India pitching for more say in IMF

India expects its shareholding in multilateral funding agency, The International Monetary Fund (IMF), to double to four per cent by 2011, when country-specific quotas will come up for review as decided by the G20 here on Thursday.

The increase in its shareholding would result in New Delhi’s contribution to the fund going up to $10 billion. India will also look at broadening its equity base in the Asian Development Bank (ADB), where it is the largest borrower, as and when the Board decides to increase the equity structure.

“India has been campaigning for a quota review as part of the governance structure reforms to reflect the current realities and strength of emerging economies. The G20 has decided to advance the quota review to 2011 from 2013. “We are ready to contribute in proportion to our quota (about two per cent), which will be $10 billion... If two per cent becomes four or five per cent then as and when the increase takes place, we will contribute,” an Indian source said.

While these institutions are not going to change overnight, reforms cannot be postponed for long given the new economic realities, sources said. From less than 20 per cent, the combined size of the Indian and Chinese economies have grown to over one-third of the US economy in the last eight years, giving more voice to the two fastest growing economies in the world.

China has announced a contribution of $40 billion towards a New Borrowing Arrangement scheme agreed by G20 to help poor countries overcome the current economic crisis.

“We (India) did not want to make a grand statement... We want to husband our resources which are around $250 billion in foreign exchange reserves,” the source said when asked why India did not offer to chip in like China did. India is also not unduly worried about, what some analysts say, is the “growing weightage” for China in institutions like the IMF as it feels that Beijing is definitely a stronger and bigger economy than India but both have their “own strengths and weaknesses”.

India also expects shareholding in ADB to go up shortly when the Board of Governors meet to ratify a decision already taken in this regard. India, the largest borrower from the Manila-based funding agency, expects the issue to be sorted out by next year. Asked whether India would approach the ADB for higher loans, the source said it was premature to talk about the matter.