International Financial Institution- International Monetary Fund—functions-- Special Drawing Rights - International Bank for Reconstruction and Development-- International Finance Corporation-- International Development Association

1. Monti International Institute of Management Studies
Puthanangadi, Perinthalmanna
Calicut University
MBA 4th
Sem Study Material
Finance Elective/ IB Elective
BUS4E F05 / IB05 Forex Management
Module 5
(International Financial Institution)
Prepared By: Mohammed Jasir PV
Syllabus:-
Module V - International Financial Institution
International Monetary Fund — functions - Special Drawing Rights -
International Bank for Reconstruction and Development - International
Finance Corporation - International Development Association

2. World Bank
 It is an international financial institution that provides loans to countries of the world
for capital projects.
 It comprises two institutions: the International Bank for Reconstruction and
Development (IBRD), and the International Development Association (IDA).
 The World Bank is a component of the World Bank Group.
 189 member countries
 7000 Staff from more than 180 countries
 Offices in over 130 locations
 World Bank Group is a unique global partnership
 Five institutions working for sustainable solutions that reduce poverty and build
shared prosperity in developing countries.
 International financial institution
 In July 1944 - Bretton woods’s
 To provide loans to reconstruction and develop countries
 Mainly for undeveloped and developing countries
 Motto – “Working for a free of poverty”
 Together, IBRD and IDA make up the world bank
 Loans helped rebuild countries devastated by world war II
 Emphasis on infrastructure such as dams, electrical grids, irrigation systems, and
roads.
 First loan - France
 1954 – Governing boards
 Today the bank group’s work touches nearly every sector that is important to
o Fighting poverty,
o Supporting economic growth, and
o Ensuring sustainable gains in the quality of people’s lives in developing
countries.
Mission
 To end extreme poverty
By reducing the share of the global population that lives in extreme poverty to 3 percent by 2030.
 To promote shared prosperity
By increasing the incomes of the poorest 40 percent of people in every country.

3. Some Developmental Moves
 World Bank made four loans totalling $497 million in 1947
 As of November 2018, the largest recipients of world bank loans were India ($859
million in 2018) and China ($370 million in 2018), through loans from IBRD
World Bank Group includes
 IBRD - The International Bank for Reconstruction and Development
 IDA - The International Development Association
 IFC - The International Finance Corporation
 MIGA - The Multilateral Investment Guarantee Agency
 ICSI Dispute - The International Centre for Settlement of Investment Disputes
The International Development Association
 The International Development Association (IDA) provides interest-free loans —
called credits — and grants to governments of the poorest countries.
 Together, IBRD and IDA make up the World Bank.
The International Finance Corporation
 The International Finance Corporation (IFC) is the largest global development
institution focused exclusively on the private sector.
 Helping developing countries achieve sustainable growth by financing investment,
mobilizing capital in international financial markets, and providing advisory services
to businesses and governments.
The Multilateral Investment Guarantee Agency
 Created in 1988
 To promote FDI into developing countries to support economic growth, reduce
poverty, and improve people’s lives.
 MIGA fulfils this mandate by offering political risk insurance (guarantees) to
investors and lenders.
The International Centre for Settlement of Investment Disputes
 It provides international facilities for conciliation and arbitration of investment
disputes.

4. Objectives of WB
(1) Reconstruction and Development
The main objective of the bank is to reconstruct the war devastated economies like
Britain, France, Holland etc. and to provide economic assistance to underdeveloped
countries like India, Pakistan, Sri Lanka, Burma etc.
(2) Encouragement to Capital Investment
Another important objective of the Bank is to encourage private investors to invest
capital underdeveloped countries, by means of guarantee of participation in loans and
other investment made by private investors and when private capital is not available on
reasonable terms, to supplement private investment by providing on suitable conditions
finance for productive purposes out of its own capital, funds raised by it and its other
resources.
(3) Encouragement to International Trade
The third objective of the bank is to encourage international trade. It aims at promoting
long-range growth of international trade and maintenance of equilibrium in member’s
international balance of payments, so that standard of living of the people of member-
countries is raised.
(4) Establishment of Peace Time Economy
The fourth objective of the Bank is to help the member-countries changeover from war-
time economy to peace-time economy.
(5) Environmental Protection
Global environmental protection is also an objective of Bank. To this end, World Bank
gives substantial financial assistance to those underdeveloped countries which are
engaged in the task of environmental protection.
(6) Maintenance of equilibrium in balance of payment
To in balance of payments of member countries by encouraging long term international
investment so as to develop productive resources of members and thereby raising its
productivity, the standard of living and labour conditions.
The following further objectives are assigned by the World Bank:
 To provide long-run capital to member countries for economic reconstruction and
development.
 To induce long-run capital investment for assuring Balance of Payments (BoP)
equilibrium and balanced development of international trade.
 To provide guarantee for loans granted to small and large units and other projects of
member countries.
 To ensure the implementation of development projects so as to bring about a smooth
transference from a war-time to peace economy.

