Spending rate of ADB loans must increase, says FM

The government aims to increase the spending rate of loans provided by the Asian Development Bank to finance projects so as to make better use of the money, Finance Minister P Chidambaram said today at a press conference.

"Our capacity to spend must increase," he said. However, he pointed out that states had to deal with limitations imposed by rules meant to impose fiscal prudence.

Chidamabaram also highlighted India's association with ADB ahead of its annual general meeting in Hyderabad next week.

Chidambaram said the aim was to increase the rate of disbursement to 20 per cent this year from 16 per cent last year. The current average annual level of inflow into the government's projects from the ADB is $1 billion.

ADB's spending plans in the country will increase in the future. The overall size of its India programme is to go from $2.25 billion in 2006 to $2.65 billion in 2008. The bulk of ADB's lending into India is directed at infrastructure.

'Surging crude prices a worry'

The government has said it was concerned over the surging global crude oil prices, now hovering around $75 a barrel and would address the issue at an appropriate time.

"True. We have no control over crude oil prices. It's always a cause for worry. I am sure the government will address it at an appropriate time," Finance Minister P Chidambaram said.