The following is an Op-Ed piece by Country Director Michael Carter that appeared in the Indian press.

www.worldbank.org/indiastrategy

Working for Results in India

MICHAEL F. CARTER

A little over a year ago, the World Bank commissioned a large multinational survey of opinion leaders around the world to better understand attitudes towards a wide range of development issues.

Interviewers spoke with more than 2,600 government officials, media people, civil society leaders, academics, private sector representatives, and members of trade unions in 48 countries in perhaps the largest and most comprehensive study ever conducted on development issues.

Obviously, Indian opinion leaders figured prominently in what is known simply as the Global Poll. Asked to identify the most important development priority for their country, Indian respondents were almost evenly split between poverty reduction (20%), education (20%), infrastructure development (20%) and promoting economic growth (19%).

But when asked to suggest what should be the main objective of the World Bank’s work in their country, the response was emphatic: 43% said it should support efforts to reduce poverty and 42% said it should focus on infrastructure development. Another 10% mentioned education.

Of course, these are all intricately linked. Poverty reduction cannot occur without infrastructure development — the provision of roads, electricity, water and sanitation, transportation and communication. Nor can it occur without improvement in health, education, job creation and livelihood outcomes, which in turn depend substantially on the quality of infrastructure.

So, if poverty reduction is the overarching goal of the country’s development agenda, then infrastructure and human development along with livelihood opportunities must form the core of the poverty reduction strategy.

It has been fascinating to see over the past few months how this assertion by India’s opinion leaders as distilled by way of the Global Poll has been corroborated on the ground by ordinary citizens of India through increased political expression demanding bijli, sadak, pani, naukri (electricity, roads, water, jobs), hospitals and schools.

Fittingly, the Tenth Plan too has articulated the vision of a healthy, educated population, which has a secure life and is guaranteed livelihood. Also, it’s unthreatened by deprivation and disease, and Indians live in well-served villages and well-run towns; and India is propelled on to the world stage by a booming economy.

So, there is an amazing unanimity across India that the formula to reduce poverty resides in a combination of infrastructure development, increasing livelihood opportunities, and improving health and education outcomes. The challenge lies in actually making it happen.

And some indeed might argue that it is already happening. The rapid economic growth of the past 10 years has averaged a comfortable 6%; population growth has dropped below 2% for the first time in 40 years. Most important, poverty incidence is now below 30%. Literacy has climbed to 65%.

India’s huge middle class is fuelling a consumer boom, the services sector has come into its own and Indian infotech and biotech firms are world leaders in their spheres. India sits on external reserves worth over $100 billion, and its eventual place on the global high table of economic superpowers is almost taken as inevitable.

But there is another India we must not forget and is still home to nearly a third of the world’s poor people. More than half of these live in the four states of Bihar, MP, Orissa and UP alone; and more than two-thirds in rural areas.

This is the India where a crisis-prone farm sector still supports two-thirds of the population and where per capita incomes remain abys-mally low; where, each year, more than 100,000 women don’t survive childbirth; where more than 60% of households are without electricity, over 20% without a safe and clean water source, and over 70% without adequate sanitation.

We know the formula, but how do we erase the faultlines — the disparities of income, state and region — that scar the face of India? Last year, the World Bank published a development policy review for India titled, India: Sustaining Reform, Reducing Poverty. It suggested a two-pronged policy agenda — better management of public resources, and improving the investment climate.

Under the first, it described a programme of fiscal reform aimed at curbing the fiscal deficit and raising revenue so that public resources could be diverted away from non-productive expenditure towards investments in development, especially infrastructure and the social sectors; and a reform of the governance and service delivery systems to ensure that resources and services reached their intended targets. Under the second, it examined product- and factor-market distortions and infrastructure bottlenecks which are hindering job-creating investment, and devoted an entire section to policy recommendations to improve agricultural productivity and rural development.

In my view, India must unlock each of these areas — fiscal mismanagement and unproductive expenditure; weak service delivery, especially in social services like healthcare, education and sanitation; hindrances to investment; infrastructure bottlenecks; and the rural crisis — if it is to crack that apparently simple formula for poverty reduction.

This takes me back to where I started — feedback from the Global Poll on the role the World Bank can play in India. As a follow-up some months ago, the Bank’s India office conducted another poll of about 600 people familiar with the Bank’s work in India.

It came back with similar results, as did feedback from a series of discussions with officials of finance and other relevant ministries, and workshops with civil society. These fed into the Bank’s new Country Strategy for India, which was endorsed by its board of executive directors (on which India is an influential voice) last month and has just become publicly available.

The Bank hopes to increase the level of its lending to $3 billion a year — still a tiny drop in the huge ocean that is India’s economy — but along with the intention to be a facilitator, convener and generator of global knowledge for India. I hope the Bank’s value in helping this country’s efforts to eradicate poverty will be worth more than just the money it lends.