Money & Banking

RBI’s surplus transfer bonanza should be used to stimulate economy: ADB

K.R.Srivats New Delhi | Updated on August 29, 2019

Finance Minister Nirmala Sitharaman and Asian Development Bank (ADB) President Takehiko Nakao, during a meeting, in New Delhi, on Wednesday. – PTI

ADB committed to support Jal Jeevan Mission, says visiting President Nakao

The Centre would do well to use the RBI’s surplus transfer bonanza of Rs 1.76 lakh crore for stimulating the Indian economy, the visiting ADB President Takehiko Nakao has said.

This surplus should be used to stimulate the Indian economy without compromising on the fiscal deficit targets, Nakao said here while endorsing the central bank’s move.

Nakao said that Indian economy, under the leadership of Prime Minister Narendra Modi, has done well on the recent years with average growth of 7.5 per cent in the last five years and will do even better in the coming days if structural reforms are pursued with more vigour. “India is already the fastest growing large economy in the World. Reform momentum has strengthened in the recent years. ADB expects Indian economy to grow 7 per cent in 2019-20 and 7.2 per cent in 2020-21”, he said.

Meanwhile, ADB plans to ramp up its non-sovereign commitment (including private sector) to India to near $ 1 billion this year (calendar year 2019) from a level of $ 560 million in 2018, Nakao said. As for the ADB’s Government lending goes, there are no plans to increase it from the last year’s level of $ 3 billion, he added. Currently, India is the biggest borrower from ADB both on the sovereign and non-sovereign front.

Over the last two days, Nakao separately met top Cabinet Ministers of the Modi-Government including Finance Minister Nirmala Sitharaman, Commerce and Industry, Railways Minister Piyush Goyal and Union Road Transport & Highways, Shipping, MSME Minister Nitin Gadkari and conveyed ADB’s commitment to several flagship infrastructure projects such as the Jal Jeevan Mission. ADB will be ready to support the Jal Jeevan Mission with not only knowledge and technical assistance, but also commit money towards this project, he added. Indications are that ADB will look to commit at least $ 500 million out of the planned $ 3 billion outlay in the census cities for the ambitious Jal Jeevan Mission.

Nakao is slated to meet the Prime Minister Narendra Modi later this evening. It would the third time that Nakao would be meeting Modi since the latter became the Prime Minister for the first time in 2014.

Published on August 29, 2019

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