NEW DELHI, Aug 28 (Bernama) -- The Asian Development Bank (ADB) will provide loan between US$7 billion-US$9 billion to India over the next three years to boost among others, the country's infrastructure development and manufacturing sector.
ADB will also provide around US$30 million for technical assistance grants, especially for building institutions and capacity at the state and local levels, its President Takehiko Nakao said.
Infrastructure development would remain the main focus of ADB's operations in India, including transport, energy, and water supply and sanitation, Nakao, who is on a official visit to India told the leaders in the country.
He met India's Prime Minister Narendra Modi and Finance Minister Arun Jaitley.
ADB will also participate in developing Smart Cities, he said.
Reports have said that India is planning to build 100 Smart Cities, with the first three by 2019.
Infrastructure projects will give priority to lagging states to support poverty reduction. In order to speed up the implementation of infrastructure projects, ADB has just introduced major reforms to streamline its procurement procedures, relying more on country systems and delegating more authority to country offices.
Nakao that the Resident Mission in New Delhi could play a much greater role to strengthen ADB's operations in India, adding that ADB will support the government's vision to boost manufacturing through economic corridors.
It will be a partner in the development of the East Coast Economic Corridor (ECEC) that will run from Kolkata in West Bengal to Tuticorin in Tamil Nadu, he said.
ADB is also providing loans to state governments to train young people for modern jobs and its ongoing technical assistance to the National Skills Development Corporation will help establish stronger linkages between private industry and technical and vocational training using public-private partnerships (PPPs), he said.
Nakao applauded the government for presenting a growth-oriented budget, while committing to a path of fiscal consolidation.
Going forward, he said that it was essential to increase capital expenditures as a ratio to GDP, enhance tax revenues through tax reforms such as the introduction of Goods and Services Tax and stronger tax collections, and streamline subsidies.
He also encouraged the government to continue the prudent economic management for lower inflation and stable rupee.
ADB forecasts the Indian economy will grow at 5.5 per cent in Financial Year 2014 (ending March 31, 2015) and expand further to 6.3 per cent in Financial Year 2015.
"To get back to a high growth path of 8 to 9 per cent it is also crucial to implement investment-friendly reforms being initiated by the government," Nakao said.
India is the largest borrower from ADB. Between 1986, when ADB started its lending operations in India, and June 30, 2014, ADB approved 183 sovereign loans totalling US$29.8 billion.
ADB has also approved 50 non-sovereign loans, equity investments and guarantees totalling more than US$3.2 billion.