US curbs will not hit State, says Shivankar

MUMBAI, May 15: The economic sanctions imposed by US and Japan following India's nuclear tests will not have any adverse impact on the forei...

MUMBAI, May 15: The economic sanctions imposed by US and Japan following India’s nuclear tests will not have any adverse impact on the foreign investment proposals and World Bank loans scheduled for Maharashtra, State Finance Minister Mahadevrao Shivankar has assured.

"The World Bank is unlikely to stop financial assistance to the on-going projects and even for new projects as neither USA nor Japan is in a position to halt new proposals since the two countries together have less than 25 per cent stake in the bank’s decision making process," Shivankar told The Indian Express.

Elaborating his contention, the minister said even if the Clinton Administration initiates drastic steps against India at the World Bank level, it is unlikely that developing countries will agree to its directives.

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The alliance government has sought World Bank’s assistance for the rehabilitation of earthquake victims of Latur and Osmanabad districts in Marathwada, Mumbai Urban Transport Project, Maharashtra State ElectricityBoard and and Rs 600 crore for the Koyna Hydro Electric project from a France-based agency, the minister informed.

The rehabilitation work for quake victims is in the last stage and hence there is no question of halting the financial aid. While the MUTP is still under the consideration, the World Bank has already declined to extend a loan for the 1000 MW project of the Maharashtra State Electricity Board.

"The World Bank had put up stringent conditions including complete privatisation of power generation and distribution. These conditions were unacceptable to the alliance government," he said, adding, the hydro electric project is unlikely to be affected.

In addition, the alliance government has sought World Bank aid for construction and strengthening of state highways and for flyovers in the metropolis.

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"All these proposals are in different stages of completion and as such it will be difficult for the World Bank to reject these proposals," he added.At the most, the Clinton Administration canrestrain the power giant Enron Development Corporation from completing its Rs 9000 crore power project at Dabhol in Ratnagiri district.

"Even if this happens, Enron will be the loser since more than 85 per cent of the work has already been completed and the company is all set to generate power. Thus, at this juncture, it will be unfair to ask Enron to abandon its prestigious project," Shivankar added.

Shivankar, who taught economics before joining politics, felt that even if the Clinton administration enforces the sanctions in letter and spirit, India’s economy in general and Maharashtra’s in particular will not be affected. "In due course of time, I feel that the Clinton Administration will have to bow to the pressure of multinational companies and developing countries to withdraw the sanctions. In the recent past, major developing countries and multinationals are concentrating on India and particularly on Maharashtra and this will make it difficult for the US to enforce the sanctions for a long time,"he added.

Commenting on the nuclear tests, Shivankar said they will in fact strengthen the country. "I think following the series of nuclear tests, a fresh wave of patriotism will sweep across the nation," he remarked.