Overview

  • AT A GLANCE

    India is in a period of unprecedented opportunity, challenge and ambition in its development.  Already the world’s third largest economy in purchasing parity terms, India aspires to better the lives of all its citizens and become a high-middle income country by 2030, well before the centenary of its independence.  

    Long-term GDP growth has become more stable, diversified, and resilient. Over the next few years, India is expected to grow at well over 7 percent per year, with progress being buttressed by dynamic reforms in the macroeconomic, fiscal, tax and business environments.  

    In recent years, the country has made a significant dent in poverty levels, with extreme poverty dropping from 46 percent to an estimated 13.4 percent over the two decades before 2015. While India is still home to 176 million poor people, it is seeking to achieve better growth, as well as to promote inclusion and sustainability by reshaping policy approaches to human development, social protection, financial inclusion, rural transformation, and infrastructure development.

    While the country’s development trajectory is strong, challenges remain.  Economic performance has been strong, but development has been uneven, with the gains of economic progress and access to opportunities differing between population groups and geographic areas. Despite regulatory improvements to spur competitiveness, levels of private investment and exports continue to be relatively low, undermining prospects for longer term growth. The country’s human development indicators – ranging from education outcomes to a low and declining rate of female labor force participation - underscore its substantial development needs. 

    ECONOMIC OUTLOOK

    India’s ability to achieve rapid, sustainable development will have profound implications for the world.  India’s success will be central to the world’s collective ambition of ending extreme poverty and promoting shared prosperity, as well as for achieving the 2030 Sustainable Development Goals (SDGs).  Indeed, the world will be only able to eliminate poverty if India succeeds in lifting its citizens above the poverty line.

    For international trade and the health of the global economy too, India’s growth will be an ever more important. In addition, the carbon footprint India leaves as it propels its high growth will have a significant influence on the planet’s ability to keep global warming within the 2-degree threshold.

    On crucial issues ranging from managing scarce water resources, to modernizing food systems, to improving rural livelihoods, to ensuring that megacities become engines of sustainable economic growth and inclusion, India’s development trajectory will have a major influence on the rest of the world.

    At the same time, India’s growing economic and political stature and the relevance of its experience, know-how and investments for the development efforts of other nations well-position the country to play a greater leadership role in the global arena.

    Last Updated: Apr 02, 2019

  • THE WORLD BANK GROUP AND INDIA

    The World Bank Group’s (WBG) seven decade-long partnership with India is strong and enduring. Since the first loan to Indian Railways in 1949, the WBG’s financing, analytical work, and advisory services have contributed to the country’s development. International Development Association – the WBG’s soft-lending arm created for developing countries like India - has supported activities that have had a considerable impact on universalizing primary education; empowering rural communities through a series of rural livelihoods projects; revolutionizing agriculture through support of the Green and White (milk) Revolutions; and helping to combat polio, tuberculosis, and HIV/AIDS.   In FY18, the relationship reached a major milestone when India became a low middle-income country and graduated from International Development Association financing.

    COUNTRY PARTNERSHIP FRAMEWORK

    The WBG’s present engagement with India is guided by its Country Partnership Framework for FY18-22 (CPF).  The CPF builds on the  decades-long partnership and seeks to address the country’s development aspirations and priority needs identified in the Group’s Systematic Country Diagnostic for India. It aims to work with India so that the country’s rapidly growing economy makes much more efficient use of resources; fosters inclusiveness by investing in human capital and generating more quality jobs; and develops strong public sector institutions that are capable of meeting the demands of a rising middle-class economy. The CPF’s approach combines a focus on ‘what’ the WBG will work on as well as ‘how’ it will engage India in the process. 

    What will the WBG work on?

    • Promoting resource-efficient growth, including in the rural, urban, and energy sectors as well addressing disaster risk management and air pollution;
    • Enhancing competitiveness and enabling job creation, including improving the business climate, access to finance, connectivity, logistics, skilling, and increasing female labor force participation;
    • Investing in human capital through early childhood development, education, health, social protection, and rural water supply and sanitation. 

    How will the WBG amplify the impact of its work in India?

    • By leveraging the private sector
    • By harnessing India’s federalism
    • By strengthening public institutions
    • By supporting Lighthouse India to foster knowledge exchanges within the country and between India and the rest of the world. 

    In all its activities, the WBG will seek to address climate change, gender gaps, and the challenges and opportunities afforded by technology.  

    WORLD BANK GROUP PROGRAM

    The World Bank’s lending portfolio consists of 105  operations with $27.1 billion in commitments, of which $18.5 billion is IBRD, $8.5 billion is IDA, and $0.1 billion is from other sources, primarily grant funding from the Global Environment Fund.  Roughly a third of the number of operations and 40% of the volume of commitments are either central or multi-state operations with the remainder consisting of state-specific operations in 21 of India’s 29 states.  The three largest portfolios are Transport and ICT (15  projects totaling $6.7  billion in commitments), Water (14  projects totaling $5.3  billion), and Energy (12 operations totaling $3.7 billion).  In FY19  the Bank approved 10  operations totaling $1.49  billion in IBRD.

