Announcement of Highlights of India and the World Bank Activities in Fiscal 1978 on September 14, 1978

:1~ I Bl l t@:_ l I HOLD FOR RELEASE eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 For Publication Thursday, September 14, 1978 INDIA AND THE WORLD BANK Highlights of Bank Activities in Fiscal 1978 India Receives $1,281.5 Mill ion India received $1,281.5 million from the World Bank and its affiliate, the International Development Association (IDA), during the fiscal year ended June 30, 1978, according to the Annual Report of the World Bank released here today. This was $531 .5 miJJ ion more than Bank and IDA commitments of $750 mill ,un in fiscal 1977 . • Dur i ng f i s ca 1 1978 , I n d i a rec e i v ed $951. 5 concessional terms and the balance from the World Bank. The Association's credits are for 50 years, free of interest, but carry a service charge of rn i 11 ion fr om I DA on 3/4 of 1%. Bank and IDA assistance to India during fiscal 1978 was devoted to agriculture and rural development ($664.5 mill ion); electric power ($305 mill ion); industrial development finance companies ($105 mill ion); telecommunications ($120 million); and urban development in Calcutta ($87 minion). South Asia The Bank Report said: "The common thread of developments in South Asia during fiscal 1978 has been the acceleration of economic growth ... / • NOTE: Money figures are expressed in U.S. dollar equivalents  - 2 - in much of the region and the Improvement in the availability of resources ~ that has followed in its wake. Since the Second World War, economic growth in the region has been held back by lack of resources--forefgn exchange, foodgrains, electricity, and essential raw materials. Although resolute development efforts have Jed to significant improvements in the production structure and the quality of the labor forcej economic growth has been sluggish in most years barely exceeding the rate of population growth. In the last three years, however, economic growth has generally been somewhat ahead of population growth in the countries of the region, with the excep- tion of Pakistan and Nepa 1 . In ff sea 1 1977, there was a s 1 i g'."lt pause in growth, but in fiscal 1978, a growth in gross domestic product for the subcontinent as a whole is likely to approach that of fiscal 1976, which, in turn, had been the year of highest growth during the present decade." The Annual R~port added that the main factor in the recent growth of the region's economy was, the bumper crops of foodgrain in India, Bangla- desh, and Sri Lanka, a recovery of cotton production in Pakistan, relatively high prices for traditional export products such as jute and tea, and con- • tinued growth of non-traditional exports. "The resource position of the region was also bolstered last year by favorable development on external account. These developments included an increase in export earnings of about 10%, increased earn·ings from tourism in Sri Lanka, India, and Nepal, and most important, increased remittances, particularly from workers who have migrated to the Middle East. In only a few years, these remittances have become the single most fmportant source of foreign exchange for India and Pakistan, and their importance is rapidly rising for Bangladesh, as well", the Annual Report said. The Bank Report said: 11 In the wake of major po 1 it i ca 1 changes in several South Asian countries, an intense scrutiny of existing social and economic policies has started. It has already resulted in important measures; such as lfberal ization of import and Investment controls, greater recognition of the role of exports and reduced emphasis on import substitution, efforts to improve the price structure of agricultural products, and importance being placed on adequate commercial performance of state enterprises. At the same • . . ./  - 3 - • tlme, governments are reappraising the role of public investment in the economic development process. Throughout the region, this reappraisal is leading to a shift away from an earlier emphasis on heavy industry and certain types of infrastructure, fn favor of agriculture, irrigation, rural development, small-scale industry, education, and health. The shift in the emphasis in public investment corresponds to a new perception in the region, both of what is required to make an economy grow, and of how the needs of the poorest might be met. 11 Bank/lDA Global Lending During the fiscal years, the World Bank and IDA committed a total of $8,410.7 million for development projects in some 75 countries. Of this total $1,648.9 million went to six countries in South Asia-- Bangladesh, Burma, lndla, Nepal, Pakistan and Sri Lanka. • - 0 - •