India has said when there is a need to regulate the financial market, the same should not be used to devise any kind of protectionism.
"We shall have to strike a balance. First of all, I would like to... In the name of the financial regulation and to regulate the markets and as I started off, I mentioned protectionism need not come. Yes, there is a need of regulating the financial market," Finance Minister Pranab Mukherjee said in an interview to CNN international.
"At the other side of the picture, these instruments need not be used to devise protectionism in some forms. Therefore, there too, we shall have to keep in view the federal reserves -- the larger social interests -- interests of the society as a whole, not fragmented and fractured internally," he said.
Noting that there is no consensus among major economies on the lessons learnt from the current global economic crisis, Mukherjee said: "But if we look at the way G-20 responded and we have ourselves been made to address only those issues where there is the possibility of consensus."
The Finance Minister felt that G-20 should not pick up those issues where consensus is elusive. "That there should not be, in the name of financial agreement...It should not be too much constructionist policies in the grab of another form of protectionism," he said.
Mukherjee and his counterparts from Russia, China and Brazil asserted that this was not the time for operationalizing an exit strategy, which means that stimulus packages for boost economies must be continued.
India's finance Minister also said that the country will lend up to $10 billion to the International Monetary Fund (IMF) to make funds available to nations in need. It will not load the government and will not stretch its resources, already hit by a slowing economy.
India said such bilateral financing are only a "temporary bridge" and the IMF should reform the quota process in favour of emerging and developing countries.
Mukherjee told reporters that "what is needed now is reform of international financial institutions taking into account the ground reality".
"The reform of international financial institution is crucial to insure a stable and balanced global economy. For the IMF and the World Bank Group, the main governance problem, which severely undermine their legitimacy, is the unfair distribution of quotas, shares and voting power," he said.
Priority should be given to substantial shift of quotas and shares in favour of developing countries, he added.
"The big countries proposed setting up of a target for that shift of order of 7 per cent in the IMF and 6 per cent in the World Bank group so as to reach an equitable distribution of voting power between advanced and developing countries."
"This would lead the overall share of emerging market and developing countries in the IMF and World Bank to correspond roughly to their share in the world GDP," Mukherjee said.