NEW DELHI (PTI): The World Bank feels that India is not yet out of the woods as far as the balance of payments position is concemed.

While the severe import compression last year has helped in bringing down the country ‘s current account deficit to three billion dollars in 1991-92 against nine billion dollars in 1990-91, the bank estimated that the current account deficit during 199293 would be of the order of six billion dollars.

This coupled with repayments would entail an external financing of the order of 9.8 billion dollars in 1992-93, making the situation as acute as it was a year ago, the World Bank sources said.

The sources said if India’s claim of scoring a comfortable foreign exchange reserves were true, there was no need for going in for further loans from the IMF or the World Bank, But the ground realities were different as India’s exports have not picked up and imports might increase this year to meet industries’ needs, the sources said.

Meanwhile the World Bank is understood to have recommended 6.7 billion dollars of aid to India this year, the same level as last year, for consideration at the aid India consortium meeting in Paris later but a strong case is being made out with donors to  enhance assistance for a total success of the reforms program undertaken here. A two member official team from the finance ministry, which visited donor countries mainly Japan, the Netherlands, UK, France and Germany, highlighted the recent trends in the Indian economy and re~ iterated the government’s commitment to implement the economic reforms. While the team has returned to Delhi after their deliberation: there is as yet no indication of th fast disbursing component of the aid, which was 2.3 billion dollar last year.

Officials here are cautious! optimistic that aid quantity would be about same as last year’ level given economic difficulties faced by three of the major donors— Japan, Germany an Britain.

It is for first time that the meeting, slated for June 4 and 25, a Paris, is taking place against the backdrop of major economic reforms. The perception of donor: on drastic changes undertaker would be known at the meeting

The Indian delegation to the meeting is comprised of economic affairs secretary, Montekt Singh Ahluwalia, chief consultant, Ashok Desai and N.K. Singh  joint secretary, fund bank.

Article extracted from this publication >> July 3, 1992