Washington: The World Bank has approved a $225 million loan to Bihar aimed to support the state in implementing reforms in fiscal policy, public financial management, and governance, in order to boost economic growth.
“While India has emerged as one of the fastest growing countries in the world, it faces the challenge of addressing widening economic disparities. Bihar is the poorest state in India with about 39% of population living in poverty,” The Bank said in a statement.
The First Bihar Development Policy Loan is designed to improve fiscal policy, public financial management and governance.
“It aims to boost economic growth through reforms in agriculture, investment climate, and basic infrastructure, with an emphasis on roads. It will also support improving public service delivery in education and social protection,” it said.
“Bihar is a crucial state for poverty reduction and inclusive growth in India,” said Isabel Guerrero, World Bank Country Director for India.
Bihar registered economic growth of 4% in recent years which is much slower than the rest of the country While the state has 8.5% of India’s population, it accounts for only 1.6% of the country’s GDP.
“It is India’s poorest as well as one of its slowest growing states. But with arable land, water resources, favourable demography, and unexploited tourism potential, Bihar has the necessary preconditions to accelerate development. By focusing on accelerating growth and improving public service delivery, this operation will assist Bihar towards achieving the development goals set out in its Eleventh Plan,” she added.