Indias Stake In Imf Declines

Despite an average seven per cent economic growth in the last three years, Indias stake in the International Monetary Fund (IMF) has taken a beating with the financial body deciding to increase its own share in its funds.

From being fifth in the early years of IMF, India now ranks 13th on the basis of the size of its IMF shareholding. Indias current quota is 3,555.5 million special drawing rights (SDRs) which will increase to 4,158.2 million SDRs. However, in percentage terms, its share will come down from 2.090 per cent to 1.961 per cent.

South Asian countries, with the exception of Bhutan and Maldives, will also lose their relative importance in the world body when IMFs shareholding is increased from 146.226.1 billion SDRs or about $197 billion to 212.029 billion SDRs or $287 billion.

The IMF executive board has submitted a report and a draft resolution to the board of governors proposing an increase of four per cent in IMF quotas.

The governors have been asked to vote on the proposed resolution, without a meeting, by January 30. Adoption of the resolution requires a 85 per cent majority voting among the IMF membership.

From being fifth in the stakes, Indias position in the IMF eroded gradually as the quotas were reviewed at intervals.

The latest is the 11th general review which increases the total quotas by 45 per cent. The deterioration in the Indian position is directly linked to the fact that when some economies grew faster, India lagged behind.

After the latest review, Pakistans shareholding increases from 758.2 million SDRs to 1,033.7 million SDRs but its relative share decreases from 0.88 per cent to 0.519 per cent.

Bangladeshs current quota is 392.5 million SDRs or 0.268 per cent which will become 533.3 million SDRs or 0.252 per cent, while Sri Lankas 303.6 million SDRs or 0.208 per cent changes to 413.4 million SDRs or 0.195 per cent.

Nepals 52 million SDRs or 0.06 per cent changes to 71.3 million SDRs or 0.034 per cent, Maldives 5.5 million SDRs or 0.004 per cent becomes 8.2 million SDRs with the percentage remaining the same, and Bhutans 4.5 million SDRs goes up to 6.3 million SDRs but the percentage remains at 0.003.

With a quota of 26,526 million SDRs, the US currently has 18.141 per cent of the IMF shareholding. This becomes 37,149.3 million SDRs or 17.52 per cent.