India to borrow more from Japan for Covid relief

Tribune News Service

New Delhi, January 9

Strained Central finances have led India to sign an agreement with Japan to borrow up to Rs 3,500 crore (50 billion yen) for sustaining the Pradhan Mantri Garib Kalyan Yojana (PMGKY).

This is on top of an earlier borrowing commitment in September last year of the same amount (Rs 3,500 crore) from Japan to equip hospitals with ICUs and infection prevention and management facilities.

The new loan is aimed at mitigating the adverse socio-economic impact and strengthening socio-economic institutions in India.

This includes the distribution of foodgrains for the poor and vulnerable, the provision of assistance and support to construction workers, and the provision of special insurance scheme for health workers fighting Covid.

Termed, “Covid Crisis Response Support Loan for Social Protection”, the government will initially borrow 30 billion yen at an interest rate of 0.65 per cent per annum with a redemption period of 15 years. India has also borrowed from Germany and France.