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FM Sitharaman met World Bank President Ajay Banga and discussed reforms in Multilateral Development Banks among other things
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman met Ajay Banga, President World Bank on the sidelines of the World Bank and IMF Annual Meetings 2024, in Washington DC, on October 23, 2024. (Image:
Ministry of Finance X)
Finance Minister Nirmala Sitharaman on Wednesday met World Bank President Ajay Banga and discussed reforms in the Multilateral Development Banks among other things.
The two discussed issues related to private capital participation in Global Public Goods, Energy security, and Multilateral Development Banks (MDBS) reforms on the sidelines of the World Bank and IMF Annual Meetings in Washington.
Multilateral Development Banks
Multilateral Development Banks (MDBs) are international financial institutions created by multiple countries to promote economic development, reduce poverty, and foster cooperation in developing regions. These banks provide financial and technical assistance for large-scale infrastructure projects, social programs, and other development initiatives.
MDBs are typically funded by member governments, which provide capital and guarantee loans. They offer grants, loans at low interest rates, and technical advice to developing countries, supporting projects in areas like energy, transportation, education, and health.
Examples of major MDBs include World Bank and Asian Development Bank.
The Finance Minister said that she is keenly looking forward to the World Bank taking forward the IEG’s recommendations on MDBs reforms from India’s G20 Presidency and also requested regular monitoring of the implementation of the recommendations going forward, the finance ministry said in a post on X.
Independent Expert Group (IEG), appointed under the auspices of the 2023 Indian G20 Presidency, recommended a triple agenda of reforms to MDBs.
The three elements of this agenda are adopting a triple mandate of eliminating extreme poverty, boosting shared prosperity, and contributing to global public goods tripling sustainable lending levels by 2030; and creating a third funding mechanism that will permit flexible and innovative arrangements for purposefully engaging with investors willing to support elements of the MDB agenda.
Sitharaman also stressed the need for a broader consultation process on the advisory mechanism jointly convened by the World Bank and IMF for discussing Bretton Woods Institutions as they turn 80 years old.
The Bretton Woods Institutions are the IMF and the World Bank Group, established in 1944 at a conference in Bretton Woods, New Hampshire in the US.
Banga noted substantial progress on the IEG recommendations, which are set to be presented at the G20.
He emphasised the WBG’s focus on jobs, knowledge frameworks, and bankable projects and reiterated its emphasis on collaborating with India’s budget priorities, including skilling, water and sanitation, and urban development.
‘India Can’t Accept FDI Blindly’
In another interaction, Sitharaman said India will impose restrictions on foreign direct investment (FDI) when necessary to protect national interests, particularly given its location in a strategically sensitive region.
During an interactive session at Wharton Business School on October 22, she also emphasised that the Modi government’s development strategy focuses on four key areas: infrastructure, investment, innovation, and inclusiveness, to transform India into a developed nation by 2047.
“I cannot blindly accept FDI simply because we need investment, unmindful of where it is coming from. We want business, we want investment, but we also need some safeguards, because India is located in a neighbourhood that is very, very sensitive,” Sitharaman said.
(With PTI inputs)
