The World Bank would now provide lending to some of the government’s transformative projects, such as the dedicated freight corridor (DFC), Ganga cleaning project and Kosi flood recovery project, besides assisting in other programmes related to sustainable development.
The Bank’s total lending to India would reach $9.3 billion in the financial year ending June, compared to $2.2 billion lent by the Bank last year. The World Bank follows July to June financial year.
In an effort to mobilise capital for infrastructure development, the government has asked the Bank to focus these three projects. However, these projects are yet to be approved by the Bank’s board of directors.
“Going forward, we would focus on some large transformative projects, which would help the government achieve its aim of spending $500 billion towards infrastructure development during the current Five-Year Plan,” said Roberto Zagha, World Bank country director in India.
Over the coming years, the Bank would also focus on some pilot projects like improvement of agriculture in Maharashtra and introduction of social security for the unorganised sector, he said.
The lending also included a $2-billion package to provide capital to facilitate credit expansion of some public sector banks and prevent a shortfall of capital from affecting India’s economy in the wake of the global economic crisis, Zagha added.
The total lending of $9.3 billion includes $2.6 billion interest-free credit and $6.7 billion in the form of long-term, low-interest loans spread across 25 new projects. According to Zagha, the rise in lending to India is mainly as “demand for additional infrastructure lending has been increasingly voiced by countries like India and China over the last few years and the Bank has been making sustained efforts to respond to it”.
Developing nations had been lobbying for a long time to increase their power in the Bank’s daily operations and fund disbursements. India has become the seventh-largest shareholder, with an increased voting power of 2.91 per cent.