Fact Check: No, India Is Not Debt Free, Still Owes Billions To World Bank
The Logical Indian Crew India
October 21st, 2019 / 6:11 PM
Image Credit: VarthaBharati
A viral post is doing rounds on social media claiming that PM Modi led NDA government has repaid all the loans taken in the past six years from the World Bank.
The Facebook post says, “For 70 years India was the biggest borrower at the World Bank. Once every Indian born was a debtor at birth, the things which great economists couldn’t do, a chaiwala did it, he changed India’s and Indian’s fate. Within 6 years @narendramodi has cleared every penny of India’s debt at the World Bank, all paid. Full settlement is done at UN by India, who is that fellow who was talking about some economic slowdown in India? #UNLoanCleared #ModiHaiToMumkinHai.”
The claim has been promulgated along with a screenshot of a tweet by India’s permanent representative at the United Nations, Syed Akbaruddin.
Akbaruddin, in his tweet, conveyed about the payment made to the United Nations. However, the World Bank and UN are two separate international agencies which have no link with each other.
A report on the ‘Financial situation of the United Nations’ published on October 11, 2019, has a chart that listed the countries that have paid all assessment dues to the international body as of 11 October 2019. However, assessment dues are different from loans repayment. Assessment dues are the mandatory sum to be paid to the UN for being its member. The countries can further contribute as a charity to the UN above the assessment sum. Article 17 of the UN charter says, “The expenses of the Organization shall be borne by the Members as apportioned by the General Assembly.”
India’s loan from the World Bank has only increased since the NDA government came to power. The World Bank provides two types of loans – IDA(International Development Association) and IRDA (International Bank for Reconstruction and Development). The former gives loan to poorest of the countries without expecting any grant in return. The latter has a prescribed per cent of the rate charged on the lump sum amount of loan.
The Facebook post claims that India has repaid all loans in the last six years. However, India still owes IDA, which helps the world’s poorest countries, to the tune of $1.1 billion for 21 projects undertaken between 2014 to date. India also owes IBRD of over $2.3 billion for 11 projects, of which nine were agreed upon during UPA government.
According to a report published in 2016 pointed out that India has become the largest recipient of loans among all nations since its independence. These include loans taken during Narendra Modi’s first term as Prime Minister.
As a developing nation with considerable infrastructural needs, India continues to borrow from the World Bank for various projects zeroing in on transport, healthcare, education, energy, among others.
(with inputs from the Alt News)
Written by : Prashasti Awasthi
Edited by : Shubhendu Deshmukh