India signs $1 billion loan with NDB to support MGNREGS and rural infrastructure

The government signed a loan agreement worth $1 billion with the New Development Bank (NDB) to support the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and India’s rural infrastructure, on Wednesday.

The loan will aid India’s economic recovery from the pandemic “by supporting expenditures on rural infrastructure related to natural resource management (NRM) and rural employment generation under Government of India’s Mahatma Gandhi National Rural Employment Guarantee Scheme,” a finance ministry statement said.

The funding came under the NDB’s fast-track emergency response to COVID-19 and is expected to help preserve rural income and sustain rural expenditure, thereby resulting in increased demand that aids economic recovery, the statement said.


The loan comes with a 30-year tenor and includes a five-year grace period.

The programme under the loan agreement called for the creation of durable rural infrastructure assets and focuses on generation of employment opportunities for rural poor, especially migrant workers who have returned from urban areas after having lost their livelihoods due to the pandemic.

The agreement was signed by Baldeo Purushartha, joint secretary, Department of Economic Affairs and Xian Zhu, vice president, of the NDB.

The multilateral lender was formerly known as the BRICS Development Bank and was set up by the BRICS nations of Brazil, Russia, India, China and South Africa.