June 13, 1998 - Evening Transmission
The Finance Minister has said that the unilateral action of the G-8
industrial powers to block all future loans and aid will not affect India's
economy in the short run. Mr. Yashwant Sinha told a private TV network
in New Delhi last night that the Finance Ministry will study its implications.
The group of eight richest nations at their meeting in London yesterday
decided that all loans and aid barring those for humanitarian purposes
to India and Pakistan be blocked because of their nuclear tests last month.
They were anxious not to isolate both the countries and exempted loans
for humanitarian purposes. The G-8 measures have only a symbolic significance
since new International Monetary Fund and World Bank credit has effectively
been frozen since the US imposed sweeping economic sanctions on both the
countries.
The UN Secretary General, Mr.Kofi Annan has urged India
and Pakistan to enter into a dialogue to sort out serious issues dividing
them. Earlier, he discussed the nuclear situation in South Asia with five
permanent members of the Security Council.
India will respond to rejection of its offer to Pakistan
for resumption of the stalled Foreign Secretary level talks after studying
Islamabad's statement. The Minister of State for External Affairs, Mrs.
Vasundhara Raje said last night that New Delhi has made an offer and we
stand by the offer to talk about all bilateral issues including Kashmir.
The Prime Minister's special envoy and Deputy Chairman
of the Planning Commission, Mr. Jaswant Singh said, the talks with Pakistan
would go ahead despite the failure to agree on a time and place. In an
interview to CNN, he said, it is just a question of fixing the date and
venue. It may be recalled that India invited Pakistan for talks in New
Delhi on June 22nd but Islamabad made a counter offer setting its own terms
for a dialogue on June 20th.
Earlier, Mr. Jaswant Singh held a two-and-half hour meeting with Deputy
Secretary of State, Strobe Talbott and explained India's stand on nuclear
tests.
In a significant initiative India today invited Pakistan
for bilateral discussions on all outstanding issues. It has suggested that
the talks at the Foreign Secretary level be held on the 22nd of this month
in New Delhi.
Pakistan however has rejected India's offer and instead invited Indian
Foreign Secretary to Islamabad on the 20th of this month. A Foreign Office
Statement in Islamabad described the Indian offer as unrealistic and said
it is not acceptable as a working basis for resumption of talks.
The Finance Minister tried to take the battle into the
opposition ranks today. He had been forced on the defensive by criticism
that the budget fell quite short of what the economy needed . He conceded
the opposition on urea issue.
The Government today ruled out exemption of dearness allowance,
city compensatory allowance and house rent allowance of Government employees
from income tax. The Minister of State for Finance Mr. Kadambur Janardhanan
told the Lok Sabha that these are personal expenses and therefore covered
under the term salary. He was responding to demands from almost every section
of the House that allowances of salaried employees who are hard hit by
inflation and should be exempted from income tax to help these honest tax-payers.