Chidambaram questions IMF's growth projection calls

Chidambaram further said that although the Fund has taken various measures to strengthen its surveillance activities, particularly with regard to spillovers, there was need for further reflection on it so that it could better foresee the significant global macroeconomic developments.

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"The surveillance should be forward looking and it should forewarn the member countries of the impending threats, if any, to the global economy," he said.

Chidambaram had earlier said the IMF needs to undertake a detailed study as to how the unwinding will unfold, what impact it will have on advanced and emerging market economies, and how they should deal with the evolving situation.

"The Fund must play a role in better informing the spillover effects in a globally integrated world, so that advanced economies can take them into account while formulating their policies," he had said.

During his intervention at the annual plenary meeting of the IMF Committee yesterday, Chidambaram expressed disappointment over delay in quota reforms in IMF and the World Bank to give greater voice to the emerging economies, saying the delay would impact their credibility, legitimacy and effectiveness.

"We are disappointed that the deadline for the 2010 Quota and Governance Reform of the Fund has not been met. There is no clarity, even after the passage of a year, as to when this will be finally achieved," the Minister said.

Chidambaram said, "in the absence of ratification of the 14th Quota review, and given its current commitments and possible needs in the future, it has had to place increasing reliance on the NAB and bilateral resources."

"The delay in ratification of the 14th Quota Review will only mean that the reliance on borrowed resources will increase. This is not desirable," he added.