The Hindu Business Line : World Bank ready to enhance loan assistance

HELPING HAND: The Finance Minister, Mr P. Chidambaram, with the Regional Vice-President, South Asia, World Bank, Mr Praful Patel, and the Country Director Designate, Ms Isabel M. Guerrero, after signing an agreement, in the Capital on Monday. — Kamal Narang

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New Delhi, Feb. 12 The World Bank is keen to expand its loan assistance programme to India from the current annual average of $2.5 billion to an annual average of about $4 billion over the next three years.

"Most of the additional lending would be targeted towards infrastructure support in various sectors. There are lot of gaps in infrastructure here," Mr Praful Patel, Regional Vice-President, South Asia, World Bank, told newspersons here on Monday.

He also said that the World Bank would continue to support lagging states and also look at scaling up its service delivery in the next three years.

"We have told the Finance Ministry here that the World Bank would be ready to enhance our lending programme to a level of $12 billion over the next three years (annual average of $4 billion). This year (July 2006-June 2007) we will finish with about $3.5 billion, much higher than the $1.4 billion in the previous year," he said.

Mr Patel also announced the appointment of Ms Isabel Guerrero as the new Country Director for World Bank in India. Ms Guerrero, a Chilean national, would formally assume office on March 1, 2007. Before this, she was the Country Director for Bolivia, Ecuador, Paraguay and Peru.

State loans

Mr Patel also said that the World Bank would lend about $835 million this year for modernising irrigated agriculture and restoration of water bodies in Tamil Nadu, Andhra Pradesh, Karnataka and Orissa.

Of this $835 million, the World Bank signed on Monday, in the presence of the Union Finance Minister, Mr P. Chidambaram, loan agreements amounting to $485 million for the Tamil Nadu project.

"In the next few months, we will sign a similar loan agreement for Andhra Pradesh amounting to $200 million. There will also be a $150-million loan for Orissa and Karnataka put together," he said.

The Tamil Nadu Irrigated Agriculture Modernisation and Water Bodies Restoration and Management Project is designed to modernise irrigation systems covering over 6,00,000 hectares in 63 selected sub-basins throughout Tamil Nadu.

On the growth prospects for the Indian economy, Mr Patel said that the "underlying growth was robust" and chances are that this (growth) would move up. He, however, declined to put a number to the growth estimates.

Mr Patel also expressed confidence that the Indian policy makers and monetary authority would be able to come to grips with the inflation situation.

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