THE WORLD BANK
(IBRD AND IDA)
34.1 The International Bank for Reconstruction and Development (IBRD) was established in 1945 and began its programme of economic assistance in June 1946. Its member countries subscribe to its capital and its lending operations are financed primarily from its borrowings in the International capital markets, from retained earnings and the flow of repayments of its loans. India is a major beneficiary of assistance from the World Bank Group, including IBRD and its soft loan affiliate the International Development Association (IDA). IBRD assistance to India commenced in 1949, and comprises long term loans for financing various development projects. The re-payment period is at present 20 years, inclusive of five years grace period. The interest rate is variable and revised semi-annually in accordance with the banks own cost of borrowing funds The current rate of interest is around 6.34%. The commitment charge on undisbursed balance is at present 0.75%. A rebate of 0.5% is however permitted for timely repayment of World Bank loans.
34..2 The International Development Association was established in 1960, as an affiliate of the World Bank to make concessional long term loans. IDA credits carry no interest charge but a service charge of 0.75% is levied on the disbursed portion of the credit. Commitment charges on undisbursed balances are fixed every year upto a maximum of 0.5%. The credits to India upto 30th June 1987 are re-payable in 50 years, inclusive of a grace period of 10 years and those approved from 01 Jul 1987 are re-payable in 35 years inclusive of a grace period of 10 years.
34..3 The Bank group assistance to India comprises of investment related project loans and has covered a wide variety of sectors. IDA assistance has focused on agriculture, Irrigation, Urban Development, Health and Family Welfare and Dairy Development. IBRD assistance has been extended to the Railways, Power, Fertilizer and Telecommunication sector. These categorizations are not, however, either exhaustive or mutually exclusive. Currently, there are 96 IBRD and IDA assisted projects under implementation (as on 31.3.99)
34.4 The total amount of loan/Credit assistance extended by IBRD and IDA upto the end of March, 1999 stood at US$ 43953.70 million as shown in the table below:
(Net of Cancellation)
1. Upto the end of First Five Year i.e. (31.3.1956)
2. During Second Five Year Plan (1.4.1956 to 31.3.1961)
3. During Third Five Year Plan (1.4.1961 to 31.3.1966)
4. Yearly Plan 1.4.1966 to 31.3.1969
5. During Fourth Five Year Plan (11.4.1969 to 31.3.1974)
6. During Fifth Five Year Plan (1.4.1974 to 31.3.1978)
7. Yearly Plan (1.4.1978 to 31.3.1980)
8. During Sixth Five Year Plan (1.4.1980 to 31.3.1985)
9. During Seventh Five Year Plan (1.4.1985 to 31.3.1990)
10. Yearly Plan (1.4.90 to 31.3.91)
11. Yearly Plan (1.4.91 to 31.3.92)
12. Eighth Plan (1.4.92 to 31.3.97)
13. Annual Plan (1.4.97 to 31.3.98)
14. Annual Plan (1.4.98 to 31.3.99)
Total 22592.41 21361.29 43953.70
WORLD BANK AND INDIA DEVELOPMENT FORUM
34.5 The World Bank also plays the coordinating role in relation to external assistance to India, through the India Development Forum formerly known as Aid India Consortium which meets annually to discuss and determine aid commitments by the multilateral development funding agencies and bilateral donors.
34.6 Consequent upon the nuclear test conducted by India in May,1998, economic sanctions were imposed by major member countries of the Bank against India. On 6th November 1998, partial lifting of sanctions was announced by US. These relaxations included restoration of EXIM Bank, TDA and OPIC operations. In respect of World Bank, disbursements against ongoing projects continued. New projects relating basic human needs were being supported. The commitments made by Bank during 1998-99 against 12 projects aggregate to US $ 1542.90 million.
34.7 Details of loans/ credits extended upto 31st March 1999, by IBRD and IDA, their terms and conditions, utilisation and debt servicing payments are given in Annexure I and II.