The World Bank has approved loans totaling $1.75 billion (about Rs 13,834.54 crore) to finance Indian Prime Minister Ayushman Bharat’s program and private investments to boost economic growth.
Of the total loan, USD 1 billion will go to the health sector, while the remaining USD 750 million will be in the form of a Development Policy Loan (DPL) to fill financing gaps through private sector investments in the economy.
The World Bank’s Board of Directors has approved two complementary loans of $500 million each to support and strengthen India’s health sector.
With this combined $1 billion in financing, the World Bank will support India’s flagship Pradhan Mantri-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), launched in October 2021, the World Bank said in a statement on Friday.
The funds will be used to improve public health infrastructure across the country. In addition to national-level interventions, one of the loans will prioritize seven states, namely Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu and Uttar Pradesh. said the multilateral funding agency.
Separately, its board of directors endorsed the DPL to the union government to support critical reforms to close financing gaps by leveraging private sector investment in infrastructure, small businesses and finance markets. green.
The World Bank said India’s performance in the health sector has improved over time. He estimated India’s life expectancy at 69.8 years in 2020, up from 58 years in 1990, which is above the average for the country’s income level.
The under-five mortality rate (36 per 1,000 live births), infant mortality rate (30 per 1,000 live births) and maternal mortality rate (103 per 1,00,000 live births) are all close to India’s average income level, reflecting significant achievements in access to skilled birth attendants, immunizations and other priority services, the World Bank said.
Despite these advances in the health sector, COVID-19 has underscored the need to revitalize, reform and expand capacity for essential public health functions, as well as improve the quality and comprehensiveness of service delivery. health.
“The COVID-19 outbreak has again underscored the urgency of significant reforms to improve the performance of the health sector in India,” said Hideki Mori, World Bank’s Acting Country Director for India.
Mori said India’s decision to invest early and significantly to strengthen its health system even as it emerges from the pandemic is a pioneering choice and “we are happy to support this important program”. In health, two loans – the Public Health Systems Pandemic Preparedness Program (PHSPP) and the Enhanced Health Service Delivery Program (EHSDP) – are designed to have complementary and transformational impact.
It will support the Indian government’s reform agenda to accelerate universal coverage, improve quality and increase health system resilience and preparedness, the World Bank said.
The PHSPP will support government efforts to prepare India’s surveillance system to detect and report outbreaks of potential international concern; strengthen the capacity to detect pathogens, including zoonotic diseases and strengthen coordination and strengthen the institutional capacities of key public health institutions.
The EHSDP will support government efforts to strengthen service delivery through a redesigned primary health care model; improve quality of care by supporting certification of national quality assurance standards in health and wellness centers (HWCs); and transform health sector governance and accountability by strengthening implementation capacity.
On the DPL, the World Bank said that the Indian government has taken several steps over the past decade to improve financial inclusion as well as the stability of the domestic financial sector and capital markets.
This has resulted in a more efficient and resilient sector in the face of the COVID-19 crisis and other external shocks.
Despite this progress, the pressure on public resources and the financing needs of key sectors of the economy remain high. For infrastructure and micro, small and medium enterprises (MSMEs), the annual financing gap is estimated at 4% of GDP and between Rs 18 and 25 lakh crore, respectively.
In addition, World Bank estimates show that the energy transition needed to meet the government’s commitments at COP26 will require a cumulative annual investment of 1.5% of GDP.
“An efficient financial system capable of meeting the country’s investment needs is key to supporting India’s rebound from the pandemic and achieving its ambitious sustainable growth goals,” Mori said.
This operation aims to reduce pressure on public finances by mobilizing private resources to support the country’s development objectives, the official said.
Of the $750 million commitment, $667 million will be a loan from the International Bank for Reconstruction and Development and $83 million will be financed by a credit from the International Development Association (IDA), the concessional loan from the World Bank.