IFC is expected to increase its annual allocation for India to $3 billion.
New Delhi: The International Finance Corporation (IFC) – a member of the World Bank Group – is expected to increase its annual allocation to India to $3 billion (about Rs 22,500 crore) from the current $2 billion.
Alfonso Garcia Mora, IFC Regional Vice President for Asia and the Pacific, said HEY“Last year we made $2 billion, which is more or less what we’ve done in the last five years. We’re thinking of taking it to the next level, closer to $3 billion. He further mentioned that the US rate hike will not hit India as its macro indicators were in a comfortable range.
The World Bank’s private sector investment arm has injected money into more than 150 Indian companies through venture capital funds, and six startups have already become unicorns.
At present, the IFC is focusing on asset monetization unveiled by the Indian government. According to the financial daily, Mora said, “We believe asset monetization is an attractive way to raise private capital. We also help mobilize foreign investors. He said the IFC was also working with institutions to issue green bonds, mentioning that the company acted as lead investor without naming them.
The Indian economy had seen a good recovery after the outbreak of the second wave of the Covid-19 pandemic. The IFC expects GDP to grow by 8.3% in FY21, and India could be on a firm growth path of 7-7.5% in the future, Mora said, pointing out that programs such as Production Linked Incentives (PLI) and Monetization Pipeline are needed in India.
The reduction in the US Federal Reserve or an increase in interest rates like last time was unlikely to have a negative impact on India.
“We don’t think India will suffer from a rise in US interest rates. First, we don’t think monetary policy tightening in the US will be very extreme. Second, relevant indicators such as the CAD (current account deficit) are in a comfortable range in India,” Mora said in the post.
He pointed out that a very rapid rise in interest rates could put pressure on the financial sector as price-earnings ratios were quite high, pointing out that if the Fed or the European Central Bank started raising rates, it could have serious consequences. on the markets and on capital flows However, he ruled out any risk of capital flight.
