The states were removed to avoid a possible Chinese objection to the loan which aims to strengthen power infrastructure
Govt drops Arunachal, Sikkim from proposed World Bank loan - Livemint
New Delhi: The Indian government has dropped Arunachal Pradesh and Sikkim from a World Bank loan proposal to avoid running into Chinese objections over multilateral financial aid to projects in the border areas, according to two government officials.
The initial proposal for a Rs.11,000 crore loan to strengthen electricity transmission and distribution in the northeastern region covered Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim. After excluding the two states, the loan amount is around Rs.8,115 crore. The projects in Arunachal Pradesh and Sikkim are to be financed by the government.
To be sure, the proposal is still in the works and is yet to be formally presented to the World Bank. The government is seeking the loan only for six northeastern states from the World Bank for the comprehensive scheme for strengthening transmission and distribution in the north eastern region. Arunachal Pradesh and Sikkim, which were earlier included will be funded through a separate window under the NLCPR (non-lapsable central pool of resources), said an Indian government official, requesting anonymity due to the sensitive nature of the issue.
It was due to the China factor that the two states were dropped, but it wasnt the case that the government proposed and World Bank rejected funding for them, said the official. Even for the six states, funding has still not been approved and the finance ministry is finding ways to work around raising the headroom for GoI (government of India) borrowing from World Bank for this.
Ties between the neighbours have oscillated between conflict and a tense bonhomie over the past few decades. China claims 90,000 sq. km of Indian territory in Arunachal Pradesh and occupies around 38,000 sq. km in Jammu and Kashmir, which India claims is its own.
While Arunachal Pradesh and Sikkim were part of the original plan, they were later dropped and the projects will now be funded by the government of India, a senior government official said, declining to be named.
Finance ministry officials said they were not aware of the matter.
Strategic analysts were critical of Indias strategy, describing it as being timid.
Whatever be the concerns behind not seeking assistance for Sikkim and Arunachal Pradesh, be it anxiety about China or keeping areas contiguous to China underdeveloped, the logic does not hold, said C. Uday Bhaskar, distinguished fellow at the New Delhi-based Society for Policy Studies. India cannot appear to be so timid if it is staking a claim to these states. If you are staking a claim then you have to treat them as any other state and address economic development, of which power is a primary requirement, said Bhaskar.
A row broke out in 2009 over a $2.9 billion Asian Development Bank (ADB) loan with China protesting the inclusion of a water management project in Arunachal in the lenders country assistance strategy for India.
The two states were earlier a part of the proposed loan which is in the works, said another government official, who also didnt wish to be identified. He tried to play down the China angle and said, It is well known that World Bank doesnt give loan to the border areas.
The 2009 row forced ADB to introduce a disclaimer in its project documents which, while stating that it has no position on territorial disputes, effectively discourages the applicant from pushing for assistance for projects in disputed areas.
While the detailed project report (DPR) for the projects in Arunachal and Sikkim are (still) being prepared, the DPR for projects in the six states have been prepared, said a third person aware of the development and requesting anonymity.
According to the proposed funding for the projects in the six states, a 5% contribution will be made by the state government, 10% by the Union government and the remaining 85% as loan from the World Bank. The project will be implemented in three phases, with the first phase of investment at about Rs.3,000 crore.
Remya Nair contributed to the story.
Govt drops Arunachal, Sikkim from proposed World Bank loan - Livemint
New Delhi: The Indian government has dropped Arunachal Pradesh and Sikkim from a World Bank loan proposal to avoid running into Chinese objections over multilateral financial aid to projects in the border areas, according to two government officials.
The initial proposal for a Rs.11,000 crore loan to strengthen electricity transmission and distribution in the northeastern region covered Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim. After excluding the two states, the loan amount is around Rs.8,115 crore. The projects in Arunachal Pradesh and Sikkim are to be financed by the government.
To be sure, the proposal is still in the works and is yet to be formally presented to the World Bank. The government is seeking the loan only for six northeastern states from the World Bank for the comprehensive scheme for strengthening transmission and distribution in the north eastern region. Arunachal Pradesh and Sikkim, which were earlier included will be funded through a separate window under the NLCPR (non-lapsable central pool of resources), said an Indian government official, requesting anonymity due to the sensitive nature of the issue.
It was due to the China factor that the two states were dropped, but it wasnt the case that the government proposed and World Bank rejected funding for them, said the official. Even for the six states, funding has still not been approved and the finance ministry is finding ways to work around raising the headroom for GoI (government of India) borrowing from World Bank for this.
Ties between the neighbours have oscillated between conflict and a tense bonhomie over the past few decades. China claims 90,000 sq. km of Indian territory in Arunachal Pradesh and occupies around 38,000 sq. km in Jammu and Kashmir, which India claims is its own.
While Arunachal Pradesh and Sikkim were part of the original plan, they were later dropped and the projects will now be funded by the government of India, a senior government official said, declining to be named.
Finance ministry officials said they were not aware of the matter.
Strategic analysts were critical of Indias strategy, describing it as being timid.
Whatever be the concerns behind not seeking assistance for Sikkim and Arunachal Pradesh, be it anxiety about China or keeping areas contiguous to China underdeveloped, the logic does not hold, said C. Uday Bhaskar, distinguished fellow at the New Delhi-based Society for Policy Studies. India cannot appear to be so timid if it is staking a claim to these states. If you are staking a claim then you have to treat them as any other state and address economic development, of which power is a primary requirement, said Bhaskar.
A row broke out in 2009 over a $2.9 billion Asian Development Bank (ADB) loan with China protesting the inclusion of a water management project in Arunachal in the lenders country assistance strategy for India.
The two states were earlier a part of the proposed loan which is in the works, said another government official, who also didnt wish to be identified. He tried to play down the China angle and said, It is well known that World Bank doesnt give loan to the border areas.
The 2009 row forced ADB to introduce a disclaimer in its project documents which, while stating that it has no position on territorial disputes, effectively discourages the applicant from pushing for assistance for projects in disputed areas.
While the detailed project report (DPR) for the projects in Arunachal and Sikkim are (still) being prepared, the DPR for projects in the six states have been prepared, said a third person aware of the development and requesting anonymity.
According to the proposed funding for the projects in the six states, a 5% contribution will be made by the state government, 10% by the Union government and the remaining 85% as loan from the World Bank. The project will be implemented in three phases, with the first phase of investment at about Rs.3,000 crore.
Remya Nair contributed to the story.
