India urges World Bank to increase funding, seeks $5-7 billion aid
Stressing the need for increase in funding, India has urged the World Bank to grant $5-7 billion (Rs 33,250 crore to Rs 46,500 crore) to meet the financial requirements of its projects.
In a meeting with World Bank CEO Kristalina Georgieva, Finance Minister Arun Jaitley today stressed the need for increase in funding for India from International Bank for Reconstruction and Development (IBRD), part of the World Bank Group, to meet the financial requirements of its huge pipeline of projects.
The Finance Minister, according to a Finance Ministry statement, said that "since India has now decided to take assistance from the World Bank only through IBRD and cease the funding from the International Development Association (IDA), an increase in IBRD support is imperative to meet India's current requirement of USD 5-7 billion and a huge pipeline of projects."
As the original World Bank institution, IBRD offers loans to middle-income developing countries, while IDA gives loans and grants to the world's poorest developing countries.
During his meeting with Georgieva, Jaitley also emphasised on the need for developing countries like India to have more voting right at the multilateral lender.
In addition, he also stressed on the need for capital increase in the World Bank Group.
Elaborating on the financing issues relating to the World Bank Group, Jaitley highlighted the need for lowering the effective rate of interest on World Bank loans by removing the commitment charges levied on the undisbursed loans; exploring innovative financing options and relaxing the requirement of Sovereign Guarantee for loans to AAA rated organisations.
"The World Bank should explore innovative financing options and relax the requirement of Sovereign Guarantee for loans to AAA rated organisations," reiterated Jaitley.
The meeting was also attended by senior officials including Economic Affairs Secretary, Executive Director (India) for the World Bank Group, and Country Director (India), it said.
The discussions held ranged from the performance of ongoing World Bank projects in India to various policy issues relating to the World Bank Group, it said.
Economic Affairs Secretary Shaktikanta Das also held a one-on-one meeting with Georgieva to further discuss on the policy issues regarding World Bank funding.
Georgieva, who is currently on a two-day official visit to India to understand the long standing partnership between India and the World bank and to discuss the Bank's strategy and programme in India, had held meetings with Maharashtra Chief Minister Devendra Fadnavis, RBI Governor Urjit Patel yesterday.