India's long term growth story intact: Mukherjee to World Bank

The country's long term growth story is intact due to demographics, rising middle class, urbanisation, strong savings and investments, Mukherjee told World Bank President Robert Zoellick at a meeting with him during his visit here last week.

Officials said the Indian minister also said that the country was witnessing rising entrepreneurship and continuing reforms under a democratic polity.

Mukherjee was in Washington to attend the annual meeting of International Monetary Fund and World Bank.

While Mukherjee sought Zoellick’s view on the global scenario, the latter was interested in the steps being taken by India on governance and fighting corruption in view of the recent civil society protests against that in India.

A senior Indian official, speaking on the condition of anonymity, said Mukherjee told Zoellick that his government is committed to tackling corruption, bringing transparency in procurements and allocating resources through auctions. Besides, it has undertaken other measures such as doing away with discretionary powers of the Ministers.

A new National procurement Law and a new Land Acquisition Bill are under consideration, Mukherjee informed.

The minister is also believed to have said that negotiations of various agreements for the purchase of IBRD Bonds up to USD 4.3 billion by RBI are at an advanced stage and are likely to be finalised in a short time.

However, Mukherjee pointed out that this is only a temporary measure and the long term solution lies in the Bank’s capital base going up.

He is believed to have suggested that the Bank must explore ways of expanding its lending beyond the current levels and meet the huge demand from developing countries.

He also said that given the huge infrastructure demands from several States and Ministries and lending constraints faced by the Bank due to single borrower limit; the Bank has to be innovative, nimble and efficient to meet the diverse needs of its various clients.

The World Bank should consider mobilising co-financing, doing joint projects with IFC and other development partners and private sector.

India, said the Finance Minister, will be happy to discuss all the ideas with the World Bank on how it could continue its strong partnership with New Delhi.

Sharing his view on the current global economy, Mukherjee said there are worrying clouds over the horizon due to weak growth in advanced economies, and financial market turmoil over sovereign debt sustainability.