India will be seeking to restructure multilateral financial institutions like the International Monetary Fund and World Bank which are out of sync with present-day challenges, a top official said on Monday.
These Bretton Woods bodies were created after the World Bank, and are largely focused on the direct lending which was necessary in the post-second world war period, India's G-20 Sherpa, Amitabh Kant, said.
He said 15x more resources can be ploughed in to fight various developmental challenges like education and health and achieve sustainable development goals by using innovative financial instruments like blended finance, credit enhancement and first loss guarantees.
"So you will need a restructuring of the multilateral financial institutions over a long period of time. And that is critical for the world. I mean, a lot of these are things which are doable within this year's presidency," Kant said during an Asia Society event in Mumbai late this evening.
Earlier in the day, Kant had said that the developed world had promised to provide climate finance of USD 100 billion per year for the developing world in 2009 but has yet to act on its commitment.
Harping on the same aspect in the evening, he said India's contribution to the carbon pool is over 1 per cent currently, whereas it should be at over 17 per cent if one were to look at it on a per capita basis.
The challenge before a country like ours is to industrialise without carbonising, and hence, such finance facilities will be of help, he stressed.
He said the G-20 has emerged as a very important platform on the world stage because the United Nations has "stopped to function and failed" to play a critical role in the Russian invasion of Ukraine.
"The way it's structured is that it's operated through the Security Council which comprises the veto power of the five large nations. Now, if one of the nations is at war, then how do you operate the security council? and therefore the United Nations has stopped to function, failed to play a critical role in the war," he rued.
This is where India's role as the president of the G-20 becomes important, Kant said, promising the best to the world.
"India's presidency will be very inclusive, it will be action-oriented, it will be decisive and very outcome-oriented. So let's hope that we are able to drive that," he said, adding that this requires a lot of hard work and relationship-building.
Speaking at the same event earlier, Swiss brokerage Credit Suisse's Neelkanth Mishra said since 1945, there has been a single world order and it is time to create another.
Mishra, who is also a member of the Economic Advisory Council to the Prime Minister, termed this as India's moment in the sun because it is trusted by all and is the leader of the global south.
Kant said India's presidency will also look at pushing through a fund created within World Bank to tackle crises like the Covid pandemic to help the world.
He said there is a need for consensus on the challenge of private cryptocurrencies that the world faces, and India will attempt to drive the same in the presidency as well.
When asked if any efforts will be taken to reduce the reliance on the dominance of the US dollar, Kant said we need to accept that this is the reserve currency for the world and attempts should be made to be a part of the global supply chain, reminding that China did the same in its growth story.
India needs to grow much higher than the present rate of about 7 per cent for over three decades to make it happen for itself, Kant added.
He recommended faster urbanisation, stressing that it should not be 'haphazard' like in the case of the financial capital.
India also needs about 12 states which grow at double digits over a long period of time to achieve her ambitions, he added.
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