On October 01, The Logical Indian exposed the Modi government’s heavy dependence on foreign loans and resistance to using PM-CARES fund for the fight against corona. The story revealed that the Centre’s Rs 15,000 crore special COVID package, announced on April 22 this year, was entirely financed through loans from Asian Development Bank (ADB), International Bank for Reconstruction and Development (IBRD), and the Chinese Asian Infrastructure Investment Bank (AIIB). Professor Jayati Ghosh of JNU, a UNDP award-winning development economist called this ‘absolutely unnecessary’, ‘a currency risk’ and that the loan will ‘significantly add to repayment costs as the rupee will depreciate in value’. She also said that the amount could have been easily financed by the Centre itself, if not the PM-CARES fund since it is only 1/10th of the amount given as tax concessions to corporates last year ‘without blinking an eyelid’.
Minister’s Response
Dr. Harsh Vardhan, who is India’s Health Minister, was holding a social media interaction called ‘Sunday Samvaad With Dr HV’ with his followers on October 04. He was replying to various scripted questions during this interaction and one of the questions read as follows-
‘The Government of India had to take loans from China’s AIIB Bank to fight the pandemic earlier this year. So, will we be able to manage Rs 80,000 crores for the vaccines immunisation program in 2021?’
This is exactly what this author had received as an RTI response from the Ministry of Health, based on which the story was published.
Replying to this question, the Minister said-
‘The government has taken loans from World Bank, the AIIB (Chinese bank) and the ADB to the tune of Rs 15,000 crores for managing COVID. The support to states and other implementing agencies is being done through budgetary resources. Moreover, the loan is on a reimbursement basis and the government is not dependent on funds being received from financing agencies for implementation of the COVID-19 Emergency response. Giving vaccines to all countrymen is the government’s priority. And nothing shall come in the way of fulfilling this target. You can be rest assured Shipa ji’.
Minister’s Half-hearted Response Fails to Address Many Issues
Dr. Harsh Vardhan failed to explain the necessity of taking these loans for the COVID package, which could have been easily financed by the centre or PM-CARES fund. His assurance that ‘the government is not dependent on funds being received from financing agencies’ is hollow since documents accessed by this author on behalf of The Logical Indian reveal that even on June 15, the government preferred rushing to the ADB for a loan of Rs 22 crores (3 million dollars) to strengthen Point of Entry system in the country. Again, this amount could have been easily covered by the PM-CARES fund or by the Centre, and therefore it is unclear why this unnecessary burden was put on the public exchequer.
Further, when the Minister claims that ‘support to states and other implementing agencies is being done through budgetary resources’, one could ask- then why borrow the loans at all and burden public exchequer?
The Minister also did not utter a word on the usage of the PM-CARES fund, either for COVID response or for mass vaccination. In all this, the mystery still remains unsolved- what is the PM-CARES fund being used for?
You can read the full story here.
