Constrained by funds, ADB may cut lending to India

Greater Noida, May 2 (IANS) The Asian Development Bank (ADB) is finding it difficult to maintain the current level of lending due to poor capital base and might cut financial support to countries like India, ADB President Takehiko Nakao said Thursday.

“We have no solid base of capital to continue to lend at higher levels,” Nakao told a press conference at the 46th annual meeting of the ADB board of governors here.

He said the ADB has increased its lending programmes to $10 billion from earlier level of $5-6 billion, but was finding it difficult to maintain the higher level because of poor capital base.

Major contributor to the ADB’s capital base, especially Japan, are facing difficult economic situation and are gradually cutting down the support.

India is ADB’s biggest borrower. The Manila-based agency has extended $2.4 billion loan to it for development of social and physical infrastructure in the areas like energy and transport.

Nakao said ADB’s support was crucially important for the countries like India and the multilateral agency would continue to provide support in all possible way.

“Looking at Asia as a whole, despite its remarkable growth in the past few decades, it still faces many developmental challenges. It is disheartening that in a region of such rapid progress, we still have a population of more than 800 million people living in absolute poverty. This, along with growing inequality, remains an overarching challenge,” he said.

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