World Bank proposes multi-billion plan to reduce poverty in India

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 a majority of India’s poor live, to just 5.5 per cent in 2030 against 29.8 per cent 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 per cent of the financing will go to State Government-backed projects and half of this, or 30 per cent of the total lending, will go to low-income or special category States (where public services face high delivery costs).

Under the previous strategy, 18 per cent 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 per cent from 19.1 per cent.

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

“India’s seven low-income States, with 60 per cent 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.

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