India can get back to higher growth path of 8-9 percent if it were to change foreign investors’ perception about the country, the visiting Asian Development Bank President Takehiko Nakao has said.
A change in perception to India being committed to implement investment-friendly reforms can have “dramatic” impact on its economic growth, Nakao told a press conference after his nearly forty minutes meeting with Prime Minister Narendra Modi here on Wednesday.
ADB forecasts the Indian economy will grow at 5.5 percent in 2014-15 and expand further to 6.3 percent in fiscal 2015-16.
Nakao, who is visiting India for the first time after BJP-led Government assumed office at the Centre, met Finance Minister Arun Jaitley on Tuesday evening.
During his separate meetings with these two Indian leaders, Nakao had conveyed that ADB was fully committed to partnering with India in reigniting growth and reducing poverty.
ADB will also look to ramp up its lending to India to a level of $ 7-9 billion over the next three years as against annual lending level of about $ 2 billion.
Easing the regulatory burden on industry by eliminating red tape and promising inter-agency coordination, enabling single window clearance mechanisms and reviewing land acquisition procedures should be part of the national strategy to attract local and foreign investors, he said.
Nakao said there is lot of expectations on Prime Minister Narendra Modi going by his track record on improving investment climate in Gujarat.
“Because of this track record, it is now important (at the national level) to show case results sooner than later”, he said.
Nakao also said that Prime Minister Modi had concurred with his views on the need to attract more foreign direct investment into India.
“FDI is important and it will come to India to meet the increasing demands of middle-income families in the country”, he added.
ECONOMIC CORRIDORS
ADB will support the government’s vision to boost manufacturing through economic corridors.
The Manila-headquartered development bank will be a partner in the development of the East Coast Economic Corridor (ECEC) that will run from Kolkata in West Bengal to Tuticorin in Tamil Nadu, Nakao said.
For the first phase of the ECEC—the Vizag-Chennai industrial corridor, the ADB is currently undertaking a pre-feasibility study, which is expected to be submitted to the Government in the fourth quarter this calendar year.
The Vizag-Chennai industrial corridor is expected to play a key role in boosting trade with East and Southeast Asia, Nakao said.
Srivats.kr@thehindu.co.in