GS PrelimsEconomyExternal Sector1996

Consider the following statements: Most international agencies which fund development programmes in India on intergovernmental bilateral agreements, mainly provide 1. Technical assistance. 2. Soft loans which are required to be paid back with interest. 3. Grants, not required to be paid back. 4. Food assistance to alleviate poverty. Of these statements

A

II and IV and correct

B

I, II and III are correct

C

I, II and IV are correct

D

III and IV are correct

Correct Answer: Option B

Explanation

1. International agencies fund development programmes in India through various mechanisms. 2. Technical assistance (providing expertise, training, technology transfer) is a common component of aid (Statement 1 is correct). 3. Soft loans (loans with concessional terms, lower interest rates, longer repayment periods) are a major form of funding provided by agencies like the World Bank (IDA) and bilateral donors. These loans need to be paid back with interest, albeit on favorable terms (Statement 2 is correct). 4. Grants (funds that do not require repayment) are also provided, especially for social sector projects, technical assistance, or humanitarian aid (Statement 3 is correct). 5. Food assistance can be part of development aid, particularly in response to crises or for specific nutrition programmes to alleviate poverty, but it might not be the main form of funding from *most* agencies compared to loans and technical assistance for broader development (Statement 4 is less universally applicable as the 'main' provision compared to 1, 2, 3). 6. Considering the primary modes of funding through intergovernmental bilateral agreements, technical assistance, soft loans, and grants are the main components. Food aid is more specific. Therefore, statements I, II, and III accurately describe the main provisions.

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