World Bank Approves $84 Million to Strengthen Social Protection Programs in Bihar, India

January 9, 2014

Over 50 million rural people expected to directly benefit from the project

WASHINGTON, December 30, 2013 - The World Bank has approved an $84 million credit for the Bihar Integrated Social Protection Strengthening Project to deliver better quality, timely and effective social protection (SP) programs for the poor and vulnerable people in the state.

The project will focus on building the institutional capacity of the departments of Social Welfare and Rural Development in Bihar to better implement social protection programs at the state, district and block levels. It will also help the government of Bihar expand outreach of social care services for the poor and vulnerable households, persons with disabilities, older persons and widows.

Today, there are several social protection programs in place in Bihar. These include the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) - a demand-driven public works program that guarantees all rural households up to 100 days of unskilled works annually; Indira Awaas Yojana (IAY) - cash transfers to poor rural households for building houses; and Social Pensions - cash transfers for older persons, widows and persons with disabilities. The total expenditures on these programs in FY2010-11 accounted for 74% of the total social protection spending in the state or about 3.04% of Gross State Domestic Product (GSDP). The other SP programs include the Public Distribution System (PDS) and social care services, which represent a total of 25% of expenditures in 2010-11.

However coverage of most social protection programs, including MGNREGS, IAY, and social pension programs for rural households, is low. Therefore, the potential to increase program coverage and thereby to address deprivation and poverty in the state of Bihar is very high. A recent World Bank study estimates that, if the implementation of the MGNREGS was strengthened, the extra labor earnings from MGNREGS could potentially bring down the poverty rate in Bihar by about 10% points rather than its actual impact of closer to 1% point.[1]

“Bihar has been spending significant amount of resources on its social protection programs, however, both administrative and census data suggests that the coverage of rural households under most of the social protection programs in the state can be significantly increased. The project will work to ensure that these programs reach the 54 million people in the state who still live below the poverty line as well as the millions of others who are old, widowed or disabled,” said Onno Ruhl, World Bank country director for India. “It will focus on strengthening institutions to deliver better services and, thereby, support the government’s core agenda of promoting better governance and service delivery in the state. Good practices that emerge from its implementation could be replicated in other states,” Ruhl added.  

This project will improve the capacity of the State Society for Ultra-Poor and Social Welfare (SSUPSW) and the Bihar Rural Development Society (BRDS) – program implementation arms of the departments of Social Welfare and Rural Development respectively, at the state, district and block levels. It will strengthen the delivery of MGNREGS, IAY, Social Pensions and programs for care and rehabilitation of older persons, persons with disabilities and widows; standardize procedures and tools for effective management of the benefits process; create a Bihar State Resident Registry (BSRR) to track beneficiaries of selected social protection schemes; and strengthen financial management systems and capacity at the state, district and block levels for all central and state schemes.

To ensure state-wide coverage of social care services, 101 Social Care Service Centers, also known as Buniyad Centers,   will be set up to provide care, support and rehabilitation services for older persons, widows and persons with disabilities. Services offered at the Buniyad Centers would include basic care and support, legal aid, therapy, counseling and rehabilitation, emergency outreach services through a state level toll free Helpline Service, and provision of assistive devices.

“Over the past few years the government of Bihar and the World Bank and have been working together under the Bihar Capacity Building Technical Assistance Program in examining the current systems, identifying the critical challenges and solutions, and developing a consensus on the changes that are required in providing effective social protection programs. The project design has emerged from these deliberations and assessments and as a result is better prepared to focus on implementing improved services,” said Jessica Leino, senior economist and the project’s task team leader.  

The Project will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm – which provides interest-free loans with 25 years to maturity and a grace period of five years.




[1] Estimates from an impact evaluation of MGNREGS conducted in 2009 and 2010 in rural Bihar by the World Bank at the request of the Rural Development Department (see Dutta et al (2013)).




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