The World Bank has cleared a $4.3 billion loan for India, the largest loan the bank has given the country. Out of the $4.3 billion, $2 billion will be used to inject capital into some public sector banks. Another $1.2 billion will be for the government’s India Infrastructure Finance Company or IIFCL. $1 billion will go to the government-owned Power Grid Corporation and the remaining $150 million will go to a rural water and sanitation project in Andhra.
Prime Minister Manmohan Singh had a word of caution on Wednesday as he left for his meeting with G-20 leaders in the United States. Singh told reporters that while the world economy had picked up, it was still not out of the woods. He also called for reform in institutions like the IMF and talked about the need for a strong stance against protectionism. Leaders of the G-20 nations are meeting in Pittsburgh on Thursday and Friday as part of their efforts to coordinate their strategies for economic recovery.
Though talks between India and Japan on a free trade agreement ended inconclusively in January, the two countries are going to restart negotiations on 29 September. But there are obstacles ahead. India wants its pharmaceutical companies to get greater access to Japanese markets. But Japan doesn’t recognize US FDA standards for Indian drugs and wants clinical trials for Indian drugs to be held in Japan. Japan is also seeking a bilateral agreement on government purchases But India is unlikely to favour such an agreement after an UNCTAD study found it would give Japan an advantage.
The government plans to review its minimum support price for wheat when the new sowing season starts in October. Over the last few years, the government has increased wheat prices and currently pays Rs1,080 for ever 100 kg of wheat.
Nacil, the company that operates Air India, has dumped its plan to restructure a deal for Airbus 320 planes. That means Air India will stick to its original plan of inducting the 15 planes by the end of next year. Air India had asked for a restructuring plan after it accumulated massive losses earlier this year. The airline has since been trying to revamp its operations so it can get a government bailout.
Ford Motor has unveiled its first small car for the Indian market. It’s called the Figo, which is Italian slang for cool.
Ford will manufacture the Figo at its factory in Chennai and will also export the car Asia-Pacific countries and Africa.