India willing to increase contribution to IMF: Manmohan
03 Apr 2009
India is willing to increase its contribution to the International Monetary Fund (IMF) and does not intend to borrow any money from the multilateral lending agency, prime minister Manmohan Singh said at the Group of Twenty summit in London.
''We do not visualise any need in the near future to go to the IMF,'' he said, adding, ''We can consider contribution to IMF in proportion to our quota.'' he told reporters after the meeting of the G-20 leaders.
While the IMF has opened a new facility for emerging economies to finance development, Manmohan said India may not require such aid. India has foreign exchange reserves of about $250 billion, he pointed out.
The prime minister said the G-20 summit emphasised the need to make good the decline that has taken place in capital flows to developing countries by providing adequate resources to the international financial institutions.
''I am happy to say that the G-20 have agreed to expand the resources of the IMF and the ADB and to also bring forward the quota review in the IMF. The leaders have also agreed to a fresh issue of SDRs. These are positive decisions. Together they involve a massive provision of $1.1 trillion for emerging market economies.
''India does not need IMF funding but we have been in favour of expanding IMF resources as this will help developing countries that need assistance. It will restore confidence about emerging markets,' he added.
He said the summit also agreed on broad direction for improvements in regulatory and supervisory structure for the world's financial system. These will take time to take effect but they are very important. They will be carried forward by the Financial Stability Forum (FSF) and the Basle Committee on Banking Supervision, the two key standard setting bodies.
India is now a member of both bodies. Broadening representation in these bodies is an important improvement. The directions of the reform of financial regulation and supervision that have been agreed are in line with our own thinking in India, he noted.
Meanwhile, the IMF denied talks about selling more gold than the 403.3 tonnes proposed a year ago.
In April 2008, the IMF's board had approved a proposal to sell 403.3 tonnes of bullion as part of a plan to close the global lender's annual deficit.
A decision to sell IMF's gold reserve requires the backing of 85 per cent of its executive board, and the board representative from the US needs the approval of Congress to vote in favour of any sales.
G-20 leaders said they will use the IMF gold sales to help provide poor countries with $6 billion over the next two to three years.
