India:From aid-taking to aid-giving

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India's makeover: From aid-taking to aid-giving

Author: Times News Network

Publication: The Times of India

June 2, 2003

URL:

http://timesofindia.indiatimes.com/cms.dll/xml/uncomp/articleshow?

msid=2333

India on Monday opted for an image change-over from being an aid-

taker to an aid-giver even as Prime Minister Vajpayee ended his

meetings at the G-8 Evian summit as the head of government of one of

the select developing countries with big impact on global economy.

 

The finance ministry here announced that India will not accept any

tied aid in future. Simultaneously, it discontinued taking aid from

all bilateral donors, barring six - Japan, Germany, the US, the UK,

the European Commission and Russia. It also declared that all

outstanding debt due to all bilateral donors, except just four -

Japan, Germany, the US and France - will be paid back ahead of time.

 

Ministry officials said India will soon announce a debt relief

package for the least developed countries which are highly indebted.

India will write off some of the credit it had extended to these

countries in the past. Also, the ministry will come up with a fresh

scheme for India extending lines of credit and technical assistance

to developing countries in need of such help.

 

India on Monday has one of the largest foreign exchange reserves

among all countries in the world at over $ 80 billion. India also

has one of the world's fastest growing economies. The country has

been reducing its reliance on official development assistance over

the years, preferring to attract greater private capital inflows and

trade turnover.

 

India's outstanding bilateral debt in respect of 20 countries as on

March 31, 2003, stands at Rs 66,316 crore. In respect of repayment

of bilateral credit, payment ahead of schedule will be done of all

outstanding bilateral debt due to 14 countries: the Netherlands,

Russia, Canada, Sweden, Italy, Denmark, Belgium, Austria, Kuwait,

Spain, Switzerland, Saudi Arabia, Australia, Czech Republic and

Slovak. There are no outstanding bilateral debt liabilities to the

UK and Norway.

 

The total amount to be paid ahead of schedule is Rs 4,490 crore.

 

"The finance ministry has decided to discontinue receiving aid from

certain bilateral partners with smaller assistance packages so that

their resources can be transferred to other developing countries in

greater need of official development assistance,'' an official

release explained.

 

"In India, the aid would be directed towards NGOs working in

specified areas and not to the Central or state governments,'' it

said. The department of economic affairs in the ministry will hold

an annual consultation with these bilateral donors to review the

list of institutions and NGOs which the donors propose to assist.

Other than this, the donors can work directly with the institutions.

 

Monday's decision is a follow-up to the finance minister's

announcement in the budget this year. While phasing out such aid,

the existing programmes which are ongoing and approved out of grants

by donor countries will, however, continue and reach their

completion.