World Bank Group — Structure and India

5.1 World Bank Group — The Five Institutions

The "World Bank" commonly refers to IBRD + IDA together. The full World Bank Group consists of 5 institutions:

1. IBRD (International Bank for Reconstruction and Development, 1944):

• Lends to middle-income countries and creditworthy low-income countries
• Interest rates: near-market (LIBOR/SOFR + spread, approximately 4-5%)
• 189 member countries
• India's relationship: Major IBRD borrower; India active projects portfolio ~$25 billion (2024)

2. IDA (International Development Association, 1960):

• "Soft loan window" — concessional lending to world's 74 poorest countries (per capita GNI < threshold)
• Terms: 25-40 year maturity, 5-10 year grace period, 0.75-1.25% service charge (no interest)
• Replenished every 3 years — IDA20 (2022): $93 billion for 2022-25 (largest replenishment)
• India graduated from IDA eligibility in 2014 — moved to IBRD

3. IFC (International Finance Corporation, 1956):

• Private sector arm of World Bank Group
• Provides loans and equity to private companies in developing countries — WITHOUT government guarantee
• India: Major IFC investment destination — HDFC, Mahindra Finance, renewable energy startups, microfinance

4. MIGA (Multilateral Investment Guarantee Agency, 1988):

• Provides political risk insurance to private investors and lenders investing in developing countries
• Covers risks: expropriation, currency inconvertibility, breach of contract, war/civil disturbance
• Aims to facilitate FDI flow into developing countries

5. ICSID (International Centre for Settlement of Investment Disputes, 1966):

• Arbitration and conciliation facility for investment disputes between foreign investors and host states
• India has NOT ratified the ICSID Convention — disputes involving India go to UNCITRAL (ad hoc) arbitration instead

5.2 World Bank — Current Priorities and Evolution

World Bank's Mission (evolved):
Original mission (1944): "Reconstruction and Development" — post-WWII reconstruction of Europe, then development lending.
Current mission: "To end extreme poverty and boost shared prosperity in a livable planet" (2023 revision).

World Bank's Evolution Roadmap (2023):
Proposed by President Ajay Banga (took charge June 2023 — first Indian-American president). Key changes:

1. Expanded mandate: Address global challenges — climate, pandemics, fragility — not just individual country development
2. Triple Bank: Functions as a development bank + knowledge institution + convener/coordinator
3. Private capital mobilisation: Aim to mobilise $1 trillion from private sector over 10 years through guarantees and de-risking
4. Hybrid Capital: New financial instruments — hybrid equity — to expand lending capacity without new capital increases from shareholders

IDA 20 Replenishment (2022):

• Largest IDA replenishment: $93 billion for fiscal years 2022-25
• Theme: "Building Back Better from the Crisis Towards a Green, Resilient, and Inclusive Future"
• 70% of IDA20 resources go to Africa
• Climate-specific commitments: 35% of IDA20 allocated to climate
• Fragile and conflict-affected states: 30% of IDA20

5.3 World Bank and India — Major Projects

India is among the World Bank's largest borrowers:

• India's IBRD portfolio: ~$25 billion active projects (2024)
• Sectors: Urban infrastructure, water supply, education, health systems, renewable energy, transport

Key India-World Bank Projects:

Project	Loan	Focus
National Rural Livelihood Mission (NRLM)	$500 million (IDA+IBRD)	Women's SHGs, rural livelihoods
PM Gati Shakti (National Logistics Efficiency Programme)	$1.5 billion	Multimodal logistics
Green Growth Development Policy Loans	$1.5 billion (series)	Renewable energy, EV ecosystem
National Health Systems Strengthening	$500 million	Primary and secondary health
Maharashtra Resilient Climate Smart Agriculture	$250 million	Climate-resilient farming

World Bank Publications India Uses:

• Ease of Doing Business (EoDB) ranking (now discontinued; India reached rank 63 in 2020 from 142 in 2014)
• Human Capital Index (HCI): India 0.49 (2020) — needs investment in health and education
• Poverty and Equity data

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