India - Andhra Pradesh Irrigation And Command Area Development Composite Project : Loan 1251 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1251 T-IN LOAN AGREEMENT (Andhra Pradesh Irrigation and Command Area Development Composite Project) Between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated June 10, 1976 LOAN AGREEMENT AGREEMENT, dated June 10, 1976, between INDIA, acting by its President (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS: (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Bank has determined that the Borrower is eligible to receive the Loan as an intermediate term loan, as that term is defined in Resolution No. 75-111 of the Executive Directors of the Bank establishing an Interest Subsidy Fund for the Third Window (hereinafter called the Fund) and upon the terms and condi- tions set forth in such Resolution; (C) the Administrator of the Fund (hereinafter called the Administrator), subject to the terms and conditions set forth in the Resolution referred to in (B) above, is obligated to pay to the Bank semi-annually from the resources of the Fund an amount equal to four per cent (4%) per annum of the outstanding amounts of principal on intermediate term loans, of which the Loan is one; (D) by an agreement of even date herewith between the Bank and the State of Andhra Pradesh, the State of Andhra Pradesh has agreed to undertake certain obligations in respect of the carrying out of the Project; - 2 - (E) by an agreement of even date herewith between the Bank and Agricultural Refinance and Development Corporation (herein- after called ARDC), ARDC has agreed to undertake certain obliga- tions in respect of the carrying out of the Project; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan to the Borrower upon the terms and conditions hereinafter set forth and in the agreements referred to in Recitals (D) and (E) above; NOW THEREFORE the parties hereto hereby agree as follows: -3- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guar- antee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said Gen- eral Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the con- text otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Andhra Pradesh" means the State of Andhra Pradesh, a State of India, or any successor thereof; (b) "ARDC" means Agricultural Refinance and Development Corporation, a statutory corporation established and organized under the laws of the Borrower; (c) "Andhra Pradesh Project Agreement" means the agreement between the Bank and Andhra Pradesh of even date herewith as the same may be amended from time to time; (d) "ARDC Agreement" means the agreement between the Bank and ARDC of even date herewith as the same may be amended from time to time; -4- (e) "NSP" means the Nagarjunasagar Irrigation Project in Andhra Pradesh; (f) "Project Area" means the following culturable command areas in Andhra Pradesh: (i) Pochampad; (ii) NSP Right Bank Canal; (iii) NSP Left Bank Canal; and (iv) Tungabhadra High Level Canal (Stage 2); (g) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower F-- ARDC pursuant to Section 3.01 (d) hereof, as the same may be amended from time to time; and (h) "Lending Banks" means Agricultural Development Banks and Comnercial Banks in Andhra Pradesh participating in lending to farmers under the Project. -5- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equival n to one hundred forty-five million dollars ($145,000,000). ' Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expendi- tures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. (a) Except as the Bank shall otherwise agree, the goods and works for the Project to be financed out of the pro- ceeds of the Loan, shall be procured in accordance with the pro- visions set forth in the Schedule to the Andhra Pradesh Project Agreement. (b) Where a contract is awarded for the supply for the Proj- ect of goods manufactured outside India, the Borrower shall imme- diately grant permission to import the goods covered by the con- tract, and no reviews of such permission to import shall be made by the Borrower or by any of its agencies, and all foreign exchange required therefor shall be promptly made available. -6- Section 2.04. The Closing Date shall be December 31, 1982, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of four and one-half per cent (4-1/2%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time; provided, however, that if the Administrator shall at any time de- termine that the resources of the Fund shall not be sufficient to pay to the Bank at the next succeeding semi-annual interest payment date of the Loan the amount scheduled to be paid by the Administra- tor at that interest payment date as specified in paragraph (C) of the Preamble to this Agreement, the Borrower shall, upon notifica- tion by the Administrator of such determination and the amount of the resulting shortfall, pay additional interest on such principal amount of the Loan equal to such shortfall. Section 2.07. Interest and other charges shall be payable semi-annually on January 15 and July 15 in each year. Section 2.08. The Borrower shall pay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. -7- ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out or cause to be carried out the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, agricul- tural, engineering and health practices and shall provide or cause to be provided, promptly as needed, the funds, facilities, ser- vices and other resources required for the purpose. (b) Without any limitation or restriction upon any of its other obligations under this Agreement, the Borrower shall take and cause all its agencies to take all action (including the pro- vision of funds, facilities, services and other resources) which shall be necessary or appropriate on their part to enable Andhra Pradesh, with respect to the Andhra Pradesh Project Agreement, and ARDC, with respect to