"We know it is a tough job which has to be performed through better targeting and prioritising the area for subsidy cut," said Caio Koch-Weser, managing director (operation), World Bank. For 1998-99, the multilateral agency has earmarked $ 3 billion for India, the highest for any country in the world, he said.

Koch-Weser, who was on a nine-day tour of the country, earlier met the prime minister A B Vajpayee and finance minister Yashwant Sinha. "Both of them have assured me categorically that the economic reforms will be deepened, broadened and accelerated in course of time," he said.

About the future of economic reform in India under the swadeshi agenda of the new government, the MD said "I welcome Yashwant Sinha's statement that hewill intensify the reform process." However, he was vague on controversial issues like the swadeshi agenda of the new government, convertibility of the rupee in view of the South-east Asian crisis and opening up of insurance sector.

In reply to a question about the government's policy on convertibility of the Indian rupee and the new Finance Minister's preference for a strong rupee, he said "There are some lessons for India from the experience of South East Asian countries. I don't want to comment on that." About World Bank's view on the opening up of Indian insurance sector, he said India should open up its insurance sector for foreign capital. According to him, the bank has reminded the new government about the need for macro-economic stabiliy, faster privatisation and large scale investment in infrastructure development. Chandrababu Naidu's Andhra Pradesh is getting the lion's share of World Bank assistance loans and development assistance to various Indian states as the state will get a US $ 1 billionloan for the power sector privatisation and development programmes. Koch-Weser said that he was happy with Indian state authorities coming up for a dialogue with the bank to speed up state-level and sectoral economic reforms in the areas of infrastructure and social sector.

He added that in the next few months, WB would also process a $ 200 million loan for the Hyderabad Water Supply and Sewerage Board and another USD 550 million as economic restructuring loan for social sector and development of roads in Andhra Pradesh.

Referring to the ongoing World Bank assisted projects in Maharashtra, Koch-Weser said he was not happy with the pace of the Mumbai Sewerage Project was going on. "It is running behind the schedule and the performance is not satisfactory," Koch-Weser said.

To another question, he replied that the WB decision not to issue loans to the Maharashtra State Electricity Board would not be reconsidered in recent future. Commenting on funding the Mumbai Urban Transport Project II (MUTP II),Koch-Weser said it was very necessary to improve transportation facilities, keeping in mind the rehabilitation of the people affected by it.