UP to receive biggest-ever WB Stuctural Adjustment Loan

Lucknow, July 26 (UNI) The Centre has facilitated the biggest ever Structural Adjustment Loan of Rs 15,242 crore through the World Bank (WB) to debt-stressed Uttar Pradesh to be utilised as a tool in debt swapping.

UP has become the first state to get the Centre's nod for such a huge loan which would be made available during the current fiscal, UP chief minister Mayawati disclosed this in a statement.

The proposal for the same was submitted to the Prime Minister Manmohan Singh when Ms Mayawati had met him on May 26 last after having sworn in. The PM had assured the CM during their second meeting on July 20 last of the proper initiative on behalf of the Central Government and forwarded the same to the WB for further action.

Following the Centre's positive recommendations, the (WB) has agreed to disburse the loan amount in the current fiscal.

This WB loan would be available on a cheaper rate of interest of 6.25 per cent and would be utilised for swapping their high cost debts obtained at the rate of as high as 11.50 per cent, the CM stated. It would save the state about five per cent as rate of interest which has been worked out to be Rs 1,450 crore per annum for five years as there would be a moratorium of five years for repayment of principal amount on the 20-year loan period.

''Not only it would reduce the burden on the repayment of earlier loans but the amount thus saved would be used for Infrastructural development and Economic Reform Programmes in the state,''Ms Mayawati said.

It is being seen as the major achievement of the UP government which seems to have struck a right understanding with the Centre because generally the WB extends loan assistance to the tune of Rs 1,000 crore to Rs 1,500 crore.

Making it clear that it had not been the fresh loan, she said it was a debt-swap and it would not add to the indebtness of the state.

''...instead the loan amount would be utilised for paying off the existing laons.'' It would come as a major relief to the financial situation of the state which has loan liabilities of about Rs 1,37,92 crore. The state of UP would continue to enjoy the benefit of reduced interest rate for 20 years till the WB loan is to be repayed.

UNI