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Government of India and World Bank Sign $84 Million Agreement to Strengthen Social Protection Programs in Bihar

May 29, 2014

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

NEW DELHI, May 28, 2014 - The government of India, the government of Bihar and the World Bank today signed a $84 million credit agreement to deliver better quality, timely and effective social protection (SP) programs for the poor and vulnerable people in Bihar.

The credit agreement for the Bihar Integrated Social Protection Strengthening Project was signed by Nilaya Mitash, joint secretary, department of economic affairs, ministry of finance, on behalf of the government of India;  Rajit Punhani, secretary, social welfare department, government of Bihar, on behalf of the government of Bihar; and Michael Haney, World Bank’s operations advisor in India, on behalf of the World Bank.  

Today, there are several social protection programs in Bihar. However their coverage, including that of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Indira Awaas Yojana (IAY), and social pension programs for rural households, remains low. This project will improve the capacity of the State Society for Ultra-Poor and Social Welfare (SSUPSW) and the Bihar Rural Development Society (BRDS) – the 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.

“This is the first social protection project at the state level that promotes an integrated delivery approach and expands social care services for the most vulnerable. It can serve as a model and provide evidence of good practices that could be replicated in other states,” said Nilaya Mitash, joint secretary, department of economic affairs, ministry of finance, government of India.

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, and provision of assistive devices.

“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,” said Rajit Punhani, secretary, department of social welfare, government of Bihar.  

Today, some of the major social protection programs in Bihar are the MGNREGS - a demand-driven public works program that guarantees all rural households up to 100 days of work annually; 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). Other SP programs include the Public Distribution System (PDS) and social care services, which represent a total of 25% of expenditures in 2010-11.

“Bihar has been spending significant 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 Michael Haney, World Bank’s Operations Advisor in India.

The good practices that emerge from its implementation will be replicated in other states.

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

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.

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