In a significant reflection of the country's growing economic clout, India will shoot up to the eighth place in the Board of the International Monetary Fund (IMF) once the G-20 countries approve the quota reforms that have already been proposed.
"India will move to the eighth position in the IMF Board from its present 22nd position. We will get much more in the quota share once the G-20 leaders take a political decision to approve what has been decided by the IMF on quota increase in 2008," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here, briefing on the deliberations ahead of the G-20 summit beginning on Thursday.
While the decision was taken by IMF two years ago, the approval by the G-20 Finance Ministers last month in South Korea has added significantly to its merit and the decision at the highest political level in the G-20 will amount to a "seal of approval" that can be implemented thereon.
Ahluwalia said IMF reforms of six per cent shift in quota have helped India and China to some extent.
With the eighth-largest quota, India gets much more in the quota share. China is the third-largest beneficiary after India.
Strictly speaking, at present the IMF Board has 20 members and the decision has been approved by a number of countries. About 15 more, however, have to approve it.
"We will not not get marginalised. Our vote is more. Ultimately these organisations go by the consensus on ultimately how you are respected and what alliances you make," Ahluwalia said.
On current account deficit induced by excessive financial flows from abroad, the Planning Commission Deputy Chairman said a three per cent level of Current Account Deficit (CAD) is "not too high at all" this year or the next year.
"I am quite comfortable with three per cent deficit. $55 billion inflow is ok. Another $20 billion dollars is also ok. If it goes upto $100 billion and if you ask me on whether rupee should be appreciated, I will say no. The rupee will reflect volatility and temporary eruption," he said.
On a US proposal that countries should limit their CAD to four per cent of gross domestic product (GDP), Ahluwalia said he did not not think there was any unanimity on the subject.
"I don't there is any formal proposal. One of the mutual assessment process (MAP) currently on in the G-20 was how to balance sustainable flows." He said four per cent may be appropriate.
"If you are a country which can absorb investment in long term infrastructure, you can run a four per cent deficit. If you are a big country it will have a systemic impact. If you are a small country it will not have a systemic impact. Our view is that there is sustainable surplus depends on country to country," Ahluwalia said.
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