World Bank-India Partnership

Owing to its fast-growing economy, India now has a strong middle class and an increasingly competitive workforce. Social conditions in the South Asian country, which was upgraded to lower-middle-income status in 2008, have improved as well. Life expectancy is now at 70 years, up from 62 years in 2000, and HIV prevalence among youth and adults aged 15 to 49 have stood at 0.3 percent since 2007. Nearly 92 percent of India’s citizens have access to an improved water source as well. Nonetheless, more than 400 million people in India continue to live in poverty; they comprise one-third of the world’s poor. Forty percent of the world’s malnourished children are also in India. In addition, nearly 300 million Indians are not connected to the national grid. Further, cultural and socio-economic inequalities — partly a result of the country’s caste system — have kept several groups within income traps. Human rights violations and gender-based violence remain high. As such, while many donors have begun downsizing or shutting down their aid programs in India, the World Bank remains committed to help India strengthen poverty reduction efforts and enhance wealth sharing. To achieve balanced growth and development, the bank aims to strengthen its sub-national programming and focus lending on India’s poorest states. This aid strategy is aligned with the Indian government’s 12th Five-Year Plan, which targets “faster, sustainable and more inclusive growth” in the country. Funding levels Through the International Development Association, International Bank for Reconstruction and Development, International Finance Corp. and several trust funds, the World Bank committed $33.6 billion in development assistance to India from 2007 to 2013. Click on the table to view a larger version. Under the fiscal year 2013-2017 country partnership strategy, the World Bank will be allocating an average $4 billion annually during the period. About 60 percent will be allotted to government-supported programs, and 30 percent will be committed to projects in low-income and special category states. Development assistance is delivered in coordination with several bilateral and multilateral donors, via financial resource pooling, knowledge creation and dissemination, and capacity building partnerships. Various bank operations in education, infrastructure and urban development are co-financed by donors such as the U.K. Department for International Development, Japan International Cooperation Agency, and the Asian Development Bank. Funding priorities Based on its 2013-2017 country partnership strategy with India, the bank’s overarching goals are to reduce poverty and promote prosperity by focusing aid engagement on three key areas: - Addressing infrastructure needs, spurring economic growth and supporting job creation. - Improving the standard of living in both rural and urban areas, particularly in secondary cities. - Increasing the access of secluded groups to education and health services and promoting women empowerment. Some of the currently implemented World Bank-funded projects in India include: - Secondary Education Project – A $12.9 billion project that aims to assist the government in implementing its National Secondary Education Campaign and improving the access, quality, equity and management of secondary education in the country. The project is co-financed by DfID. - Andhra Pradesh Rural Poverty Reduction Project (Second Additional Financing) – A $2.6 billion project that aims to help the rural poor in Andhra Pradesh to improve their livelihoods and quality of life. - Fourth Power System Development Project – A $2.1 billion project that aims to further facilitate and strengthen the transmission system in order to increase reliable power exchanges between the regions and states of India. Devex analysis The 2013-2017 country partnership with India is the first to be drafted around the bank’s “ambitious” goal to end extreme poverty and boost shared prosperity by 2030. In his trip to India last year, World Bank President Jim Yong Kim said India is a “good investment” and that the bank intends to deepen its engagement in the world’s second most populous country. Kim maintained that the bank is committed to provide as much as $5 billion in development assistance annually over the next five years. But IDA financing will no longer be made available to India, which is set to graduate from the bank’s soft loan window by the end of the 17th replenishment period. India and the bank are now working out a transitional arrangement wherein the South Asian country would still be able to get concessional loans with interest rates that are higher than IDA’s but still lower than market rates. Contact World Bank Office in India Tel: (91-11) 4924-7000 Email: indiapic@worldbank.org Join the Devex community and access more in-depth analysis, breaking news and business advice — and a host of other services — on international development, humanitarian aid and global health.