New Delhi: Stressing on the need to strengthen institutions like IMF to tackle financial crisis, Economic Affairs Secretary SC Garg called for quota reforms so that share of emerging nations increases in line with their growing economic position.
He also pointed out that protectionism, trade tensions and tightening of financial conditions are challenges for the world.
In the context of these challenges, he said the time for building buffer and policy action by the emerging market economies is not there.
"A suitable approach could be the association of the IMF (International Monetary Fund), being at the centre of the GFSN (global financial safety net), at an earlier stage rather than when crisis has already occurred. Hence, the strengthening of this Multilateral Institution is crucial," he said.
Speaking at 15th General Review of Quotas in Bali, Indonesia Saturday Garg said this agenda of IMF is urgent as there is a deadline fixed for its conclusion next year.
"Both, enhancement in the Quantum of Quota Resources and Realignment of Voting Shares should take place so that Quota Shares of EMDCs (Emerging Market & Developing Countries) increase in line with its growing relative economic position in the world," he said.
Garg also participated in the 98th meeting of the Development Committee Plenary.
He mentioned that India had supported the capital increase of the World Bank Group with the expectation that it will deliver on its core development responsibilities articulated in the Forward Look.
The additional capital would be put to work expeditiously and leveraged to enhance International Bank for Reconstruction and Development (IBRD) lending volumes and International Finance Corporation (IFC) investments, he said.
Pointing out severe flaws in Human Capital Index, Garg said it will not succeed in focusing the attention of the world on building the right kind of human capital, which new technologies will need.
While welcoming the emphasis placed by the World Bank on building human capital, the secretory pointed out that he is not so certain about the Human Capital Index in its current form.
The World Bank ranked India 115th among 157 countries in its first-ever Human Capital Index (HCI), drawing criticism from the Indian government.
India's neighbours Bangladesh, Nepal and Sri Lanka were better placed at 106th, 102nd and 74th position, respectively. The index took into account parameters like child mortality, health and education.
Highlighting that digital technologies are transforming the very system of production of goods and services and their distribution, he said these technologies are in the process of changing the nature of the work and nature of 'jobs' as one knows.
Garg mentioned that India has extensively used digital technologies to build FinTech, most prominently in the payment space.
He said that the Aadhaar system is global scale and is serving India very well in advancing the FinTech agenda.
In the context of debt build-up in low income countries, Garg said harnessing FinTech could also be one way to build fiscal efficiencies, better debt reporting and debt management.
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