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: Oct 07, 2018

  • THE WORLD BANK GROUP AND INDIA

    The World Bank Group (WBG) partnership with India is strong and enduring, spanning nearly six decades. The WBG’s financing, analytical work, and advisory services have contributed to the country’s development since the first loan to Indian Railways in 1949. The soft-lending arm of the WBG – the International Development Association – 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.   A major milestone in the relationship was reached in FY18 when India fully graduated from eligibility for International Development Association financing and became a low middle-income country.

    COUNTRY PARTNERSHIP FRAMEWORK

    The WBG’ 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 priority development aspirations and needs identified in the Group’s Systematic Country Diagnostic for India, ensuring that the country’s rapid growth embraces much more efficient use of resources; fostering inclusiveness by generating more quality jobs and investing in human capital; and strengthening public sector institutions capable of meeting the demands of a middle-class economy. The CPF’s approach combines a focus on ‘what’ the WBG will work on and ‘how’ it will engage India. 

    The “What” are objectives which contribute to (i) resource efficient growth, including in the rural, urban, and energy sectors as well addressing disaster risk management and air pollution; (ii) enhancing competitiveness and enabling job creation, including improving the business climate, access to finance, connectivity, logistics, skilling, and increasing female labor force participation; and (iii) investing in human capital through early childhood development, education, health, social protection, and rural water supply and sanitation. 

    The WBG systematically employs strategic approaches -- or “How” -- to amplify its impact for India. The four “Hows” of smarter engagement are leveraging the private sector, harnessing the incentives of India’s federalism, strengthening public institutions, and supporting a Lighthouse India of knowledge exchange within the country and between India and the rest of the world. In all its activities, the WBG seeks 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 104 operations with $27.1 billion in commitments, of which $17.2 billion is IBRD, $9.9 billion is IDA, and $0.1 billion is from other sources, primarily 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 (17 projects totaling 7.5 billion in commitments), Water (13 projects totaling 5.2 billion), and Agriculture (21 operations totaling 3.9 billion, inclusive of livelihoods).  In FY18 the Bank approved 18 operations totaling $3.5 billion in IBRD (the first year of IBRD lending after India’s graduation from IDA).

    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 committed own account portfolio in India stood at just over $6 billion across 281 projects.  The Bank and IFC work together in several areas, most notably in energy, transport, 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.  The Multilateral Investment Guarantee Agency (MIGA) does not have exposure in India.  It 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, facilitate the scale up of innovative solutions, and improve state capability. Highlights include support for state-level business climate reforms, semi-annual India development updates focusing on key macroeconomic themes, analysis of the relationships between jobs and spatial transformation, and knowledge fora for state-level health insurance schemes.

    Last Updated: Oct 07, 2018

  • 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, Bank projects have increasingly focused on improving the quality of health services provided by the public sector.

    In Uttar Pradesh, one of the poorest states in India, around 50 district hospitals have seen quality improvements and 19 of them have been accredited.  In Karnataka and Tamil Nadu between 2004 and 2016, Bank health projects have contributed to a reduction of more than 40% in rates of maternal and infant mortality.  Since 1990, mortality from TB has halved, and the prevalence of the infection has fallen by 55 percent. More than 20 million people have been treated through Bank supported programs since 1997, 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 2007-15.

    Agriculture: Bank supported watershed projects have helped raise farm yields and incomes for roughly 2 million farmers in the dry rainfed areas of Karnataka, and for more than 500,000 families in Himachal Pradesh and Uttarakhand.   World Bank financed operations in five states to rehabilitate irrigation systems, particularly community tanks, and to develop institutions at community and state levels to manage and maintain these systems. These operations led to over 2 million ha of land having improved irrigation, and corresponding improvements of productivity, and over 50% increase in paddy production. Successive operations in Uttar Pradesh have led to over 120,000 ha of sodic land reclaimed, with cropping intensity on these lands increasing from 25 percent to 206 percent.

    Energy: A series of investments amounting to over US$ 2.5 billion since 1993 and an intensive capacity-building support, the World Bank has helped POWERGRID, India's state-owned power transmission company emerge as the world's third largest transmission utility.

    Overall, Bank financing to Powergrid and Haryana Power operations directly resulted in over 5,000 km of transmission lines being installed. India’s focus on renewable energy can have far-reaching, global implications for the battle against climate change. The Bank’s $625 million Solar Rooftop program has already financed around 500 MW of commercial and industrial installations (out of which 80 MW are already installed) and will help mobilize other commercial financing to the sector.

    Last Updated: Oct 07, 2018

Api


LENDING

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

*Amounts include IBRD and IDA commitments

MULTIMEDIA

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