IFC chief executive Lars Thunell is in Delhi this week, attending the World Economic Forum's India Economic Summit. Thunell is looking to boost the IFC's capital base by $2.4bn, much of which will be dedicated to the world's poorest countries and regions, including India.
India has surpassed Russia as IFC's largest investment portfolio. The FT explains this trend:
The IFC decision to increase India's exposure, which was worth $3.4bn last year or 10 per cent of its global portfolio, comes as it is trying to boost support for entrepreneurial companies working with the world's poorest people.
"One of the very positive things coming out of the new government here is their high focus on inclusiveness," said Lars Thunell, chief executive officer of IFC, referring to the India's Congress-party-led government, which was re-elected in May. "That's why we are here."
The article notes that India's seven poorest states contain 40 per cent of the national population, yet only attract 1 per cent of the country's FDI.
Of these seven states, five (Andhra Pradesh, Orissa, Madhya Pradesh, Uttar Pradesh, and Bihar) were measured in the World Bank/IFC's Subnational Doing Business in India. Here's how they fared:
As the flow of financial resources to these regions increases, it will be interesting to see how the distribution of these funds matches up with the ease of Doing Business, especially for an investment such as IFC's, which aims to support entrepreneurs.