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p. 81 of 95 BACK | NEXT Message from the Chairman of the Board of Directors Members, Capital Stock and Voting Power The Record Abbreviations 2004 in Review: Board of Directors' Report Special Theme: The Changing Face of the Microfinance Industry: Building Financial Systems for the Poor Part 1: Institutional Effectiveness Part 2: Poverty Reduction Strategic Priorities Thematic Priorities Regional Perspectives East and Central Asia Mekong The Pacific South Asia Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka Southeast Asia Part 3: Financial Statements: Management's Discussion and Analysis

Annual Report 2004 : Part 2: Poverty Reduction : South Asia

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India

Strategy and Policy Dialogue. Political and economic developments since the 2003 CSP confirm the validity of mainstreaming poverty reduction through infrastructure-led growth supported by social development and good governance. In line with the new government's priorities, some aspects of the strategy were strengthened in the CSPU for 2005–2007, namely ADB's operations in agriculture and rural development (including integrated water resource management and agribusiness development), and the shift in focus to poorer states and less developed regions, especially the northeastern states, in order to address regional disparities and to achieve the MDGs.

Infrastructure investments, including roads, railways, inland waterways, power, urban infrastructure, and rural water management systems remained the backbone of ADB's assistance. Transport sector operations focused on strengthening connectivity to link poor rural families to markets and social services in cities, towns, and ports while energy sector operations assisted with power sector reforms, promotion of more efficient, renewable energy sources, upgrading transmission and distribution systems, and encouraging energy conservation. Urban sector projects combined infrastructure development with targeted poverty reduction components and strong elements of municipal governance and policy reforms. ADB's private sector development program focused on rationalizing capital market regulations and extending the securities market. Social development goals were addressed in components of physical infrastructure and other economic projects. ADB also provided assistance for comprehensive fiscal reforms in several states including Kerala and Assam and technical assistance to modernize central tax administration. ADB's ongoing policy dialogue with the government and various executing agencies focused on improving state policy environments and in critical sectors such as power, transport, urban infrastructure, finance, and agriculture and rural development.

Loans and Technical Assistance. In 2004, ADB approved six loans amounting to $1.3 billion covering five projects for upgrading national highways, an inter-state power transmission system, reconstruction work in the states of Jammu and Kashmir, a policy loan for implementing fiscal reforms and improving governance in the state of Assam, and one private sector loan for a power generation plant involving an equity investment of $20.6 million. Two equity investment projects were approved in 2004—$20 million in a private sector equity fund, and $9.7 million in a liquefied natural gas terminal which also involved a partial credit guarantee facility for $65.3 million. ADB launched its first local (rupee) currency bond issue for Rs5 billion (about $110 million) in February 2004—the first such issue by ADB in a DMC. This will enable ADB to offer rupee-denominated loans to private sector borrowers thus protecting them against exchange rate risks since most ADB-financed projects generate revenues in local currency. Sixteen technical assistance activities for $11.2 million were also approved.

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