ISTANBUL: India has called for expeditious implementation of the automatic exchange of tax information saying it would help in tracking illegal money stashed in foreign banks.
Raising the issue at the recently concluded meeting of the G20 Finance Ministers and central bank governors here, Minister of State for Finance Jayant Sinha advocated "full and fast implementation" of Automatic Exchange of Information within the agreed time-frame.
"This would help India to trace transactions of money illegally earned or stashed in foreign banks without paying appropriate taxes in the countries where those transactions took place," Sinha said.
During his intervention, Sinha expressed concern over the unconventional monetary policies adopted by a number of advanced economies.
He emphasised on the need for having an effective mechanism to deal with negative spillovers that may arise due to these policies or due to unexpected and disorderly withdrawal of these policies in future.
"I highlighted paradox of Quantitative Easing in the US, Japan, EU (and that) results in tightening of long term investment flows in emerging markets due to QE exit worries," he said in a tweet.
Sinha also raised the issue of quota reforms at the International Monetary Fund (IMF) with a view to increase the representation of developing countries in the multilateral lending agency.
"India called for strengthening the IMF through implementing the 2010 quota and governance reforms and creating an environment for multilateral swaps to overcome such negative impact," Sinha said.
The quota reform, if implemented, will increase India's voting share in IMF from the current 2.44 per cent to 2.75 per cent, following which the country will become the eighth largest quota holder at the IMF, up from the 11th position.
India also called for addressing the concerns of developing countries while implementing the Base Erosion and Profit Shifting (BEPS) initiative and suggested that toolkits be prepared for its effective implementation.
The leaders of 20 developing and developed countries in Brisbane in November also endorsed the action plan to tackle BEPS which is to be finalised in 2015, to make sure companies pay their fair share of tax.
The BEPS initiative would ensure that tax is paid where profits are made.
Sinha also said a very high priority needs to be given to investment including that in infrastructure to achieve G20's collective growth objective.
"This should be done through taking policy measures to improve business environment, mobilisation of resources of multilateral banks and their technical expertise..," Sinha said.
He said this could also be undertaken through facilitation of long term financing from institutional investors and use of new financial models to promote infrastructure as an asset class.
India also called for early operationalisation of the Global Infrastructure Hub which has been set up following the last G-20 Summit for the development of a knowledge sharing platform and to improve investment.
Located in Sydney, the Hub will contribute to developing a knowledge-sharing platform and network between governments, the private sector, development banks and other international organisations.
Sinha also emphasised the need to improve the quality of public investment processes including PPP models to attract further investment "which will act as a boost for growth of the economy and create the jobs we need".