Govt secures interest-free $518 million loan from World Bank

NEW DELHI: The government on Friday secured an interest-free loan of $518 million from the World Bank group which would be used for eradicating polio and diseases spread by agents such as mosquitoes and rodents.

Funds from the World Bank in the form of International Development Assistance is an interest-free loan, which has to be repaid along with a processing fee.

"The National Vector Borne Disease Control and Polio Eradication Support Project aims at enhancing the effectiveness of government response to control malaria, eliminate kala azar and eradicate polio. This will be achieved by increasing the number of people benefiting from effective prevention, diagnosis and treatment services for malaria and kala azar, and vaccination against polio," the finance ministry stated here.

The agreement was signed by Alok Sheel, joint secretary in the Department of Economic Affairs and the World Bank's operations adviser Rachid Benmesssaoud, the statement added.

India is now aiming to double its loans from the World Bank, which follows a financial year of July to June. The World Bank group offers loans under two windows, one of them interest-paid and the other interest-free.

India now borrows about $ 1.5 billion to $ 2 billion from the International Bank for Reconstruction and Development which gives interest-paid loans and about $ 1.6 billion interest-free loans a year from the International Development Assistance.

India is borrowing more from multilateral agencies as its fiscal deficit is spiralling out of its budgeted target on account of the tax cuts and the extra spending made to sustain the pace of economic growth.