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World Bank Approved USD 500 Million Loan to Support India’s Informal Working Class

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World Bank approves USD 500 million loan to support India's informal working class amid pandemicOn June 30, 2021, the World Bank (WB) Board of Executive Directors approved a USD 500 million (~ Rs 3,726.30 crore) loan programme to support India’s informal working class to overcome the COVID-19 distress and to support the states to manage the current pandemic, future climate and disaster shock.

  • Out of the USD 500 million loan, USD 112.50 million will be financed by the International Development Association (IDA) and the remaining USD 387.50 million will be provided as a loan from International Bank for Reconstruction and Development (IBRD).
  • Maturity: The loan has a maturity period of 18.5 years with a grace period of 5 years.

Note – IBRD and IDA were the members (lending arms) of the World Bank Group.

Key Facts of the Loan Programme:

i.The loan programme was named – ‘Creating a Coordinated and Responsive Indian Social Protection System’ (CCRISP), it was built on the USD 1.15 billion ‘Accelerating India’s COVID-19 Social Protection Response Program’ which was approved to support schemes under the Pradhan Mantri Garib Kalyan Yojana (PMGKY).

ii.Under the credit program, around 5 million urban street vendors could get affordable working capital loans of up to Rs 10,000 and those street vendors would be identified by the Urban Local Bodies (ULBs) through an IT-based platform.

iii.This program will invest in the National Digital Urban Mission, which will create a shared digital infrastructure for people living in urban areas through investments at the municipal level, and it will also provide gender-disaggregated information on women workers.

World Bank Funding:

i.Total WB funding under COVID-19: From the beginning of the pandemic, the World Bank has provided a total of USD 1.65 billion (~Rs 12,264.54 crore) towards strengthening India’s social protection programmes and helping the poor and vulnerable households.

ii.Emergency relief cash transfers to about 320 million individual bank accounts (identified through pre-existing national social protection schemes) and food rations for about 800 million individuals were provided under the 1st two operations approved by WB in 2020.

iii.Emerging issues after COVID-19: Increased suffering of urban and migrant informal workers due to lack of portability of benefits to them. Urgent need to design future relief measures and state-specific safety nets to tackle shocks.

Recent Related News:

The World Bank’s(WB) Board of Executive Directors has approved a $500 million programme named ‘Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance’ (RAMP), to support the Government of India’s nationwide initiative to strengthen the MSME sector, which has been heavily impacted due to COVID-19.

About World Bank:

President – David R. Malpass (13th President)
Headquarters – Washington DC, USA
World Bank Country Director in India – Junaid Ahmad