PARIS, June 21, Reuter: India won promise of more financial aid form wealthy countries this year, Indian Finance Secretary S. Venkitaramanan said on Tuesday.
He said an annual meeting of donors here, under the auspices of the World Bank, pledged India about 6.3 billion dollars this year, of 16 per cent from last year’s 5.4 billion dollars.
A World Bank statement said the two day meeting attended by 13 nations as well as aid bodies of the Indian consortium felt India had coped well with last year’s drought, the worst for 100 years.
The World Bank had recommended donors give at least 5.8 billion dollars this year.
“This is a vote of confidence in India’s economy and a reflection of the faith of the international community in the country to resolve its problems,” Venkitaramanan said.
He said that of the total aid committed, 3.9 billion dollars was likely to be on concessional terms against 3.3 billion in concessional aid last year.
“Each country has done its best and we see the 6.3 billion figures as a floor not a ceiling,” he said.
Donors agreed that India needed easy terms on its loans to continue its efforts to alleviate poverty and boost its industry.
Venkitaramanan said he expects Indian economic growth of seven per cent this year.
In a background note to the meeting, the World Bank said that given the longer run India needed to achieve at least a five percent annual growth rate “to improve the living standards of a population that is still rising by more than two per cent a year, provide productive employment for the growing labor force, and reduce poverty”.
Venkitaramanan said India’s main aim was to reduce poverty.
The number of poor living below the poverty line had been brought down from 48 per cent, or 278 million, a decade ago and is expected to fall to about 26 per cent or 211 million, by next year.
He put India’s external debt at about 30 billion dollars.
“But if we borrow less we will therefore need more concessional aid,” he said.
Article extracted from this publication >> July 1, 1988
