World Bank's loan cap at $3 billion

The World Bank is willing to lend up to $3 billion over the next three years to help develop rural infrastructure. This amount would, however, come from the bank's existing lending commitment of $9 billion for the next three years.

World Bank President Paul Wolfowitz, who wrapped up his first visit to India on Saturday, indicated that the multilateral body would not step up overall lending to the country.

"The current plan is to lend $3 billion per year for three years. Doing any of these projects the right way involves a lot of work. I don't know if we could scale up that rapidly," he said.

The bank is already active in some of the areas covered under rural infrastructure development programme, Bharat Nirman, and has approved new loans worth $1 billion in the last two years in areas of irrigation, roads, drinking water and sanitation.

On the government's viability gap fund to help infrastructure projects, Wolfowitz said that details of individual projects would have to be looked at. "Infrastructure constraints are an impediment to growth.

The government has rightly made provision of rural infrastructure and investments in hard infrastructure a priority. The World Bank feels privileged to support these efforts," he said.

However, there was no firm commitment to increase the lending for the area, which is estimated to require $100-billion investment in the next seven years.

On India's growth prospects, Wolfowitz said it would be dangerous to make predictions but the last 15 years had been 'phenomenal'. India's human capital had enabled it to grow at a healthy pace, he said.

However, he warned that if the country did not follow sound fiscal and monetary policy and encourage a climate friendly to private investment, it would find it difficult to sustain the 6-7 per cent growth.

Ruling out the possibility of the bank lending to nuclear power plants in the country, he said that the G-8 leaders had asked the bank to construct a framework to facilitate investment and technology transferto ensure more and cleaner resources for energy in developing countries.

However, nuclear technology involved issues of waste disposal and "We are not sure that we are ready to go there as yet," Wolfowitz said.