India is a source of untapped resources, both natural and man-made. The huge subcontinent is a reserve of various minerals, natural wealth and manmade wealth left to be used. The huge population is a big asset for the country as it can be skilled as well as unskilled.

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The country has come a long way from the days of independence, taking long strides towards development and growth. Now it has achieved an unique place in the global arena because of the unique culture, technical skills and adaptability to adjust in any situation.

Though the country has so many advantages, it’s lagging behind because some of the boons have turned into banes. The huge population which has the capability of being the workforce has become an obstacle due to lack of job opportunities. The technical know-how which was a big advantage is slowly moving out of the country as opportunities are shrinking. The vast mineral and land reserves have fallen prey to unruly political nexus.

Things are slowly changing though, now the situation has improved a lot. The government has taken many measures like the NREGA etc, are formed to help the people rise above poverty. Along with tremendous support from World Bank, the country is charting a fast paced growth and development in key sectors. World Bank, the institution formed in 1944 has 187 member countries. It is an important source of technical and financial support to developing countries around the world.  It consists of 2 parts: International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). These 2 parts are supported by International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for the Settlement of Investment Disputes (ICSID).

Its projects in India have made noteworthy changes and have helped the country travel the curve faster. From rail and road infrastructure in Rajasthan to facilitate trade and accessibility of far-flung areas to cities; building state highways in Andhra Pradesh to promote internal trade and removing middlemen from the process of trade between producers and retailers. From reclaiming saline lands in Uttar Pradesh to include more and more land into agriculture; to reducing Cataract blindness in the country, especially in women in remote and tribal areas.

The projects undertaken by the World Bank are of great importance and it’s hoped that with continued support the country will soon emerge out of the developing nations category and firmly place itself into the developed countries’ section.

 Targeted sectors-

India is a country with huge potential in terms of development and growth. Though its lagging behind in the aforementioned criteria’s, it can come at par with the developed countries by keeping a few key things in mind. It has to realise its true potential, and earmark its strengths. Its bane can become a boon, if things are chalked out in a planned manner. After complete study of the present situation of the Indian economy, I have zeroed down upon a few sectors which are developing and still have tremendous options in growth and expansion.

1) Infrastructure Sector- the sector is so huge and colossal that if development starts in a right manner, the results would be manifold. It comprises of plethora of sub sectors like transport, water, energy, communications, manufacturing etc. The important aspect of this sector is that it requires labour in skilled as well as unskilled categories. Demand for labour leads to generation of jobs, leading to better living condition and improvement in health and hygiene issues; literacy etc.

Transport Infrastructure- the transport facilities in the country though developed have huge lapses in between. There is still a lot to do regarding roadways, railways, airways and waterways of the country. This comes in public sector part of the economy. Except for the airways, the other transport systems are state-owned.

Roadways and Railways – half of the Indian roads are not paved and the rest is not well-maintained and quite a considerable size of railway stations and tracks are in total disrepair. This leads to decline in internal trade, resulting in less revenue generation. Given proper attention and with help of a well chalked plan, this condition can be improved. A committee should be set up that will draft a plan and will look into allocation of funds as well. The construction process will involve skilled as well as unskilled labour. It should be kept in mind that unskilled labour to be chosen locally, which will lead to regional prosperity and reduce unemployment. As India is an agrarian country, a large section of the agricultural society is seasonally employed. Which means that those who generally earn only for few months a year, can earn and raise a livelihood.

In the category of skilled labour, there are sub divisions in form of degree of the skill. In roadways and railways construction, semi-skilled and highly skilled labour would get job opportunities. The youth from small towns who lack such opportunities, would get good opportunities.

Airways- well connected cities by air, is a must these for growth and development. The airports should be in close proximity to the city and well connected by roads.

High standard of transportation facilities guarantees internal and external trade as well as foreign investment. Lots of foreign investment is lost due to lack of proper transportation infrastructure.

Manufacturing Infrastructure- this sector can be broadly divided into heavy and light industry. Manufacturing sector takes in raw material and gives finished goods as output. This sector consists of many sectors like machinery, food processing, textiles, automobiles and its ancillary industries to name a few. Though this sector is quite developed and employment generating, there is still a huge scope of employment and growth remaining. This is a sector which can be developed throughout the country. The revenue earned from this sector is huge. There are various levels of employment that can be generated in this sector. The manufacturing units can target national as well as international trade. The revenue earned from this sector can be invested in many development projects, which will benefit the nation.

This category of infrastructure attracts both public and private sector investments. This sector can actually benefit the most from the investment.

The investment will actually create a cascading effect on industries dependent on it. The ancillary industries, which also have a sizeable share in employment, will also gain from it. The employment generated will also increase the living standards as it would give citizens access to proper food, health facilities, education and housing and sanitation.

Overview of Physical Infrastructure

The government of India, due to the rising demand in air traffic and increased in Infrastructure in the country’s key airport, wants private firms to invest in the development of airport in the major cities like Delhi, Mumbai, Hyderabad and Bangalore. The funding of World Bank in this regard will help the government to achieve its target to a great extent

The government also aims to add about 18,000 wagons, 1019 kms of new lines in rail transport and 4,000 coaches in railway sector during the fiscal year to facilitate quicker movement of passengers and goods.

