India's economic growth and infrastructure development hopes are set to get a booster dose from none other than World Bank. As per a business daily, the World Bank has approved loans of US$ 4.3 bn for India to help finance India's infrastructure development. The loans are part of the World Bank's commitment to lend US$ 14 bn in crisis-related lending for Asia's third-largest economy over three years through 2012. The bank has also approved US$ 1.2 bn for India nodal infrastructure financing company - India Infrastructure Finance Co. Ltd (IIFCL) - to spur private financing for public-private partnerships in infrastructure, and to stimulate the development of a long-term local currency debt financing market. To expand the volume of credit available to Indian companies, the World Bank would also provide US$ 2 bn to India's banking sector. In addition, loans to the tune of US$ 1 bn have been approved to address India's acute power shortages by assisting the Power Grid Corporation of India in its investment programme.
We believe that while funding may not be an issue for India's infrastructure plans, execution delays and cost overruns may keep it from fructifying. Having said that, the World Bank's willingness to lend a hand to India's growth plan is at least indicative of a change in the world economic order.
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