World Bank to lend India upto $20 bn to fight poverty

The World Bank has come out with a multi-billion four-year plan aimed at bringing down poverty levels in seven low-income Indian states, where majority of India’s poor live.

The World Bank has come out with a multi-billion ($12-20 billion) four-year plan aimed at bringing down poverty levels in seven low-income Indian states, where majority of India’s poor live, to just 5.5% in 2030 against 29.8% in 2010.

The seven low-income states are Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, and Uttar Pradesh.

The World Bank’s Country Partnership Strategy (CPS) for India (2013-2017) proposing a lending programme of $3 billion to $5 billion each year over the next four years was discussed by its board of executive directors.

Under the proposal, 60% of the financing will go to state government-backed projects and half of this, or 30% of total lending, will go to low-income or special category states (where public services face high delivery costs). Under the previous strategy, 18% of lending went to these states.

The proposal was announced for the first time by the World Bank president last week.

In a statement, the Bank said its proposal would increase the share of people living above the threshold where they are at risk of falling back into poverty to 41.3% from 19.1%.

If India were to grow as it did from 2005 to 2010 without making growth more inclusive, poverty would fall to only 12.3% while 33.6% would remain above the vulnerability threshold by 2030, the Bank said.

“India’s seven low-income states, with 60% of India’s poor, are now growing faster than the average, and so investments there have the potential for greater impact,” said Onno Ruhl, World Bank country director in India.