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Skylark 284 Shahid Bhagatsingh Road Grams Econweekly
Grams Econweekly Editor Krishna Raj Associate Editor Rajani X Desai Assistant Editor M S Prabhakar Gautam Navlakha Editorial Staff K Vijayakumar, Arindam Roy Manager S Nagarajan Advertisement Manager R Venkiteswaran THE US decision not to endorse the Indian application for the SDR 5 billion IMF loan at the meeting of the Fund's Executive Board on November 9 fa decidedly a political blessing for the Government of India, in the very short run. Immediately the odium of Western dictation has been lessened somewhat. However, the actual disbursal of the loan, spread over three years, will be very much subject to US surveillance and satisfaction. Indeed, the schedule prescribed for disbursement of the full loan amount represents a substantive concession to the US position that India's present balance of payments position does not warrant a loan of this size. Thus, only SDR 900 million will be available in the first year upto June 30, 1982; SDR 1.8 billion can be drawn in the second year ending June 30, 1983; and disbursement of the largest instalment of SDR 2.3 billion has been put off to the third year ending June 30, 1984. Further, the IMF's communique on the approval of the loan explicitly states that drawal of every instalment of the loan will not only be conditional on satisfactory completion of reviews, approved by the Fund's Executive Board, of progress towards the financial and structural adjustments agreed to by the Government of India with the Fund but can be made "only when required to finance a balance of payments need".