The World Bank on Friday announced an aid of $1 billion (Rs 6,925 crore approximately) to support India’s efforts to provide social assistance to the poor and most vulnerable households severely impacted by the coronavirus pandemic.
The support package in fiscal and monetary measures 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 bank said in a statement.
Governments around the world have taken unprecedented steps to restrict the movement of people through lockdowns intended to slow down the spread of the virus. This has had a severe impact on 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 Junaid Ahmad. “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 first phase of the operation will be implemented countrywide through the Pradhan Mantri Garib Kalyan Yojana. “It will immediately help scale-up cash transfers and food benefits, using a core set of pre-existing national platforms and programs such as the Public Distribution System and Direct Benefit Transfers,” the World Bank added. This will benefit the vulnerable groups, particularly migrant and informal workers, who face high risks of exclusion under the Pradhan Mantri Garib Kalyan Yojana, it said. It will also provide “robust social protection” for essential workers involved in Covid-19 relief efforts.
In the second phase, the programme will “deepen” the package, whereby additional cash and in-kind benefits based on local needs will be extended through state governments and portable social protection delivery systems, the bank said.
The World Bank called the social protection package a “critical investment” since half of India’s population earns less than $3 dollar (Rs 226.47) a day and “are precariously close to the poverty line”. Over 90% of India’s workforce is employed in the informal sector, without access to significant savings or workplace based social protection benefits, it said. “Over 9 million migrants, who cross state borders to work each year, are also at greater risk as social assistance programs in India largely provide benefits to residents within states, without adequate portability of benefits across state boundaries.”
The package also aims to provide targeted support to the poor in urban towns and cities as the country’s largest social protection programs are focused on rural populations, the World Bank said.
This came just days after the Centre’s economic rescue package of Rs 20 lakh crore in fiscal and monetary measures to support an economy battered by a seven week-long lockdown to fight the coronavirus. In an address to the nation on Tuesday, Prime Minister Narendra Modi said the package was equivalent to 10% of India’s gross domestic product, and was aimed at the multitudes of workers and the businesses who were left economically devastated because of the prolonged shutdown.