India ready to buy USD 10 bn IMF bonds: Montek

Washington, Apr 26 (PTI) India is ready to buy about USD
10 billion (around Rs 50,000 crore) of International Monetary
Fund bonds, the Wall Street Journal said quoting India's
Planning Commission Deputy Chairman Montek Singh Ahluwalia.

"If the IMF can issue the securities, it's an easy way
for us to make a contribution," said Ahluwalia, who is in the
US to attend the Spring Meetings of the IMF and the World
Bank.

The IMF is finalising plans of its first bond offering
and is lining up BRIC countries including Brazil, Russia,
China and India as purchasers. The bond would be sold to the
central bank, not to individual investors.

Ahluwalia told the Journal that buying bonds is a better
alternative for India than making the IMF a loan as Japan has
done. That's because the Indian central bank could simply
purchase the bonds and hold them in its reserves. That
wouldn't require separate Indian government approval.

"Separately, Ahluwalia said that he believes India could
grow more rapidly than the 4.5 per cent the IMF forecasts for
India this year and 5.6 per cent for next year," the WSJ said.

The report further quoted Ahluwalia as saying that Indian
banks are relatively in good shape, though their lending is
still constrained. The government, he added, stands ready to
increase fiscal stimulus, although the amount depends on the
outcome of the Lok Sabha elections.

"We are both capable and interested in doing more
stimulus," Ahluwalia said.

Brazil and Russia haven't said how much they are likely
to spend on the bonds. British Prime Minister Gordon Brown
said at the G-20 summit earlier this month that China would
chip in USD 40 billion. But there is debate within China about
whether that would be too large a purchase.

Reserve Bank of India Governor Duvvuri Subbarao has said
that emerging countries should "get a bigger share in the
management of the IMF reflecting their growing strength in the
economy."

Efforts to triple the IMF's resources to USD 750 billion
are coalescing and the BRIC countries have joined in seeking
to contribute through a bond offer to help the IMF as a
temporary measure as they push for a stronger voice at the
institution. PTI DRR