Asian Development Bank President Takehiko Nakao on Thursday said the transfer of Rs 1.76 lakh crore surplus from the RBI to the government is an "appropriate policy" and help in stimulating the economy.

Earlier this week, the Reserve Bank of India's (RBI) central board had approved the transfer of record Rs 1.76 lakh crore dividend and surplus reserves to the government.

In a media interaction, Nakao said some Indian industries may benefit from the US-China trade dispute but their concerns about its general impact on the global economy, market sentiments, and fluctuation in currency exchange rates move more quickly.

"But, what is important is that India will continue to invest in infrastructure, invest in people and macroeconomic policies have been sound.

"And transfer of the retained income from the central bank to the government and such kind of ideas also might help" in improving investment climate, he said.

He is on a four-day visit to India concluding on Friday.

Nakao said while such fund transfers from the RBI cannot happen frequently, but this year, "it can be used for the government expenditure". It will help stimulate the economy, he added.

He further said the recent decision of the government to further liberalise the foreign direct investment norms would also be help for the economy.

The Asian Development Bank's (ADB) president also said India has been growing rather rapidly after economic reforms started in early 1990s and added that Prime Minister Narendra Modi-led government has continued the reforms momentum.

On gross domestic product (GDP), he said last year's growth rate of 6.8 per cent was slower than the previous years but growth rate can fluctuate.

"So, I am not really worried about the future of India if the country continues to implement needed reforms and investment in infrastructure and human capital," Nakao said.

The ADB expects India's GDP growth for the current financial year ending March 2020 at 7 per cent and 7.2 per cent in the next year.

The Manila-headquartered multilateral bank proposes to lend USD 4 billion to India, which includes USD 1 billion for the private sector.

Currently, India is the biggest borrower from ADB both on the sovereign and non-sovereign fronts.

ADB also plans to support the Jal Jeevan Mission of the government and Nakao indicated that the bank may commit USD 500 million towards it.

Prime Minister Narendra Modi said on August 15 that the government will launch a Jal Jeevan Mission to bring piped water to households and resolved to spend more than Rs 3.5 lakh crore in coming years.