Centre borrows another $1 billion from World Bank for COVID-19 relief
Funds to also be used for reforming social security net
- The Centre is taking another $1 billion loan from the World Bank to support its COVID-19 relief measures and financial assistance for the poorest and most vulnerable communities.
- The money will also be used for reforms in India’s social security net, making it more integrated, portable and focussed on the urban poor.
- The loan was approved by the World Bank’s Board of Executive Directors.
- The bank had already approved a $1 billion loan to support India’s health sector in April, taking its total commitment to India’s COVID-19 response to $2 billion.
- An allocation of $750 million —more than ₹5,600 crore — will be made immediately to help fund the Pradhan Mantri Garib Kalyan Yojana, which the Centre announced in March to scale up cash transfers and free foodgrain distribution to vulnerable communities, pensioners and poor workers, and provide insurance support to health workers.
- The second phase will provide $250 million — almost ₹1,900 crore — post July 2020, which will fund additional cash and in-kind benefits based on local needs through state governments and portable social protection delivery systems.
- The money will also be used to implement reforms.
- The COVID-19 pandemic has also put the spotlight on some of the gaps in the existing social protection systems.
- This program will support the Government of India’s efforts towards a more consolidated delivery platform – accessible to both rural and urban populations across state boundaries.