Fourth Plan-Far from Dispensing with Aid

Fourth Plan A Correspondent writes:
THE Fourth Plan had estimated that gross external assistance of Rs 4,130 crores would be necessary to close the gap between payments and receipts of foreign exchange during the Plan period. The Mid-Term Appraisal, which was completed before the suspension of aid by the United States, suggests that the gap would widen by Rs 464 crores to Rs 4,594 crores. Out of the total promised aid, the cancellation of aid by the US so far affects only $ 86 million dollars. The rest of the aid in the pipe- line would continue to be available, In view of the lag between aid authorisation and utilisation, suspension of US aid need not affect aid-financed imports from the US provided the rate of aid utilisation is stepped up. Now that the country can afford to do without PL 480 food assistance, the net impact of aid suspension would be in respect of non-PL 480 assistance which averaged annually at about $266 million during 1907-68 to 1970-71. Assuming that the country is not to depend upon US assistance in the last two years of the Plan, the shortfall in total external assistance would be around Rs 400 crores. If the planned aid from other sources comes through, the total gap envisaged in the Mid-Term Appraisal would widen from Rs 464 crores to around Rs 850 crores.