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India

India’s Cabinet has approved the extension of $25 million as budget support loan to the government of Maldives.

ADK GENERAl

Indian papers reported that the Cabinet made this decision yesterday.

The Indian government had agreed in 2011 to extend $100 million to Maldives, inclusive of $50 million as credit facility. The Indian Cabinet made the decision to reduce the credit facility to $25 million, and extend the remaining $75 million as budget support to the government of Maldives.

The Parliament’s Finance Committee had granted approval last Sunday to Finance Ministry to obtain additional $25 million as budget support.

Finance Minister Abdullah Jihad has said that difficulties will arise in paying salaries this month, unless this money is secured.

India had earlier extended $25 million out of the $100 million loan promised during SAARC Summit last year. An agreement was also signed earlier this month between the Indian government and Maldivian government for the provision of $25 million.

The $100 million loan should be repaid to the Indian government in 10 years with an annual interest rate of 1.5 percent.

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