Japan extends 3,550 cr loan to India to help destitute populations affected by Covid-19

India and Japan signed an agreement for a loan of up to 50 billion yen (about ₹3,550 crore) to back the implementation of health and medical policy for New Delhi’s economic support programmes concerning the poor and vulnerable affected by the Covid-19 crisis, on Friday.

READ | COVID-19: India Delivered 9 Consignments Containing Relief Supplies To Bhutan Since March

In New Delhi, Additional Secretary, Department of Economic Affairs of Finance Ministry, CS Mohapatra and Japanese ambassador Suzuki Satoshi signed the agreement with an interest rate of 0.65% per annum and a repayment period of 15 years, including a five-year grace period. Suzuki Satoshi tweeted about the signing pact.

READ | MEA On US Threat Against Russia's Missile Deal: 'India Pursues Independent Foreign Policy'

Earlier Japan supported the Indian government to counter the Covid-19 crisis by providing budget support of 50 billion yen and grant assistance worth one billion yen (about ₹71 crore). 

The Japanese embassy stated that the vulnerable groups, including the poor and women, had been severely affected by the economic slowdown caused by the pandemic and will contribute to the Pradhan Mantri Garib Kalyan Yojana. 

“This loan will provide the necessary funds for the government of India to implement economic support programs for the poor, vulnerable and policy reforms, including but not limited to health and medical sectors, which are essential in the fight against Covid-19,” the embassy said.

READ | India Reiterates Afghan Peace Commitments While Chairing UNSC Taliban Sanctions Committee

This financial supports from Japan aims to support the Indian government's programmes such as Pradhan Mantri Garib Kalyan Yojana (PMGKY), that will contribute to a more stable and sustainable socio-economic development in India. Including provision of special insurance for health workers fighting Covid-19, provision of assistance and support to construction workers and distributing food grains to the poor and vulnerable.

It is expected that this grant aid will lead to reinforcing the fight against infectious diseases COVID-19, in India, and contribute towards further strengthening cooperation between Japan and India.

READ | India's UNSC Term Critical; Focus On Indo-Pacific, Terror Threats: French Prez' Advisor

Pradhan Mantri Garib Kalyan Yojana (PMGKY)

Pradhan Mantri Garib Kalyan Yojana (PMGKY) was launched by the Government of India and came into effect since 2016. It allows individuals to deposit money that has not been taxed. Under the scheme, 50% of the untaxed amount must be paid. This scheme was initially valid from December 2016 to March 2017. It was later extended to overcome the economic impact of Coronavirus-induced lockdown on the poor, Prime Minister Narendra Modi, soon after the imposition of lockdown on March 24, announced a relief of Rs 1.70 lakh crore under the Pradhan Mantri Garib Kalyan Yojana.