World Bank strategy for India can improve support for infrastructure and poor States

December 13th, 2008 - 11:39 am ICT by ANI  

Washington, Dec.13 (ANI): The World Bank Group is preparing to help India to speed up its infrastructure development projects and provide support to its seven poorest States in offering better living conditions to their residents.
The World Bank Group’’s new Country Strategy for India, discussed by the Institution’’s Board today, envisaged a total proposed lending program of 14 billion US dollars for next three years.
Of this proposed amount, 9.6 billion US dollars is from the International Bank for Reconstruction and Development (IBRD) and 4.4 billion US dollars (SDR 2.982 billion equivalent at the current exchange rate) from the International Development Association (IDA).
The strategy to offer support is guided by the priorities of the Central Government, as stated in the 11th five-year plan for the country.
Among the main challenges for India, it identifies sustaining rapid growth as critical; not only for building the infrastructure, which underpins growth, but also for bringing along the 300 million Indians who live in dire poverty.
A related challenge is to ensure that development is sustainable, meaning that the environment is cared for in the process. Providing services for all citizens implies much greater effectiveness of public spending.
“India’’s rapid growth will not be sustainable if it does not include the 300 million citizens who live below the official poverty line, nearly 60 per cent of whom reside in the country’’s seven poorest states,” said Giovanna Prennushi, World Bank Economic Adviser while adding: “This strategy is designed to boost support to these states, but also not to forget about the poorest people in India’’s middle income states. The challenge is to target poverty where we can help make the difference.”
Giovanna said that critical to boosting growth and bridging the gap between rich and poor, is addressing India’’s vast infrastructure deficits. “No Indian city provides water 24 hours a day, 7 days a week, only half the population has access to safe drinking water, and 40 per cent of the country’’s 600,000 villages are not connected to a road.”
The tremendous size of India and the sharply different levels of development both within states and between states require a differentiated approach to meeting the country’’s development needs. And, the World Bank’’s new strategy takes into account these differences.
The Bank Group’’s focus will be on the seven low-income States– Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, and Uttar Pradeshfor reducing their poverty and helping these states achieve the Millennium Development Goals.
Support to middle-income States will be on two fronts– fighting poverty in the lagging areas of these States, and addressing the challenges emerging from rapid growth, compounded now by the global economic downturn.
The World Bank Group’’s new strategy will support some of India’’s middle-income States like Andhra Pradesh, Karnataka, Punjab, Tamil Nadu, Haryana, Gujarat, and Maharashtra.
It will help them explore and share innovative approaches to reduce poverty just like is the instance of the Andhra Pradesh’’s Indira Kranti Patham, which empowers millions of poor women through self-help groups.
The Bank Group will continue to support policy and institutional changes in the Central government and the expansion of national programs. One such example is the support for India’’s public education system, the Sarva Siksha Abhiyan (SSA).
Schools are now accessible and the program has achieved gender equity. Under the next phase, Bank support will focus on the quality of education.
Another example is the Bank’’s continued support to PowerGrid, a leading electric transmission network in India.
Strengthening project implementation is at the core of the new strategy. The Bank Group will more closely examine risks and ways of reducing the impact of potential risks on project outcomes.
“At a time when India has experienced rapid growth, choosing activities carefully is crucial if the World Bank is to make the most of its limited resources. The World Bank and the Government will jointly implement a more rigorous project selection process than in the past,” said Rachid Benmessaoud, World Bank Acting Country Director for India.
He said the World Bank will also support analysis of important issues confronting policymakers, including poverty and exclusion, skills and job creation, low-carbon growth, the challenges of rapid urbanization, and the management and development of water resources.
The International Finance Corporation (IFC), the World Bank’’s private sector affiliate, has an extensive program for addressing poverty in India through investment and advisory work on economic inclusion, regional integration, rural development and India’’s low income states.
The World Bank and IFC are collaborating to bring cutting-edge expertise for Public-Private Partnerships (PPPs), tailored to India’’s needs.
While such support has been most visible in infrastructure - power transmission, roads, irrigation and rural infrastructure - it is being extended to health and education, agribusiness, and renewable energy.
“IFC’’s program in India, including support for the infrastructure sector, climate change initiatives and in scaling up access to finance for the under-served is providing critically-needed support to the private sector, particularly at this difficult time,” said Paolo Martelli, IFC’’s Director for South Asia. (ANI)

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