5.  To promote capital investment in member countries by the following ways;
o To provide guarantee on private loans or capital investment.
o If private capital is not available even after providing guarantee, then IBRD
provides loans for productive activities on considerate conditions.
The main functions can be explained with the help of the following points:
1. World Bank provides various technical services to the member countries. For this
purpose, the Bank has established “The Economic Development Institute” and a Staff
College in Washington.
2. Bank can grant loans to a member country up to 20% of its share in the paid-up
capital.
3. The quantities of loans, interest rate and terms and conditions are determined by the
Bank itself.
4. Generally, Bank grants loans for a particular project duly submitted to the Bank by
the member country.
5. The debtor nation has to repay either in reserve currencies or in the currency in which
the loan was sanctioned.
6. Bank also provides loan to private investors belonging to member countries on its
own guarantee, but for this loan private investors have to seek prior permission from
those counties where this amount will be collected.

6. International Monitory Fund
 What is IMF
 Facts of IMF
 Objectives of IMF
 Functions of IMF
Basic Facts about IMF
 International Financial institution
 Dec 25 1945
 Bretton woods Conference 1944
 Initial membership – 29 countries
 189 member countries – Current
 Headquarters is located in Washington D.C.
 2400 employees from more than 150 Countries
 Visualised as guardians of the intl. financial and monitory system
 Related to rules and code of conduct on intl. monitory system
 To oversees Intl. Monitory System
 Fiscal year for IMF - May 1 to April 30.
 A country’s voting power is based on the size of its economy and the amount of the
quota it pays when it joins IMF.
 U.S. has the largest share of votes (approximately 17 %).
 Decisions require a supermajority – 85 percent of votes.
 U.S. contributes about 20 percent of the total annual IMF Budget.
 The largest member of the IMF is U.S. and the smallest member is Tuvalu.
 Largest borrowers of the IMF are Portugal, Greece, Ukraine and Pakistan.
 The largest number of IMF loans has gone to the African Continent.
Objectives of IMF
It is an intl. financial institution formed in BWC to promote
 Intl. monetory cooperation (Collaboration)
 Exchange rate stability
 Maintenance of high level of employment
 Orderly arrangements of exchanges
 Resource of fund
 Economic growth
 High level of economic growth

7.  Financial assistance (for ease BOP adjustments)
 To promote international monitory cooperation through a payment institution that
provide machinery for consultation and collaboration on intl. monitory problems
 To facilitate the expansion and balanced growth of international trade, leading the
promotion and maintenance of high level of employment, real income and
development of productive resources of all members
 To promote exchange rate stability and to maintain orderly arrangements among
members, and to avoid competitive exchange rate depreciation
Basic Operations Or Functions Of IMF
1. Financial Assistance
 Loan to countries (BOP Problems)
 To rebuild intl. reserves.
 Stabilize their currencies
 Payment for imports
 Strong economic growth
 Natural disasters
 IMF does not lend for specific projects
2. Technical Assistance
 Development of productive resources of member countries
 Effective mgt of Economic policy and financial affairs
 Economic policy, Tax policy, revenue administration, expenditure
management, Exchange Rate System, macro economic factors etc.
 Free of charge
 90% to low or middle income people and post-conflict country
 Contributes to a robust and stable global economy
3. Surveillance
 Intl. Economic stability by multilateral cooperation
 Overseeing Intl. monitory system
 Monitoring policies (Fin & Eco) of 189 Countries
 Expert advice on economic and financial developments

