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Nirupam signals shift for aid

Calcutta, Sept. 22: The state government today said it has appealed to the British government for “plan assistance funds” to finance schemes in the social sector.

The statement by commerce and industries minister Nirupam Sen suggests a shift in the cash-starved government’s stand on its choice of aid donors.

Under plan assistance — unlike grants which are meant for specific projects — the recipient government can decide how and where the money is spent. But since the risk of misuse is inherent in such allocations, donor agencies usually set conditions — a sore point with some governments which view them as unwarranted interference in governance.

The Bengal government, too, has reservations about such donors, notably the World Bank, and has been insisting that it would not accept conditions tied to loans.

But today’s announcement by Sen, who has just returned from the UK, carried an indication of the government’s willingness to explore the possibility of aid from agencies such as the World Bank.

Sen said the British government’s Department for International Development (DFID), which gives only grants, has told him that the funds could be offered on the condition that Bengal take a loan from a multilateral agency like the World Bank or the Asian Development Bank.

The department is already providing similar assistance to Andhra Pradesh and Orissa.

“The DFID told us that they give plan assistance only with some lending institutions like the World Bank. Let us discuss the matter further with the DFID. If it finally agrees to provide grants to us, we can approach the Planning Commission and the department of economic affairs,” he said.

The government is working on the modalities to see “if their terms and conditions match ours”, he added.

“The Left Front government is open to changes. We are changing everyday,” Sen said. He, however, sought to dispel doubts that foreign funds in plan assistance might mean involvement of the foreign agency concerned in the state’s budgetary plans.

According to a senior industries department official, the state government had just put in its proposal and detailed discussions with the DFID are yet to be held.

“We know that Orissa and Andhra Pradesh are taking funds from the DFID as plan assistance. However, we don’t know their modalities. We will also have to find out how this grant fits in with the Planning Commission,” the official said.

The minister said the DFID was positive about giving grants for a second phase of restructuring public sector enterprises in Bengal. It is already providing a grant to the government for offering early retirement schemes to employees of sick public sector enterprises.

Sen said British officials would visit Calcutta in December to finalise a project to develop the city’s riverfront.

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