Click to play videoNew Delhi: India needs to invest $60-$100 billion a year in infrastructure to achieve above nine per cent growth says the Asian Development Bank.
Rajat Nag, the next managing director, of the manila-based bank says that a pan ASEAN Free Trade Agreement will raise the region's GDP three per cent and India must not be cautious.
Nag, the Indian born Canadian, will take over as the managing director of Asian Development Bank mid-December, after a 20-year stint. Quoting an ADB study, he says India can achieve eight per cent plus growth.
“The infrastructure investments which are going to be huge in India atleast a $100 billion a year are made but not just investments you have to got the right institutions and you have to got the right policies,” Nag said.
The Economist magazine says even though China is growing faster, it is India's growth that looks fragile because of higher inflation, factories operating at close to optimal capacity and many other reasons where India appears stretched. But Nag sees fragility coming from another direction.
Nag added, “Inclusiveness is going to very key.”
An ASEAN FTA is likely to happen next month during a summit meeting in the Philippines, which Prime Minister Manmohan Singh will attend. India is not prepared to make big tariff cuts on 500 items including oilseeds, but Nag says India should not be too cautious.
“It’s a win-win proposition for all. Some may win more than others and my point always is less focus on what we win rather than what the other party wins,” Nag said.
An FTA would add three per cent to the region's GDP. India can gain a slice if it joins in but it also needs to make sure that the benefits are spread out and again calls for better infrastructure.
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