New Delhi: Following India’s call for further quota reforms at the IMF, its managing director Christine Lagarde said on Sunday that with a round of reforms just done, the agency required some “breathing space” before the next round of reforms that are a continuous process.
“IMF has just completed the quota reform. It was an in-depth series of changes, which are not sufficient. The quota review is a continuous momentum. We will be at it over and over, because it has to mirror the state of the economy,” she told reporters at the end of the Advancing Asia conference here, co-hosted by the Indian government and the International Monetary Fund.
“We just completed one (round of reforms) and we need to breathe for a few moments and then move to the next one,” she added.
Addressing the conference on Saturday, Prime Minister Narendra Modi said that the long-pending quota revisions had finally come into effect, but “even now, IMF quotas do not reflect the global economic realities”.
The IMF’s historic quota and governance reforms, that for the first time place four emerging market countries — Brazil, China, India, and Russia — among its 10 largest members, came into effect in January this year, after these were approved by the US Congress in 2015. They had been approved by the IMF’s Board of Governors in December 2010.
The reforms, pending for long, also increase the financial strength of the IMF, by doubling its permanent capital resources to SDR 477 billion (about $659 billion) from about SDR 238.5 billion (about $329 billion).
Other top 10 members of the 188-nation agency include the US, Japan, and four big European countries — France, Germany, Italy and Britain.
The reforms represent a major step toward better reflecting, in the institution’s governance structure, the increasing role of dynamic emerging market and developing countries, the IMF has said.
Currently, India has voting rights of 2.34 percent. In terms of quota, the country has a share of 2.44 percent.
The government on Friday presented in parliament a supplementary demand of grant of Rs.69,575 crore towards increasing India’s quota in the International Monetary Fund (IMF) that will allow increased voting rights for the country at the IMF.