The Hindu : National : World Bank to focus on poor States

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Tuesday, Sep 07, 2004

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World Bank to focus on poor States

By Our Special Correspondent

NEW DELHI, SEPT. 6. The World Bank has decided to shift focus from the relatively better-off States in India to poverty-intensive ones such as Bihar, Jharkhand, Orissa and Uttar Pradesh. It has also decided to direct its investment lending more broadly to the States on the basis of guidelines for each sector.

The reviewed focus forms part of the World Bank's new country assistance strategy for India. It takes into account the fact that while economic reforms and social changes have begun, and growth has had an impact on people's lives, a large number of citizens still do not have access to public services, employment opportunities and brighter prospects. Consequently, "bridging the gap between these two Indias is perhaps the greatest challenge facing the country today," the Bank's Country Director for India, Michael Carter, said.

The country strategy envisages an increased lending programme of up to $3 billion a year. Since 1997, the Bank's strategy included a focus on States undertaking comprehensive reforms. During this period, States such as Andhra Pradesh, Karnataka and Uttar Pradesh extensively engaged the Bank's lending programmes. But with the widening gulf between faster and slower growing States, the emphasis has been changed. Now, in consultation with the Central Government and other partners, the Bank would seek to ensure that all of the largest and poorest States of India, willing to undertake Bank-aided programmes, would be engaged in a dialogue on cross-cutting reforms.

The Bank has also decided to work proactively to build a productive development relationship with Bihar, Jharkhand, Orissa and Uttar Pradesh — four States where poverty is high. It has also decided to channel investment lending to States on the basis of guidelines for each sector, rather than just concentrate on `focus States.' The guidelines would set out the sector-specific conditions that would be necessary for the success of the projects.

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