ADB to enhance disbursements to India to $ 1 bn

New Delhi, Jan 16 (UNI) Acting on the advice of the Indian government, ADB today announced that it would enhance disbursement of loans to one billion dollars to ensure early project completion.

It also plans to enhance assisstance programme from around 2.45 billion dollars in 2007 to 2.85 billion dollars in 2009.

Addressing a press conference here, ADB Country Director in India Tadashi Kondo said disbursement has gone up over the years and added that the ambit of lending would also be enhanced to include new sectors. These include funding for projects like irrigation and commodity market development.

Besides, the ADB would endeavour to provide greater lending to the poorer states and it was considering providing funds to areas like education and health.

Mr Kondo said the ADB would tailor its lending requirements to follow the broad development strategy of the Indian government to have inclusive growth. In this regard the multilateral regional funding institution was holding discussions with the government for starting funding for projects relating to health and education.

So far, ADB loans are intended for sectors and areas where there is a stream of revenue generation, but now it was possible loans could be extended to areas where there was no revenue outcome.

Mr Kondo said ADB will increase the amount of loan approvals to 2.45 billion dollar in India this calendar year against 2.2 billion dollar in 2006.

ADB disbursed 701 million dollar in India last year and expects to raise it to over one billion dollar in 2007, he said.In 2004 disbursements were to the tune of 340 million dollars, which went upto 640 million dollars in 2005.

Asked why the Bank has decided to increase the level of disbursements, Mr Kondo said Finance Minister P Chidambaram had made a request to this effect to ADB President Kuroda in 2005 and since then this was being worked out in meetings between officials of the Finance Ministry and ADB.

Mr Kondo said disbursements were about 16 per cent of the sanctioned amount in a year and the effort would now be to increase these to 17 to 18 per cent.

He said with a figure of 16 per cent it would take six years to complete the project, but now the endeavour would be to complete old projects and finish new projects in a shorter duration.

Mr Kondo said lending has already been announced for projects in poorer states like Jharkhand and Chattisgarh, but the Bank now plans to bring states like Bihar and those located in the North East in its fold.

He said the reason why Bihar was now under the active consideration of the ADB was that being a large state any improvement in its millenium development goals will improve the national average.

"Improved portfolio performance and higher disbursement levels are key to further enhancing lending levels to India in the years ahead,", Mr Kondo said.

UNI