Asian Development Bank (ADB) will revise upwards projection on India?s growth in February in wake of buoyant economy that has resulted in improved industrial production and increased capital flows, Hun Kim, country director, ADB, told FE.
The bank?s move to revise the projection is in line with increasing confidence in the second fastest growing economy. Finance ministry has pegged India’s growth at 8.75% for the current fiscal, while RBI has a comparatively conservative projection of 8.5% for this year.
The multilateral lending agency had earlier projected a growth rate of 8.5% for 2010-11. ?India growth is being supported by robust investment, increased capital inflows, and stronger industrial output, buoyed by rising consumer demand ,? the ADB chief said.
With an impressive growth of 10.8% shown in industrial production for October led by manufacturing and services sector, it is expected that India will achieve close to 8.75% for this year.
The increased projection by multilateral agencies are helpful for enhancing the investment in India facing huge infrastructure deficit. India is no where near achieving its target of $500 billion of investment in infrastructure in the 11 th five year plan, while it has set the target of $1 trillion for the 12th plan.
Although India remains the focus of the multilateral lender, capacity constraints and higher inflation have been a matter of concerns for the bank. International Monetary Fund so far has the most optimistic outlook of 9.7% growth in the current financial year.