Prime Minister Manmohan Singh reiterated the demand to give emerging economies greater control over the International Monetary Fund (IMF) in return for the additional sums of money they are putting up to bail out Europe, saying this should be “done expeditiously”.
Addressing the Group of 20 summit in Mexico on Tuesday shortly after India had pledged $10 billion (R56,000 crore) to the IMF to help eurozone nations come out of the current economic crisis, he said: “I must point out, however, that progress in quota reform (which is expected to give India more voting rights and, therefore, greater clout in the IMF) is proceeding more slowly than raising resources.”
India, along with the other Brics nations — Brazil, China, Russia and South Africa — have pledged $75 billion (R4.2 lakh crore) to the IMF for the eurozone bailout.
Singh's statement served to remind western governments that dominate the IMF's board today that emerging economies would give funds, but the West would have to give IMF votes in return.
The PM also stressed that quotas should be worked out in terms of GDP calculated using the purchasing price parity method - a measure of national wealth that puts India as the fourth largest economy in the world.
Quota reform is supposed to be completed by 2012, but will almost certainly miss this target because many countries, such as the US, have yet to get legislative approval for it. If the reforms were to be carried out, India would have to provide the IMF even more funds as votes are determined by the amount of money loaned to the Fund. This would be about $11 billion (Rs 61,600 crore), of which about $4 billion (Rs 22,400 crore) has already been paid, according to R. Gopalan, secretary at the ministry of finance.