India close to picking candidate for New Development Bank

Washington: India is in the "final stages" of nominating candidate for the President's post of the USD 100-billion New Development Bank (NDB) to be headquartered in Shanghai, Finance Minister Arun Jaitley has informed fellow members of the five-nation BRICS bloc.

"As regards the President of the Bank, we are in the final stages of nominating the candidate," Jaitley said at the meeting of BRICS finance ministers and central bank governors on April 16.

India will preside over its operations for the first six years, followed by five-year terms for Brazil and then Russia.

The bank will be established by BRICS countries. India has ratified the provisions under the Bank and Contingent Reserve Arrangement (CRA). "We look forward to the ratification by all other countries," he said.

The announcement about the bank was made in July last year at the conclusion of the VIth BRICS Summit at Fortaleza.

BRICS is a grouping of five major emerging economies Brazil, Russia, India, China and South Africa.

The establishment of the bank will help India and other signatory countries raise and utilise resources for their infrastructure and sustainable development projects.

The NDB will be set up with a starting capital of USD 50 billion with a provision to increase it to USD 100 billion. Its CRA will have a USD 100 billion fund.

During the meeting, Jaitley also said India has been witnessing a series of changes with the opening of markets, along with radical tax reforms.

"In India, we have of late seen a huge sprout of changes. Our growth has risen to a stable 7.5 per cent and our deficits have declined significantly. The impact of our reforms appears to be very positive. We are opening markets, easing business activities and placing an emphasis on infrastructure spending as well as radical tax reforms," he added. The reduction in oil prices has helped the reforms process in India and "a lot will depend on how the world economy will move ahead in the next year", he added.

He stressed on creating an additional mechanism to finance infrastructure in "our economies as well as the developing world".

On economic recovery, he said it has been relatively weak, characterised by imbalances and build-up of financial market risks.

"Even more worrisome is the decline in potential growth in both advanced and emerging economies," he added.