India will rise to 8th position in IMF ranking

India will improve its IMF rank by three notches to 8th position as G20 decided to increase quota of emerging markets in the lending agency by over 6%. India’s rank in IMF will rise to 8th position, finance minister Pranab Mukherjee said. “What we have achieved is significant. The quota share (of India in the IMF) will improve to about 2.75% (from the present level of 2.44%),” Mukherjee added. Similarly, China will see an improvement in its ranking to the third position from the present sixth. Quota represents the relative position of members of the IMF. It is based on various parameters like country’s GDP, openness, forex reserves etc. The finance minister said the quota reforms will give legitimacy to the IMF in the new world economic order. India and other emerging market economies have been demanding reforms in the IMF to give more powers to them in line with their share in the global economy. Emerging market economies contribute around 47.5% to the global economy in terms of purchasing power parity, but have only 39.5% share in the IMF. Their share will now increase to over 45.5% in the 187-nation body IMF. Now next phase of reforms will start in 2013.

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