World Bank to give Rs 5,600 crore support to Covid-hit MSMEs
Tribune News Service
New Delhi, July 1
India will borrow $750 million (Rs 5,600 crore) more from the World Bank to support the vulnerable sections affected by the lockdown.
New Delhi has been borrowing from four multilateral institutions as well as from individual countries to partially cover the expenditure on the PM Garib Kalyan Yojana and one component of the Rs 3 lakh crore credit scheme for MSMEs.
$2.75 billion committed so far
The World Bank has so far committed $2.75 billion (about Rs20,000 crore) to support India’s Covid response
AdvertisementThe first $1 billion emergency support was for immediate support to India’s health sector
Another $1 billion was approved for cash transfers and food benefits
The latest loan will have to be paid in 19 years, including a five-year grace period
The funds for the latest tranche of support will come from the World Bank’s MSME emergency response programme to address the immediate liquidity and credit needs of some 15 lakh viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs.
“This is the first step among a broader set of reforms that are needed to propel the MSME sector over time,” said the World Bank in an indication that there will be more credits on offer for clearly tailored schemes. The loan in this case will channel liquidity to MSMEs by de-risking lending from banks through instruments such as credit guarantees.
The World Bank has so far committed $2.75 billion (about Rs 20,000 crore) to support India’s Covid response. The first $1 billion emergency support was for immediate support to India’s health sector. Another $1 billion was approved for cash transfers and food benefits. The latest loan will have to be paid in 19 years, including a five-year grace period.
In another decision, the World Bank enhanced its support to the Namami Gange programme with a $400 million loan to stem pollution and strengthen river basin management. This will be the bank’s ninth year of backing pollution control in the Ganga.
India has already borrowed $1.5 billion (about Rs 10,500 crore) from the Asian Development Bank (ADB) and will soon get another $750 million (about Rs 5,000 crore). India has also borrowed $2.25 billion (about Rs. 17,000 crore) from two China-led multilateral banks. France and Germany too have lent a little less than Rs 5,000 crore to support the PM’s Garib Kalyan Yojana.
In all, according to publicly available figures, India has borrowed Rs 60,000 crore from abroad to strengthen the health infrastructure, provide livelihood relief and support the MSME sector.
