Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman participated virtually in the Third G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting under the Italian Presidency. The two-day meeting held on July 9th and 10th, 2021 saw discussions 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.

The G20 Finance Ministers and Central Bank Governors reaffirmed their resolve to use all available policy tools for as long as required to address the adverse consequences of COVID-19.

Smt. Sitharaman appreciated the Italian G20 Presidency for identifying three catalysts of resilient economic recovery from the pandemic as being Digitalization, Climate Action and Sustainable Infrastructure and shared the Indian experience of integrating technology with inclusive service delivery during the pandemic.

The Finance Minister shared recent policy responses of Government of India to strengthen the health system and economy, including the efficient application of CoWIN Platform to scale-up vaccination in India. Smt. Sitharaman added that this platform has been made freely available to all countries as humanitarian needs outweigh commercial considerations in this extraordinary crisis. The Finance Minister stated that as the co-chair of Framework Working Group of the G20, India along with UK, views digitalization as an agenda that will continue to play a key role in bolstering economic growth.

Smt. Sitharamanreferred to the global risks in view of the emerging CoVID-19 variants and highlighted the need for international coordination and cooperation on this front. The Finance Minister joined other G20 members in welcoming the Report of the G20 High-Level Independent Panel on Financing the Global Commons for Pandemic Preparedness and Response and emphasized on the urgent need to strengthen multilateralism for global health.

Smt. Sitharaman shared her insights on the Italian Presidency’s ongoing work on a roadmap to guide sustainable finance. Speaking on the need for aligning recovery strategies with climate concerns, the Finance Minister called for climate action strategies to be based on the principles of the Paris Agreement and noted the criticality of timely fulfilment of international commitments on climate finance and technology transfer.

Regarding the “Statement on a two-pillar solution to address the tax challenges arising from the digitalisation of the economy” released by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS-IF) on July 1st, the G20 Finance Ministers called on the OECD/G20 BEPS-IF to swiftly address the remaining issues. Smt. Sitharaman suggested that further work needs to be done to ensure a fairer, sustainable and inclusive tax system which results in meaningful revenue for developing countries.

International taxation reforms aim to address digitalisation challenges and secure fairer revenue for developing countries. International taxation and the tax challenges from digitalisation were foregrounded, with G20 Ministers urging the OECD/G20 BEPS Inclusive Framework to finalise the two pillar solution so it produces a fairer, sustainable and inclusive tax system that provides meaningful revenue for developing countries. The meeting also stressed coordinated pandemic response, strengthened multilateral financing for preparedness, and recovery strategies aligned with digitalisation, climate action and sustainable infrastructure, including commitments on climate finance and technology transfer.