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Down To Earth
Money flow
Composition of funding based on projects under consideration, 2005-2008 | | Project heads | US $ million | | Roads & Highways | 2,550 | | State Water Sector | 2,490 | | Urban reform, infrastructure & development | 1,580 | | Health | 1,559 | | State Structural Adjustment Loans | 1,410 | | Powergrid, state power & rural energy access | 1,320 | | State Livelihoods | 662 | | Education, childhood development & vocational training | 650 | | Agriculture technology, productivity & competitiveness | 640 | | Hydropower | 550 | | E-governance | 500 | | Forestry, Environment & Clean Energy | 468 | | Slums | 350 | | Rural & SME financing | 270 | | State Rural Service Delivery | 250 | | Others | 474 | | Total | 15,723 | Note: The actual lending will be lower, remaining within the overall limit of US $12 billion
Source: Anon 2004, Country Strategy for India, The World Bank | |
The group criticised the cas consultation process. The bank had put up a draft on its website, available for less than a month; this excluded the vast majority that had no Internet access. For the four weeks the draft was available for comments, public consultations were held only in New Delhi, Lucknow, Mumbai and Bangalore. Civil society got only two days time to respond. The meetings were not open to the public and the criteria by which invitees were selected were not known either. Moreover, annexes to the document were held back until after the strategy was endorsed. In all, a "poor demonstration of the wb's commitment to transparency."
CAS spells out cas spells out wb's funding strategy for 2005-2008, and the composition of the assistance (see table: Money flow). wb's targeted loan amount is us $3 billion a year. A major reason it believes India will pick up all this money is because it has done away with "triggers" (rules internal to the bank, which it uses to determine how much loan is to be actually disbursed, as against the promised amount). In cas 2002-2004, such triggers -- like improvements in fiscal balances, privatisation and structural reforms -- had substantially reduced actual lending volumes of the International Bank for Reconstruction and Development (ibrd), particularly to states. Though ibrd's loan limit was us $2.15 billion a year, it actually shelled out us $1.7 billion. Why were the triggers removed this time? India's improved creditworthiness. In the last two years, India substantially pre-paid ibrd loans, so bringing India's outstanding loans to ibrd down from us $7.3 billion in 2002 to about us $4.3 billion on June 30, 2004.
This time around, ibrd's loan limit remains the same: us $2.15 billion a year. The rest will come from the group's International Development Association (ida) -- which provides funds in the form of concessional loans or grants -- and the International Finance Corporation (ifc), which lends to the private sector. How much India will get from ida depends, in turn, on how much ida will get from its 39 donors; this might be the same as that in cas 2002-2004: us $850 million a year. ifc is expected to lend about us $300-350 million a year.