WB endorses financial support framework for India’s transition to high-middle income nation
Washington: The World Bank has endorsed an ambitious five-year framework for India under which it is expected to receive USD 25-30 billion in financial support for its transition from a low-middle income to a high-middle income country, a senior official from the global lender said.
The Country Partnership Framework (CPF) for India is aimed at supporting the country’s transition to a higher middle-income country by addressing some of its key development priorities — resource efficient and inclusive growth, job creation and building its human capital.
It is expected to bring between USD 25-30 billion in financial support for India from the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).
“With a fast-growing economy, global stature, and its unique experience of lifting the highest number of poor out of poverty in the past decades, India is well-positioned to become a high middle-income country by 2030,” said Hartwig Schafer, World Bank South Asia vice president.
“It’s a five-year framework that commits the Bank’s engagement in India, both in areas where what we’ll do, how we will work in these areas and the level of financial commitment. This is the first country partnership framework written with India,” Junaid Ahmad, Country Director, World Bank, India, told PTI in an interview.
“The CPF was preceded by a systematic country diagnostic (SCD) that offered a narrative about India,” Ahmad said.
Soon after the World Bank endorsed the CPF for India, Ahmad said, the Bank recognises the incredible growth and development of India over the last several decades.
“It recognises that India has gone from a low-income country status to a low-middle income. And now India is entering the economic transformation from low-middle income to high-middle income (country). This CPS is about how can the Bank support this transition,” he said.
Noting that both the SCD is a highly consultative document, Ahmad said, the CPF is a joint document with the Indian government.
“I complement the World Bank Group for aligning the CPF with India’s development and investment objectives of high, sustainable and inclusive growth,” said Subhash Chandra Garg, Economic Affairs Secretary, in a statement.
Observing that the SCD basically said India’s big story is steady growth from very low several decades back to a steady growth of seven per cent plus, Ahmad said, this document also showed that the growth is quite diversified.
“Some of it is based on export. A lot of it is based on an internal consumption and investment, unlike say China, which is highly export led growth. So India’s is more broad based, diversified growth path,” he said.
“Over time, this growth has become more stable and is resilient. Recently there were shocks on the economy, which included demonetisation and the GST implementation and there was this fall in the growth. But it is now rebounded, and not only has it gone back to seven per cent, this quarter it is at eight per cent,” Ahmad said.