India may seek Asian Infrastructure Investment Bank funding for PM Narendra Modi’s pet projects

NEW DELHI: India may soon approach the Asian Infrastructure Investment Bank to obtain funds for some of Prime Minister Narendra Modi’s pet projects in agriculture, rural housing and railways.

The move comes after India was last month elected to the board of directors of the China-sponsored bank.

Officials said Modi, who met AIIB president Jin Liqun in Delhi last month, has asked senior officials to approach the institution for loans. India is not only a founding member, but also the second largest shareholder of the AIIB, which has its headquarters in Beijing and opened for business on January 16 with a capital of $100 billion. The finance ministry has accordingly asked the ministries of agriculture, rural development, water resources and railways to prepare proposals for loans from the new bank.

DJ Pandian was appointed as one of the vice presidents of AIIB earlier this month. He will also be the chief investment officer of the bank.

According to a note circulated by the Department of Economic Affairs, Modi has asked the officials to seek AIIB loans for Pradhan Mantri Krishi Sinchayee Yojana (Prime Minister’s Agricultural Irrigation Scheme) or PMKSY, rural housing programme and railway projects.

The PMKSY, meant for irrigation across India, has budget of Rs 50,000 crore over the next five years. The agriculture ministry is understood to have informed the finance ministry that it would be in a position to approach the AIIB by the end of this month.

The rural development ministry is concluding the guidelines of Pradhan Mantri Gramodaya Yojana, involving construction of 2.95 crore houses in rural areas over a period of seven years. The AIIB and other lending institutions could meet the requirements, officials said.

The railways could seek funds from the AIIB for the proposed East West Corridor and East Coast Corridor, according to the DEA note.