India to write off $200 mn credit to Bangladesh
7 May 2012 7:48 AM IST
India on Sunday announced that it will write off $200 million of the $1 billion line of credit offered to Bangladesh, and promised to implement all bilateral agreements, including those that have witnessed delays.
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 India 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 said.
‘This $200 million will be utilised for projects that Bangladesh prioritises,’ he said.
The rest $800 million will bear a one per cent interest, instead of previously announced 1.75 per cent.
Mukherjee also cited ‘ground realities’ of coalition politics as the reason for India’s failure to seal the Teesta water sharing deal during Prime Minister Manmohan Singh’s visit to Bangladesh last year.
‘In a democracy such as ours... this process often becomes time consuming,’ he said. ‘There are certain issues that need to be resolved.’
Earlier, during his meeting with Premier Sheikh Hasina, Mukherjee vowed to implement all agreements signed with the country during Manmohan Singh’s visit last year.
India and Bangladesh could not sign a much talked about water sharing deal on Teesta river last year as east Indian state West Bengal Chief Minister Mamata Banerjee’s last minute opposition to the deal scuttled what would have been a landmark agreement.
While the Teesta episode did not go down well with Bangladesh, there were also allegations on delays in delivering on the promised projects. Mukherjee defended the work done so far and pointed out that five contracts worth $834 million had already been signed.
Mukherjee arrived in Dhaka Saturday evening on a two-day tour to join the 150th birth anniversary celebrations of Rabindranath Tagore.
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 India 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 said.
‘This $200 million will be utilised for projects that Bangladesh prioritises,’ he said.
The rest $800 million will bear a one per cent interest, instead of previously announced 1.75 per cent.
Mukherjee also cited ‘ground realities’ of coalition politics as the reason for India’s failure to seal the Teesta water sharing deal during Prime Minister Manmohan Singh’s visit to Bangladesh last year.
‘In a democracy such as ours... this process often becomes time consuming,’ he said. ‘There are certain issues that need to be resolved.’
Earlier, during his meeting with Premier Sheikh Hasina, Mukherjee vowed to implement all agreements signed with the country during Manmohan Singh’s visit last year.
India and Bangladesh could not sign a much talked about water sharing deal on Teesta river last year as east Indian state West Bengal Chief Minister Mamata Banerjee’s last minute opposition to the deal scuttled what would have been a landmark agreement.
While the Teesta episode did not go down well with Bangladesh, there were also allegations on delays in delivering on the promised projects. Mukherjee defended the work done so far and pointed out that five contracts worth $834 million had already been signed.
Mukherjee arrived in Dhaka Saturday evening on a two-day tour to join the 150th birth anniversary celebrations of Rabindranath Tagore.
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