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3rd G20 Finance Ministers and Central Bank Governors Meeting held in Venice, Italy; Nirmala Sitharaman attended virtually

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Third G20 Finance Ministers and Central Bank Governors MeetingThe 3rd G20 Finance Ministers and Central Bank Governors Meeting (FMCBGs) held on July 9-10, 2021 was hosted by Italy in its city Venice, Veneto. India was virtually represented by Union Minister Nirmala Sitharaman, Ministry of Finance. This was the first in-person Finance Track meeting since February 2020.

  • It was held as part of the G20 (Group of Twenty) Leaders Summit 2021, which will be hosted by Italy in October 2021.
  • The discussions were held on a wide range of issues including global economic risks and health challenges, policies for recovery from the CoVID-19 pandemic, international taxation, sustainable finance and financial sector issues.

At the end of the meeting, an official Communique was released. Following are the key points and endorsements from it:

i.The Ministers and Governors endorsed the key components of the two pillars i.e. reallocation of profits of multinational enterprises and an effective global minimum tax.

  • These were set out in the “Statement on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy” released by the OECD (Organisation for Economic Co-operation)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on July 1, 2021.

ii.They also endorsed the G20 Menu of Policy Options on Digital Transformation and Productivity Recovery, which provides policies and good practices to make better use of the opportunities of digitalisation.

iii.They endorsed the G20 Policy Agenda on Infrastructure Maintenance for preserving infrastructure assets over their life-cycle.

iv.They also endorsed the G20 Recommendations for the Use of Policy-Based Lending to boost MDBs (multilateral development bank) coordination, complementarity and effectiveness.

v.It was decided that G20 Sustainable Finance Working Group (SFWG) will deliver a multi-year G20 Roadmap for sustainable finance in synergy with the Financial Stability Board (FSB) in October meeting of FMCBGs.

vii.They also supported the proposal of a new IMF (International Monetary Fund) general allocation of Special Drawing Rights (SDRs) in an amount equivalent to USD 650 billion.

viii. They reaffirmed the use of all available policy tools to address the adverse consequences of COVID-19.

ix.They welcomed the report of the G20 High-Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response.

Key points from Indian Side:

i.Indian side appreciated the Italian G20 Presidency for identifying three catalysts of resilient economic recovery from the pandemic viz. Digitalization, Climate Action and Sustainable Infrastructure.

ii.India as the co-chair of G20 Framework Working Group of the G20, along with the United Kingdom (UK) will continue to play a key role in bolstering economic growth.

iii.An international coordination and cooperation is needed to tackle CoVID-19 variants.

iv.There is also a need for climate action strategies based on the principles of the Paris Agreement for their timely fulfilment.

Recent Related News:

Minister of State for Education Sanjay Dhotre virtually represented India in two G20 meetings – G20 Education Ministers meet 2021 & G20 Ministers for Labour & Employment meet 2021. Minister of Public Education of Italy, Patrizio Bianchi chaired the G20 Education Ministers Meet 2021.

About Group of Twenty (G20):

The 2021 G20 is under the Italian Presidency. It is focusing on three broad, interconnected pillars of action: People, Planet, and Prosperity.
Members– 20 (19 countries + European Union)
Establishment– 1999