On Wednesday, the World Bank announced the approval of a USD 500 million (about Rs 3,717.28 crore) financing package to assist India’s informal working class in overcoming the present epidemic distress. The loan will give states more flexibility to deal with the ongoing pandemic as well as potential climate and disaster shocks, according to a statement from the World Bank.
The USD 500 million commitment will be funded in part by its concessionary lending arm, the International Development Association, and in part by a loan from the International Bank for Reconstruction and Development (IBRD).
The loan has a maturity length of 18.5 years, plus a five-year grace period. Since the beginning of the epidemic, the World Bank has invested USD 1.65 billion in expanding India’s social protection programmes to assist the poor and vulnerable households (about Rs 12,264.54 crore).
According to the World Bank, the first two operations approved last year provided immediate emergency relief cash transfers to approximately 320 million individual bank accounts identified through pre-existing national social protection schemes, as well as additional food rations for approximately 800 million (80 crores) individuals. States can now use disaster response monies to create and implement suitable social protection actions. According to the statement, the monies would be used in a social protection programme for urban informal workers, gig workers, and migrants.
“In an era when countries are increasingly confronted with cycles of economic, pandemic, and climate shocks, investment in social protection aims to strengthen economies and people’ livelihoods. This is the overarching goal of the World Bank-supported social protection programmes in India “According to Junaid Ahmad, World Bank Country Director in India.
A National Digital Urban Mission will build a shared digital infrastructure for people living in cities by making municipal investments to help scale up urban safety nets and social insurance for informal workers. It will also contain gender-disaggregated data on female workers and female-headed families.
Policymakers will be able to address gender-based service delivery gaps and successfully reach the unreached, particularly widows, teenage girls, and tribal women. Street sellers play an important role in India’s urban informal economy. The programme would provide street sellers with access to low-interest working capital loans of up to Rs 10,000. According to the World Bank, urban local bodies (ULBs) will identify them using an IT-based platform.
According to the report, the new loan programme might help up to five million urban street sellers.
“The operation will strengthen states’ ability to employ resources based on an assessment of local risks and expand the social safety net for underserved urban informal workers while building the framework for a more climate-responsive social protection system,” according to the mission statement said, Qaiser Khan, Lead Economist, and Shrayana Bhattacharya, Senior Social Protection Economist, are the Task Team Leaders for this operation at the World Bank.