ADB chief Haruhiko Kuroda meets Manmohan Singh

November 14th, 2007 - 2:07 am ICT by admin  
Kurado, who is on a six-day visit to India, has also met Finance Minister P. Chidambaram.

He is scheduled to meet Commerce and Industry Minister Kamal Nath later today.

On Thursday, Kuroda, during his meeting with a delegation of Indian companies led by Vinayak Chatterjee, Co-Chairman, CII Infrastructure Council and Chairman, Feedback Ventures, called on Indian industry to train their focus on infrastructure development, as he believed that this would increase the country’s current rate of GDP growth from eight to nine percent to about ten to eleven percent, as was seen in the case of China.

Kuroda also emphasised the importance of public-private partnerships (PPPs) in mobilising resources for the infrastructure sector. India’s experience in designing and executing such partnerships could then become a lesson for other emerging economies.

Manila-based ADB is holding talks with India about a currency swap that would help fund infrastructure projects without adding to the inflows that are complicating monetary policy.

India’s strong rate of economic growth and soaring stock market is attracting billions of dollars in direct and portfolio foreign investment, pushing up the rupee and causing a monetary policy headache for the Reserve Bank of India (RBI).

India’s banking system is awash with potentially inflationary excess cash, due to central bank rupee sales for dollars, to keep the exchange rate down. Selling billions of dollars for rupees on the open market would put further upward pressure on the rupee.

ADB is also discussing swaps with other countries, including the Philippines, but hoped India would be the first. While the amount would not match the total infrastructure funding needs, it would be “billions of dollars”.

Chidambaram has said Asia’s fastest-growing economy after China needs 475 billion dollars to upgrade its road, rail and power networks; and unclog the bottlenecks, which risk fuelling inflation and hindering the pace of expansion.

As the lender, the ADB would offer long-term fixed rate financing for 15-20 years, which would reduce a borrower’s risk and the cost of doing business. Borrowers must be developmental, like infrastructure or power companies in the private or state sector. (ANI)

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