While prime minister Manmohan Singh, on his way back from a highly successful tour of the UK and the US, addressed one of the main bastions of capitalism, the New York Stock Exchange, back home a simmering, ideological battle raged within the nodal economic agency, the Planning Commission.

The four Left parties, which offer critical support to the Congress-led government at the centre from outside, had challenged the presence of foreign experts from the World Bank, the Asian Development Bank, McKinsey & Co and the Boston Consulting Group on the the Planning Commission''s joint consultative committee on industry for a mid-term appraisal of the 10^th five-year plan.

The Left known for its anti-World Bank and anti-IMF stand has not been able to digest the fact that multilateral agencies would have a say in the planning process of the country. It is ironic that the West Bengal government which has a Left Front government ruling for the last 27 years has enlisted the help of foreign experts and consultants including McKinsey & Co.

In June this year, the West Bengal government took the decision to accept World Bank assistance after a gap of five years as it was satisfied that World Bank and other multilateral agencies had stopped imposing conditions on loan recipients.

However against the backdrop of the tug of war in the corridors of the Planning Commission, the World Bank recently unveiled its country strategy for India building a growing relationship with the Government of India between 2005 and 2008 to accomplish one of the missions of its ''millennium development goals'' — that of halving poverty by 2015. The strategy also envisages an increased lending programme of up to US $ 3 billion a year.

Grappling with two Indias Interestingly, one of the aims of the World Bank is to help India bridge the widening gulf between the rich and the poor within India — a long cherished desire nurtured by the Left and a laudable objective in the preamble of the Indian Constitution.

According to the World Bank there remains a substantial disparity of opportunity, particularly in the education, health, and economic prospects of women and other vulnerable groups. In addition, a growing gulf has emerged between Indian states, with the result that poverty is getting increasingly geographically concentrated. According to the strategy report, India has over one-quarter of the world''s poor (between 260 million and 290 million) and the World Bank endeavours to assist India with best practices and financing for development.

The World Bank''s country director for India, Michael Carter says, "Looking at these disparities, what emerges is a picture of India occupying two worlds simultaneously. In the first, economic reform and social changes have begun to take hold and growth has had an impact on people''s lives, opportunities have opened up. In the other, citizens appear almost completely left behind by public services, employment opportunities, and brighter prospects. Bridging the gap between these two Indias is perhaps the greatest challenge facing the country today."

A glance at the common minimum programme (CMP) hammered out by the United Progressive Alliance, which the Left Parties support, reveals that its goals are not particularly different from the country strategy for India which, the World Bank unveiled recently.

Both these documents express concerns about the emergence of two Indias and the regional disparities as a result of which one is the rich India and the other is the poor India.

The CMP talks about redressing growing regional imbalances both among states as well as within states, through fiscal, administrative, investment and other measures. It mentions that it is a matter of concern that regional imbalances have been accentuated by not just historical neglect by also by distortions in the allocation of plan and budgetary resources, and central government assistance. It voices the fact that in the 10^th five-year plan, states like Bihar, UP and Assam received per capita allocations much below the national average.

Carter also says "There is another India we must not forget, and it is still home to nearly a third of the world''s poor people. More than half of these live in the four states of Bihar, UP, MP and Orissa alone, and more than two-thirds in rural areas." He points out that this is where a crisis-prone farm sector still supports two-thirds of the population where per capita incomes are abysmally low.

Infrastructure, the key to growth and progress This is another area, which is accorded top priority by the World Bank and the CMP. The World Bank sees priority to infrastructure as an important tool to attack poverty. In a global poll (consisting primarily of India''s opinion leaders) conducted by the World Bank as to what its main objective should be, 43 per cent said it should support efforts to reduce poverty and 42 per cent said it should focus on infrastructure development.

Carter points out that poverty reduction cannot occur without infrastructure development — roads, electricity, water and sanitation, transportation and communications.

The UPA, through the CMP, has committed itself to a comprehensive programme of development and expansion of infrastructure right from providing basic amenities like roads, highways, water supply, sewage treatment and sanitation to urban renewal and expansion of social housing.

Part of the widening gulf between India''s rich and poor can be attributed to the neglect of the rural poor and lack of productive employment opportunities in the countryside. The UPA is planning to revamp the functioning of the Khadi and Village Industries Commission and launch new programmes for the modernisation of coir, handlooms, power looms, garments, rubber, cashew, handicrafts, food processing, sericulture, wool development, leather, pottery and other cottage industries.

The government is giving the highest priority through investments, credit and technological support to continued growth of agriculture, horticulture, aquaculture, floriculture, afforestation, dairy farming and agro-processing that will help significantly in creating new jobs.

The World Bank is looking at helping with rural livelihoods situation with an emphasis on community driven projects.

Human Development — Improving the quality of life The World Bank''s country strategy talks of high priority to human development in terms of education, health, social protection. Similarly, the CMP deals with each of these issues separately. It plans to raise public spending in education to at least 6 per cent of the GDP with at least half this amount being spent on primary and secondary sectors. It has also earmarked special funds for development of women and children especially in rural areas and urban slums.

Social harmony and protection of minorities is also a priority for the new government. It proposes to enact a model comprehensive law to deal with communal violence and encourage each state to enforce the law. The government also proposes to raise public spending on heath to at least 2-3 per cent of GDP over the next five years, with a high priority to food and nutrition security.

It is clear that both the World Bank and the Left parties, which form a part of the ruling group in India, have the same goals as far as social responsibilities are concerned. It will be interesting to observe how Singh and his handpicked deputy chairman of the planning commission, Montek Singh Ahluwalia, harmonise the common views of ideological opponents in the future.

There have been instances where Left parties have gone hammer and tongs at some of the UPA government''s policies such as the foreign direct investment limits and employee provident fund rate reduction.

Normally, multilateral institutions attach conditionality mainly to structural adjustment loans. However, the World Bank itself is moving away from its earlier rigid norms of conditionality-linked adjustment loans. It is now adopting a development policy lending approach in which governments take ownership of reforms and develop programmes that meet the needs of their individual countries.