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India: COVID-19 Active Response and Expenditure Support Program

Sovereign (Public) Project | 54182-001 Status: Active

The proposed COVID-19 Active Response and Expenditure Support (CARES) Program, under the Countercyclical Support Facility COVID-19 Pandemic Response Option (CPRO) of the Asian Development Bank (ADB), will provide critically needed support to help the government mitigate the severe health, social, and economic impact caused by the coronavirus disease 2019 (COVID-19) pandemic. ADB's support will allow the government to undertake public expenditures that are essential for supporting vulnerable populations and curtailing spread of the disease.

Project Details

Project Officer
Mitra, Sabyasachi South Asia Department Request for information
Country
  • India
Sector
  • Public sector management
 
Project Name COVID-19 Active Response and Expenditure Support Program
Project Number 54182-001
Country India
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3915-IND: COVID-19 Active Response and Expenditure Support Program
Ordinary capital resources US$ 500.00 million
Loan 3916-IND: COVID-19 Active Response and Expenditure Support Program
Ordinary capital resources US$ 1,000.00 million
TA 9969-IND: Building Capacity for Improved Implementation of Government's COVID-19 Response and Pro-Poor Economic Package
Technical Assistance Special Fund US$ 2.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Sector / Subsector

Health / Disease control of communicable disease - Health system development

Public sector management / Social protection initiatives

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The proposed COVID-19 Active Response and Expenditure Support (CARES) Program, under the Countercyclical Support Facility COVID-19 Pandemic Response Option (CPRO) of the Asian Development Bank (ADB), will provide critically needed support to help the government mitigate the severe health, social, and economic impact caused by the coronavirus disease 2019 (COVID-19) pandemic. ADB's support will allow the government to undertake public expenditures that are essential for supporting vulnerable populations and curtailing spread of the disease.

The ADB CARES Program will contribute directly to the immediate priorities in government's response to the pandemic- the need to improve access to health facilities and care, and protect the weakest economic section of the population and disadvantaged groups. It will contribute to the government's efforts in containing COVID-19 and treating infected people, for free, thus protecting the lives of the poor and vulnerable and preventing them from falling deeper into poverty because of medical expenses. The program also targets providing social assistance and protection over 3 months to more than 800 million people, including families below poverty line, farmers, health care workers, women, women's self-help groups, widows, senior citizens, people with disabilities, low wage earners, and construction workers. Beneficiaries will be reached through established channels under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), or the Prime Minister's Welfare Scheme for the Poor. Food, gas, and cash for the affected and vulnerable beneficiaries will help them endure the shocks induced by the lockdown. Support in these areas will help a quicker economic recovery when the lockdown is eased. Any further fiscal stimulus will be sub-optimal if these urgent concerns are not addressed. The numbers of beneficiaries are detailed in the government's COVID-19 Response Program.

Project Rationale and Linkage to Country/Regional Strategy

COVID-19 infection is increasing rapidly in India. By 18 April 2020, India has reported 14,377 confirmed cases, 1,991 cured and discharged cases, and 480 deaths. India is currently experiencing clusters of cases where several infection cases occur in close proximity in terms of both time and geography. India faces serious shortage in medical staff and necessary facilities and equipment. Assuming the worst-case scenario of 2.2 million infected people, the existing intensive care unit capacity of 57,000 beds will need to be doubled and all of them will have to be equipped with ventilators.

Health system. While the government is committed to universal health coverage and has implemented key health sector interventions such as the National Health Mission for the poor and vulnerable, public health expenditure in India remains at about 1% of gross domestic product (GDP). India continues to face persistent communicable diseases accounting for 27.5% of all deaths. It also has a serious shortage of medical staff and necessary facilities and equipment, with 0.8 physician and 0.7 hospital bed per 1,000 people. It is estimated that a maximum 57,000 beds in intensive care units are available, less than half of which (25,000) have ventilators. Assuming the worst-case scenario of 2.2 million infected people, India would need 110,000 intensive care units equipped with ventilators. The protection of health workers is equally important in the fight against COVID-19. Personal protective equipment (PPE) and ventilators alone would cost about $898 million according to the government's estimation of requirements.

