World Bank's India loans to stay at '07 levels

The World Bank has told the Indian government that it expects to maintain lending in fiscal 2008 at similar levels as the previous year.

In 2007, the Bank sanctioned an unprecedented and all-time record high of $3.8 billion for India, a 169 per cent increase over the previous year's lending of $1.4 billion. The Bank follows a July-June financial year.

The sanctions are the largest ever in the history of the engagement of India with the Bank for any single country and includes concessional International Development Association (IDA) credits of $2.32 billion and International Bank for Reconstruction and Development (IBRD) loans of $1.5 billion.

In addition, the International Finance Corporation (IFC) had funded $700 million in different projects in the country, said Dhanendra Kumar, India's executive director at the Bank.

The Bank's increased lending comes at a time when revenue collections of the central government have risen at a fast clip (overall tax collections in 2006-07 stood at Rs 4,71,897 crore), on the back of a booming economy that grew 9.4 per cent during the year.

The government has stepped up spending on social and physical infrastructure and key policy makers like Finance Minister P Chidambaram have repeatedly pointed out that money is not a problem for well-designed schemes.

Kumar wrote to Finance Secretary D Subbarao on July 6 informing the government about this, official sources said here today.

"The Bank hopes to maintain a similar momentum during the year when a number of new and innovative projects, designed in India are likely to come up," the sources added.

Since 1995, the IDA has supported India with $11 billion through 62 projects.

Three quarters of IDA lending has gone to rural development (28 per cent), health and nutrition (26 per cent) and education (20 per cent).

A major portion of the Bank's fiscal year 2007 total lending "" $1.6 billion "" is for supporting government rural development initiatives and one-third of IBRD lending for infrastructure, including components of Bharat Nirman.

All these projects were designed in India. Some of the projects include the restoration of two water bodies in Tamil Nadu and Andhra Pradesh, for $450 million and $189 million, respectively.

A vocational training improvement project, funded through an IDA credit of $280 million, seeks to upgrade the skill sets of the country's growing workforce.