June 20 : India intends to make available up to US$ 10 billion to shore up the resources of the International Monetary Fund (IMF). It is significant that India, which had to resort to IMF financing on a few occasions till the early nineties, will now be participating in an international effort to make resources available to the Fund for lending to countries in need.
However, this participation in IMF’s debt would not load the Government of India and not further stretch its resources.
An important outcome of the G-20 London Summit, held on 2nd April 2009, was the agreement that IMF’s lendable resources through bilateral financing and the New Arrangements to Borrow (NAB) would be increased by US$ 500 billion in the near term. The announcement by India made last night is part of this significant endeavour.
The amount US$ 10 billion is broadly in proportion to India’s curren quota share at the IMF. India believes that the IMF is a quota-based institution and raising resources through bilateral financing and the expansion of the New Arrangements to Borrow are not a substitute for quota resources, but a temporary bridge to a quota increase.
We fully expect that the next general quota review, which is now agreed to be concluded by January 2011, will result in the long overdue substantial re-balancing of quota and voting power in favour of emerging market economies and developing countries.