World Economy

ADB to Step Up Lending to India

ADB to Step Up Lending to IndiaADB to Step Up Lending to India

Asian Development Bank President Takehiko Nakao met with India’s Finance Minister Arun Jaitley to discuss ADB’s partnership with India. Nakao also met with Minister of Urban Development, M. Venkaiah Naidu and discussed ADB’s support to the government’s new urban initiatives.

He stressed that ADB is committed to strengthening its support to India’s new initiatives that target increased economic growth and reduced poverty, PTI reported.

“In India, ADB aims at increasing its sovereign and non-sovereign lending from the present $7 billion-$9 billion in three years from 2015 to 2017 to $10 billion-$12 billion between 2016 and 2018 using ADB’s expanded lending capacity,” said Nakao.

ADB’s annual lending capacity is expected to increase to as much as $20 billion a year from the current level of $13 billion, based on the merger of its Asian Development Fund lending operations with its Ordinary Capital Resources balance sheet.

ADB’s latest economic outlook for India, published in March, projects GDP growth of 7.8% in fiscal year 2015 (starting 1 April this year), rising to 8.2% in FY 2016. The strong growth outlook is backed by good macroeconomic indicators such as a decline in inflation and the current account deficit, and reforms to further open up certain sectors for foreign direct investment and reduce fuel subsidies. Efforts to expedite clearances for key infrastructure projects will also sustain growth momentum.

In discussions with the finance minister, Nakao expressed strong support for reforms in the labor market as well as the proposed new goods and services tax. “The government’s proactive role in pushing key reforms will lead to an improved business climate,” he said.