The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today gave its approval for establishing the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement (CRA). The New Development Bank will mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement existing efforts of multilateral and regional financial institutions for global growth and development. The establishment of the Bank will help India and other signatory countries to raise and avail resources for their infrastructure and sustainable development projects. It would also reflect the close relations among BRICS countries, while providing a powerful instrument for increasing their economic cooperation. The BRICS CRA proposes to provide short-term liquidity support to the members through currency swaps to help mitigating BOP crisis situation, in case such a situation arises. The BRICS CRA will help India and other signatory countries to forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability. It would also contribute to strengthening the global financial safety net and complement existing international arrangements (from IMF) as an additional line of defence. The Agreement will enter into force and the Bank will begin operations only after all member countries deposit their instruments of ratification with Brazil. It will also provide the force of law to the commitments made by India in the inter-governmental agreement of the NDB including privileges and immunities that are to be extended to the Bank and its employees as specified in the Articles of Agreement. Central Banks of the member countries will also have to finalize an Inter-Central Bank Agreement containing the operational details of swap transactions and the Standing Committee`s Operational Procedures (SCOP) before the arrangement can be operational. Signing of the Agreement for the establishment of the New Development Bank is expected to allow India to raise and obtain more resources for the much needed infrastructure development, the lack of which is coming in the way of inclusiveness and growth as of now. Besides, the governance structure and decision making in the Bank will be equitable unlike the existing multilateral development banks. So far infrastructure financing in India has been done from two public sources: Government and existing multilateral development banks. These have been supplemented by private sector contributions through Public-Private Partnership projects. However, in the context of fiscal consolidation, declining resources of existing MDBs and risk-averse private sector, the New Development Bank to be established by BRICS countries will make available additional resources thereby recycling the savings accumulated in emerging countries which are presently being locked up in Treasury bonds having much lower returns. Signing of the Agreement is the first step towards economic cooperation of BRICS countries for pursuance of common goals. BRICS CRA will ensure equity and inclusiveness by providing a backup safety net arrangement in place that will allow the Government of India to go ahead with its necessary and bold policy decisions without being concerned about the international economic development that may lead to domestic imbalances and worsen BOP position. The BRICS CRA is expected to serve the needs of our emerging economy in boosting access to additional foreign exchange reserves, should such situation arise. So far IMF support is the primary safety net that is available to India in case any BOP crisis situation arises. Pending the IMF governance reforms, India does not have much say in the IMF decisions. The proposed CRA will provide an alternative approach. This will also provide yet another window for our economy to engage with the BRICS in a more fruitful manner. |
Read,Write & Revise.Minimum reading & maximum learning
26 February 2015
Agreement on the New Development Bank and the #BRICS Contingent Reserve Agreement
Subscribe to:
Post Comments (Atom)
Featured post
UKPCS2012 FINAL RESULT SAMVEG IAS DEHRADUN
Heartfelt congratulations to all my dear student .this was outstanding performance .this was possible due to ...

-
Long Term Ecological Observatories for Climate Change Long Term Ecological Observatories (LTEO) for Climate Change Studies are one of ...
-
Need for speed: What telcos mean when they say 4G, LTE-A or VoLTE Telcos trying to outdo each other with their announcements of faster ne...
-
Status of Development of National Waterways -3 Kottapuram- Kollam stretch of West Coast canal (168 km) along with Champakara canal (...
-
The budget and higher education Increase in enrolment calls for improvement of the quality of education, which is in a dismal state ...
-
How to improve education There is no substitute to good teacher preparation; unless teachers are well prepared, their capacity to perfor...
-
Government constitutes Banks Board Bureau (BBB) to Improve The Governance of Public Sector Banks: Shri Vinod Rai, Former CAG of India, app...
-
World’s fastest supercomputer now has Chinese chip technology The Sunway TaihuLight supercomputer is more than twice as powerful as the ...
-
Cabinet clears national IPR policy, gives innovation a push Intellectual Property Rights policy aims to encourage creativity, innovation...
-
india cannot take shortcuts to development The private sector cannot replace the state when it comes to human development, which boosts...
-
In this regard, state government has granted no-objection certificates (NOC) for open field trials of 5 genetically modified (GM) crops....
Ganga Gram Yojana In Hindi” के बारे में सारी जानकारी देने का प्रयत्न किया है | “Ganga Garm Yojana” Saksham Yojna Applicant Detail
ReplyDeleteThis comment has been removed by the author.
ReplyDelete