NEW DELHI: With an eye on making Indian funding attractive amid massive Chinese funded projects in the developing world, the Modi government has approved the new Indian Development Assistance Scheme (IDEAS) to streamline Lines Of Credit (LOC) offered to various countries in South Asia, SE Asia, Africa and Central America emphasising on timely completion of projects.
Timely completion of projects under Line Of Credit scheme and other assistance programs across countries have been key complaint of the recipient countries. Several factors including delay in release of funds to audit system for projects abroad based on Indian rules contribute to projects missing deadlines.
The recipient countries have been raising the delay factor with India in various bilateral meetings or in meetings on the sidelines of multilateral meets. However, hoping to reverse this trend the Modi government has updated the IDEAS scheme this month.
The initiative includes provisions to provide better terms of credit, which will be attractive to many developing countries, who are now seeking alternative means of finance, according to MoS (External Affairs) VK Singh.
In a reply to Lok Sabha last week on the progress of various LoC funded projects, Singh informed that several changes have been made in the operational guidelines such as making Detailed Project Report, strengthening of monitoring system, pre-qualification of competent companies and requirement of regular reports by the borrowing governments. Additionally, regular monitoring is also being carried out by borrowing governments, Project Management Consultants, implementing agency and Indian Missions abroad to ensure projects are executed in a timely manner, according to the Minister.
“These changes should improve the implementation of projects undertaken through these LOCs,” Singh said. The Modi government, with India’s limited resources, hopes to correct its record amid China’s growing commitments to aid developing countries.
The Economic Times View:
Great ideas of India
Financial assistance is a powerful tool of diplomacy. However, it appears that beneficiary countries are not as enthusiastic to use of the line of credit offered by India, preferring to access similar offers from other countries like China. The decision to streamline the line of credit offered to various developing countries as part of development assistance will enable tailoring to local requirements, and bring in a level of accountability that will help address the problem of delays in completion of projects. This will allow India to leverage development and financial assistance effectively.