The Indian Economy Overview

The World Bank and India

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The World Bank and Population "Problem"

The Bank's first social sector loan was approved for the First Population Project in 1972 as a pilot project. But more money was made available to Indian government in the decade of 80s and 90s. Out of $2.2 billion allocation to human resource development, over 70% was committed in 1990s.

World Bank's ideology on poverty and population in 80s underwent a major shift from the more liberal view. That poverty alleviation through social and economic development was the main key to fertility decline. Now, according to analyst Peter Gibbon, "the Bank believes that population problems cannot wait for resolution by socio-economic development; their urgency has been increased to succeed with the structural adjustment effort" (Gibbon 1991). Despite differences of opinion within the institution, the Bank presently attaches greater importance to population than to poverty.

The World Bank has encouraged governments to make family planning the 'cornerstone' of their health policy. This, with a higher priority than other desperately needed Mother and Child Health interventions.

Neo-Malthusian theories predominate the population-development debate which foresee doom on this planet due to "overpopulation".

Notwithstanding, affluent nations consume more commercial energy and fresh water, than the so-called less developed countries which are densely populated.

The World Bank in its WDR 1993 urges various changes in policies of third world countries and advocates the abandonment of "unnecessary" prescription requirements. It also suggests that constraints such as 'excessively restrictive' medical screening be removed in order to run more "efficient" family planning services. Thus, even the control exerted by bodies such as the Drugs Controller of India (which regulates the introduction of new contraceptives) is sought to be diluted by the Bank.

History of Bank Lending

The Bank chose to enter the population field because rapid population growth was seen as undermining attempts to improve living standards in many developing countries. The establishment of a Population Project Department in 1969 provided administrative support for the Bank's involvement in population area. The volume of lending slowly grew, with over $306 million committed to 16 projects in 10 different countries from 1972 to 1979.

In 1979, the Bank decided to begin lending for free-standing health projects. A new Population, Health and Nutrition Department (PHN) was formed to carry out this new work in health and to continue work in population and nutrition. Health became an operational objective, but emphasis was primarily on health and population. This, both in the delivery of family planning services and on the opportunities to open dialogue with countries which were yet to develop explicit population and family planning objectives programs.

Energy Consumption
per capita (kg of oil equivalent)

  1970 1991
India 113 337
Bangladesh NA 57
Canada 7467 9390
U.S.A. 7665 7681
Norway 6029 9130

Fresh Water Resources
Annual Withdrawal (1970-89)
per capita (cubic meters)

  Domestic Agricultural Total
India 18 594 612
Bangladesh 6 205 211
Canada 303 1381 1684
U.S.A. 234 1718 1952
Norway 98 392 490
    Source : UNDP

Following an administrative reorganization in 1987, population and health lending activities are now carried out by a new sector called Population and Human Resources Division.

Since 1980, 1% of the Bank's loan portfolio has been devoted to population projects. This amount constitutes about 10% of the funds provided by bilateral multilateral and private donors to the developing world for population activities. Four countries (India, Indonesia, Bangladesh and Kenya) have received 79% of these funds. In 1988, the Bank was financing ongoing projects in 17 countries.

Population on the National Agenda

In recent years, the Bank has turned its attention to population issues in Sub Saharan Africa. This region has the highest population growth rate in the world and it continues to increase. Its growth rate is not expected to peak until the year 2000, 30 years later than in other major developing world regions. Consequently, the Bank has put considerable effort into trying to bring population issues into the forefront in Africa. These efforts range from "dialogue" with government heads, to outright coercion. In Senegal, for example, preparation of a Population Policy Statement and Action Plan became an "agreed condition" of the release of the third tranche of the SAL. This statement will first be approved by the Bank before going on to the Council of Ministers for Senegal's approval.

In Senegal, preparation of a Population Policy Statement and Action Plan became an "agreed condition" of the release of the third tranche of the SAL.

In Kenya, the Bank funding for health began in 1974, to establish a network of rural health facilities and training schools. Family planning components in the beginning were weak. During this period the population growth rate actually increased, so the next next two projects had more substantial inputs related to population and F.P. The next phase of the Bank inputs included policy dialogue, sector work and efforts to persuade the Government to establish an inter-ministerial coordinating agency for population outside the Ministry of Health (MOH). this was included as a condition in the second structural adjustment loan.

