USAID supports India’s development of a regulatory environment that provides stability and investor confidence in financial markets, and a level playing field for domestic and international investment. It ensures that capital markets are providing access for micro-loans, micro insurance, slum upgrading, agribusiness and other products aimed at the poorest segments of the population. It is helping to reduce state and local deficits as it works to improve the allocation of scarce public funds toward education, health and infrastructure. Increasing public and private investments in water and sanitation systems is also a priority. Contributing to the Agriculture Knowledge Initiative, an Indo-U.S. effort to strengthen India’s agriculture, USAID promotes use of cutting-edge approaches in biotechnology, improved production methods and marketing.

Key Accomplishments

Financial Markets & Market Development

• The India Growth Fund, established with USAID support to spur the venture capital market and increase investment in small and medium sized enterprises, has raised over $160 million for investment in companies, already generating more than 3,000 skilled and semi-skilled jobs.
• India's regulatory structure for its capital markets are a model for the world. Since USAID assistance began in 1995, the equity market capitalization has nearly quadrupled to 90% of gross domestic product, foreign institutional investment has risen by fifty times to $50 billion and mutual fund assets have tripled to $80 billion.
• Assistance to India's insurance regulator has resulted in a robust insurance supervision system, rapid growth of private health insurance market and 50% rise in insurance coverage.

Public Finance Reform

• With USAID support, the Government of Jharkhand established the first specialized fiscal unit to support better forecasting, budgeting and investment of public resources. Karnataka has adopted performance-linked budgets and best practice methods for selecting large capital projects to enhance state economic development. The Government of India is encouraging states to use debt management technology for the first time to manage states’ debt and investments.

Urban Development

• USAID introduced municipal credit rating systems to help cities generate capital through the bond market; framed a “Model Municipal Act” to promote reforms in a number of states; and implemented “pooled” financing to help smaller urban bodies attract private investments. The Government of India has also now set up a ‘Pooled Finance Development Fund’ using its own resources.
• In partnership with international and Indian not-for-profit agencies and municipal corporations, USAID helped implement comprehensive slum upgrading strategies in over 95 settlements in the Gujarat state covering 142,000 slum dwellers. Successful efforts of slum upgrading in Gujarat are being replicated in other cities of India.

Agriculture

• University-industry partnerships in biotechnology food crop development are producing pest-resistant eggplant, drought-tolerant rice, and blight-resistant potatoes. University-to-university partnerships are updating student learning and linking schools to agriindustry.
• USAID is providing U.S. institutional expertise (government, industry, university) to counterparts in India to create an “internal common market” for food crops by creating grades and standards and market information for farmers.
• A USAID supported program of linking small and marginal farmers to high value markets has demonstrated that small-scale Indian farmers can be successfully incorporated into organized retail supply chains. The program introduces new production and post-harvest practices.
• USAID assistance helps farmers raise household incomes. On more than three million hectares of land, farmers are using “zero tillage” practices – decreasing their fuel costs and conserving water.

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