India, for years the world's symbol of ineradicable poverty, appears to be achieving self-sufficiency in food, and could even become an exporter of wheat and rice, according to a new World Bank report.

The bank, a principal source of aid to India, labeled the outlook "substantially more optimistic than many past projections," but warned at the same time that it did not mean that poverty or malnutrition had been ended in India, or even that those problems would be overcome by the year 2000.

The confidential report is for internal bank use. A copy was made available to The Washington Post.

The major new challenge for India, now that the supply-and-demand picture is being brought into balance, is to achieve a more equitable distribution of food, bank experts say.

The bank report notes that the apparent level of grain consumption in 1978-79 was 170 kilograms per capita, or "approximately equal to a caloric-sufficient quantity, on the average, for the Indian population."

This level of average consumption is well above what was projected earlier for 1978-79. Nonetheless, the report says, "with unequal distribution of this consumption, this means undernutiriton for lower-income groups."

The better outlook is not keyed to any significant reduction in India's population growth -- still the overidding problem. The bank assumed that the annual population growth rate, now 1.9 percent, would average 1.75

That is higher than the Indian government's target of 1.5 percent, which the report said was "achievable" but apparently not realistc. (The United Nations uses a more pessimistic projection of an average population growth of 2 percent to the year 2000.)

Despite the cautions the go with the new assessment, Indian self-sufficiency in food grains is regarded as a tremendous step forward in that country's economic progress, and possibly the most important success story for international lending agencies.

"Food grain self-sufficiency or surplus, if it comes about," the report says, "will be an impressive achievement of a long-standing goal of Indian economic development.

"It indicates that India, by continuing its major efforts in agriculture, may be in the desirable position of having a range of options which she did not have during the period when increasing food grain output was the overriding goal of agricultural development."

Exuberant Indians observe that, for all practical purposes, India has required no food aid in the last few years, and that the general impression of millions of starving Indians is false.

But Indians concede that while the vast subcontinent no longer needs food aid, it has been brought to what one called "the current pinnacle of self-sufficiency" by a consistent flow of nonfood aid, including technical assistance.

India last year received $4.8 billion in subsidized loans from the World Bank's soft-loan affiliate -- 40 percent of all such money dispensed by the World Bank.

In explaining what contributes to the new and more optimistic outlook on per-capita food consumption, the bank cited stepped-up use of fertilizers and more land under irrigation, rather than any dramatic change in agricultural tehcnology or any significant change in the total area under cultivation.

The bank also cites the importance of $600 million in price subsidies from the Indian government, which have maintained "stable incentive prices for producers and have moderated price rises to consumers even in the years of drought."

India has committed another $600 million for importing fertilizers and holding down the price of domestically produced fertilizers. The bank suggested that these subsidies might have to increase under political pressure to provide a good return for farmers and low prices for consumers. Experts also credit India with "getting its act together on agriculture." For example, monsoon rains are the lifeblood of India's agriculture, supplying vital water for parched land. Only a small percentage of the cropland gets the benefit of artificial irrigation, but that percentage is growing.

Last year there were insufficient monsoons in India. But instead of being thrown off stride, one expert said, the country was "able to ride it out, not simply by drawing on reserves, but by better management."

For example, the government, through a better-organized agricultural extension service, was able to get the word out to farmers on how to cope with drought conditions.

But the report is careful to point out that, despite the clear prospect of self-sufficiency, future grain production "will still depend on the monsoon -- consecutive years of monsoon failure could lead India to import grain."

As to the export possibility, the report concludes that this "may still be some years in the future." I suggested that India could build enough of a surplus to export wheat and rice, although in the thin international market for rice, Indian varieties may not be easily marketable.

The more comfortable food outlook should also enable India to eliminate some of internal price distortions in food grains, and to diversify land now given over to wheat or rice for more oilseed crops so as to reduce dependence on edible oil imports, the report said.