Wednesday, May 18, 2011

World Bank: Social development programs in India riddled with corruption

A few years ago, India's Congress party was elected into power with promises of helping the poor. They began a distribution program to give all those in poverty food and fuel. The Congress party also began another program that guaranteed employment for all.

The World Bank has a new report that analyses how well the Congress party has done. The Bank says that both programs are riddled with corruption and red tape. Despite the graft limiting their effectiveness, the bank does admit the programs have helped to spark some growth.

From Reuters India, writer Henry Foy unpacks the report for us.

"While India devotes over 2 percent of GDP to her social protection programmes... the poor are not able to reap the full benefits of such large investments," the report stated.

"India is not getting the 'bang for the rupee' that its significant expenditure would seem to warrant."

Costly social sector spending will likely make it difficult for the government to meet its fiscal deficit target of 4.6 percent of GDP in the fiscal year ending March 2012.

A decade of booming economic growth has pulled millions out of poverty, but its failure to provide for its 1.2 billion population means it lags other developing nations, such as China, in key development indicators.

The programmes assessed by the report have been praised for driving growth in rural areas, which rely heavily on agriculture and were largely bypassed by the mostly urban-centric economic boom that has swollen the middle class.

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