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DEA ‘s consent for 2nd Extension under IDEAS

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Cabinet Committee on Economic Affairs has given its nod for second extension to the Indian Development and Economic Assistance Scheme (IDEAS) for Lines of Credit (LOC) to African and other developing countries for another five years i.e. from 2015-16 to 2019-20 of US $ 589.34 mn.

  • The first extension to the scheme was granted in 2009-2010.

DEA ‘s consent for 2nd Extension under IDEASProcess of sanctioning of the Line of Credit
The IDEA Scheme with suitable modifications and amendments will continue to be implemented through the Department of Economic Affairs (DEA) in the Ministry of Finance by the following process.

  1. The project proposals shall be examined by the Standing Committee comprising JS (DPA), MEA and JS (BC), DEA.
  2. On receiving approval of the External Affairs Minister on the recommendations of the Standing Committee, MEA shall forward the proposal to DEA for seeking the approval of Finance Minister.
  3. DEA will then issue a formal letter conveying sanction of the Line of Credit.

About Line of Credit under IDEAS
The LoC is presently operated through Export Import Bank of India, which raises resources from the market to finance the LoCs.

  • GOI backs the Lines of Credit by signing a Deed of Guarantee in favour of the lending bank as a guard against any default.
  • The GOI will provide the Interest Equalisation Support (IES)*.

* IES – i.e. the difference between the cost of borrowing and the concessional lending rate.

Total LOCs and IES under scheme

  •  So far 222 LOCs have been issued to 64 countries worth USD 14640.19 mn.
  • The total amount of IES paid by GOl to Exim Bank up to 31.3.2015 is Rs. 1903.95 crore.