$325 mn World Bank loan for Maharashtra

'I have been discussing how the World Bank can help in scaling up the rural infrastructure'.

World Bank President Paul Wolfowitz today had a series of meetings with top finance ministry and Planning Commission officials during which the government projected a funding requirement higher than $3 billion per year "" the current level of assistance from the Bank.

"One of the most important things I have been discussing with my hosts is how the World Bank can do more to support the critical challenge of scaling up the rural infrastructure," Wolfowitz said.

India is talking to the World Bank for a $1 billion loan, to part fund the Rs 1,74,000 crore Bharat Nirman Programme for developing rural infrastructure. In addition, another $1 billion may be required for the funding of infrastructure projects in roads, ports, airports and power.

The World Bank chief also signed a $325-million loan agreement to help Maharashtra in improving the productivity of its water resources in the presence of Finance Minister P Chidambaram.

The Maharashtra project expects to increase irrigation coverage in the state by about 22 per cent, and crop yield by 5 to 20 per cent. Farm incomes on average are expected to increase 49 per cent. About 33,610 families fully dependent on agriculture will rise above the poverty line by the time the project is completed

He also discussed the progress made by India in achieving millennium development goals, especially reduction in poverty level. Wolfowitz also met Prime Minister Manmohan Singh over lunch and called on President APJ Abdul Kalam.

At an hour-long meeting with the Planning Commission officials, Wolfowitz, who is on a four-day visit to India, was given a detailed presentation on the upcoming projects and funding needs.

During the meeting, Ahluwalia briefed Wolfowitz on the progress made in the Bharat Nirman programme, status of infrastructure in the country, growth in different sectors of the economy, and financing plans.

"We have mentioned that India could easily absorb something of the order of a billion dollars in the Bharat Nirman Programme," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

"We have said this is certainly a flagship programme," he said. He also added that India would need huge funds over the next few years, especially in the 11th Plan period (2008-13), for the infrastructure development programmes.