World Bank to Support Indian State of Maharashtra’s Initiative to Enable More Districts to Drive Economic Growth

WASHINGTON, Dec. 3, 2024 - The World Bank's Board of Executive Directors approved a new loan to support the state of Maharashtra, in India, in its efforts to stimulate economic growth across the state, especially in the lagging districts. The program will help strengthen the capacity of the district administrations to identify growth opportunities, facilitate private sector participation, and use data for evidence-based planning and decision-making.

Maharashtra's $500 billion state economy is the largest in the country. However, there are significant disparities amongst its 36 districts with seven districts accounting for more than half the state GDP. Lack of credible and timely data, and multiple agencies operating in silos, are some key factors impeding the implementation of state growth plans across these lagging districts. District governance challenges and inadequate access to timely government services by the private sector are also constraining growth. Maharashtra's vision for a one-trillion-dollar economy will require more districts increasing their contribution to the state's economy. This will boost overall economic growth and attract private sector investments, while ensuring that people living in the districts are able to participate and benefit from this growth.

The $188.28 million Maharashtra Strengthening Institutional Capabilities in Districts for Enabling Growth operation will support district planning and growth strategies. Investments under the operation will equip districts with the necessary data, funds, and expertise to maximize the value of public money employed for driving growth and job creation. It will also enhance private sector participation by improving e-government services for businesses in districts, especially in the tourism sector.

"By providing well-articulated investments in institutional capability and coordination at the district level, the program will enhance evidence-based planning and policymaking, efficient public sector interface with the private sector, and improved service delivery to the public - all of which are the fulcrum of broad-based growth, especially in lagging districts," 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 operation will unlock the value of public data by building a data governance architecture including the Maha Databank for better coordination, integration, analysis, and dissemination of insights into state development. This data can be used to address key development gaps including gender disparities.

"The operation sets up an incentive framework that will trigger annual fiscal rewards to districts that achieve performance targets. The operation will also strengthen the online service delivery portals MAITRI 2.0 (for services to private sector) and the RTS portal (used for all government services) for improving access of the private sector to timely government services," said Neha Gupta and Thomas Danielewitz, the Task Team Leaders for the project.

The $188.28 million loan from the International Bank for Reconstruction and Development (IBRD) has a final maturity of 15 years, including a grace period of 5 years.