It sets to invest Rupees 35,680 crores on roads and highways construction and targets to construct 2,500 km highways by 2012.

Proposal to finance in Indian infrastructure sector:

Project name: Mizoram Roads, Additional Financing II

IBRD Loan: US$30 million equivalent

Terms: Maturity = 5 years

Project Description: The objective of the project is to additionally finance the capability of the roads in the state of Mizoram, to enhance the growth of land transport to connect to the other parts of India. Mizoram is in the North eastern part of India, which is a hill locked state, closely surrounded by the neighbouring country of Bangladesh and Burma. The roads through the hills are very stiff and it’s very hard for two vehicles to pass as the roads are narrow and also it’s not concrete. The other objective of the project is to provide a mainstream to the people of Mizoram, as the completion of road will lead to overcoming of lots of hurdles in respect to food, and other raw materials.

The project will aim to enhance the importance of lots of minerals and raw materials which can be transported from the state to other parts of the country fusing a rapid growth in the fields of different industries, as Mizoram is a place full of different kind of raw materials and minerals. The state capital of Mizoram, Aizawl is a hill station which has the widest beauty of flora and fauna and is known for its amazing art and craft. The other aim for this project will be to preserve the 200 years old culture.

The Projections for the project

The Project is designed for improving and widening of around 184 kms of state highway

Rehabilitations and maintenance of 524 kms of state road

Design, advisory and supervision of technical civil work

Road safety engineering interventions

Achievement of project development objective

Strengthening of the terms of the indigenous people with outside world

The investments in the infrastructure i.e. in manufacturing sector will also will lead to developments in this sector. So far the service sector has gained importance and grown rapidly as it is less dependent on infrastructure. The country has more than 250 million poor people living in villages and those are migrating to urban area with the view to better standard of living. The additional financing will help to set better living environments in the rural areas and giving amenities which will create a better standard of living. However, poverty is declining to a an extend and living standards are improving to a great extend.

The funding in infrastructure will lead to increase in rural community’s approach and provision in sustainable drinking water and sanitation services.

Things to keep in mind

Compliance with legal Covenants- Mizoram will have a chance to rise funding for supervision and maintenance of the important road network so as to check that these funds shall equal at least 80%.

Cost Overrun- The important thing to keep in mind is the cost overrun which should be reduced at any cost for the proper running of the project. The instances any if in case the project cost goes overboard can lead to disfunctioning of the additional funds

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Social and environment safeguards- This will include all the social and environment aspect which should be safeguarded at any cost which means at any means there should not be any violation in context to this important issues, as it may lead to the stoppage of the project.

Legal Aspect- In this project, the legal aspect should be also kept in mind as without a proper rescheduling and rethinking in terms of economic norms and the rules and regulations that pertains to the act of the country should be kept in mind for the sensitivity of the project.

Economic Analysis- There should be a proper analysis of the project in terms of the economic significance and the affect of it in the project. This is a basic thing and it should be the first thing before starting of the project.

Outcomes- The basic outcome of the project should be ascertained so as to check the vulnerability of the project keeping in mind the various sensitivity issues. The basic outcome of the project should be linked to the road and finally providing a link to the people of Mizoram with the rest of the world and the country.

Calculations- The calculations should be strictly cleared out in the pre-evaluation of the project and a revaluation of the funds should be ascertained so as to check the proper functioning of the project.

Expected Outcomes

The possible outcome is to improve the sustainability and quality of the important road link of Mizoram. The additional financing will boost and help to achieve this result by keeping in mind the completion of the most important road in the state connecting Aizwal to the second next important town Lunglei in Mizoram.

Benefits and Risks

The successful and proper implementation of road upgrading and improvement, safety works components and road maintenance, will help in improving the quality of the state road network. Possible Implementation of the Maintenance Management System (MMS), computerization of the whole PWD system, restructuring and implementation of training plan, operationalization of Road Safety Action Plan maintenance, and finance study of road, would increase the management performance capabilities of the PWD.

Policy waiver


Financial terms and conditions for the Additional Financing

The Financial term will be on a term of 5 years as the maturity period and will be on standard IDA terms.

There will be no effective conditions to its terms and project.

It will only pertain to road up gradation contract and not anything else.

Any violation of the terms and conditions will be taken as a serious issue and there will be no explanation to it

This project will be a topmost priority in respect to World bank and there has to be serious note while implementing

2) Power sector – The raising population and the growth, the requirement for fast stepped growth in power generation is progressively gaining importance. Energy, however, is considered to be one of the major contributors to the economic development of a country. The government of India has targeted electricity for all by 2012 by the end of 11th year plan. The demand for electricity is growing extremely. There is a good opportunity for World Bank to invest and financing in both the public and private sectors. The absence of adequate and reliable is one of the concern for the Indian businessman .In this industry, irregularity and low quality is always seen. As seen in the study, majority of Indian firms operate in their generators i.e. 61% of Indian manufacturing firms have work on their generators , however, 20% in Malaysia and 27% in china. This shows that the captive generator has further increased the cost of power faced by the industry. Power sector is widely accepted as the fundamental to improving performances of the industries. The World Banks private sectors strategy should support India in its increasing private sector investment and by rising productivity. Power sector reforms will play an important role in the bank policy. It will concentrate on dealing with the problems of cross-subsidization and cross sub optimal pricing, which will lead to improvement in the financial health of state electricity board with reduction in transmission and distribution losses which arises due to theft and leakage.

There is a broad manifest from India and around the world that supply of power improves the living standard, supports in job opportunities and development, and nurtures social activities. The study shows that gains are fully recognized by both urban and isolated rural sectors which seize a significant meaning to electricity access. Studies in India and in other places have shown that most of the people are ready to pay significant part from their income for reliable electricity.

Power structure in India- Supply and demand of power in India during 2004-09

The power shortage in the country has been to the line of 11.9% during 2008-09. The country has about 80,000 villages where the transmission of electricity is yet to be fully generated. The government of India aims for the growth plans for provision of power in all the regions by 2012. Private sector is required to make significant share in the development of power structure in the country. The additional credit by World Bank with the ongoing projects will provide an added advantage for well performance of the activities efficiently.

Proposal to finance in Indian power sector:

Name of the company: – Power Grid Corporation of India.

Amount of investment: – $20million

Maturity:-5 Years

Project Description:

Hydropower is one of the key initiatives of government of India which aims to meet country’s energy and provision of full access of electricity to all the citizens. The government of India is in the aim to utilize the mostly untapped potentials in this sector. Presently only 23 percent of hydro electric power is being utilized in India. The financing of World Bank in this sector will uplift the untapped potentials and also foster gains leading to rise in economic growth providing additional generating capacity it is in the need. The World Bank has partnered with Power Grid since its inception in 1989. Power Grid is a leading power transmission utility and carries 51% of generated power access in the country.

The project for the development in the power sector by World Bank will aim to fortify India’s electricity transmission arrangement with the view to increase reliable power in between the regions. The project will comprise of schemes in the regional transmission to strengthen the northern, southern and western transmission systems also the interrelated power exchange in the nation. The additional loan will provide finance backup and additional transmission investments. The bank has provided five direct loans to Power Grid in the following years -1993, 2001, 2006, 2008 and 2009. It has also provided $3.1 billion in oriented financial and technical support to the energy sector in India.

The World Bank will finance of $20million to the power sector of India to uplift and raise the adequate power supply in the regions of the country. The ongoing projects of World Bank for this will gain a financial backup for next five years. It will serve as an additional backing and will help in increasing the supply in a faster way. This financing will help to provide additional transmission from the surplus region to towns and village. The partnership deal between World Bank and Power Grid has achieved higher results and able to supply the electricity in the short span of time. The association has also helped power grid to achieve higher corporate standards. The national transmission was estimated to cost $16.5 billion and World back was ready to provide the major portion of funding which power grid has to mobilize from internal sources as i.e. $12 billion .The funding $20million will be an addition to the project investments. The additional credit will support and help the cost of the investment associated with ongoing projects and scale up the line of activities and well performance in the course of project in a sustainable manner.

The projections for the project:-

The project will provide an additional financial support to the undergoing project and will strengthen the power transmission with a grace period of 5 years.

With this 5 years financing plan of $20 million will help Power Grid to facilitate power Transmission to towns and villages of the of the country.

It will also help to facilitate private investment in the transmission sector.

This will help to strengthen its procurement procedures and policy’s resulting to improvements in accounting and financial management.

The World Bank also aims to safeguard the concern of the people by initiating social and prevention policies

As a result, India will be able to utilize the extra capacity that survived in some areas.

Improvements will be earned in the operation and maintenance of existing power plans.

The demand for electricity in the country will continue to increase leading to gains and growth in the economy which will benefit the bank to a great extend.

The financing will also increase the consolidation of national grid which will result into raise in system reliability and a deduction in transmission losses.

The work bank association with Power grid has multiplex growth and contributed significantly towards the development of India’s power sector. And the additional financing of $20million will enhance the developments by eliminating any short span shortcoming and improve its social and environmental practices.

With the Government of India venturing upon an aspirational program for the increment of power generation and bring electricity to all by 2010, there will be a compacting need to augment and to fortify the existing transmission network so that the additional power passes to the entire country effectively, allowing power grid to transfer 50% of power yielded in the country as against 45% showing today. In respect to global downtrend and at the request of the government the World Bank has stretched alone of 1 billion in the year 2009. The loan will help power grid to stabilize five transmission systems in the Southern, western and Northern region of the country. The cumulative transmission network of power grid is aimed to increase by 40,000 circuit kilometres for a total of 100,000 circuit kilometres with an inter-regional carry-over capacity of more than 37,000 mw currently at 20,750 mw and carrying 50% of power generation in the country.

Demand of power in the different regions of India


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