Shreya Nandi and Beena Parmar Moneycontrol News
Prime Minister Narendra Modi on Tuesday pitched for greater long-term investment from multilateral development lender Asian Infrastructure Investment Bank (AIIB), spelled out India’s sound macroeconomic fundamentals and investor-friendly rules and regulations for businesses.
The country’s macroeconomic fundamentals are strong, with robust external sector and fiscal situation firmly in control, he said, adding that despite rising oil prices, inflation, which is hovering around the higher end of 4 percent, is within a ‘mandated range’.
He called upon the Beijing-headquartered bank to quadruple its financing to reach $40 billion by 2020 and escalate it 25 times to $100 billion by 2025.
AIIB has already committed to invest in seven projects worth USD 1.4 billion towards infrastructure projects in India. Another nine projects worth USD 2.4 billion are also in pipeline, out of which four projects worth USD 860 mln are non-sovereign or private projects.
India is hosting AIIB's third annual meeting in Mumbai and is being attended by delegates from 86 countries who have received funds from the multilateral development lender. However, top Indian industrialists seem to have given the event a miss.
“We are happy to have this opportunity to deepen our engagement with the bank and its members. As developing countries, we share similar challenges. One of them is to find resources for provision of infrastructure...Investments by AIIB in sustainable infrastructure can impact the lives of billions of people,” Modi said.
He further said that Indian economy has performed well on all the parameters including macroeconomic, political stability and supportive regulatory framework that investors look for, before putting in funds into any country.
This can also be evident from the 7.7 percent Gross Domestic Product (GDP) growth during January-March, 2017-18 and a projection of 7.4 percent growth in the current financial year.
Besides, the government is ‘firmly committed’ to the path of fiscal consolidation, he added.
India is the seventh largest in the world and is the third largest in terms of purchasing power parity.
“From the point of larger scale of operations and higher value addition, an investor is also attracted by a large domestic market size, availability of skilled labour and good physical infrastructure,” Modi said.
AIIB commenced its operation in January, 2016 and aims to improve economic and social development in Asia by investing in high quality, financially. India is AIIB’s second-largest shareholder with around 8 percent stake and is also a major recipient of loans from the bank that focuses on infrastructure projects primarily in Asia.
Currently, the development bank is reviewing certain projects related to transportation, urban (metro) and rural (roads). In addition, it is also looking at power grid improvements, transmission improvements and renewable energy (sovereign and non-sovereign) and Water and waste management projects.
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