ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Quotas are the IMF’s main source of financing. Each member of the IMF is assigned a quota, based broadly on its relative position in the world economy. The IMF regularly reviews quotas to assess their adequacy overall and their distribution among members.

Detailed explanation-2: -A Member’s Voting Power Quotas are a key determinant of a member’s voting power in IMF decisions. Each member has one vote per SDR 100, 000 of quota plus basic votes (same for all members). Access to Financing The maximum amount of financing a member can obtain from the IMF under normal access is based on its quota.

Detailed explanation-3: -Quota Reforms: As part of the Fourteenth General Review of Quotas (2010, India’s total quota has been increased to SDR 13, 114.4 million from SDR 5821.5 million. With this increase, India’s share would increase to 2.75 % (from 2.44%), making it the 8th largest quota-holding country in the IMF.

Detailed explanation-4: -Typically, a country’s government and the IMF agree on a program of economic policies before the IMF lends to the country. In most cases, a country’s commitments to undertake certain policy actions, known as policy conditionality, are an integral part of IMF lending. 4.

Detailed explanation-5: -External debt is the portion of a country’s debt that is borrowed from foreign lenders, including commercial banks, governments, or international financial institutions.