The Indian economy is poised to take off much in the same way it was around the year 2000 when investment in infrastructure gave it the quiet impetus it needed, KV Kamath, president of multilateral BRICS bank, said on Saturday.
Deficits are under control and so is inflation, Kamath said, adding that to grow at more than 8% per year was a possible aspiration.
Speaking to HT at his Shanghai office, Kamath, who took over the reins of the bank now called the New Development Bank (NDB), said: “If you remember 2000, the very act of investing in a whole lot of infrastructure that time quietly got the economy going. Otherwise, with the challenges facing the Indian industry from 1995–2000, nobody would have given the country any chance at all in the economic context of growing. I would think that India is poised at the same spot at this point of time.”
Soon after his interaction, the NDB signed an agreement with Chinese foreign minister Wang Yi regarding the NDB headquarters in a function attended by Christine Lagarde, president of International Monetary Fund (IMF chief), Raghuram Rajan, governor of Reserve Bank of India (RBI), and Chinese finance minister Lou Jiwei.
On the NDB’s role in PM Narendra Modi’s Make in India campaign, Kamath indicated the bank’s role was focused on building infrastructure. “There is a vast swath of infrastructure needs, which is a thing we are best equipped to look at. I am sure other domestic players can look at the other needs in a complementary way,” Kamath said.
Speaking of projects likely to be funded by NDB in India, Kamath said, “We have a wide variety of projects on the slate. We are in discussion about ones we will sequence. Green energy, solar, water, projects in the road sector…we will develop these as we go along,” Kamath said.
It is likely the NDB will approve one project from each BRICS (Brazil, Russia, India, China and South Africa) country in April.
Kamath said it was not right to compare China’s development with India’s. “If I look at the Chinese GDP in 2000-2001, India hit that GDP in 2004. India needs to introspect what happened thereafter, in the next eight-nine years. We are now looking at a $10 trillion (Chinese) economy and somewhere between $2-3 trillion (Indian) economy,” he said.