India to write off $200 mn from credit to Bangladesh

India had announced a $ 1 billion Line of Credit to Bangladesh,the largest it has offered to any country,in 2010.

Finance Minister Pranab Mukherjee said on Sunday that New Delhi had decided to consider $ 200 million of that amount as a grant rather than credit,and Bangladesh can utilise the fund for its priority projects.

India will treat the amount as grant,not credit, Mukherjee told a group of senior editors as he wound up a 20-hour trip to Dhaka. This $ 200 million will be utilised for projects that Bangladesh prioritises, he said.

The rest $ 800 million will bear a 1 per cent interest,instead of previously announced 1.75 per cent,according to bdnews24.

Mukherjee also cited ground realities of coalition politics as the reason for Indias failure to seal the Teesta water sharing deal during Prime Minister Manmohan Singhs visit to Bangladesh last year.

In a democracy such as ours… this process often becomes time consuming, Mukherjee said.

There are certain issues that need to be resolved, he said while referring to the Teesta issue as a sensitive one.

Earlier,during his meeting with Premier Sheikh Hasina,Mukherjee vowed to implement all agreements signed with the country during PM Manmohan Singhs visit last year.

Although it was late,(all) these agreements (signed with Bangladesh) will be materialised soon, he was quoted as telling Hasina by a Prime Ministers Office spokesperson.