The world bank today has approved USD 1 billion ‘Accelerating India’s Covid-19 Social Protection Response Program’ to support the country’s efforts for bestowing social assistance to the poor and vulnerable households that are severely impacted by the pandemic. This takes the total commitment from the World Bank for emergency Covid-19 response in India to USD 2 billion.
Already, a USD 1 billion support was announced last month to support the country’s health sector.
“The response to the Covid-19 pandemic around the world has required governments around the world to introduce social distancing and lockdowns in unprecedented ways,” said Junaid Ahmad, World Bank Country Director in India in a webinar interaction with the media.
“These measures, intended to contain the spread of the virus have, however, impacted economies and jobs – especially in the informal sector. India with the world’s largest lockdown has not been an exception to this trend,” he added.
He also stated that “The COVID-19 pandemic has also put the spotlight on some of the gaps in the existing social protection systems. This programme will support the Government of India’s efforts towards a more consolidated delivery platform – accessible to both rural and urban populations across state boundaries.”
This loan would facilitate the country move from more than 460 fragmented social protection schemes to an integrated system, which would be faster, more flexible and also acknowledge the diversity of needs across states, said the bank. Geographic portability would also be introduced in order to ensure that social protection benefits could be accessed from anywhere in the country, which will help in providing relief to inter-State migrant workers. Furthermore, there would be a shift from the current rural focus of social protection schemes to include the needs of the urban poor as well.
Mr. Ahmad said, “The platform draws on the country’s existing architecture of safety nets – the PDS, the digital and banking infrastructure, and Aadhar – while positioning the overall social protection system for the needs of a 21st century India. Importantly, such a system will need to leverage India’s federalism enabling and supporting the States to respond quickly and effectively in their context.”
USD 550 million of the USD 1 billion commitment, will be financed by a credit from the International Development Association (IDA), which is the World Bank’s concessionary lending arm. Also, USD 200 million will be a loan from the International Bank for Reconstruction and Development (IBRD) and this will be with a final maturity of 18.5 years including a grace period of five years.
Furthermore, the remaining USD 250 million will be made available after the 30th of June 2020.