WB backs India to return to growth path

Economy to expand 8 to 9 per cent in the next one or two years

“India has emerged from the (global) economic crisis with a clear vision of what it will take to accelerate back to earlier growth rates (of 8 to 9 per cent) and beyond. It could achieve this (high) growth rate in one to two years’ time,” World Bank president Robert Zoellick said here on Friday.

Zoellick’s projection is significant as just a few months back the World Bank and other international financial agencies like the International Monetary Fund and the Asian Development Bank had drawn a bleak growth projection for the country.

As recently as last July, the Bank had said India growth rate for the current fiscal could be just 5.1 per cent.

Around the same time, it had also predicted that the growth rate for 2010-11 would be around 7 per cent. 

Virtually giving a thumbs-up to Indian economy, he showered praises on India’s capability to come out of the crisis.

Envisaging a role for India in the global economic recovery, Zoellick said: “The sustained global demand from India’s 1.2 trillion dollar economy is playing an important role in helping the world recover from the global economic crisis.”

The World Bank chief, who was winding up his four-day visit to the country with a press conference, said, “We in the World Bank will like to play a more catalytic role in boosting India’s growth within the scope of our resource capabilities.”

Spelling out future funding activities in India, Zoellick, who had a meeting with Prime Minister Manmohan Singh ahead of the press conference, indicated that the International Finance Corporation (IFC) – the Bank’s private sector arm – would fund Indian firms taking up developmental projects in other countries.  India has emerged as the largest portfolio last fiscal for the IFC at more than 3.4 billion dollars.

Future funding

As the rising food prices in the face of falling production has become worrisome for India, Zoellick said the Bank would step up its funding programme for the country in the areas of agriculture and rural development.

The Bank plans to raise its funding commitment to the country during 2009-12 to US$ 5.3 billion dollars.

The World Bank chief however added a note of caution: in order to fuel the next generation growth, India would have to mobilise vast sums of money to invest in urgently improving human resource and building physical infrastructure, he said.