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Time for India to Stretch its Wings

WASHINGTON, DC – Imagine you are a parent with a large number of children and limited resources. Your oldest child is mature enough to move out of your home, but he does not want to. So he stays, consuming resources that his siblings desperately need. Is it right to allow your other children to suffer because their big brother is reluctant to strike out on his own?

A similar dynamic is playing out between the World Bank and the recipients of its International Development Association program. IDA supports equitable growth in poor countries by providing low-interest, long-term loans and grants to national governments. The program supports 77 of the poorest countries in the world – half of which are in Africa. It also provides assistance to one country that no longer deserves it: India.

At the end of the 2014 fiscal year, India officially graduated from the IDA program, because it was no longer poor enough to qualify. The World Bank sets a threshold for receiving assistance, based on per capita gross national income (GNI). In the fiscal year 2016, the threshold is $1,215. India’s per capita GNI has exceeded the World Bank’s limit each year since 2010. In 2014, it was $1,570.

India is also considered creditworthy, giving it access to international capital markets. And yet India continues to receive $3.2 billion over a three-year period in transitional support from the IDA program, even as other poor countries plead for more funds.