India plans to develop its existing infrastructure projects as a separate asset class—a move aimed at attracting funds from multilateral banks such as the Asian Infrastructure Investment Bank.
“Such assets having passed the stages of land acquisition and environment and forest clearances are relatively de-risked,” Prime Minister Narendra Modi said during the annual meeting of the governors of the AIIB today. “Hence, for such assets, institutional investments from pension, insurance and sovereign wealth funds are likely to be more forthcoming.”
This came after AIIB cleared a $100-million investment into the National Investment and Infrastructure Fund, which will help to mobilise private sector capital for infrastructure projects in the country.
AIIB has funded seven projects worth $1.4 billion in India and has agreed to finance the Bengaluru Metro. It has also financed a couple of electricity transmission upgrade projects.
Modi said the bank had invested $4 billion in more than 25 projects in several countries in the last two and a half years. The Prime Minister also called upon AIIB to expand its investment to $40 billion by 2020 and $100 billion by 2025.
Here are the key highlights from Prime Minister Modi’s speech.
- Investments by AIIB in sustainable infrastructure can impact the lives of billions of people.
- ‘Regional multilateralism’ through institutions like AIIB play a central role in raising resources.
On Indian Economy
- India has emerged as a bright spot in the global economy. With a size of $2.8 billion, it is the seventh-largest economy in the world.
- Despite rising oil prices, inflation is within the mandated range.
- The government is committed to the path of fiscal consolidation.
- India continues to be one of the top FDI destinations in the world.
- From a foreign investor’s perspective, India is a very low political risk economy.
- We have liberalised the FDI regime with most sectors on automatic approval route.
- The Goods and Services Tax is one of the most significant systematic reforms in India.
- India has jumped 42 places in three years in the ease of doing business report of the World Bank.
- In India we are upgrading connectivity at all levels.
- We have planned to set up 175 gigawatt of renewable energy by 2022.
- Bharatmala is aimed at improving road connectivity.
- Sagarmala will help improve port connectivity.
- Dedicated trade corridors are being developed to reduce congestion on rail networks.
- UDAN scheme will improve regional air connectivity.
- India is working on new-age infrastructure concepts.
- Bharat Net is working on improving last-mile connectivity through internet.
- UPI along with BHIM and Rupay cards has shown true potential of digital India.
- Digital India mission aims to bridge the rural-urban divide.
- Promoting investments in warehousing, cold storage, food processing and allied business to improve agriculture development.
- Aim to provide every poor household with affordable housing by 2022.