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Financial Sector

Creating an Ecosystem for Sustainable Financial Inclusion through Community Institutions

Parmesh Shah's picture

Bihar, a state in Eastern India has more than 100 million inhabitants and is India’s second poorest state. Ninety percent of the population lives in rural areas and the state has lagged behind in increasing access to finance in these areas. The credit-to deposit ratio of Bihar at 37% (an indicator of availability of credit in peri-urban and rural areas) is one of the lowest in India.

Jeevika, a program jointly supported by the World Bank and Government of Bihar, has demonstrated that investments in community institutions can deliver significant results. Investments in community institutions have helped them mature and become an institutional platform for the poor enabling them to demand better services from the public sector, improve access to finance from commercial banks and enhance their existing livelihoods.

Rising Tides Raise Some Boats More Than Others

Mabruk Kabir's picture

Like a Bollywood dance sequence, South Asia’s growth numbers tend to dazzle. It is the second-fastest-growing region in the world after East Asia. But behind the glamour lies a paradox. Despite robust economic growth, the total number of people living in poverty in South Asia has not fallen fast enough. Today, there are more poor people living under $1.25 a day in South Asia than in Sub-Saharan Africa.

Social indicators are lagging as well. South Asia has the highest rates of malnutrition in the world, with 250 million children undernourished. More than 30 million children still do not go to school. Gender discrimination remains a scar. Women’s labor-force participation in the region is among the world’s lowest, boys outnumber girls in school enrollment, and legal and judicial systems still do not address systemic gender violence.

Voices of Youth: What Does India Need to Get Back to a High Growth Trajectory?

Amrita Chowdhury's picture

India today is the fourth largest economy in the world. But for the country to sustain a growth rate of close to 6%, it remains vulnerable to the vicissitudes of global investors. It’s time to ponder: why it is not the other way round? How can India reach a position where we not only follow the rise and fall of global economic forces but also lead the way in sustaining the global economy? This is my dream.

Improving Ongoing Flagship Programs:
-The monitoring of all flagship projects should be improved right from the Gram Panchayat level to the state and central level.
-Models need to be developed for every flagship program, success factors studied, and implementation aligned with the specific needs of each state.
-All program implementation officers should be trained by those who have worked in successful programs. Pay should be linked with performance.
-Resource reallocation should depend on progress and work load.
-All unsuccessful programs should be analyzed to understand the main causes for failure and alternatives planned.
-Benchmark studies should be conducted to identify critical indicators for development in education, health and infrastructure and year on year progress checked.

Join Us to Discuss Global Economics and Future Prospects for Countries Like India!

Nandita Roy's picture

World Bank India has just launched its Facebook page! We are extremely excited at the prospects that social media channels like Facebook bring in making our communication with the outside world more dynamic, real time, interactive and conversational in style. It will surely add a new dimension to the way we communicate. The link to the page is http://www.facebook.com/WorldBankIndia and we’d like to hear more from you!

Tomorrow, we're launching an online discussion on what are the prospects for advanced and developing economies of the world in the current global economic situation on the wall of our Facebook page.

Nobel Laureate Andrew Michael Spence, who was also the Chairperson of the Growth Commission will lead this online discussion and Mr N. Roberto Zagha, World Bank Country Director in India, will moderate the discussion.

Wanted: Photos Highlighting the Diversity and Dynamism of Microfinance!

Michael Rizzo's picture

On June 6th, CGAP launched its annual and ever-growing photo contest that highlights the diversity and dynamism of microfinance around the world. Each year, the CGAP Photo Contest receives stunning photographs from around the world that help tell the story that CGAP’s work addresses.

Now in its 7th year, CGAP has asked entrants to focus on the broader issues that surround financial inclusion to help show the variety of formal and informal ways in which finance is woven into the fabric of poor people’s day-to-day activities. CGAP is continually trying to build upon the Contest’s success by challenging photographers to use their imaginations to capture microfinance in distinctive ways and diversify the representations of microfinance. In particular, photographers from South Asia that have consistently dominated the top prizes will need to continue wowing the judges for place as a finalist as more and more photographers from Sub-Saharan Africa, Latin America, and the Middle East deliver compelling work.

Realizing India’s Potential

Kalpana Kochhar's picture

Yesterday, I discussed India’s incredible economic transformation over the last two decades and some of the challenges that the country is currently facing. So, what can India do to reduce the impact of global uncertainty and improve growth performance and boost investor confidence?

