As part of efforts to have a greater say in the running of the international financial institutions, India has decided to invest up to USD 10 billion from its reserves to supplement the IMF resources.
"India has decided to invest up to 10 billion dollars of its reserves in notes issued by the IMF," Finance Minister Pranab Mukherjee told reporters at London on Friday night after the BRIC (Brazil, Russia, India and China) ministerial meeting ahead of a G-20 conference.
Mukherjee said "the G-20 egged governments on to adopt an aggressive monetary and fiscal stance, and was particularly successful in raising reforms for International Financial Institutions that played a major role in stabilising developing country markets.
The communique issued at the end of the BRIC Finance Ministers' meeting said "for us, IMF notes or bonds are the best option to provide immediate resources to the IMF without undermining the quota reform process.
"We are together contributing USD 80 billion to supplement the resources of the IMF. The IMF is a quota-based institution and should remain so. We propose that the next quota review should at least double the overall size of quotas."
China accounts for USD 50 billion of the USD 80 billion contribution and the rest would be borne by India, Russia and Brazil.
Brazil's Finance Minister Guido Mantega told newsmen that the BRIC countries would like to have a greater say in the running of the IMF and other international financial institutions such as the World Bank and are prepared to have a larger share of quotas and voting.
US Treasury Secretary Timothy Geithner joined part of the meeting, which Mukherjee said was an acknowledgement of the group's emergence as a key voice in global economic and financial issues.
Need to regulate financial market but no protectionism: Pranab
India has said when there is a need to regulate the financial market; the same should not be used to devise any kind of protectionism.
"We shall have to strike a balance. First of all, I would like to... in the name of the financial regulation and to regulate the markets and as I started off, I mentioned protectionism need not come. Yes, there is a need of regulating the financial market," Finance Minister Pranab Mukherjee said in an interview to a news channel at Washington.
"At the other side of the picture, these instruments need not be used to devise protectionism in some forms. Therefore, there too, we shall have to keep in view the federal reserves -- the larger social interests -- interests of the society as a whole, not fragmented and fractured internally," he said.
Noting that there is no consensus among major economies on the lessons learnt from the current global economic crisis, Mukherjee said: "But if we look at the way G-20 responded and we have ourselves been made to address only those issues where there is the possibility of consensus."
The Finance Minister felt that G-20 should not pick up those issues where consensus is elusive.
"That there should not be, in the name of financial agreement...it should not be too much constructionist policies in the grab of another form of protectionism," he said.
Responding to a question, Mukherjee said India shall have to come back to the fiscal conservatism.
"That's why in my medium term plan, I have indicated that I am ending the year with a 6.8 percent of fiscal... but I will come around to 5.5 and four percent in the next two years," he said.
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