The government and the New Development Bank (NDB) on Wednesday signed a loan agreement worth $1 billion to help India’s economic recovery from Covid-19 by supporting spending on rural infrastructure related to natural resource management (NRM) and rural employment generation under MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme). The loan has a tenor of 30 years, including a 5-year grace period.
“The programme proposes creation of durable rural infrastructure assets relating to NRM and generation of employment opportunities for rural poor, especially migrant workers who have returned from urban areas and have lost their livelihoods due to the Covid-19 pandemic,” a Finance Ministry statement said.
It added the funding under NDB’s policy on fast-track emergency response to Covid-19 will help preserve rural income and sustain rural expenditure, leading to increased demand that aids economic recovery.
Economic activity slowed down post lockdowns to contain the spread of virus, resulting in loss of employment and income of workers especially those employed in the informal sector, including rural areas.
Meanwhile, the World Bank Board of Executive Directors also Tuesday approved four projects worth over $800 million for strengthening India’s social protection architecture, promoting nutrition-supportive agriculture for tribal households in Chhattisgarh, enhancing quality education in Nagaland and improving safety and performance of existing dams across states.
“The four projects will support India’s efforts to build back better by creating a sustainable and resilient economy. Development work today has an additional responsibility: to help poor and vulnerable families roll back the adverse impact that the pandemic has had on their lives,” said Junaid Ahmad, country director, World Bank India.
“These projects will help many such families access better income opportunities, education, water supply and benefit from the expanded social protection schemes of the government,” he said. Of these projects, the $400-million social protection response programme will help provide assistance to poor and vulnerable households severely hit by Covid.
“This is the second operation in a programmatic series of two. The first operation of $750 million was approved in May 2020. It enabled immediate cash transfers to about 320 million individual bank accounts identified through pre-existing national social protection schemes under the Pradhan Mantri Garib Kalyan Yojana and additional food rations for about 800 million individuals,” the World Bank said in a statement.
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