World Bank approves $1 bn loan to India
   Date :16-May-2020

RSS workers shower flower
 RSS workers shower flowers on nurses at Rajendra Institute of Medical Science (RIMS) to express gratitude towards them for their contribution in fighting against COVID-19, in Ranchi on Friday. (PTI)
World Bank is also in discussions with Govt to provide assistance to the country’s micro, small and medium enterprises 
THE World Bank on Friday approved a USD 1 billion loan to support India’s efforts for providing social assistance to the poor and vulnerable households, severely impacted by the COVID-19 pandemic. The “Accelerating India’s COVID-19 Social Protection Response Programme” will support the Government’s efforts towards a more consolidated delivery platform – accessible to both rural and urban populations across state boundaries. This takes the total commitment from the World Bank towards emergency COVID-19 response in India to USD 2 billion. A USD 1 billion support was announced last month towards immediate support to India’s health sector.
The multilateral lending agency is also in discussions with the Government to provide assistance to the country’s micro, small and medium enterprises, said World Bank Country Director in India Junaid Ahmad in a webinar with media. The response to the COVID-19 pandemic around the world has required Governments to introduce social distancing and lockdowns in unprecedented ways, he said.
These measures, intended to slowdown 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. Of the USD 1 billion commitment, USD 550 million will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm and USD 200 million will be a loan from the International Bank for Reconstruction and Development, with a final maturity of 18.5 years including a grace period of five years. The remaining USD 250 million will be made available after June 30, 2020. The programme will be implemented by the Union Ministry of Finance.
The new support will be funded in two phases – an immediate allocation of USD 750 million for fiscal year 2020 (fiscal year starting July 1, 2020) and a USD 250 million second tranche that will be made available for fiscal year 2021. Ahmad further said the COVID-19 pandemic has also put the spotlight on some of the gaps in the existing social protection systems. This platform draws on the country’s existing architecture of safety nets – the PDS, the digital and banking infrastructure, and Aadhaar – while positioning the overall social protection system for the needs of a 21st century India. “What COVID-19 had done is that it has actually gotten the Government to create linkages between the system and begin to move the social protection system of India, what I think will be the 21st century system.