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The Central government and the New Development Bank (NDB) have signed a loan agreement for lending $1 billion towards ‘supporting India’s economic recovery from Covid-19’.
The loan will support expenditures on rural infrastructure related to natural resource management (NRM) and rural employment generation under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
The $1-billion loan from the NDB has a tenor of 30 years, including a 5-year grace period.
The programme will support the government in mitigating the adverse economic impact of Covid-19 pandemic and enable economic recovery in the rural areas through natural resource management works which will facilitate economic activity and employment generation to stimulate rural demand.
The programme proposes creation of durable rural infrastructure assets relating to NRM and generation of employment opportunities for the rural poor, especially migrant workers who have returned from urban areas and have lost their livelihoods due to the Covid-19 pandemic, an official release said.
The agreement was signed by Baldeo Purushartha, Joint Secretary, Department of Economic Affairs, Ministry of Finance, and Xian Zhu, Vice President, Chief Operations Officer, NDB.
Job oppurtunities
Purushartha said that the programme will improve the livelihood of rural poor along with providing income opportunities to migrant workers who returned home due to job loss caused by Covid-19 pandemic.
Xian Zhu said that the programme will support the government’s efforts in mitigating the adverse economic impact of Covid-19 pandemic and enable economic recovery in the rural areas through NRM works and employment generation. The funding under NDB’s Policy on fast-track emergency response to Covid-19 will help preserve rural income and sustain rural expenditure, resulting in increased demand that aids economic recovery.
The NDB was established based on the Inter-Governmental agreement among the BRICS countries (Brazil, the Russian Federation, India, China and South Africa) signed on July 15, 2014. The purpose of the bank is to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries.
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