World Bank to provide $1 billion loan for social protection

NEW DELHI: After healthcare, the World Bank on Friday said it had cleared a $1 billion assistance for social protection and is in talks with the government for funding initiatives to assist micro, small and medium enterprises (MSMEs).
World Bank country director Junaid Ahmad did not elaborate on the size of the loans for MSMEs, saying they were being negotiated. He, however, complimented the government’s approach, focusing on healthcare, social protection and economic stabilization.
“India’s assistance is the largest among emerging markets… The government has been very practical in coming in phases. It needs to keep the powder dry… and come in later, if needed,” he said.
The multilateral agency’s support for social protection will be funded in two phases – an allocation of $750 million before the end of June and a $250 million second tranche by June, 2021.
More on Covid-19

In the first phase, the funding is meant to support Pradhan Mantri Garib Kalyan Yojana will help scale up the public distribution system and direct benefit transfer apart from supporting other initiatives such as social protection for workers engaged in the fight against Covid19.
“This $1 billion will help the government’s large support. It is the government of India which is leading with expenditure, we are just following. Other development partners will also come behind this programme,” said Junaid Ahmad, World Bank country director in India.
The assistance is meant to tackle problems being faced by the urban poor and migrants, deal with portability of benefits and the agency will work with the Centre and the states, he added.
One of the elements would be to create an urban social protection platform, using Aadhaar, to enable release of social benefits and cash transfers easily. This is expected to help create portability of benefits, such as the use of ration cards anywhere in the country.
In addition, an integrated platform for social protection, which may not link all the 460 transfers, but is expected to rework businesses processes and targeting so that beneficiaries do not have to apply again and again for different social transfer programmes, said Shrayana Bhattacharya, senior economic at the World Bank.
Of the $1 billion commitment for social protection, $550 million will be financed by a credit from the agency’s International Development Association and $200 million will be a loan from the International Bank for Reconstruction and Development (IBRD), with a final maturity of 18-and-a-half years including a grace period of five years.
In Video:World Bank to provide $1 billion loans for social protection