Minister of State for Finance Anurag Thakur informed the Parliament on Monday that the Centre took two loans to the tune of over Rs 9,000 crore from the Chinese-backed Asian Infrastructure Investment Bank to augment the fight against coronavirus crisis, amid border tensions with the neighbouring country.

Thakur was responding to questions put forth by Bharatiya Janata Party MPs Sunil Kumar Singh and PP Chaudhary in the Lok Sabha about how the government had put the funds to use and whether they had been transferred to the states.

The minister informed the Lok Sabha that the first loan agreement was signed on May 8 while the second one was made on June 19, just four days after the Galwan Valley clash. The initial reports about Chinese intrusion in Ladakh had, however, begun emerging in May.

“The Government of India has signed two loan agreements with the Asian Infrastructure Investment Bank under COVID-19 Crisis Recovery Facility,” Thakur said. “First loan of USD 500 million [Rs 3,676 crore approximately] was signed on May 8, 2020 to partly support the ‘India COVID-19 Emergency Response and Health Systems Preparedness Project’ to respond to the threat posed by COVID-19 pandemic and strengthen the national health system for preparedness.”

Thakur added: “The second loan of USD 750 million [Rs 5,514 crore approximately] was signed on June 19, 2020 as budgetary support to Government of India for Accelerating India’s COVID-19 Social Protection Response Programme in order to support measures undertaken under Pradhan Mantri Garib Kalyan Yojana (PMGKY), the benefits of which have also flown to States/UTs [Union territories].”

The minister said that the Asian Infrastructure Investment Bank has so far released an amount of $251.25 million [Rs 1,847 crore approximately] from the first loan. He added that the funds were used to help the states.

On Tuesday, Thakur had told the Rajya Sabha that the World Bank had provided India three loans amounting to $2.5 billion [Rs 18,386 crore approximately] to combat the coronavirus pandemic, according to All India Radio.

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On Wednesday, Congress leader Rahul Gandhi criticised the Centre for taking “huge loans” from the bank amid the tense situation.

Tensions between India and China flared up after the June 15 clash in Galwan Valley in Ladakh, when 20 Indian soldiers and an unknown number of Chinese soldiers were killed. Military heads of the two countries have engaged in several rounds of talks over the last three months but little progress has been achieved.

The border situation escalated again this month. The Ministry of External Affairs had said on September 1 that Chinese troops engaged in “provocative action” in Ladakh on August 31. Less than a week later, China accused India of “outrageously firing warning shots” in a new confrontation on the southern bank of Pangong Tso lake in Ladakh. India denied the accusation.

On September 10, India’s Minister of External Affairs S Jaishankar met his Chinese counterpart Wang Yi in Moscow on the sidelines of the Shanghai Cooperation Organisation summit. The two ministers agreed on a five-point plan to defuse tensions between the countries and said the current situation in the border areas of Ladakh was “not in the interest of either side”. They agreed, therefore, that the border troops of both sides should “continue their dialogue, quickly disengage, maintain proper distance and ease tensions”.