The Hindu Business Line : `World Bank committed to supporting reform process'

THE World Bank is committed to supporting the ongoing reform process and exploring new opportunities in various Governments' quest to bring social change, according to its Lead Economist for South Asia region.

The Lead Economist, Public Finance, South Asia region for the World Bank, Mr Vinaya Swaroop, told Business Line that Uttar Pradesh and Andhra Pradesh rank among the top two States in India in terms of World Bank lending programme.

"We continue to partner with States targeting some areas for focussed development work be it education sector, healthcare or public enterprise reforms or poverty alleviation programmes."

Mr Swaroop was in Hyderabad to hold parleys with various stakeholders and explore new avenues and interact with some of the ongoing projects.

He said negotiations are on with the Government of India for yet another project that seeks to improve urban infrastructure in various municipalities of the State. This could actually involve a total outlay of about $180 million to $200 million.

The World Bank official, who is engaged with various initiatives in the region spread across some eight countries, and working closely with Andhra Pradesh, Karnataka and Maharashtra Governments, said, "Often the role of World Bank is misunderstood. If you look at our funding patterns, we don't fund to States. We actually enter into arrangement with a sovereign government that is the Government of India, which is then routed to a particular State for specific purpose be it structural reforms or any other targeted development.

"In the case of Andhra Pradesh, I have been associated with the State initiatives since 1997. Over the last 10 years, the Bank has been associated with various Governments including State Governments in their reform process in the capacity of a consultant and a lender. We never impose any conditional ties as often made out. Everything is made transparent and all the agreements, once approved by the board, are made public and can be accessed online. Anybody can access them," he said.

"Often when Government's change in a democratic set up, there is a period of transition wherein the new Government takes time to adjust. The new Government in Andhra Pradesh announced its policy to offer free power to farmers based on their manifesto. It is for the Government to decide on their priorities as long as they are sure of the funds for the sector. They should not end up in a situation where most of the funds are deployed for establishment and other areas neglecting capital expenditure. As long as the purpose is to help the deserving, it is fine," he said

"In the case of Andhra Pradesh, the World Bank is associated with both investment lending which is project centric or policy based lending which is targeted based on structural adjustments. Irrespective of type of loan, the primary objective is to help people to improve social infrastructure and reduce poverty. Since we cannot be part of all development activity, we take up some areas and work in partnership with States by providing both insights as also advisory services," he said.

Andhra Pradesh and Karnataka are are perceived as reform-minded having their own strategy for growth. It is not a coincidence that Andhra is among the top two States in terms of overall lending support. There are several instances of ill-informed reportage about World Bank lending programmes. The issue here is we don't lend to States, but to the Government of India, which in turn directs it to States depending upon their requirements and priorities for specific sectors.

"For instance, as a country, India is on the verge of implementing value-added tax regime. Most people are keen to understand the impact and implications of such an initiative across segments be it trade, people and consumers. As a consultant, we would be happy to work on this and present an impact report that would help better prepare for the new regime," he said.

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