The Asian Development Bank (ADB) on 29 June 2017 committed USD 10 billion support for infrastructure building and immediate development needs of less-developed states in India.
The Manila-based multi-lateral funding agency also decided to increase the annual funding to the country by USD 1 billion to USD 4 billion. ADB expects India to grow by 7.4 percent in the current financial year and 7.6 percent in 2018-19.
Elaborating further, ADB’s President Takehiko Nakao said that the agency stands ready to meet immediate development needs of up to USD 5 billion over the five-year period for less developed states, including Uttar Pradesh, Bihar, Jharkhand, Odisha and Chhattisgarh.He also confirmed that with ADB assistance, strategic planning for economic corridors is rapidly progressing.
The funding agency is prepared to invest up to USD 5 billion during 2018-2022 for infrastructure building to develop the East Coast Economic Corridor. The main objective is to achieve high and inclusive economic growth.
Nakao praised progress by the government on attracting investments in manufacturing industries in the Corridor. He said that several reform measures introduced by the government for rationalising tax structure, boosting competitiveness and easing foreign direct investment norms in crucial sectors like infrastructure will boost growth.
He added that further reforms both at central and state levels for improving efficiency in the land and labour markets and strengthening the banking sector will also contribute to the economy.
However, he added that there are some areas that require further strengthening of reforms and one of the major issues for India is to integrate more with the global market. Other areas that require due attention include labour practises, FDI regulation and land acquisition.
Speaking on the occasion, Indian Finance Minister Arun Jaitley thanked ADB president for the continued support from ADB for development projects in India and for agreeing to enhance the lending operations of the Bank in India from USD 3 billion a year to USD 4 billion per annum.
Besides this, the ADB President, who was on a 3-day visit to India, also assured to expand the bank's assistance to relatively lesser developed states in the area of power (including renewable energy), transport, urban development and health services.
Why has ADB pledged USD 10 billion to India?
• The effort is part of the international community’s thought to invest in infrastructure to boost growth.
• The effort is also driven by the motive of investing more in climate change infrastructure, keeping in mind the sustainable development goals of the UN and to contribute to poverty reduction.
• India is one of the important countries because of its capacity to implement projects to eliminate poverty.