Finance Minister P Chidambaram is set to review the India Development Initiative announced with much fanfare by his predecessor Jaswant Singh in the Budget for 2003-04.
Under this initiative, the Centre has approved till date assistance of almost $400 million to developing countries.
According to government sources, Chidambaram is also likely to let the government's year-long contract with the United Kingdom-based public relations company, Financial Dynamics, lapse. The ministry had retained the company mid-2003 to push the India story in the UK.
The sources said Chidambaram had given the India Development Initiative "temporary relief" and the initiative would continue till after Budget when the finance minister plans to take a closer look at its objectives and utility.
As far as the other issue of retaining a public relations outfit was concerned, the minister was not quite convinced about its lobbying power, they said.
The India Development Initiative has lent and promised funds largely to African countries like Mozambique, Sudan and Angola and in turn sought to promote India's economic interests in these countries.
For instance, India has negotiated for concessions in Sudanese oil in return for the aid being extended. In Angola it has procured mining rights at a concession.
The government has disbursed and approved $400 million aid to African and South Asian countries during the past year.
This is against a total lending of a little over $ 430 million over the last 40 years. It was viewed as a powerful tool to explore business opportunities in countries rich in natural resources like oil and coal.
The sources said the aid extended might, at first glance, appear to be generating negligible returns. But the government has managed, and is expecting, to derive mileage by boosting Indian business interests in the countries that are being supported in the initiative.
The India Development Initiative is estimated to contribute over Rs 2,000 crore (Rs 20 billion) of exports from India. Companies like Rites, Tata Motors and the state-owned oil firms have benefited from the initiative.
The India Development Initiative, according to Jaswant Singh, was to promote India as both a production centre and an investment initiative.
It was also intended to support an imaginative promotion of India and its trade and to foster techno-economic and intellectual cooperation with other countries. While he had set aside Rs 200 crore (Rs 2 billion) in 2003-04 for the initiative, he had earmarked Rs 100 crore (Rs 1 billion) in the Interim Budget for the current fiscal.