India raises spillover effect of monetary policy of West at G20

 India has urged the Group of 20 (G20) nations to establish an effective mechanism to deal with negative spillovers of unconventional monetary policies pursued by advanced economies.

At a recently concluded meeting of finance ministers and other officials from the G20 economies in Istanbul, Minister of State for Finance Jayant Sinha also raised the issue of quota reforms at the International Monetary Fund (IMF) in order to increase participation of developing countries, a statement issued in New Delhi said.

Reserve Bank of India Governor Raghuram Rajan too has been the most vocal opponent of the easy monetary policy pursued by the West.

The governor had recently warned that as these countries move to exit unconventional policies, some recipient countries would be leveraged, imbalanced, and vulnerable to capital outflows.

India has called for expeditious implementation of the automatic exchange of tax information saying that it would help track illegal money stashed away in foreign banks.

At the meeting, Sinha also advocated “full and fast implementation” of automatic exchange of tax information between countries within the agreed timeframe.

“This would help India to trace transactions of money illegally earned or stashed in foreign banks without paying appropriate taxes in the countries where those transactions took place,” Sinha said.

Quota reforms

Sinha raised the issue of quota reforms at the International Monetary Fund .
“India called for strengthening the IMF through implementing the 2010 quota and governance reforms and creating an environment for multilateral swaps to overcome such negative impact,” Sinha said.

The quota reform, if implemented, will increase India’s voting share in International Monetary Fund  from the current 2.44 per cent to 2.75 per cent, following which, the country will become the eighth largest quota holder at the International Monetary Fund, up from the 11th position.