India, UK welcome US Congress passing IMF quota reform

LONDON: India and UK on Wednesday welcomed the passing of IMF quota reforms by the US Congress saying this will make the multilateral institution stronger and more legitimate.

"We are pleased that the US Congress has agreed to ratify the 2010 reforms of IMF quota and governance, which will make the IMF a stronger and more legitimate institution," said a joint statement issued after a meeting of India's Finance Minister Arun Jaitley and UK Chancellor of the Exchequer George Osborne.

The US Congress had last month passed a legislation approving long-pending quota reform of International Monetary Fund (IMF) that will give more voting rights to emerging economies like India and China in the functioning of the organisation.

The Washington-headquartered IMF reviews members' quotas once in five years and the last such review took place in December, 2010. India has already consented to its quota increase under the review.

The 2010 reforms were originally propelled by Washington, and the White House, under President Barack Obama, has repeatedly endorsed them.

However, the US Congress has refused to sign the deal, with some legislators not wanting to contribute more money to the IMF and others concerned about any erosion to the dominant US role at the Fund.

Once the review takes effect, India's share will increase 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 IMF, up from the 11th position.

Emerging economies like India, China, Brazil and Russia have been asking for increased voting rights in IMF, which would reflect their growing share in world economy.

The IMF quota reforms are aimed at giving more voice and voting power to the emerging economies with regard to the functioning of the multilateral body.