ADB’s future financial support to India will depend on how the country mobilises infrastructure funding, especially from private sector through PPPs, the multilateral agency said in a report. “ADB’s future support to India, one of its biggest borrowers, will continue to be shaped by government’s Finance Plus policy,” a report by Independent Evaluation Department of the funding agency said. Finance Plus policy is ADB’s way of interpreting how India channels development partners to anchor finance for projects, especially from the private sector. The assessment report on ADB’s USD 22 billion assistance to India over the past decade, says PPPs have become an important source of economic development for India which will be crucial in closing infrastructure investment gap. The Indian government sees private sector as a key player to promote faster and more inclusive growth, it said. ADB’s support helped catalyse infrastructure investments and PPPs by providing loans to government and private sector through financial intermediaries for projects with development impacts.
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“ADB is well placed to make a significant contribution to the Finance Plus policy, given the knowledge resources it has built up over its long engagement with India, particularly by capitalising on best practices and lessons learnt from implementing and evaluating projects,” said Marvin Taylor- Dormond, Director General of Independent Evaluation Department. During 12th Five Year Plan (2012-17) ended March, India’s infrastructure investment was projected at around USD 836 billion, with 48 per cent targeted to be financed by private sector, mainly through PPPs. The report said Asian Development Bank (ADB) support to finance infrastructure in lagging states helped India promote inclusive economic growth.
The financing is well aligned with government’s strategy of reducing disparities in poverty rates across states, it added. “India is enjoying strong economic growth that is being more widely shared across states than ever before, and it is the low income and highly populous states that are growing faster than the national average,” Taylor-Dormond said.