To support India’s PM Ayushman Bharat initiative and private investment to spur economic growth, the World Bank has authorised loans totaling $1.75 billion (about Rs 13,834.54 crore).
Two complimentary loans totaling $500 million each were granted by the World Bank Board of Executive Directors to assist and improve the health sector in India.
The Pradhan Mantri-Ayushman Bharat Health Infrastructure Mission (PM-ABHIM), announced in October 2021, aims to develop the public healthcare infrastructure throughout India. The World Bank will assist with this combined funding of $1 billion.
One of the loans would provide priority to seven states, including Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu, and Uttar Pradesh, in addition to the national level measures.
One billion dollars of the entire loan would go to the health sector, while the remaining $750 million will be used as a development policy loan (DPL) to close funding gaps in the economy through private sector investment.
Separately, its board authorised the DPL to the union government to assist changes necessary to close funding shortages by utilising private sector investment in infrastructure, small companies, and the green finance markets.
India’s performance in the health sector has improved over time, according to the World Bank. India’s life expectancy is predicted to increase to 69.8 in 2020 from 58 in 1990, which is greater than the average for the nation’s income level.
According to the World Bank, India has made significant strides in improving access to skilled birth attendance, immunizations, and other priority services. The under-five mortality rate (36 per 1,000 live births), infant mortality rate (30 per 1,000 live births), and maternal mortality ratio (103 per 100,000 live births) are all relatively low compared to other countries with similar income levels.
It was said that despite these developments in the health field, Covid-19 has highlighted the necessity of reviving, reforming, and building capacity for essential public health activities, as well as for enhancing the calibre and comprehensiveness of the delivery of health services.
According to Hideki Mori, the World Bank’s acting country director for India, “the Covid-19 epidemic has re-emphasized the imperative for fundamental changes to enhance the functioning of the health sector in India.”
India made a trailblazing decision, according to Mori, to invest early and extensively to rebuild its health system even while it recovers from the epidemic. “We are glad to support this essential objective,” Mori added.
Two loans in the health sector, the Enhanced Health Service Delivery Programme (EHSDP) and Public Health Systems for Pandemic Preparedness Programme (PHSPP), are intended to complement one another and have a transformative effect.
The World Bank stated that it will help the Indian government’s reform plan to hasten universal coverage, enhance quality, and boost the health system’s resilience and preparation.
PHSPP will aid the government’s initiatives to set up India’s surveillance system to identify and report epidemics that could pose a threat to other countries, as well as to improve the capacity to identify pathogens, including zoonotic diseases, and to improve institutional capacity of key public health institutions.
The EHSDP will assist the government’s initiatives to enhance care quality by assisting Health and Wellness Centers (HWCs) in achieving certification under the National Quality Assurance Standards, and to develop implementation capability in the health sector governance and accountability.
According to the World Bank, India’s government has implemented a number of policies during the past ten years to increase financial inclusion, financial sector stability, and domestic capital market activity.
In the face of the Covid-19 crisis and other external shocks, this has led to a more effective and resilient industry.
Despite this development, there is still a significant demand for finance for important economic sectors and strain on public resources. The anticipated yearly financial deficit for infrastructure and micro, small, and medium-sized businesses (MSMEs) is 4% of GDP and Rs. 1825 lakh crore, respectively.
Additionally, according to World Bank projections, a cumulative yearly investment of 1.5% of GDP will be needed to complete the energy transformation necessary to achieve the government’s COP26 obligations.
“To enable India’s recovery from the epidemic and to achieve its ambitious sustainable growth ambitions, the nation requires an efficient financial system capable of satisfying the country’s investment demands,”
By utilising private resources to promote the nation’s development goals, this operation seeks to lessen the strain on public budgets, the official added.
The International Bank for Reconstruction and Development (IBRD) will lend $667 million of the $750 million promise, while the International Development Association (IDA), the World Bank’s concessionary lending arm, will credit $83 million of it.