ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Not By Aid

THE Aid India Consortium, meeting in Paris on June 19 and 20, has pledged $ 4 billion in aid to India in 1984-85. It has been pointed out that, compared to the commitment of $ 3.7 billion for last year, this represents an increase of 8.5 per cent in dollar terms and 9.4 per cent in SDH terms. Before the meeting it had been feared that India's aid diplomats might have a difficult time persuading the Consortium of India's need for larger aid especially in the context of the government's decision not to draw the last instalment of SDK 1,1 billion of the SDR 5 billion loan from the IMF. The government had then claimed that the decision bad been made possible because of improvement in the country's balance of payments position. Of course, the claim was patently untenable and for the sake of India's plea for more aid, it is just as well that it was. At the Consortium meeting, the Secretary to the Department of Economic Affairs, who was the chief Indian government representative. had quite a different explanation for the decision to forgo part of the IMF loan: that the government had felt that such borrowings should be used only to meet short-term liquidity requirements and not for long-term development financing. That is certainly not what the Prime Minister had told the country when she specially went on the air to claim credit for the govern- ment being able to dispense with the last instalment of the IMF loan. But then the representatives of the World Bank and the aid-giving countries are pragmatic enough to overlook such discrepancies.

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