Ex-Ante Evaluation (for Japanese ODA Loan)
South Asia Division 1, South Asia Department, JICA
1. Name of the Program
Country: India
Program: The COVID-19 Crisis Response Support Loan for Social Protection
Loan Agreement: January 8, 2021
2. Background and Necessity of the Program(1) Current State and Issues of COVID-19 in India and the Positioning of theProgram
COVID-19, which was declared a global pandemic by the WHO in March 2020,
has been spreading rapidly in India since the end of March. As of December
2020, India has the second highest number of total cases, with nearly 10 million,
and the third highest number of total deaths in the world, with nearly 150,000,
and the country is still seriously impacted by COVID-19. Although a national
lockdown implemented at the end of March has been gradually lifted, local
lockdown measures are still in place in the areas where the virus is spreading.
As a result, the COVID-19 pandemic has severely affected India'ssocioeconomic conditions. IMF projects India's real GDP growth at −10.3% in
FY2020/2021, which is the lowest GDP growth in the last 30 to 40 years. Thepandemic and the prolonged lockdown measures as well as their social
consequences have resulted in decline in sales, suspension and reduction in
production, and disruption in supply chain, adversely affecting the private
sector's business activities. The economic activities of over 1,400 Japanesecompanies operating in more than 5,000 sites across India have also been
seriously impacted.
To deal with rapid economic slowdown, the Government of India and theReserve Bank of India (RBI) have both stimulated the economy, through fiscal
and monetary policies, with huge economic packages worth a total of 30 trillion
rupees (approx. 43 trillion yen, 1 rupee = 1.43 yen), which accounts for nearly 15
percent of India's GDP. However, these policies are negatively impacting on
India's fiscal account due to increased COVID-19 related government spending
and reduced revenue resulting from the economic downturn. General
government deficit (including state governments) for FY2020/2021 is expected
to drastically increase to 13.1 percent of GDP from 8.2 percent in the previousyear (IMF).
There is a disproportionate impact particularly on the vulnerable, including the1poor1 and women due to the economic slowdown (ADB, 2020). Owing toeconomic stagnation caused by the lockdown measures, India's unemployment
rate soared to 23% in April from 7% in February before the lockdown, and nearly
100 million people, mainly the poor, temporarily lost their job. As a result, thelivelihoods of the poor and their families have been severely impacted, causing
enormous social uncertainty (Centre for Monitoring Indian Economy, 2020).
Particularly in urban areas, many of poor migrant workers from rural areas
working in the construction and manufacturing sectors have lost their jobs. The
unemployment rate showed some improvement by November, which stood
below the pre-lockdown level of 6.5 percent. However, it is pointed out that theimprovement is only a consequence of lower labor participation rate, andfurthermore, the unemployment rate rose to 9 percent in December. Therefore, itis yet vital to provide support to those who have lost their jobs, mostly the poor,and the vulnerable who have been significantly influenced by social uncertainty.
Since social protection services by state governments are provided only to theresidents of each states, millions of migrant workers working outside their home
states were forced to go back home, amid restrictions on transportation services,to apply for social protection programs despite the concerns that traveling may
increase their risk of getting infected with the virus. MSMEs in urban areas which
are dependent on migrant workers as their workforce are suffering from serious
labor shortages as a consequence of the outflow of migrant workers, while
economic activity has been gradually recovering. Hence, there is a growing needto provide support for the livelihoods of people such as migrant workers in
informal sector, and to implement policy reform to ensure those in need forsupport can enjoy it upon necessity. People living in rural area account for nearly
80 percent of the poor in India and nearly 70 percent of its labor force (2011Census), and the livelihoods of internal migrant workers who have returned
home and their families need to be supported. In addition, it is imperative toimprove working conditions of workers, particularly front-line healthcare workers
tackling COVID-19, who have been working without adequate health insurance
for COVID-19.
In March 2020, the Government of India announced the Pradhan Mantri Garib
Kalyan Yojana ("PMGKY") totaling 1.7 trillion rupees (approx. 2.4 trillion yen),

1

People living below the poverty line (less than $3.2 per day) in lower middle income countries
which account for nearly 40.2 percent of the world's population as of 2018.

