Finance Minister discusses global economic outlook at 3rd G20 Finance Ministers and Central Bank Governors meet

The Union Finance Minister Nirmala Sitharaman on July 18, 2020, virtually participated in the 3^rd G20 Finance Minister and Central Bank Governors (FMCBG) meet held at Riyadh (Saudi Arabia).

In the meet, the Finance Minister discussed the global economic outlook in the evolving COVID-19 crisis as well as other priorities of the group for the year. In the first session of the meet, she also spoke about the G20 Action Plan in response to the COVID-19 pandemic.

In the virtual meeting, the Finance Minister of India also shared some of the policy measures taken by the Indian government to combat the pandemic, which includes, special support to agriculture and MSME sectors, direct benefit transfers, rural employment guarantee measures, and others.

Key Highlights:

•   In the virtual meet, Sitharaman emphasized that the G20 Action Plan needs to reflect how the economies have been balancing their supply-side and demand-side measures in response to coronavirus.

•   She also shared with her counterparts the way in which India has been working to ensure the balance through direct benefit transfers, credit schemes for liquidity, and employment guarantee scheme.

•   Finance Minister mentioned the G20 Action plan which includes a list of collective commitments under the pillars of economic response, health response, strong and sustainable recovery as well as global financial coordination which aims at coordinating G-20 efforts to fight the pandemic.

•   In the virtual meet, while laying out India’s economic plan, she referred to India’s comprehensive economic package in order to address the recovery and growth amounting to over 295 billion, about 10% of India’s GDP.

•   In the session, Sitharaman also spoke about the procyclicality of credit rating downgrades by the rating agencies along with its deterrent impact on policy options.

Developments on G20 Finance Track Deliverables:

In the second session of the meet, G20 Finance Ministers also discussed the developments on G20 Finance Track deliverables:

•   First, enhancing the access to opportunities for women, SMEs, and Youth as a priority agenda, especially at the time when the pandemic has been impacting the vulnerable sections of the society the most.

•   Second, while referring to the international taxation agenda and the intended deliverable of formulating a solution for digital taxation challenges, Finance Minister noted the progress on the agenda and mentioned that it is imperative that the consensus-based solution must be impulsive, simple, and based on the robust economic impact assessment.