China Pushes AIIB, Jaitley Sets Aside Funds for Lackluster BRICS Bank

AIIB Shines but No Funds from India

India has set aside Rs. 930 crore in the 2015-16 budget in addition to Rs100 crore that it had earmarked for the year ending 31 March Reaffirming its commitment to the BRICS New Development Bank (NDB), which is expected to rival the International Monetary Fund (IMF) and the World Bank, India has set aside Rs.930 crore in the 2015-16 budget in addition to the Rs.100 crore that it had earmarked for the year ending 31 March.

However, the budget has no amount allocated for the proposed $50 billion Asian Infrastructure Investment Bank (AIIB), which will be led by China.

At the sixth BRICS summit in Fortaleza, Brazil, in July last year, the five emerging economies agreed to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies through the NDB.

Each of the five members will contribute $10 billion to create a capital base of $50 billion for the NDB. But India’s attempt to host the headquarters of the bank was thwarted and China garnered the group’s support to locate it in Shanghai. India had to be content with the first presidentship of the bank.

The group also signed a treaty to establish the CRA with an initial size of $100 billion to help countries guard against actual or potential short-term balance of payments pressures.

While the NDB proposal awaits approval from all BRICS members, the AIIB has gained more currency in recent days. India, along with more than 20 other countries, signed the inter-governmental memorandum of understanding (MoU) on establishing the AIIB in October last year in Beijing. UK and Australia have signed up much to the chagrin of US which is opposing reform at IMF to accommodate China.