World Bank $500 million Aid to India: The World Bank has authorized a $500 million scheme to help the Indian government revive the MSME sector across the country. The Indian government will get the amount from the International Bank for Reconstruction and Development (IBRD) for the same purpose. It will rebuild and kick start the activity of the MSME sector in India during this COVID 19 pandemic situation. Now let’s check this financial aid of World Bank on this page in detail.
MSME in India:
The government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The act defines the micro, small and medium enterprises under the investment in plant and machinery. MSME sector is the backbone of India’s economy. The sector has been contributing 30 percent of India’s GDP and 40 percent of exports. But now, the MSME Sectors in India has heavily impacted by the COVID-19 crisis in the country due to lockdown and other factors. So that, the World Bank’s Board of Executive Directors today approved a$500 million program to support the Government of India’s nationwide initiative to revitalize the MSME sector.
World Bank Program on MSME in India 2021:
World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries. Now it decided to assist India in MSME sector. The World Bank sanctioned $500 million to support the Government of India’s nationwide initiative to revitalize the MSME sector. This program targets improvements in the performance of 555,000 MSMEs and is expected to mobilize financing of $15.5 billion, as part of the government’s $3.4 billion MSME Competitiveness. The $500 million loan from the International Bank for Reconstruction and Development (IBRD), has a maturity of 18.5 years including a 5.5-year grace period.
World Bank Finance $1.25 Billion to India:
Since last year (2020) the World Bank’s financing towards improving the productivity and financial viability of the MSME sector amounts to $1.25 billion. It includes the $750 million MSME Emergency Response Program, approved in July 2020 and $500 million Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance (RAMP) which was approved in June 2021.
Junaid Ahmad, who is World Bank Country Director in India, has stated that, “The MSME sector, a critical backbone of India’s economy, has been hard hit by the Covid-19 pandemic. The RAMP program will intensify efforts to support firms to return to pre-crisis production and employment levels, while laying the foundations for longer-term productivity-driven growth and generation of much-needed jobs in the MSME sector.”
This program will boost up the MSME sector during this pandemic period. Let’s wait for the Indian government announcement on the MSME sectors. Stay connected with us for the further updates regarding this.
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