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India largest recipient of World Bank aid

Our Bureau

New Delhi , July 16

DEVELOPING countries drawing financial support from the World Bank obtained $22.3 billionfor 279 projects worldwide in the fiscal year ending June 30, 2005.

This is an increase of $2.2 billion over the previous year. The Bank's aggregate support to India of $2.89 billion made India the largest recipient by an individual country and this is more than double the $1.4 billionit received in fiscal 2004.

Overall lending quality also rose as steady improvements were achieved through better preparation, greater selectivity and more effective supervision as a result of more effective utilisation of International Bank for Reconstruction and Development (IBRD)/International Development Association (IDA) assistance.

According to a Bank release issued in Washington, the share of total outstanding commitments at risk of not achieving their development objectives declined significantly to 13.5 per cent at the end of fiscal year 2005, from 15.9 per cent in fiscal 2004 in particular.

India was also the largest recipient of IDA assistance, with credits totalling $1.1 billion. Bangladesh received credits totalling $600 million, making it the third largest IDA recipient after India and Vietnam. The increase in Bank support to India reflects the rapid growth in the country's economy with the bulk of the new lending going to the much-needed infrastructure sector. Human development also received a significantly increased sharegoing to national programmes most relevant to achieving the Millennium Development Goals (MDGs).

While Bank support to India is significant, it represents a small proportion of the country's financing requirements. Non-lending support was also provided to India, including reports and analysis covering the country's financial sector, investment climate, trade, forestry, water sector, and knowledge economy.

Borrowing by the South Asia region accounted for the second largest share of lending during the fiscal— $5 billion was only slightly less than the Latin American region, which borrowed $5.2 billion.

Of the total loans, grants and guarantees, $15.7 billion was for investment operations while the remaining $6.6 billion was for development policy support.

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