the ARDC Agreement, to perform all of their obligations under the said Agreements and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) In order to assist Andhra Pradesh in carrying out the Project, the Borrower shall make available to Andhra Pradesh in accordance with the Borrower's standard arrangements for develop- mental assistance to the States of India part of the proceeds of the Loan equivalent to one hundred thirty-five million eight hun- dred fifty thousand dollars ($135,850,000) or such other amounts as the Bank may from time to time agree. -8- (d) The Borrower shall enter into a Subsidiary Loan Agree- ment with ARDC on terms and conditions (including inter alia those set forth in Schedule 4 to this Agreement) satisfactory to the Bank for the purpose of lending to ARDC part of the proceeds of the Loan equivalent to nine million one hundi,ed thousand dol- lars ($9,100,000) or such other amounts as the Bank may from time to time agree. The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purnose of the Loan and, except as the Bank may otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. (a) The Borrower shall insure, or cause to be insured, or make, or cause to be made, adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, trans- portation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods. (b) Except as the Bank may otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.03. The principal lending terms and conditions re- lating to the Project shall be as set out in Schedule 4 to this Agreement, said schedule being subject to amendment by agreement between the Borrower, ARDC and the Bank. ) -9 - ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, i.n normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of for- eign exchange held under the control or for the benefit cf such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or per- mitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or adminis- trative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfac- tory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; - 10 - and (ii) any lien arising in the ordinary course of banking trans- actions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdi- vision thereof and of any entity owned or controlled by, or oper- ating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. - 11 - ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (k) thereof: (a) Andhra Pradesh shall have failed to perform any of its obligations under the Andhra Pradesh Project Agreerent; (b) ARDC shall have failed to perform any of its obligations under the ARDC Agreement or under the Subsidiary Loan Agreement; (c) an extraordinary situation shall have arisen which shall make it improbable that (i) Andhra Pradesh will be able to perform its obligations under the Andhra Pradesh Project Agreement; or (ii) ARDC will be able to perform its obligations under the ARDC Agreement or under the Subsidiary Loan Agreement; (d) ARDC shall have become unable to pay any of its debts as they mature or any action or proceeding shall have been taken by ARDC or by others whereby any of the property of ARDC shall or may be distributed among its creditors; and (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of ARDC or for the suspension of the operations of ARDC. - 12 - Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraphs (a) and (b) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower; and (b) any event specified in paragraphs (d) and (e) of Section 5.01 of this Agreement shall occur. -13 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) that the execution and delivery of the Andhra Pradesh Project Agreement on behalf of Andhra Pradesh have been duly authorized or ratified by all necessary governmental action; and (b) that the execution and delivery of the ARDC Agreement on behalf of ARDC have been duly authorized or ratified by all necessary corporate action. Section 6.02. The following are specified as additional mat- ters, within the meaning of Section 12.02 (c) of the General Con- ditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Andhra Pradesh Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, Andhra Pradesh and is legally binding upon Andhra Pradesh in accordance with its terms; and (b) that the ARDC Agreement has been duly authorized or rati- fied by, and executed and delivered on behalf of, ARDC, and is le- gally binding upon ARDC in accordance with its terms. - 14 - Section 6.03. The date September 8, 1976, is hereby specified for the purposes of Section 12.04 of the General Conditions. -15- ARTICLE VII Representative of the Borrower; Addresses Section 7.01. Any Secretary, Additional Secretary, Joint Secretary, Director or Deputy Secretary to the Government of India in the Ministry of Finance of the Borrower is designated as repre- sentative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: The Secretary to the Government of India Ministry of Finance Department of Economic Affairs New Delhi, India Cable address: ECOFAIRS New Delhi, India For the Bank: International Bank for Reconstruction and Development 1818 H Street, N. W. Washington, D. C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. - 16 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INDIA By /s/ T. N. Kaul Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Ernest Stern Regional Vice President South Asia 0 -17 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil Works: (a) NSP Canal 107,300,000 60% Network, Gag- ing Stations and Road Pro- gram (b) Command area 10,000,000 66% development (2) Equipment, vehicles and materials (other than materials fi- nanced under Cate- gory (1)): - 18 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (a) NSP operation 9,200,000 ) 100% of foreign monitoring ) expenditures for equipment and ) directly imported NSP Road Pro- ) items; 100% of the gram ) ex-factory cost of locally manu- (b) Command area 400,000 ) factured items; development ) and 70% of cost of items imported ) and procured locally (3) Consultancy Services 100,000 100% (4) Project Preparation 50,000 100% and Evaluation Group under Part G of the Project (5) Unallocated 17,950,000 TOTAL 145,000,000 - 19 - 2. For the purposes of this Schedule the term "foreign expendi- tures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; (b) expenditures relating to Categories (1) (b) and (2) (b) (command area development) until (i) evidence satisfactory to the Bank has been furnished showing that Andhra Pradesh can at its option carry out such on-farm development works as it considers necessary in the Project Area and recover the cost of such works from the farmers concerned; and (ii) the revolving fund referred to in Section 2.01 (b) of the ARDC Agreement has been set up; and - 20 - (c) expenditures relating to Categories (1) (b) and (2) (b) (command area development) until (i) evidence satisfactory to the Bank has been furnished to the Bank that the execution and deliv- ery of the Subsidiary Loan Agreement on behalf of the Borrower and ARDC have been duly authorized or ratified by all necessary corporate and governmental action; and (ii) the Bank has been furnished with an opinion or opinions satisfactory to the Bank of counsel acceptable to the Bank showing that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and ARDC, and is legally binding upon the Borrower and ARDC in accordance with its terms. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above: (a) if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Cate- gory, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated short- fall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement per- centage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made; and - 21 - (b) if the estimate of expenditures to be made under any Category shall decrease, the Bank may by notice to the Borrower: (i) reallocate the amount of such Category no longer required therefor to Category (1); and (ii) increase the percentage appli- cable to such Category (1) correspondingly (up to a maximum of 100% net of taxes). 6. If the Bank shall have reasonably determined that the procure- ment of any item in any Category is inconsistent with the proce- dures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and t - Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under this Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such ex- penditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 22 - SCHEDULE 2 Description of the Project The Project which is designed to complete Andbra Pradesh's Nagarjunasagar Irrigation Project,and to initiate the first of the projects to be included in the Borrower's composite command area development program, consists of the following parts: A. (1) Completion of the NSP Left Main Canal (about 65 miles) and NSP Right Main Canal (about 29 miles). (2) Construction of irrigation and drainage facilities to serve the NSP Left Bank area (about 190,000 hectares) and NSP Right Bank area (about 140,000 hectares). B. Rehabilitation, upgrading or construction of about 1575 kilometers of village roads in the NSP command area. C. Command area development covering about 16,000 hectares of the NSP Left Bank area, about 16,000 hectares of the NSP Right Bank area, about 33,600 hectares of the Pochampad Irrigation Project area and about 6,400 hectares of the Tungabhadra High Level Canal Area. - 23 - D. (1) Studies of portions of the NSP irrigation distri- bution system to determine and evaluate system operation and seepage losses. (2) Modernization studies to determine possible modifi- cations or additions to the irrigation system to achieve improved irrigation efficiencies. E. (1) Program to monitor crop yields in the Project Area and to monitor and define field irrigation effi- ciencies below the turnouts in the NSP Left and Right Bank areas. (2) Studies to define project benefits resulting from irrigation, command area development and extension service work in the Project Area. F. Strengthening of agricultural supporting services, especially extension in the Project Area. G. Assistance to the Project Preparation and Evalua- tion Group in the Borrower's Ministry of Agricul- ture and Irrigation. In this Schedule the term "hectares" shall be construed as hectares of culturable command area. * * P * The Project is expected to be completed by June 30, 1981. - 24 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* January 15, 1983 2,555,000 July 15, 1983 2,610,000 January 15, 1984 2,670,000 July 15, 1984 2,730,000 January 15, 1985 2,790,000 July 15, 1985 2,855,000 January 15, 1986 2,920,000 July 15, 1986 2,985,000 January 15, 1987 3,050,000 July 15, 1987 3,120,000 January 15, 1988 3,190,000 July 15, 1988 3,260,000 January 15, 1989 3,335,000 July 15, 1989 3,410,000 January 15, 1990 3,485,000 July 15, 1990 3,565,000 January 15, 1991 3,645,000 July 15, 1991 3,725,000 Janu-ry 15, 1992 3,810,000 July 15, 1992 3,895,000 January 15, 1993 3,985,000 July 15, 1993 4,075,000 January 15, 1994 4,165,000 July 15, 1994 4,260,000 January 15, 1995 4,355,000 July 15, 1995 4,455,000 January 15, 1996 4,555,000 July 15, 1996 ,655,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. - 25 - Payment of Principal Date Payment Due (expressed in dollars)* January 15, 1997 4,76o,ooo July 15, 1997 4,865,000 January 15, 1998 4,975,000 July 15, 1998 5,090,000 January 15, 1999 5,205,000 July 15, 1999 5,320,000 January 15, 2000 5,44o,ooo July 15, 2000 5,565,000 January 15, 2001 5,670,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. - 26 - Premiums on Prepayment The following percentages are specified as the premiums pay- able on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1% More than three years but not more than six years before maturity 2-1/4% More than six years but not more than eleven years before maturity 4% More than eleven years but not