The WB (World Bank) has informally said India that its rapidly growing economy may soon make it ineligible for soft (low interest) loans, prompting the government to lobby for concessional lending for a few more years.
India stands to lose over $ 200 crore in low interest funds for many of its welfare schemes, besides missing out on social initiatives spearheaded by the WB over the previous decade.
A senior official with the World Bank said “We expect India to move into the middle income category of countries in the next 2 years. This will mean that the International Development Association (IDA) funding which India got last year was the last cycle of such funding for the country,”
The WB lends to developing countries under its 2 arms – the International Development Association (IDA) and the IBRD (International Bank of Reconstruction and Development).
The IDA funds are highly concessional or interest free loans and grants aimed at improving the living conditions of the poor. India right now is classified as a “blend” country – defined as one in transition from lower middle-income to middle-income.
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