Business Today
Loading...

World Bank sanctions another $1 billion to India to fight coronavirus; total assistance now at $2 billion

The total commitment from the Bank towards emergency COVID-19 response in India is now $2 billion. A $1 billion support was announced last month towards immediate aid to India's health sector

twitter-logoJoe C Mathew | May 15, 2020 | Updated 12:37 IST
World Bank sanctions another $1 billion to India to fight coronavirus; total assistance now at $2 billion

The World Bank has sanctioned a second tranche of $1 billion support to India to fight the COVID-19 related social security shock. The 'Accelerating India's COVID-19 Social Protection Response Program' is meant to support India's efforts at providing social assistance to the poor and vulnerable households, severely impacted by the COVID-19 pandemic, the bank said.

The total commitment from the Bank towards emergency COVID-19 response in India is now $2 billion. A $1 billion support was announced last month towards immediate aid 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 statement issued by the Bank said.

The first phase of the operation will be implemented countrywide through the Pradhan Mantri Garib Kalyan Yojana (PMGKY). The additional funds will help the government scale-up cash transfers and food benefits through pre-existing national platforms like the Public Distribution System (PDS) and Direct Benefit Transfers (DBT). It will also provide robust social protection for essential workers involved in COVID-19 relief efforts and benefit vulnerable groups, particularly migrants and informal workers, who face high risks of exclusion under the PMGKY. The Bank said that in the second phase, the funding for which will be available during the next financial year, the programme will deepen the social protection package in the form of additional cash and in-kind benefits based on local needs extended through state governments and portable social protection delivery systems.

"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 Junaid Ahmad, 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."

The programme will create a system that will strengthen the delivery of India's safety nets programme, the Bank said. It is expected that it will help India move from 460 plus fragmented social protection schemes to an integrated system that is fast and more flexible, acknowledging the diversity of needs across states.The geographic portability of social protection benefits that can be accessed from anywhere in the country, ensuring food, social insurance and cash-support for all, including for migrants and the urban poor and moving India's social protection system from a predominantly rural focus to a pan national one that recognises the needs of the urban poor are the objectives.

Of the $1 billion commitment, $550 million will be financed by a credit from the International Development Association (IDA) - the World Bank's concessionary lending arm and $200 million will be a loan from the International Bank for Reconstruction 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 Bank said.

Also read: Coronavirus scare: Japan tweaks FDI rules; declares Sony, Toyota, other 516 firms core to national security

Also read: Coronavirus relief tranche II to cost govt Rs 14,750 cr; fiscal dent of 0.07%: SBI Ecowrap

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close