"We know it is a tough job which has to be performed through better targeting and prioritising the area for subsidy cut," said World Bank managing director (operation) Caio Koch-Weser.

For 1998-99, the multilateral agency has earmarked $3 billion for India, the highest for any country in the world, he said, addressing a press conference in Mumbai on Thursday.

Koch-Weser, who was on a nine-day tour of the country, met prime minister AB Vajpayee and finance minister Yashwant Sinha.

"Both of them have assured me categorically that the economic reforms will be deepened, broadened and accelerated in the course of time," he said.

According to him, the bank has reminded the new government about the macro-economic stability, faster privatisation and large-scale investment in infrastructural development.

Refusing to comment on the BJP government'seconomic policy of swadeshi and national agenda, Koch-Weser said that it is better to wait for the budget to ascertain the economic outlook of the government.

India must take some precautionary measures before going for convertibility of its currency in capital account in light of the recent south-east Asian currency crisis, he said. Speaking to The Financial Express, country director, India, Edwin R Lim said that the current annual programme of $3 billion has virtually doubled since last year as it includes the vast investment towards infrastructural sector.

"We may increase the fund size of the programme on the basis of its requirement," he said.

According to him the World Bank, which has already granted $26 million for the IDBI fund operation to phase out ozone depleted substance, may further hike the grant amount.

$1-billion largesse for Andhra Pradesh

The World Bank is to process a $1-billion loan to the Andhra Pradesh government for its power sector. Besides, it is also to givemore grants in the form of a $200 million loan for the Hyderabad Water Supply and Sewerage Board, and another $550 million as economic restructuring loan for social sector and development of roads in the state.

A World Bank team which toured Andhra Pradesh, Rajasthan and Uttar Pradesh, lauded the initiatives of the Andhra Pradesh government and said in the next few months, the $1 billion loan for the power sector would be processed and disbursed in tranches.

"After inspecting various World Bank-assisted projects being undertaken in Andhra Pradesh, including some irrigation projects, we are satisfied at the participation of the user groups in the projects, which could be emulated by other states as well," said Koch-Weser adding that the collection of the user charges for the irrigation projects has been increasing. World Bank would also be interested in assisting the Uttar Pradesh and Rajasthan governments in various infrastructure and social sector projects, said Koch-Waser. He said that he was encouragedwith Indian state authorities coming up for a dialogue with the bank to speed up state-level and sectoral reforms.