The IMF said that the increased fund would be released to its member countries in proportion to their existing quota. In the new allocation, about $ 275 billion will go to the poor countries of the world.
Important decision of IMF to defeat Corona
The administrative body of the International Monetary Fund has approved an increase of US $ 650 billion in aid to help economically weaker countries battling the corona virus epidemic and economic slowdown.
The IMF said its administrative board has approved an increase in its reserves called Special Drawing Rights (SDRs), the largest increase in the institution’s history.
IMF Managing Director Kristalina Georgieva said, “This is a historic decision and a catalyst for the global economy at a time of unprecedented crisis. He said, “This will especially help our most vulnerable countries to deal with the outbreak of the COVID-19 crisis.”
Poor countries will get more help
The normal allotment of SDRs will be effective from August 23. The IMF said that the increased fund would be released to its member countries in proportion to their existing quota. In the new allocation, about $ 275 billion will go to the poor countries of the world. The agency said it is also looking into how wealthy countries can voluntarily send SDRs to poorer countries. Large increases in IMF resources were rejected by the Trump administration, but after President Joe Biden took office in January, Finance Minister Janet Yellen endorsed the proposal.
Relief package is needed
Earlier last week itself, International Monetary Fund’s Chief Economist Gita Gopinath had said that small businessmen and weak households need more relief package to improve India’s situation. Gita Gopinath appreciated the steps taken by the Government of India, from free food for the poor to health care expenses and the RBI’s stand. He said, the government may need to encourage vulnerable families, SMEs and increase education and capital expenditure.
appreciation of government efforts
The Chief Economist of the IMF said, given the ongoing health crisis, fiscal policy should provide agile and flexible policy support to support COVID-19 related developments. According to TOI, the government’s announcement to provide additional support to reduce the social cost of the pandemic is a good one. Explain that the government has made provision for free ration to the poor, additional expenditure on health infrastructure and free vaccines to the states.
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