World Bank lauds India's anti-poverty programme

Friday, 11 April 2003, 19:30 IST
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WASHINGTON: World Bank president James Wolfensohn has lauded India's anti-poverty programme, saying it has made "very good progress" in terms of gross domestic product (GDP). At his press conference here Thursday ahead of the World Bank-International Monetary Fund (IMF) annual spring meeting, he said addressing an Indian journalist: "I think you know exactly what is happening in India." Wolfensohn was referring to the World Economic Outlook released by the IMF Wednesday, which projected a growth of 5.1 percent this year and 5.9 percent in 2004 for India. The estimates are however lower than the Fund's earlier projections of 5.2 percent and 6.5 percent respectively. IMF's semi-annual economic survey said India's economy grew by 4.9 percent last year despite a severe drought, which adversely affected agricultural production. IMF voiced concern at the large fiscal deficit, which has reached 10 percent of GDP, and suggested establishing a "credible" fiscal consolidation strategy to deal with the situation. It noted that India took some "welcome steps" to further open the economy to foreign direct investment and move towards market-based pricing of petroleum products. IMF stressed the need for pushing through other key reforms, including early passage of the proposed fiscal responsibility legislation. Wolfensohn said the economic situation had begun to pick up in India's neighbouring countries as well. "There is evidence now of an improvement. It has been slow, but nonetheless, I think that with education, with health programmes, with improving governance, and with increased trade, you can project that you will have a betterment of life in South Asia, and there is evidence that is coming through," he said. The document says the situation in Pakistan has continued to improve, with GDP growth accelerating, inflation remaining subdued and balance of payments strengthening. However, Islamabad needs to lower the fiscal deficit to reduce vulnerabilities, the IMF said. For Bangladesh, the IMF favours a comprehensive strategy for strengthening state-owned banks and to sustain recent improvement in growth and the external position.
Source: IANS