Southern States - Andhra Pradesh   

CPI(M)-TDP wordy duel on World Bank loan

By Our Special Correspondent

HYDEABAD Dec. 9. The war of words between the CPI(M) and the Telugu Desam over World Bank funding continued with the Marxist party reiterating that the caretaker Government was trying to "secretly" enter into an agreement with the World Bank for a fresh loan of Rs.1,100 crores and utilise the amount for doling out sops to the people in view of the ensuing Assembly elections.

Addressing a press conference here on Tuesday, the CPI(M)'s State secertary, B.V. Raghavulu, sought to nail the claim made by the TDP leaders, C. Ramachandraiah and K. Ram Mohan Rao, that the Government was not seeking a fresh loan and that Bank was only releasing the second tranche of the Andhra Pradesh Economic Restructuring Loan (APERL). Why did the Principal Finance Secretary, S.K. Arora, submit a report to the World Bank on March 15, 2003, that the agreement was fully implemented if APERL still continued, he asked. Besides, why did the World Bank fix the Board meeting on December 16, 2003, to approve the loan if it was not a fresh one, he questioned.

He said the agreement between the State Government and the World Bank itself stated that "APERL is a single - tranche loan/credit, based on upfront actions to support Andhra Pradesh's reform program".

He said that the caretaker Government had no right to enter into an agreement with the World Bank and said that a delegation of the CPI(M) leaders would meet the State Governor, Surjit Singh Barnala, and seek his intervention in this regard. An appointment with the Governor was sought for December 11.

He described as "bogus argument", the ruling party's claim that the Government was borrowing loans at six per cent interest from the World Bank and said that any loan amount taken from the World Bank was given by the Central Government in the format of 70 per cent (loan) and 30 per cent (grant). While the Central Government would charge an interest of 13 per cent from the State Government for the loan, it would, in turn, be paying an interest rate up to 24 per cent to the World Bank depending on the foreign exchange fluctuation of the rupee.

He also refuted the claim that CPI(M) had not invited the TDP leaders to the recent seminar organised by it on World Bank funding and said that a letter inviting them was written on December 3. He urged the TDP to organise another seminar and invite all the parties for a discussion on the issue. He also released to the press a letter written in this regard to the TDP MPs, C. Ramachandraiah and K. Ram Mohan Rao.

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