Financial Daily from THE HINDU group of publications
Tuesday, Apr 25, 2006
Financial Daily from THE HINDU group of publications Tuesday, Apr 25, 2006 |
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Money & Banking
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RBI & Other Central Banks Govt seeks $1b assistance from ADB, World Bank Our Bureau
DEVELOPMENT AGENDA: The Finance Minister, Mr P. Chidambaram, addressing a press conference on the annual meeting of the Asian Development Bank in the Capital on Monday. - Kamal Narang
New Delhi , April 24 India is looking up to an overall resource assistance of $1 billion from the Asian Development Bank (ADB) and the World Bank for the proposed revamp of the short-term co-operative credit structure based on the Vaidyanathan panel recommendations, the Finance Minister, Mr P. Chidambaram, said here today. The total cost of the rehabilitation of the short-term cooperative credit structure is estimated to be about Rs 10,000 crore. "Revival of the co-operative credit structure based on the Vaidyanathan committee is a priority for the Government. We would be happy to have ADB as one of the partner who puts resources for this critical programme linked to the agriculture sector," Mr Chidambaram said at a press conference here. Stating that revamp of the short-term co-operative credit structure would require "lot of money", Mr Chidambaram expressed hope that India would be able to persuade the World Bank and the ADB to support the country in this programme. Mr Chidambaram also asserted that borrowing from ADB and World Bank was a reflection of India's strength and not its weakness. He pointed out that India was a founder member of the ADB and the fourth largest shareholder after the US, Japan and China. India has a 6.38 per cent stake in ADB's paid-up capital and this translates into voting power of 5.4 per cent. "We are a good borrower. We have a high credit rating. They are happy to lend to us. It's not a sign of weakness, it's a sign of strength," he said. The Finance Minister said that the level of borrowing from ADB is likely to be ramped up from the current level of $1.2 billion a year to about $2 billion a year by 2009. About $1 billion (Rs 4,500 crore) is the average annual level of ADB funds that flow into Government resources. Interest outflow to the ADB per year is between Rs 800-900 crore. Mr Chidambaram also highlighted that the United Progressive Alliance Government's development agenda was reflected in the steady increase planned in the overall size of the ADB's India programme from $ 2.25 billion in 2006 to $ 2.45 billion in 2007 and $ 2.65 billion in 2008. At the same time, he also underscored the need for the country to improve its capacity to design and present viable projects. "Our capacity to draw the money and spend has to be improved. Money is available. The capacity to spend must increase. Unless we increase the rate of disbursement to 20 per cent, simply by having a large country program we are not going anywhere What is the point in having a large country program on paper if you can't draw the money and use it," Mr Chidambaram said. Meanwhile, the Finance Minister announced that India would play host to the 39th Annual General Meeting (AGM) of ADB next month. The AGM would be held in Hyderabad at the international convention centre from May 3-6, 2006. About 2,000 delegates are expected to attend the event. This is the second time ADB would hold its AGM in India.
More Stories on : RBI & Other Central Banks | Co-operatives
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