The government has ruled out any short-term impact on foreign capital inflows on account of the US-sponsored sanctions, though it is apprehensive about its impact on the upcoming loan negotiations at the World Bank.
According to the government, even if aid flows to the country were stopped the impact would be felt only in the medium term. In this context, they pointed out that it was only Japan, besides the US, which had spiked fresh annual aid flows so far.
This was disclosed by top government officials - finance secretary Montek Singh Ahluwalia and foreign secretary S Reghunathan - at a briefing convened by Prime Minister Atal Bihari Vajpayee for the opposition parties. The Congress was represented at the briefing by Manmohan Singh and Sharad Pawar.
This was disclosed here on Monday by parliamentary affairs minister Madan Lal Khurana (who was present at the meetings). Khurana said that the officials conveyed the viewpoint that there was a split between the US adminsitration and its business representatives, with the latter calling an end to sanctions.
Khurana quoted the officials as saying that most countries were keenly awaiting the presentation of the budget, which is expected to spell out the basic thrust of the government's economic policy, he added.
The officials also conveyed to the opposition leaders that the government was keenly following the deliberations at the World Bank, specially in relation to the two loans slated to come up before the board.
The US is expected to seek a postponement of the board meetings and thereby causing a hiccup in the loan negotiations.
Meanwhile, the resident director of the World Bank in India Ed Lim held meetings with the finance secretary. Coming out of the meetings, Lim said, "It is a holiday today in Washington and I do not know anything as of now."
