Government on Thursday cleared the utilisation of India's capital contribution to SAARC Development Fund (SDF) for promoting cross-border infrastructure projects, trade and growth.
The Cabinet approved the proposal to permit utilisation of India's capital contribution to SDF for Economic and Infrastructure Windows, an official statement said.
So far, India's capital contribution was only for the Social Window of SDF.
"The approval will help in promoting projects such as cross border infrastructure. Such projects will help improve intra-SAARC trade and growth potential of the SAARC region, and also in promoting financial inclusion and social security to disadvantaged/vulnerable sections of society in the region," the statement added.
There are no additional financial implications for India, as it only entails a restructuring of India's capital contribution to the SDF, it said.
SDF was set up in 2008 to improve the livelihood of the people and to accelerate economic growth, social progress and poverty alleviation in the SAARC region.
It provides for utilisation of the Fund for projects in three windows -- Social, Economic Window and Infrastructure.
The Social Window focuses on poverty alleviation and social development projects. The infrastructure Window covers projects in the areas such as energy, power, transportation, telecommunications, environment, tourism and other infrastructure areas. The Economic Window for non- infrastructural funding.
At the 18th SAARC Summit in November 2014, leaders had agreed to operationalise the SDF's Economic Window and Infrastructure Window for implementation of regional and sub-regional projects.
"In light of the pressing need to address infrastructure bottlenecks for improved growth of the SAARC region, it is pertinent to use India's capital contribution to SDF for its Economic and Infrastructure Windows in addition to the Social Window," the statement added.
