The World Bank has approved a new loan to support Maharashtra, India's largest state economy, in its efforts to stimulate economic growth, particularly in underdeveloped districts. The initiative aims to strengthen district administrations' capacity to identify growth opportunities and facilitate private sector participation.
Maharashtra's economy is valued at $500 billion, but significant disparities exist among its 36 districts. Seven districts contribute more than half of the state's GDP. Challenges such as lack of timely data and multiple agencies working in silos hinder growth plans in less developed areas. To achieve a vision of a one-trillion-dollar economy, more districts need to enhance their contributions.
The $188.28 million Maharashtra Strengthening Institutional Capabilities in Districts for Enabling Growth operation will support district planning strategies by providing necessary data, funds, and expertise. It aims to maximize public investment value and boost private sector involvement through improved e-government services.
"By providing well-articulated investments in institutional capability and coordination at the district level, the program will enhance evidence-based planning and policymaking," said Auguste Tano Kouamé, the World Bank’s Country Director for India. "The program will thus contribute to the state’s objective of achieving higher and more balanced growth across districts."
The project will develop a data governance architecture including the Maha Databank for better coordination and analysis of development insights. This approach addresses key gaps such as gender disparities.
"The operation sets up an incentive framework that will trigger annual fiscal rewards to districts that achieve performance targets," stated Neha Gupta and Thomas Danielewitz, Task Team Leaders for the project.
The International Bank for Reconstruction and Development (IBRD) is providing a $188.28 million loan with a 15-year maturity period, including five years of grace.