India and World Bank have recently signed a deal, according to which WB will issue a loan of $4.2 billion for the infrastructure projects as well as for re-capitalizing the public sector banks.

The deal was signed in the presence of the legislative bodies of the central government, Indian Infrastructure Finance Co. (IIFC), PowerGrid Corp and the World Bank.

According to the deal, the World Bank will provide $2 billion for state-run banks, while $1.195 billion will be provided to the IIFC for infrastructure projects, and another $1 billion will be issued for the PowerGrid Corp for the up-gradation of country’s power transmission system.

While talking to reporters, Director of WB, Mr. Roberto Zagha said, “Today's support will help maintain credit growth and continued infrastructure investments in the country. Supporting infrastructure is particularly important during the current crisis, not just to sustain the domestic economy at a time of reduced global demand, but even more to lay the foundations for stronger future growth.”

While, the MD & Chairman of IIFC, Mr. S. S. Kohli said, “This loan will help IIFC increase the availability of long-term finance for infrastructure projects across a range of sectors including roads, power, airports, and ports. India's infrastructure needs have been estimated at between $100-150 billion per year, with realizations well short of this target.”