Three World Bank loan / credit agreements amounting to $944 million were signed
in New Delhi today during the visit of World Bank president Robert B Zoellick.
Also present on the occasion were finance minister P Chidambaram, commerce and
industry minister Kamal Nath and labour minister Oscar Fernandes. The
agreements were signed by Madhusudan Prasad, joint secretary, ministry of finance,
and Isabel Guerrero, country director, India, World Bank. $600
million worth of loan and credit will go towards strengthening the rural credit
cooperatives project; $280 million is meant as credit for the India Vocational
Education Training Project; and $64 million as additional financing loan and credit
for the Karnataka Community Based Tank Management Project. Extending
a very warm welcome to Zoellick on his first visit to India as the president of
World Bank, Chidambaram said, "The agreements are being signed today for
about $950 million of World Bank assistance in three critical areas - rural finance,
vocational training and restoration of water bodies. It gives me personally a
great satisfaction to see the culmination of project preparation process, as all
these three relate to announcements that I have made in my Budget speech in the
Parliament." He
said a well functioning system of finance was essential for sustaining agricultural
growth and alleviating rural poverty. "Our rural credit cooperatives have
been a key pillar in the system of rural finance and the World Bank assistance
will help in revitalizing these institutions and provide credit to farmers with
significantly enhanced access to formal finance," Chidambaram said. "The
World Bank project envisages assistance of $ 600 million, which is, I understand,
the largest single project funded by the World Bank in India. NABARD would be
helping in implementing this project. The second project addresses the issues
of improving the quality of vocational training, in keeping with the government''s
keenness to ensure greater competitiveness of the labour force. "Under
the World Bank project, Industrial Training Institutions will be strengthened
to enable our workers to upgrade their skills and contribute to the country''s
growth process. With $ 280 million of IDA assistance envisaged in this project,
400 ITIs will be upgraded over a period of four years. "In
several states, traditional water bodies have been an important source of irrigation
and livelihood support over centuries. We had initiated a pilot project for restoration
and repair of these water bodies to unlock the huge potential they hold for improving
agricultural production and livelihoods of the rural people. Based on the pilot
scheme, the World Bank has already finalized projects for Tamil Nadu and Andhra
Pradesh. The project for Karnataka, which we are signing today, is the third in
the series and it envisages Bank assistance of $ 64 million. "I
understand that this would cover 1225 tanks and bring an estimated 52,000 hectares
under improved irrigation. All the three projects being signed today reflect Government
of India''s priorities in rejuvenating the rural economy. They also embody the
important development partnership we have with the World Bank. I wish all the
best to the project authorities for the successful implementation of these projects
and also look forward to a strengthened engagement of India with the World Bank
under the leadership of Mr. Zoellick." Speaking
on the occasion, Oscar Fernandes said, "India''s population profile is such
that we will have a large proportion of younger age-groups in the coming decades.
To convert this potential to an advantage, my country needs to work simultaneously
on growth with concomitant employment opportunities, on enhancing skills and productivity;
and for reducing inequality. "Thus,
the agreement for vocational education project that is being signed today is a
significant and important link in this country''s strategy for skill enhancement
of the workforce. Together with our other initiatives for upgrading the education
and skill levels of our young men and women, India would be poised to bridge the
critical gaps in the labour markets. This strategy has implications for poverty
reduction and spreading the benefits of economic growth to large segments of our
population. "Given
the shortages of labour in the developed world, they too stand to gain by the
strategic shift towards human resource development." Robert
Zoellick said, "The three projects being signed today reflect the government
of India''s very pertinent focus on revitalising the rural economy and on removing
skill gaps that could impact India''s sustained growth. The bank is committed to
supporting these priorities. "Reforming
and revitalising the country''s rural cooperative credit institutions will provide
millions of farmers access to affordable credit for their critical needs, be it
for better quality seeds and fertilizers, or a higher breed of cattle. The vocational
training project will not only help revamp India''s vocational training system,
but also enable India''s young and growing workforce attain multi-skilling and
constantly upgrade their skill sets in a fast changing global economy. "The
ongoing ''Karnataka tanks project'' is helping farmers rejuvenate tanks, an integral
part of the traditional village water bodies, which have been put to disuse because
of inadequate maintenance." Strengthening
rural credit cooperatives project supports the centre''s initiative to reform and
revitalise the country''s rural cooperative credit institutions and is designed
to transform access to financial services for India''s poorest farmers. These institutions
include some 31 state cooperative banks, 367 district central cooperative banks
and over 100,000 primary agricultural credit societies. The
$280 million credit for the India Vocational Training Improvement Project is being
earmarked towards helping the centre''s efforts to improve the vocational training
system through policy reform and by making the design and delivery of training
more demand responsive by improving the quality and relevance of training in 400
eligible industrial training institutes. The
loan and credit of $64 million for the Karnataka community-based tank management
project in additional financing to the original project that has so far mobilised
1,518 ''tank user groups'' (TUG) to develop and manage some 1,681 irrigation tanks
since April 25, 2002, when the original project was approved by the World Bank.
The
project will continue to improve rural livelihoods and reduce poverty by developing
community-based approaches to improving and managing small reservoirs, locally
known as ''tanks''.
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