India is among the major beneficiaries of far-reaching reforms in the governance of the International Monetary Fund (IMF), which was initiated at the meeting of the finance ministers of the group of 20 (G20) nations in South Korea on Saturday.
''What we have achieved is significant,'' declared Pranab Mukherjee, the Indian finance minister. ''An agreement has been reached on IMF reforms. There will be a shift in quota shares to dynamic emerging market developing countries (EMDCs) and to under-represented countries, of over six per cent, while protecting the voting share of the poorest.''
India's rank in the IMF in terms of quota will improve to eighth position from the current 11th, said Mukherjee in the South Korean city of Gyeongju. India's quota share in the IMF will improve to 2.75 per cent from the present 2.44 per cent.
Dominique Strauss-Khan, the managing director of the fund, described it as ''a historical moment, making for the biggest reform ever in the governance of the institution.'' Europe will lose two seats in the 24-member board to developing countries and will also transfer six per cent of overall votes to these nations.
Mukherjee pointed out that the developing countries had maintained that the quota share should reflect ground reality and economic strengths, else the institution's credibility would be eroded.
Last year, the G20 had agreed to shift about five per cent of the voting rights to developing countries. Saturday's moves would mean China would emerge as the third most powerful member of the fund, up from six, and India eighth. The quota share in the IMF is based on parameters including GDP, foreign exchange reserves and openness of doing business.