New Delhi, India: The World Bank announced on Wednesday that it has approved a loan programme worth USD 500 million (about Rs 3,717.28 crore) to help India's informal working class overcome the current pandemic 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.
Of the USD 500 million pledge, USD 112.50 million will come from the International Development Association's concessionary lending arm, while USD 387.50 million will come from a loan from the International Bank for Reconstruction and Development (IBRD). The loan has an 18.5-year maturity duration, plus a five-year grace period.
Since the outbreak of the pandemic, the World Bank has invested USD 1.65 billion in expanding India's social protection programmes to assist the poor and vulnerable (about Rs 12,264.54 crore). According to the World Bank, the first two operations approved last year provided immediate emergency cash transfers to about 320 million individual bank accounts identified through pre-existing national social protection schemes, as well as additional food rations to about 800 million (80 crore) people.
States can now use disaster response money to create and implement suitable social protection actions with more flexibility. According to the statement, the cash would be used to fund a social safety programme for urban informal workers, gig workers, and migrants.
"In a world where countries are more subjected to economic, pandemic, and climate shocks, social protection investments strive to strengthen economies and people' lives. This is the overarching goal of the World Bank-supported social protection programmes in India "According to Junaid Ahmad, the World Bank's Country Director for India.
A National Digital Urban Mission will assist scale out urban safety nets and social insurance for informal workers by investing at the municipal level to develop a common digital infrastructure for those living in urban regions. It will also provide gender-disaggregated data on female workers and homes headed by women. This will enable policymakers to reduce gender-based service delivery gaps and successfully reach the unreached, including widows, teenage girls, and indigenous women.
The informal economy of India's cities is dominated by street vendors. The initiative would provide street sellers with low-interest working capital loans of up to Rs 10,000. According to the World Bank, they will be identified by Urban Local Bodies (ULBs) using an IT-based platform. According to the report, the new loan programme might benefit five million urban street sellers.
"The operation will strengthen states' ability to use resources based on local risk assessments and expand the social protection net for underserved urban informal workers while laying the groundwork for a more climate-responsive social protection system," said Qaiser Khan, Lead Economist, and Shrayana Bhattacharya, Senior Social Protection Economist and World Bank Task Team Leaders.
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