- The World Bank has approved a USD 500 million loan programme to support India’s informal working class to overcome the current pandemic distress.
- The loan will create greater flexibility for states to cope with the ongoing pandemic, future climate and disaster shocks.
- Of the USD 500 million commitment, USD 112.50 million will be financed by its concessionary lending arm International Development Association (IDA) and the rest will be a loan from International Bank for Reconstruction and Development (IBRD).
- The loan has a maturity period of 18.5 years including a grace period of five years.
- In 2020, provided immediate emergency relief cash transfers to about 320 million individual bank accounts identified through pre-existing national social protection schemes.
- Also an additional food rations for about 80 crore individuals.
- States can now access flexible funding from disaster response funds to design and implement appropriate social protection responses.
- The funds will be utilised in social protection programmes for urban informal workers, gig-workers, and migrants.
- A gig worker is indulged in the gig economy which is a free market system in which temporary positions are common and organizations contract with independent workers for short-term engagements.
- It is aimed at building the resilience of economies and livelihoods of communities.
- Investments at the municipal level will promote National Digital Urban Mission that will create a shared digital infrastructure for people living in urban areas and will scale up urban safety nets and social insurance for informal workers.
- It will also include gender-disaggregated information on women workers and female-headed households.
- This will allow policymakers to address gender-based service delivery gaps and effectively reach the unreached, particularly widows, adolescent girls, and tribal women.
- Street vendors are an integral part of India’s urban informal economy. The programme will give street vendors access to affordable working capital loans of up to Rs 10,000.
- Some five million urban street vendors could benefit from the new credit programme,
World Bank Group
- The World Bank Group is a unique global partnership which consists of five development institutions.
- International Bank for Reconstruction and Development (IBRD) provides loans, credits, and grants.
- International Development Association (IDA) provides low- or no-interest loans to low-income countries.
- The International Finance Corporation (IFC) provides investment, advice, and asset management to companies and governments.
- The Multilateral Guarantee Agency (MIGA) insures lenders and investors against political risk such as war.
- The International Centre for the Settlement of Investment Disputes (ICSID) settles investment-disputes between investors and countries.
- India is not a member of ICSID.
- As of now, IBRD has 189 member countries, while IDA has 173.
- Strengthening MSME: Nearly 40% of the informal workforce is employed with Micro, Small and Medium Enterprises (MSMEs). Therefore, it is natural that the strengthening of MSME will lead to economic recovery, employment generation, and formalization of the economy.
- Skilling Under CSR Expenditure: The large corporate houses should also take the responsibility of skilling people in the unorganized sectors under Corporate Social Responsibility (CSR) Expenditure.
- Recognizing Invisible Labour: A national policy for domestic workers needs to be brought in at the earliest to recognize their rights and promote better working conditions.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT