India extends loan guarantees for healthcare and tourism

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Indian Finance Minister Nirmala Sitharaman and Governor of the Reserve Bank of India (RBI) Shaktikanta Das arrive to attend the RBI Central Council meeting in New Delhi, India, July 8, 2019 REUTERS / Anushree Fadnavis / File Photo

NEW DELHI, June 28. (Reuters) – India has provided a federal guarantee for bank loans for medical and travel services, waiving visa fees for 500,000 foreign tourists, the finance minister said Monday, boosting support for the economy hit by the pandemic.

Finance Minister Nirmala Sitharaman told reporters that the government will expand federal loan guarantees for businesses to Rs 4.5 trillion ($ 60.7 billion) from the previously set limit of Rs 3 trillion.

According to her, the government will provide a guarantee of Rs 1.1 trillion on loans to the health sector and medical infrastructure, which will allow them to attract loans at a lower interest rate of 8-8.25% per year.

The Emergency Credit Lines Guarantee Scheme (ECLGS), launched last year, has helped cash-strapped small businesses raise funds during the COVID-19 lockdown for working capital and order fulfillment.

The government will extend the benefits of the free food grain program for the poor, launched last year, until November, which will cost Rs 938.7 billion, bringing the total cost of the program to over Rs 2.27 trillion, she said.

Slow vaccinations and local restrictions after a second massive wave of infections and deaths across the country hit economic activities such as retail, transportation and construction, leaving millions out of work.

India’s economic growth jumped 1.6% in January-March from a year earlier, but economists are increasingly pessimistic about this quarter after a huge second wave of COVID-19 infections hit the country in April-May.

(1 US dollar = 74.2125 Indian rupee)

Report by Aftab Ahmed and Manoj Kumar; Editing: Toby Chopra

Our standards: Thomson Reuters Trust Principles.

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