NEW DELHI: Germany on Oct.1 denied that there was any linkage between aid to India and this country’s defence expenditure,
The German ambassador, Dr. Hans-Georg Weick, asserted that if there had been any marginal decline in assistance, it could be attributed to constraints arising from Germany’s commitments to the erstwhile East Germany in the economic and social fields, Also, the number of counties, which needed development aid had increased following the disintegration of the Soviet Union.
Dr. Weick, who was addressing a news conference on the eve of the second anniversary of unification of Germany, announced that an agreement on bilateral financial cooperation would shortly be signed here under which a loan of DM 352.3 million (Rs 604 crore) would be made available on liberal terms, Such assistance mainly consists of soft loans carrying an interest of 0.75%. Repayment, spread over 40 years, starts only after a 10-year initial gap.
The loan would be used for projects in areas such as power, lignite, import of potash fertilizer and support for structural adjustment of the economy, including the National Renewal Fund. Grants of DM 55.7 million (Rs 96 crore) would be available for areas like basic education, housing for economically weaker sections, poverty alleviation and environmental protection.
Dr. Weick said with total bilateral aid commitments totaling over DM 14 billion (from 1958 to 1992), India continued to top the list of Germany’s partners in development cooperation, During the current year, the commitments would amount to DM 550 million (Rs 943 crore). He noted with satisfaction that the rate of disbursement of assistance had increased substantially, reaching an all-time high of DM 426 million (Rs 730 crore) in 1991,
A new series of Indo-German projects was emerging in such areas as watershed development, basic education, rural water supply and sanitation, lift irrigation, forestry and integrated rural development. They needed long gestation periods and thorough preparation. He said the Indo-German joint economic commission would hold its next meeting in Bonn on December 2-3. It would be chaired jointly by the finance minister, Dr. Manmohan Singh, and the federal minister for economics, Jurgen Mollemann.
Referring to the European scene, the ambassador stated that links with the European Community would enable India to have access to the market in the continent and the forthcoming negotiations in Brussels assumed special importance in this context. He emphasized that it was imperative for India to ensure that the products it exported conformed to the prescribed standards and were competitive.
Article extracted from this publication >> October 16, 1992