8. Special Drawing Rights
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its
member countries’ official reserves. So far SDR 204.2 billion (equivalent to about
US$291 billion) have been allocated to members, including SDR 182.6 billion allocated
in 2009 in the wake of the global financial crisis. The value of the SDR is based on a
basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese
yen, and the British pound sterlingJj
The role of SDR
The SDR was created as a supplementary international reserve asset in the context of the
Bretton Woods fixed exchange rate system. The collapse of Bretton Woods system in
1973 and the shift of major currencies to floating exchange rate regimes lessened the
reliance on the SDR as a global reserve asset. Nonetheless, SDR allocations can play a
role in providing liquidity and supplementing member countries’ official reserves, as was
the case with the 2009 allocations totaling SDR 182.6 billion to IMF members amid the
global financial crisis.
The SDR serves as the unit of account of the IMF and some other international
organizations.
The SDR is neither a currency nor a claim on the IMF. Rather, it is a potential claim on
the freely usable currencies of IMF members. SDRs can be exchanged for these
currencies.
The SDR Interest Rate
The SDRi provides the basis for calculating the interest rate charged to members on their
non-concessional borrowing from the IMF and paid to members for their remunerated
creditor positions in the IMF. It is also the interest paid to members on their SDR
holdings and charged on their SDR allocation.
SDR allocation and transaction
Under the Articles of Agreement, when certain conditions are met, the IMF may allocate
SDRs to members participating in the SDR Department in proportion to their quotas
(known as a general allocation). A special one-time allocation in 2009 enabled countries
that joined the IMF after 1981 (i.e., after previous allocations) to participate in the SDR
system on an equitable basis. The SDR mechanism is self-financing and levies charges on
allocations which are then used to pay interest on SDR holdings.

9. Members can buy and sell SDRs in the voluntary market. If required, the IMF can also
designate members to buy SDRs.
Purpose of SDR’s
 Used as a unit of account by IMF and several other international organizations.
 They are originally created to replace gold and silver in large international transactions
and provide cost free alternative to member states for building reserves.
Pro’s of SDR:
 Stable.
 No “exorbitant privilege” for USA.
 A way of developing countries.
 Less risk for countries while lending.
Cons of SDR:
 Liquidity
 Shifting the problem from USD to SDR’s.
 Advantage of SDR over a diversified reserve basket.
 Contains only 4 currencies.
 Geographical risks.
 IMF voting power.

10. International Bank for Reconstruction and Development (World Bank)
 Also known as ‘World Bank’
 Type - International organization
 Purpose/focus - Crediting
 Location - Washington DC
 Membership - 189 countries
 President – Jim Yong Kim
 Website - http://www.worldbank.org
The International Bank for Reconstruction and Development (IBRD) is an international
financial institution which offers loans to middle-income developing countries.
 The IBRD is the first of five member institutions which compose the World Bank Group
and is its headquarter is in Washington, D.C., United States.
 It was established in 1944 with the mission of financing the reconstruction of European
nations devastated by World War II.
 Together, the International Bank for Reconstruction and Development and its
concessional lending arm, the International Development Association, are collectively
known as the World Bank as they share the same leadership and staff.
History of IBRD
 The IBRD and IMF were established by delegates at the Bretton Woods conference in
1944 and became operational in 1946
 The IBRD was established with the original mission of financing the reconstruction
efforts of war-torn European nations following World War II

11.  The Bank issued its inaugural loan of $250 to France in 1947 to finance infrastructure
projects.
 The institution also established its first field offices in:
 Paris, France.
 Copenhagen, Denmark.
 Prague, Czechoslovakia.
 All the way till 1950s, the Bank financed projects seeking to dam rivers, generate
electricity, and improve access to water and sanitation.
 Following the reconstruction of Europe, the Bank's mandate has transitioned to
eradicating poverty around the world.
 In 1960, the International Development Association (IDA) was established to serve as the
Bank's concessional lending arm and provide low and no-cost finance and grants to the
poorest of the developing countries as measured by gross national income per capita.
Functions of IBRD
 Granting reconstruction loans to war devastated countries.
 Granting developmental loans to underdeveloped countries.
 Providing loans to governments for agriculture, irrigation, power, transport, water supply,
educations, health, etc.
 Providing loans to private concerns for specified projects.
 Promoting foreign investment by guaranteeing loans provided by other organizations.
 Providing technical, economic and monetary advice to member countries for specific
projects
 Encouraging industrial development of underdeveloped countries by promoting economic
reforms.
Services Provided
 Basic education and health services.
 Safety needs.
 Infrastructure development.
 Environment protection.
 Private sector development.
 Governance and investment.
 Climate.
 Technical assistance.
Goals of IBRD:
 Wipe out extreme poverty and hunger.
 Offer all children a good basic education.
 Help women get equal rights and empower them.

