India's finance minister Nirmala Sitharaman highlighted the need for G20 to take collective measures to revive global growth. Sitharaman said it is the responsibility of the G20 nations, comprising 19 countries and European Union, to “navigate the global policy coordination" by taking strong steps towards “building buffers and catalyzing a second wave of reforms".
The G20 is a group of influential developed and emerging economies. The minister is leading the Indian delegation to the International Monetary Fund (IMF) annual meeting in Washington DC. She called for concerted action in the face of a global slowdown and highlighted that the emerging market economies, in particular, face the challenge of achieving economic growth and inclusive development while pursuing sustainable financing.
The FM emphasised on the importance of countries pursuing structural reform measures to counter the growth slowdown. She highlighted the measures unveiled by India, particularly the reduction of corporate tax rate. Sitharaman said India had reduced the corporate tax rate from 30% to 22%, thereby making it one of the lowest corporate tax imposing countries in the world today and this move is expected to spur investment.
The main issues discussed during the BRICS finance ministers and central bank governors meeting included those linked to the New Development Bank (such as membership expansion and enhancing the effectiveness of the utilisation of the NDB’s project preparation facility); developing the way forward on IMF resources as well as formulating a consensus co-operation on authorised economic operators programme.
The FM also highlighted India’s strong support for NDB’s membership expansion and encouraged the NDB management to continue the good progress achieved on this issue till date. As far as improving the effectiveness of the project preparation facility (PPF) is concerned, the FM indicated that sustainable recovery mechanisms need to be built into the PPF guidelines so that the assistance extended is recovered once the project loan is sanctioned.
With reference to the alternative proposal emerging at the current juncture with reference to strengthening borrowed resources of IMF, FM expressed a word of caution and indicated that borrowed resources cannot provide full confidence in extreme crisis situations as creditor nations themselves may be in stress.
