World Bank’s $1.75 billion loan to India for health, private investment

Author: Yuvi July 1, 2022

world bank

The World Bank has approved a total loan of USD 1.75 billion (about Rs 13,834.54 crore) for India’s PM Ayushman Bharat scheme and private investment to boost economic growth.

Out of the total loan, USD 1 billion will go towards the health sector, while the remaining USD 750 million will be in the form of Development Policy Loan (DPL) to fill the financing gap through private sector investment in the economy.
The World Bank’s Board of Executive Directors approved two complementary loans of USD 500 million each to support and enhance India’s health sector.

Through this joint funding of USD 1 billion, the World Bank will support India’s flagship Prime Minister-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), which will be launched in October 2021, the World Bank said in a release on Friday. went.

The money will be used to improve public healthcare infrastructure across the country. The multi-lateral funding agency said that apart from national level interventions, one of the loans will give priority to seven states namely Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu and Uttar Pradesh.

Separately, its board approved the DPL to the central government to support key reforms to bridge the financing gap by leveraging private sector investment in infrastructure, small businesses and green finance markets.
The World Bank said that India’s performance in the health sector has improved over time. It has projected India’s life expectancy to be 69.8 in 2020, up from 58 in 1990 – higher than the country’s average for income levels.

The under-five mortality rate (36 per 1,000 live births), the infant mortality rate (30 per 1,000 live births), and the maternal mortality ratio (103 per 100,000 live births) are all close to the average for India’s income level. which represents. The World Bank said significant achievements in access to efficient birth attendance, immunization and other priority services.

It said that despite these advances in the health sector, COVID-19 has underscored the need to revitalize, reform and develop capacity to improve the quality and comprehensiveness of healthcare delivery along with core public health functions.

“The outbreak of COVID-19 has re-emphasised the need for significant reforms to improve health sector performance in India,” said Hideki Mori, Acting Country Director for the World Bank in India.

Mori said India’s decision to invest early and significantly to strengthen its health system despite emerging from the pandemic is a pioneering choice and “we are pleased to support this important agenda.” Under health, the two loans—the Public Health System for Pandemic Preparedness Program (PHSPP) and the Advanced Health Services Delivery Program (EHSDP)—are designed to be complementary and transformative in effect.

The World Bank said it will support the Indian government’s reform agenda to accelerate universal coverage, improve quality and enhance health system resilience and preparedness.

PHSPP will support the Government’s efforts to build India’s surveillance system to detect and report pandemics of potential international concern; To enhance the ability to detect pathogens including zoonotic diseases and strengthen coordination and build institutional capacity of major public health institutions.

EHSDP will support the Government’s efforts to strengthen service delivery through a redesigned primary health care model; Improving the quality of care by supporting National Quality Assurance Standards certification in Health and Wellness Centers (HWCs); and transform health sector governance and accountability by strengthening implementation capacity.

Regarding the DPL, the World Bank said that the Indian government has taken several measures over the past decade to improve financial inclusion as well as the stability of the financial sector and domestic capital markets.
This has resulted in a more efficient and resilient sector to face the COVID-19 crisis and other external shocks.

Despite this progress, pressure on public resources and financial needs for key sectors of the economy remains high. For infrastructure and micro, small and medium enterprises (MSMEs), the annual finance gap is estimated at 4 per cent of GDP and between Rs 18-25 lakh crore, respectively.

In addition, World Bank estimates suggest that the energy transition needed to meet the government’s COP26 commitments would require an annual cumulative investment of 1.5 percent of GDP.

“An efficient financial system capable of meeting the country’s investment needs is critical to supporting India’s return from the pandemic and realizing its ambitious Sustainable Development Goals,” Mori said.

The official said the operation aims to ease the pressure on public finances by leveraging private resources to support the country’s development goals.

Of the USD 750 million commitment, USD 667 million will be a loan from the International Bank for Reconstruction and Development and USD 83 million will be financed by a credit from the International Development Association (IDA), the concessional lending arm of the World Bank .

Author: Yuvi

My name is Yuvi, I work as Sub Editor at

1 July, 2022, 6:53 pm

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