$150 bn needed for infrastructure: PM
He said that India's investment rate, which is 31 per cent of the GDP, is expected to further increase.india Updated: May 05, 2006 12:03 IST
Prime Minister Manmohan Singh said on Friday that over $150 billion investment is needed in the next few years for development of India's infrastructure.
Speaking at the 39th Annual Meeting of the Board of Governors of Asian Development Bank (ADB), he said, "India's infrastructure need in next few years is estimated at over $150 billion."
ADB, which till now has funded public transport, power and urban infrastructure projects in India, is now looking at investments in new areas including restoration of water bodies, tourism infrastructure and agriculture.
India's investment rate, he said, was 31 per cent of the GDP. This along with foreign investment flow was expected to further increase in future.
He said India had signed agreements with SAARC, Singapore and Thailand and it was working with China, Japan and South Korea for similar agreements.
Singh also said the economic cooperation may herald new FTAs in all over Asia that could even extend to Australia and New Zealand.
He, however, said the Asian crisis of 1997, which had severly dented global confidence towards globalisation, was something from which lessons could be learnt.
"With the benefit of hindsight, there's a view that funding must come from international financial institutions before the foreign exchange reserves dry up," he said.
Referring to the vast disparity in world economies, Singh said in 2005, USA had a current account deficit of $805 billion or 6.4 per cent of the GDP. At the same time, Japan had a current account surplus of $163.9 billion, China, $158.6 billion and the Middle-East region had a surplus of $196 billion.
While mismatch in current account deficit were expected in large global economies, large disparities raised concern, he said.
"Global imblance cannot be sustained forever," Singh added.
A coordinated effort by the deficit and surplus countries was needed to prevent a sudden downturn, he said.
Stating that East and South East Asia had become an engine of global growth, he said Asia would consume more food and energy and would demand better infrastructure and services.
"We must therefore find ways of better use of our skills, collective savings and surplus in the region," Singh said.
Chinese economy, the Prime Minister said, had performed exceedingly well and the world had lots to learn from the its growth pattern.
He warned against the threat of terrorism derailing economic progress.
On the surging international oil prices, Singh said international lending agencies need to pool in their collective wisdom to devise credible ways to tackle volatilities in prices.
Challenge before Asians is to create hike economic growth on a sustainable basis. "Our government is committed to ensure that growth is all pervasive and reaches all sections of society... We are committed to reducing the gap between rural and urban income that may create imbalances in the society. And this must be done through participatory policies".
"If growth is equitable, we could have open democratic societies," he added.