Under pressure from the US and Japan, the World Bank board is expected to once again defer a decision on the $140 million loan for Uttar Pradesh's diversified agriculture loan programme.
If the US succeeds in getting the bank board to defer the meeting, scheduled for Tuesday, it will be second time in as many weeks that this will have happended. Earlier last week, the bank board deferred loans aggregating $855 million in energy and roads sector loans under pressure from the US.
These loans included $450 million for the Power Grid Corporation, $275 million for the roads sector in Haryana and $130 million for renewable energy projects.
The Indian government so far has not sought to press the issue at the board and force a vote. It has gone along and accepted the rights of an executive director (in this case from the US) to seek a postponement of the board meeting by a fortnight.
Though, the Americans have drawn support from the Germans and Japanese, they are unlikely to win a vote at the board level. The vote strength of the US with other G-8 countries works out to only 45.35 per cent. In that case, a vote could turn out to be an embarassment for the US.
The articles of agreement and rules of procedures of the bank require that at least 13 out of the 24 executive directors are present to ensure a quorum. If 50 per cent of the directors present cast their vote, then the loan programme goes through.
Officials say that typically the chairman ascertains what the consensus view is without a formal vote.
But if an executive director requests a vote, except as otherwise specifically provided, all matters before the board wouldbe decided by a majority of votes cast (that is 51 per cent of total votes cast, not counting abstensions).
They went on to maintain that if consensus did not emerge for a project, then its consideration by the board gets delayed. Going by existing precedent, the longest that a loan programme of any country had got delayed so far was for a period of seven months. The loan in question was to accrue to China and got blocked by the US in the wake of the Tiannaman massacre.
The government itself is confident of obtaining the nod of the World Bank nod in the near future.
Officials point to the fact that in the first week after India declared its nuclear intentions, it successfully concluded negotiations for $1.2 billion in loans with the World Bank.
These include the $540 million for Andhra Pradesh, $380 million for Gujarat State Highways and $300 million for the Integrated Child Development Scheme. The latter is funded out of funds from the Interational Development Association _ the soft lending arm of the World Bank _ and would not actually require a US concurrence as it does not contribute funds to the corpus.
