The Asian Development Bank (ADB) on Tuesday agreed to give a $1.5 billion loan to India to support its immediate response to coronavirus (Covid-19) pandemic such as disease containment and protection of economically vulnerable sections of the society, a finance ministry statement said.
More such help under the ADB’s Covid-19 Active Response and Expenditure Support Programme (CARES) may come for the affected industries and entrepreneurs, particularly micro, small, and medium-sized enterprises (MSMEs), the statement said.
“ADB is also in dialogue with the government for further possible support for stimulating the economy, support strong growth recovery, and to build resilience to future shocks,” it said.
Strengthening of public service delivery will be another important agenda, including the extension of comprehensive primary health services in urban areas, and of secondary and tertiary health care systems through public-private-partnership (PPP) modalities, it said.
The loan agreement was formalised by Sameer Kumar Khare, additional secretary in the Department of Economic Affairs (DEA) in the ministry of finance and Kenichi Yokoyama, country director of ADB in India.
“We thank ADB’s timely assistance for the government’s immediate response measures to the coronavirus pandemic to implement one, Covid-19 containment plan to rapidly ramp up test-track-treatment capacity, and second, social protection for the poor, vulnerable, women, and disadvantaged groups to protect more than 800 million people over the next three months,” said Khare.
The ADB’s financial and technical support will contribute in the implementation of the government’s far emergency response to the pandemic in March 2020. On March 26, finance minister Nirmala Sitharaman had announced a Rs 1.7 lakh crore (approximately $23 billion) welfare package under the Pradhan Manti Garib Kalyan Yojana that was mainly to provide food, free cooking gas cylinders and direct cash transfer to the poor.
“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 and ramp up test-track-treatment capacity. It has also extended insurance coverage to frontline health workers engaged in Covid-19 response.
India’s central bank, the Reserve Bank of India (RBI), also took monetary measures to provide relief to the people and the business. It 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 (NBFCs), mutual funds as well as taken measures to push the flow of funds to the MSMEs and the corporate sector.