Announcement of Seventy-Eight Million Dollars Credit for the Expansion of Telecommunications Facilities in India on April 29, 1971

,. • INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON D. C. 20433 TELt::PHONE: EXECUTIVE 3-6360 IDA Press Release No. 71/13 Subject: $78.0 million credit for the April 29, 1971 expansion of telecommunications facilities in India India's telecommunications facilities will be further expanded and modernized with the help of a credit of $78.0 million from the International Development Association (IDA), an affiliate of the World Bank. Improved conmunications will benefit all sectors of economic activity -- industry, trade, agriculture and governmemt. India's large size and the wide dispersal of industrial and agricultural • activities in the country generate enormous movement of goods from the producing tc, the marketing centers. This imposes heavy demands on tele- connnunications facilitiis to assist the flow of information within the producing areas and between these and the principal market outlets of Bombay, Calcutta, Delhi, Madras and Nagpur. During the last decade, telecommunications facilities in India have been greatly expanded partly with the assistance of the World Bank and IDA. Since 1961, the number of connected subscriber lines has been increased from 330,000 to 950,000, a high capacity co-axial cable trunk network interconnecting the principal cities of Delhi, Calcutta, Bombay, Madras, Coimbatore and places in between has been constructed, JLong distance sub- scriber dialing facility has been provided to handle about 30% of all long • i~ ' distance calls, and a telex network installed. /more v Ii  IDA P.R. No. 71/13 - India - teleco~.mWlications - 2 - Despite this expansion, telephone, telex administrative demand. ~~d telegraph services are quite inadequate to meet the rapidly growing commercial, industrial and With 950,000 telephone connections, telephone • density in India is still about 2 telephones per 1,000 people, compared with 18 per 1,000 in Malaysia and 9 per 1,000 in Iran. The IDA credit of $78.0 million will finance the foreign exchange costs of the Indian Posts and Telegraphs Department's (P&T) program to continue the expansion of telecommunications services in the remaining two years of India's Fourth Five-Year Plan (April 1969 - March 1974). The total capital expenditure during the five-year period is estimated at the equivalent of $652 mi.Ilion, of which $168 million will be required in foreign exchange. Today's IDA credit brings the total of Bank and IDA assistance to India's telecommtn1ications development to $208 million. P&T's Five-Year Program includes the expansion of automatic and manual local telephone exchanges, together with the necessary cables and subscriber equipment to connect an additional 540,000 telephone subscribers. Long • distance facilities will be greatly improved and the telex network and public telegraphs services will be expanded. About a third of the foreign exchange provided by IDA will be used to import microwave equipment, cable, and local exchange systems and the balance will finance imported materials and components for local manufacture of switching and transmission equipment, telephones, teleprinters and cable. Equipment financed by IDA will be purchased on the basis of international competitive bidding. The local costs are being met by the P&T (Ministry of Information, Broadcasting and Commtn1ications, New Delhi, India) and the Government of India. The IDA credit will be for a term of 50 years, including a 10-year grace period; it will be interest free, but a service charge of 3/4 of 1% will be made to cover IDA's administrative costs. • - 0 -