FOR IMMEDIATE RELEASE
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~orldBank
1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234
BANK PRESS RELEASE June 10, 1981
INDIA CONSORTIUM
The following announcement was issued by The World Bank's European Office
in Paris.
The consortium of governments and in$titutions interested in development
assistance to India met in Paris on June 9 and 10, 1981 under the Chairmanship of The
World Bank. The meeting was attended by representatives of the Governments of
Austria, Belgium, Canada, Denmark, France, Germany, Italy, Japan, The Netherlands,
Norway, Sweden, the United Kingdom and the United States. Also represented were the
International Monetary Fund, the United Nations DevelolJllent Programne, the Develop-
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ment Association Committee of the OECD, the Commission of the European Communities,
the Government of Switzerland, the International Fund for Agricultural Development,
and the Asian Development Bank.
The Government of India was represented by a delegation led by Mr. R.N.
Ma 1hotra, Secretary to the Govermient of India, l;)epartment of Economic Affairs,
Ministry of Finance.
The meeting reviewed the current economic situation in India, discussed
the direction of developnent policy and considered foreign aid requirements for the
fiscal year which began on April 1, 1981.
The members of the consortium welcomed the recovery of the Indian economy
during 1980/81 from the drought-induced decline in production during 1979/80. The
return of foodgrain production to record levels and the government's management of
the foodgrain economy were particularly canmended. Considerable concern was expres-
sed, however, over the marked deterioration in the balance of payments during the
past year due to the sharply increased oil import bill and a disadvantageous shift in
the terms of trade. These developments, combined with strains on infrastructure,
particularly in the power and transportation sectors, were viewed by members of the
consortium as posing serious problems for the Indian economy which were likely to
persist for some time. Considerable concern was also expressed at the result of the
recent census which suggested that the population growth rate had not slowed to the
extent previously estimated.
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The representatives of the Government of India out 1 i ned the measures
a 1ready underway and p 1anned to enab 1e the economy to adjust to these emerging
strains. Referring particularly to the recently launched Sixth Five Vear Plan, they
outlined measures to enhance the growth of exports, to moderate the growth of imports
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through increased production of key products which substitute for imports such as --
fertilizers, cement, steel, and edible oils, to expand developnent of danestic energy ·
sources, and to consolidate and spread the gains achieved in agriculture. The
representatives also noted that in addition to its emphasis on these immediate needs
to adjust the economy to external strains, the plan included substantial provisions
for social services and programs specifically directed at the problems of India's
poor. They also shared the concern expressed by many consortium members over the
implications of the recent census results and noted the improvements and expansion of
the fami 1y planning program incorporated in the Sixth Plan. The members of the
consortium we1caned the Government's efforts to deal with these problems in a
comprehensive manner.
The meeting endorsed India's need for incresed flows of aid and support in
its efforts to resolve its balance of pa',fflents problems in the mediun term.
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