New Delhi: Pressed by the government for a greater say, the International Monetary Fund (IMF) on Monday promised to look into alternatives to make the country a top ten shareholder as the US was "not ratifying" the quota reforms at the multilateral lending agency.
In a meeting with IMF chief Christine Lagarde, who is on a two-day India visit, Finance Minister Arun Jaitley pitched for early implementation of IMF quota reforms to give a more say to emerging economies like India.
Ms Lagarde, who also called on President Pranab Mukherjee and met Prime Minister Narendra Modi, emphasised that IMF is a global multilateral institution where countries like India must have a bigger say.
"Finance Minister Arun Jaitley during his meeting with IMF Managing Director Christine Lagarde called for early implementation of the 2010 IMF quota and governance reform," an official statement quoted him as saying.
Earlier in the day, the IMF chief said in a lecture at a college here that the US is "not ratifying" the quota reforms that would facilitate larger roles of emerging economies at the multilateral institution.
The IMF is looking at alternatives to realign quotas that will put India into the top 10 shareholders, she said.
"Implementing the reform would lift up India within the top 10 shareholders of the institution. It's hard work because there is one member which is not ratifying. The US that was determined to re-balance, to move Europeans out and bring emerging market economies in, is not ratifying the reform," she said.
She said IMF "looking at options".
"I hope some would be acted upon. I certainly hope so. But we need to (bring) comprehensive reforms...so that economies are represented in a fair manner," Ms Lagarde said.
Quota reforms seek to provide greater say to developing economies in the IMF, where the US and large European countries now command a high influence. The ratification of the US is necessary to implement the quota reforms, agreed by the member countries in 2010.
"It so happens when IMF was set up 70 years ago, there was a very large economy which is still the first economy in the world, the US, that had the veto right. That is in the Article of constitution. So major changes such as representation around the table can only happen with approval of the US which has about 15 per cent voting right," Ms Lagarde said.
It would be in the interest of everybody to implement 2010 reforms, she added.
India has a quota of 2.44 per cent, with 2.34 per cent voting right, in the IMF.
As per the current quota system, the US has 17.69 per cent while the voting right is 16.75 per cent. It is followed by Japan (6.56 per cent with 6.23 per cent voting share).
Highlighting the importance of India, Ms Lagarde said "the world needs a vibrant India and India needs the world".
"As one of the largest commodity importers in the world, an open and transparent multilateral system for trade and financial flows will be essential to support India's vibrant economy. With growing economic size and power come greater leadership expectations," Ms Lagarde said.
"We look forward to seeing India becoming even more active on the global stage - in fora such as the G-20 and the IMF."
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