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Re: IMF Conditionality

Postings not related to the writing of the Manifesto or policy chapters
are likely to be summarily rejected. Thanks for your understanding. IPI
Professor Jagadiswara Rao is wholly mistaken.   The IMF has nothing to do
with project-financing whatsoever but with balance of payments and
exchange-rate problems.  He  may be confusing the World Bank with the IMF.

India is one of the 12 original members of the Fund, with, if I recall
rightly, the USA, UK,  Republic of China, Canada,  Australia and New Zealand
and others I forget at the moment.

Subroto Roy

-----Original Message-----
From: Prof. R. Jagadiswara Rao <rvp_org80@hotmail.com>

>Please find below my answers to the questions posed by Mr. Thornhill on
>the above subject.
>Reasons for India's dependence on IMF:
>Soon after India became independent in 1947, it followed the model of
>Soviet Union for its development. All foreign companies and many big
>Indian companies were nationalized. The government took up the entire
>responsibility of developing infrastructures required for economic and
>social development. Realizing the powers enjoyed by the politicians and
>the money commanded by the contractors, many rich and influential people
>became politician contractors. The politicians who earlier fought for
>independence began to fight for infrastructures to be taken up in their
>regions in a big way. In order to get sanction of their pet projects at
>any cost; they managed the engineers' in-charge of the investigation to
>manipulate the project reports for getting a higher benefit-cost (BC)
>ratio. They knew that once a project gets started, no one bothers about
>the BC ratio. The erring engineers were favored by making them in-charge
>of the construction work of the projects cleared. The politician
>contractors managed not only to grab the project works but also to
>execute them with poor quality. Because of starting a large number of
>projects without adequate resources, each project took an inordinately
>long time for completion and delivering the goods. Once a project is
>completed, no assessment is made on the benefits accrued by the project.


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