Row over World Bank's Kashmir clause

NEW DELHI: Finance minister Pranab Mukherjee has assured a delegation of J&K MPs that the government will oppose a disclaimer clause put up by World Bank in return for a Rs 740 crore loan it has sanctioned for a watershed project in the state. The Bank has asked the state government to give an undertaking that the loan would not be treated as a certificate that the "disputed territory" was an integral part of India.

This is not the first time an international agency has put up conditions to its sanctioned loan, Mukherjee told the delegation. He assured the state government that Centre will sort out the matter immediately, J&K forest minister Altaf Mian told TOI.

A six-member delegation led by the J&K forest minister met Mukherjee at his North Block office on Thursday and told him the Bank had stopped disbursement of a sanctioned loan and raised fresh conditions.

India had encountered similar difficulties earlier this year when China had objected to an Asian Development Bank loan in Arunachal Pradesh seeking to defer the loan as it was a "disputed territory".

However, Altaf Mian said World Bank had funded two projects in J&K, in 1991 and 1999. Though the loan component was much smaller, the multilateral agency had never sought any disclaimer.

No one from the Department of Economic Affairs in the finance ministry, which is dealing with the issue, was ready to speak on the matter. While finance secretary was out of town, the ministry spokesperson said he would get back.
The state government was not even aware of the fresh conditions till a follow up with the Union environment and forest ministry revealed that a demand had been raised by World Bank seeking the disclaimer.

"We have brought this to the FM's notice and he has assured that in shortest time, the Centre will sort this out with the Bank," Mian said.