2

which consists of five existing social protection programs2. This is the first major
economic package among other packages that include various social protection
programs. The purpose of this scheme is to mitigate the rapidly worsening
economic impacts and to support the poor and the vulnerable. The PMGKY is asocial protection program that provides economic support mainly to healthcare
workers and the poor and the vulnerable who are significantly affected by thesocioeconomic crisis. The PMGKY provides 1) free health insurance forhealthcare workers; 2) cash payments for the vulnerable (farmers, the poor,women, elderly people, and persons with disabilities); 3) distribution of food andfuel rations for the poor; and 4) relief supplies and cash payments for workers inboth formal and informal sectors. In addition, the program is aimed at containing
and mitigating socioeconomic impacts of COVID-19 and strengthening
socioeconomic institutions in India so that its citizens can benefit from social
protection programs no matter which state they are staying and they can resume
working beyond the state borders.
Under the COVID-19 Crisis Response Support Loan for Social Protection ("theProgram"), budget support will be extended in order to meet immediate financial
needs of the Government of India and to support to address issues in social
protection sector through the PKGKY promoted by the Government of India.
Hence, the Program is regarded as a key project in India's countermeasuresagainst COVID-19.
(2) Japan's and JICA's Cooperation Policy for COVID-19 and the Positioning ofthe Program
In the Country Assistance Policy for India (March 2016), the Government ofJapan highlights income generation programs for the poor as a priority area tosupport sustainable and inclusive economic growth in India and committed toproviding assistance which contributes to poverty reduction and social sector
development. The Program is classified as a basic social service improvement
program, which is to be carried out as one of the priority areas "Supporting
Sustainable and Inclusive Growth." Under its pillar of "Inclusive Rural Growth,"
JICA Country Analysis Paper for India (March 2018) points out the need tofurther enhance health and social services for the improvement of the livelihood
2Five existing social protection programs include job creation in rural areas, provision of gas
cylinders, cash payments for widows, elderly people, and persons with disabilities, and cash
payments for women on a low income, as well as coordination and monitoring between state
governments and central governmental departments and agencies that will be required toimplement the PMGKY.

3

of the poor and the need to secure income for the achievement of sustainable
and inclusive growth in remote rural areas where many low-income households
are located. The Program is consistent with JICA's policies and analysis andcontributes to the achievement of SDG Goal 1 (No Poverty), Goal 5 (GenderEquality), and Goal 8 (Decent Work and Economic Growth). Moreover, theProgram, which is aimed at containing and mitigating socioeconomic impacts ofCOVID-19 and strengthening socioeconomic institutions in India, supports theimprovement of the business environment for Japanese companies operating inIndia which have been severely affected by socioeconomic uncertainty in thecountry and have had difficulty in securing local workers for their construction
projects including ODA projects. Hence, the Program ultimately contributes tothe effort for economic recovery of Japan.
(3) Other Donors' Activities
In May 2020, the World Bank provided a US$750 million loan to theGovernment of India for the implementation of the PMGKY, as the first tranche ofits COVID-19 Social Protection Response Program. In December 2020, theWorld Bank approved a US$400 million loan as the second tranche of theprogram, taking its total commitment to US$1.15 billion. The Asian Infrastructure
Investment Bank ("AIIB") provided a US$750 million loan as a co-financing withthe World Bank. The French Development Agency ("AFD") and the German
Development Bank ("KFW") committed 200 million euros and 250 million euros
respectively as co-financing with the World Bank's program sharing the samepolicy matrix. Similarly, to support the PMGKY, the Asian Development Bank("ADB") extended a US$1 billion loan (Countercyclical Support Facility),separately from the World Bank's program. For the Indian government's US$2billion healthcare program, "COVID-19 Emergency Response and Health
System Preparedness Package," the World Bank provided a US$1 billion loan
and the AIIB made co-financing contributions of a US$500 million to the program.
The ADB separately provided a US$500 million loan to support the program. TheNew Development of Bank ("NDB") also approved a US$1 billion loan for both
health sector and social protection program. In June 2020, the World Bank
further approved and provided a US$750 million loan to the Government of India
to support its MSME support program.

