NEW DELHI: The Asian Development Bank (ADB) will help India accelerate infrastructure development, boost manufacturing, improve the skills of young people to enhance their employability, expand trade through regional cooperation, and promote private sector activities.
ADB President Takehiko Nakao met with India Prime Minister Narendra Modi and Finance Minister Arun Jaitley, and stressed the bank ADB is committed to partnering with India in reigniting growth and reducing poverty.
Nakao said ADB’s operations for India will maintain high levels of lending, amounting to a total of $7 billion to $9 billion over the next three years. ADB will also provide around $30 million for technical assistance grants, especially for building institutions and capacity at the state and local levels.
The ADB president applauded Modi’s government for presenting a growth-oriented budget, while committing to a path of fiscal consolidation.
“It is essential to increase capital expenditures as a ratio to GDP [gross domestic product], enhance tax revenues through tax reforms such as the introduction of Goods and Services Tax and stronger tax collections, and streamline subsidies by better targeting,” Nakao said.
He also encouraged Modi’s government to continue the prudent economic management for lower inflation and stable rupee. ADB forecasts the Indian economy will grow at 5.5 percent in fiscal year 2014 ending March 2015, and expand further to 6.3 percent in fiscal year 2015.
“To get back to a high growth path of 8 [percent]to 9 percent, it is also crucial to implement investment-friendly reforms being initiated by the government,” Nakao said.
The ADB believes India’s easing its regulatory burden on industry by eliminating red tape and promoting inter-agency coordination, enabling single window clearance mechanisms, and reviewing land acquisition procedures should be part of the national strategy to attract local and foreign investors.
Nakao told Indian leaders that infrastructure development would remain the main focus of ADB’s operations in India, including transport, energy, and water supply and sanitation. The bank will also participate in developing Smart Cities. Infrastructure projects will give priority to lagging states to support poverty reduction. In order to speed up the implementation of infrastructure projects, ADB has introduced major reforms to streamline its procurement procedures, relying more on country systems and delegating more authority to country offices.
“The Resident Mission in New Delhi can play a much greater role to strengthen ADB’s operations in India,” Nakao said. ADB NEWS