The Hindu : Karnataka News : World Bank happy with reforms process

Online edition of India's National Newspaper
Wednesday, Jan 26, 2005

Karnataka

Karnataka

World Bank happy with reforms process

By Our Special Correspondent

BANGALORE, JAN. 25. A team from the World Bank has expressed satisfaction with the implementation of economic and administrative reforms under the Karnataka Economic Restructuring Loan (KERL).

At a meeting with the Deputy Chief Minister, Siddaramaiah, the team said it is happy with the strong tax growth, expenditure control and reduction in revenue deficit registered by the State Government, official sources told The Hindu .

Highest growth

Mr. Siddaramaiah told the team leader, Stephen Howes, Lead Economist of the bank in India, that the State registered the highest growth rate of 25.85 per cent in commercial taxes in the country. The commercial tax collection is expected to cross Rs. 10,500 crores at the end of the financial year.

The Government has not implemented some of the reforms in the power sector on account of consecutive droughts during 2001-04. Now the power situation has improved and bill collections have increased. Mr. Siddaramaiah, who is also the chairman of the Cabinet subcommittee on power reforms, assured the team that the Government will not reverse the reforms in the financial sector.

On the reopening of closed public sector units, such as Mysore Lamps and NGEF, Mr. Siddaramaiah wanted the World Bank team to discuss the issue with the Minister for Industries and Infrastructure, P.G.R. Sindhia.

The State launched the comprehensive reform programme under the KERL in 2000-01. Of the $1 billion loan sanctioned, the bank has so far released only $250 million in two instalments.

The National Democratic Alliance (NDA) Government, which was in power at the Centre, rejected the proposal for a third instalment ($200 million) on the ground that the State had not achieved the targets under the medium-term fiscal plan. The State is expected to get the third instalment after a review of the reforms process by the team.

More discussions

The World Bank officials held discussions with the Minister for Public Works and Energy, H.D. Revanna; the Chief Secretary, K.K. Misra; and officials of the Finance Department. Wednesday being a holiday, the team will resume the discussions with officials on Thursday.

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