The Central government on Monday signed a deal with the World Bank to boost micro, small, and medium enterprises (MSMEs) amid the coronavirus crisis. The agreement worth $750 million has been signed under the MSME Emergency Response Programme. "The World Bank's MSME Emergency Response Programme will address the immediate liquidity and credit needs of some 1.5 million viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs," the Ministry of Finance said in a statement.
"COVID-19 pandemic has severely impacted the MSME sector leading to loss of livelihoods and jobs. The Government of India is focused on ensuring that the abundant financial sector liquidity available flow to NBFCs, and that banks which have turned extremely risk averse, continue taking exposures in the economy by lending to NBFCs," Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance, said.
The World Bank has so far committed $2.75 billion to support India's emergency coronavirus response, including the new MSME project. The first $1 billion emergency support was announced in April this year for immediate support to India's health sector. Another $1 billion project was approved in May to increase cash transfers and food benefits to the poor and vulnerable, including a more consolidated delivery platform - accessible to both rural and urban populations across state boundaries.
Meanwhile, in its latest edition of the Global Economic Prospect, the World Bank said that the COVID-19 pandemic and the multi-phased lockdown imposed to curb its spread has resulted in a devastating blow to the Indian economy. India's economy will shrink by 3.2 per cent in the current fiscal, the World Bank said.Also read: India-China issue: Chinese Army moves back over 1 km from Galwan valley
Also read: Sovereign Gold Bond scheme opens for subscription: Five things to know before you invest