World Bank approves $1 billion for India
The World Bank on 15 May 2020 approved USD 1 billion 'Accelerating India's COVID-19 Social Protection Response Program' to support the country's efforts for providing social assistance to the poor and vulnerable households, severely impacted by the pandemic. This takes the total commitment from the World Bank towards emergency COVID-19 response in India to USD 2 billion. A USD 1 billion support was announced last month to support India's health sector.
- The response to the COVID-19 pandemic around the world has required governments around the world to introduce social distancing and lockdowns in unprecedented ways.
- These measures, intended to contain 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.
- Of the USD 1 billion commitment, USD 550 million will be financed by a credit from the International Development Association (IDA) – the World Bank's concessionary lending arm and USD 200 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.
- The remaining USD 250 million will be made available after June 30, 2020.
- Founded in 1944, the International Bank for Reconstruction and Development—soon called the World Bank—has expanded to a closely associated group of five development institutions.
- Originally, its loans helped rebuild countries devastated by World War II. In time, the focus shifted from reconstruction to development, with a heavy emphasis on infrastructure such as dams, electrical grids, irrigation systems, and roads.
- With the founding of the International Finance Corporation in 1956, the institution became able to lend to private companies and financial institutions in developing countries. And the founding of the International Development Association in 1960 put greater emphasis on the poorest countries, part of a steady shift toward the eradication of poverty becoming the Bank Group’s primary goal.
- The subsequent launch of the International Centre for Settlement of Investment Disputes and the Multilateral Investment Guarantee Agency further rounded out the Bank Group’s ability to connect global financial resources to the needs of developing countries.