India calls for IMF restructuring, reversal of capital outflow

DAVOS: India on Saturday made a strong case for restructuring of the International Monetary Fund (IMF), saying it is not capable enough to deal with the problems of the world following the global financial meltdown.

"Institutions (like IMF) that we have, are not capable to deal with the problem...let us restructure these institutions. We have got a huge crisis, and the way institutions function needs to be rethought," Deputy Chairman of Planning Commission Montek Singh Ahluwalia said while speaking at a session at the World Economic Forum here.

Noting that $300 billions had gone out from the developing countries following the financial meltdown, he said, "Global community should put in place an institutional mechanism that will restore this flow."

Stressing that though world did need an IMF (like organisation), he said, "what we are doing is...putting bandages and all kinds of bits and pieces".

Ahluwalia further said several developing countries had accumulated huge foreign exchange reserves, because they thought that IMF was neither adequately equipped nor had sufficient operational flexibility to deal with the global financial problem.

Replying to a question that there were more than 180 countries in the world and even G-20 did not include all of them, Ahluwalia said, "In any institution, we should have best governance and be as inclusive as is consistent with functional efficiency."