Over 90 percent of workforce are employed in the informal sector
The World Bank Board of Executive Directors today approved $1 billion for the Accelerating India’s COVID-19 Social Protection Response Programme to support India’s efforts at providing social assistance to the poor and vulnerable households, severely impacted by the COVID-19 pandemic.
The Government of India and the World Bank today signed an agreement for an immediate release of $750 million under the program. The remaining $250 million will be made available for fiscal year 2021.
This takes the total commitment from the Bank towards emergency COVID-19 response in India to $2 billion. A $1 billion support was announced last month towards immediate support to India’s health sector.
The agreement was signed by Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India and Junaid Ahmad, Country Director, India on behalf of the World Bank.
“A strong and portable social protection system is critical to carry vulnerable households through the current and future crises,” said Sameer Kumar Khare.
“This programme will expand the impact and coverage of India’s social protection system by helping vulnerable groups access more social benefits directly and across the country,” he added.
The first phase of the operation will be implemented countrywide through the Pradhan Mantri Garib Kalyan Yojana (PMGKY). It will immediately help scale-up cash transfers and food benefits, using a core set of pre-existing national platforms and programs such as the Public Distribution System (PDS) and Direct Benefit Transfers (DBT); provide robust social protection for essential workers involved in COVID-19 relief efforts; and benefit vulnerable groups, particularly migrants and informal workers, who face high risks of exclusion under the PMGKY. In the second phase, the program will deepen the social protection package, whereby additional cash and in-kind benefits based on local needs will be extended through state governments and portable social protection delivery systems.
Social protection is a critical investment since half of India’s population earns less than $3 a day and are precariously close to the poverty line. Over 90 percent of India’s workforce is employed in the informal sector, without access to significant savings or workplace based social protection benefits such as paid sick leave or social insurance. Over 9 million migrants, who cross state borders to work each year, are also at greater risk as social assistance programs in India largely provide benefits to residents within states, without adequate portability of benefits across state boundaries. Importantly, in an urbanizing India cities and towns will need targeted support as India’s largest social protection programs are focused on rural populations.
“The response to the COVID-19 pandemic around the world has required governments to introduce social distancing and lock downs in unprecedented ways. These measures, intended to slow down the spread of the virus have, however, impacted economies and jobs – especially in the informal sector. India with the world’s largest lockdown has not been an exception to this trend,” said Junaid Ahmad.
“In this context, cash transfers and food benefits will help the poor and vulnerable access a ‘safety bridge’ towards a time when the economy will start to revive.”
Learn More: The World Bank
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