World Bank Will Soon Clear A Special Loan Package - March 16, 2009

World Bank will soon clear a special loan package of $2.6 billion. Under the package, India Infrastructure Finance Company is expected to get $1.2 bn while SIDBI $400 mn and Power Grid Corporation $1 bn.

World Bank''s Economic Adviser (India) Giovanna Prennushi told that the Bank is in advanced stages of approving this package. Besides this, the World Bank is also working on a loan of $3 bn for the recapitalization of public sector banks. The World bank in December last year had decided to step up its exposure to India to $14 bn beginning 2009 from about $8.1 bn during the previous three years. In line with this, the bank till February this year has approved five projects in India with a total commitment of $1.34 bn. World Bank had sanctioned a loan of $400 mn earlier this year to Power Grid Corporation.

The intentions of the World Bank over increasing its exposure to the Indian infrastructure sector is in line with its thinking that such investments would help developing nations to tide over the global recession.

World Bank Projects 7% Economic Growth For India - June 11, 2008

The World Bank witnesses India''s economic growth to distinctly slow further to seven per cent in 2008, following an easing in its gross domestic product (GDP) growth to a still strong 8.7 per cent in 2007 from nine per cent in 2006. In its flagship annual publication Global Development Finance, 2008, released in Cape Town, South Africa on June 10, the Bank said beginning this year, inflationary pressures started to build in India with deceleration in industrial output to three per cent in April 2008, indicating growing signs of a cooling economy. But a falloff in growth in countries where migrants are employed, coupled with the sharp depreciation of the dollar, could lead to lower remittance inflows in local currency terms, the Bank said adding that this could lead to weaker consumer demand.

Volatile and declining equity prices in the region, particularly in India - just as ownership of stocks and other financial assets is beginning to take hold among the burgeoning middle-class could hamper both consumer and business outlays, while depressing overall confidence levels in the economy. It called upon countries particularly active in global interbank markets Brazil, China, Hungary, India, Kazakhstan, Russia, South Africa, Turkey and Ukraine to be concerned about the possibility that their domestic banks would face funding difficulties in international markets, should liquidity pressures in interbank markets remain at elevated levels.

India-China Has Led To Rise In Consumption Level Has Led To Shortage

Firmly rejecting the contention that rising consumption in developing nations was responsible for the soaring food and fuel prices, India has blamed the policies of World Bank and IMF and ''''excessive and unsustainable'''' demand in developed countries for the crisis. This consumption trend has existed for more than a decade, said Indian UN Ambassador Nirupam Sen, pointing out that over last two years, the demand for oil has gone up one per cent but prices in dollar terms have risen by 90 per cent.

Addressing a special meeting of the United Nations Economic and Social Council to consider the issue of rising food prices, he held financial crisis leading to weakening dollar and diversion of grains to production of bio-fuels among the major causes.Sen also blamed the policies followed by the Bretton Woods Institutions (BWI) responsible and severely criticized their advice to countries to shift from food crops for domestic population to cash crops for exports.The debate came in the backdrop of UN agencies warning that more than one billion could added to those already needing food assistance because of high prices. Finger pointing over the issue was sparked off after the US and EU said the growth of India and China which has led to rise in consumption level has led to the shortage.

Investment In Agri Vital To India: World Bank

NEW DELHI: Greater investment in agriculture in transforming economies like India is vital to the welfare of 600 million rural poor, mostly in Asia, says the latest World Development Report (WDR) of the World Bank.

Presenting the India highlights of the report here on Friday, WDR co-author Alain de Janvry said there was "much mis-spending on agriculture" in India, with investments accounting for only 25 percent of public expenditure, while subsidies took up 75 percent.