Inclusion, crypto roadmap, multilateral bank reforms to be India's G20 legacy

A common global template for crypto assets, capital adequacy reforms of multilateral development banks (MDBs) yielding additional lending capacity of $200 billion in the next decade, a financial inclusion plan for the next three years and global sovereign debt roundtable may turn out to be the legacy of India's G20 Presidency. Sources say proposals and recommendations by the finance track to the effect will be taken up in the G20 summit meeting this week in New Delhi.

Apart from the three key issues, the deliberations and recommendations of the finance track in the build up to the summit meeting also centred around sustainable and environmentally conscious development of cities, managing global debt, climate finance, sustainable development goals, and macroeconomic consequence of food and energy security in the context of Russia-Ukraine war.

The finance track had 27 deliverables, out of which seventeen have been welcomed and ten endorsed and will now be taken up at the apex level during the summit. The source, however, points out that a language of consensus has not been arrived at on the war and the food and the ensuing concerns over food and energy security.

"On crypto, the roadmap has almost been arrived at subject to approval by the leaders. The roadmap and building blocks have all been discussed and the way forward is also clear. The roadmap being taken up by the IMF will be the next step," the source says.

On the reforms roadmap at MDBs, the finance track has recommended G20 independent review of the capital adequacy framework, according to the source. "If you go by the recommendation, the reforms will yield additional lending of $200 billion in the next decades. We are looking at 21st century ways of utilising resources, raising resources and having a greater leverage in supporting developmental activities," the source points out.

"The MDBs themselves have been encouraged to see the scope of the discussion and its implementation. We expect this will enhance the strength of the multilateral banks in dealing with the emerging challenges. India’s presidency has articulated the voice of the global South. When we articulated the position from the point of view of the global south point of view it gained a lot of traction," the source points out.

On yet another issue which could be the legacy of India's G-20 presidency – financial inclusion – the source mentioned that a Financial Inclusion Action Plan (FIAP) for a period till 2026 has been laid down. "FIAP is clearly our legacy," the source points out. It may be noted that the FIAP has been released on Wednesday listing the objectives, key action areas and cross-cutting issues for 2024-26.

According to the FIAP document, the key action areas are financial inclusion of individuals and MSMEs, promoting open interoperable reliable inclusive and secure digital infrastructure to rapidly advance the provision of digital financial services for financial inclusion, among others.

The source points out that a global sovereign debt roundtable has also taken shape under India's G20 Presidency. "This roundtable will continue as an institution in the future. This is also a legacy we will give to G20," the source says.