By TIOL News Service

NEW DELHI, DEC 17, 2020: INDIA signed a USD1 billion (Rs 7,500 crore) loan pact with the New Development Bank (NDB) on Wednesday to fund its rural infrastructure and employment schemes which were adversely affected by the COVID-19 pandemic.

"The programme will support the government in mitigating the adverse economic impact of COVID-19 pandemic and enable economic recovery in the rural areas," said an official release.

The country-wide restriction on movement of people, coupled with additional stringent restrictions imposed by states slowed down economic activity and resulted in the loss of employment and income of workers, especially those in the informal sector, including rural areas.

India has already borrowed USD1 billion from the BRICS bank which was set up by Brazil, Russia India, China and South Africa.

The latest tranche will try to stimulate demand by funding the creation of a durable rural infrastructure assets and generation of employment opportunities for rural poor, especially migrant workers who have returned from urban areas.

The BRICS bank loan has a tenure of 30 years, including a 5-year grace period.