India to pay $11bn for higher voting share in IMF

[Bobby]

The government will have to make an additional payment of USD 11 billion towards increasing its voting share in the International Monetary Fund (IMF), once the quota reforms at the multilateral agency are approved, Parliament was informed on Friday.

India's quota share in the IMF would increase to 2.75 per cent from 2.44 per cent once the reforms comes into effect.

"This increase would require an additional payment of USD 11 billion," minister of state for finance Namo Narain Meena said in a written reply in the Lok Sabha.

He said the cash outflow would be about USD 2.75 billion, around 25 per cent of the total amount.

"... the balance is in the form of rupee denominated securities that can be encashed when required by the IMF," he noted.

In the 2012-13 Budget, the government has proposed to earmark Rs 56,000 crore in case IMF calls for the payment when the quota reforms comes into effect.

The IMF reviews quota shares of member nations every five years and the last such review happened in 2010.

"The quota payment is an international obligation of the government of India as a member of the IMF. With the growth in India's economy, its quota share has also increased reflecting the size of Gross Domestic Product ( GDP)," the minister noted.

 

[KRAIT]

Indians are already good in buying votes.

 

[Audio]

Moar money for the US and Euro pension funds!

Yes, yes it's trolling, but i dont think im that far from the truth.

 

[IndoCarib]

How member countries’ quotas are determined

When a country joins the IMF, it is assigned an initial quota in the same range as the quotas of existing members that are broadly comparable in economic size and characteristics. The IMF uses a quota formula to guide the assessment of a member’s relative position.

The current quota formula is a weighted average of GDP (weight of 50 percent), openness (30 percent), economic variability (15 percent), and international reserves (5 percent). For this purpose, GDP is measured as a blend of GDP based on market exchange rates (weight of 60 percent) and on PPP exchange rates (40 percent). The formula also includes a “compression factor” that reduces the dispersion in calculated quota shares across members.

Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account. The largest member of the IMF is the United States, with a current quota of SDR 42.1 billion (about $68 billion), and the smallest member is Tuvalu, with a current quota of SDR 1.8 million (about $2.9 million)

Factsheet -- IMF Quotas

 

[Bobby]

Indians are already good in buying votes.

It is not like you can buy any amount of quota in IMF.

If your Economy has grown bigger than last year you will be allowed to more quota in that ratio.

Buying more quota means your economy is doing good

 

[SQ8]

Now I wonder what countries need IMF loans the most..

 

[Bobby]

Moar money for the US and Euro pension funds!

Yes, yes it's trolling, but i dont think im that far from the truth.

Who gave you this idea...

 

[JanjaWeed]

Now I wonder what countries need IMF loans the most..

& now you know who to blame if IMF refuses the loan or goes hard on the countries who are at IMF's mercy!

 

[Bobby]

Now I wonder what countries need IMF loans the most..

Taking loan is not bad thing..not able to pay ..is bad thing.

 

[T90TankGuy]

going by recent trends it seem Europe is in most need .

 

[Raphael]

For now, India's interests at international financial organizations are pretty convergent with those of BRICs, so

 

[Thəorətic Muslim]

^Like you dont have any hungry people in your country? Chinese Century

I'm amused that members here dont know that you must first fix your house before you dictate to others. I know the America card will now be played. We also have alot to fix in America.

$11 billion is alot of money for just 0.31% extra voting. IMF is pretty loaded.

 

[Dharmachakra]

Lol..... India buys 200 tons of gold from IMF at $6.7 billion in nov 2009. And 2 1/2 years later that 1045/ounce rules at 1600/ounce

more than 65% profit in real terms and brings the investment value to over $11billion as of today. Also as of Nov 2009 India holds over $5 billion of IMF SDR`s.

I see this more of a economic posturing to international community rather than thinking of the poor in the country itself.
But again, it has got its own advantages. Throw out some 11 billion now and milk more as soft loans and development loans in future.

Its a good thing that atleast we are saving some 11 billion from hands of corrupt politicians.