Announcement of India Consortium Meeting on June 9, 1978

FOR. IMMEDIA'TE RELEASE ' . --~ • World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE JUNE 9, ] 978 INDIA CONSORTIUM MEETING The following announcement was issued today at the end of the India Consortium Meeting in Paris. The consortium of governments and institutions interested in develop- ment assistance to India met in Paris on June 8 and 9, 1978, under the chairman- ship of the World Bank. The meeting was attended by representatives of the governments of Austria, Belgium, Canada, Denmark, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, the United Kingdom and the United. States. Also present were representatives of the International Monetary Fund and the United • Nations Development Programme. The Government of Switzerland, the Organization for Economic Cooperation and Development, and the European Economic Community were represented as observers. The Government of India was represented by a delegation led by Dr. Manmohan Singh, Secretary to the Government of India, Department of Economic Affairs, Ministry of Finance. The meeting reviewed the current economic situation in India, discussed the direction of development policy and considered foreign aid requirements for the year which began on April 1, 1978. The members of the consortium noted with satisfaction the continued good ·performance of the Indian economy. In 1977 /78., foodgra in output is 1 i ke, y to have exceeded the previous record of 121 million tons and foodgrain stocks remain ample. The large growth in agricultural production was enough to off- set a lower rate of growth· of industrial production of about 4% to allow • overall economic activity to grow at 6%. There were no major shortages of something of a problem. - 2 - critical supplies, although the availability of electrlc power remained The· balance of payments situation continued to • improve with a large increase In foreign exchange flows, mainly due to increased invisible earnings. The members of the consortium welcomed the basic thrust of India's development pol icy in taking advantage of the currently favorable situation· to stimulate the economy to faster growth ar.d fuller develop- ment. The representatives of the Government of lndfa discussed the inten- tion to further increase development expenditure over the next five years while affecting·a substantial shift of public resources to the rural sector through high priority projects in rural infrastructure such as irrigation and village electrification and in improving the provision of basic govern- ment servic~s such as heal~h and education. Participants especially wel- comed the Government's reiteration of its firm commitment to the family planning program, its integration with the rural health system and the Government's determination not to allow finances to constrain the develop- ment of the program. The meeting recognized the clear need to increase the provision of ·electric power and appreciated the Government's plans • to devote a higher proportion of Government investment to this sector. The members supported the Government's liberalized import policy, noted the recent large increases In imports that have resulted and encouraged the Government to continue with this policy. Members expressed their hope that the. Government of Ind la would continue and enhance Its efforts to encourage private and publ le investment in industry by providing a more favorable climate for production. Members indicated the contribution they had already made or expected to make toward the achievement of lndia''s medium-term objectives. - 0 •