Rural India in Sharp Focus at Official Talks

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New Delhi, August 19, 2005  - Rural India remained in sharp focus as World Bank President Paul Wolfowitz met the country's leadership in New Delhi, a day after visiting rural women in Andhra Pradesh, who are leading the way in India's growing self-help movement.

Wolfowitz met Indian Prime Minister Manmohan Singh, Finance Minister P. Chidambaram, and chief of India's Planning Commission, Montek Singh Ahluwalia.  He also paid a courtesy call on the President of India, Dr APJ Abdul Kalam. 

Continuing the rural focus of Wolfowitz's first day in India, the Bank president joined Chidambaram in presiding over the signing of a US$325 million loan agreement for the Maharashtra Water Sector Improvement Project  in New Delhi.

Home to 96 million people, Maharashtra is India's second largest state. It faces complex challenges in managing its water in a changing environment.  Nearly 60 percent of the population lives in rural areas, of which about 80 percent are engaged in agriculture, consuming 80 percent of the state's water.  At the same time, Maharashtra is moving rapidly into urbanization and industrialization, increasing the pressure on scarce resources.

In signing the loan agreement, the Indian Finance Minister said repair, renovation and restoration of water bodies was a national priority.

"The Maharashtra project supports our national objective as it covers rehabilitation and modernization of irrigation schemes as well as improving the safety of dams," Chidambaram said.

	World Bank President Paul Wolfowitz with India's Finance Minister P. Chidambaram.

In response, Wolfowitz said helping India develop and manage its water resources was "one of the most exciting things for the World Bank to participate in." "I hope this project - which is aimed at making every drop of water count in Maharashtra - can be an excellent example of development work making a real difference for people battling to improve their lives."

In official meetings over the course of the day, Wolfowitz shared his enthusiasm about what he had seen in rural Andhra Pradesh. He complimented the Government for creating a great social force of empowered women and learned the women's self-help group movement was spreading to other states.  Significantly, this growth was almost entirely demand-driven.

Indian Government teams briefed Wolfowitz on the country's ambitious and high priority program, Bharat Nirman ("Building India"), which is a business plan to build basic infrastructure in the rural areas.

It is to be implemented over four years at a cost of about US $ 40 billion. The plan sets high targets to be achieved by 2009 in six areas: irrigation, roads, water supply, housing, rural electrification, and rural telecom connectivity. It plans to make strong use of local government bodies and community organizations.

The Bank is already very active in supporting India in three of those sectors: irrigation, drinking water supply and rural roads. The Government leaders sought expanded support from the Bank for these sectors. The Bank team, which included the Vice President for South Asia, Praful Patel, and Country Director for India, Michael Carter, agreed to work with the government to see how best support could be enhanced, especially at the state level.

	Paul Wolfowitz with India's Finance Minister P. Chidambaram Friday during signing of a project agreement to improve water sector management in Maharashtra state.

The Bank delegation was also told of India's huge physical infrastructure needs. Half of the country's households are still not electrified. Ninety percent of the highways are two-lane and in poor condition. Airports, ports and railways all suffer from inadequate capacity.

India needs to invest US $ 100 billion in infrastructure over the next seven years. The only way resources of such magnitude can be raised is to involve the private sector. The two sides agreed to look at specific ideas, which could help harness public and private resources.

The Prime Minister and Finance Minister expressed great appreciation for the Bank's work in India, saying the relationship was one which would grow in the years ahead. The Bank President will meet representatives of women, youth and business on Saturday.