The World Bank has insisted upon a disclaimer from the Jammu and Kashmir government that funding for a project will not be seen as recognition of India`s territorial claim on the state.
The agency has put a `disclaimer clause` for bankrolling a key project in the border state which indicates that funding of projects in disputed areas should not be used to endorse territorial claims.
This has been communicated to the Centre by the state government which wants the World Bank-funded Rs 740 crore `Participatory Watershed Management Project` to be completed.
Jammu and Kashmir forest minister Mian Altaf Ahmad, along with MPs from the state met finance minister Pranab Mukherjee on Friday evening in New Delhi to discuss the issue.
Jammu and Kashmir wants the Centre to settle issue with the World Bank, which has refused to fund more projects in the state, treating it as disputed territory. Ahmad said the World Bank had raised the disclaimer issue last year after assessment of the project which was then at the funding stage.
He said if the Centre pursued the matter, the bank could be convinced to give up the disclaimer condition. Despite Ahmad`s views to the contrary, this is a shocking development. The World Bank was instrumental in committing India to allow the waters of the state`s three principal rivers - the Indus, the Jhelum and the Chenab - to flow unimpeded under the Indus Water Treaty of 1960.
Article XI of the treaty is quite emphatic in that it will deal with only the water-sharing issue and its implementation will not acknowledge or waive any other rights other than those specified in the treaty. In other words, it will have nothing to do with the territorial dispute between the two parties.
In the troubled history of India-Pakistan relations, the Indus Water Treaty stands out as a major success for which the World Bank, the third signatory to the treaty, deserves great credit. As party to the treaty, the bank created an $895 million Indus Basin Development Fund to which India contributed some $174 million.
In the wake of the terrorist attack on Parliament House in 2001, there were voices questioning India`s generosity for which the main price had been paid by Jammu and Kashmir because the waters of the Jhelum and the Chenab have to flow unimpeded to Pakistan. Yet, New Delhi stood by its treaty commitments.
Now, for reasons best known to it, the World Bank has linked funding for the watershed development project to the disclaimer condition on the territorial issue.
This is the second time this year that India has had friction with a multilateral development agency over project funding in a state that has a border dispute. An Asian Development Bank (ADB) country loan to India had run into trouble because it included funding for a watershed development project in Arunachal Pradesh - a point that was objected to by the Chinese at the ADB meeting.
The World Bank had funded two projects in Jammu and Kashmir under the integrated Watershed Development Programme with Rs 90 crore from 1990 to 1999 and Rs 198 crore from 1999 to 2005 without bringing up the disclaimer issue.
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