Asian Development Bank?s (ADB) India investment plan may be hampered in the long-term if the ongoing global meltdown continues for some more time in future.
The possibility of fall in ADB?s India investment may happen as the USA and Japan with 13 % shares each in ADB are the major shareholders in the agency and are severely affected by the current financial turmoil. Though ADB raises fund through bond issues from the world?s capital markets, it also relies on its members? contributions for its resources.
However, the ADB officials currently on visit to India maintain, ?We will not be affected by the present financial crisis as there is no change in our India investment plan as of now?.
Speaking to FE on the sidelines of a seminar on business opportunities with ADB, which was hosted by Exim Bank in Mumbai on Tuesday, Omar H Tiwana, principal procurement specialist, central operations services office, ADB, said, ?I don?t think that there will be any immediate impact on our India investment plans due to the current global meltdown.
But in case, the crisis continues for some more time in future, there may be some impact on the general capital increase (GCI) by our donor nations in the next couple of years which will further impact on our lending volumes to India,?? added Tiwana. There may be a pressure on ADB?s donor nations to rethink on their funding if the present scenario would continue, he said. The picture will be clear by the year 2010. However, it was not clear when the board of the bank meets the governments of the donor nations to discuss GCI.
However, Shigehiko Muramoto, head, project administration unit, India Resident Mission, ADB, maintained ADB will not be affected by the present financial crisis as there is no change in the India investment plan as of now.
India?s growth is very good. Particularly, the construction industry is doing quite well, said Muramoto. Only the thing that the gap between the rich and poor parts was widening in the country, he cautioned.
Particularly, the states like Jammu & Kashmir, Uttarakhand and all the seven states in North-East are lagging behind in terms of development. “We can introduce our own projects in fields like urban, energy and transport, to help India address this problem,?? advised Muramoto.
ADB?s Indian portfolio has currently 40 loans under implementation and has a total undisbursed balance was $3.97 billion. Besides total ADB?s projects under preparation for 2009-11 amounting to $ 7.82 billion are in the areas like energy, transport, urban development, finance, agriculture, irrigation, tourism and public-private participation (PPP) in infrastructure.