Govt extends IDEA scheme for five years

In Uncategorized
November 19, 2015

The government on November 18 extended its economic assistance programme IDEAS for five years. Under this the line of credit is provided to African as well as other developing nations and will have a financial implication of about Rs 3,771.77 crore. The decision was taken by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi.

Background:-

Government has been providing Line of Credit (LoC) under the Indian Development and Economic Assistance Scheme (IDEAS) since 2005-06. The first extension to the scheme was granted in 2009-2010.
The objectives of the scheme continue to be relevant, it has been decided to give second extension to the scheme for another five years i.e. from 2015-16 to 2019-20.
Financial implication is towards payment of interest equalisation support to the lending bank, for which budgetary provision shall be made by the Department of Economic Affairs every year.
The amount includes the interest equalisation support on existing LoCs as well as new LoCs to be issued during 2015-16 to 2019-2020.

Role of The Ministry of External Affairs:-

The Ministry of External Affairs will select specific projects keeping in view diplomatic considerations and requests received from various developing countries.
On receiving approval of the External Affairs Minister on the recommendations of the Standing Committee, MEA shall forward the proposal to DEA for seeking the approval of the Finance Minister.
IDEA will then issue a formal letter conveying sanction of the Line of Credit.
The LoC will be operated through Export Import Bank of India or any other willing bank/ lending agency decided with the approval of the Finance Minister.
The lending bank will raise resources from the market to finance the LoCs.