G20 pledges to improve business environment, check tax evasion

Committing to resist protectionism, the G20 nations have pledged to improve business environment to promote growth and strengthen transparency to prevent cross border tax evasion.

The G20 Ministers also expressed concern over terrorist activities and called upon the member nations to expeditiously comply with international norms concerning exchange of information and freezing of terrorist assets.

The communique issued at the end of the two-day meeting of G20 Finance Ministers and central bank governors late last night also underlined the need for IMF quota reforms to give greater representation to emerging economies.

India was represented by Minister of State for Finance Jayant Sinha and RBI Governor Raghuram Rajan at the meeting.

Observing that global economic recovery continues to remain uneven, the communique said "we are determined to overcome these challenges and ... achieve our objective of strong, sustainable and balanced growth, and create jobs and foster inclusiveness."

Taking note of the sharp decline in oil prices, the communique said it will provide some boost to global growth with varying implications across economy.

"The outlook for oil prices remains uncertain. We will continue to closely monitor developments in commodity markets and their impact on the global economy," it added.

The falling prices, it said, would also enable some countries to reassess their fiscal policies and reduce "inefficient fossil fuel subsidies in favour of investment and better targeted transfers".

The communique also called for addressing the issues concerning volatile financial flows. "We will cooperate to manage spillovers arising from our domestic policies. We will stick to our previous exchange rate commitments and will resist protectionism".

The member nations committed to boost investment in their countries via concrete and ambitious investment strategies that will also support "our" collective growth objective.
"These strategies will include a set of policy measures that further improves the business environment and facilitates financial intermediation," it said.

Expressing disappointment over delay in IMF quota reforms, the communique said "We reaffirm that their earliest implementation remains our highest priority for the Fund. We continue to urge the United States to ratify the 2010 reforms as soon as possible".

Emerging counties, like India, China, Brazil and Russia have been asking for increased voting rights in IMF, which would reflect their growing share in the world economy.

Quota reform, if implemented, will increase India's voting share from current 2.44 per cent to 2.75 per cent, following which the country will become the eighth largest quota holder at the IMF, up from 11th position.