General awareness on current topics is essential as not only you will be getting questions on GK in various MBA entrance exams but it will be useful for Essay writing test and WAT also.
Today, you will read General Awareness Topic: “World Bank and India”
The World Bank is a lending institution that funds essential infrastructural requirement, globally. Headquartered in Washington D.C., this fiscal institution is banked upon heavily by the governments of the world for timely dispensing of funds to support the development of major facilities and services.
World Bank comprises the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). It is also responsible for the working of the International Finance Corporation, Multilateral Investment Guarantee Agency and the International Center for Settlement of Investment Disputes. The primary role is the unbiased distribution of funds for economic upliftment of the international community. It bears the responsibility of ensuring aid to settle investment disputes and facilitate fiscal and infrastructural reconstruction.
India has been borrowing from World Bank through IBRD and IDA for various development projects in the country particularly related to infrastructure development, poverty alleviation, rural development etc. In 1958, World Bank played an important role in establishing India Aid Club for providing economic assistance to India.
Later in was renamed as India Development Forum. So far India has borrowed around $68billion from the World Bank. IDA funds are one of the most concessional loans given by the Bank and in India, they largely used for social sector projects that contribute towards attaining the Millennium Development Goals (MDG).
The World Bank’s Country Strategy (CAS) for India for 2009-2012 focuses on helping the country to fast-track the development of much-needed infrastructure and to support the seven poorest states achieve higher standards of living for their people. The strategy envisages a total proposed lending program of US$14 billion, in three years, of which US$9.6 billion is from the International Bank for Reconstruction and Development (IBRD) and US$4.4 billion (SDR 2.982 billion equivalent at the current exchange rate) from the International Development Association (IDA).
The strategy is closely aligned with the Government of India’s own development priorities expressed in the Eleventh Five Year Plan. It was arrived at after a series of consultations with a broad range of stakeholders including the government and civil society. Under the strategy, the Bank used lending, dialogue, analytical work, engagement with the private sector, and capacity building to help India achieve its goals.
In March 2012, World Bank announced $ 4.3 billion financial aid to India through a new innovative and flexible financing arrangement to help the country fight poverty. This arrangement, while facilitating a $ 4.3 billion increase in support to India, is designed to maintain International Bank for Reconstruction and Development’s (IBRD) - which is its lending arm - net exposure within the limit of $ 17.5 billion established by it. Bank statement said that this will enable India to continue accessing long-term, low-interest IBRD finance for development projects aimed at improving the lives of its people, one third of whom are yet to make their way out of poverty.
On 5 November 2012, World Bank signed an agreement with the central and Assam governments to provide $320 million, around Rs 1,760 crore, for improving secondary road network in the north-eastern state. The project will support improvement of priority sections of secondary roads, implementation of Assam's 'Road Sector Modernization Programme' and development of a multi-sector road safety strategy, a statement said. As per the agreement, the project will be implemented over a period of six years.
This is the second big financial allocation, though from an external agency, for Assam after the road transport and highways ministry gave around Rs 6,000 crore to improve the national highways across the state. Assam has the maximum share of a special road development programme designed for the north-eastern states. The objective of the World Bank project is to enhance road connectivity in Assam by assisting the public works department to improve and effectively manage its road network.
The World Bank will continue to assist the central government by providing comprehensive analytical work to underpin policy and institutional reform and to improve the implementation of central government projects on the ground. Under the Sarva Siksha Abhiyan (SSA) for example, while schools are now more accessible and gender parity has been reached, the focus will now be on improving the quality of education provided. In the power sector, the Bank will continue to support Powergrid, India’s national electricity transmission agency, which it has helped to grow into a world-class institution.
Though World Bank had dedicated ample funds for the economic development of the developing countries, still it is criticized for its organizational structure where developed countries had maximum say while the developing countries has little or no say. There is no doubt about its contribution in making the lives in developing countries better, now there is a need for it to make its organisation more democratic, and representative.