By Subramaniam Sharma

New Delhi - The World Bank plans to lend India $9 billion (R59 billion) during the next three years for rural development as the world's second-most populous nation seeks to accelerate economic growth to reduce poverty.

"We will be prepared to commit $3 billion a year for the next three years" for rural projects, World Bank president Paul Wolfowitz said on Saturday at the end of a four-day visit.

The bank wanted to "help India sustain its impressive economic growth because without growth it's not possible to reduce poverty".

Prime Minister Manmohan Singh is seeking to spend 1.74 trillion rupees (R262 billion) by 2009 to improve irrigation, housing, water, electricity, telephones and roads to alleviate rural poverty.

The World Bank estimates 350 million of India's 1.1 billion people live on less than $1 a day.

The government wants the economy, Asia's fourth-largest, to grow at more than 7 percent annually over the next decade. It expanded 6.9 percent in the fiscal year to March 31, and the central bank has forecast it would grow 7 percent in the current fiscal year.

Wolfowitz said the Washington-based multilateral lender wanted to "help the government both at the federal level and the states to see that the benefits of growth are distributed more rapidly to the poorest people".

Pyaralal Raghavan, an economist at the Federation of Indian Chambers of Commerce and Industry, said increased investment in rural infrastructure would benefit companies including Larsen & Toubro, India's biggest engineering company; Bharat Heavy Electricals, the nation's largest power equipment maker; and Steel Authority of India, the country's biggest steel maker.

The World Bank's participation would help attract other investors, said Raghavan. "The problem in India has been implementation," he said. "With the World Bank's involvement there will be better evaluation and scrutiny of the projects."

The World Bank lent $2.9 billion to India in the year to June 30, compared with $1.4 billion the year before, according to Michael Carter, the lender's country director for India.

Under the four-year plan know as Bharat Nirman, or "Building India", the government aims to provide electricity to all 250 million rural homes, build 6 million houses and provide safe drinking water to the 74 000 villages that don't have access to it.

The prime minister said each of India's 700 000 villages would have at least one phone by 2009. About 70 percent of India's population lives in villages.