Economic impact of the lockdown. Given the extremely high risks of the pandemic, particularly for the lower income segment of the population, once community transmission starts to take place, the Prime Minister on 24 March 2020 announced a 21-day nationwide lockdown, which was later extended until 3 May 2020. While the lockdown was necessary to curtail widespread transmission and to simultaneously address existing health sector weaknesses, it has severely depressed economic activity. The IMF has slashed the FY2021 economic growth forecast for India to 1.9%, down by more than 3.9 percentage points over its January 2020 forecast. ADB estimates that the GDP growth could fall to 1.4% under longer containment. Some forecasters have already projected an outright recession in FY2021. Although all sectors are affected, hotels, restaurants and other personal services; light and heavy manufacturing, utilities and construction; and transport services are expected to show negative growth. India has only experienced negative GDP growth twice earlier - in the 1950s and 1960s when famine struck.

Disproportionate impact on the poor and vulnerable, including women. The latest official estimates show that 21.2% of the population lived below the national poverty line in FY2012. Further, about 40.2% of the population lived below the $3.2 poverty line in 2018, indicating that a large section of the population is vulnerable to sudden and prolonged income shocks that may drive them back into extreme poverty. Depending upon the length of the crisis and the severity of economic and social impacts, poverty simulations show that the number of $3.2/day poor could increase by up to 104 million compared with the scenario without COVID-19. Women would be more impacted by the pandemic as they have a higher probability of exposure to COVID-19, being the primary caregivers to the family and taking up high proportion of frontline health workers.

Unemployment in the formal and informal sectors. About 68.4% of the workers are engaged in non-agricultural informal sector, and 54.8% of informal workers are women. With businesses disrupted, these are the first to lose their jobs which could easily push households below the poverty line. Among the regular wage or salaried employees in the non-agriculture sector, about 71.1% do not have a written job contract and 54.2% are not eligible for paid leave. Nearly half of the employed workers are self-employed, 22.8% earn a regular wage or salary and the remaining 24.9% are casual workers. A prolonged widespread lockdown and disruption to economic activities make these people particularly vulnerable to the loss of jobs and livelihoods.

Among the wide range of the government measures to address the pandemic impact, the CARES Program will focus on addressing the immediate needs of vulnerable groups for 3 months while stepping up the health sector response. The scope of the government's COVID-19 response program is summarized below, and detailed breakdown is in the linked documents.

A $2 billion COVID-19 containment plan. The Prime Minister announced the COVID-19 Response and Health Systems Preparedness Project on 24 March. It includes a Rs150 billion ($2 billion, or about 0.1% of GDP) package to (i) carry out emergency responses through the provision of PPE, enhanced surveillance, improved health facilities, training of health workers, testing and tracking for the containment of COVID-19; (ii) strengthen the national and state health systems to support prevention and preparedness; (iii) strengthen pandemic research; and (iv) enhance risk communication and community engagement. This project is designed to provide necessary support in response to the emerging situation by reallocating the project budget flexibly, considering the WHO advisories and other emerging evidences. Under the project, the MOHFW is providing essential supplies such as PPE, significantly increasing the testing capacity through a network of public and private laboratories and the introduction of antibody-based blood tests to speed up the detection of cluster infection; introducing mobile application, Arogya Setu, using Bluetooth for effective infection path tracking; supporting districts to increase isolation wards at district hospitals and medical colleges; enhancing risk communication and community engagement using information technology as well as frontline health workers.

