Chapter 10

Germany

10.1 The Government of Germany has been providing assistance for India’s economic development since 1958. Till 31.3.99, FRG has extended a total financial assistance of the order of DM 14987 Million. Out of this DM 2195 Million was provided as loans outside GOI budget (Non-Government loan), DM 11970 Million as loan through Government and DM 822.6 Million as grants. Presently Germany provides both technical and financial assistance to India.

10.2 The German soft credit is provided at an interest @ rate of 0.75% p.a and is repayable over a period of 40 years including a grace period of 10 years. The Export Credit (commercial credit) is provided at prevailing market rates and is repayable over a period of 10 years including a grace period of 5 years. For a particular project, the commercial credit is provided as a mix of soft and commercial loan as a composite financial cooperation loan (also termed as Second Window). The funds under this window are available for projects in the areas of power, coal and railways etc.

10.3 The financial assistance extended by Germany has been utilised for projects in the field of Housing, Power, Environment, Forests, Rlys, Telecommunication, Rural water Supply, Energy, Water Resources and towards the cost of import of capital goods, fertilisers etc. The present focus of German assistance is on rural development, agriculture, environment and industry, infrastructure, especially power and transport, human resource development especially health and education.

10.4 With the introduction of disintermediation procedure since 1994, German aid to Central PSUs is being provided without Government of India intermediation i.e outside the Government of India budget.

Technical Assistance

10.5 The Government of Germany also provides technical assistance as grant for projects involving assignment of experts, training facilities abroad and import of small project related equipments. Presently German technical assistance is available for projects in the field of Environment and natural resources protection, technical training, higher education and applied research, improving productivity and competitiveness of Indian industry and for poverty alleviation projects etc.

10.6 The details of Loans and Grants are given in Annexure I and II.