Fastest Expansion In 18 Years For India's Economy

October 13, 2007 9:30 a.m. EST

New Delhi, India (AHN) - Robust investment, buoyant industrial expansion and moderate agricultural growth will expand India's economy by 8.5 percent in 2007 and 2008, the Asian Development Bank (ADB) says. It noted that was the country's fastest expansion in the last 18 years.

"I am pleased to note the prevailing buoyancy stemming from India's unprecedented growth and strong economic fundamentals," said ADB president Haruhiko Kuroda, who is in India for a five-day visit. "The increased integration of the global economy has made India a visible economic force."

Kuroda, in a meeting with Prime Minister Manmohan Singh, said the ADB is committed to support the dynamic South Asian nation in its efforts to achieve sustainable and equitable economic growth.

ADB remains committed to working with India in efforts to eradicate poverty, with infrastructure development remaining as the core focus in key areas of transport, energy and urban sectors, as well as in the government's priority sectors like agriculture and water resources, he said.

The key strategy for India is to help reduce poverty through infrastructure-led growth, the ADB said on its website.

ADB will increase its focus to provide assistance in rural areas through investments in agriculture, irrigation, rural roads and rural finance, to achieve broad-based economic growth. Those things directly benefit the poor, 75 percent of whom live in rural areas.

Earlier, ADB's key economic publication, Asian Development Outlook 2007, projected India's economy will expand by 8.5% in 2007 and 2008, up from an earlier forecast of 8.0% and 8.3%, respectively.

India's economy grew at a scorching pace of 9.4% in the fiscal year ending March 2007, the fastest expansion in the last 18 years.

The report, however, warned that inflation risks persist and any shock to food prices could stoke price pressures.