AIIB says projects, cost overruns biggest negatives of India
The Beijing-headquartered multilateral bank has USD 3 billion exposure to India which has a lot of appetite for credit and will continue to be the largest borrower in the near future.
The bank was established in 2016 to fund developmental projects as part-time of which it takes both equity and debt interests in projects. Among the close to 60 member countries, India is the second-largest shareholder after China.
"... the concern is how quickly a project is implemented. Time overrun will always take the project cost higher. If you are able to stick to the plan and do the project in time, that would be great," chief investment officer DJ Pandian told over the weekend.
He said apart from this regulatory issues and those surrounding land acquisitions are also concerns for the bank but added that they face these issues across many other countries too.
He said the current slowdown is temporary and more cyclical in nature, hinting that the bank is not too perturbed by the negative headlines on GDP expansion.
The government must do more for infrastructure when there is a slowdown as it helps in a pickup.
"Slowdown should not deter the government from building infrastructure as this is one of the surest ways to restart faster growth," he said.
When asked if India will maintain its position as the largest borrower, he replied in the affirmative, adding the present 30 per cent share that India enjoys in funding may go up or down.
The bank is willing to fund USD 1 billion worth projects in India per annum for some more time, he said, pointing out that the domestic needs are very large.
"India can afford to borrow, the space for borrowing is there. Many countries don't have the limits by being under IMF watch or some similar thing. India has good quality projects," he said, adding the bank has over USD 6 billion of pending projects from India.On the fiscal side too, there is a space available for India to invest in infrastructure. Our job is to fill up the gap, he said, stressing that there is more need for the private sector to participate in infra building. AA BEN MR
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