Bank's Projects in India

The Bank's first population project in India started in 1972, by which time the country's approach to family planning was firmly entrenched. Thus, the Bank could not do much by way of shaping policy. Although it played only a low-key role, the Bank had several criticisms of the Indian program for e.g., excessive focus on sterilization which ignores spacing needs; excessive centralization and reliance on a single delivery system and ignoring the NGO and private sector; insufficient attention to program operations and quality (as opposed to program expansion); and neglect of factors that can influence demand.

PTO 1988, the Bank funded five population projects worth of $245.7 million. After which its involvement substantially increased, with financing of projects in 1989 ($124.6 million) and 1990 ($96.7 million). Consequently, the Indian government made efforts to address the criticisms made by the Bank. This was subsequent to the Bank's new emphasis on research, and the publication of papers that began to develop a strategic image of what the Bank felt need to be done. Thus, there was an Indian government policy shift in focus on priority program components at the state level, support for NGOs and social marketing of contraceptives.

There is evidence of the Bank's desire to increase its influence in this sphere. India's Eighth Plan allocates $2.7 billion to the Family Welfare Program, and the Bank indicated its willingness to increase its commitments to nearly 10% of this amount.

This project encourages NGOs in health service delivery, social marketing of contraceptives targeted to urban slums, and investment of the private sector.

Projects funded in the post-1988 period reflect the Bank's emphasis on strengthening the GOI's goal of bringing down the fertility rate. A loan of $79 million was extended for a Family Welfare Project (1993-99) for Urban Slums in Delhi, Hyderabad, Bangalore and Calcutta with the objectives of expanding service delivery, improving the demand for quality family welfare services. This, through an expanded program of information, education and communication, strengthening the management & administration of municipal health departments, and female education. It proposes to encourage private voluntary organizations in health service delivery, social marketing of contraceptives targeted at urban slums, and encourage private investment in this market.

The obsession with "excessive" fertility as the main cause of "over population" and therefore poverty, is an undercurrent of such projects. The Government during negotiations, provided assurances that it shall develop, by June 1993, a program of measures to improve compliance with the Child Marriage Restraint Act. Any illusions that such concerns are in the genuine interests of women, will be hastily dispelled in the face of coercive measures such as the recent proposal to amend the Maternity Benefits Act in order to restrict benefits to the second child.

In a similar view, the proposed "Child Survival and Safe Motherhood Project" of the Bank focuses major attention on health issues of importance in influencing fertility decisions.

"It is difficult to believe that fertility rates can be reduced much further without resorting again to coercive measures, unless the probability of children surviving is substantially increased". (WB Operations Evaluation Dept., 1992).

The Economic Survey (1993-94) reveals the extent of World Bank assistance under the Social Safety Net Program for "family welfare", which is to the tune of Rs 320 crores. This scheme is to provide 'special inputs' to 90 'poor performing districts', 83 of which are in Bihar, M.P., Rajasthan and U.P.


Hazards of Liberalization
The red carpet being laid out for MNCs to invest in India has resulted in Upjohn Co. of USA with their Indian collaborator Max Pharma, allowed to manufacture and market Depo Provera, a hazardous injectable contraceptive. This controversial drug was finally given approval by the US Food and Drug Administration only in 1992, after many attempts by Upjohn. The Approval was refused earlier because of the adverse effects of the drug which include menstrual disturbances, depression, loss of bone density, risk of heart disease & cancer and unknown effects on breast fed infants. The Drugs Controller has licensed Depo Provera despite the fact that no clinical trials have been conducted in India.

In a similar move, Nonesterat (Net en), another injectable contraceptive manufactured by German Remedies (Parent Company : Schering, A.G.) is also to be made available on the market, despite the fact that Net-en has extremely hazardous effects. In the interests of profit-making, concerns about women's health take a back-seat.

For further details contact:PIRG (Public Interest Research Group) 142, Maitri Apt, Plot No 28, Indraprastha Ext. Delhi 110092. India. Ph: 2432054 Fax: 2224233 email:

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