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By Our Special Correspondent
In a mid-term assessment of the Country Assistance Strategy for 2001-04, the World Bank said: "India can be proud of its impressive progress in poverty reduction during the 1990s, a progress which has touched many lives. But there is still much to do to improve access to basic services for poor people and to continue the current rates of increase in incomes, both essential ingredients for the achievement of MDGs.''
The World Bank also cautioned that it would be difficult to raise, or even sustain, economic growth rates without substantial progress in fiscal consolidation, faster structural reform and improved governance. "The risk of not making good progress in all these areas is the risk of not making a difference in the many lives hungry to turn a small opportunity into a life's chance,'' the Bank said.
The country assistance strategy, prepared every three years, describes the Bank's strategy for a country based on an assessment of that country's priorities and indicates the level and composition of assistance the World Bank would provide. The strategy and the progress report are discussed with the Government of the country concerned, but the Government need not necessarily endorse all the contents, judgments and opinions of the Bank.
In the report for India, the World Bank said that during the 1990s, India substantially improved poverty and education indicators, but progress in the health sector was slower.
Also, as a result of faster progress in better performing States, poverty and illiteracy were concentrated in larger and poorer States. Uttar Pradesh, Bihar and Madhya Pradesh between them now accounted for nearly 50 per cent of India's poor and the country would not be able to achieve the MDGs without continued economic growth to widen opportunities and determined efforts to deliver more effective basic services, especially in these poorer States.
The report also pointed out that India's growth prospects were weakened by excessively high fiscal deficits, resulting in one of the highest levels of public debt in its history; a slowdown in the implementation of structural reforms and a financial system that was successful at mobilising savings but not in their efficient allocation. The reforms progress was also mixed with external liberalisation continuing but the pace of domestic reforms was inconsistent. Privatisation has moved faster and there had been some banking reforms but the system continued to remain inefficient, the Bank said. However, the incentives for States and cities to undertake reforms had been strengthened, it noted.
The World Bank's India portfolio is the second largest in the world, comprising some 69 ongoing projects with a net commitment of $ 12.9 billions at the end of September 2002.
New commitments are estimated at $ 1.6 billions for 2002-03 and $ 1.9 billions for 2003-04.
The International Finance Corporation, the Bank's private sector lending arm, had a portfolio of investments in 84 companies in India as of June 2002 and its commitments totalled $ 233 millions in 2000-01 and $ 139 millions in 2001-02.
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