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India will be third largest economy by 2025: World Bank

October 23, 2006 20:55 IST

India will become the third largest economy in the world after China and the United States of America, according to World Bank managing director Graeme Wheeler.

Addressing a media conference in Hyderabad on Monday evening, Wheeler praised India's tremendous progress in recent years and emphasised the need for sustaining the growth in the high-value sectors along with the strides in the healthcare and education sectors.

The World Bank MD earlier spent a hectic day interacting with women self-help groups, village organisations, children, mandal samakhya members, physically challenged persons as well as HIV-positive persons during his visit to Ibrahimpally and Chevella in neighbouring Rangareddy district. He also had interaction with Zilla Samakhya members at Jubilee Hall.

He disclosed that "six projects from Andhra Pradesh are in the pipeline for a cumulative net financial commitment of one billion dollars from the World Bank over the next three to four years."

He said that a budgetary support operation-the third tranche of Andhra Pradesh Reform Loan/Credit-has just been appraised and "it is expected to be presented to the Bank's Board of Executive Directors in January 2007."

He explained that the World Bank's projects currently being implemented in the state include three single-state projects (two rural poverty reduction programmes and a community forest management project) as well as several multi-state/ national projects that include a number of health projects and one project each on hydrology and the improvement of technical and engineering education.

The three single-state investment projects for a net commitment of 369 million dollars that are currently under implementation in the state are AP District Poverty Initiatives project and AP Rural Poverty Reduction project, collectively known as the Velugu programme, for which the World Bank lending amounts to $230 million.

These projects seek to enable the state's rural poor, particularly the poorest of the poor, to improve their livelihoods and quality of life. They build on the AP government's investments in self-help groups of poor rural women over the last 10 years.

Over the past five years, these projects have supported more than half a million self-help groups and 910 federations, covering eight million households in over 29,000 villages. The coverage works out to 90 per cent of all poor rural households in the state, Wheeler said and added that he was truly impressed with his first interaction with self-help groups.

The Bank's $108 million Community Forest Management project aims to improve forest management and reduce rural poverty by making the poor and primarily tribal forest-dependent communities assume full responsibility for the development and maintenance of forests formally placed under their stewardship. The project covers 5,000 villages in 14 districts of the state.

Wheeler said that the World Bank has a longstanding development partnership with Andhra Pradesh based on a shared commitment to poverty reduction. The Bank's current lending portfolio (net commitment) in the state amounts to $400 million.

He explained that in the past several years, the Bank has financed a variety of investment projects in the state- for rural roads and state highways, child nutrition, irrigation and power-as well as two structural adjustment loans which focused on fiscal, governance and power sector issues.

He praised Andhra Pradesh for forging ahead with sectoral reforms in various fields and said that the Bank was happy with the state's policy initiatives to reform the various sectors.

Rural Development Minister D Srinivas said that the lending for self-help groups from the banks at nominal interest rate of three percent per annum increased from Rs 1,200 crore (Rs 12 billion) in 2004-05 to Rs 2,000 crore (Rs 20 billion) in 2005-06. The target for the current financial year 2006-07 is Rs 3,000 crore (Rs 30 billion), he added.

Praful Patel, vice-president, South Asian Region World Bank and Faiz Omar, acting country director for India, World Bank, were present at the media meet.

Syed Amin Jafri