Announcement of India Consortium Meeting held on June 19, 1985

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W. , Washington, D.C. 20433 , U.S.A . l :n;., ll If' L •-:i•1--.ii.ny i:tr'"' JOI, T Ll JU 21 1985 •. y BANK NEWS RELEASE .,, __ .r._1;r ' 9'<t!latct: Pas tor B. Sison June 19, 1985 (202) 477-3573 INDIA CONSORTIUM MEETING The following announcement was issued on June 19 at the end of India Consortium Meeting in Paris. 1. A consortium of Governments and institutions interested in development assistance to India met in Paris on June 18 and 19, 1985, under the chairmanship of the World Bank. The meeting was attended by representatives from the Governments of Austria, Belgium, Denmark, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, the United Kingdom and the United States. Also represented at the meeting were the Asian Development Bank, the Commission of European Communities, the Development Assistance Committee of OECD, the International Monetary Fund, the United Nations Development Programme and the Government of Switzerland. 2. The Government of India was represented by a delegation led by Mr. S. Venkitaramanan, Finance Secretary to the Government of India. 3. The meeting reviewed India's recent progress in economic development, major policy issues to be addressed in the Seventh Five-Year Development Plan, and the country's aid requirements for the forthcoming year. The meeting paid tribute to the quality of India's economic performance and management which has been noteworthy, not only in terms of the acceleration of economic growth which has occurred, but equally important in terms of the policy changes which have been initiated for imparting dynamism to the industrial structure. The meeting noted that during fiscal year 1984/85, the GDP expanded by 4.2% and that this significantly exceeded the long-term trend growth of 3.5% per annum. The balance of payments position remained stable despite a modest 4.3% volume growth in exports. In particular, the meeting noted India's success in containing inflationary pressures and assuring prudent management of the balance of payments. 4. The representatives of the Government of India indicated that the Seventh Five-Year Plan, now in its final stages of preparation, is expected to aim at an average annual GDP growth of 5%. The Plan will continue with the structural adjustment efforts of the Sixth Five-Year Plan and stress, in particular, the need for higher productivity of capital investment, expanded production of food and greater employment opportunities. A major objective of economic policy will be to accelerate industrial development and export growth. The representative of the Government of India emphasized that while the financing of investment of the Seventh Plan would rely primarily on domestic savings, external assistance on highly concessional terms would also be important. Although India has increased its reliance on commercial loans, it would continue to borrow only at levels which would be consistent with prudent debt management.  -2- 5. Consortium members noted the smooth functioning of the political process in India during a year of major transitions and the continued progress in economic growth and development which was being achieved. They commended the Government, in particular, for the policy measures to accelerate earlier initiatives for trade and industrial liberalization. The road ahead, however, would continue to be difficult, as foreign exchange resources remained scarce, and domestic savings were already at a high level. Thus, during the Seventh Plan period, policies that support accelerated export growth and more efficient utilizatin of resources, would need to be strengthened further. 6. Consortium members were encouraged by the emphasis being given by the Government to the poverty alleviation programs and the related areas of social forestry, education, nutrition and family planning. The Seventh Five-Year Plan will aim to further strenghen India's anti-poverty programs and ensure that the benefits of progress and development are equitably distributed. The meeting noted India's efforts to balance the resource requirements for economic growth with those for alleviating poverty through poverty alleviation programs. Finally, the meeting noted that concessional assistsance had provided considerable support to India in attaining its development objectives, and endorsed India's strong case for continued significant concessional assistance during the Seventh Plan period. 039-01 0280 Duces, Ms. Brisitte IMF 530