ADB will support India for sustainable growth

HYDERABAD — The Asian Development Bank President Haruhiko Kuroda has said that ADB was committed to support the India's efforts for the poverty reduction through sustainable, inclusive economic growth. He also expressed confidence that the new initiatives by the Indian government will go a long way in improving the infrastructure.

By From Our Correspondent

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Published: Fri 10 Mar 2006, 10:50 AM

Last updated: Sat 4 Apr 2015, 3:32 PM

Delivering keynote speech on "Investing in Infrastructure: Key to Economic Growth at the Administrative Staff College of India, Hyderabad on yesterday, Kuroda lauded the reforms and improvement in the infrastructure sector in India but added that country still needs to go a long way."

As India moves forward towards becoming a mature and vibrant economic, the need for infrastructure to support broad based, inclusive growth is ever more pressing, the ADB President said. He expressed happiness with the Indian government providing viability gap funding and establishing India Infrastructure Finance Company and hoped that it will go a long way in attracting private investments again in India's ambitious programme for national highways, railway freight corridors, power generation, transmission and urban infrastructure.

ADB has so far extended an assistance of $15 billion to India. Underlining the shortcomings in India's infrastructure, Kuroda quoted the latest Economic Survey of India that a power shortage of 12 per cent at peak levels and of 8 per cent at non peak levels is equivalent to around Rs150 billion or $ 3.4 billion of foregone generation capacity or a GDP loss of Rs 3 trillion ($ 68 billion).

"I believe that India is on the right track. I am confident that the public and private sectors working in partnership and in collaboration with development agencies will be able to bring about significant and sustainable improvements in India's infrastructure which will also help the over all process of growth, he said.

Lauding the Indian government for its response to the infrastructure problems, he hoped that the $ 39 billion Bharat Nirman programme will significantly improve the lives of millions of poor people by connecting villages.

While taking note of 8 per cent growth rate during the current year, and the prowess of India in IT, ITES, biotechnology, pharmaceuticals and various manufacturing segments, Koruda said that despite rapid growth and decline in poverty, millions of Indians were still poor.

"Given the current pace and pattern of growth, India will not reach many of the non income Millennium Goals for material mortality rtes, infant mortality rtes, or gender parity in secondary enrolment ratios with in the stipulated timeframe of 2015, he said.

Kuroda said that the ADB had strengthened its operations in India in agriculture and rural development and shifted focus to the poorer states and less developed region.

"The bulk of our ongoing operations in India, as well as the proposed programme for 2006-2008, remain focused on the three core areas of transport, urban and energy sector, he said. Kuroda described meeting the increasing demands of energy and increasing the investments in to the infrastructure development with out increasing the fiscal deficit as the major challenges before India.

ADB which provided a series of loans to assist with the first two phased of the National Highway Development Programme was now working with the National Highway Authority to help in attracting private participation and investment on a build-operate-transport basis, he said. The ADB was assisting rural road project in Chattisgarh and Madhya Pradesh, Assam, Orissa and West Bengal. Similar projects were planned for Uttaranchal, North Eastern states. Jammu Kashmir and Jharkhand.

In Energy sector, the ADB was helping in reducing system losses specially in Madhya Pradesh, West Bengal, North Eastern region, Assam and Gujrat. ADB was helping Gujarat, Karnataka, Madhya Pradesh, Rajasthan and West Bengal in infrastructure development and poverty reduction with a strong focus on municipal reforms.

In 2006-08, the ADB will take up similar projects in select cities of Jammu and Kashmir, Uttaranchal and North East, Kuroda said.

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