Govt slows down debt pre-payment

8220;The policy of pre-payment initiated by the NDA government seems to have taken a back-seat. The UPA government is not planning to go ahead with the aggressive pre-payment policy and this is part of the present government8217;s foreign policy,8221; an official said.

Meanwhile, ADB has got the approval of the finance ministry to step up lendings to India. At present, the bank provides an assistance of 1.5 bn annually. As per the new plan, the exposure would go up to touch 2 bn annually. Sources added that the actual lending may be lower than the sanctioned amount due to the high interest rates.

The NDA government had earlier adopted an aggressive policy of pre-paying the high-cost debt to the agencies. 8220;It was also feasible with the surging foreign exchange reserve level in the country,8221; the official added.

However, a sum of 1.2 bn will be payed to the Japanese. The finance ministry is in consultation with RBI to decide on when to make the payments. WB has also approached the finance ministry for approval of stepping up lendings to India.