Intervention made by Finance Minister, Mr. Arun Jaitley...
Intervention made by Finance Minister, Mr. Arun Jaitley during the Development Committee Plenary Meeting at IMF on April 18, 2015

Mr. Chairman,

1. Financing reconstruction and development globally is the prime reason for the existence of Multilateral Development Banks (MDBs). The "Billions to Trillions" document rightly underlines the challenges of meeting the sustainable development goals (SDGs). While the world has made considerable progress in eliminating extreme poverty, the development challenges of providing affordable healthcare to people, improving quality of education and development of skills, ensuring equality of opportunity for growth and development to all, particularly for women and the marginalised sections, and creating remunerative jobs for all, remain.

2. India has no hesitation in saying that countries primarily bear the responsibility for the development of their people. The first and the most important vehicle for growth and development would be deployment of domestic resources by mobilizing finance from public and private sources. However, domestic resources are not sufficient to bridge the large gaps in infrastructure, to produce required goods and services for their people, to create social protection mechanisms, and to achieve inclusiveness. The deficit in resources required has to be met internationally. MDBs have a big responsibility and also, a huge opportunity, to provide these investment resources.

3. The paper outlines a strategy that focuses on the use of MDB resources to mobilize more public and private finance, including through technical assistance and policy advice. The Paper, however, promises very little in financial resources to developing countries and, if I may so, in this respect should exhibits higher levels of ambition. While the financial landscape moves from billions to trillions, the MDBs remain largely stuck in lesser level equilibrium.

4. The World Bank Group with its AAA rating in the market is in a position to raise finances at very competitive rates. The World today offers great opportunity MDBs to raise large scale long term finance at very low rates of interest. The IBRD can today think of multiplying its balance sheet many times to provide resources.

5. To do so, MDBs including IBRD and IFC, will also need to raise additional capital. We the Governors, must encourage these institutions to create additional lending capacity by raising capital, and to innovatively borrow long term by capitalizing on the cheap long term resources, available in abundance.

6. To conclude, I must underline that, In spite of decades of development work, more than a billion people still live in extreme poverty, one in every three person does not have access to a clean toilet, 1 billion people are without access to electricity, 2.9 billion people are without clean cooking fuel, and about 2000 children die of preventable diseases each year. The development task on our hands remains still formidable and daunting. We must rise to the challenge and do everything that needs to be done. Increasing the capacity of the MDBs to raise and provide development finance resources many times more than what these institutions do today will be our contribution towards achieving this goal.

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