The Hindu : Andhra Pradesh News : Rosaiah rules out toeing Naidu line on loans

Online edition of India's National Newspaper
Tuesday, May 24, 2005

Andhra Pradesh

Andhra Pradesh

Rosaiah rules out toeing Naidu line on loans

Special Correspondent

The Finance Minister has made it clear that World Bank aid, if at all accepted, will be "on State's terms"

K. Rosaiah

HYDERABAD: The Finance Minister, K. Rosaiah, has denied having said anywhere that the Rajasekhara Reddy Government would follow the path of N. Chandrababu Naidu in respect of availing loans from the World Bank.

Addressing a press conference here on Monday, Mr. Rosaiah said his recent statement at Rajahmundry that the Government would continue all earlier loans was misinterpreted to mean that this Government would succumb to the conditions of the World Bank.

Mr. Rosaiah said the Congress Government had neither taken any loan from the bank nor accepted any conditions while proposing to seek Rs. 4,580 crores. However, the State had received Rs. 10,000 crores as a "continuity and follow-up" of ongoing schemes for which the erstwhile TD Government had signed the agreements, he said.

The Minister derided the attempts by TDP leaders to create an impression that the present Government had become a slave of the World Bank. The Congress party was clear in its stand that it should first make efforts to mobilise resources internally and tap the World Bank only if necessary for the sake of development.

He recalled how the Channa Reddy Government secured a loan of Rs. 713 crores from the World Bank to repair the drainage system in the delta region in the early 1990s which helped in boosting paddy production.

Assets worth Rs 1.02 were created for every rupee of loan taken by 1994 when the Congress left office but the ratio dwindled to Re 1 : 0.43 paise later with the Telugu Desam regime using the loans unproductively as pointed out by the CAG report.

Clarifies on ordinance

Mr. Rosaiah denied that the proposed ordinance on fiscal discipline ordinance was drafted at the World Bank's instance to get the Structural Readustment Loan III (Rs. 1,600 crores) but in line with the guidelines of the 12th Finance Commission to restrict loans to 3 per cent of the GSDP and bring down the revenue deficit to zero.

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