Mr Chairperson,
Mr President of IFAD,
Distinguished Governors,
Ladies and Gentlemen,

I begin by expressing my appreciation of Her Excellency Mrs Finskas for having steered so ably the deliberation of the Governing Council during the past two years and welcoming the Finance Minister of Indonesia to the Chair. We would greatly value the Chair's guidance in our collective efforts in pursuing IFAD objectives.

I take this opportunity to offer felicitations to Mr Westley and express our appreciation for his contribution during his tenure as Vice-President of IFAD.

I extend a hearty welcome to Mr Cyril Enweze as he takes charge of the Vice-Presidency of this important UN institution. I also welcome Mr Phrang Roy, who has taken over as Assistant President. I am confident that the team of President Båge would most ably meet the challenges ahead. We reiterate our confidence in wider representation in IFAD leading to convergence of diverse experience, knowledge and regional perspectives.

We compliment IFAD for maintaining a "Zero" growth administrative budget. The need continues to be crucial and paramount for IFAD to remain cost effective so that maximum resources are available for actual outputs. We look with interest at the new initiatives of President Båge to improve the output delivery and the performances of IFAD programmes. We fully endorse the need to make Monitoring and Evaluation sharper and more relevant. I must state that we appreciate the introduction of interactive session and the roundtables discussions interlaced with the deliberation of the Governing Council. The discussions of both the events were fruitful and I am sure would deepen our understanding of the challenges and issues while helping harmonising different regional perspectives in the development of IFAD strategies.

The theme for this year's Interactive Session, i.e., "Financing Development - The Rural Dimension", is intricately linked to the major UN initiatives towards organizing the Conference on Financing for Development (FfD). We perceive the process as an important opportunity for engaging the countries in meaningful dialogue towards creating a consensus on enlightened international economic cooperation and on steps now required towards the goal of equitable and universal development. While the joint efforts of IFAD, FAO, and WFP would indeed go a long way in bringing the issues of hunger and poverty centre stage, the importance of the efforts to redress a weakening international economic environment (most starkly measured by the ever-declining levels of ODA) and developing a commitment to multilateral development cooperation would need to be reiterated. It is estimated that an additional USD 50 billion would be required every year for the achievement of international development goals for 2015 as set out in the Millennium Summit Declaration. Generating this amount will be a challenge which has to be faced.

Mr. Chairman, India shares IFAD's vision in focussing on investments in the rural sector and for Capital formation in agriculture in particular, in order to eradicate hunger and reduce poverty. The focus of our efforts in rural poverty alleviation is on developing better market access to our farmers and on undertaking productive works and their maintenance, such as rural roads, watershed development, rejuvenation of tanks, afforestation, irrigation and drainage. Simultaneously, we recognise the critical importance of education, particularly for girls, empowerment of women through self help groups and micro-finance projects, people's ownership of programme and participative planning as essential elements of the poverty reduction strategy. The incidence of poverty expressed as a percentage of people below the poverty line declined in India from 55% in 1973-74 to 26% in 1999-2000. The commitment is reflected in the second generation economic reforms and increased budgetary allocations to reach the targeted pace of reduction in poverty level. The crux of the Government of India's policy on poverty eradication is that the rural poor should not merely benefit from the percolation effect of growth generated elsewhere, they should also be equal partners both in the process of contributing to growth and benefiting from it. We, therefore, deeply appreciate that IFAD is this forum aims at devising international financial and operational approaches that supports a long-term basis, the efforts of developing countries to finally break out of the vicious cycle of under-development, poverty, deprivation and indignity.

Predictable and assured resource levels commensurate with needs are a key ingredient of effectiveness and impact. Developing societies, Mr. Chairperson, cannot thrive only on a diet of advice. The 5th Replenishment has become effective and the Consultation for the 6th is being initiated. Given the mandate of IFAD, the resource base remains small and thus efforts to leverage more funds towards IFAD led interventions would be welcome. While development assistance would be helpful, Mr. Chairman, India believes that the responsibility for its development lies with the Indian State itself and that there is no shying away from it. ODA can only play a catalytic role but we have to induce an environment in which greater investments flow. The agenda notes reports on IFAD's innovative partnership with the private sector, efforts towards enhanced cooperation with the World Bank and greater coordination within the UN system. While we appreciate the new developing partnerships, these initiatives must preserve the essential character of IFAD assistance, which is neutral, impartial and based on the priorities defined by the recipient country.

IFAD's India portfolio continues to demonstrate new interventions and approaches to poverty eradication and agricultural development. India believes that democracy, rule of low, transparent, accountable and effective governance, gender equity, economic growth and development are mutually reinforcing. Thus our programme delivery is strongly premised upon community empowerment and people centered approach to development. We urge IFAD to take note of the major Constitutional mechanisms for devolution of power to local self Government institutions through the 73rd and the 74th Constitution Amendments, which has given to the rural local self Government or the Panchayat Raj institutions, as they are defined in India, the status of independent constitutional tier of the governance of the Indian State. These institutions are the crucial building blocks for the people led poverty eradication initiatives in India.

Mr. Chairman, I would like to conclude with an appeal to all the member countries to transcend national positions to share and work towards achievement of IFAD's goals and the targets set out in the Millennium Declaration. I assure of India's continued support to IFAD in all its endeavours to achieve its objectives.

Thank you, Sir.