Source: Business Standard, June 30, 2017
The Asian Development Bank (ADB) has proposed additional loan support to India of $10 billion, over the next five years.
In the country on a three-day trip, ADB President Takehiko Nakao on Thursday told the media that the ADB was looking to increase its footprint in India. Half the loan amount would be for the development of the East Coast Economic Corridor.
Also, commenting on the upcoming goods and services tax (GST) regime, Nakao said that given the multiplicity of tax rates in the new system, the government would need to be careful about how to apply different tax rates for various commodities and services.
He also said relations between the two different tax enforcement authorities — at the central and state levels — needed to be made clearer.
As of now, the ADB board had approved $631 million in 2016 for the Vishakhapatnam-Chennai section of the corridor. Also, the bank is looking to focus on less developed states, including Uttar Pradesh, Bihar, Jharkhand, Odisha, and Chhattisgarh, and is ready to commit up to $5 billion over the five-year period. To this end, Nakao has also met Uttar Pradesh Chief Minister Yogi Adityanath and promised to ramp up lending to the state, which had received $300 million last year to upgrade district roads.
This $10 billion in major investments would be part of the ADB’s new country strategy. The final amounts will depend on the implementation readiness of projects under preparation and the borrowing policies of the central and state governments.
Almost 90 per cent of the amount would be spent on infrastructure, apart from energy security and public sector works, ADB Country Director for India Kenichi Yokoyama said.
Further reforms in foreign direct investment norms as well as labour rules are also needed in India, Nakao has told the government.
This is to further the integrate the economy with the larger region.
He has met Finance Minister Arun Jaitley as well as Commerce and Industry Minister Nirmala Sitharaman.