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India signs US$371.2 million loans with World Bank

Natural disaster costs US$9.8bn/yearly

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Natural disaster costs US$9.8bn/yearly

 

Uttarakhand Disaster Recovery Project.

 

The Indian Government has signed US$371.2 million agreements with the World Bank for a wide range of projects. These were signed in New Delhi on 5 Mar 2019.

The bigger loan of US$250 million is for the National Rural Economic Transformation Project (NRETP) to boost Rural Incomes across 13 States. It is from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a final maturity of 20 years.

The second signed loan of US$96 million for Additional Financing for Uttarakhand Disaster Recovery Project. The World Bank signed it with the Indian Government and Government of Uttarakhand (GoUK). It is from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a final maturity of 15 years.

The third World Bank loan signed was for US$25.2 million for Chhattisgarh Public Financial Management and Accountability Program. It is also from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a final maturity of 10.5 years.

Projects

The US$250 million for NRETP will help women in rural households shift to a new generation of economic initiatives by developing viable enterprise for farm and non-farm products.

A Key Focus of the Project will be to promote women-owned and women-led farm and non-farm enterprises across value chains; enable them to build businesses that help them access finance, markets and networks; and generate employment.

The NRETP is an additional financing to the US$500 million National Rural Livelihoods Project (NRLP) approved by the World Bank in July 2011.

The NRLP which is currently being implemented across 13 states, 162 districts and 575 blocks, has so far mobilized more than 8.8 million women from poor rural households into 750,000 self-help groups (SHGs).

These SHGs have been further federated into 48,700 Village Organizations and 2900 Cluster/Gram Panchayat-level Federations. While these 13 states will continue to be supported under the new project signed today, 125 new districts will be added from within these states.

Speaking on the occasion, Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, said that the National Rural Livelihoods Mission (NRLM) aims to alleviate rural poverty and create sustainable livelihood opportunities in rural communities by promoting sustainable community-based institutions which will facilitate economic and financial services for the rural poor.

He further said that this additional funding will help give impetus to the poverty alleviation measures by the Government and ensure equitable and inclusive growth in the country.

The Loan Agreement was signed by Khare and Hisham Abdo, Acting Country Director, World Bank India, on behalf of the World Bank.

Abdo said that the National Rural Livelihoods Project has mobilized close to nine million rural women into strong self-managed institutional platforms, helping them access services, participate in Gram Sabhas and start engaging in income generating activities.

Many of these women are now geared towards moving into higher order economic initiatives in farm and non-farm sectors. He further said that the New Project will now help them engage purposefully in an evolving rural economy.

The second loan of US$96 million is to provide additional funds to the State of Uttarakhand in its post-disaster recovery plans, ongoing since the floods of 2013, as well as strengthen its capacity for Disaster Risk Management.

The World Bank, through the Uttarakhand Disaster Recovery Project, has been supporting the State Government since 2014 to restore housing and rural connectivity, and to build resilience of communities. So far, the Project has completed more than 2,000 permanent houses and 23 public buildings and restored over 1,300 kilometers of roads and 16 bridges.

The additional financing of US$96 million will further help in the reconstruction of bridges, road and river bank protection works, and in the construction of a training facility for the State Disaster Response Force (SDRF).

The Project will also help to increase the technical capacity of the State Entities to respond promptly and more effectively to such crises in the future.

Khare said that India is vulnerable, in varying degrees, to many natural as well as man-made disasters. The Government of India is committed to develop a holistic, proactive, multi-disaster-oriented strategy, using technology effectively to build a safe and disaster resilient India. He further said that the Uttarakhand Disaster Recovery Project has been delivering on these objectives and the additional finance will help expand its impact.

Khare, representing the Indian Government, and Amit Negi, Secretary, Finance and Disaster Management, Government of Uttarakhand and Program Director, Uttarakhand Disaster Recovery Project, signed the loan with Abdo.

In June 2013, a heavy deluge caused devastating floods and landslides in the Himalayan State of Uttarakhand. The disaster, the worst of its kind since the 2003 tsunami, hit more than 4,200 villages, damaged 2,500 houses, and killed 4,000 people.

Abdo said noted that the Natural disasters cost India an average of US$9.8 billion annually.

Speaking after the agreement signing, Ignacio Urrutia, Task Team Leader for the Project, said that while the impacts of climate change in future disasters remain uncertain, efforts to ensure that the State has additional capabilities and resilient infrastructure to reduce the potential damages and recover more quickly from disasters will translate into important beneficial ripple effects on the State’s economy and livelihoods in the long term.

The third World Bank loan of US$25.2 million is for the State’s Reforms in Expenditure Management — Expenditure Planning, Investment Management, Budget Execution, Public Procurement and Accountability.

The Chhattisgarh Public Financial Management and Accountability Program, which is the First Bank-Financed State-Level Project in Chhattisgarh in nearly a decade, will also help the State strengthen its Direct Benefit Transfer (DBT) and Tax Administration Systems.

The New Project will build capacity of the State’s Human Resources and the Institutions Handling Management of Public Finances. The World Bank will facilitate cross-learning from Public Financial Management (PFM) Reforms undertaken by it in other Indian States while bringing in global experiences.

Khare, representing the Indian Government, Kamal Preet Dhillon, Secretary, Finance, Government of Chhattisgarh, signed the loan with Abdo.

Abdo noted that the Chhattisgarh Government has correctly identified improvements in Public Financial Management as a key step for achieving its development potential. This will ensure that the State can invest more and with greater efficiency, for its poor and vulnerable.

He said that the New Project, with its focus on IT solutions, will benefit almost 11,000 Village Panchayats and 168 Urban Municipalities in the State. fiinews.com

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