FEATURE STORY January 27, 2018

India Country Engagement Dialogue 2017-18 (Consultations with the Government of India)

On January 11, 2018, the World Bank Group (WBG) and the Ministry of Finance’s Department of Economic Affairs (DEA) organized a consultation with government officials on the Bank’s Country Partnership Framework (CPF).  Representatives from the Niti Ayog, various central ministries, and a number of state governments participated. 

Mr. Sameer Khare, Joint Secretary, DEA, chaired the consultation and urged participants to highlight issues of concern to their sectors and states. Mr. Junaid Ahmad, World Bank India Country Director, explained that the Bank looked forward to a broader engagement with the central and state governments. He suggested that the government engage with the WBG as a partner and a shareholder, using it to leverage funds from various sources as well as to build the state’s own institutional capacity.

Gist of Discussions

Agriculture, the Rural Sector, and Natural Resources

A number of participants spoke about the needs of Indian agriculture. It was suggested that WBG support critical issues such as agricultural productivity, water, soil, the impact of climate change, and sustainability. The Bank could also facilitate south-south collaboration between India and other countries and enable partnership in scientific research.

Ways had also to be found to retain youth in agriculture. This was a serious concern as many young people were moving to other more profitable sectors for employment.

A participant pointed out that a series of livelihood projects had resulted in appreciable improvement in rural standards of living. Now, an ecosystem needed to be developed to enable rural produce to gain better access to markets by supporting producer enterprises, micro enterprises, and enterprises owned by women. In particular, the WBG could support small rural enterprises in the food processing industry. Building a three-tier cooperative model - on the lines of Amul - would help make these enterprises self-sustaining.

A speaker mentioned that the Bank had an old relationship with India’s dairy sector, where it had benefitted the poorest of the poor. Today, however, cooperative dairy plants in the northern and eastern parts of the country were badly in need of funds to replace old infrastructure. Doing so would help double farmer incomes and perhaps lead to diary exports in the long term.

Another speaker explained that creating an institution for fisheries would support poor fishermen in the coastal areas.

It was said that given the recent launch of the National Clean Air Program, it would be useful to leverage international knowledge and best practices on ‘air-shed’ support.

A speaker suggested that the WBG bring in expertise for lowering India’s carbon footprint and developing indigenous skills in the sector.

A participant from Rajasthan asked if the Bank had expertise in the conservation and building of water storage structures, where end users could pay back part of the investment. Moreover, western Rajasthan had potential for the development of solar and wind power which could be possible areas for collaboration.


Inclusion across Locations and People

It was suggested that the WBG focus on making job creation more inclusive. Today, jobs were increasingly being outsourced with little job security for the contractual workforce. The World Bank could bring in international experience in developing a policy framework to address these issues[1].

A number of speakers highlighted the special needs of India’s northeastern states. These states needed to bring development to remote hill tribes, people working on tea gardens, and those living on riverine islands. These states also needed to develop their core infrastructure in which they were severely deficient. A speaker from Mizoram said that his state’s high literacy rates gave it considerable potential to build human capital.  It was also said that these states needed to develop their capacity to implement the country’s Act East agenda and transform the region into an attractive investment destination.

A participant said that the government had taken several initiatives to improve the ease of doing business, as well as to promote inclusion and social security; even so it could benefit from the WBG’s experience in other countries.

A participant wanted to know the WB’s approach to deepening financial inclusion, and creating a framework for digital inclusion.

It was asked whether the new concept of social impact bonds could be considered, particularly in areas like drinking water and health.

Building state capacity

To strengthen local governance, it was suggested that the Bank continue its support for strengthening Panchayati Raj Institutions (PRI).

A speaker suggested that most public sector enterprises which were created in the 1950s and 1960s had not undergone any change, and many had become loss making organizations. She suggested  the WBG do a diagnostic study of the challenges they faced to help them make a turnaround.

A speaker from Kerala asked what the Bank could do for his state that was doing well in social development and had been declared open defecation free, but where the fiscal position was not satisfactory. About 80% of government revenue went into salaries, pensions, and administrative costs he said, with only the balance available for development. Moreover, the state had high literacy rates but low employment, with large numbers migrating out for skilled and semi-skilled jobs and service sector employment[2].

It was also said that the WBG’s advisory services help rejuvenate central government initiatives in the social sector such as the Atal Pension Yojna, the Pradhan Mantri Bima Suraksha Yojna etc. which, as per available data, had yet to take off in states such as Haryana.  

Urban

A participant from Tamil Nadu sought the Bank’s help in the areas of affordable housing and addressing urban services in an integrated manner. She said the state could also benefit by understanding various PPP models to better engage with the private sector and attract more private financing.

Infrastructure

A speaker said that although the power sector was an old beneficiary of the WBG’s intervention the sector still needed the Bank Group to bring in global best practices. For instance, the WBG could help power distribution companies to reduce distribution losses, infuse them with private finance, use technology to promote energy efficiency, and share best practices in the regulatory regime.

On inland waterways, it was said that with 111 national waterways having been identified, there was need to share experience between inland water transport projects both within and outside the country. India’s ports could also benefit from international experience and technical advice to raise their efficiency to levels attained by the best in Asia and the developed world.

Working with the Bank

Participants also came up with ideas to improve the way of working with the WBG. It was suggested that DEA hold special sector level discussions with critical ministries as this would be beneficial for all sectors concerned.

Under the concept of ‘Lighthouse India’, where the WBG aimed to share India’s development successes, a participant wondered whether the erstwhile portal that was a repository of best practices -- the Governance Knowledge Centre -- could be revived.

Summing up, Mr. Khare, JS, DEA, reminded the gathering that this was a great opportunity to partner with WBG in a holistic manner and ensure that they received the maximum benefit by leveraging the Bank’s technical assistance, knowledge sharing and funding support.

Mr. Ahmad, World Bank India Country Director, ended by thanking Mr. Khare for his leadership and the participants for such a rich and productive discussion.

 

[1] Mr. Ahmad said that while the WBG had global knowledge, India would need to pool its knowledge which some relevant global inputs and decide the best way forward. Mr. Khare pointed out that ‘the future of work’ was a global issue facing and both developing and developed economies. Though the matter was being debated, there were no clear answers.

[2] Junaid Ahmad replied that these were structural issues, making it necessary to consider a larger engagement with the WBG. Kerala, he said, could benefit from policy based lending, and involve the WBG in analysis and planning.



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