more than sixteen years before maturity 5-1/2% More than sixteen years but not more than twenty-one years before maturity 7-1/4% More than twenty-one years but not more than twenty-three years before maturity 8% More than twenty-three years before maturity 8-1/2% - 27 - SCHEDULE 4 Principal Lending Terms and Conditions I. Ordinary Land Development Loans 1. Borrower to ARDC (a) For ARDC refinancing up to 9 years: (i) annual interest rate of not less than 6.75%, less 0.25% for prompt payment; and (ii) repayment at the end of 9 years. (b) For ARDC refinancing for more than 9 and up to 15 years: (i) annual interest rate of not less than 7.25%, less 0.25% for prompt payment; and (ii) repayment at the end of 15 years. (c) Borrower to carry exchange risk. 2. ARDC to Lending Banks (a) Annual interest rate of 7.5% minimum. - 28 - (b) Installment repayments to coincide approximately with collections from ultimate borrowers.. (c) Refinancing by purchase of debentures or by loans not exceeding 90% of individual loans. 3. Lending Banks to Ultimate Borrowers (a) Annual interest rate of 10.5% minimum. (b) A once and for all evaluation fee of 0.5% of the cost of project investments may be charged. (c) Repayment periods to be based on the ultimate borrower's repayment capacity, but not to exceed: (i) 12 years for normal lending; and (ii) 15 years for lending to small farmers. (d) Grace periods not exceeding 2 years from the date of disbursement of the loans, may be granted at the discretion of ARDC provided that the repayment period of such loans is not exceeded. II. Special Land Development Loans 1. Borrover, Andhra Pradesh and ARDC to the Command Area Development Special Loans Fund (CSLF) Terms and interest rates to be agreed between Borrower, Andhra Pradesh and ARDC. - 29 - 2. CSLF to Lending Banks (a) Annual interest rate of not less than 1% and not more than 4% over the interest rate charged for ordinary loans. (b) Installment repayments to coincide approximately with collections from ultimate borrowers. (c) Refinancing by purchase of debentures or by loans for the full amount of individual loans. 3. Lending Banks to Farmers (a) Annual interest rate of not less than 1% and not more than 4% over the interest rate charged for ordinary loans. (b) A once and for all evaluation fee of 0.5% of the cost of project investments may be charged. (c) Repayment periods not exceeding those for ordinary loans. (d) Grace periods not exceeding 2 years from the date of disbursement of the loans, may be granted at the discretion of CSLF provided that the repayment period of such loans is not exceeded. - 30 - III. General 1. (a) Lending banks would maintain separate accounts for Small Farmers. (b) Security would be as determined by the Lending Banks and ARDC or CSLF. (c) Technical standards acceptable to ARDC and CSLF would be observed. (d) Where the land development works are executed by centralized agencies and no cash is paid to the individual farmer to carry out the work, no cash contribution will be necessary. In any other cases the contribution described in the respective loan agreement with ARDC will apply. (e) In respect of lending by Agricultural Development Banks, the borrower will have to purchase at least one share to become a member. 2. For the purposes of this Schedule, unless the context otherwise requires, the following terms shall have the following meanings: (a) "CSLF" means the committee consisting of represen- tatives of the Borrower, Andhra Pradesh and ARDC responsible for the management of the revolving fund required to be established under Section 2.01 (b) of the ARDC Agreement. - 31 - (b) "Special Land Development Loans" means loans to farmers falling under one or more of the follow- ing categories: (i) farmers without any valid titles (such situ- ations arise as a result of oral sales, bena- mi sales, sales without permission under the Tenancy Act, etc.); (ii) protected tenants, illegal occupants and minors without guardians in the case of ryot- wari tenure or patta lands; (iii) farmers occupying lands where there are dif- ficulties in deciding the authority which would be able to mortgage inami or temple lands for obtaining loans; (iv) farmers occupying Government lands which have not so far been assigned or government lands assigned but which lands revert to government in case the assignees mortgage the land for any purpose; (v) farmers occupying lands alienated by women before the promulgation of the Hindu Succes- sion Act of 1966; (vi) landholders holding lands under the Ceilings Act of Andhra Pradesh; - 32 - (vii) landholders unable to get institutional fi- nance because of heavy indebtedness to insti- tutional sources which are to be cleared be- fore obtaining finance for further capital investment; and (viii) farmers who are unwilling to apply for ordi- nary land development loans. (c) "Small Farmer" shall mean any farmer cultivating land providing an annual predevelopment net re- turn to family resources to such farmer and his family not exceeding Rs2,000 based on 1972 prices, said net return being determined by the applica- tion of the following criteria: (i) "land" shall include all land aitually cul- tivated by the farmer, notwithstanding the fact that ownership of such land may vest in one or more persons; (ii) "net return to family resources" shall mean gross family income from the land, less costs actually incurred (including cash value of farmer's own inputs including seed, fertilizer, hired human labor, hired bullock labor, feed consumed by family bullocks, irrigation char- ges, land revenue, interest on crop loan, and rent on leased land); and - 33 - (iii) the amunts for the current year shall be arrived at by applying the current price in- dex of the All India Agricultural Laborers Index* for Andhra Pradesh. Source: "Agricultural Situation in India" published by the Directorate of Economics and Statistics, Ministry of Agri- culture.