Govt Draws Up Blueprint To Counter Us Sanctions

The atal bihari vajpayee government, under the aegis of principal secretary Brajesh Mishra, yesterday drew up a tentative blueprint to cope with any harsh sanctions being imposed by the United States.

While officials were tight-lipped about details about the blueprint, sources said it incorporates various scenarios.

This includes a situation where foreign inflows into India would complete dry-up and the country may have to adopt tough economic measures _ along the lines of that effected in Pakistan _ after taking the people into confidence.

"We would like to hear the final word and then react. Yes, we have been engaged in discussions on the subject," said a senior government official.

The principal secretary yesterday held a three-hour meeting with senior Central government officials in this regard.

The meeting assessed that in the eventual fall-out of tough sanctions and the country having to forfeit bilateral and multilateral aid, the threatened inflows would add up to about $3 billion.

The government anticipates that the $540 million Andhra Pradesh loan, slated to come up before the World Bank board on June 25, would be deferred. In other words, over $2 billion in loans set to be approved by the Bank have been deferred in the wake of the Pokhran nuclear tests.

In fact, the Parliamentary Standing Committee on Finance which was to discuss the impact of sanctions on the economy has deferred its discussions till June 29-30.

"Our problem so far has been that the United States has never spelt out what sanctions would mean. Hence, we have not quantified it in the budget," says an official.