ADB gives $1.5-billion loan to India to combat Covid-19

The Asian Development Bank (ADB) on Tuesday announced $1.5- billion loan (over ₹11,400 crore) to India for its fight against Covid-19 pandemic.

“ADB is fully committed to supporting the Government of India in its response to this unprecedented challenge,” ADB President Masatsugu Asakawa said. The quick-disbursing fund is part of a larger package of support that ADB will provide in close coordination with the government and other development partners.

The agency reiterated its determination to support India’s Covid-19 response programmes and ensure that they provide effective support to the people of India, especially the poor and vulnerable.

The present funding is part of the Covid-19 Active Response and Expenditure Support (CARES) Program. This programme will contribute directly to the improvement of access to health facilities and care, as well as social protection for more than 80 crore people, including families below the poverty line, farmers, healthcare workers, women, senior citizens, people with disabilities, low wage earners, and construction workers. The CARES Program is funded through the Covid-19 Pandemic Response Option (CPRO) under the ADB’s Countercyclical Support Facility.

CPRO was established as part of ADB’s $20-billion expanded assistance for developing member countries’ Covid-19 response, which was announced on April 13.

ADB mentioned that the CARES Program will be provided with a $2-million technical assistance grant to support the government to strengthen its operational framework and efficient targeting, delivery, and monitoring and evaluation of its pro-poor economic package, as well as its health sector and social protection interventions.

In the medium term, the agency will support to the government’s efforts and coordinate with other development partners to stimulate the economy, build capacity for monitoring and evaluation of government programs, and improve economic resilience against future shocks. This will include the economic recovery of affected industries and entrepreneurs through better access to finance for micro, small, and medium-sized enterprises; a credit enhancement facility for infrastructure projects; and the strengthening of public service delivery at the national and State levels.

Revival in Q2

Earlier this month, the agency estimated India’s gross domestic product (GDP) to slow to 4 per cent during current fiscal (2020-21) due to a weak global environment and continued efforts to contain the Covid-19 outbreak in the country. The forecast assumes that the pandemic dissipates and full economic activity resumes from the July-September quarter of the current fiscal.