World Bank okays $225-m loan to Bihar

New Delhi: The World Bank approved $225 million loan/credit to Bihar to support the State in implementation of critical structural reforms to attain sustainable and inclusive development besides improving the delivery of services.

While $150 million would come as a loan from the International Bank for Reconstruction and Development (IBRD), the World Bank’s concessionary lending arm, International Development Association (IDA) would provide $75 million credit, a statement issued by the Bank in Washington on Thursday said.

IBRD loan would have 20 years to maturity and a 5-year grace period. And, IDA credit has 35 years to maturity and a 10-year grace period.

Boosting growth

The First Bihar Development Policy Loan/Credit is designed to improve fiscal policy, public financial management and governance.

It aims to boost economic growth through reforms in agriculture, investment climate and basic infrastructure with an emphasis on roads. It would also support improving public service delivery in education and social protection.

The World Bank Country Director for India, Ms Isabel Guerrero, said that Bihar was a crucial State for poverty reduction and inclusive growth in India.

Development goals

“Bihar is India’s poorest as well as one of its slowest growing States. But with arable land, water resources, favourable demography and unexploited tourism potential, Bihar has the necessary preconditions to accelerate development.

By accelerating growth and improving public services delivery, this operation will assist Bihar in achieving the development goals set out in the Eleventh Five Year Plan,” she said.

About 39 per cent of Bihar’s population live in poverty. Economic growth at 4 per cent has been much slower than the rest of the country. While Bihar has 8.5 per cent of India’s population, it accounts for only 1.6 per cent of the country’s gross domestic product.