The World Bank has cleared a $1billion assistance for the social protection on May 15 and has been in talks with the government for the funding the initiatives to assist micro, medium and small enterprises (MSME).
The Director of World Bank, Junaid Ahmad, did not elaborate the size of the loans for MSMEbut stated that it is being negotiated. He appreciated the government’s approach that focuses on social protection, healthcare, and economic healthcare.
World Bank’s support for social protection will be funded in two phases- an allocation of $750 million before the end of June 2020 and a second allocation of $250 million by June 2021.
The assistance by the World Bank is meant to tackle the problems faced by migrants and urban poor. It will deal with the portability of the benefits and the bank will work closely with both the centre and the state.
Funding by the World Bank for Social Protection:
World Bank director stated that India’s assistance is the largest among the emerging markets and government has been very practical in coming in phases.
The first phase of funding is meant to support Pradhan Mantri Garib Kalyan Yojana. It will scale up the public distribution system and direct benefit transfer. It will also support other initiatives such as social protection for workers who have been engaged in the fight against COVID-19.
World Bank Country Director in India, Junaid Ahmed mentioned that $1billion will help the government’s large support and other development partners will also support the programme.
Out of $1 billion, $550 million will be financed by a credit from the agency’s International Development Association and other $200 million will be a loan from International Bank for Reconstruction and Development (IBRD), it will have a final maturity of 18 and a half years that includes a grace period of five years
Essential elements of the assistance:
• One of the elements will be to create an urban social economic platform with the use of the Aadhaar card. It will enable the release of social benefits and cash transfers easily. It will also be expected to help in creating portability of benefits, like the use of ration cards for anywhere in the country.
• Shrayana Bhattacharya, Senior economic at the World Bank informed that there will also be an integrated platform for social protection that may not link all the 460 transfers but has been expected to rework business processes so that the beneficiaries will not have to apply again and again for different social transfer programmes.