India's Relations With the International Monetary Fund (IMF): 25 Years in Perspective 1991-2016 by V Srinivas

Author:V Srinivas [Srinivas, V]
Language: eng
Format: epub
Tags: International Relations, Intergovernmental Organizations, Political Economy, Political Science, Treaties
ISBN: 9789388161725
Google: x5VIzQEACAAJ
Goodreads: 51380384
Publisher: VIJ BOOKS INDIA
Published: 2020-02-03T00:00:00+00:00

Governor Dr. Y.V. Reddy led the Indian delegation to the IMFC in April 2006. By 2006 inflationary pressures had surfaced with oil prices showing upward trends. International Oil prices were an area of grave concern given the limited spare capacity and continuing geo-political concerns. Although global financial conditions remained largely favorable, the global economic prospects were marked by global imbalances and their changing distribution across nation states. Monetary Policy conditions turned accommodative in Euro Area and Japan. The balance sheets of corporate houses were showing strong improvements.

The Finance Minister led the Indian delegation to the IMFC in September 2006. There were concerns expressed in the Finance Minister’s statement at the IMFC on the deepening global imbalances which were proving to be a major risk to global growth and stability. India said that the imbalance is concentrated in the United States current account deficit and mirrored in the current account surpluses of China and Middle East, and that it was necessary to reduce the deficit to minimize the possibility of an adverse reaction from the markets as the US net foreign liabilities position deteriorates. India expressed concerns that abrupt corrections in the US housing market could slow down not only US growth but also global growth. On the issues concerning IMF’s Medium Term Strategy – Quota and Voice, Surveillance, Role of the IMF in Emerging Market Countries – India pressed for expediting reforms.

By April 2007, Sustainable Financing of the IMF became an important issue for deliberations of the IMFC. Finance Minister leading the Indian delegation to the IMFC welcomed the Report of the Eminent Persons on the Sustainable Financing of the Fund, and said that the proposals contained therein for investment out of quotas and part sale of gold were far reaching. India did not support the proposal for charging Technical Assistance as it would discourage several needy countries.

The New Income Model and Medium Term Budget continued to be deliberated in the Fund in 2008. The Crockett Committee recommended a New Income Model that involved sale of the post Second Amendment Gold and the creation of an endowment. India said that in implementing an expanded investment authority, the Fund should establish sound policies and transparent procedures and avoid any perception of a potential conflict of interest. The Indian view was that the Fund’s unique role as confidential advisor to member Nations with considerable access to privileged information should be preserved. India also welcomed the substantial expenditure reductions proposed by the Managing Director as part of the mid-term strategy of the IMF to ensure it focuses on its core mandate and tackle future financial crisis.

In April 2008, the Fund had completed the General review of Quotas. India said that a degree of credibility in the IMF governance had undoubtedly been restored in realigning quotas and votes. India supported the simple and transparent quota formula that adequately captured the relatively changing economic weights of the countries in the world.

The UPA II Government was in power from 2009-2014. During this period Finance Minister Pranab Mukherji attended the 20th, 22nd and 24th IMFC Annual meetings in 2009, 2010 and 2011.

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