[CA/Econ] World Bank's Assistance to India

The Government of India and the World Bank signed a $750 million of $1 billion proposed for Accelerating India’s COVID-19 Social Protection Response Programme to support India’s efforts at providing social assistance to the poor and vulnerable households, severely impacted by the COVID-19 pandemic.

This takes the total commitment from the Bank towards emergency COVID-19 response in India to $2 billion. A $1 billion support was announced last month towards 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.

The first phase of the operation will be implemented countrywide through the Pradhan Mantri Garib Kalyan Yojana (PMGKY). It will immediately help scale-up cash transfers and food benefits, using a core set of pre-existing national platforms and programmes such as the Public Distribution System (PDS) and Direct Benefit Transfers (DBT); 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.

In the second phase, the programme 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.

Of the $1 billion commitment, an immediate allocation of $750 million for fiscal year 2020 of which $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 programme will be implemented by the Ministry of Finance, Government of India.