World Bank may heed India's plea to raise foreign aid

By siliconindia staff writer   |   Monday, 26 April 2004, 07:00 Hrs
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WASHINGTON: The World Bank appears sympathetic to India's plea to raise further its Official Development Assistance (ODA) of about $4 billion a year to sustain the country's newly-acquired high growth path.

An impression to this effect was given by the Indian delegation led by Reserve Bank of India (RBI) governor Y.V. Reddy at a press conference here Sunday night after its meeting with World Bank president James Wolfensohn.

Reddy declined to spell out the exact figure that India desired in the form of ODA but said the Bank chief was "reasonably" appreciative of India's performance on the economic front, raising hopes for the increase in the foreign aid allocation.

The delegation, which included Finance Secretary D.C. Gupta and Economic Advisor Ashok Lahari, highlighted the Indian economy's march to the high growth path, insisting that the country's GDP growth this year is expected to be over eight percent.

Reddy was also hopeful of the performance of various sectors of the economy.

"Following good monsoons, the agriculture growth has rebound and is expected to be over 10 percent. The industrial sector continues to remain buoyant," he said, indicating that the investment climate during the year has improved considerably.

Bank President Wolfensohn wanted India to make special efforts in improving infrastructure, especially roads, power generation, water supply and agriculture reforms, which he considered a prerequisite for maintaining the current economic tempo.

Reddy and other members of his delegation agreed with him and said the government had accorded "renewed priority" to infrastructure development.

The delegation, which came here to attend the 2004 spring meetings of the International Monetary Fund (IMF) and World Bank that ended here Sunday, issued a statement saying India's growth performance in 2003-04 was appreciated at these sessions.

"There was universal appreciation of the underlying robustness of the Indian economy, with impressive growth prospects over the future within a stable macro-economic environment," it said.

The RBI governor drew satisfaction from the improving global economic environment but at the same time, warned against the continuing risks inherent in the process of correction of the US dollar.

He also commended IMF's efforts in strengthening the framework of surveillance in order to provide an early warning system to crises as well as the timely implementation of corrective steps.

Reddy reiterated India's continued commitment to combating the financing of terrorism as well as strengthening the anti-money laundering measures.

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