minister P.Chidambaram, Ahluwalia and economic affairs secretary Ashok Chawla met their G20 counterparts.
“We used the opportunity to brief them on what we think is our position for this summit,” said Ahluwalia, who also met former secretary of state Madeliene Albright and former Congressman Jim Leash, representing US President-elect Barack Obama and US Vice President-elect Joe Biden.
“We need governance reforms (in the IMF) and that reform needs to reflect the new economic reality,” Ahluwalia said, referring to the increased vote share of developing economies.
He said while reforms in the IMF and the Bank may take time, countries like India should find a place in the Financial Stability Forum (FSF), as “broadbasing the FSF can happen faster.”
Ahluwalia said, “History has shown that these tendencies rise during recessions... We should complete the Doha round.”