New Delhi (IANS) The Asian Infrastructure Investment Bank (AIIB) has approved a $750 million loan to India to assist the Centre in its fight against the coronavirus pandemic and its impact on the poor.
This loan follows a $500 million emergency Covid relief financing in May to enable the Government of India to scale up efforts to limit the transmission of cases, strengthen the health system to expand its response capacity and enhance preparedness to manage future outbreaks.
Co-financed by the Asian Development Bank, the budgetary support will go toward bolstering economic aid for businesses, including for the informal sector, expanding social safety nets for the needy, and strengthening the country's health care systems.
The finance would help in strengthening its response to the adverse impact of the COVID-19 pandemic on millions of poor and vulnerable households, an AIIB statement said.
It noted that India is extremely vulnerable to the pandemic given that around 270 million people continue to live below the national poverty line and around 81 million live in densely populated informal settlements with limited access to health services, according to the World Bank.
"The disruption in the economic activities threatens to impact poor households disproportionately, especially women, many of whom are employed in the informal sector," it said.
AIIB Vice President, Investment Operations, D. J.Pandian said: "Many of the world's low and middle-income countries are still in the early stages of the health crisis, but are already feeling the impacts of the pandemic. This poses an enormous risk for millions across India who have only recently emerged from poverty."
Pandian added that AIIB's support to India also aims to ensure economic resilience to prevent long-term damage to the productive capacity, including human capital, of India's economy.
The AIIB's total sovereign loans to India that have already been approved amount to $3.06 billion, including the recent $500 million COVID-19 for emergency response.
The current loan will be the second for India under AIIB's COVID-19 Crisis Recovery Facility (CRF), which was created as part of the coordinated international response to counter the pandemic, to support AIIB members' urgent economic, financial, and public health needs and quick recovery from the crisis.
While the AIIB does not have a regular instrument for policy-based financing, the bank is extending such financings on an exceptional basis under the CRF to support its members through projects co-financed with the World Bank or the Asian Development Bank, the statement said.