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International Business

notes 9.4.4 activities of the Bank

The fundamental aims underlying the World Bank’s activities are:
1. The Bank is not intended to provide the external financing required for all meritorious
projects of reconstruction and development; but to provide a catalyst by which production
may be generally stimulated and private investment encouraged;
2. The Bank should encourage necessary action by the member governments to ensure that
the Bank’s loans actually prove productive. The promotion of sound financial programmes,
the removal of unnecessary barrier, and the regional integration of production loans,
where appropriate, are some of the fields in which the Bank may be able to exert a helpful
influence; and
3. Bank must play an active rather than a passive role (and take advantage of its international
cooperative character) to initiate and develop plans to the end that the Bank’s resources are
used not only prudently from the standpoint of its investors but wisely from the standpoint
of the world.
The World Bank is primarily concerned to ensure that its loans make the greatest possible
contribution to increase the production, raising the living standards of people in the borrowing
member country and creating opportunities for further investment in the borrowing member
country.

9.5 india and the World Bank

India has been a founder member of World Bank along with that of International Monetary
Fund.
India is one of those 17 countries that prepared the agenda of Bretton Woods Conference (1944).
India was one of those 44 countries who first of all signed the final draft for the establishment
of the Bank. In fact, it is said that the present name of the Bank, viz., “International Bank for
Reconstruction and Development” was suggested by India. The benefits that India has derived
out of the membership of the World Bank are as follows:
1. Executive Director: India has been a permanent member of the Board of Executive Directors
for many years.
2. Loans: India has received enough loans from the World Bank for its development projects.
In 1949, India secured the first loan amounting to 340 lakh dollars for Indian railways. Till
1994, India had obtained loans aggregating $4,200 crore. India is the largest borrower of
the World Bank; of the total loans advanced by the Bank, share of India amounts to 15 per
cent. India has secured loans specially for the development of the following projects: (i)
Railways; (ii) Power projects of Damodar Valley Corporation; (iii) Import of agricultural
machinery; (iv) Purchase of aircrafts by Air India; (v) Development of ports; (vi) Thermal
power project of Maharashtra; (vii) Coal industry (viii) Tata Iron and Steel Co.; (ix)
Financial assistance to Industrial Development Bank of India and (x) Industrial Credit
and Investment Corporation of India; (xi) Telecommunications; (xii) Water Supply and
Sanitation; (xiii) Road Construction; (xiv) Ports and Shipping; (xv) Offshore petrol project
and refineries; (xvi) Irrigation projects; (xvii) Cement, Rubber and Electronic Industry, etc.
In 2000, India got the following loans from the World Bank.

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