ADB backs India's antipoverty projects

The Jakarta Post, Jakarta

For Puspha Khandewal, a 35-year-old resident of Kuduremala slum in southern India town of Mysore, life has never been better. Thanks mainly to a poverty-alleviation project, not only can she enjoy a better quality of life but she can also hope for an even brighter future for her three children, who have now secured access to education.

"Thanks to the program, the neighborhood has become clean and livable. But the most important thing is that I can earn enough money for my children to go to school," Khandewal told a small number of reporters who visited several towns in the country recently.

"Hopefully, my children will one day work at a prestigious firm in Bangalore," she added smiling. She was referring to a neighboring town where dozens of world-class information technology (IT) firms operating there have made it one of the most prosperous cities in India.

Khandewal's family represents more than 22,000 families across Karnataka state expected to benefit from the Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) -- a project organized by the local government and supported by the Asian Development Bank (ADB). Six towns in the state; Mysore, Tumkur, Ramanagaram, Channapatna, Mandya and Maddur are the main targets of the project.

Similar projects are also conducted in other states in the country.

The project, started in early 1997, covers various programs such as environment sanitation (including water supply, sewerage projects and solid waste management), road improvement, and institutional building.

But, there is also a program, in what appears to benefit most people like Khandewal, which directly helps them improve their access to financing. Called "direct poverty interventions", the program involves dozens of self-help groups, credit and saving schemes, vocational training, workshops, health and child care, and other activities.

Thousands of beneficiaries are now joining the credit groups, which consist of 30 to 40 women each and were started with a grant of only US$200 per group. In each of the upcoming months, each member will contribute around 5 rupees (about 10 U.S. cent) to 100 rupees.

For the KUIDFC project, ADB handed out some US$147 million in total.

Alex K. Jorgensen, ADB head of urban development in India resident mission, said that the poverty alleviation efforts through the direct intervention program formed a significant part in ADB's role in the country.

"As in other countries, programs aimed at eradicating poverty have been the focus of our work here, while also participating in other activities," Jorgensen told a small number of visiting journalists in Mysore recently who came on ADB's invitation as part of its annual press tour.

Other activities he was referring to were pro-growth projects such as assistance in infrastructure development (transportation and energy), agricultural and rural development.

India's economy has been growing rapidly in the past years, weathering the current global economic downturn and even outpacing most of its regional peers. India, whose economy has been growing by between 6 percent to 7 percent in the past several years, has been tipped by many as the next economic giant in Asia.

However, while some making fast improvements, there are some who are lagging behind. Of the total population of 1.02 billion, 26 percent still live below the poverty line and have to survive on less than $1 per day.

It is these people who are the main target of the direct poverty interventions.

India is one of the ADB's 33 borrowing members out of a total 61 members.

ADB data shows that, since its operation began in 1996, the bank had handed out $98.8 billion in loans as of last year to help finance 1,752 projects across the globe. On top of that, it had also provided $2.2 billion worth of technical assistance for 5,050 projects during the period.

Venkaesh Taj, one of beneficiaries of a similar poverty alleviation project in Jaipur -- the capital city of Rajasthan state in northern India where 24 percent of its 54 million population living in slums, shared Khandewal's view of the benefits of the program.

"I have a more organized life now. I can help my husband financially. I can even send my daughters to schools -- something unthinkable several years ago," said Venkaesh, a 30-year-old mother of four children who has lived at the area almost all her life.