On Wednesday World Bank said it had approved a USD 500 million (about Rs 3,717.28 crore) loan to support India’s informal working class to control the current pandemic suffering.
The World Bank said that the loan will create more flexibility for the states to cope up with the happening pandemic situation, future climate, and calamity shock.
From the USD 500 million loans that have been approved, USD 112.50 million will be financed by its preferential lending arm International Development Association and USD 387.50 million will be given as loans from (IBRD) International Bank for Reconstruction and Development.
The maturity period of the loan is 18.5 years including a grace period of five years.
World Bank said that it’s total funding for strengthening India’s social protection program to help the vulnerable and poor households since the start of the pandemic stands at USD 1.65 billion.
The World Bank stated that 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 and extra food rations for approximately 800 million (80 crores) individuals.
They also said that States can now access flexible funding from disaster response funds to design and implement relevant social protection responses. The funds will be utilized in social protection programs to help the urban informal workers, gig-workers, and migrants.
Junaid Ahmad, World Bank Country Director in India said that “In a context where countries are increasingly facing cycles of the economic, pandemic, and climate shocks, investment in social protection is focused at building the resilience of economies and livelihoods of communities. This is the broad-ranging objective of the social protection programs supported by the World Bank in India,”
A National Digital Urban Mission will create a shared digital infrastructure for people living in urban areas through investments at the municipal level to help scale up social insurance and urban safety nets for informal workers. It also included gender-disaggregated information on women workers and female-headed households.
This allows the policymakers to address gender-based service delivery gaps and effectively reach adolescent girls, particularly widows, unreached, and tribal women.
Street vendors are an essential part of India’s urban informal economy. The program will allow street vendors access to affordable working capital loans up to Rs 10,000.
World Bank said that Urban Local Bodies (ULBs) will identify them through an IT-based platform and some five million urban street vendors could benefit from the new credit program.
“The operation will enhance the potential of states to use resources based on an assessment of local risks and enlarge the social protection net for neglected urban informal workers while laying the preparation for a more climate-responsive social protection system,” said Qaiser Khan, Lead Economist and Shrayana Bhattacharya, Senior Social Protection Economist and World Bank’s Task Team Leaders for this operation.