India’s new proposal on ODA finds acceptance in G-20

In the G-20 meet, India mooted a new approach to official development assistance (ODA) making it contributory for all countries, instead of ...

In the G-20 meet, India mooted a new approach to official development assistance (ODA) making it contributory for all countries, instead of assistance being a dole from the rich to the poor countries. The proposal found acceptance at the ministerial meeting of the Group.

The proposal was mooted by the RBI governor Bimal Jalan in one of the sessions and was discussed among the members. The contribution by each country would be in proportion to its capacity to pay.

India has

strong
fundamentals: Bimal Jalan

New Delhi: India has strong fundamentals such as low inflation, good growth and low current account deficit so as to prevent any financial crisis, RBI governor Bimal Jalan said. “A stable macro-economic environment with low inflation, low current account deficit and reasonable growth is essential to prevent crisis. India has all the three—inflation around 3 per cent, current account deficit below 1 per cent and growth above 5 per cent”, Jalan told the meeting of G-20.
The RBI Governor said short-term banking capital should be avoided for financing investments and growth, while FDI and portfolio investments have to be encouraged in management of the capital account.

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The G-20 also pressed for the need to remove trade barriers among the developed and developing nations while again reiterating its commitment to fight terrorist funding. The Group also called for reduction of poverty in some of the ‘world’s poorest countries’.

Addressing a press conference at the conclusion of the two-day conference, finance minister Jaswant singh said the discussions focussed on globalisation, crisis prevention, stopping funds to terrorists, development and aid.

India handed over the chairmanship of G-20 to Mexico which would hold the fifth ministerial meeting in 2003.

The Group resolved to combat terrorist funding and continue efforts to eliminate financial irregularities such as money laundering plaguing the world economy.

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“While the meeting in Canada was shadowed by the events of September 11, 2001, today the recent tragic events in Bali and Moscow reinforce our resolve to combat terrorism and those that would fund it,” the G-20 finance ministers and central bank chiefs said in a statement. “We also agree to continue our efforts to eliminate other abuses of the financial system, particularly money laundering,” the statement added.

On India’s initiative in stopping financing of terror, Jalan said that while ‘hawala’ would continue to be illegal, India would encourage alternative non-banking channels for transfer of funds from abroad such as through post office.

Several countries have legalised hawala and there were suggestions from other countries that India too follow suit. Jalan, however, clarified that hawala would continue to illegal.