New Delhi: 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 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, he said.
“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 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%, he said.
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 economic growth rate. It has led to reduction of agriculture labour," he said. Skill development is an area that would help in employability, he said.