The Hindu Business Line : ADB sees scope for more assistance to India

New Delhi, Oct 12 Asian Development Bank (ADB) sees scope for continued increase in its financial assistance to India in the coming years, its President, Mr Haruhiko Kuroda, has said.

Mr Kuroda, who met the Prime Minister, Dr Manmohan Singh, here on Friday, said that ADB’s key strategy for India was to help reduce poverty through infrastructure led growth.

“We expect this year our total lending level to India could reach $2.7 billion. This is a significant increase over average lending in previous five years.

“We are quite sure that our financial assistance would continue to increase in coming years through PPP projects and other means,” Mr Kuroda said at a press conference here.

He said that ADB, which was finalising the Country Partnership Strategy 2008-12 with India, was in close consultations with the Central Government, especially in the area of public private partnership (PPP) projects.

“There are many potential projects at the Central and State level,” he added.

Meanwhile, ADB expects the Indian economy to expand by 8.5 per cent in 2007 and 2008, up from an earlier forecast of 8 per cent and 8.3 per cent respectively.

Indian economy grew 9.4 per cent in fiscal year 2006-07, the fastest expansion in 18 years.

Sub-prime impact

On the impact of US sub-prime crisis on the Asian economies, Mr Kuroda said that so far they have not been much affected by US sub-prime problems.

“Asian financial institutions have not acquired many collateralised debt obligations (CDO) or asset backed securities based on sub-prime loans.

“If the US economy slows down, many Asian economies could be affected. Consensus among economists is that although some slowdown may be possible, recession is extremely unlikely in the US. The US economy appears to be robust. The US dollar may stabilise,” he said.

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