Finance Minister Pranab Mukherjee on Wednesday said 95 per cent of the $4.3 billion World Bank grant would be spent on developing the country's infrastructure.
"The World Bank has sanctioned $4.3 billion loans for India. At least 95 percent of the fund will be used for developing infrastructure," Mukherjee said while addressing the 108th annual general meeting of the Merchants' Chamber of Commerce (MCC) in Kolkata.
"Of this total grant, $2 billion will go to the banking sector for expanding the volume of credits available to firms," he said.
The World Bank has also sanctioned $1.2 billion for India Infrastructure Finance Co Ltd (IIFCL) for public-private partnership projects in the infrastructure sector and to stimulate the development of a long-term local currency debt financing market.
This apart, $1 billion will be given to address India's acute power shortages by assisting PowerGrid Corp -- the country's electricity distribution company.
The bank has also provided $150 million to Andhra Pradesh to improve its water supply and sanitation services for 2,600 villages across six districts.