India’s firepower to respond to a crisis with traditional monetary and fiscal stimulus is much weaker now than prior to the 2008 crisis. Fiscal space for additional spending is severely constrained in light of continued high deficits. Room for monetary policy easing is modest in light of continued high inflation, and still low real interest rates. Moreover, when investor confidence is at a low ebb as it is in India, easing monetary policy would be tantamount to “pushing on a string.”

Keeping India’s Promise Alive

Kalpana Kochhar's picture

India has been a beacon to the world on how a thriving and vibrant democracy can transform itself into an economic powerhouse. The metamorphosis that took place in the Indian economy after the reforms of the early 1990s is nothing short of spectacular. The Indian economy was transformed into a dynamo of innovation and diversification. This fundamental transformation unlocked two decades of explosive growth in which poverty rates fell by nearly 20 percent, exports as a share of GDP increased nearly five-fold, and standards of living increased by a factor of almost four. This trajectory received but a glancing blow from the 2008 global financial crisis—this resilience was a testimonial to the benefits of the economic reforms of the previous 15 years.

Challenges to India’s Growth

But now, India’s economy once again faces formidable challenges and the fear is that it is considerably less well placed to deal with these challenges than at any time over the past two decades. The global economy is facing a new phase of the crisis characterized by an extreme bout of uncertainty, risk aversion and volatility, this time originating in the Euro Area. Some skeptics have recently questioned: Will India weather this storm as well as it did in 2008-09 and will the story of “Incredible India” remain credible?

What Can South Asia Do to Make the Big Leap?

Ejaz Ghani's picture

Last week, I discussed the optimistic and pessimistic views of South Asia's development potential. As I highlighted in my book, Reshaping Tomorrow, South Asia is among the fastest growing regions in the world, but it is also home to the largest concentration of people living in conditions of debilitating poverty, human misery, gender disparities, and conflict.

I also ask if South Asia is Ready for the Big Leap. The optimistic view is that India will achieve double-digit growth rates benefiting the rest of South Asia. The pessimistic view is that growth will be derailed by structural and transformational challenges. In this entry, I will make some suggestions on how South Asia could realize the optimistic view.

What can be done?

What Will South Asia Look Like in 2025?

Ejaz Ghani's picture

South Asia is among the fastest growing regions in the world, but it is also home to the largest concentration of people living in conditions of debilitating poverty, human misery, gender disparities, and conflict. In my book, Reshaping Tomorrow, I ask if South Asia is Ready for the Big Leap. 

The optimistic view is that India will achieve double-digit growth rates benefitting the rest of South Asia. The pessimistic view is that growth will be derailed by structural and transformational challenges. Which of these two outlooks will prevail?

The Optimistic Outlook

The optimistic outlook is based on favorable trends, including improved governance, the demographic dividend, the rise of the middle class, and the new faces of globalization. 

All countries in the region have an elected government for the first time since independence leading to governance that is more focused on development. Improved governance will enhance the politics of democratic accountability; diminishing the importance of identity politics; and the rates of incumbency – the likelihood of a sitting politician being re-elected – are down.

More and Better Jobs in Bangladesh

Sanjay Kathuria's picture

We launched South Asia’s first regional report, ‘More and Better Jobs in South Asia’ in a series of events in Dhaka early last week.

Through events including a seminar with youth at the University of Dhaka, a formal report launch the next day, a TV interview with the South Asia Chief Economist, Kalpana Kochchar, and an op-ed in the leading English language newspaper, the report helped  generate discussion on core economic challenges facing Bangladesh, as job creation are highly correlated with the challenges of faster growth.

Bangladesh, along with other South Asian countries, has seen steady job growth and a substantial decrease in poverty over the past three decades. The country has added nearly 1.2 million new jobs every year over the last ten years, and this has been accompanied by increasing real wages and declining poverty amongst all categories of workers. This performance will have to be improved in the future, owing to Bangladesh's early progress in its demographic transition. With substantial reductions in infant and child mortality following a significant decline in fertility rates, Bangladesh's working age population is growing more rapidly than its young and old dependents. In turn, this can be attributed to Bangladesh’s success in nurturing the desire for smaller families, through its reproductive health program as well as its emphasis on girls’ education.

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