India has voiced strong reservation to delay in implementation of the quota reform of the International Monetary Fund with the Finance Minister, Arun Jaitley, saying IMF will be constrained in meeting its obligations in the absence of governance reforms.
In his lead intervention in the Plenary Session of the International Monetary and Finance Committee (IMFC) of the IMF here yesterday, Jaitley said: “The IMF would be constrained in meeting its obligations if the IMF quota and governance reforms are not implemented.”
The IMF quota reforms are aimed at giving more voice and voting power to the emerging economies with regard to the functioning of the multilateral body.
Emphasising that the IMF plays a very important role in the global economy, he expressed concern over the unprecedented delay in implementation of the 14th General Review of Quotas.
Jaitley said the global economic outlook outlined by the IMF does not look particularly encouraging, which also has a bearing on India’s exports.
India has witnessed less than normal monsoon for two consecutive years.
In spite of these challenges, Jaitley said that the Indian economy grew 7.3 per cent during last year, significantly better than 6.9 per cent recorded in 2013-14. This year, India expects to do even better, he said.
Speaking about the economic situation back home, the Finance Minister said the Indian Government is committed to a path of fiscal consolidation. Current Account Deficit (CAD) has come down substantially to around 1.3 per cent of GDP in 2014-15, which was around 4.8 per cent two years earlier.
Similarly, he said that a couple of years ago, India was suffering from double-digit inflation and now the inflation has dipped to a low of 3.7 per cent.
He said that the country is utilising the regime of lower oil and commodity prices to increase investments in infrastructure and irrigation, according to an official press statement.
Jaitley said India is also undertaking comprehensive subsidy rationalisation and has successfully rolled out the largest financial inclusion initiative in the world under which around 185 million bank accounts have been opened.