World Bank will provide another $220 million loan to Andhra Pradesh to expedite the reforms process even as it was considering sanctioning such loans to Tamil Nadu and Orissa as well.
World Bank country director Michael Carter said, "The second loan of $220 million will be ready by February 10."
Tamil Nadu and Orissa have also sought loans for structural reforms and their proposals were expected to be processed by June 2004.
The structural adjustment loans would have five components -- fiscal adjustment and management, power sector reforms, improving governance and investment climate.
The bank was also considering a loan for improving the health sector in Rajasthan.
The move to step up assistance to states is part of the World Bank's plans to double its loan sanctions to India.
The total assistance from World Bank was around $1.5 billion last year and it was expected to be the same this year also.
Carter lauded the Centre for prepaying costly debt worth over $4.2 billion to two multi-lateral agencies -- World Bank and Asian Development Bank in the last two years.
"Such prepayment of high-cost loans opens up opportunities for further lending by the funding agencies," he said adding it was an excellent strategy.
On the performance of Indian economy, Carter said it has been growing at an average rate of over 5.0 per cent in the last two decades, which was very impressive considering that there were very few countries having a sustained higher rate of growth for such a long term.
But India has potential to grow faster for which the government has to speed up the pace of reforms, he said.
Carter said the bank has shifted its strategy to lend directly to the government instead of projects as it helps in improving the effectiveness of assistance.
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