India pitched for tripling the International Monetary Fund's (IMF's) equity to SDR 650 billion (about USD 975 billion) to empower the multilateral funding agency to play an effective role in pulling the global economy out of the current crisis.
India pleaded for 200 per cent increase in the quota size (kind of equity) of the IMF at the G-20 meeting in London last week, arguing that the current resources of the Fund are inadequate to meet the demands of the world economy in the wake of the financial crisis, which is likely to be prolonged.
The total size of the IMF quotas is SDR 217 billion, in which India's share is SDR 4.16 billion.
Prime Minister Manmohan Singh too had said after the G-20 Summit in London, "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."
According to sources, India, during the G-20 Sherpas Meetings (preparatory meetings for the Summit), also underlined the need for an early conclusion of the IMF quota review even before 2011, in addition to endorsing a target quota increase by 200 per cent.
The communique issued after the London Summit of the G-20 nations, however, made no commitment on the size of quota increases but called upon the IMF to complete the next review by January 2011, as against the original schedule of 2013.
"We commit to implementing the package of IMF quota and voice reforms agreed in April 2008 and call on the IMF to complete the next review of quotas by January 2011," the communique had said.
India wants the ratification of the April reforms and the new ones to proceed independently and in parallel, sources said.
A 200 per cent increase in total quotas would be "unreasonable given the likely demands that could be placed on the IMF", they added.
The additional quota, according to sources, needs to be distributed in such a way as to achieve the much-needed rebalancing of quota and vote shares of members, to reflect contemporary reality and ensure that emerging markets and developing countries have a greater voice at the IMF.
