FM promises reforms, seeks foreign investment

HYDERABAD: India will deepen economic reforms to achieve 8-10 per cent growth and eliminate poverty, Finance Minister P Chidambaram told the board of governors of the Asian Development Bank on the final day of its 39th annual meeting here.

Observing that the private sector and rising domestic consumption are driving India’s growth, he called for the multilateral body to reorient its strategies so that it can be a fleet-footed intermediary to help developing members attract private capital.

“The investment rate in India is around 30 per cent of GDP and it has largely been funded by domestic savings,” Chidambaram said. As the country moves to a higher growth trajectory, it would need to supplement domestic resources with foreign investment, he said.

The observations of the finance minister, who is the current chair of the ADB board, are significant as the body is currently finalising a medium-term strategy to assist developing member countries.

Chidambaram said the ADB should restore its lending charges to the lower rates prevailing before 2000, saying this is critical to the growth of the bank’s business. Further, the commitment fee charged from prospective borrowers should not be treated as a source of income and it should be possible to eliminate or substantially reduce it through improvements in operations and internal efficiencies.