Quotas
IMF constitution represents a departure in the formation of international organisations. It is financed by the participating countries with each country contribution fixed in terms of quota. Quotas were fixed on the following basis.
(i) 2 per cent of national income;
(ii) 5 per cent of gold and dollar reserves;
(iii) 10 per cent of average annual imports;
(iv) 10 per cent of maximum variation in annual exports;
(v) The sum of (i), (ii), (iii), and (iv) increased by the percentage ratios of average annual exports of national income.
It goes without saying that the quotas of all the countries taken together determine the major financial resource of the fund. The borrowings from member countries and income from operations and investments constitute another form of resources of fund moreover the contributed quota of a country determine its borrowing rights and voting strength. Each member nation of the IMF is required to subscribe its quote partly in gold and partly in its own currency. Specifically member nations must contribute gold equal to 25 per cent of its quota or 10 per cent of its gold stock and U.S dollar holdings, whichever is less. The portion of subscription paid in a nation own currency is generally paid in the form of a deposit balance in favour of the IMF held in the nation central bank. Thus the fund gets a pool of foreign currencies to lend together with gold which enables it to acquire additional amounts of currencies whenever its initial supply of some currencies becomes depleted.
|
Country |
Quota |
Gold subscription |
|
U.S.A |
6,700 |
1,672 |
|
U.K. |
2,800 |
700 |
|
Germany |
1,600 |
400 |
|
France |
1,500 |
375 |
|
Japan |
1,200 |
300 |
|
Canada |
1,100 |
275 |
|
Italy |
1,000 |
250 |
|
India |
940 |
162 |
The quotas are reviewed every five years and adjusted from time to time by the fund. In fact the enlargement of quotas from time to time reflects the fund’s appraisement of the increase in need for international liquidity. After the third revision of quotas in 1970, the total member countries quotas stand at present at about $29 billion. Indian’s quota is about $940 millions. India is thus the eighth largest quota- holder today. In table above we have enlisted the quotas of first eight IMF member countries in order of their rank.
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