Fiscal condition is in control, says Modi
Urges AIIB to increase lending to $40 billion by 2020
Our macro-economic fundamentals are strong with stable prices, a robust external sector and a fiscal situation firmly in control. The government is firmly committed to the path of fiscal consolidation. Government debt as percentage of GDP is consistently declining. — NARENDRA MODI
Stating that India is extremely a low risk political economy with stable macro-economic factors and high growth potential, Prime Minster Narendra Modi said the country has now become one of the most investor friendly economies satisfying all the parameters that global investors are looking for.
Addressing the inaugural session of the third annual meeting of the Asian Infrastructure Investment Bank (AIIB), Mr Modi highlighted investors need for a stable political and supportive regulatory environment to ensure protection of their investment.
“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. On each of these parameters, India is well placed and has performed very well. We have simplified rules and regulations for businesses and undertaken bold reforms. We have liberalised the FDI regime. These and other changes have been noticed by the global fraternity. India has jumped 42 places in three years to enter the top hundred in the World Bank’s Ease of Doing Business Report 2018,” he said.
Despite a rise in crude oil prices, Mr Modi said inflation has been contained well within the mandated range and reaffirmed his government’s commitment towards the path of fiscal consolidation. “Our macro-economic fundamentals are strong with stable prices, a robust external sector and a fiscal situation firmly in control. The government is firmly committed to the path of fiscal consolidation. Government debt as percentage of GDP is consistently declining. India has achieved a rating upgrade after a long wait,” the PM said.
Drawing attention to the investment needs of Asian countries to address their infrastructure bottlenecks, Mr Modi urged AIIB to increase lending tenfold to $40 billion by 2020 and $100 billion by 2025. “Asia still faces wide ranging disparities in access to education, healthcare, financial services and formal employment opportunities. Regional multi-lateralism through institutions such as AIIB can play a central role in helping to raise resources,” he said.
According to him, sectors such as energy and power, transportation, telecom, rural infrastructure, agriculture development, water supply and sanitation, environment protection, urban development, and logistics require long term funds.
“The interest rates on these funds need to be affordable and sustainable. With committed capital of $100 billion and huge need for infrastructure in member countries, I take this opportunity to call upon AIIB to expand from financing $4 billion dollars, to $40 billion by 2020 and $100 billion by 2025. This would require simpler processing, and faster approval,” Mr Modi added.