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The government may save about Rs 14,000 crore this fiscal as quota reforms at the International Monetary Fund (IMF) have hit a roadblock because US lawmakers failed to agree on the new funding mechanism.
The Indian government had earmarked Rs 14,000 crore in the current fiscal's Budget towards its contribution for higher share in the IMF.
However, with the delay in completion of 2010 quota reforms, India may not have to shell out its contribution within the current fiscal, ending March 31.
Although India had been pressing for early completion of the quota reforms, the postponement will be a big relief for the government which has been trying hard to restrict the fiscal deficit to 4.8 per cent of GDP in 2013-14.
The IMF reviews members' quotas once in five years and the last such review took place in December, 2010. India has already consented to its quota increase under the review.
Once the review takes effect, India's share will increase from the current 2.44 per cent to 2.75 per cent, following which the country will become the eighth largest quota holder at the IMF, up from the 11th position.
Worried over the failure of the US Congress to enhance contribution to the IMF, the multi-lateral funding agency has postponed the 15th quota review by one year to January 2015.
"Given the delay (of the 14th round), the executive board has concluded that additional time will be needed to complete its work on the 15th review," IMF said in a statement.
It also urged the member countries which have not yet accepted the 14th quota review, to ratify it without delay. The 14th general review of quota and the reform was adopted by the IMF in December 2010 to give greater voice to emerging economies.
The issues concerning completion of the 14th quota reform are likely to be taken up at the Spring Meeting of IMF and the World Bank which will be held in April, 2014.