India Overview

With a population of more than 1.2 billion, India is the worlds largest democracy. Over the past decade, the countrys integration into the global economy has been accompanied by impressive economic growth. India has now emerged as a global player with the worlds fourth-largest economy in purchasing power parity terms. More recently, the slowdown in GDP growth witnessed over the past year is likely to continue due to the weakness in investment. Tighter macroeconomic policies, slow growth in the core OECD countries and worries about another global recession, and the base effect of high growth in FY2010-11 in agriculture are also weighing down growth. Poverty has been on the decline. According to official government of India estimates, poverty declined from 37.2% in 2004-05 to 29.8% in 2009-10. Rural poverty declined by 8 percentage points from 41.8% to 33.8% and urban poverty by 4.8 percentage points from 25.7% to 20.9% over the same period. The government is now investing in a set of pioneering initiatives to bring basic services to the poor in elementary education, basic health care, health insurance, rural roads, and rural connectivity. With more children entering elementary school, the need for universalizing secondary education has emerged Equally important is building the skills of Indias rapidly expanding workforce, whose ranks are joined by some 8 million to 9 million new entrants each year. Moreover, a large proportion of the population lacks access to good quality health care, and progress in improving health indicators is slow. India also has one of the highest rates of malnutrition in the world. Indias growing economy is placing huge demands on critical infrastructure power, roads, railways, ports, transportation systems, and water supply and sanitation. While the government has raised its investments in infrastructure, the investment gap remains daunting with an estimated $1 trillion required to meet the countrys resource needs over the next five years. Accordingly, India is encouraging private participation in infrastructure development. India is also undergoing a massive urban transformation. By 2030, the urban areas will be home to 40 percent of the countrys people doubling the urban population within a span of thirty years. How India manages this urbanization will largely determine the long-term sustainability of its towns and cities, and quality of life for a sizeable part of its population. While agricultures share in the countrys economy is progressively declining, India remains a global agricultural powerhouse. It has the worlds largest area under wheat, rice, and cotton, and is the worlds largest producer of milk, pulses, and spices. The country is also home to the worlds largest number of cattle (buffaloes). However, with nearly three-quarters of Indias families dependent on rural incomes, agricultural productivity must grow along with new opportunities for non-farm incomes. In addition to producing cereal crops, India must increase its production of fruits, vegetables, and milk to meet the demands of a growing population with rising incomes and to better manage food inflation. For this, a productive, competitive, diversified, and sustainable agricultural sector will need to emerge at an accelerated pace.

Indias remarkable economic growth has raised the issue of environmental sustainability. With its high population density, stressed ecological systems, and substantial dependence on natural resources, the country is very vulnerable to climate change, the first impact of which will most likely be felt in the water sector STRATERGY The World Bank Groups Strategy for India for FY 2009-2012 is closely aligned with the countrys objectives as outlined in its 11th Five Year Plan. The Bank uses lending and analytical work to help India achieve its goals. Between 2009 and 2012, the Bank lent around $19 billion to the country. As of March 2012, total net commitments stood at $23.4 billion (IBRD $15.6 billion, IDA $7.8 billion) across 75 projects. The Bank is also increasingly engaged in agriculture and rural development. In fact, with $2 billion in new lending in FY12 for seven operations, the World Banks agriculture and rural development portfolio in India is by far the largest such Bank program worldwide in absolute dollar terms. It includes the Banks support for Indias newly launched National Rural Livelihoods Mission, one of the worlds largest community-based rural poverty reduction programs that aims to reach almost a quarter of Indias population. Other key areas of support in agriculture include helping boost productivity and farmer incomes through agricultural research and technology dissemination, improving agricultural water management, strengthening marketing and value chains, as well as developing the dairy sector. A total of 24 operations are under implementation in India, with total commitments of $5.8 billion. The Bank continues to fund the governments financial sector reform program, support rural credit cooperatives which are crucial for channeling agricultural credit to farmers and assist improvements in the country's agricultural insurance program. It also supports the scaling up of sustainable and responsible microfinance to under-served parts of the country. Under the infrastructure portfolio, the World Bank is supporting the development of rail and road transportation. This includes the greater movement of freight through environmentfriendly rail, better road connectivity through upgraded national and state highways, and an expansion of the rural road network. The Bank is also helping streamline urban transportation in Indias premier megacity of Mumbai as well as a few other cities, besides helping improve the delivery of urban services in a few large states. Moreover, to help India meet its huge energy needs, it is supporting the development of clean hydropower, together with the improved transmission and distribution of power throughout the country. In education, the Bank program is focused on helping the country bring the hardest-to-reach children into primary school and improve learning. As more children complete primary school, the Bank has recently extended support for secondary education. In addition, to prepare the youth for a rapidly changing job market, the World Bank is supporting improvements in the quality of engineering and vocational education in selected states /educational institutions. In health, ongoing Bank projects support national programs for disease control such as kalaazar, polio and malaria, HIV/AIDS, and TB, besides strengthening health systems in the states of

Tamil Nadu, Karnataka, and Uttar Pradesh. In rural water supply and sanitation, the World Bank has supported the evolution of models for efficient services through decentralized planning and execution, and the recovery of operational and management costs from rural communities. Currently, the World Bank is in the process of articulating a vision for an environmentally sustainable future for India (India 2030). Its $1 billion National Ganga River Basin Project supports the government in cleaning up and conserving the iconic river. The Bank is also supporting India in developing new models for conserving biodiversity while improving rural livelihoods, and supports efforts to protect India's fragile coasts. Moreover, Bank support to Indias low-income states is on the rise to help them develop into attractive investment destinations. In Bihar, for instance, the World Bank is supporting the development of rural livelihoods and helping reduce the states vulnerability to floods.