World Bank clears $913.8m. loan for India

By Soma Basu

NEW DELHI, SEPT. 29. Compliance with Environmental Assessment (EA) during the implementation of World Bank-assisted projects in India between the fiscal years 1990-97 has been found to be ``weak''. Yet, loans and credit totalling $913.8 million has been approved to the Government for implementing a dozen new programmes at the national, State and local levels in the current fiscal year.

With this additional resource, the total lending for the year has reached $2.5 billion to support programmes vital for poverty reduction. The World Bank has agreed to reinforce the Government's initiatives because ``India fits in the Bank's preparation of a new environmental strategy''. The new strategy recognises initiatives that will better align management of the environment and natural resources with poverty reduction and sustainable growth.

The Principal Environmental Economist in the World Bank's South Asia Environment Unit, Mr. Carter J. Brandon, told The Hindu that the Environment and Forests Ministry ``does not need any more investment money.''

``But the World Bank is keen to boost financial support for sectoral projects in different parts of the country which are not necessarily stand-alone Central projects,'' he said, adding that the World Bank's lending portfolio in India is expected to reach an annual level of $three billion over the next few years.

This means India will account for one-fifth of the World Bank's total lendings amounting to $15 billion per annum. The Bank's ``broad environmental portfolio'' includes projects in the areas of pollution management, urban environmental priorities, natural resource management, environmental capacity building and global environmental issues.

Though the World Bank's India review of the effectiveness of EAs has reported a ``steady improvement in the overall quality between projects of 1991 and those of 1997'', there are certain ``weak areas'' which the Bank hopes India would focus on more in the coming years.

The weakest areas, according to Mr. Brandon, are ``identification of issues and scoping, analysis of alternatives, prediction and assessment of impacts and public involvement and consultation.'' In his opinion, the EAs require a ``higher level of expertise as they have to focus on systemic alternatives, policy analysis, linkages with other sectors and institutional arrangements''.

Mr. Brandon said that in the South Asian region the term `environment' was primarily thought of in terms of sustainability of natural resources contributing to livelihoods, the impact of pollution on human health and the functioning of ecosystems to reduce the vulnerability of people, whereas poverty impacts need to be looked at holistically.

``One of the most important implications of the region's poverty focus is that it requires mainstreaming environmental concerns into sectoral and cross-sectoral programmes,'' he said.

It is, perhaps, in this backdrop that the region's environment- related lending is increasingly being integrated with operations of health, infrastructure, energy, rural and economic management sector units. The new projects for which India has got World Bank assistance include education and health, rural development and water supply, finance and State-level economic reforms, roads and highway development.

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