India is preparing a basket of projects worth $2-3 billion for funding by the Asian Infrastructure Investment Bank (AIIB) in several areas including urban development and energy and offered to set up an office of the China-backed bank in New Delhi. On the third day of his visit here, Finance Minister Arun Jaitley made the offer while addressing the Board of Governors Session of the Annual General Meeting (AGM) of the bank headquartered here.
“India has a huge unmet demand for investment in infrastructure and is preparing basket of projects worth $2-3 billion for AIIB funding in the areas of urban development (including smart cities), energy, urban transport, railways, inland waterways and water supply,” said an Indian Embassy statement providing details of Jaitley’s address.
“(The) Finance Minister offered India’s support in establishment of a regional office of AIIB in New Delhi to effectively cater to this potentially large portfolio and speed up the process of project development, monitoring and implementation,” the statement said.
In his address, Jaitley said the AIIB has come up amidst huge expectations in a difficult time for the global economy.
“The overall recovery of the global economy remains very modest and global growth rate projections have been revised downwards, even though the Asia-Pacific region remains the growth engine for the world,” he said. Notwithstanding the global headwinds, however, India continues to maintain a high growth rate at 7.6 per cent in 2015-16 compared to 7.2 per cent in the previous year.
“AIIB presents a much-needed additional financing window dedicated to infrastructure projects and meeting the financing gap that may be beyond the capacity of the individual countries and the existing MDBs (Multilateral Development Banks),” Jaitley said of AIIB’s role. AIIB was officially established last year with an authorised capital of $100 billion in which India and 56 other countries joined as founding members. China is the largest shareholder with 26.06 per cent voting shares.
India is the second-largest shareholder with 7.5 per cent followed by Russia 5.93 per cent and Germany with 4.5 per cent. China also houses the New Development Bank headquarters of BRICS countries - Brazil, India, China and South Africa - in Shanghai. It is headed by eminent Indian banker K V Kamath.
The AIIB on Friday released its first set of loans totalling to $509 million for infrastructure projects in Pakistan, Bangladesh, Indonesia and Tajikistan. Outlining India’s development paradigm, Jaitley said India has undertaken reforms in FDI and initiated large investments in rural infrastructure, national highway, inland waterways, shipping, power sector and smart cities, the statement said.
Jaitley also met China’s Finance Minister lou Jiwei and held talks on bilateral economic cooperation, upcoming G20 Summit in Hangzhou, and the BRICS Summit in India.