Multi-lateral funding agency Asian Development Bank (ADB) on Monday said it will raise annual funding to India up to $4 billion from existing $2.7 billion, from next year. To accelerate the inclusive economic transformation of India, ADB has decided to provide loans up to $4 billion on annual basis including non-sovereign debt during 2018-22, said Kenichi Yokoyama, ADB Country Director in India.
So cumulatively, India, the largest recipient of ADB, will get about $20 billion over a period of 5 years. As part of the country strategy 2018-22, annual sovereign funding will increase from $2 billion to $3 billion while private sector funding would be doubled to $1 billion
“The other priority pillars include increasing annual funding to low-income states and climate change,” he said. The India programme will focus on boosting economic competitiveness to create more and well-paid jobs, improved access to infrastructure and services, and addressing climate change and improving climate resilience over these five years.
ADB said infrastructure continues to be a major bottleneck. The agency said it has identified an investment shortfall of $230 billion a year in the infrastructure sector. On GDP growth, he said, India is expected to grow at 7% in the current fiscal and will accelerate to 7.4% next fiscal. Although the first quarter growth was muted, it is expected to pick up in the remaining quarters and average growth would be 7%.
The Indian economy expanded by 5.7% in the first quarter of the current fiscal, the lowest in the three years. On job creation, Yokoyama said, it is a challenge for India. “Looking at past performance, India’s poverty reduction record has been quite substantial. We saw rural wages growing faster than the economic growth rate. It has led to a reduction of agriculture labour,” he said. Skill development is an area that would help in employability, he said.