Global recovery following the economic downturn is still tentative and fragile, Asian Development Bank's managing director general Rajat Nag said in Ahmedabad on Friday.
However, according to Nag, India and China will be the main players driving the recovery in the global economy.
"China is doing extremely well and is on the path of high growth rate thanks to tremendous spending by the government through stimulus packages," he said, adding, "Even India also has survived and sustained high growth rate."
Speaking at the IIMA annual confluence here Nag said that the ADB has revised its growth projections for India and China.
Talking about India, he said that the stimulus packages have played a crucial role in bringing the economy back on track but high inflationary pressure remain a potential threat to the economic activities in the country.
According to Nag, India, if certain issues are addressed correctly, has potential to achieve over nine per cent annual growth rate for next three decades.
"In recent decades, we have made good progress and economic and industrial activities have picked up a lot in the country but still there are number of challenges," he said.
Talking about issues facing the country, he said "India has two faces, which are starker than anywhere else in the world. We have huge disparities in urban and rural population. The gap is widening between poor and rich and the state of education and health still remain huge concerns for the country."
According to Nag, the country needs to address structural inequalities in the economy, governance, infrastructure deficit, environment and regional instability.
On environment, he said that both India and China have messed up on this front and serious steps are needed to be taken while there is no element of accountability in the governance.
"Regional cooperation is also a big challenge because you cannot be prosperous and stable, if your immediate neighbours are not prosperous and stable," he said, emphasising greater role for India to achieve cooperation with its neighbours in the South Asian region.
Talking about ADB's operations in the country, he said that India was the largest recipient of ADB's aid ($2.9 billion) in 2008 and 70 per cent of bank's lending is in infrastructure area.
According to him, energy, power generation and transmission and infrastructure remain the focused areas of ADB for lending the resources.
