War against COVID-19: India-ADB may sign loan agreement this month

India and Asian Development Bank may sign a formal loan agreement this month. A source familiar with the development told ETV Bharat that the bank officials were consulting sector experts in India to prepare the loan proposal.

New Delhi: India and Asian Development Bank may sign a formal loan agreement this month to help India fight the global pandemic COVID-19, said a person familiar with the development.

Following a call between finance minister Nirmala Sitharaman and Masatsugu Asakawa, President of Asian Development Bank, the Manila based Bank announced that it was preparing a $2.2 billion immediate assistance package for the country.

“We are now preparing $2.2 billion in immediate assistance to the health sector and to help alleviate the economic impact of the pandemic on the poor; informal workers; micro, small, and medium-sized enterprises; and the financial sector,” ADB President Masatsugu Asakawa said in a statement.

According to the people familiar with the development, the Government of India was earlier not keen to borrow money from the multilateral body.

However, the situation completely changed in the last 15 days as the number of COVID-19 cases showed a steady rise, forcing the Union government to announce a 21-day complete lockdown, completely disrupting the economic activity in the country.

A source familiar with the development told ETV Bharat that the bank officials were consulting sector experts in India to prepare the loan proposal.

He said the Bank officials were in the process of finalising the draft agreement which will be shared with the department of economic affairs in the ministry of finance.

“If the government is willing then it can be announced in the next 10 days,” said the source cited above.

“Once the agreement is signed between the DEA and the ADB then it will be presented to the executive board of the Bank for its approval and the Bank can call an emergency meeting of the board and it can be cleared,” he told ETV Bharat.

“Time is short, reaction time of the government has to be fast, the broad contours have already been defined,” added the source.

The source also confirmed that unlike the World Bank’s $1 billion loan, which is primarily for the health sector, the ADB loan will also cover social sectors.

In its statement issued today, the ADB also confirmed that its assistance to India would not be limited to the health sector alone.

ADB said the $2.2 billion package for India would also include measures to alleviate the economic impact of the pandemic on the poor, unorganised workers, and the SME sector.

The novel coronavirus has killed more than 200 people in the country and the number of confirmed cases has gone beyond 6,000. The COVID-19 virus has killed over 90,000 people across the globe and infected more than 1.5 million people.

(Article by Krishnanand Tripathi)