Japan - an important funding for India

            Japan, an important funding source for India’s growth story, has urged New Delhi to unravel the red tape holding up big-ticket infrastructure projects that it is ready to fund. Akihiko Tanaka, president of Japan International Cooperation Agency (JICA) said that he has urged finance minister                        P Chidambaram to speed up project approvals, as their execution cannot start without paperwork. .

Japan has extended Yen 2,065 billion or $21 billion (at today's exchange rate) in aid to India over the last 10 years since 2002, helping put on track a host of infrastructure projects such as Delhi’s showcase metro rail. Among the projects now being funded by the country are:

·        Western freight and Delhi-Mumbai industrial corridors

·        Line-3 in Mumbai Metro's first phase

·        Development of highways in Bihar

·        A $137-million investment promotion in Tamil Nadu

·        Development of IIT-Hyderabad campus through $186 million loan

Tanaka said that, Japan cannot start a project without signing the loan agreement and hence asked the finance minister to make necessary arrangements so that the loan agreements for the four major projects can go on in a timely manner. Tanaka’s comment assumes significance in the backdrop of the recent meeting between Manmohan Singh and his Japanese counterpart, Shinzo Abe, at which Japan committed $747 million for the Mumbai Metro line and extended a yen loan equivalent of $3.7 billion for eight other projects.

 Japan has often voiced concern over the tardy pace of pace of approvals. JICA’s chief representative in India Shinya Ejima, had earlier said that going forward, the agency would only sign loan deals if approvals, such as environment clearances and most of the land acquisition, are in place.

Tanaka said he expected better progress on the $90-billion Delhi-Mumbai Industrial Corridor, which was reviewed by the two PMs. The national highway improvement plan for Bihar involves widening of the NH 82 along the Buddhist circuit. JICA has been ready to fund these projects since 2010, but they are yet to get Cabinet clearance. The bulk of JICA’s aid to India so far has been for the infrastructure sector—about 49% of its assistance since 2002 has gone into transportation projects and 20% to power sector.

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