Announcement of Thirty-three Million US Dollars Credit for Telecommunications in India on July 6, 1964

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 64/12 Sub;ject: $33 million credit for tele- July 6, 1964 comnrunications in India The International Development Association (IDA), an affiliate of the World Bank, today extended a development credit of $33 million to help India expand its telephone network to serve about 75% more subscribers and carry out other urgently needed im- provements in its telecommunications system. This brings the total of IDA funds made available for this purpose to $75 million including a credit of $42 million in 1962. As in the case of the first credit, the proceeds will be made available to the • I:c.clian Posts and Telegraphs Department (P&T) as part of the Government's capital il.'.7•?:stment in that organization. The foreiGLl exchange from the credit will cover imports of raw materials and components by the three principal Indian manufacturers of telecommunications equipment and by P&T' s own workshops, thus enabling full use to be made of indigenous manufacturing capacity in supplying the needs of the P&T program. Despite improvements already achieved, India is in urgent need of more and better telephone and. other communications facilities to meet the requirements of her developing economy~ For example, there are now only about 1.3 telephones per 1,000 inhabitants, compared With 6 for all of Asia, 50 for the world as a whole a.nd between 300 and 400 for the developed countries. Most of the existing tele- phones are concentrated in a few dEr.Bely populated areas • Long distance calls often are delayed for hours. Telegraph service is slow and uncertain because of an ex- ~ treme shortage o~ modern teleprinter sets and circuits.  - 2 - The backlog of applications for telephone service on which deposits have been paid equals about 5Cf/a of the present number of subscribers and non-priority appli- cants ha.veto wait five years or·more. Since, in these circumstances; many would- • be subscribers do not apply, the actual demand is much larger than the numbers on the waiting liste ~1e P&T's expansion program under India's Third Five-Year Plan now contemplates the e,-,.1)enditure of about $350 million through Mar.ch 1966, the target having been raised from an original figure of $282.5 million. The number of' telephone subscriber sets is to be increased from 4€,o,ooo to 810,000. About 3,700 miles of coaxial cable will be added to the 295 miles that existed when the program began three years ago. In addition, 1.,400 miles of microwave radio links will be installed. Nearly 1,700 miles of open telephone lines along railways that are being electrified will be re- • placed by shielded underground cables. Teleprinters are being installed to step up the speed of telegraph transmission on trunk lines to the international rate of 66 words per minute rather than 25 words with existing manual Morse code equipment. Many other improvements are, being carried out, affecting public teleptone and tele- graph facilities and railway communications, which also are a responsibility of the P&T. The expansion program is being executed by the Telecommunications Branch of the P&T. The Branch has considerable earnings and expects to provide from its own funds a major portion of the estimated $237 million equivaJ..ent required in local currency, The credit is for a term of 50 yea.rs. Repayment of the principal w:i.11 begin on January 15, 1975 after a 10-year period of grace. Thereafter 1% will be repay- able annually for 10 years and 'J'/o will be repayable annually for the final 30 years. The credit is free of interest, but a service charge of 3/4 of 1% per annum on the • amount withdrawn and outstanding will be made to meet IDA's administrative costs.