Q. India borrows from the World Bank through International Bank for Reconstruction and Development (IBRD) and International Development Association(IDA). Consider the following statements in this context:
IDA funds are one of the most concessional external loans,
IBRD funds are costlier and at par with the commercial external borrowings in terms of interest rates
IDA loans are used largely Infrastructure projects
Which among the above statements is/ are correct?
Answer: 1 Only
Notes: IDA funds are one of the most concessional external loans for Government of India (GOI) and are used largely in social sector projects that contribute to the achievement of Millennium Development Goals (MDGs).IBRD funds are relatively costlier but cheaper than commercial external borrowings. The GOI utilizes IBRD loans primarily for infrastructure projects. However, sometimes a blend of IDA credits and IBRD loans is also used.
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