The two officials explored various reforms needed in MDBs, especially following recommendations from the Independent Expert Group (IEG) set up during India’s G20 Presidency. These recommendations aim to drive a ‘triple agenda,’ which includes eliminating extreme poverty, boosting shared prosperity, and supporting global public goods.
A vital aspect of this agenda is tripling sustainable lending levels by 2030 and developing a flexible funding mechanism for engaging investors aligned with the MDB mission.
Sitharaman noted her anticipation for the World Bank to implement the IEG’s suggestions and stressed the importance of continuous monitoring of these reforms. According to the Finance Ministry’s post on X, the reforms would ensure that MDBs remain effective in addressing global challenges.
Union Minister for Finance and Corporate Affairs Smt. @nsitharaman met Mr. Ajay Banga, President @WorldBank on the sidelines of the World Bank and IMF #AnnualMeetings2024, in Washington DC, today.
The two discussed issues related to private capital participation in Global Public… pic.twitter.com/tBWMdc2S7b— Ministry of Finance (@FinMinIndia) October 23, 2024
Broader consultation needed for Bretton Woods institutions
Sitharaman also emphasised the need for a broader consultation process on the advisory mechanism co-convened by the World Bank and the IMF. She highlighted this as essential, especially as the Bretton Woods institutions, which include the World Bank Group and the IMF, approach their 80th anniversary.
In response, Ajay Banga acknowledged the progress made in implementing the IEG’s recommendations. He reiterated the World Bank Group’s focus on creating bankable projects and fostering collaboration with India, particularly in areas such as skilling, water management, and urban development.
India’s cautious approach to FDI
On a separate occasion at the Wharton Business School on October 22, Sitharaman underlined India’s position on foreign direct investment (FDI).
“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,” she stated.
She pointed out that the Modi government’s long-term development strategy rests on four key pillars: infrastructure, investment, innovation, and inclusiveness. This strategy aims to transform India into a developed nation by 2047 while ensuring that foreign investments align with national security and economic priorities.
(With agency inputs)