Govt not following World Bank's diktats: Rosaiah

Refuting Opposition charges that the state government is following World Bank's diktats, Andhra Pradesh finance minister Konijeti Rosaiah today said that neither his government has entered into any new loan agreements with the multilateral funding agency on any compromising conditionality nor the fiscal reforms pursued by them have anything to do with it.

He also clarified that the ruling Congress party or its leaders, when in the Opposition, never opposed to taking loans from the World Bank.

"Whatever loans we received in the last one year, including the proposed structural adjustment loan (SAL3) and the conditionalities thereof are part of the old agreements signed with the World Bank by the previous government. The present government is only honouring these agreements as they are meant for a certain time period," Rosaiah explained.

Reaffirming the government's commitment on implementing fiscal reforms in the state, he pointed out that measures such as bringing about Fiscal Responsibility Act, eliminating the revenue deficit by 2008 and bringing down the fiscal deficit to 3 per cent of GSDP level by 2009-10, are not any directions from the World Bank but also recommendations of the 12th Finance Commission, which are applicable to all the states.

Brushing aside the charges of double standards of the ruling party leaders on the issue of external aid, the minister sought to differentiate Congress government's policies from that of the Telugu Desam party which was in power for nine long years under the leadership of N Chandrababu Naidu.

"While we borrowed money to invest in productive purposes and built assets now and in the past, TDP did otherwise. It is clear from the fact that the liabilities and assets ratio of the state which was 1: 1.02 on December 12, 1994, when Congress lost power has come down to 1:0.43 under the rule of Naidu. Now, we want to revert the trend and build the assets as in the past stints," Rosaiah claimed.

While admitting that the state government has borrowed money to the tune of Rs 10,000 crore during the year 2004-05, Rosaiah said that the three new proposals, including Rs 1,600 crore state highway project, and the Rs 1,380 crore urban reforms project planned with the World Bank' assistance are yet to reach the agreement stage.

According to him, the Government of India is expected to process the state government's application on state highway project this month.

A Rs 700 crore health project funded by the Department for International Development and meant for providing basic infrastructure, is in the final stages. The entire money will be provided as a grant to the state government, the minister said.