NEW DELHI, May 24: The nuclear explosions will cast their shadow on the first budget for the full year to be presented by the BJP-led coalition government, but the direct impact will be marginal, sources in the finance ministry say. Total external funding, including grant assistance, aid material and equipment, shown as capital receipts,, amounts to about Rs 11,000 crore. This works out to be 0.4 per cent of the total capital receipts of Rs 2,64,988 crore as projected in the interim budget .Of the total external assistance, bulk of the aid comes from Japan and the World Bank group. With the World Bank option still open, only the ceasing of Japanese assistance will have to be taken into account by the budget-makers. Japanese assistance and grants have been around Rs 4,000 crore to Rs 5,000 crore a year in the past few years.
External assistance from other quarters, especially from among the consortium members, sources say, was not significant enough to create any problems for the government. A portion ofexternal assistance, it was pointed out, will continue to flow despite the sanction campaign being spearheaded by the US government. Non-consortium members, it is argued, were unlikely to fall in line as far as stoppage of assistance to the country is concerned.However, the finance ministry will have to find out sources for funding the social-sector projects, which shall be directly hit because of drying up of grants from various countries. The task for the budget-makers will anyway not be arduous as total external grant assistance, including aid material and equipment, is around Rs 1000 crore.
On its part, the centre, too, gives loan assistance and grants to foreign governments, which can be reworked to partially offset the impact of sanctions.
The interim budget for 1998-99 has proposed loan and grant assistance of about Rs 830 crore to foreign governments.
The real impact of the ceasing of external assistance, it was stated, would by on servicing of the debts. The net receipts were anyway notsignificant.
The government estimated to receive Rs 9899.35 crore as external loans during 1997-98. This, excluding repayment, will have meant a net receipts of Rs 2434.90 crore. However, as mentioned in the revised estimates, total external loans, including receipts under the revolving funds, worked out to be Rs 8086.94 crore and the net receipts came down to Rs 1201.44 crore.
In the interim budget estimates for 1998-99, the government hoped to get external assistance of Rs 9994.09 crore with net receipts of Rs 2336.5 crore. The total repayments has been estimated at Rs 7657.53 crore.
With the partial ban on external assistance, sources said, the net receipts were likely to be in the negative. The main challenge before the finance ministry in the post-nuclear explosion scene, it was pointed out, was not to manage the budget but to organise foreign exchange for servicing the past debts.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