43. Program Description(1) Program Objective
The objective of the Program is to contain COVID-19 and mitigate adverse
socioeconomic impacts in India, by extending budget support to Government ofIndia implementing emergency response programmes and policy reforms forsocial protection as countermeasures against the COVID-19, thereby
contributing to promoting the social and economic stabilization and development
efforts of India.
(2) Program Site/Target AreaIndia(3) Program Components
The Program will extend budget support to the Government of India for its
economic support programs for the poor and the vulnerable and policy reforms.
Under the Program, support will be provided in accordance with the following
common policy matrix with the World Bank as the co-financing partner.
Policy agenda

Policy action
Leveraging
Pre-existing Social
Protection Measures
for COVID-19 ReliefProtecting Workers inEssential Service
Supply Chains during
COVID-19 PandemicApprove the PMGKY under which existing social
protection programs are combined.
Develop and approve the provision of free foodrations for a three-month period.
Amend regulations to include pandemic as a reason
to allow workers to withdraw from their Provident
Fund account.
Supplement three months' contributions into theProvident Fund account for low-wage workers insmall and medium enterprises.
Establish a special health insurance scheme forhealth workers providing essential care/medicalservices to COVID-19 patients.

5Improving Access andDelivery for VulnerablePopulations

Issue advisories to all States’ government on how touse Workers Welfare Fund to provide relief materials
and cash to registered construction workers.
Enable the States’ government to use finances fromthe State Disaster Response Funds to provide
migrant workers relief materials and in-kind support.
Issue guidance largely adopted by public sectorbanks to waive ATM charges for all cash withdrawals
to facilitate access to cash and PMGKY payments.

(4) Estimated Program Cost
Loan amount: 30,000 million yen(5) Schedule
The provision of budget support under the Program commenced in May 2020.
The achievement of the policy actions has been confirmed. The Program will becompleted upon the completion of loan disbursement.
(6) Program Implementation Structure1) Borrower: The President of India
2) Executing Agency: Department of Economic Affairs, Ministry of Finance(7) Collaboration with Other Schemes and Donors
1) Japan's Assistance Activity
COVID-19 Crisis Response Emergency Support Loan was approved on
August 31, 2020 as budget support for emergency response to thehealthcare sector in the COVID-19 pandemic. In conjunction with theProgram, the emergency support is extended to India which has been
seriously impacted by COVID-19.
2) Other donors' Assistance Activity
The Program co-finances the first tranche of the World Bank’s COVID-19
Social Protection Response Program which is implemented in two tranches.
The World Bank agreed with the Indian government on the policy matrix
applicable to social protection for the poor and the vulnerable and supports
the implementation of the policy matrix through co-financing with other
donors including AFD.
(8) Environmental and Social Considerations/Cross-Sectoral Issues/Gender
Category
1) Environmental and Social Considerations
1. Category: C6

2. Reason for choosing this category: As the Program is a budget-support
loan, the negative impact on the environment from this Program is likely tohave minimal or little adverse impact on the environment under the ‘JICA
Guidelines for Environmental and Social Considerations (April 2010)’.
2) Cross-Cutting Issues:
1. Relevance to climate action: N/A
2. Poverty reduction and considerations: The policy actions under theProgram include economic support, such as relief supplies and cash
payments to the poor and the vulnerable, and the Program is therefore
classified as a poverty reduction program.
3. HIV/AIDS and other infectious disease control: N/A
4. Participation-type development: N/A
5. Disability considerations, etc.: The policy actions under the Program
include cash payments and other economic support for persons withdisabilities who have been significantly affected with economic decline
and the Program is therefore classified as a program considering persons
with disabilities.
3) Gender category:
Gender project: ■ GI (S) (Gender informed (Significant))<Reason for Categorization>
Under this Program, cash payments are made to widows and poor women to
help the socioeconomically vulnerable women to maintain their livelihoods.
Two-thirds of the cash payment recipients are women and the indicators areto be collected with gender-based information.
(9) Other important issues: N/A74. Targeted Outcomes(1) Quantitative Effects
Outcomes (Operation and Effect Indicators)
Adequacy of benefits provided through the COVID-19
Social Protection Support Program measured by
PMGKY transfers as a percent share of total household
consumption expenditures for the poorest quintile inIndia (%)

