India Seeks $2.5 Billion From World Bank, ADB To Plug Budget Gap From Oil Price Shock

Tensions in West Asia have hit India’s budget hard. With the country importing more than 80% of the crude oil it needs, the spike in global energy prices has forced the government to spend far more than it had planned on fuel and fertilizer subsidies just to keep the burden off ordinary consumers. That extra spending has pushed India into a sizeable budget deficit, the gap between what the government earns and what it spends, right at the start of the financial year. It’s also limiting how much the government can spend on big domestic projects.

Talks With World Bank, ADB Underway
To work around the shortfall, India is in active talks with the World Bank and the Asian Development Bank (ADB) to raise close to $2.5 billion, roughly Rs. 21,000 crore, through existing international lending channels.
Of that amount, $1.5 billion could come from the World Bank and $1 billion from the ADB. An official announcement on the funding is expected within the next two months.