India has asked multilateral development banks (MDBs) to share their project implementation expertise and help draw the road map to become a developed nation by 2047.
The finance ministry held a meeting with multilateral lenders on March 7 and sought their input on what it called a “budget-plus and finance-plus” strategy that would essentially cover the entire spectrum of project execution and go beyond just planning and financing, people aware of the details told ET. The ministry has approached various multilateral bodies to help mobilize other development finance institutions (DFIs) and investors, they said.
The ministry wants these MDBs – like the World Bank and the Asian Development Bank – to also help develop strategies to reduce time and cost overruns, and enable knowledge and technology transfers, among others, they said.
The move comes amid expectations that various international entities – both public and private – could show greater speed in investing in Indian projects if these are backed by MDBs that enjoy top credit ratings and governance standards.
It is also part of the wider government effort to further strengthen infrastructure creation to stimulate economic growth and employment.
Promising Support
For their part, representatives of the MDBs promised to support in “whatever way we can”, expressing their confidence in the Indian growth story, said one of the people quoted.
In February, 764 out of 1,902 infrastructure projects – each involving investments of Rs 150 crore or more – were delayed, according to the government’s latest flash report. This has inflated the cost of these projects by Rs 4.92 lakh crore from the original projections to Rs 32 lakh crore now. Cost overruns relative to original project costs, however, eased slightly in February to hit a three-month low of 18.2%.
The central government’s capital expenditure for FY25 was raised by 17% as per the revised estimate for this fiscal to a record Rs 11.11 lakh crore, outpacing the revenue rise of over 4%.
(tagsTo Translate)Indian Multilateral Banks