Announcement of One Hundred Fifty Million US Dollars Credit for Industrial Imports in India on May 30, 1974

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W .. WASHINGTON 0. C. 20433 TELEPHONE EXECUTIVE 3-6360 IDA Press Re least! No. 7 4/27 Subject: $150 million Credit for May 30, 1974 Industrial Imports in India A credit of $150 million from the Interna1::ional Development Association (IDA), an affiliate of the World Bank, will enable 800 medium- and large-scale enterprises in selected priority industries in India to ma~ntain and expand production. The credit will meet part of the industries' foreign exchang. requirements of about $550 million during 1974/75 for imports of raw materials, components and spare parts. During the late 195_0's and the first half of the 1960's India's industrial growth was quite rapid and averaged about 9% per annum. As a result, India now has a highly diversified industrial structure capable of producing a wide range of • capital goods and intermediates. Since 1966, however, India's industrial growth has slackened averag:Lng less than 4% a year. Among the factors contributing to the inadequate rate C'f growth has been the under-utilization of capacity caused by the sh(1rtage of imp01 ted raw materials and components. The IDA credit of $150 million will enable the Government to finance additional imports. The industries selected are tractors and power tillers, fertilizers, pesticides, electrical equiptrent, aluminium smelting, commeTcial vehicles, automotive ancillaries, cast iron spun pipes, machine tools, heavy construction equipment and spare parts for heavy construction equipment. The IDA credit will be extended to the Govi~rnment of India for a term of 50 years, including 10 years of grace. It will be interest-free, but will carry a service ~harge of 3/4 of 1% to cover IDA's administratiire costs . • Note: - 0 - Money figures are expressed in U.S. dollar equivalents.