India paid Rs 400 crore to international agencies, Japan, Germany for unutilized external loans
NEW DELHI: India has paid over Rs 400 crore in the last four years as commitment charges to the Asian Development Bank, Japan, Germany and the International Bank for Reconstruction and Development (IBRD) for unutilised external loans taken to fund development projects.
Japan and ADB are the two biggest beneficiaries of these slippages, according to a study compiled by the Comptroller and Auditor General in its latest report on the Union government accounts for 2014-15. “This points towards continued inadequate planning,” the official auditor has observed. During the first year of the NDA government, the commitment charges paid exceeded Rs 110 crore, CAG has noted.
Commitment charges are a fee charged by a lender to a borrower for an unused credit line or undisbursed loan. They are incorporated in external financial assistance negotiated by the central government. Though pushed as soft loans, much below market lending rates, once these commitment charges are added, the interest components sometimes become costlier than external commercial borrowings.
Read full article: TOI
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