World Bank approves $500 M Program to support India’s large informal workforce amid COVID

The World Bank Board of Executive Directors on Wednesday, June 30 approved a $500 million program to support India’s large informal workforce and create greater flexibility for states to cope with the ongoing pandemic, future climate, and disaster shocks. Creating a Coordinated and Responsive Indian Social Protection System (CCRISP) builds on the $1.15 billion in order to accelerate India's COVID-19 Social Protection Response Program to support schemes under the Pradhan Mantri Garib Kalyan Yojana (PMGKY).

Of the $500 million commitment, $112.50 million will be financed by a credit from the International Development Association (IDA) – the World Bank's concessionary lending arm and $387.50 million will be a loan from the International Bank for Reconstruction and Development (IBRD), with a final maturity of 18.5 years including a grace period of five years. Towards strengthening India's social protection programs to help the poor and vulnerable households since the start of the COVID pandemic, the total World Bank funding stands at $1.65 billion.

With the newly approved program:

• The states will get greater flexibility and more money in their hands. 
• Devolution of funds under the 15th Finance Commission recommendations will help states create a more adaptive social protection system
• It will provide support to excluded groups and cater to context-specific needs, not only for COVID-19 but also for any future crisis, ecological risk, or natural disaster. 
• Enhanced disaster relief funds to geographically targeted hot-spot districts will support states during the current phase of the pandemic and any future waves. 
• The program will strengthen these platforms to deepen social protection coverage in urban areas.

World Bank Approves $500 Mn Program To Revitalize India's MSME Sector 

Earlier this month, In order to support India's nationwide initiative to revitalise the Micro, Small and Medium Enterprise (MSME) sector, the World Bank's Board of Executive Directors has approved a USD 500 million worth of programs. This came after the country's MSME sector was heavily impacted amid the COVID-19 crisis. As per the statement released on Friday, the program targets improvements in the performance of 555,000 MSMEs and is expected to mobilise financing of USD 15.5 billion, as part of the government's USD 3.4 billion MSME Competitiveness - A Post-COVID Resilience and Recovery Programme (MCRRP).

The USD 500 million Raising and Accelerating Micro, Small and Medium Enterprise (MSME) Performance (RAMP) Program-- is the World Bank's second intervention in this sector. The first being the USD 750 million MSME Emergency Response Program, approved in July 2020 to address the immediate liquidity and credit needs of millions of viable MSMEs severely impacted by the ongoing COVID-19 pandemic.

(Image Credits: AP/PIXABAY)