India Inc hails Brics pact to set up New Development Bank
Jul 16 2014 , New Delhi
"Agreements on setting up of the BRICS New Development Bank and the BRICS Contingency Reserve Arrangement are indeed historic. These will take economic cooperation amongst BRICS countries to altogether new and higher level and open up new avenues for engagement," Ficci President Sidharth Birla said.
"The work of the Bank will be guided by our own development experience and it will support projects that meet the growth priorities of BRICS nations. The Indian business fraternity has been strongly supportive of these moves and we are enthused that these ideas have come to fruition," he said.
In a major victory for India, the BRICS Summit decided to establish a new development bank with an initial authorised capital of USD 100 billion for which the initial subscribed capital will be equally shared by the founding members, a point New Delhi emphasised to prevent domination by any of the members.
The agreement on establishing the bank and a contingency reserve arrangement came at a Summit meeting of the five-nation BRICS grouping in which Prime Minister Narendra Modi launched his first multilateral engagement with global leaders.
"The Bank will help fund infrastructure and sustainable development projects not only in the BRICS countries but in other developing economies also. This is an excellent move by the BRICS leaders and could hedge off any possible future economic crises as well as be a very important step towards reconfiguration in the international economic governance," CII Director General Chandrajit Banerjee said.
However, Assocham President Rana Kapoor said: "The BRICS development bank must find ways to raise resources to the extent of many times over the USD 100 billion, sort of seed capital, since the development requirements of the emerging economies are huge requiring big-time resources. India alone needs in excess of USD one trillion in infrastructure".
Kapoor said the decision was a strong signal to the rest of the world about the growing economic clout of BRICS nations -- Brazil, Russia, India, China and South Africa.
"The Bank aims at funding infrastructure projects in developing nations would lead for the betterment of stalled projects in India. Since 2009, when BRICS leaders met for the first time, launch of such bank was much needed to counterbalance the volatile economic conditions," PHD Chamber of Commerce President Sharad Jaipuria said.
The idea of establishing a development bank was conceived in Delhi in 2012 and approved in Durban last year.
BRICS accounts for more than a quarter of the world's land mass, 40 per cent of its population and a combined GDP of USD 24 trillion.