Finance minister Arun Jaitley has demanded an increase in the shareholding of developing nations, including India, in the World Bank Group so as to reflect their share in the global economy even as he emphasised the need for a significant increase in the capital base of the global lender for financing development projects and programmes needed for achieving the United Nations' Sustainable Development Goals (SDGs).
To highlight the very high demand for development finance, he quoted a World Bank report admitting inability to support elevated levels of lending beyond 2018.
IFC, an arm of the World Bank, which is already capital constrained, is now faced with the challenge of mobilising over $100 billion per year for climate finance.
Speaking at the plenary meeting of the Development Committee, the ministerial-level forum of the World Bank Group and the IMF for intergovernmental consensus-building, on development issues, in Lima, Peru on Sunday, Jaitley also called on developed countries to fulfill their commitment of mobilising an additional $100 billion per annum for climate finance.
Jaitley represents the constituency consisting of Sri Lanka, Bangladesh, Bhutan and India in this ministerial-level forum.
He said that the consultations on the World Bank's proposed `Environment and Social Framework' must ensure that the new framework is realistic, simple to implement and affordable in terms of cost and time.
Jaitley also participated in the restricted session of the International Monetary and Finance Committee (IMFC) of the IMF and the informal gathering of the World Economic Leaders, organised by the IMF and the World Economic Forum in Peru yesterday.
IMFC is a key body providing strategic direction to the work and policies of the IMF.
The closed door discussions centered on moderation of global growth and heightening of risks and volatility.
Later, the finance minister participated in the panel discussion on 'The Search for Growth and Stability amid Deflation and Divergence', organised by Financial Times and Citi Group. Speaking on the occasion, Jaitley said that the economic conditions in India are reasonably good, notwithstanding two consecutive years of below normal monsoons.
He said that the commodity and oil prices decline have provided fiscal space for enhanced public sector investments in infrastructure and irrigation. Consequently, the country has witnessed a staggering 35 per cent increase in the indirect tax collections in the first six months of the current fiscal year, he said
Jaitley expects public investments in infrastructure to play a catalysing role in reinvigorating the private sector investments.
Inflation has declined from 11 per cent to 3.7 per cent during the last 15 months, which have also resulted in reduction of the bank rate and cost of capital, the minister added. He said the country is firmly on the path of fiscal discipline and has contained the fiscal deficit at 4 per cent (lower than targeted) last year.
Jaitley said FDI flows into the country have been robust. He cited reports in foreign media that during the last six months, India was the leading destination for investments in greenfield projects, demonstrating the high degree of confidence of the global investors.
The financial and forex markets in the country are also stable, notwithstanding recent global volatility, the minister added.
Other panelists included Brazilian finance minister Joaquim Levy and noted economic commentator Martin Wolfe.
Finance minister Arun Jaitley is currently on an official tour to Peru to attend the Annual Meetings of the International Monetary Fund and the World Bank and other associated meetings. He is accompanied by RBI governor Raghuram Rajan, secretary, economic affairs Shaktikanta Das, chief economic adviser Arvind Subramanian besides other officials.