ADB to extend $1.5 billion COVID Loan to India

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The Government of India and the Asian Development Bank (ADB) today signed a $1.5 billion loan that will support the government’s fight against the novel coronavirus disease. This may facilitate the government to focus on immediate priorities such as disease containment and prevention, as well as social protection for the poor and economically vulnerable sections of the society, especially women and disadvantaged groups.

Additional Secretary, Fund Bank and ADB in the Department of Economic Affairs in Ministry of Finance Sameer Kumar Khare, and Country Director, ADB, in India Kenichi Yokoyama have signed the loan agreement. Earlier, the ADB’s Board of Directors approved the loan to provide budget support to the government to counter and mitigate the adverse health and socio-economic impact of the pandemic.

“We thank ADB’s timely assistance for the government’s immediate response measures to the coronavirus pandemic to implement (i) COVID-19 containment plan to rapidly ramp up test-track-treatment capacity, and (ii) social protection for the poor, vulnerable, women, and disadvantaged groups to protect more than 800 million people over the next three months,” said Khare. 

“ADB is glad to support India’s bold measures to contain the COVID- 19 pandemic outbreak while protecting the most vulnerable people affected by movement restrictions, by fast-tracking and delivering the largest ever loan to India. We will continue to engage with the government to strengthen the implementation framework and capacities including monitoring and evaluation systems of its health services and social protection programmes so that the benefits reach to the poor, women, and other disadvantaged people,” said Yokoyama.

India has taken several decisive measures to contain the outbreak of COVID-19 pandemic, including a $2 billion health sector spending programme to expand hospital facilities, ramp up test-track-treatment capacity and launched a $23 billion pro-poor package to provide direct cash transfer, provide basic consumption goods and free cooking gas cylinders to the poor, particularly to women, old and socially disadvantaged groups. It has also extended insurance coverage to frontline health workers engaged in COVID 19 response.

The Central bank, Reserve Bank of India, has slashed policy rates, eased asset quality norms, provided loan moratoriums, taken measures to support exporters and allowed states to borrow more to meet their financing requirements. It has also pumped in massive liquidity to support banks, non-banking financial companies, mutual funds as well as take measures to push the flow of funds to the MSMEs and the corporate sector.