India was World Bank's largest borrower in 2007
Thursday, 06 September 2007, 19:30 IST
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Washington: India was by far the largest borrower from two World Bank institutions, accounting for $3.75 billion, or 15 percent of their total lending as the bank group globally committed $34.3 billion in fiscal year 2007. The World Bank's programme in India focuses on providing basic services such as access to clean water and education, improving infrastructure for rural areas, and employment. The increase also reflects $700 million in lending to the health sector to India which was carried over from the previous year,according to a World Bank release. The World Bank Group extended loans, credits, grants, equity investments, and guarantees totalling nearly $6.9 billion to South Asia in fiscal year 2007, an increase of $2.3 billion over the previous year. The increase demonstrated the institution's continuing role in fighting poverty as South Asian countries look for ways to tackle their social challenges even while most of their economies grew aggressively, it said. Contributing to this increase was: $1.6 billion from the International Bank for Reconstruction and Development (IBRD), $4.03 billion from the International Development Association (IDA), $1.18 billion from the International Finance Corporation (IFC), and $76 million from the Multilateral Investment Guarantee Investment Agency (MIGA). "South Asia is home to the largest number of people in the world living below one dollar a day, so the agenda for poverty alleviation in the region remains very large," said Praful Patel, World Bank Vice President for South Asia. "The lending numbers from the IDA and IBRD in Fiscal Year 2007 are in line with the scaling up strategy we developed for the region three years ago." "There's a huge demand for IDA resources in South Asia and there's a huge prospect for making a real impact on the ground to reduce poverty," said Patel. "These types of programmes would not be possible without IDA funding. IDA leverages government programmes, enabling them to innovate and scale up." Many of the Bank's projects in the last fiscal year supported existing programmes that are delivering results. Looking ahead, the Bank will focus on cross-cutting reforms such as governance and fiscal management, and continue addressing deficiencies in the region's investment climate, such as weak infrastructure, red tape, and corruption. It will also deepen its engagement in states where poverty is increasingly concentrated, such as Orissa and Bihar in India and Sindh in Pakistan. IFC's investment commitments in the South Asia region reached $1.07 billion for 30 projects in FY07, and it mobilised an additional $102 million through syndications. Three quarters of the $2.6 billion of the disbursed and outstanding regional portfolio is in India, with Bangladesh at $147 million, the second largest. Private sector projects worth $3 billion were supported as a result of IFC's assistance to the Indian corporate sector. IFC doubled its committed portfolio in India in the infrastructure sector, to $600 million. Investments ranged from natural gas to wind power and from port services to a fund for developing public-private projects in infrastructure sector. "The South Asia Region has been acknowledged as a leader in impact Evaluations - to better understand what works and what doesn't work, so governments and the Bank can decide what should be scaled up and what should be scaled down," said Shanta Devarajan, World Bank Chief Economist for South Asia. This year also saw earlier Bank analytical work having policy impact. Estimates of teacher absenteeism in India, for example, have contributed to a shift in the focus of India's major primary education programme towards improved education quality, the Bank said. In response to the Bank's Doing Business report, the Indian government set up a Committee of Secretaries in November 2006. This Committee has directed that action is taken to reduce the time and cost of doing business in the country.
Source: IANS
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