The Hindu Business Line : `Oil prices not to impact GDP rate'

The Union Finance Minister, Mr P. Chidambaram on Sunday said that the high price of oil in the global market may not have a direct impact on India's GDP growth rate. However, it could fuel inflation, he added.

Admitting that the high crude prices were a matter of concern, Mr Chidambaram said, "We need to do a balancing act and we are devising ways of handling the situation." On an optimistic note, he said it is also possible that the oil prices might moderately come down in the near future.

The Finance Minister, who was here to review the upcoming meeting of the Asian Development Bank (ADB), in Hyderabad told reporters that it was a good opportunity for us to present the `India Story' of accelerating multi-faceted and inclusive growth to global financial players first hand so that they carry it back to every part of the world. The 39th Annual Meeting of the ADB during May 3-6, being hosted by India for the second time in the country, would offer a big opportunity to bring in international funding institutions to accelerate the tremendous growth being achieved in infrastructure and invest into priority areas like agriculture and irrigation, public sector and in projects on a public-private-partnership model.

India is a founder member of the ADB. Since 1986 the country has accessed $14 billion in loans. Given the huge requirement for infrastructure financing, borrowing is expected to increase steadily from $2.25 b in 2006 to $ 2.45b in 2007 to $2.65b in 2008, he said.

Reacting to reported concern expressed by the ADB President on the infrastructure and labour reforms issues, Mr Chidambaram said, "Our policies on infrastructure are sound, but we need to accelerate. On labour reforms, we have our own constitutional procedures and national interest which would be addressed by the Parliament."

On conditionalities in ADB loans, Mr Chidambaram said the Government of India is a willing partner in sourcing funds. "India is one of the largest borrowers, which is not a sign of weakness, but strength and confidence on our credit worthiness. It is in our interest to increase levels of funding," he argued.

Agenda of meet

Mr Chidambaram said, the key trends in international economy and its impact for Asia; financial sector in India and Asia; seminars on infrastructure, labour etc., common current for Asian countries, knowledge-based economies of the 21st century are some of the important topics slated. On day four, which was `India Day, the Dy Chairman of the Planning Commission would showcase the India story. Chief Ministers from A.P., Delhi, Goa, Rajasthan and Finance Minister of West Bengal, would participate in a panel discussion.

NGO's dissent and views

The Finance Minister said Non-Government Organisations (NGOs), can definitely differ and have their views and space has been created for them. "Dissent is always welcome we will not quell it," he said.

India is at an advanced stage of pitching for a $1 billion water resources project with funds from the ADB and the World Bank. The preliminary rounds of discussion have been completed, and we expect to make the final presentation during end of May, Finance Minister Mr P. Chidambaram said.

The project entails revival of 20,000 water bodies across the country, which would mean providing additional irrigation to 1.5 million hectares in four years. "I have already discussed with the ADB Chief about the project, whose design has been firmed up," Mr Chidambaram said.

Strengthening of the commodities market infrastructure, revival of cooperative credit structure are also very high on the priority of the Government to have ADB as a partner in funding, the Minister said.

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