India to give $100 million soft loan to Sri Lankan defence: Economic Times

[TamilNet, Monday, 28 April 2008, 07:25 GMT]
Economic Times, one of India's leading business dailies, on Sunday revealed that in spite of possible "political and diplomatic ramifications", the Indian Government was "finalizing a soft loan package of $100 million for Sri Lankan defence department to buy arms and ammunition." The newspaper went one step ahead and dubbed this move "the India fund for fighting Tamil Tigers in Sri Lanka."

Citing reliable sources, the newsreport added that India was giving the loan at a "highly concessional interest rate of just 2%" though Sri Lanka did not come under the category of Least Developed Country which would enable it to secure such a discounted interest.

India was also planning to give another term loan of $100 million to Sri Lanka for railway projects. The combined soft loan amount of $200 million ($100 for defence, $100 for development) was very high compared to India's total "bilateral disbursement of $500 million soft loans" for the entire fiscal year 2008, the Economic Times newsreport said. Moreover, the daily also added that India's move was seen as "yet another attempt to eliminate the Tamil Tigers in an indirect manner."

Chronology: