The World Bank has agreed to lend up to $3 billion a year over the next three years to India for various development programmes, its president, Paul Wolfowitz, said on Saturday. He said India had grown at an impressive pace in the past 15 years but would have to sustain the growth momentum, without which it would not be able to lift nearly 260 million people out of poverty.
"A lot of work needs to be done to sustain growth," Wolfowitz, on his first visit to India as World Bank president, told reporters.
"The World Bank is ready to lend up to $3 billion over the next three years to support the Bharat Nirman programme, especially to build roads, provide drinking water and establish irrigation facilities in Indian villages."
The Bharat Nirman programme is a government-run scheme to improve rural infrastructure. The Bank lent $2.9 billion to India in the financial year to June 2005, more than double $1.4 billion lent the year before, making Asia's third-largest economy the multilateral lending institution's largest borrower.
India plans to spend $6 billion this year to tackle poverty and earlier in the week, the centre-left Congress coalition government, introduced legislation in parliament seeking to offer 100 days of employment a year to every rural household.
Senior government officials told Wolfowitz India needs to invest $100 billion over the next seven years in infrastructure projects such as power, highways, airports, ports and railways.
India's cash-strapped government spends nearly half its revenue on servicing debt, and is left with little money to improve rickety infrastructure, much needed to achieve double-digit growth.
India has averaged 6 percent a year growth since reforms started in 1991 and the average per capita income is about $700. But millions still earn less than $1 a day, mostly in rural India.
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