NITI Aayog Advocates Reforms for Green and Sustainable Growth Funding

NITI Aayog, in collaboration with the International Development Research Centre (IDRC) and the Global Development Network (GDN), has called for regulatory measures on credit rating agencies and reforms in multilateral development banks (MDBs) to mobilize funds for green and sustainable growth in developing nations.

Restructuring of MDBs

The report emphasizes the need for a new policy toolkit and restructuring of MDBs to facilitate capital mobilization, effective project implementation, joint financing, risk-sharing, and the recognition of sustainable infrastructure as an asset class.

Global Funding Requirement

Highlighting a global requirement of $3 trillion over the next decade to finance green growth, the report stresses the urgency to mobilize both public and private finance. The report was compiled following a G20 international conference in July during India’s G20 presidency.

Challenges and Gaps in MDBs

The report points out significant performance gaps, transparency issues, and geopolitical impacts that MDBs are currently grappling with. The effectiveness and efficiency of these banks are being undermined, creating a void in financial and technical support for many developing countries.

Role of Credit Rating Agencies

The report raises concerns about the impact of credit rating agencies on developing nations seeking funds for green and sustainable growth. It recommends the regulation of credit rating agencies to ensure fair assessments for emerging countries.

SDR Allocation

Addressing the need for special drawing rights (SDR) allocation, the report suggests a rule-based and less discretionary approach to enable developing nations to benefit from SDR allocations.

Reforming WTO

Expressing concerns about rising protectionism, the report proposes reforms for the World Trade Organization (WTO). It suggests promoting plurilateral initiatives, regional trade agreements, and comprehensive partnerships as a way forward.

Month: Current Affairs - December, 2023

Category: Reports & Indexes Current Affairs