Better infra critical to growth: ADB chief

Improved infrastructure is critical if India has to achieve an economic growth rate of 10 to 11 per cent, Asian Development Bank (ADB) president Haruhiko Kuroda said today.

Infrastructure development in India could increase the rate of growth of gross domestic product from the current 8-9 per cent to about 10-11 per cent, as in the case of China, Kuroda told a delegation of the Confederation of Indian Industries.

Discussing the problems over infrastructure financing, the ADB president said the public-private partnership model can help the country in mobilising long-term resources required for upgrading infrastructure facilities.

The ADB president also said that India's example in designing and executing infrastructure projects through the public-private partnership mode could become a lesson for emerging economies.

The Planning Commission has estimated that India requires $492 billion in the 11th Plan (2007-12) to fund infrastructure development, which is key to achieving an average 9 per cent economic growth in this period and 10 per cent in the terminal year of the plan. Of this amount, $240 billion would be raised as debt by the private and the public sector.

The economy grew by 9.4 per cent in 2006-07 and as per the Reserve Bank's projection the country is likely to record a growth rate of 8.5 per cent this fiscal.

Finance Ministry Joint Secretary Arvind Mayaram, who also attended the meeting, said that ADB's involvement in infrastructure projects would deepen the appraisal capacity of Indian financial institutions.