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Overview

  • AT A GLANCE

    As 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. Between 2011-15, more than 90 million people escaped extreme poverty and improved their living standards thanks to robust economic growth. However, India’s growth rate has decelerated in the past two years.

    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. Implementation challenges of indirect tax reforms, stress in the rural economy and a high youth unemployment rate in urban areas may have moderated the pace of poverty reduction since 2015. 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 ever more important. Growth is projected to be 6.0 percent this fiscal year and expected to rise to 6.9 percent in 2020/21 and to 7.2 percent in the following year. 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 25, 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: Oct 25, 2019

  • WBG financing supported India’s achievement of numerous results over the past five years, highlights of which include:

    Education: Since 2001, India’s Education for All program –WBG supported Sarva Shiksha Abhiyan (SSA) - has brought nearly 20 million children into primary school. Between 2012-13 and 2015-16, the net enrollment in upper primary school has increased by 10 percent. There are now 102 girls for every 100 boys in primary school, compared to just 90 in 2001.

    Rural Livelihoods: Over the past 15 years WBG has invested $3 billion in promoting a unique approach to the development of rural livelihoods in India - by empowering poor rural women. WBG supported self-help groups have been successful in mobilizing 45 million poor rural women who have been empowered with skills, access to finance, links to markets, and help in business development.  Women are now taking charge, becoming entrepreneurs, and providing jobs to other women. They have also gained greater voice, food security, and better health and nutrition. Since 2013, they have leveraged $25 billion in financing from commercial banks.  

    Rural Water Supply and Sanitation: Since 2000, WBG 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. In addition, some 23 million rural people have benefitted from improved sanitation. Many projects have helped promote women’s participation in discussions around changing age-old sanitation behaviors, as well as in making decisions about the use and maintenance of water and sanitation infrastructure. 

    Rural Roads: Since 2004, World Bank financing totaling $2 billion has helped India’s National Rural Roads Program and state roads projects build some 40,000 km of all-weather roads mostly in economically weaker and hill states. World Bank support has helped introduce many reforms and governance changes in the program including improved institutional effectiveness of the road agencies, use of green and climate-resilient road construction, improved asset management that focuses on creating an efficient road network of good quality rather merely construction, improved road safety, and better delivery of the national program. India’s National Rural Roads Program has been recognized as one of the country’s top 50 achievements since independence.

    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. State operations to provide obstetric and neonatal care in Tamil Nadu and Karnataka contributed to decline in infant mortality of 30 and 36% between 2005 and 2015.  In Karnataka at least 80% of babies in the state, even in the most disadvantaged districts, are delivered by skilled health personnel, up from 39% in 2007.  Since 1997, WBG supported Revised National Tuberculosis Control Program has treated over 20 million patients and, in 2006-15 alone, averted 3.5 million TB related deaths. While India has the world’s largest burden of tuberculosis (TB), the TB mortality rate in the country has fallen by 50% since 1990, and the TB prevalence rate has reduced by 55%.  WBG support contributed to averting an estimated 41,300 new infections among high risk populations, equivalent to a 32% reduction from 2007 to 2015.  WBG has contributed to India’s strong response to HIV, which has been lauded as a global success story. India’s adult HIV prevalence rate has continued to fall - from 0.34% in 2007 to 0.26% in 2015.

    Nutrition: Since September 2015, WBG assisted Integrated Child Development Services Systems Strengthening and Nutrition Improvement Project has reached approximately 29.7 million pregnant and lactating women (PLW) as well as children aged between 6 months to 3 years across 162 districts in eight states. The program’s ability to provide timely and effective services within the critical 1000-day window has improved. This was done by introducing innovative methods to build the capacity of community nutrition workers (Anganwadi Workers), combined with behavior change communication, as well as by making innovative use of technology to monitor and manage the program.

    Agriculture: Over the past decade, WBG support has helped 2.3 million farmers in the rain-fed regions of Karnataka, Himachal Pradesh and Uttarakhand implement soil and water conservation measures and raise agricultural productivity. Lessons learnt have helped shape the Government of India’s Common Watershed Guidelines and the design of national watershed programs. World Bank has developed and improved, more water efficient irrigation for over 2 million hectares; productivity gains for crops ranging from paddy to horticulture; and an increase of over 200,000 farmers’ share of retail prices for several commodities by over 20 percent in Assam and Maharashtra states.

    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. WBG has supported Madhya Pradesh’s government to set up the largest single-site solar power project in India, attracting private investments of about US$750 million, where the rigorous structuring of the project risk-sharing mechanism led to intensely competitive bidding that resulted in the lowest ever solar tariff bid—some 33 percent lower than lowest preceding bid—in India in 2017.

    Last Updated: Oct 25, 2019

Api


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