Realising India's pent-up demand in infrastructure and seeing a potential borrower in the country for bankable projects, World Bank President James Wolfensohn and Vice-President (South Asia Region) Praful Patel held separate meetings with senior Indian officials in the last two days in Dubai.
According to officials of the International Monetary Fund and the World Bank, Wolfensohn held a 30-minute breakfast meeting with Reserve Bank of India Governor Y Venugopal Reddy and Finance Secretary DC Gupta on Saturday.
Patel followed up with an elaborate discussion with senior officials in the Indian delegation on Sunday to impress upon them an ambitious World Bank plan for infrastructure investment in India.
Indian officials said there was a subtle shift in the World Bank's lending stance now.
"While the focus in the last 2-3 years was on extending structural adjustment loans to states, the Bank now is keen on infrastructure lending," said an official.
The World Bank now seems to think that investment in the infrastructure sector will lead to growth which in turn will help mitigate poverty levels.
The Indian officials were, however, tight-lipped about the quantum of investment the World Bank was considering for the sector.
There was a disconnect between the infrastructure needs in the sectors including power, roads, ports and railways in India and the resources the country could generate internally, they added.
Strictly speaking, there was no limit on the International Bank for Reconstruction and Development loans that India can avail of from the World Bank, sources in the multilateral institutions said.
Patel, a Ugandan national, who took over in July this year, had recently presented a concept paper on infrastructure lending and the proposed areas of support by the World Bank to Finance Minister Jaswant Singh.
In Dubai to attend the Fund-Bank annual meetings, Patel again met the Indian officials on Sunday.
When asked about Wolfensohn's meeting with the Indian delegation, Michael Carter, Country Director, World Bank India, said, "I will describe it as very fruitful."
He, however, declined to elaborate on the meeting and the details of the World Bank's proposal. Carter too had accompanied Wolfensohn to the breakfast meeting with Indian officials on Saturday.
The Bank's strategic area of engagement with India would be infrastructure in the near future. The most critical gaps that needed to be addressed for taking India to a 7-8 per cent growth path included power, ports, railways and telecom, Patel had told Business Standard earlier.
He had also said there was technically no limit to the quantum of IBRD loans that World Bank can lend to India for investment in the infrastructure sector.
Patel had presented to Singh what he felt was the right mix of lending for infrastructure development in India. He had sought to ensure that the access to World Bank loans by India was not underpitched while India strived to achieve an 8 per cent growth.
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