World Bank grants India $1.75 bn loan for health, private investment

The World Bank has approved loans totalling USD 1.75 billion (about Rs 13,834.54 crore) to fund India's PM Ayushman Bharat scheme and private investment to boost the economic growth.

Of the total loan, USD 1 billion will go towards the health sector, while the rest USD 750 million will be in the form of development policy loan (DPL) to fill the financing gaps through private sector investment in the economy.

The World Bank Board of Executive Directors approved two complementary loans of USD 500 million each to support and enhance India's health sector.

Through this combined financing of USD 1 billion, 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 release on Friday.

The funds will be used to improve public healthcare infrastructure across the country. In addition to the national-level interventions, one of the loans will prioritize seven states namely Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu, and Uttar Pradesh, the multi-lateral funding agency said.

Separately, its board approved the DPL to the union government to support reforms critical to addressing financing gaps by leveraging private sector investment in infrastructure, small businesses, and the green finance markets.

The World Bank said India's performance in the health sector has improved over time. It has estimated India's life expectancy at 69.8 in 2020, up from 58 in 1990 -- higher than 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 ratio (103 per 1,00,000 live births) are all close to the average for India's income level, reflecting significant achievements in access to skilled birth attendance, immunizations, and other priority services, the World Bank said.

It said despite these advances in the health sector, COVID-19 has underscored the need for revitalizing, reforming, and developing capacity for core public health functions, as well as for improving the quality and comprehensiveness of the health service delivery.

"The COVID-19 outbreak has re-emphasized the urgency for significant reforms to improve the health sector performance 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 pleased to support this important agenda."