New Delhi: The World Bank’s lending to India is set to triple this year, a government statement said Wednesday, as the agency’s chief declared the country was poised to be a new driver of global growth.
India, which already has $19.57 billion in World Bank loans that are supporting 68 development, infrastructure and other projects, is the Washington-based financial institution’s biggest borrower.
World Bank loan “commitments are expected to reach $7 billion” in the current year, a statement from the finance ministry said.
The sum is three times the average $2.3 billion the Bank has loaned India annually over the past four years.
The statement came after a meeting between World Bank president Robert Zoellick and finance minister Pranab Mukherjee in New Delhi.
As part of the $7 billion, the World Bank in September announced $4.3 billion in loans to India, including two billion for the banking sector, to help strengthen its economy amid the global economic crisis.
Zoellick wrote in the Hindustan Times newspaper Wednesday that India faces enormous challenges but “if it can remove bottlenecks that slow its economy, then India is well positioned to become one of the new poles of global growth.”
The world financial system “needs to accommodate India and other powers whose growth rates far exceed those of developed countries,” Zoellick said.
As India’s economy returns to growth rates of 8-9%, “we can expect it to grow not only as a market but as a supplier of a range of services and increasingly knowledge-intensive goods,” Zoellick said.
He made his comments two days after India reported quarterly economic growth rose 7.9% from a year earlier, underscoring what analysts said was the country’s faster-than-expected recovery from the global slump.
The finance ministry said Mukherjee pressed Zoellick for swift completion of reforms to give a greater voice to developing nations at the World Bank.
In September, leaders at a Group of 20 summit in the US city of Pittsburgh backed plans to give developing countries greater voting rights at the World Bank and the International Monetary Fund.