Country Partnership Strategy for India: 2013–17
Moreover, India’s seven low-income states are now growing faster than the average. Investments in those states thus have higher economic returns than investments elsewhere. The impact is even greater when considering the payoffs in poverty reduction. IFC will continue to expand its investments and advisory program in the low-income and northeast states. Engagement under the CPS will focus on extensive capacity building, technical assistance, analytical work, and knowledge exchanges that underpin lending operations. The World Bank Group can help India realize the CPS vision to 2030, building on a strong partnership in development stretching back 60 years. Since the first IBRD loan to the Indian Railways in 1949, India has made extensive use of financing, knowledge, advisory services, and technical assistance from the World Bank Group. Over these six decades, IBRD, IDA, and IFC financing to India reached approximately $160 billion at 2010 prices—far more than any other country. But the World Bank Group has also benefitted enormously from the partnership. India has been home to major innovations in development, from the Green Revolution to the Mahatma Gandhi National Rural Employment Guarantee program to the promotion of the right to information. There is growing demand to learn from India’s diverse development experience. India is emerging as a key provider of development experience in South–South knowledge exchange and investment capital.
There is growing demand to learn from India’s diverse development experience. India is emerging as a key provider of development experience in South– South knowledge exchange and investment capital.
Although the World Bank Group’s contributions to the government’s overall development financing is small, its support can be catalytic and transformative when financing is combined with knowledge and experience. To make a meaningful contribution on the assault on poverty, especially in low-income states where over 200 million of India’s poor reside, the volume of support from the World Bank Group should be about $5 billion per year. However, World Bank Group estimated financing levels could average about $4 billion annually during the CPS period, when one includes India’s purchase of Special Private Placement Bonds, IFC financing and assumes that India receives transitional IDA. At their first IDA17 replenishment meeting in Paris, IDA Deputies broadly agreed with the proposal that India receive transitional support after it graduates from IDA; a final decision will not be taken until the end of 2013, including on the volume and terms of transitional support. While transitional IDA support would help boost World Bank Group financing, it still falls short of levels needed and net flows from IDA and IBRD combined turn negative by FY2018.
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