AIIB Open to Provide Budgetary Support to India

Beijing-headquartered Asian Infrastructure Investment Bank is in the process of disbursement of funds to India under its COVID-19 Crisis Recovery Facility. The bank has approved a loan worth USD 500 million to support India's fight against COVID-19.

Hari Bhaskar, Senior Investment Operations Specialist, said, "In a week's time, the loan will be effective." Moreover, commenting on the Rs 20 lakh crore economic package announced by the Indian government, Bhaskar, said, “AIIB will provide India budgetary support or finance their economic package if it is needed.” He added there are no constraints there.

India continues to be the largest borrower of AIIB. “India has borrowed around USD 3.6 billion which is 25 per cent of the AIIB’s overall lending till date,” said Bhaskar. According to the AIIB website, India has proposed 26 projects of them around 16 projects have been approved.

India’s is the first project that was passed under COVID-19 Crisis Recovery Facility. Adding to this, Rajat Misra, AIIB Acting Director-General, Investment Operations, said, “In the past, AIIB has funded infrastructure projects such as metros, roads, irrigation etc, but this is the first healthcare project funded by AIIB in India.” The loan is extended up to December 2024.

When asked if this healthcare project goes beyond COVID-19 response, Bhaskar added, “This healthcare project has two objectives— short term and medium to long term. In the short term, half of the funds will be used for COVID-19 emergency response. In the medium to long term, the rest half of the funds will be used. This is mainly to strengthen the healthcare system of India.”

When probed if strengthening of the healthcare system is in line with Ayushman Bharat, Bhaskar explained, “The long-term objective of the project aligns with India’s ambitious ‘Ayushman Bharat Scheme’. This is because the scheme talks about strengthening India’s healthcare system.”