India will improve its rank by three notches to the 8th position in IMF, as the group of 20 nations (G-20) today decided to increase the quota of emerging markets in the multi-lateral lending agency by over six per cent.
"Agreement on IMF reforms has been reached. There will be a shift in quota shares to dynamic EMDCs (emerging market developing countries) and to underrepresented countries of over 6 per cent while protecting the voting share of the poorest," Finance Minister Pranab Mukherjee said here.
With this, India's rank in International Monetary Fund (IMF) will improve to the 8th position from the current 11th in terms of quota, he told reporters after a meeting of Finance Ministers of G-20 nations.
"What we have achieved is significant. The quota share (of India in IMF) will improve to about 2.75 per cent (from the present level of 2.44 per cent)," Mukherjee added.
Similarly, China will see an improvement in its ranking to the third position from the present sixth.
Quota represents the relative position of members of IMF. It is based on various parameters like country's GDP, openness, forex reserves etc.
The Finance Minister said the quota reforms will give legitimacy to the IMF in the new world economic order.
India and other emerging market economies have been demanding reforms in IMF to give more powers to them in line with their share in the global economy.
Emerging market economies contribute around 47.5 per cent to the global economy in terms of purchasing power parity, but have only 39.5 per cent share in the IMF.
Their share will now increase to over 45.5 per cent in the 187-nation body IMF.
Also, Europe will give up two of the eight or nine seats it controls at any given time on the IMF's Executive Board, which will continue to have 24 members, as per the agreement.
Now next phase of reforms will start in 2013.