12.  Reduce death rate of young children.
 Improve the health of mothers.
 Combat HIV/AIDS, malaria and other diseases.
 Help countries protect their environment.
 Promote a global partnership for development.
Biggest Global Challenges for IBRD
 Population growth
 Elimination of global poverty.
 Global life expectancy.
 Aid to education.
Membership Eligibility:
 Members of IMF are members of world bank.
 A country holding the membership of the bank must subscribe to the charter of the bank.
 If a country resigns its membership, it is required to payback all loans granted to it
through interest on due date
 Each member of the world bank has a capital subscription which is similar to but not
identical with its quotes in the fund.
 The member’s subscription also measures roughly its voting power, but again the smaller
nations have a slightly higher rate.
Capital resources of IBRD:
 The initial authorized capital of the World Bank was $10,000 million, which was divided
in 100,000 shares of $100,000 each. The authorized capital of the Bank has been
increased from time to time with the approval of member countries.
 On 30th June, 1996, the authorized capital of the Bank was $188 billion out of which
$180.6 billion (96% of total authorized capital) was issued to member countries in the
form of shares.
Member countries repay the share amount to the World Bank in the following ways:
 2% of allotted share are repaid in gold, US dollar or Special Drawing Rights (SDR).
 Every member country is free to repay 18% of its capital share in its own currency.
 The remaining 80% share deposited by the member country only on demand by the
World Bank.

13. Achievements
General Progress
 The Bank's membership has increased from the initial number of 30 countries to 68
countries in 1960 and to 151 countries in 1988.
 In 1960, the Bank approved loans worth $ 659 million which went up to $ 14,762
million in 1988.
 In 1960, 31 operations were approved for financial assistance. In 1988, the number of
operations approved increased to 118.
 Cumulatively, up to June 1988, the IBRD has provided loans worth $155049 million.
Lending Operations
In 1988, the IBRD has granted loans worth $155049 million. About 22% of the Banks
aggregate lending is for energy, 21% for agriculture and rural development, 18% for
transportation and communications and 10% for industry and small scale enterprises.
Loans For Reconstruction
In the initial years of its establishment, the World Bank's loans were mainly directed to
the European countries (whose economies were shattered during the World War II) for
financing their programs of reconstruction. The Bank provided loans worth about $ 5, 00
million for reconstruction purpose.
Assistance To Underdeveloped Countries
 The World Bank has a special role in accelerating the process of economic and
welfare schemes in these countries. The following are the main aspects of Bank's
assistance to the underdeveloped countries :
 Bulk of the Bank's financial assistance has been given to the underdeveloped
countries for the promotion of development.
 Through its 'third window", the Bank has made available loans to the underdeveloped
countries at tower interest rates.
 The Bank organizes meetings of creditor countries for extending assistance to the
developing countries. Aid India Club is one such example.
 The Bank also provides technical assistance to the developing countries by making
available training facilities through its various institutions.
Projects in India
 Agriculture
 Infrastructure-power
 Transport
 Water
 Urban development
 Skills

14. What is IFC?
 The International Financial Corporation is a member of the World Bank Group and is
headquartered in Washington, DC
 It shares the primary objective of all World Bank Group institutions i.e. to improve the
quality of lives of people in its developing member countries.
 It was established in 1956.
 In the developing world, IFC is the largest multilateral source of loan and quit financing
for private sector projects.
Since 2009, Its goals are to increase
 Sustainable agriculture opportunities,
 Improve health and education,
 Increase access to financing for microfinance and business clients,
 Advance infrastructure,
 Help small businesses grow revenues,
 And invest in climate health.
Ownership and management:-
 IFC has currently 184 members, which determine its policies and approve investments.
 To join IFC, a country must first become a member of the International Bank for
Reconstruction and Development (IBRD).
 The corporate powers of IFC are vested in its Board of Governors, to which member
countries appoint their representatives.
 IFC's share capital is provided by member countries, and voting rights are in proportion
to the number of shares held.
 The President of World Bank Group RobertZoellick is currently serving as the IFC's
president also.
Functions:-
It promotes sustainable private sector development primarily by:
 Providing financial assistance to the private sector projects and companies located in the
developing world;
 Helping private companies based in the developing world mobilize financing in the
international financial markets;
 Providing advisory and technical assistance to the businesses and governments.
 While the World Bank finances projects with sovereign guarantees only, the IFC finances
projects without sovereign guarantees also. This means IFC is primarily active in private
sector projects.

