The Asian Development Bank (ADB) expects India’s growth to pick up in the coming financial year ending March 31, 2019 to 7.3 percent from 6.7 percent in the current year, said the Bank’s Vice-President (operations 1) Zhang Wencai recently in an interview with Xinhua in New Delhi.
Zhang said inflation is likely to remain modest, and average less than 5 percent in the forthcoming financial year. Some recent measures taken by the government such as GST (Goods & Services Tax), improving ease of doing business, bolstering agriculture and rural development in next year’s budget, are expected to boost growth in the short run, he added.
According to Zhang, India had the potential to grow at over 8 percent for a sustained period in the medium term due to a variety of factors, such as steady urbanization leading to strong increase in the consumption power and demand for goods and services, favorable demographics with a relatively young workforce, significant improvement in the ease of doing business during the past few years, and emerging as an attractive destination for FDI.
But, for achieving this, he said, India needs to overcome a few challenges, including resolving infrastructure bottlenecks, closing the gap between advanced and lagging regions where most of the poor are concentrated, improving its skilled workforce, addressing worsening environmental degradation, natural resource depletion, and climate change impacts.
The new ADB country partnership strategy (CPS) 2018-2022 for India approved in 2017 aims at supporting the country’s rapid economic transformation from lower towards upper middle-income status and achieve a faster, more inclusive, and sustainable growth.
The CPS envisages an enhanced annual lending of 3 billion to 4 billion U.S. dollars for 2018-2022, including private sector operations, compared with an average of 2.65 billion U.S. dollars per year in 2013-2017, subject to resource availability and project readiness.
The ADB had in 2017 approved a total of 12 projects for India totaling 2.2 billion U.S. dollars in areas such as transport, energy, urban, agriculture and natural resources and skills sectors, Zhang said, adding that the bank approved non-sovereign projects amounting to 460 million U.S. dollars in 2017.