ADB stresses core sector spending

The Asian Development Bank has told the Centre that infrastructural development is crucial to the reduction of poverty in the country.

An ADB team, led by Geert van der Linden, special adviser to the bank's president, pointed out that studies had found a strong linkage between infrastructure investments, economic growth and poverty reduction.

Thus, any poverty reduction strategy would need to focus on infrastructure development, especially in the transport, energy and urban sectors, it said.

According to a release issued by ADB, the team held discussions with the finance ministry and Planning Commission, as part of an overall review of the bank's poverty reduction strategy.

The team said the key infrastructure components include rural roads, rural electrification and assured irrigation. It further said there should also be a system of power grids and national highways linking poor rural producers to power sources and their markets in towns, cities and ports.

The team also emphasised the need for urban infrastructure to cope with rapid urbanisation.

The review team also discussed the importance of India's rural economy, which continued to sustain 74 per cent of its poor, and the Centre's role in improving governance to address the needs of the poor.

Team leader Van der Linden said as part of the review of the poverty reduction strategy, consultations were being held in five other ADB member countries, including China, Sri Lanka, the Kyrgyz Republic, Papua New Guinea and Vietnam.

Sudipto Mundle, the India chief economist at the bank, said the Centre had supported their poverty reduction strategy, which was based on the three pillars of pro-poor sustainable economic growth, inclusive social development and good governance.

The actual operational strategy for each country will be prepared after consultations with the different ministries and other stakeholders.

A country strategy and programme was prepared for India earlier this year, which mainstreamed poverty reduction through growth as the central goal of the Manila-based bank's operations in India.