15.  Like a bank, IFC lends or invests its funds to its customers and expects to make a
sufficient risk-adjusted return on its global portfolio of projects
 IFC supports projects with positive developmental outcomes, and to improve the outcome
of such projects by various means.
 IFC provides both investment as well as advisory services.
 IFC's Advisory Services focus basically on five core areas: Access to Finance, Business
Enabling Environment, Environmental & Social Sustainability, Infrastructure Advisory,
and Corporate Advice.
Places Where IFC Works
 IFC operates in more than 100 countries.
 East Asia & Pacific
 Europe & Central Asia
 Latin America & Caribbean
 Middle East & North Africa
 South Asia
 Sub Saharan Africa
 Western Europe
IFC - Services
1. Loans
2. Equity
3. Trade and Supply Chain Finance
4. Syndications
5. Treasury Client Solutions
6. Venture Capital
7. Advisory
8. Asset Management
Purpose of forming IFC
The Purpose of forming IFC is
 Create opportunities for people to escape poverty and achieve better living standards by
mobilizing financial resources for private enterprise,
 Promoting accessible and competitive markets,
 Supporting businesses and other private sector entities,
 And creating jobs and delivering necessary services to those who are poverty-stricken or
otherwise vulnerable.

16. Objectives
 To invest in productive private enterprises, in association with private investors, and
without
 government guarantee of repayment, in cases where sufficient private capital is not
available on
 reasonable terms.
 To serve as a clearing house to bring together investment opportunities, private capital
(both
 foreign and domestic) and experienced management.
 To help in stimulating the productive investment of private capital, both domestic and
foreign.
Governance
 The IFC is owned and governed by its member countries (184), but has its own executive
leadership and staff that conduct its normal business operations.
 It is a corporation whose shareholders are member governments that provide paid-in
capital and which have the right to vote on its matters.
 The IFC is governed by its Board of Governors which meets annually and consists of one
governor per member country (most often the country's finance minister or treasury
secretary).
 Each member typically appoints one governor and also one alternate. Although corporate
authority rests with the Board of Governors, the governors delegate most of their
corporate powers and their authority over daily matters such as lending and business
operations to the Board of Directors.
 The IFC's Board of Directors consists of 25 executive directors who meet regularly and
work at the IFC's headquarters, and is chaired by the President of the World Bank Group.
 The executive directors collectively represent all 184 member countries. When the IFC's
Board of Directors votes on matters brought before it, each executive director's vote is
weighted according to the total share capital of the member countries represented by that
 The IFC's Executive Vice President and CEO oversees its overall direction and daily
operations.
 As of October 2012, Jin-Yong Cai serves as the Executive Vice President and CEO of the
IFC.
 President of the World Bank Group Jim Yong Kim appointed Jin-Yong Cai to serve as
the new Executive Vice President and CEO of the IFC.

17. India’s Role in IFC
 India is one of the founder members of IBRD, IDA and IFC.
 First investment of IFC in India took place in 1959 with US$ 1.5 million. India became a
member of MIGA in January 1994.
 India has an Executive Director, in the Board of Directors of IBRD / IFC / IDA/ MIGA.
The Executive Director from India represents a constituency comprising of four
countries: India, Bangladesh, Bhutan and Sri Lanka. Mr. M. N. Prasad represents India in
the Board of Directors w. e. f. 30th September 2011. Mr. Kazi M. Aminul Islam from
Bangladesh is currently the Alternate Executive Director for this constituency.
Fund Mobilization
 IFC mobilizes its funds through either Central Banks (or other Banks which they consider
eligible) present in within the country or in another country.
 Examples of such banks, AKA Export Finance Bank, DHB Bank (Nederland) N.V., ING
Bank N.V., Intesa Sanpaolo S.p.A., RosEvroBank JSCB, and Sumitomo Mitsui Banking
Corporation
Investments & Projects
 The corporation is assessed by an independent evaluator each year. In 2011, its
evaluation report recognized that its investments performed well and reduced poverty, but
recommended that the corporation define poverty and expected outcomes more explicitly
to better-understand its effectiveness and approach poverty reduction more strategically.
 The corporation's total investments in 2011 amounted to $18.66 billion.
 It committed $820 million to advisory services for 642 projects in 2011, and held $24.5
billion worth of liquid assets.
 The IFC is in good financial standing and received the highest ratings from two
independent credit rating agencies in 2010 and 2011.

