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Multi-lateral funding agency Asian Development Bank (ADB) today said it is planning to raise annual lending to India to a maximum of $4 billion per year during 2018-22 to accelerate inclusive economic transformation.
"The ADB plans to raise its annual lending to India to a maximum of $4 billion to support the country to accelerate inclusive economic transformation toward upper-middle-income status," it said in a release.
The proposal was endorsed at new ADB Country Partnership Strategy (CPS) for 2018-2022.
ADB said the lending programme by 2022, which includes private sector operations, compares with an average of $2.65 billion a year in loans extended during 2012-2016.
The India programme will focus on boosting economic competitiveness to create more and well-paid jobs, improved access to infrastructure and services, and addressing climate change and improving climate resilience over these five years.
Financing will also go for public sector management, agriculture, natural resources and rural development as well as skills development and urban health, the statement said.
The new lending will be complemented by technical assistance to undertake strategic studies, build capacities and prepare projects.
ADB said it will also explore co-financing opportunities, including climate funds for relevant projects.
"ADB's new 5-year partnership with India supports the government's goal of inclusive and sustainable growth grounded by economic structural transformation and job creation, with an increased focus on low-income states," said Kenichi Yokoyama, ADB Country Director in India.
"We aim to assist transformative investments, deliver holistic solutions removing sectoral boundaries, and demonstrate high-value addition of our assistance in terms of innovation, timeliness, efficiency, and quality," Yokoyama said.
As part of the enhanced lending under CPS, ADB said it will continue to prioritise private sector development and support government in reviving private financing of infrastructure projects, including via public-private partnerships.
In private sector, it will support transport, power, urban infrastructure (including sewerage and solid waste management), affordable housing, manufacturing, health and education among others.
India has been growing at an average rate of more than 7% since FY2012, putting it among the world's fastest-growing large economies, ADB said.
It has also more than halved poverty rate since FY2004 to 21.9% and has achieved most of the Millennium Development Goals.
"To accelerate such positive trends requires that the country create more high-quality jobs since half of India's workforce is based around agriculture, which is still marked by low productivity and incomes," it said.
However, ADB said infrastructure continues to be a major bottleneck.
The agency said it has identified an investment shortfall of $230 billion a year in the infrastructure sector.
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