    India has been the largest country in IFC’s investment portfolio for several years, with FY18 recording a further increase in commitments of $2.6 billion, growing at a much faster pace than IFC’s average growth.  As of the end of FY 18, IFC’s India portfolio - own account and mobilization - stood at $6.1 billion across 283 projects.  The World Bank and IFC work together in several areas, most notably in energy, transport, water and health.  IFC-Bank synergies have been particularly strong in raising financing for renewable energy, highlighted by the Government of Madhya Pradesh’s decision to set up the largest single-site solar power project at record low cost in 2017.  IFC and the World Bank had a similar collaboration under the government’s flagship Clean Ganges program for sewage treatment plants using hybrid annuity-based PPP projects. IFC led the PPP mandate and World Bank’s loan is helping provide payment guarantee to increase the private sector’s participation in this sector. The Multilateral Investment Guarantee Agency (MIGA) does not have exposure in India.  It is presently engaging with the Government of India to explore opportunities for its guarantee products.

    The WBG has a strong analytical program to inform policy debate, provide analytical underpinnings for improving operations and strategy, facilitating the scale up of innovative solutions, and improving state capability. These include support for reforming the business climate at the state level, producing semi-annual development updates focusing on key macroeconomic themes in India, conducting an analysis of the relationships between jobs and spatial transformation, and providing knowledge inputs for state-level health insurance schemes.

    Last Updated: Apr 02, 2019

  • RESULTS

    The World Bank Group’s support to India’s development agenda has contributed to improving outcomes in a range of sectors. Some results are highlighted below:

    Education: Between 2000-01 and 2017-18 elementary school enrolment soared by more than 33 million, rising from 156.6 million in 2000-01 to 189.9 million in 2017-18. Over two-thirds of India’s states have achieved universal primary enrollment. There is now a primary school within one kilometer of all habitations, and gender and social gaps have reduced.

    Rural Livelihoods: Since 2011, the World Bank supported National Rural Livelihoods Mission has mobilized 50 million poor rural women into self-help groups and their federations. These groups have leveraged $30 billion from commercial banks. Over 3 million women now benefit from technical services in agriculture and nearly 2.8 million poor women have been elected to local government institutions.  Poor rural women have not only benefitted from greater and more predictable access to a range of financial services, they have also gained skills, support in business development, and been linked to markets. In Bihar, some women-owned collective enterprises have recorded a turnover of nearly $2 million. 

    Rural Water Supply and Sanitation: Since 2000, World Bank projects have contributed over $3.4 billion in financing for rural water supply and sanitation.  This has helped about 36 million people in 40,000 villages—with populations ranging from 150 to 15,000—gain better access to drinking water.  World Bank support in Uttarakhand, which contributed to establishing 24/7 water supply, received the Right to Information award for good governance and transparency. An independent impact assessment found 98 percent user satisfaction and 90 percent sustainability for this operation.

    Rural Roads: Since 2004, World Bank support of $2 billion has helped build and improve around 40,000 kms of all-weather rural roads in some of India’s poorest and most inhospitable regions. The roads are revitalizing the rural economy and improving the quality of rural life in about 30,000 habitations by connecting them to schools, health centers, markets, and jobs. 

    Health: World Bank support to India’s health sector began in 1972. Over the years, it has focused on helping India meet the health MDGs, improve child nutrition, and tackle the long-standing burden of disease. Over the last 2 decades, World Bank projects have increasingly focused on improving the quality of health services provided by the public sector. In Uttar Pradesh, one of India’s poorest states, around 50 district hospitals have seen quality improvements and 19 of them have been accredited.  In Karnataka and Tamil Nadu, World Bank health projects contributed to a reduction of more than 40% in maternal and infant mortality rates between 2004 and 2016.  Since 1990, mortality from TB has halved, and the prevalence of the infection has fallen by 55 percent. Since 1997, more than 20 million people have been treated through World Bank supported programs, and 3.5 million deaths averted. India’s response to HIV/AIDS is a global success story. Prevalence among adults has continued to fall, with new infections coming down by two thirds between 2007 and 2015.

    Agriculture: A series of World Bank supported watershed projects have helped raise farm yields and incomes for roughly 2 million farmers in the dry rainfed areas of Karnataka, as well as for more than 500,000 families in Himachal Pradesh and Uttarakhand.   In addition, World Bank supported operations in three of India’s states have helped rehabilitate irrigation systems - particularly community tanks – on 2 million hectares of land. Projects have also developed community and state levels institutions to manage and maintain these systems. As a result, agricultural productivity has improved and paddy production has increased by over 50%.

    Energy: Since 1993, a series of World Bank investments totaling over $2.5 billion, together with intensive support for capacity-building, has helped POWERGRID, India's state-owned power transmission company, emerge as the third largest transmission utility in the world. Overall, World Bank financing for Powergrid, and its power operations in Haryana, resulted in the installation of over 5,000 km of transmission lines. In renewable energy, the World Bank’s $625 million Solar Rooftop program has financed around 500 MW of commercial and industrial installations, of which 60 MW has already been installed.  The program will also help mobilize other commercial financing to the sector.

    Last Updated: Apr 02, 2019

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LENDING

India: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

MULTIMEDIA

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Additional Resources

Country Office Contacts

Sudip Mozumder

70 Lodi Estate
New Delhi
India
+91-11-41479301 / 49247000
smozumder@worldbank.org