Chapter 7Republic of Czech & Republic of Slovak
7.1 The Government of Czechoslovakia started its economic assistance to India in 1959 and upto 31.3.1992 three credits were extended for an aggregate amount of Rs.176.20 crores.
7.2 The first credit of Rs. 33.20 crores dated 24.11.59 was intended for imports from Czechoslovakia of equipment and spares for various projects of the Heavy Engineering Corporation Ltd., BHEL, Tiruchy and Hyderabad units and the same was fully utilised. The second credit of Rs.63 crores dated 11.5.1964 was meant for projects such as Ennore Thermal Power Project of Tamil Nadu State Electricity Board, Ramagundam Thermal Power Project, Talcher Fertilizer Project of the Fertilizer Corporation of India, various projects under the Heavy Engineering Corporation Ltd., and this credit too was fully drawn. The third credit of Rs.80 crores dated 5th December, 1973 comprised Rs.50 crores as project segment and Rs.30 crores as component segment for financing import of components from Czechoslovakia by Indo-Czech Project. The total utilisation against the third credit was only 60.80 crores as on 31.8.90. The balance amount of Rs.19 crores had lapsed.
7.3 The terms of the credit for repayment for the Project Segment is over 15 years (inclusive of a grace period of 3 years) and in the case of the Component segment the repayment is over 11 years (inclusive of grace period of 1 year). Both the segments carry an interest-charge at the rate of 2.5% per annum.
7.4 An important feature of these credits is that the debt servicing payments are made in non-convertible Indian Rupees, for utilisation by the Czech authorities to purchase Indian goods for export to Czechoslovakia in accordance with the Indo-Czech Trade Agreement in force from time to time. The last Trade and Payment Agreement signed on 17.1.1991 remained valid for a period of 2 years with effect from 1.1.91.
7.5 By an agreement dated 11th May,1962 Czechoslovakia had also provided technical assistance to India for total value of Rs.0.95 crores for the establishment of the Central Machine Tools Institute at Bangalore. The total utilisation amounted to Rs.0.63 crores in the form of machinery and equipment, tools and essential spares.
7.6 After the division of Czechoslovakia into two Republics i.e. Czech Republic and Slovak Republic with effect from 1.1.1993, India has signed two Trade agreements separately with Czech and Slovak on 15.3.1993 and 14.5.1993 respectively. Therefore, since 1.1.1993,the rupee payment arrangements with these countries has now ceased to exist and trade with both Czech and Slovak is being conducted in freely convertible currency.
7.7 Details of loans, utilisation and debt servicing thereof are given in Annexures I. The details of Grants are given in Annexure II.