New Delhi: Union Minister for Finance & Corporate Affairs , Smt. Nirmala Sitharaman, led the Indian delegation at G20 Finance Ministers and Central Bank Governors as well as the BRICS Finance Ministers and Central Bank Governors meetings held in Washington D.C yesterday. Finance Minister is leading the Indian delegation to the IMF/WB Annual Meetings being held in Washington D.C this week.
The focus of discussions in the G20 Finance Ministers and Central Bank Governors Meeting was on the current challenges to the global economy and possible responses to mitigate them. Smt Sitharaman emphasized that the G20 has the responsibility to navigate the global policy co-ordination in effective fashion by identifying and taking strong measures for building buffers and catalysing a second wave of reforms. She gave a clarion call for concerted action in the face of global slowdown. She also highlighted that the emerging market economies, in particular, face the challenge of achieving economic growth and inclusive development while pursuing sustainable financing. In this context, Finance Minister emphasized on the importance of countries pursuing structural reform measures to counter the growth slowdown. The structural reform measures undertaken by India was highlighted by the Finance Minister particularly, the recent measures such as reduction of Corporate tax. Smt. Sitharaman indicated that India has reduced the Corporate tax from 30% to 22% thereby making India one of the lowest corporate tax imposing countries in the world today. This will spur investment. Alongside the Corporate tax reform, Government of India’s measures pertaining to Aaadhar based Direct Benefit Transfer as well as Universal Health Care policy received special mention from the Finance Minister. In conclusion, FM re-emphasized the need for G20 to ensure collective action so as to enable global growth to regain pace.
The main issues discussed during the BRICS FMCBG meeting included those pertaining to New Development Bank (such as membership expansion and enhancing the effectiveness of the utilization of the NDB’s Project Preparation Facility); developing the way forward on IMF resources as well as formulating a consensus co-operation on Authorized Economic Operators Programme.
On NDB issues, the Finance Minister in her interventions, emphasized India’s strong support for NDB’s membership expansion and encouraged NDB Management to continue the good progress achieved on this issue till date. As far as improving the effectiveness of the Project Preparation Facility is concerned, the Finance Minister indicated that sustainable recovery mechanisms need to be inbuilt into the PPF guidelines so that the assistance extended is recovered once the project loan is sanctioned. Regarding the IMF resources issue, Smt. Sitharaman indicated India’s deep regret on the lack of progress of the 15th General Review of Quotas (15th GRQ). With reference to the alternative proposal emerging at the current juncture with reference to strengthening borrowed resources of IMF, Finance Minister expressed a word of caution and indicated that borrowed resources cannot provide full confidence in extreme crisis situations as creditor nations themselves may be in stress.
Prior to the G20 FMCBG, the G20 Finance and Central Bank Deputies also met to discuss the way forward on priority G20 agenda items such as Quality Infrastructure Investment, building effective country platforms, attaining debt sustainability as well as strengthening universal health care financing. Secretary, Economic Affairs Shri Atanu Chakraborty as India’s G20 Finance Deputy led the Ministry of Finance delegation for this meeting.
On Quality Infrastructure Investment, Shri Chakraborty urged the G20 to explore innovative sources of financing for boosting infrastructure development ensuring that quality considerations are in-built into these financing sources. As far as debt sustainability is concerned, Secretary , Economic Affairs while agreeing the importance of the agenda, struck a word of caution that the agenda of debt sustainability and transparency in LICs should not undermine the internationally agreed commitment on official development assistance. He also expressed India’s keen interest in the work IMF is pursuing on collateralized debt and looked forward to the research from IMF on the area. On strengthening UHC financing, he emphasised that the discussions on UHC financing must adopt a holistic approach encompassing preventive, curative and palliative care as well as plurality of pathways for achieving UHC including through traditional and complementary systems of medicine. On building effective country platforms, Shri Chakraborty emphasized that the G20 should reflect further about who will build the platform, how the private sector will be engaged in the process and the contours and scope of the platform as to whether it will involve project preparation, knowledge sharing, technical assistance etc.
In other engagements, Union Finance Minister attended an Industry Roundtable organized by USIBC and CII as well as an Economist Roundtable organized by CII. She also held bilateral meetings with Chancellor of Exchequer United Kingdom, Mr. Sajid Javed; Secretary of State for Development of the United Kingdom, Rt. Hon. Alok Sharma; Finance Minister and Deputy Prime Minister of South Korea, Mr. Hong Nam Ki; President of the World Bank, Mr. David Malpass; Special Advisor to Japanese Finance Minister and Candidate for ADB, Mr. Masatsugu Asakawa; Governor of JBIC, Mr. Tadashi Maeda; and Global CEO of Standard Chartered, Mr. Bill Winters.