A viral post on social media showing that India does not owe anything to the World Bank for the first time in 62 years is false, as World Bank data shows that India’s obligations towards the institution exceeds US$ 15 billion.
This post appeared on a Facebook page called ‘Narendra Modi’ with almost 21,000 followers. The page is not affiliated to the Prime Minister.
|Original Statement (Hindi)||Translation in English|
|62 वर्षों में पहली बार अब भारत पर वर्ल्ड बैंक का कोई कर्ज नहीं कहलाया जाएगा विकसित देश||For the first time in 62 years, India will have no debt upon it by the World Bank. It will be called a developed country.|
BOOM found several users on Facebook and Twitter who have shared the post, also writing their own versions of the claim.
62 वर्षो में पहली बार हुआ अब भारत पर वर्ल्ड बैंक का कोई कर्ज नहीं— Bunty Verma (@inderveshverma) July 24, 2019
कहलाया जायेगा विकसीत देश
मोदी है तो मुमकिन है।
BOOM also received the same post on its Whatsapp helpline (7700906111) multiple times.
The World Bank is made up of two organisations – the International Bank of Reconstruction and Development (IRDA) and the International Development Association (IDA). While the IRDA advances loans to middle and lower-income countries, the IDA advances interest free loans – or credits – and grants to the poorest of countries. This can be read here.
BOOM looked at data from the statement of loans from both the IRDA and IDA to fact check this claim. The statement of loans from both these divisions of the World Bank, are as of June 30 this year.
Various arms of the Indian government currently have 123 loans with the IRDA, including loans that have been disbursed (or are being dispersed) and those that are currently in the process of being repaid, according to the IRDA’s statement of loans
India currently owes the IRDA US$ 14.58 billion collectively to these accounts. This amount has been calculated after taking into consideration all cancelled and already repaid debt.
The primary borrower is the Controller of Aid, Accounts and Audit (CAAA), a division under the Department of Economic Affairs, Ministry of Finance, which deals with external borrowers and ensures timely service of debt. Other borrowers include public enterprises like the State Bank of India, Power Grid Corp. of India and the Indian Renewable Energy Development Agency, among others.
Another US$ 12.5 billion remains yet to be disbursed from these loans, and from loans that have just been signed.
The IRDA’s latest statement of loan can be found and downloaded below.
A statement of these 123 accounts can be found on CAAA’s website here. This ledger of loans are as of 8 May 2019, and shows the statement in both Indian rupees and US dollars.
The sole borrower from the IDA has been the CAAA, and the data embedded below shows the statement of loans of the IDA to India.
There are 23 accounts, towards which India currently owes just above US$ 1 billion.
Another US$ 2.6 billion still remains to be disbursed. Two additional loans, worth US$ 250 millions have been approved.
Therefore, contrary to the claims on social media, India’s current obligations exceed US$ 15 billion to the World Bank based on the given data.
BOOM has contacted the World Bank for a statement on the issue, and will update this story on hearing from them.
Why Are Loans From The World Bank Such A Taboo?
This is not the first time social media users have expressed their distrust towards loans taken from the World Bank.
Posts like the one embedded below is an example of the perception about loans taken from the World Bank. Here, users are applauding India for allegedly not borrowing from the institution for the last three years, forcing the officials of the World Bank to come to India to try and sell loans.
In reality, the World Bank specialises is in providing aid and capital to developmental projects of creditworthy countries – be it a loan through the IBRD or aid/grants through the IDA. These investment may be across a cross-section of developmental avenues, such as roads, irrigation, social infrastructure, disaster relief and clean energy.
Recently approved projects of India with the World Bank includes a state highway development project for Rajasthan, a project to strengthen Andhra Pradesh’s health systems, investing in solar power and hybrid technologies and building Uttar Pradesh’s road network. More on these projects can be read here.
The World Bank’s objectives differs from that of its sister organisation, the International Monetary Fund (IMF). While the World Bank lends to support development, the IMF primarily deals with the stability of the international monetary system. It ensures monetary and financial stability, and are approached by governments when they are in financial crises.
Much also depends on how recipient countries handle IMF assistance. For example, while it helped India out of a crisis in 1991, a $6 billion bailout approved earlier in July will be Pakistan’s 13th such assistance package since the late 1980s.
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