DATE=6/13/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-233852
TITLE=INDIA / G-EIGHT REACT (L-O)
BYLINE=ANJANA PASRICHA
DATELINE=NEW DELHI
CONTENT=
VOICED AT: 

INTRO:  INDIA IS PLAYING DOWN THE IMPACT OF THE DECISION BY THE 
WORLD'S MAJOR INDUSTRIALIZED NATIONS TO BAN MOST LOANS TO INDIA 
AND PAKISTAN AFTER THEY CONDUCTED NUCLEAR TESTS (IN MAY). FROM 
NEW DELHI, ANJANA PASRICHA REPORTS.

TEXT:  INDIAN FINANCE MINISTER, YASHWANT SINHA, SAYS THERE WILL 
BE NO  IMMEDIATE FALLOUT FROM THE DECISION BY THE SO-CALLED GROUP
OF EIGHT NATIONS TO BLOCK LOANS TO INDIA -- EXCEPT FOR 
HUMANITARIAN MONEY.  HE SAYS NEW DELHI WILL STUDY THE 
IMPLICATIONS OF THE ACTION, BUT ADDS, "THERE IS A LONG PIPELINE 
OF LOANS."  OFFICIALS EXPLAIN THEY DO NOT EXPECT ANY SIGNIFICANT 
REDUCTION IN FLOW OF FUNDS DURING THIS FISCAL YEAR -- SINCE IT 
DOES NOT AFFECTED CURRENT LOAN DISBURSEMENTS.  

LOANS FROM INTERNATIONAL FINANCIAL INSTITUTIONS TO NEW DELHI HAVE
EFFECTIVELY BEEN FROZEN SINCE WASHINGTON IMPOSED ECONOMIC 
SANCTIONS FOLLOWING LAST MONTH'S NUCLEAR TESTS. SO FAR, THE WORLD
BANK HAS PUT ON HOLD LOANS WORTH NEARLY ONE BILLION DOLLARS WHICH
WERE TO HAVE BEEN SPENT ON IMPROVING THE COUNTRY'S 
INFRASTRUCTURE.

HOWEVER INDIAN OFFICIALS MAINTAIN THAT ECONOMIC SANCTIONS WILL 
NOT HAVE A SIGNIFICANT IMPACT ON THE NATION'S ECONOMY, AND SAY 
THEY HAVE NOT AFFECTED DIRECT FOREIGN INVESTMENT IN THE COUNTRY.

BUT OPPOSITION PARTIES ARE QUESTIONING THE GOVERNMENT'S DECISION 
TO CARRY OUT THE NUCLEAR TESTS IN MAY.  ON SATURDAY CONGRESS 
PARTY LEADER, SHARAD PAWAR, CRITICIZED THE GOVERNMENT FOR 
"INVITING TROUBLE" FOR INDIA IN TERMS OF SANCTIONS FROM THE 
WORLD'S INDUSTRIALIZED NATIONS. OTHER OPPOSITION LEADERS ASKED 
THE GOVERNMENT TO EXPLAIN HOW IT PLANNED TO WITHSTAND THE IMPACT 
OF SANCTIONS. (SIGNED)

NEB/AP/TMD/JO

13-Jun-98 11:05 AM EDT (1505 UTC)
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Source: Voice of America
.