The funds will also be utilised for employment generation under the Mahatma Gandhi National Rural Employment Guarantee Scheme.
The loan has a repayment tenor of 30 years, including a five-year grace period.
The New Development Bank (NDB) will lend India $1 billion for supporting the country’s economic recovery from the Covid-19 pandemic through expenditure on rural infrastructure related to natural resource management, the finance ministry said on Wednesday.
The funds will also be utilised for employment generation under the Mahatma Gandhi National Rural Employment Guarantee Scheme. The loan has a repayment tenor of 30 years, including a five-year grace period.
The loan is aimed at supporting the government to ensure an economic rebound in rural areas through natural resource management works that will facilitate economic activity and employment generation and stimulate rural demand.
“The country-wide restriction on movement of people, coupled with additional stringent restrictions imposed by state governments and intermittent localised lockdowns to contain the spread of Covid-19 affected domestic supply and demand, resulting in slowed-down economic activity. This resulted in loss of employment and income of workers especially those employed in the informal sector, including rural areas,” the ministry said in a statement.
The NDB, often referred to as BRICS Bank, was set up based on the inter-governmental agreement among the BRICS nations (Brazil, Russia, India, China and South Africa) in July 2014. The purpose of this bank is to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries.
Up to May, the bank had approved 55 projects of member countries for funding, with a total amount of $16.6 billion.