The Hindu : Karnataka News : Lending policies of World Bank draw flak

Online edition of India's National Newspaper
Wednesday, Jul 14, 2004

Karnataka

Karnataka

Lending policies of World Bank draw flak

By Our Special Correspondent

BANGALORE, JULY 13. The Additional Chief Secretary and Development Commissioner, Vijay Gore, has criticised the World Bank's lending policies.

Speaking at a consultative workshop on the World Bank's draft country assistance strategy (2005-08) here on Monday, Mr. Gore opposed the procurement policy of the bank and the imposition of conditions on lending to State governments. There was delay in the implementation of the bank-aided projects in the State because of the uniform procurement policy, he added.

The former Chief Secretary, A. Ravindra, also questioned the bank's poverty reduction strategy for India and said the new country assistance strategy (CAS) should look into problems such as urban poverty and migration of people from rural areas. The formulation of State-wise strategy would also help in tackling poverty, he said.

Another former Chief Secretary, B.K. Bhattacharya, suggested to the bank to continue lending to major irrigation projects as they would help in generating employment in rural areas. The bank stopped lending to mega irrigation projects after the controversy over the Narmada Dam, he added.

Representatives of various non-governmental organisations also opposed the conditional lending by the bank and stressed the need to promote participatory approach at the grassroots. The bank should give up its "top-down" style of functioning, they added.

Earlier, Michael F. Carter, Country Director of the World Bank, made a brief presentation on the new CAS and said in the coming years, the bank would be ready to lend $ 3 billion to the country annually. However, it would pay special attention to States such as Bihar, Jharkand and Uttar Pradesh. The bank had lent $ 2.5 billion during the last financial year.

Stating that there was a need for scaling up lending for infrastructure, human development and rural livelihoods, Mr. Carter said the main objective of the bank was to empower communities by promoting private sector-led growth. The bank was against giving free electricity for irrigation because such a policy would lead to over-exploitation of groundwater, he added.

The Chief Secretary, K.K. Misra, and officials of the Project Monitoring Unit (PMU) of the State Government were present.

`Focus on quality goods'

Speaking at the 23rd Foundation Day programme of the National Bank for Agriculture and Rural Development (NABARD) here, Mr. Gore said self-help groups (SHGs) could usher in prosperity in rural areas and bring about a change in the lives of the poor by exploring market for their products in urban areas.

Mr. Gore said SHGs should pay more attention towards producing quality goods to get remunerative prices in the competitive market. They could earn more by expanding the market for their goods in taluk and district headquarters. Advising them against seeking government support to market their products, he said the SHGs should make efforts to sell their products by having tie-ups with marketing federations.

The State ranked next only to Rajasthan with regard to arid area and only 22 per cent of the area had irrigation facility. The NABARD, the State Government, and voluntary organisations should make efforts for conservation of water by building check-dams and developing watershed areas, he said.

B.B. Mohanty, Chief General Manager, NABARD, Karnataka, spoke. Devaki Muthukrishnan, Regional Director, RBI, Bangalore, R.V. Shastri, chairman and managing director, Canara Bank, Santhosh Vas, chief executive officer, Janodaya, Bangalore, and A.P. Fernandez, executive director, Myrada, were present.

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