April 13, 2024


Delighting finance buffs

How World Bank’s $1 billon package will support India’s migrant workers

The World Bank’s $1 billion social protection package is aimed at increasing efficiency of several schemes like public distribution system and MNREGA to provide social protection to marginalised migrant workers and labourers in India.

Speaking to India Today TV News Director Rahul Kanwal, World Bank’s India country director Junaid Kamal Ahmad said, “We are supporting the social system that India has pivoted towards to support migrants, the unorganised workers, which is almost 90 per cent of the labour force.”

Ahmad said World Bank’s social protection package is not directed towards any specific scheme but for strengthening India’s social protection system, including public distortion system, food assistance schemes, Jan Dhan Yojana and MNREGA.

“What we are doing is supporting the government in taking what is predominantly a rural focus system and making it a pan-national system,” Ahmad said.

He said the fresh package will help the government is smoothing social protection schemes for urbanising the economy besides building a portable facility for migrant workers to access all such schemes from anywhere in the country.

It may be noted that Finance Minister Nirmala Sitharaman in her press conference yesterday mentioned the creation of One Nation One Ration Cards, which is expected to benefit at least eight crore migrant workers by March 2021.

“Migrants, urban poor and urban workers need support so shifting the PDS, shifting the cash system into the hands of the migrants is important. Ensuring portability and that’s very important because today there is fear that migrants returning home will not come back because of the pain they have faced in this Covid-19 crisis,” Ahmad explained.

“But portability gives them comfort that if they come back, they bring with them the benefits that are owed to them while their families continue to get benefits in their own states.”

Saying that India has over the years built a strong social protection system, he said the money put in by World Bank will help create this “pivot for more coordinated, integrated system of social protection”.

“One that I believe is positioning India into a 21st-century social protection system,” he said.

It would be safe to assume that the fresh World Bank package is largely dedicated to strengthening and smoothening India’s social protection system, especially for those employed in India’s vast unorganised sector and migrant labourers.

Out of the $1 billion commitment by World Bank, $550 million will be financed by credit from International Development Association (IDA), which is the World Bank’s concessionary lending arm.

An amount of $200 million will be a loan from the International Bank for Reconstruction and Development, with a final maturity of over 18 years, including a grace period of five years. The remaining $250 million will be made available after June 30, 2020.

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