India to fork out $20bn for crisis kitty

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http://timesofindia.indiatimes.com/...20bn-for-crisis-kitty/articleshow/4357269.cms

India to fork out $20bn for crisis kitty
4 Apr 2009, 0210 hrs IST, Shankar Raghuraman, TNN

NEW DELHI: India is open to the idea of contributing a total of around $20 billion — roughly Rs 100,000 crore — towards increasing the capital
base of the IMF, the World Bank and the Asian Development Bank (ADB) as part of the global effort to enable these institutions to lend more.

The contribution, which is likely to be spread out over the next two years, will be in proportion to the quotas or shareholding that India has in these multilateral bodies, sources said. In response to a question on why India had made no commitments of additional resources to the IMF at the G-20 summit in London, unlike its neighbour China, the sources said "we do not wish to make any grand announcements, but we would be willing to contribute to the extent of our shareholding".

India's quotas in the IMF are currently 2% and that would translate into roughly $10 billion for that institution alone. An equal amount might be needed for the World Bank and ADB when the exercise to enhance their capital base and rebalance shareholdings takes place, the sources said, adding that these were just preliminary estimates.

The amounts involved could be larger if the reallocation of quotas happens before the contributions are to be made. The money given to the IMF will initially be part of the new arrangement for borrowing (NAB) that the body is now running on an ad hoc basis, but will eventually be transformed into an enhanced equity base.

China announced at the G-20 that it would put in $40 billion as its contribution to the NAB.

The reallocations of quotas in the IMF has been a vexed issue for long with Europe and the US having traditionally been reluctant to loosen their grip on these institutions, but the reallocation earlier expected to happen around 2013 has now been advanced to January 2011.

While India has approached the World Bank for an extra $5.2 billion in lending over the next two years — the bulk of it, $3.2 billion, for recapitalization of public sector banks — there was no immediate plan to hike borrowing from the ADB, the sources said. India is already the largest borrower from the ADB and there was little headroom for any more till the bank's capital base is expanded, they said.

The increase in the ADB's equity has more or less been accepted by the 64 member countries, but would need to be formally approved by the ADB's board, and also at the annual general meeting in May this year. Once that happens and the ADB has more resources, India could consider seeking more from it, the sources said.

On another key decision at the G-20 summit, to "name and shame" countries that behave as tax havens and do not comply with transparency norms on tax matters, the sources

said while the idea clearly was to take some sort of action against them if they refused to fall in line, "that stage has not yet come".


Why is India doing this when it did not create or contribute to this crisis and is only a victim of it?
 

EnlightenedMonk

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Neither did China create any of this, but they are having to shell out 40 billion USD for the fund...

This is called modern diplomacy and "team play"

Even if one of the chaps creates the mess, all the others are supposed to help him clean it up...
 
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I hope it will be returned, with H-1B,outsourcing and protectionism by USA I don't know?
Cutting foreign aid could also add a few billion, China has 10 times more trade than we do with USA so they gave a smaller percentage.
 

EnlightenedMonk

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Do we give any significant foreign aid to anybody ??? Except Afghanistan ???
 

thakur_ritesh

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Do we give any significant foreign aid to anybody ??? Except Afghanistan ???
india does to various countries like nepal, sri lanka, burma, mauritius, bhutan, parts of africa if you recall last year when india held a meet for the african union in delhi then there was a steep jump in the aid that was to follow to that continent in the present 5 year plan, the sale of dhruv is to an extent happening on the grounds of providing "aid" to various countries and if i am not mistaken then the same catch line is being used to promote the chopper in bangladesh. these are just a few of them who receive aid there is a big list, then we should not forget that when ever there is any kind of clamity india has always been one of the first countries to respond to the ocassion by providing aid to the suffering country, please recall last year india offered aid to US on the same pretext, and all this aid per year is in double digit billion dollar bill.
 

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