World Bank Extends Another $ 1 Billion to Battle of India Covid-19
VIJAYWADA: The world Bank The executive board of the board of directors approved on Friday a $ 1 billion COVID-19 Accelerating India Social Response Program to support India's efforts to provide social assistance to poor and vulnerable households severely affected by the pandemic of Covid-19.
This brings the Bank's total commitment to the COVID-19 emergency response in India to $ 2 billion. Last month a $ 1 billion support was announced for immediate support to India's health sector.
This new support will be funded in two phases – an immediate allocation of $750 million for fiscal year 2020 and a $250 million second tranche that will be made available for fiscal year 2021, a world Bank press release said.
The first phase of the operation will be implemented across the country through the Pradhan Mantri Garib Kalyan Yojana (PMGKY). It will immediately help expand cash transfers and food benefits, using a core set of pre-existing national platforms and programs such as The Public Distribution System (PDS) and Direct Benefit Transfers (DBT); provide strong social protection for essential workers involved in COVID-19 relief efforts; and they benefit vulnerable groups, particularly migrants and informal workers, who face high risks of exclusion under the PMGKY. In the second phase, the program will deepen the social protection package, whereby additional cash and in-kind benefits based on local needs will be extended through state governments and portable social protection delivery systems, said the statement.
Social protection is a critical investment as half of India's population earns less than $ 3 a day and is very close to the poverty line. More than 90 percent of India's workforce is employed in the informal sector, without access to significant savings or workplace-based social protection benefits such as paid sick leave or social security. More than 9 million migrants, who cross state borders to work each year are also at a higher risk, as social assistance programs in India largely provide benefits to residents within states, without adequate portability of benefits across the state. Importantly, in an urbanizing India, cities and towns will need specific support as India's largest social protection programs focus on rural populations, he added.
“The response to the COVID-19 pandemic around the world has required governments to introduce social distancing and lock downs in unprecedented ways. These measures, intended to slow down 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,” said , world Bank Country Director in India. “In this context, cash transfers and food benefits will help the poor and vulnerable access a ‘safety bridge’ towards a time when the economy will start to revive.”
Of the $1 billion commitment, $550 million will be financed by a credit from the (IDA) – the world Bank ’s concessionary lending arm and $200 million will be a loan from the and Development (IBRD), with a final maturity of 18.5 years including a grace period of five years. The remaining $250 million will be made available after June 30, 2020 and would be on standard IBRD terms. The program will be implemented by the Ministry of Finance .