World bank approves $1.75 bn loan to fund PM Ayushman Bharat scheme

Medpho Team May 1, 2023

 Ayushman Bharat Scheme

The World Bank has endorsed loans totalling USD 1.75 billion (about Rs 13,834.54 crore) to endow India's PM Ayushman Bharat scheme and private investment to boost economic growth. This decision was taken on 1st July 2022 by the World Bank Board of Executive Directors, where they have approved two complementary loans of $500 million to support and enhance India's health sector. The remainder of USD 750 million was approved as a development policy loan (DPL) to fill the financing interludes through private sector investment in the economy.

The loans approved promise to expand the accessibility of healthcare services to the Indian population and fortify the overall healthcare system. One part of the loan will fund by the world bank and will mainly prioritise seven states, including Andhra Pradesh, Kerala, Meghalaya, Odisha, Punjab, Tamil Nadu, and Uttar Pradesh.

The transition in Health Infrastructure post Independence

In post-independence India, the health infrastructure had not received the required attention for an extended period. However, the recent efforts taken by the government of India have set up an upbeat track to enhance the overall standard of healthcare structure in the country. The government expenditure on healthcare has increased by 137% YoY (Rs. 2,23,846 crore (US$ 30.70 billion)) in BE 2021-22, as against Rs. 94,452 crores (US$ 12.95 billion) in BE 2020-21 with the start of the Covid-19 episode.

About Ayushman Bharat Scheme

The PM Ayushman Bharat Scheme, one of the significant moves launched on 23rd September 2018 by Dr Narendra Modi to serve the unserved strata of the society, was an intelligent move to digitalize the overall healthcare system across the country. The effectiveness of the Ayushman Bharat depended on different challenges besides the much-awaited increase in budget allocation.

What made the World Bank approve $ 1.75 bn?

Despite refinements in the health of the Indian people, COVID-19 has stressed the need for restoring, reforming, and creating capacity for core public health procedures and improving the quality and comprehensiveness of health service delivery. The COVID-19 episode has highlighted the urgency for essential reforms to improve health sector performance in India.

The World Bank noticed India's performance in the health sector that has enhanced over time. Looking at this positive approach to resolving healthcare infrastructure and healthcare needs, the World Bank was pleased and decided to support this influential agenda. It significantly praised the Indian government for its decision to strengthen its health scheme( PMJAY) even as it emerged from the pandemic. It evaluated India's life expectancy, which was 58 in 1990, and has remarkably improved to 69.8 in 2020.

Ayushman Bharat scheme

The two Loans approved by the World bank

The two loans approved were the Public Health Systems for Pandemic Preparedness Program (PHSPP) and Enhanced Health Service Delivery Program (EHSDP)

PHSPP will help the government design India's management system to witness and register epidemics of potential international situations, enhancing the capacity to detect pathogens, including zoonotic diseases, strengthening coordination, and building the institutional capacity of core public health institutions.

The EHSDP will sustain the government's measures to boost service delivery through a redesigned primary health care model. These were designed to be complementary and alter the outcome, allowing the Government of India's reform plan to speed up universal coverage, enrich the rate, and improve the strength and preparedness of India's health system.