World Bank to extend $180 mn to MP

The World Bank will soon extend a tranche of $180 million soft loan to Madhya Pradesh for the second phase of its district poverty initiative project (DPIP). The first phase of the project started in March 2001 in 14 districts, covering 2,900 villages, with World Bank assistance of $100 million, and has been completed amid confusion and complaints from bankers.

Phase II will cover 53 blocks in 14 districts, with approximately 10,000 villages, including those covered under Phase I. The common interest groups (CIGs) formed under the project, will now be working as Self Help Groups (SHGs). The project estimates to cover 7.8 lakh. The project will be demand driven.

“The Madhya Pradesh government has submitted a proposal of $180 million for the second phase of the project. The central government has to clear it. We will extend the amount as soon as the Indian government decides on it,” Nathan M Belete, Senior Rural Development Economist, South Asia Sustainable Development department of World Bank told Business Standard in Bhopal. He was in town to seek suggestion of various sections of the society who are actively associated with the project.

However, there are questions which World Bank, the state government and the central government have to look into and find answers from beneficiaries, NGOs and various other social sectors; How wealth ranking process have included some people above below poverty line but also those who are rich? Why is the rate of interest offered to poor people through micro-finance as high as 12 per cent vis-a-vis 7 per cent offered to land holders? To what extent shifting CIGs to SHGs (which are already not at consolidation stage in the state) will help? and how to repair cases of refusal from market agencies or corporate houses for products or yield created by CIGs.

Further the gestation period of marketing linkage to CIGs (which will be six months in second phase) is too lengthy for beneficiaries.

“The DPIP has created a crop producers’ company in Sironj district, of which farmers of BPL (below poverty line) families are stake-holders. They produce foundation or breeder seeds. But the system of certification and grading is faulty,” a source associated with the DPIP project said on condition of anonymity.