India may borrow up to $3.8 billion from the World Bank this financial year. “This is the largest delivery we have ever done. It is the biggest in the history of India,” World Bank vice-president for South Asia Praful Patel remarked. Some economists question the bank’s continued involvement in the Asian country. “India has, like China, a huge capital influx and is accumulating foreign exchange reserves so it really doesn?t need any World Bank assistance,” according to Allan Meltzer of Carnegie Mellon University. Harvard professor Ken Rogoff sees the benefits of bank technical assistance and support but believes that “loans are ? counter-productive.? Dhanendra Kumar, India”s representative on the bank’s board, insisted that the country remains in high need of the global lender’s backing as “private capital does not get attracted to the pro-poor programs.” He also stressed that poverty remains prevalent in India, with the number of people living below $1 a day equaling that in sub-Saharan Africa.
Source: World Bank loans to India climb 170% (Financial Times)