Remarks by Axel van Trotsenburg, World Bank Managing Director, Operations at the

Good morning to all of you.

I am very happy to be here. It was this time last year that David Malpass addressed all of you and talked about ‘Strengthening Indian Civil Service towards Efficient Service Delivery.’

David’s remarks focused on the shift from compliance to enable service delivery, partnerships with private sector and community organizations.

David noted that making India’s economic hopes a reality will require patience, persistence, and lots of energy from you and your colleagues.

Much has changed since David’s remarks last year – and likely the single biggest change has been the impact of the COVID-19 pandemic.

But many of the same challenges you faced last year, you likely face this year as well – how to be an effective, resilient, versatile, and adaptive civil service, one that can help your country respond to both the short-term needs and prepare for a better future.

So, let me start with Impact of COVID

The COVID 19 pandemic has brought on the biggest global crisis we have faced in 80 years.

Unlike the financial crisis of 2008, this one is truly a global shock. For example, the 2008 crisis impacted the G7 mainly – while countries such as India and China continued with strong growth. The COVID crisis, in contrast, has forced governments world-wide to purposely slow down their economies to manage the pandemic.

As a result of the unprecedented sudden stop in global economic activity, the global economy is on track to contract by 5.2% this year – the deepest global recession since World War II, and the fourth deepest since 1870.

According to our forecasts, per capita income would contract in over 90% of the world’s economies in 2020, the highest rate since 1870.

And extreme poverty is expected to increase this year by an additional 115 million people.

In the longer term, the pandemic could have scarring effects on households, firms, and governments, leading to persistent behavioral changes that lower potential growth. The crisis threatens to set back decades of economic progress and poverty reduction.

And this concerns us very much, at the World Bank, and is one of the reasons we have been working so hard to support countries mitigate the economic, social, and health impacts of this crisis.

Here in India, on top of existing development challenges, the COVID-19 pandemic has had significant consequences for lives, livelihoods and the broader economy.

Although India has made remarkable progress in reducing absolute poverty, the COVID-19 outbreak has likely reversed the course of poverty reduction.

Between 2011-12 and 2017, India’s poverty rate is estimated to have declined from 20.3% to values ranging from a little over 8 percent to a little over 11 percent. Recent projections of GDP per capita growth rate indicate that, due to the pandemic the poverty rates in 2016 and 2020 will be in that upper range – 11.4 percent in 2016 and 11.1 percent in 2020.

The pandemic has exacerbated the vulnerabilities for traditionally excluded groups, such as youth and women. It has hugely impacted jobs.

Micro, Small and Medium sized enterprises are considered to have been impacted the most from lockdown – and these MSMEs account for the largest non-farm employment (30%) with about 20% female participation.

The economic impacts also put at high risk the continued delivery and uptake of essential services such as education, health, nutrition, water and sanitation which are key in ensuring that India’s human capital gains are not compromised.

The government of India …