A $23 billion pro-poor economic relief package. The Finance Minister announced the Prime Minister's Welfare Scheme for the Poor (PMGKY) on 26 March 2020, which includes a Rs1.7/trillion ($23 billion or about 0.8% of GDP) package to provide immediate social security benefits to the poor, vulnerable and disadvantaged groups including women affected due to the lockdown. It consists of (i) providing free health insurance for all levels of health workers and providing funds for health-related expenditures (estimated at $3.3 billion); (ii) measures to provide social assistance for compensating economic loss to vulnerable populations, including cash transfers to farmers, women, senior citizens, and people with disabilities, and free food and gas distribution for the poor (estimated at $15.0 billion); and (iii) social security measures for affected workers in both the formal and informal sectors, including the government's contribution to the employers' share of contributions to the Employees' Provident Fund for 3 months benefiting small businesses, and allowing employees to withdraw up to 75% of their Employees' Provident Fund balance or 3-month salary whichever is less (estimated at $4.8 billion).

Impact Adverse social and economic impact by the COVID-19 pandemic reduced.
Project Outcome
Description of Outcome Access to immediate healthcare for all and economic relief for vulnerable groups during COVID-19 pandemic enhanced.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

COVID-19 response and health system measures implemented

Measures to provide social assistance for compensating economic loss to vulnerable groups enhanced

Social security measures enhanced for affected workers in both organized and informal sectors

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects Following an assessment of outputs, the CARES Program is not expected to have adverse environmental and will not trigger ADB's safeguards policies. It is category C for environment. No category A or B activities are envisaged. Investment activities prohibited under ADB's Safeguard Policy Statement (2009) will be excluded.
Involuntary Resettlement Following an assessment of outputs, the CARES Program is not expected to have adverse social safeguards impacts and will not trigger ADB's safeguards policies. It is category C for involuntary resettlement. No category A or B activities are envisaged. Investment activities prohibited under ADB's Safeguard Policy Statement (2009) will be excluded.
Indigenous Peoples Following an assessment of outputs, the CARES Program is not expected to have adverse social safeguards impacts and will not trigger ADB's safeguards policies. It is category C for indigenous peoples. No category A or B activities are envisaged. Investment activities prohibited under ADB's Safeguard Policy Statement (2009) will be excluded.
Stakeholder Communication, Participation, and Consultation
During Project Design The program will be anchored on continued communication and dialogue, both with key vulnerable groups as well as civil society organizations. Social dialogue and information dissemination will be crucial in developing an effective and responsive solution.
During Project Implementation The program team will keep adequate contact with civil society organizations to ensure that information dissemination will reach poor communities.
Responsible ADB Officer Mitra, Sabyasachi
Responsible ADB Department South Asia Department
Responsible ADB Division India Resident Mission
Executing Agencies
Department of Economic Affairs, Ministry of Finance
Ministry of Finance
Room No. 40-B North Block
New Delhi-110001, India
Timetable
Concept Clearance -
Fact Finding 13 Apr 2020 to 13 Apr 2020
MRM 15 Apr 2020
Approval 28 Apr 2020
Last Review Mission -
Last PDS Update 28 Apr 2020

Loan 3915-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Apr 2020 28 Apr 2020 29 Apr 2020 30 Jun 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 500.00 Cumulative Contract Awards
ADB 500.00 28 Apr 2020 500.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Apr 2020 500.00 0.00 100%

Loan 3916-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Apr 2020 28 Apr 2020 29 Apr 2020 30 Jun 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1,000.00 Cumulative Contract Awards
ADB 1,000.00 28 Apr 2020 1,000.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Apr 2020 1,000.00 0.00 100%

TA 9969-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Apr 2020 28 Apr 2020 28 Apr 2020 30 Apr 2022 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
2,000,000.00 0.00 0.00 0.00 0.00 0.00 2,000,000.00 28 Apr 2020 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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Tenders

Tender Title Type Status Posting Date Deadline
Emergency Response and Strategic Intervention Expert – Health Individual - Consulting Active 23 May 2020 05 Jun 2020
Emergency Response and Strategic Intervention Expert – Health Individual - Consulting Active 23 May 2020 05 Jun 2020

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.