040(2021)

Access to essential food supplies measured bypercentage share of poor households receiving theadditional food ration entitlement for a three-monthperiod (%)

060(2021)

Access to wage protection measures measured bypercentage share of low-wage workers withdrawing
funds from Employee Provident Fund Accounts citing
the COVID-19 pandemic as a reason for withdrawal (%)

025(2021)

Timeliness of wage-loss compensation measures
measured by percentage of low-wage workers in SME’s
receiving additional contribution announced withineight-weeks of the announcement (%)

060(2022)

Utility of health insurance measures measured bypercentage share of essential service workers infectedwith COVID-19 using the Special Health Insurance
Scheme (%)

030(2021)

Access to support measured by percentage share ofconstruction workers registered with Workers Welfare
Fund receiving cash transfers (%)

050(2021)

Migrant-neutrality of support measured by percentageof India’s population able to access to portable foodbenefits through the Public Distribution System (PDS)(%)

033(2022)

Timeliness of cash-transfers provided measured bypercentage of poor households who have received at600least one PMGKY benefit within eight-week period of(2021)
program announcement
Note: The same operation and effect indicators have been set with the World8Bank as the co-financing partner.
(2) Qualitative Effects
Reduction in unemployment, support for livelihoods of the poor and thevulnerable, improved social protection programs for the poor and the vulnerable
and more efficient implementation institution, and consequently social andeconomic stabilization in India.
(3) Internal Rate of ReturnNot calculated as it is a program loan.
5. Preconditions and External Conditions(1) Preconditions
None in particular(2) External Conditions
India shall continue its measures to contain COVID-19 and to avoid furtherdeterioration.
6. Lessons Learned from Past ProgramsTwo major lessons have been drawn from the ex-post evaluation of the"Emergency Budget Support Japanese ODA Loan" program for the Philippines.
Firstly, this particular loan, which was built on the framework of existing programloans, was provided in a flexible and timely manner in the midst of the financial
crisis of 2008, thus enhancing the effectiveness of the intervention. Secondly,
since one of the objectives of emergency budget support was to extend
financing in a timely manner to facilitate crisis response, the procedures for theloan disbursement should be as simple and flexible as possible. Having learned
the lessons above, the Program makes the most of the framework developed by
the Government of India and agreed with the World Bank in identifying the policy
actions and evaluation indicators. This arrangement enables the timely provisionof the loan to meet the urgent financial needs.
7. Evaluation Results
The Program, which is designed to meet immediate financial needs of theGovernment of India and to support to address issues in social protection sector
through the PKGKY promoted by the Government of India, is consistent with thedevelopment issues and policies of India as well as Japan's and JICA'scooperation policies and analysis. The Program is also beneficial to containingand mitigating socioeconomic impacts of COVID-19 and strengthening ofsocioeconomic institutions in India through support for the poor and thevulnerable, and is expected to contribute to the achievement of SDG Goal 1 (No9Poverty), Goal 5 (Gender Equality), and Goal 8 (Decent Work and Economic
Growth). For these reasons, there is a significant necessity to support theimplementation of the Program.
8. Plan for Future Evaluation(1) Indicators to be used in future evaluation
As indicated in section 4.
(2) Future evaluation schedule
Ex-post evaluation: two years after the program completionEnd10