India to increase development assistance for debt-ridden Sri Lanka
2 min read . Updated: 21 Jan 2023, 01:26 AM IST
Premium- India and Sri Lanka will discuss a debt restructuring plan for helping the country carve a way out from its deep economic crises
As Union Minister for External Affairs S Jaishankar landed in Sri Lanka for a two-day trip, India on Friday announced to double its high-impact community development project in the debt-trapped island nation. During his visit, Union Minister will sign a new bilateral agreement regarding the same with the top leaders of the country.
India and Sri Lanka will discuss a debt restructuring plan for helping the country carve a way out from its deep economic crises.
"This agreement related to community development projects in Sri Lanka with the support of the government of India was signed in May 2005. Its project limit was rupees 300 million which will now be doubled to rupees 600 million by the agreement signed today," a statement from President Ranil Wickremesinghe’s office said.
The statement from President's office added that special attention was paid to “the debt restructuring program of Sri Lanka which received a positive response from the Indian government".
The minister said that India understands the situation in Sri Lanka and is ready to provide all possible support to the country. He also handed over 300 houses in the Galle, Kandy, and Nuwara Eliya as part of the housing project implemented by India.
The visit by the External Affairs Minister was much looked forward to in Sri Lanka as India agreed to grant necessary financial assurances requested by the International Monetary Fund (IMF). Sri Lanka has applied for $2.9 billion as a bailout package from the IMF.
The bailout was put on hold by the IMF as Sri Lanka talked with its creditors to meet the global lender's condition for the credit facility.
Various countries appreciated India's move to grant financial assurances. “Great news that India had confirmed its commitment to provide Sri Lanka with debt relief consistent with restoring debt sustainability under the IMF-supported program," the Australian government said.
India has helped the island nation in crises with both monetary and non-monetary packages. The country has extended around $4 billion in line of credit and rollovers to debt-ridden Sri Lanka.
(With inputs from PTI)