18. International Development Association (IDA)
Background of IDA:-
 IBRD was established in 1944 to help Europe recover from the devastation caused by
World War II.
 By the 1950s, the issue of poorest developing countries needing softer terms than those
that could be offered by the Bank came up, and a need for special provisions for the
developing world was felt so that they could afford to borrow the capital they needed to
grow at favorable terms.
 US took the initiative, and a group of the Bank’s member countries decided to set up an
agency that could give financial assistance to the poorest countries on the most favorable
terms possible. They called the agency as “International Development
Association” (IDA).
 Articles of Agreement of IDA came into force in 1960 and the first IDA loans, known as
credits, were approved in 1961toChile, Honduras, India and Sudan.
 IDA provides interest-free credits and grants for programs that boost eco. Growth, and
reduce poverty and inequalities.
 IDA complements IBRD–which serves middle-income countries with capital investment
and advisory services.
 IBRD and IDA share the same staff and headquarters.
 IDA is one of the largest sources of assistance for the world’s 79 poorest countries, 39 of
which are in Africa alone. It is the single largest source of donor funds for basic social
services in the world’s poorest countries
 IDA lends money (also known as credits) on concessional terms i.e. IDA credits have no
interest charge and repayments are stretched over 35 to 40 years, including a10-year
grace period. IDA also provides grants to countries at risk of debt distress.
Membership:-
 IDA currently has 169 members.
 Eligibility for IDA support depends on a country’s relative poverty also defined as
GNI per capita below an established threshold and the same is updated annually.
 IDA also supports several small island economies, which although are above the
operational cutoff but lack the creditworthiness needed to borrow from IBRD.
 Some countries, such as India, Indonesia and Pakistan, are IDA-eligible based on their
per capita income levels, but at the same time are creditworthy for IBRD borrowing also.
These are referred to as ‘blend’ countries.
 79 countries are currently eligible to receive IDA assistance. Collectively these countries
are home to about 2.5 billion people, which amount to half of the total population of the
developing world.

19. IDA Lending:-
 IDA credits have maturities ranging from 20, 35 to40 years with a further grace period
of 10 years before repayments of principal begin. IDA funds are allocated to the
borrowing countries in relation to their income levels and record of success in managing
their economies and their ongoing IDA projects.
 IDA also provides donor assistance to provide relief to those poor countries that cannot
manage their debt-service burden.
 IDA-financed operations address primary education, basic health services, clean water
&sanitation, environmental safeguards, business climate improvements, infrastructure &
institutional reforms.
IDA Funding:-
 IDA is funded largely by funds provided by the governments of its richer member
countries. Additional funds also come from IBRD's income and from the borrowers’
repayments of earlier IDA credits/loans.
IDA & India:-
 India is among the top 10 IDA borrowers with $956million borrowings in the financial
year 2009.
 IDA has assisted India with US $10.1 billion over the past decade through 48 projects.
 IDA also helped India stabilize its economy in the early 1990s during the economic
reforms and accelerate growth through various policy reforms.
 In education, IDA has supported world’s largest ‘Education for All’ (EFA) program - the
‘Sarva Shiksha Abhiyan’ (SSA).In 1st phase IDA contributed US $500 million & in 2nd phase
over US$9billion.
 IDA also supported an innovative community forestry project in Andhra Pradesh,
recognized as the best practice in India.
 With the help of IDA funding, AP is now considered to have the best-managed power
sector, third highest credit rating, one of the best investment climates and fourth lowest
corruption level among Indian states.
 The Andhra Pradesh Rural Poverty Reduction Project and its precursors tried to improve
the livelihoods of the rural poor and reduce their vulnerability to shocks like illness, a
death in the family, crop failure, livestock disease, etc.
 Similar results have been achieved in the state of Orissa also.
Future Perspective:-
 IDA & various other institutions have played a vital role in economic and social up
liftment of the Indian poor but a lot more needs to be done.
 In coming years, the emphasis should be on implementation procedures and institutional
arrangements that focus on: getting results (including demand-side accountability
through-beneficiary, civil society and community involvement); strengthening capacity
for publicly provided services; and enhancing private sector participation.