Japan offers up to 30-bn yen loan to help poor hit by COVID-19 in India

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The coronavirus pandemic has created an unprecedented disruption, ultimately leading to losses across all sectors, around the world. In India, the government is scrambling to find ways to mitigate the socio-economic impact—not to mention the health impact—COVID-19 had brought to the country with ally Japan by its side.

Recently, the government of India in Delhi has signed a loan agreement of up to 30 billion yen—or over Rs 2,100 crore—with the Japan International Cooperation Agency (JICA) for its program to address the ongoing pandemic’s socio-economic impact across different sectors.

From agriculture to leisure: COVID-19 takes its toll

A recent study by Dr. Ranjan Aneja, associate professor in Department of Economics, Central University of Haryana, and Ms. Vaishali Ahuja, post-graduate student in Economics at Central University of Haryana, pointed out that “all sectors of the economy has been disproportionately affected and even within a sector, there is a disproportionate loss. The societal impacts are dire too with job losses, mental illness, increased domestic violence, and so forth.”

The agriculture sector, which saw relaxations on the imposed national lockdown, still faced significant losses due to transport constraints, mobility restrictions and lack of labor. This is in addition to reports that about 44 percent of funds transferred under the Pradhan Mantri Kisan Samman Nidhi Yojana during the lockdown could have failed to reach the beneficiaries.

A separate academic report, titled ‘Consequence of lockdown amid COVID-19 pandemic on Indian agriculture,’ noted: “Agriculture sector currently contributes to 16-17% of the GDP. India hosts nearly one fourth of the world’s farmers and possess 48% of world’s arable land. The country has made significant advances in many off-farm sectors such as service sector, industrial production etc. but agriculture continues to be the lifeline of the nation, especially for the 64% Indians living in rural areas.”

Central and state governments in India have enacted measures to reduce the community transmission of COVID-19 in the country, including enforcing a national lockdown that effectively brought social and economic life to a standstill—so much so that even the entertainment industry was not spared by the pandemic. As people continue to do their daily activities from home such as working, shopping for necessities, studying, catching up with friends and relatives and even play casual entertainment games on online casinos, more and more entertainment and tourism venues are forced to temporarily close their doors.

Japan ODA for ‘Crisis Response Support Loan’

This is the second official development assistance (ODA) from Japan under the ‘COVID-19 Crisis Response Support Loan for Social Protection,’ after JICA gave the government of India a 50 billion yen (over Rs 3,500 crore) loan to augment the government’s health infrastructure amid the COVID-19 emergency in August 2020.

The latest agreement was signed by Suzuki Satoshi, Ambassador Extraordinary and Plenipotentiary of Japan to India, and CS Mohapatra, Additional Secretary, Department of Economic Affairs of the Ministry of Finance.

“The objective of the program is to contain COVID-19 and mitigate its adverse socioeconomic impacts in India, by extending budget support to the Government of India, implementing emergency response programs for the health sector as countermeasures against COVID-19, and thereby contributing to promoting the social and economic stabilization and development efforts of India,” JICA said in a statement.

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