The following points highlight the top ten advantages to India from IMF.
Advantage # 1. Independence of the Indian Rupee:
Before the establishment of the IMF, the Indian rupee was linked with the British Pound Sterling.
But Indian rupee has become independent after the establishment of IMF.
Its value is expressed in terms of gold. It is not determine d by the Pound Sterling. It means that Indian rupee is easily convertible into the currency of any other country.
Advantage # 2. Membership of the World Bank:
India has become a member of the World Bank also by virtue of its membership of the Fund. As a result, India has got several loan facilities from the World Bank for the development purposes.
Advantage # 3. Availability of Foreign Currencies:
The Govt., of India has been purchasing foreign currencies from the Fund from time to time to meet the requirements of development activities. The large amount of availability of foreign currencies has greatly promoted the economic development of the country.
Advantage # 4. Reputation in International Circle:
India is one of those six countries which have occupied a special place in the Board of Directors of the Fund. Thus, India had played a creditable role in determining the policies of the Fund. This has increased the India’s prestige in the international circles. India takes keen interest in the formulation of Fund’s policies.
Advantage # 5. Guidance and Advice:
Being member of the Fund, India got the expert opinion of the Fund for solving its economic problems. The attitude of the Fund towards India was always remained sympathetic. The Fund has given valuable to the Government of India with regard to the financing of the Five Year Plans.
Advantage # 6. Timely Help:
India has received timely help from the Fund to eliminate the deficit in its balance of payment. The Fund granted India loans to meet the financial difficulties arising out of the Indo—Pak conflict of 1965 and 1971. Otherwise, the fund has given timely help to solve economic crisis.
Advantage # 7. Freedom from Sterling:
Indian rupee was convertible into other currencies through the medium of sterling before becoming the member of the fund. With the fixation of par value of the rupee in gold, Indian currency is now freely convertible into any other currency.
Advantage # 8. Sale and Purchase of Foreign Exchange:
Fund has entrusted the sale and purchase of foreign exchange worth more than Rs. 2 lakh to Reserve bank of India. The latter cannot enter into any transaction of foreign exchange that is of the value of less than Rs. 2 lakh.
Advantage # 9. Economic Consultation:
In the financial management of Five Year Plans, IMF fund has given valuable advice to government of India from time to time. Many Economic Missions were sent to India by the Fund to suggest measures for its economic development.
Advantage # 10. Help during Emergency:
India got a large amount of financial assistance from the Fund to solve its economic crisis arising due to natural calamities like floods, earth quake, famines etc. and at the time of Chinese and Pakistani aggressions. In order to meet its balance of trade deficit in the wake of like in oil prices, India secured a loan amounting out of oil facility. Thus, India got help during the period of any emergency.
To sum up the discussion, we can say that India has gained in many way by being a member of IMF, e.g :.
(i) Indian rupee has become an independent currency for international payments,
(ii) India has received help to correct its balance of payments disequilibrium,
(iii) Being member of the Fund, India has also become a member of World Bank. As a result, India has received large financial help,
(iv) India has also received technical assistance from the Fund,
(v) India is always confident of receiving assistance from the Fund at the time of any emergency,
(vi) India has a key role in the policy-making of the Fund. As a result, India has an important place in international economic field. India is also a member of the Committee of 20 member countries.