Announcement of Meeting of the India Consortium on June 17, 1974

INTERNATIONAL BANK FOR ~ECONSTRUCTION AND DEVELOPMENT 1818 H STREET. N.W,. WASHINGTON D. C. ·20433 TELEPHON_E: EXECUTIVE 3-8360 June 17, 1974 Subject: Meeting of the India Consortium The following announcement was issued today at the World Bank's European Office in Paris. The Consortium of Governments and Institutions interested in develop- ment assistance to India met in Paris on June 13 and 14, 1974, under the chair- manship of the World Bank. The •eting was attended by representatives of the governments of Austria, Belgium, Canad,a, Denmark, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, the U\~d ted Kingdom and the United States. Also present were representatives of the International Monet-ary- Fund and the United Nations Development Programme. The Government of Switzerland and the Organisation for Ec,onomic Co-operation and Development were represented as observers. The Govemment of India was represented by a delegation led by Mr. M.G. Kaul, Secretary to the Government of India, Department of Economic Affairs, Ministry of Finance. • The meeting reviewed the current economic situation in India and con- sidered foreign- aid requirements for the fiscal year which began April 1, 1974. The meeting noted that India's economic situation is unusually difficult, with the impact of high prices of oil and other essential conaodities and a serious deterioration in India's tenns of trade superimposed on a shortage of food, rapid inflation, and scarcity of many critical goods. The effect of these developments on India's balance of payments and development program was a matter of serious concern to the meeting. The members also took note of the steps the Government had taken to adjust to the situation and stressed the need for further efforts to make effective use of the resources available to it. The Govemment of India stated it would continue its efforts to mobilize resources from sources outside the Consortium. The meeting agreed that, in present conditions, substantial new commitments of aid, most of it in fas~-disbursing form, were required in the current year so as to maintain imports at a minimum adequate level and to avoid a severe cutback in developmen~. To this end, members agreed that, for the year which began April 1, 1974, camnitments of non-project assistance, including free foreign exchange, predominantly in the form of debt relief, of about US$800 million and of projec~ assistance of about US$600 million would be desirable. Most members indicated the contribution they had already made or would be able to make, subject to necessary approval, toward these aid goals, including debt relief. Others expected to be able to do so later in the year antd gave • their support to the_ overall progvam • - 0 -