HYDERABAD, 7 November 2004 — The World Bank has proposed to more than double its lending to India to $3 billion in the current fiscal year, from $1.4 billion last year.
Disclosing this here on Friday evening, World Bank Country Director for India Michael F. Carter said, “The Bank hopes to increase the level of its lending to $3 billion a year — a tiny drop in the huge ocean that is India’s economy — but along with our intention to be a facilitator, convener and generator of global knowledge for India, and our desire to help India’s poorest states in particular, I hope the bank’s value will be worth more than just the money it lends.”
Carter said that the lending would be expanded in infrastructure sectors such as roads, transport, power, water supply and irrigation as well as urban development and human resource development sectors — education, health and social protection.
Delivering the C.C. Desai memorial lecture on “World Bank and India: Working in cooperation for achievement of millennium development goals (MDGs)” at Administrative Staff College of India, the country director said that the bank’s present portfolio of projects in India was its second biggest worldwide. The bank was assisting 12 states in the country.
Since 1997, the bank’s Country Assistance Strategy has included a focus on states undertaking comprehensive reforms. During the last CAS period (2001-04), the focus was on Andhra Pradesh, Karnataka and Uttar Pradesh. With the widening gulf between India’s faster and slower growing states, some shifts in this approach were warranted.
Unveiling these shifts, Carter said the bank, in consultation with the government of India and other partners, would seek to ensure that all of the largest and poorest states of India are engaged in a dialogue on cross-cutting reforms. The bank would work proactively to build a productive development relationship with four states where poverty was increasingly concentrated in India: Bihar, Jharkhand, Orissa and Uttar Pradesh.
State-level adjustment lending operations aimed at supporting the achievement of the MDGs would be an important part of the bank’s program. Instead of concentrating on focus states, investment lending would be channeled more broadly to states on the basis of guidelines for each sector, where the guidelines attempt to set out the sector-specific conditions that experience has shown to be necessary for project success.
“India today is poised on the verge of a great opportunity — if it makes the right decisions and choices now, this great nation will very quickly become an economic and cultural power, and along with China, make the 21st Century its own. But if missed, it will be a tragedy both for itself and the world as a whole,” he said.
“India at this time is occupying two worlds simultaneously. In the first, economic reform and social changes have begun to take hold and growth has had an impact on people’s lives, and opportunities have opened up.”
