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The World Bank today committed $1.5-billion funding support to the Prime Minister's rural road initiative — Pradhan Mantri Gram Sadak Yojana. This is the largest rural road project approved by the World Bank so far, its visiting President, Mr Robert Zoellick, said.
The funding will be used to build more than 24,000 km of all-weather roads in Himachal Pradesh, Jharkhand, Meghalaya, Punjab, Uttarakhand, Uttar Pradesh and any other State, which may join the programme at a later date over the next five years.
Two World Bank institutions – IBRD and IDA — will provide the $1.5 billion funding for the project. The roads project is expected to benefit over six million people.
The World Bank will also provide $255 million International Development Association (IDA) credit to support the first phase of the Government's national programme to mitigate the impact of cyclones.
More than one million people living in the coastal areas of Orissa and Andhra Pradesh will benefit from this initiative, Mr Zoellick said.
The National Cyclone Risk Mitigation Project (I) is being implemented by the National Disaster Management Authority (NDMA). The project marks the first disaster risk mitigation initiative to be implemented in India.
The loan agreements for the rural roads initiative and also the cyclone risk mitigation project were signed separately here on Friday in the presence of Mr Zoellick and the Union Finance Minister, Mr Pranab Mukherjee.
Bilateral talks
Before the signing of the loan agreements, Mr Zoellick and Mr Mukherjee had bilateral discussions on the global economic environment and India's increasing role in the global economy.
“We shared many common views on how the global economy landscape is shaping. We discussed raising commodity prices worldwide, continuance of low growth and unemployment in advanced countries, inflationary conditions in emerging markets and global imbalances”, Mr Mukherjee said later at press conference.
Mr Zoellick said that he and Mr Mukherjee have agreed that the World Bank's funding and technical resources will also be put to use to help build infrastructure, overcome bottlenecks that come in the way of sustaining high growth and ensure that development programmes remain socially inclusive and environmentally sustainable.
global environment
Mr Mukherjee said that he had, during the discussion, stressed the need for a stable global environment to ensure that India's developmental efforts are not disrupted. “We also talked about developing a finance plus approach”, he added.
The Finance Minister also said that India sees an enhanced role for the World Bank group in recycling global savings for investment in developing countries as one of the approaches for resolving global imbalances.
Mr Mukherjee said that India has asked the International Finance Corporation (IFC) to expand its operations in India and use its international link to bring greater private sector investments into infrastructure projects. “We would also like their (IFC) advisory services to low-income States be expanded”, he said.
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