3rd G20 FMCBG Meeting under India’s Presidency held in Gandhinagar, Gujarat

On July 17-18, 2023, the 3rd G20 Finance Ministers and Central Bank Governors (FMCBG) 2023 meeting under the Indian Presidency was held in Gandhinagar, Gujarat. It was jointly chaired by Union Minister Nirmala Sitharaman, Ministry  of Finance, and Reserve Bank of India (RBI) Governor Shaktikanta Das.

• The meeting concluded with a G20 Outcome Document and Chair’s Summary comprising 26 paragraphs and 2 Annexures.
• This FMCBG meeting was preceded by the 3rd G20 Finance and Central Bank Deputies (FCBD) meeting during 14-15 July 2023 in Gandhinagar.

Objective:

To review the outcomes of the G20 Finance Track and to seek guidance from Ministers and Governors on the way forward

Thematic Sessions:

The meeting was organised in five thematic sessions covering

1. Global Economy and Global Health
2. Sustainable Finance and Infrastructure
3. International Financial Architecture
4. International Taxation
5. Financial Sector & Financial Inclusion.

Participants:

520 participants across 66 delegations including Finance Ministers and Central Bank Governors from G20 member countries, Invitee Countries, and Heads of various International Organisations (IOs).

Endorsements:

i.The G20 FMCBGs endorsed G20 Report on Macroeconomic Risks Stemming from Climate Change and Transition Pathways

ii.The member also endorsed new G20 2023 Financial Inclusion Action Plan (FIAP) for the three years 2024-26.

What is FIAP?

It aims to advance financial inclusion of individuals and Micro, Small & Medium Enterprises (MSMEs) in G20 and beyond by focusing on promoting technological, innovations and digital infrastructure including DPI.

• India will lead the implementation of the new FIAP, as one of the Co-Chairs of Global Partnership for Financial Inclusion (GPFI), for the next three years starting from 2024.

iii.The G20 FMCBGs endorsed Roadmap for Implementation of Recommendations of the G20 Independent Review of MDBs’ Capital Adequacy Frameworks (CAF)’ which will help unlock more lending resources in Multilateral Development Banks (MDBs).

iv.The G20 Policy Recommendations for Advancing Financial Inclusion and Productivity Gains through Digital Public Infrastructure (DPI)’, developed under the Indian Presidency was also endorsed

• These policy recommendations will be instrumental in guiding the G20 and non-G20 countries to utilize DPI for boosting development processes for strong and inclusive growth.

Key Deliverables:

These include the following, among others:

i.Volume 1 of a Report of the G20 Independent Expert Group on Strengthening MDBs

ii.Progress in the debt treatment for countries under the Common Framework

iii.Guidance note for developing a globally coordinated framework for the regulation and supervision of crypto-assets

iv.Recommendations on Advancing Financial Inclusion and Productivity Gains through DPI to achieve financial inclusion of the last mile

v.Principles for Financing Cities of Tomorrow

Side Meetings:

These include the following,

 i.Infrastructure Investors’ Dialogue on ‘Leveraging Funding and Financing Mechanisms and Approaches for the Cities of Tomorrow’

ii.High-Level Tax Symposium on ‘Combatting Tax Evasion, Corruption and Money Laundering’

iii.Roundtable Discussion on Crypto Assets to discuss and deliberate on some of the key questions pertaining to the crypto asset

iv.Roundtable on the Report of the G20 Expert Group on Strengthening MDBs

v.Workshops on ‘Interlinking Fast Payment Systems (FPS)’ and ‘Achieving Growth-Friendly Climate Action and Financing for Emerging and Developing Economies’

Highlights from Discussions held during 3rd G20 FMCBG Meeting:

It should be noted that the discussions held during the Third G20 FMCBG meeting will inform the Leaders for the G20 Summit to be held in India in September, 2023. The G20 FMCBGs will meet next in October 2023 in Marrakesh, Morocco on the sidelines of 2023 Annual Meetings of the World Bank Group (WBG) and International Monetary Fund (IMF) from October 9 – 15, 2023.

Following are the highlights from discussions:

I.Discussions were held on the key deliverables of the Finance Track under the Indian G20 Presidency for 2023 along with global economic outlook and risks, including macroeconomic implications of food and energy insecurity, and climate change.

