40 SOCIAL SCIENTIST Government of India. When the humiliating conditionality clauses of the I.M.F. loan were criticised in India, the World Bank. I.M.F. lobby In the corridors of power was very active in its defence. The patriotic protest against the I.M.F: loan was rejected by the powerful lobby of Indians which always extends its support to the Bank and I.M.F. operations in India. The World Bank also adopts methods of misinformation to induce the Government of India and the private corporate sector to enter the western markets for commercial loans at exorbitant interest rates. The World Bank Report observed : India, due to the inward orientation of its economy and inflow of external resources, including from LB.R.D and I.D.A., escaped the full brunt of adverse international factors....No doubt, India's total debt amounted to $ 20 billion. This is about 7.3 per cent of the GNP. And service obgligation has been around 7.2 per cent of export earnings. This ratio is. relatively low as compared to other upper middle-income developing countries, such as Mexico, Argentina and South Korea. On the whole Indians credit-worthiness is rated high.2 The above comment of the World Bank on India has a trap. It praises India for low level of dependence on foreign aid and it suggests that India can go further in borrowing from the capitalist countries. The result of this World Bank thinking and advice is that beginning with 1980, India has tapped commercial loans amounting to US $ 6 billion mainly to finance NALCO^ the National Thermal Power Corporation, O.N.G.C., and Air India. In spite of the World Bank's testimonial on the credit-worthiness of India in the international market, apprehensions have been expressed in India on commercial borrowing of US $ one billion per year. In an editorial entitled "Undue optimism", the Economic Times observed : Commercial borrowing, unless backed by structural adjustment, will not provide us an^escapc route for long. It needs to be pointed out that debt servicing will have to be financed in convertible currencies, that is, out or trade outside "Eastern Europe.8 With a trade deficit of Rs. 5,800 crores in 1983-84, which is unlikely to come down much in 1984-85, the credit-worthiness of India would be eroded if our reliance on external aid and borrowings increases. It may be stated here that debt service payments of India arc on the increase, i.e., from Rs. 796 crores in 1978-79 to Rs. 1,025 crores in 1983-84. Of late, collective neo-colonialism is in active operation in India which is reflected in our growing economic relations with the United States and Japan. The foundations for such a linkage were laid in the, 50s, 60s and,70s, but in the 80s the trend is clear. While the two-way trade between India and the U.S. is more than U.S. $ 3 billion, India is trying to expand its linkages with Japan. Both the Indo-U.S. Joint Commission and the Indo-Japanese Joint Commission are, pressurising India to liberalise its trade, fiscal, investment import and technological policies. The FICCT journal Economic Trends in an editorial on "India-Japan Trade and Economic Cooperation", observes