India is 'best' borrower of World Bank: FM

I / Bangalore September 19, 2006

Finance Minister P Chidambaram today asserted India remains one of the best borrowers of the World Bank and suspension of funds by the Bank to some health projects in the country earlier does not imply that the multilateral agency is not keen to lend to it.

"Whatever projects we are proposing to the World Bank are being funded. We are among the best borrowers of the World Bank. We are among the best clients of the World Bank and my impression is that the bank is happy to lend to India," Chidambaram said on the sidelines of the ongoing World Bank-IMF annual meet here today.

India, in fact, has perhaps the best utilisation rate of the loans that are disbursed by the World Bank, which has stepped up its lending to about $3 billion annually.

"Our disbursement or utilisation rate now at 25% is one of the highest in the world. We are much above average. It may be that we are the highest this year."

Regarding allegations of malpractice in the World Bank funded health projects in India, Chidambaram said: "There was an allegation of misfeasance. We have taken action against those accused of corruption in procurement. A couple of people were suspended and there was a CBI inquiry," he said.

"So we said all steps have been taken and there is no justification to suspend the loan. We stood firm in our position. The World Bank realised that such suspension (of funding) was unjustified and lifted the suspension," he said.

The second instalment of the $625 million World Bank loan to three social sector projects, including two rural health projects, was released last month.