India : COVID-19 Active Response and Expenditure Support Program

Health / Disease control of communicable disease - Health system development

Public sector management / Social protection initiatives

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.

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).

Adverse social and economic impact by the COVID-19 pandemic reduced.

Access to immediate healthcare for all and economic relief for vulnerable groups during COVID-19 pandemic enhanced.

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

A NHM Guidance Note on India Covid-19 Emergency Response and Health Systems Preparedness Package was issued to states to plan their response by planning out activities and utilize funds to strengthen response.

A total of 2.2 million health workers, including 10,47,324 ASHAs were provided with a life insurance coverage of INR 5 million (USD 67,404) which was initially valid till 30 June 2020 and subsequently increased up to April 2022. Target Achieved.

Currently India reports the capacity of testing more than 2.1 million samples per day.

Till 31 July 2021, 100% district hospital doctors and nurses have been trained following MoHFW guidelines, per WHO standards of clinical treatment for COVID-19, out of that 61% are women. Target Achieved. 100% districts (734 districts) with availability of COVID-19 isolation capacity in at least one hospital including medical colleges as of 31 July 2021. Target Achieved.

97% of the States/UTs i.e., 35 are using Integrated Health Information Platform (IHIP) and all the 36 States/UTs are using the COVID-19 Surveillance System Portal as of 31 July 2021. Target Achieved.

Pradhan Mantri Jan Dhan Yojana: About 206 million women received the three instalments of INR 500 against the target of 204 million women. Of the total allocation of INR 310 billion (USD 4.18 billion), INR 309.5 (USD 4.17 billion) (99.8%) has been disbursed. Target Achieved.

Pradhan Mantri Garib Kalyan Anna Yojana: Of the overall target of food grains distributed to 166.7 million households per month, the scheme performance was as follows: 91% of the target (150.9 million) was achieved in April 2020, 97% (162.1 million) in May, 99% (165.5 million) in June, 94% (156.1 million) in July, 94% (157.3 million) in August, 94% (156.8 million) in September, 94% (156.0 million) in October, 90% (149.5 million) in November 2020, 94% (156.6 million) in May 2021, 94% (156.8 million) in June 2021, and 91% (152 million) of the target was achieved in July 2021. Target Achieved.

National Social Assistance Program (NSAP): A total of 28.1 million beneficiaries registered under NSAP (poor senior citizens, widows, and people with disabilities) received the ex-gratia payment of INR 1,000 (USD 13.5) in two instalments each in April and May 2020, totaling INR 14.1 billion (USD 190.1 million). Disaggregated beneficiary data received from Ministry of Rural Development showed that 21.4 million senior citizens, 5.9 million widows, and 0.8 million differently-abled persons received a financial benefit of INR 214.3 billion (USD 2.9 billion), INR 5.94 billion (USD 80.1 million) and INR 773 million (USD 10.4 million), respectively, under the scheme. Target Achieved.

Direct Benefit Transfers (DBTs) to farmers: By end-August 2020, a total of 85 million farmers received the advanced disbursement of INR 2,000 (USD 26.9). In December 2020, a total of 90 million farmers received the advanced disbursement of INR 2,000 (USD 26.9). In May 2021, more than 95 million farmers received financial support of INR 2,000 (USD 26.9). Target Achieved.

Free LPG cylinders under Pradhan Mantri Ujjwala Yojana for BPL households: A total of 75.6 million (94.3% of target) beneficiaries received at least one cooking gas cylinder out of which 10 million (13.3% of the targeted beneficiaries) received all three cylinders, 46.0 million (60.8% of the target beneficiaries) received two cylinders and 19.5 million (25.8% of the target beneficiaries) received only one free cylinder. In summary, a total of 141.7 million cylinders / free refills have been issued by Oil Marketing Companies (OMCs) between April-December 2020. Target Achieved.

Mahatma Gandhi National Rural Employment Guarantee Scheme: Between April 2020 to July 2021, 5,437.4 million person-days of employment were generated, of which 2,865.5 million person-days, i.e. 52.7% of the total, accrued to women beneficiaries. Target Achieved.

Relaxation of rules under the Employees' Provident Fund Organization (EPFO) scheme: Between April 2020 to January 2021, a total of 3.9 million workers benefited under the scheme, with INR 25.7 billion (USD 346.2 million) assistance provided.