With China in way, India looks at loan options in Arunachal
The Department of Economic Affairs is now looking at Japan and the European countries for loans after ADB declined finance to a third project in Arunachal due to China’s opposition. Beijing considers the northeastern state a “disputed territory” and argues that multilateral development banks cannot fund projects in disputed areas.
Sources said the shift to tap bilateral donors for the projects was suggested by Minister for Urban Development Kamal Nath, who advised last month that Japan International Cooperation Agency or Germany’s state-owned Kreditanstalt für Wiederaufbau be approa-ched. Finance Minister P Chidambaram seconded Kamal Nath’s idea and asked the DEA to reach out to these countries.
Arunachal Pradesh Chief Minister Nabam Tuki had met Prime Minister Manmohan Singh and Planning Commission Vice-Chairman Montek Singh Ahluwalia in November to discuss the funding crisis.
India’s move is a marked departure from the Finance Ministry’s statement in March 2010 that New Delhi would continue to present projects in the state for funding by multilateral banks, and that there was “no change in policy regarding multilaterally funded projects in various sectors or states”, including projects in Arunachal. Sources said that the immediate provocation was China’s objection to ADB funding for infrastructure development of Arunachal capital Itanagar under the ongoing North Eastern Region Urban Development Programme.
The first phase of NERUDP, approved in June 2009, was limited
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