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WB to use India's expertise in rural development; Sinha presses for easing of sanctions

R C Murthy in Washington

The World Bank has accepted the offer of utilising India's expertise and experience in integrated rural development, a concept the World Bank calls holistic development, and introduced in select dozen poverty reduction pilot projects located all over the world.

Finance Minister Yashwant Sinha said India's experience showed that there was no single formula for rural growth but there should be flexibility to tailor to local requirements. But the overriding objective should be to achieve successful local involvement at the grassroots level.

In the formulation and financing debt forgiveness plan for poorest countries, India emphasised there should be no burden on poor countries that managed their economies prudently and repaid the loans with interest.

In the formulation and monitoring global integration of developing countries, India was coopted to the newly constituted Group of 20. Also, a role is assigned in the enlarged and rechristened International Monetary and Financial Committee, that is replacing the Interim Committee.

The first meeting of G-20 deputies would be in November in Canada followed by the G-20 ministerial meeting at Berlin in December.

Inclusion of Indonesia in that committee is in suspense because of the ongoing row between the IMF and that country. Malaysia has been kept out of it angering that country's finance minister, who asked for the criteria for selection.

Significantly, Sinha met with, among others, the finance ministers of Canada and Australia, the two countries that displayed unusual anger after Pokhran-II.

Sinha said India was one of the 10 fastest growing countries. Three features at the meetings are significant. First, India is to play increasingly a global role; second, its economic reforms are recognised and applauded and lastly its contribution to the evolution of international consensus on various issues is recognised.

Replying to a question about the conviction of Harshad Mehta in one of the securities scam cases, the minister reminded that it was the special court that took the decision. The delay would have been longer had the case been handled by normal channels.

Sinha stated that NRIs contributed enthusiastically to last year's bond issue. Also, their clout in moulding public opinion in the US and elsewhere in favour of India was increasing.

The government had recognised the NRIs' contributions but giving dual citizenship bristled with problems of constitutional amendment.

C K Arora/UNI adds:

Sinha also questioned the World Bank's approach in restricting its lending to India under the nuclear-related sanctions and urged the multilateral institutions to at least widen the scope of the exempted category of ''basic human needs'' to allow funding for the country's infrastructural projects.

He said the bank officials and others whom he had met during the Word Bank-International Monetary Fund annual meetings here had agreed with him that ''political considerations are not injected into the programmes and operations of the Bretton Woods institutions.''

He, however, said he was not certain as to how they would react.

Appreciating the sensitivity of the west, particularly the United States, on the nuclear proliferation issue, India has not made lifting of the sanctions as a major issue, preferring a realistic approach of making the best of the worst situation. That explains its plea for widening the definition of the basic human needs category to secure clearance for as many development projects as possible, say observers.

Sinha said he had made a strong pitch for keeping politics out of these institutions and, ''in the immediate future, the widening and, more appropriately defining the concept of basic human needs.''

His suggestion was that the definition should include projects for power generation and road-construction, otherwise falling in the category of infrastructure which is barred from funding as mandated by the sanctions imposed on India following its May 1998 nuclear funds.

In the fiscal 1999 that ended on June 30, the World Bank granted loans to India totalling $ 1.05 billion against $ 2.1 billion the previous year.

According to the US International Trade Commission report, India will get $ 1.95 billion less from the World Bank and $ 1.69 billion from the Asian Development Bank due to the sanctions this year.

The minister, in his speech at the Bank-IMF annual meeting yesterday, voiced his government's protest on the issue in a gruarded way.

''We must consciously strive to protect the integrity and objectivity of these great international economic institutions from the encroachments of the short-term, national, foreign policy expediencies, Sinha observed.

When his attention was drawn to the reports that the Kargil conflict had cost Pakistan $ 1 billion and asked about India's loss in the six-week-long border war, he said the government had some estimates of the cost in the short- and medium-terms. ''But, I am unable to share those figures with you yet,'' he added.

He, however, insisted that the cost was manageable. ''Looking at our overall fiscal situation and fiscal deficit, I don't think Kargil is going to be the culprit which is going to raise the fiscal deficit in a very significant manner. We have other areas to worry about,'' he added.

Sinha claimed that India's nuclear programme was not an expensive venture. ''We don't have to take an additional burden to carry out the programme. It has been going on for long and had been built into the regular Budget.''

Sinha, however, admitted that it would cost money in the long run.

These questions were asked in the context of his assertion that the Bharatiya Janata Party government, if returned to power, would strive for an annual growth of 8 to 9 per cent, unheard of before in India, to eliminate poverty and unemployment in record time of ten years.

The main ingredients in his proposed policy of achieving the higher growth path included higher savings rate, increased foreign participation in the development, capital market reforms and determined efforts to reign in deficit both at the Centre and in states.

In reply to a question about the demand by a section of the Non Resident Indians for a dual citizenship, he said, ''I am not ruling it out but I do not see it happen in near future.'' It involved amendment of the Constitution for which a consensus had to be built in the country before moving ahead, the minister added.

UNI

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