The Hindu Business Line : $100-m IBRD aid for projects to push economic reforms

THE World Bank has approved a sum of $100 million for projects to accelerate growth and reduce poverty by way of supporting economic reforms in the State.

This is the second tranche of assistance to Karnataka's economic restructuring programme, which would help the State implement economic and structural reforms already under way, according a World Bank release.

"There is broad agreement in India on the need for reforms at the State- level to accelerate growth and poverty reduction,'' said Mr Edwin Lim, World Bank Country Director for India.

"These projects reinforce initiatives by the Government to support and facilitate reforms and Karnataka is among the frontline States to have embarked upon reforms. If the States can establish a more stable fiscal position, boost the allocations to priority social sectors and function transparently and effectively, it will contribute to a more rapid rate of poverty reduction and improvements in social indicators.''

. The first tranche of $150 million was approved by the Bank in June 2001.

"Since the first operation, the Government of Karnataka has made significant progress in implementing its reform programme, despite a slowdown in growth and severe drought,'' said Mr Lili Liu, Senior Economist and Co-Task Leader for the project.

The Karnataka economic restructuring programme has four main components:

Fiscal and public expenditure reforms including a multi-year framework for fiscal adjustment, with the objectives of restoring the State's financial wealth, creating additional fiscal space for high-priority expenditures, and promoting more efficient and transparent management of the Government's financial resources.

Administrative reforms focus on the civil service, freedom of information, service agencies, anti-corruption initiatives, decentralisation, and e-governance. The objective is to improve the efficiency and transparency of Government as it conducts its business and delivers services.

The private sector development component focuses on improving the business environment through deregulation and on privatisation or closure of public enterprises.

The poverty monitoring and statistical strengthening component supports better use of data in policy-making through development of a human development monitoring system, increased emphasis on programme evaluation and strengthening of the State's statistical system.

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