2nd June, 2003
Ministry of Finance & Company Affairs



The Union Finance Ministry has decided to discontinue receiving aid from certain bilateral partners with smaller assistance packages so that their resources can be transferred to other developing countries in greater need of Official Development Assistance. In India, the aid would be directed towards NGOs working in specified areas. India will not accept any tied aid in future.

Accordingly, it has been decided to discontinue taking aid from bilateral-partners other than Japan, UK, Germany, USA, EC and the Russian Federation. This is as a follow up of the Finance Ministerís Budget announcements. While phasing out such aid, the existing programmes which are ongoing and approved out of grants by donor countries will , however, continue and reach their completion.

Any further grants from these bilateral-partners would be directed towards institutions, universities, NGOs etc. and not to the central or state governments. The Department of Economic Affairs would hold annual consultations with these bilaterals, so that the list of institutions and NGOs, which the donors propose to assist, and the purpose for funding are made available. Other than this, the donors will work directly with the institutions.

Indiaís outstanding bilateral debt in respect of twenty countries as on 31.3.2003 stands at Rs.66, 316.07 crores. In respect of repayment of bilateral credit, prepayment will be done in respect of all outstanding bilateral debts except outstandings to Japan, Germany, USA and France. The outstandings from these four are to the tune of Rs.58825.30 crores. The balance amount due to fourteen countries is Rs. 7490.77 crores. These include Netherlands, Russian Federation, Canada, Sweden, Italy, Denmark, Belgium, Austria, Kuwait, Spain, Switzerland, Saudi Arabia, Australia, Czech & Slovak. There are no outstanding bilateral debt liabilities to UK and Norway.

With this step, India would now provide relief to a large number of its bilateral partners with smaller assistance packages, so that their resources can be transferred to specified NGOs in greater need of official development assistance.

It would be recollected that in his Budget speech, the Finance Minister had said that a stage has come in our development where we are required to review our dependence on external donors.


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