II.The Union Finance Minister, in her welcome remarks, reiterated the collective responsibility of G20 to steer the global economy towards strong, sustainable, balanced, and inclusive growth.

III.Under the priority of strengthening MDBs to address global challenges of the 21st century, members recognized the urgent need to strengthen and evolve the MDB ecosystem.

• A G20 Independent Expert Group on Strengthening MDBs was constituted by the Indian Presidency which has prepared Volume 1 of the Report on Strengthening MDBs, and Volume 2 is expected in October 2023.

IV.The G20 encouraged the efforts of the Global Sovereign Debt Roundtable (GSDR) towards strengthening communication to facilitate effective debt treatment. The GSDR is chaired by India, IMF and the World Bank (WB).

V.As India prioritized a need to consider macrofinancial implications of crypto assets, it presented high-level recommendations provided by the Financial Stability Board (FSB) regarding crypto-asset activities and global stablecoin arrangements. This was welcomed by G20 members.

Key Points:

i.The Indian Presidency has submitted a “Presidency Note” to all G20 members, which includes essential inputs for a Roadmap on crypto assets.

ii.This Roadmap will be part of the Synthesis Paper being prepared jointly by IMF and FSB.

iii.The Roadmap aims to establish a comprehensive policy and regulatory framework, addressing various risks, including those specific to emerging market and developing economies (EMDEs) and global implementation of FATF (Financial Action Task Force) standards.

iv.The Synthesis Paper and Roadmap will be presented before the G20 Leaders’ Summit in September 2023.

v.The meeting also saw the discussions on climate finance where members welcomed the recommendations on the mechanisms to support timely and adequate mobilization of resources for climate finance, prepared by the Sustainable Finance Working Group, along with Analytical Framework for SDG (Sustainable Development Goals)-aligned finance.

VI.Members welcomed the discussion on the Framework on Economic Vulnerabilities and Risks (FEVR) arising from pandemics, while taking into account country-specific circumstances.

VII.On the infrastructure agenda, members supported for work under the Indian Presidency’s priority of ‘Financing the Cities of Tomorrow’.

VIII.In the tax agenda, members appreciated the significant progress made with respect to the two-pillar international tax package and called for the finalization of the pending work as per the agreed timelines.

India and Indonesia Launched “India – Indonesia Economic and Financial Dialogue (EFD Dialogue)

During the meeting, the Indonesian Finance Minister Sri Mulyani Indrawati and her Indian counterpart Nirmala Sitharaman jointly inaugurated the India-Indonesia Economic and Financial Dialogue (EFD) in Gandhinagar, Gujarat to enhance collaboration on bilateral and international economic and financial matters.

• The EFD will promote shared understanding of global issues and enhance collaboration on macroeconomic challenges, global economic prospects, and bilateral investment relations. It will also extend cooperation in G20 and ASEAN (Association of Southeast Asian Nations) matters.

Others:

i.India’s Union Finance Minister also engaged in various bilateral discussions with her counterparts on the sidelines of the FMCBG meeting.

ii.The delegates were hosted for ‘Ratri Bhoj Par Samvad’ (Conversation over Dinner), and for cultural programs curated by the Government of Gujarat.

iii.Excursion events are also planned for the delegates to experience Gujarat through visits to Adalaj Step wells, Sabarmati Ashram, Sabarmati River Front, Patan and Modhera.

Recent Related News:

i.On 21st April 2023, the Ministry of Finance announced that the Government will release a new commemorative coin of Rs 100 denomination on 30th April 2023, for the 100th episode of Prime Minister Narendra Modi’s radio show Mann Ki Baat.

ii.On 26th April 2023, Union Minister Nirmala Sitharaman, Ministry of Finance (MoF), approved the upgradation of Rail Vikas Nigam Limited (RVNL) to a Navratna Central Public Sector Enterprise (CPSE) from a Category-I MiniRatna CPSE.

About Ministry of Finance:

Union Minister – Nirmala Sitharaman (RajyaSabha- Karnataka)
Minister of State (MoS) – Pankaj Chaudhary
Departments under the MoF – Department of Expenditure; Department of Economic Affairs (DEA); Department of Revenue; Department of Financial Services; Department of Investment and Public Asset Management (DIPAM) & Department of Public Enterprises.