World Bank okays $180-mn loan for MP poverty project

The World Bank has approved a tranche of $180 million as a soft loan to Madhya Pradesh for the second phase of its district poverty initiative project (DPIP).

A team of the bank is likely to visit the state soon to ink a deal with the state government.“An internal decision committee in its meeting in Washington DC has approved the loan. Soon, an appraisal team will visit the state to finally sign a memorandum of understanding in this regard,” a source associated with the project told Business Standard.

The state government had submitted a proposal of $180 million for the second phase of the project.

The first phase of DPIP, covering 2,900 villages of 14 districts, started in 2001 with financial assistance of $100 million extended by the Bank.

The second phase will cover the existing 53 blocks in 14 districts and approximately 10,000 including those which were covered under the first phase. It is likely to offer benefits to about 780,000 people.

Under the second phase, the state government has decided to do away with common interest groups (CIGs), formed under the first phase, and to replace them with self-help groups (SHGs).

However, the existing project team will have a daunting task to address various issues pertaining to wealth ranking process, high interest rates offered to poor people through micro-finance and cases of refusal from market agencies or corporate houses for procuring products manufactured by the CIGs.

The first phase covered 326,000 people (poor and ultra poor) through 56,089 CIGs.

An independent survey on the DPIP scheme conducted by a Delhi-based agency, New Concept, reveals that the 14 districts have posted 65 per cent increase in the total income with 149 per cent in agriculture production, 46 per cent land converted into double crop and 114 per cent into triple crop, 66 per cent increase in animal husbandry, 70 per cent increase in man-days, 23 per cent increase in wages, distress migration decreased from 30 per cent to 14 per cent savings and a whopping increase of 183 per cent in savings.