Industry hails US move

Indian corporates, however, were confident that, since a beginning had now been made, it was only a matter of time before the US relented on its opposition to aid to India through multilateral financing agencies.

Immediately, on kerb deals on Dalal Street, stocks surged — while Reliance went up from its overnight Rs 119 to 123, SBI went up from 155 to 163. The Confederation of Indian Industry (CII) also expressed the hope that the easing of sanctions would result in a review of India’s credit rating, currently in the speculative grade.

If theUS does allow the Bank to go ahead with its India-programme, what would get cleared immediately is lending for four projects totalling a little under $1 bn, which were put off followingK the sanctions. These include a $450 mn loan for Powergrid, $130 mn for a renewable energy project by IREDA, a $275 mn Haryana Highway project and a $130 mn diversified agriculture in Uttar Pradesh. While India had projects worth $2.2 bn pending at the time of the Pokharan blast, around $1 bn was cleared since these projects had a large humanitarian aid component.

Apart from various state electricity boards which are in the process of negotiating loans with theWB, National Thermal Power Corporation was working on the second tranche of its 2,000 MW Talcher-II plant in Orissa. What will get cleared immediately, of course, is lending by US banks and financial institutions for projects being executed by large US corporates. Most of these projects, in the power and telecom sector, were held up since the corporates couldn’t tieup financing post sanctions.