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New Delhi : Union Minister Finance & Corporate Affairs Minister 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 DC on October 17, 2019. The 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. Sitharaman emphasised 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, the Finance Minister emphasised 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. 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. The FM re-emphasized the need for G20 to ensure collective action 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 utilisation 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, emphasised 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 (PPF) 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, 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, she 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, Atanu Chakraborty as India’s G20 Finance Deputy led the Ministry of Finance delegation for this meeting, according to a PIB release. The Finance Minister also attended an Industry Roundtable organized by USIBC and CII as well as an Economist Roundtable organized by CII.