The Indian government had to do some “heavy lifting” in bolstering investments to prop up economic growth earlier when India Inc took a pause after creating excess capacity, Dasgupta indicated. But now private entities are again raising their investments, he added. A key part of Dasgupta’s role at ADB involves deep engagement with private players. Gross fixed capital formation in FY24 will account for 34.1% of India’s gross domestic product, the highest in over a decade, the National Statistics Office said in its second advance estimate last month.
In an interview to ET, Dasgupta said: “At ADB, we have taken a strategy shift. One of the pillars of that new strategy is the private sector. So we do believe that there is a growing opportunity across Asia, including India, for private sector activities.”
ADB mobilised $1.2 billion for private projects in India in 2023, of which its own contribution was about $775 million and private parties made up the rest, he said. About 27% of these projects pertained to climate action.
ADB also supported financing of sovereign-backed projects worth $2.6 billion in India last year. The support to both sovereign and private projects in India will be scaled up in the coming years, Dasgupta said. “We are investing in clean energy, we are looking at green ammonia, battery storage and new technology, clean technology,” Dasgupta said. “So it (ADB’s India interest) is across the spectrum for both adaptation and mitigation (relating to climate change).” The multilateral body has also deepened its India engagement in the financial inclusion space, particularly for affordable housing, agri science, MSME and women-centric initiatives.
Reforms at ADBADB has started undertaking reforms in sync with the G-20 agreement (under India’s presidency) to make multilateral development banks “bigger, better and bolder” to meet new-age challenges, Dasgupta said. It has introduced a capital adequacy framework to create an additional lending room of about 40%. It aims to extend $100 billion in climate finance over a decade through 2030.Realising the second goal of “being better” involves transformation in the internal processes at ADB. “We carry on internal process reforms to become a lot more agile, responsive and faster as a bank. That work has already started and is going on,” he said. The third goal-being bolder-relates to resource mobilisation, essentially alternate forms of capital. ADB has launched a first-of-its kind model-IF-CAP-which will use guarantees from partners to boost climate change investment. For every $1 of guarantees, ADB could extend up to $5 in climate finance, Dasgupta said. Asked about the impact on global supply chains in the wake of Houthi rebel’s attacks on merchandise ships in the Red Sea, Dasgupta said strifes that can potentially hit global trade is a matter of concern. “But we hope that these are temporary situations and things will improve,” he added.