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May 27, 1998

The World Bank has postponed an 865 million dollar loan package to India as an immediate reaction to the Pokhran Nuclear Tests. The postponed loan package includes three World Bank loans and a ten million dollar loan from the International Finance Corporation. The World Bank package comprises 130 million dollars package for a renewable energy programme, a 450 million dollar loan to develop a power-grid and a 275 million dollar loan to improve the highway network in Haryana. Two of these loans were to be voted at the Board of Governors meeting in Washington on May 26. But sources said several executive Directors went by the US request and wanted more time to consider the matter. The actual impact of the postponement on India would be about 50 to 100 million dollars a year. The World Bank has not specified when these loans would again be put up before the board.

On Monday, the European Union had also criticised the nuclear tests and said it would attempt to delay the World Bank loans to New Delhi. India has reacted strongly to the European Union's condemnation. A press release issued by the external affairs ministry yesterday said, the country's policies are determined by its national interests and any suggestions that India should conform to an international regime or face economic consequences are unacceptable.


Canada says India has damaged its chances of getting a permanent seat on the UN Security Council by conducting the nuclear tests. The Canadian Foreign Minister, Mr. Lloyd Axworthy told a Parliamentary Committee in Ottawa that the International Community has to show its rejection of the acquisition of nuclear weapons by a country for the purpose of elevating its status.
The fallout of the Pokhran tests will dominate the proceedings of the two month long budget session of Parliament beginning on May 27. Prime Minister Atal Behari Vajpayee will make a statement on the issue in the Lok Sabha immediately after question hour. Both the Houses will debate the statement for two days and the Prime Minister will give his reply tomorrow. The debate will be telecast live on Doordarshan. Among the important legislations likely to figure during the session are the Lokpal Bill, the Electricity Bill to replace the recent Ordinance and the Bill for the creation of new States of Chhatisgarh, Vananchal and Uttaranchal. The election to the post of the Deputy Speaker of the Lok Sabha is also scheduled during the session. The Railway Budget will be presented on Friday and will be preceded by a status paper on the Railways. Tomorrow, the economic survey for 1997 will be presented while the General Budget for 1998-99 is to be presented by the Finance Minister, Mr. Yashwant Sinha on Monday. All India Radio correspondent says, though the Centre has tried to convince the opposition about the compulsions for the nuclear tests, political parties particularly the Congress and the left will adopt an aggressive posture as they fear that the BJP will try to take political mileage out of the issue.

The Cabinet on 26 May approved an amendment to the Explosives Act providing for stringent punishment including the death sentence for possessing sophisticated explosives. This amendment will also be brought in the budget session.


The Cabinet Committee on Foreign Investments has cleared six major projects amounting to fifteen thousand crore rupees. An official spokesman said in New Delhi that the Committee approved the expansion of Mangalore refineries to nine million tonnes and setting up of an Oil Refinery at Vadinar in Gujrat. Among the other projects approved, is the 6,300 crore rupee Cuddalore Thermal Power Plant in Tamil Nadu, which will use imported coal from Indonesia, Malaysia and Australia as fuel.

The Jammu and Kashmir Chief Minister, Dr. Farooq Abdullah has urged the world community to take note of the increasing barbarity of crimes being perpetrated by Pakistan trained militants in the State. Talking to the visiting Ambassadors of Belgium and Finland in Srinagar on 26 May, he said, even mourners at a victim's funeral were not spared. Calling Pakistan the mother of all terrorism in the world, Dr. Abdullah said influential countries must put sanctions against Pakistan instead of helping it.


According to the American Cable News Network, Pakistan has completed preparations for a nuclear test. CNN says Islamabad could conduct a nuclear test in a matter of hours if it decides to go ahead. US officials have, on the basis of satellite intelligence, also alerted policy makers that Islamabad is close to being ready to test a nuclear device. However, News Agencies report that no confirmation is immediately available about this from Islamabad.

Meanwhile, Qatar and Oman have decided to join Pakistan in its protest over India's nuclear tests. The messages offering support were delivered to Prime Minister Nawaz Sharief by special envoys on 26 May.


The country continues to reel under intense heatwave conditions with the national capital recording the hottest day in May in the last fifty years on May 26. The mercury touched 46.2 degree celsius in Delhi, 5-degrees above normal. Dholpur in Rajasthan was the hottest place in the country with a maximum temperature of 49.5 degree celsius on may 26.
The President, the Vice-President and the Prime Minister on May 26, led the nation in paying homage to Pandit Jawaharlal Nehru on his 34th death anniversary. They visited Shantivan in New Delhi this morning and paid floral tributes at the samadhi of Pandit Nehru.

The Congress President, Mrs. Sonia Gandhi visited the samadhi and paid her tributes. A special prayer meeting was held on this occasion.


The Defence Minister Mr. George Fernandes has supported the idea of inducting nuclear weapons in the Indian Armed Forces. In a television interview he said without weaponisation the whole question of being a nuclear weapons state does not make any sense. He said nuclear weaponisation is necessary as well as inevitable. Asked whether this meant that Indian missiles will now be equipped with nuclear warheads the Defence Minister said this is precisely what nuclear weaponisation means. Mr. Fernandes said the government decision to impose unilateral moratorium on further nuclear testing will not affect the weaponisation programme. Stating that no time frame has been set as of now to complete the programme.
The Congress President Mrs. Sonia Gandhi has charged the government with not taking the country into confidence on the deterioration of the security environment which warranted nuclear tests. Talking to newspersons in New Delhi she alleged that the government lacks transparency as its ministers are making different statements on the issue. Earlier she addressed the general body of the Congress Parliamentary Party which met in New Delhi to prepare its game plan for the budget session.
The Prime Minister has indicated some policy changes in accordance with the national agenda adopted by the BJP and its allies in the government. Addressing the meeting of the BJP Parliamentary Party in New Delhi, Mr. Atal Behari Vajpayee said his government approachs the first budget session with a sense of achievement and pride. He said the issue to undertake nuclear tests was being discussed for a long time and his government has taken a decision as it is a part of the national agenda.

The Prime Minister also said that the increase in procurement price of wheat has helped the farmers and resulted in record procurement. Mr. Vajpayee said the raising of retirement age by two years will in no way harm the interests of unemployed youth as the recruitment age has also been raised by the same period.


The Commerce Minister Mr. Ramakrishna Hegde told a Conference of Indian Commercial Representatives in London that the key growth sectors for exports will be identified. Mr. Hegde said the missions should also keep a data bank of importers to maintain close liaison with customers and visa restrictions for professionals from India must be relaxed. He said fighting the restrictive trade practices by the developed countries whouse anti-dumping and anti-subsidy measures to check Indian exports have to be tackled by the commercial representatives.

The Rupee closed at 41.15 against the US dollar down from 40.96 of May 26.


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