WB Grants India US$14 Billion to Withstand Economic Crisis
Dec. 16 – Owning to the capital markets drying up, a lack of long term financing ability and an expected rise in banks non-performing assets, the world bank has decided to lend India's state-run banks US$14 billion over three years. The biggest loan yet to India, the world bank said a majority of the loan will focus on areas most affected by the global financial crisis, including state-owned and housing banks, small- and medium-sized enterprises and infrastructure. The loan will also increase assistance especially in infrastructure to seven of India's poorest states as well as poorer regions in middle income states.
The loan comes at a time when Indian's realised their economy isn't really decoupled from the global crisis as politicians had said it was. The global financial crisis is taking its toll on the Indian economy and the country has tried everything from cuts in interest rates and fuel prices to a stimulus package to prevent the country from sinking. Nonetheless, exports, manufacturing and industrial output, all affected by the crisis have continued to fall. Only last week, the world bank's growth projections for developing countries forecast India's economy would slow to 5.8 percent in 2008, with a recovery to 7.7 percent by 2010.
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