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DATE=6/3/98
TYPE=CORRESPONDENT REPORT
NUMBER=2-233262
TITLE=INDIA - DEFENSE / SANCTIONS (L)
BYLINE=JIM TEEPLE
DATELINE=NEW DELHI
CONTENT=
VOICED AT: 
INTRO:  INDIA'S FINANCE MINISTER HAS STRONGLY DEFENDED A 
14-PERCENT INCREASE IN DEFENSE SPENDING UNVEILED EARLIER THIS 
WEEK.  V-O-A'S JIM TEEPLE REPORTS THE WORLD BANK HAS PUT ON HOLD 
MORE THAN 200-MILLION DOLLARS IN LOANS TO INDIA BECAUSE OF ITS 
RECENT NUCLEAR TESTS, BUT THE COUNTRY'S FINANCE MINISTER SAYS THE
SANCTIONS WILL  NOT  DETER FOREIGN INVESTMENT.  
TEXT:  ON THE EVE OF U-N SECURITY COUNCIL TALKS (THURSDAY) TO 
ADDRESS THE NUCLEAR TESTS IN INDIA AND PAKISTAN, INDIA'S FINANCE 
MINISTER YASHWANT SINHA IS STRONGLY DEFENDING A 14-PERCENT 
INCREASE IN DEFENSE SPENDING.  
INDIA'S BUDGET, PRESENTED EARLIER THIS WEEK, ALSO SHOWS A 
68-PERCENT INCREASE FOR SPENDING ON NUCLEAR ENERGY, AND A 
62-PERCENT INCREASE FOR SPENDING ON THE COUNTRY'S SPACE PROGRAM 
WHICH DEVELOPS INDIA'S MISSILE TECHNOLOGY.  MR. SINHA SAYS THE 
DEFENSE SPENDING INCREASE IS JUSTIFIED BECAUSE INDIA'S NEIGHBORS 
SPEND FAR MORE. 
                  //  INSERT SINHA ACTUALITY //
         IF YOU TAKE THE DEFENSE EXPENDITURES OF EITHER CHINA OR 
         PAKISTAN, YOU WILL FIND THEY ARE MUCH HIGHER IN TERMS OF
         G-D-P THAN WHAT WE SPEND IN INDIA. 
                      //  END ACTUALITY //
THE WORLD BANK ON WEDNESDAY PUT ON HOLD MORE THAN 200-MILLION 
DOLLARS IN LOANS TO INDIA, BRINGING TO MORE THAN ONE-BILLION 
DOLLARS THE AMOUNT IT HAS FROZEN BECAUSE OF LAST MONTH'S NUCLEAR 
TESTS.  
MR. SINHA SAYS SO FAR THE SANCTIONS HAVE HAD  NO  EFFECT ON 
DIRECT FOREIGN INVESTMENT IN INDIA.  MONTEK SINGH ALUWALIA, 
INDIA'S FINANCE SECRETARY WHO IS RESPONSIBLE FOR EVALUATING THE 
IMPACT OF SANCTIONS, SAYS PRIVATE CAPITAL IS  NOT  AFFECTED.  
                //  INSERT ALUWALIA ACTUALITY //
         THIS IS A PROBLEM BETWEEN THE U-S ADMINISTRATION AND THE
         GOVERNMENT OF INDIA.  IT DOES  NOT  ALTER OUR STAND AS 
         FAR AS WHAT THE PRIVATE SECTOR SHOULD DO, AND MY 
         UNDERSTANDING IS THAT THE U-S GOVERNMENT IS  NOT  SAYING
         THEY WANT TO INTERFERE IN PRIVATE SECTOR ACTIVITIES. 
                      //  END ACTUALITY //
MEANWHILE DIPLOMATIC ACTIVITY IS INTENSIFYING IN ADVANCE OF 
THURSDAY'S SECURITY COUNCIL MEETING IN GENEVA.  AFTER MEETING 
WITH INDIA'S PRIME MINISTER ON WEDNESDAY, IRAN'S FOREIGN MINISTER
CALLED ON BOTH INDIA AND PAKISTAN TO REDUCE TENSIONS IN THE 
REGION BY WORKING TO CREATE A NUCLEAR FREE-ZONE IN SOUTH ASIA.  
(SIGNED) 
NEB/JLT/LTD/MMK
03-Jun-98 8:45 AM EDT (1245 UTC)
NNNN
Source: Voice of America
.