$170 mn World Bank loans for Rajasthan, Uttarakhand

$170 mn World Bank loans for Rajasthan, Uttarakhand
Washington: The World Bank has approved an International Development Association (IDA) credit of $162.7 million to help improve livelihood opportunities for some 400,000 village households in 17 districts of Rajasthan.

The Bank has also approved a credit of $7.98 million additional finance for an ongoing watershed development project in Uttarakhand, that is helping rural communities increase agriculture productivity as well as rural incomes through a decentralised watershed management approach.

The funding for the Rajasthan Rural Livelihoods Project will help improve economic opportunities for rural communities, especially women and marginal groups, in 9,000 villages of the state, the Bank said in a release.

The Project aims to help the state government raise income levels for some 400,000 rural poor households in Rajasthan.

"This Project with the World Bank is building on the successful livelihood initiatives undertaken in India to provide mechanisms by which rural households can improve their overall economic well-being," said Joint Secretary, Department of Economic Affairs, Ministry of Finance, Venu Rajamony.

"Global experience has shown that while general growth of the economy helps reduce poverty, it needs to be complemented by specific strategies designed to expand opportunities for the poor," said World Bank country director for India, Roberto Zagha.

The additional funding of $7.98 million for the Uttarakhand Decentralised Watershed Development Project will sustain support for ongoing activities like helping farmers set up small agribusinesses.

These are critical to achieving the planned 10 percent increase in rural incomes in project areas by the end of the implementation period, said the Bank. The need for additional funds was brought about largely by increases in the prices of goods and services since the Project began in 2004.

According to a mid-term impact survey of 400 households in 40 villages conducted by The Energy and Research Institute (TERI), real income in these households has increased by seven percent, two percentage points higher than the mid-term target of five percent.

Both IDA credits provided by the World Bank's fund for the poorest have 35 years to maturity and a 10-year grace period.