India - Second Foodgrain Storage Project

Document of l rFURN The World Bank REPORTS DESK 1WITHINa FOR OFFICIAL USE ONLYW Report No. P-2135-IN REPORT AND RECOMMENDATIONS OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE GOVERNMENT OF INDIA FOR THE SECOND FOODGRAIN STORAGE PROJECT November 3, 1977 This document has a restricted distribution and may be used by recipients only in the performance of their officili duties. Its contents may not otherwise be disclosed without World Bnnk authorization.  CURRENCY EQUIVALENTS (as at October 14, 1977) Rs 1000 Paise 100 US$1.00 = Rs 8.51 Rs 1.00 = US$0o1175 Rs 1 million = US$117,500 (Since September 24, 1975, the Rupee has been officially valued relative to a "basket" of currencies. As these currencies are now floating, the U.S. Dollar/Rupee ex- change rate is subject to change. Conversions in the Appraisal Report were made at US$1 to Rs 8.75.) FISCAL YEAR April 1 - March 31 List of Abbreviations and Acronyms Used in this Report CAP - Cover and plinth (bagged grains placed on brick plinth and covered with polyethylene sheets) FCI - Food Corporation of India GOI - Government of India PID - Project Implementation Division  FOR OFIC"IAL USE ONLY INDIA SECOND FOODGRAIN STORAGE PROJECT Credit and Project Summary Borrower: India, acting by its President. Beneficiary: Food Corporation of India (FCI). Amount: US$107 million equivalent. Terms: Standard Relending Terms: From Government of India (GOI) to FCI: Repayment over a period up to 20 years including four years of grace at 10.5% annual interest, with 0.25% interest rebate for timely repayment. Project Description: The project would assist GOI in constructing storage facilities required for foodgrain procurement and dis- tribution operations and improving foodgrain handling practices, including bulk handling. The project components include: - construction of 3.5 million tons of foodgrain storage and 75,000 tons of port silos; - provision of ancillary facilities for grain handling and transport; - training of management and key technical staff; and - technical assistance, including engineering con- sultants, and operations research studies. This document has a restricted distribution and may be used by recipients only in the performance of their omcial duties. Its contents mAy not otherwise be disclosed without World Bank authorization.  Estimated Costs: (US$ million) Local Foreign Total Bag storage 95.4 - 95.4 Bulk-cum-bag storage 24.1 2.8 26.9 Bulk storage 14.3 1.5 15.8 Port silos 13.5 5.1 18.6 Rural Grain Procure- ment Centers 1.5 0.2 1.7 Transport Equipment 4.6 1.7 6.3 Technical Assistance 8.6 0.4 9.0 Training and Operations Research 0.5 0.4 0.9 Sub-total 162.5 12.1 174.6 Physical contingencies 9.9 1.1 11.0 Price contingencies 27.0 2.9 29.9 Total Project Cost 199.4 16.1 215.5 Financing Plan: (US$ million) Local Foreign Total IDA 90.9 16.1 107.0 GOI 108.5 - 108.5 Total 199.4 16.1 215.5 Estimated Disbursements: (US$ million) FY78 FY79 FY80 FY81 Annual 15 20 40 32 Cumulative 15 35 75 107 Rate of Return: About 20%. Appraisal Report: No. 1643a-IN dated November 3, 1977.  REPORT AND RECOMMENDATION OF THE PRESIDENr TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE GOVERNMENT OF INDIA FOR THE SECOND FOODGRAIN STORAGE PROJECT 1. I submit the following report and recommendation on a proposed development credit to India for the equivalent of US$107 million on standard IDA terms to help finance a project for constructing foodgrain storage and distribution facilities and for improving foodgrain handling practices. With the exception of US$2.4 million which would be used by Indian Railways to purchase special bulk transport railwagons, the proceeds of the credit would be onlent to the Food Corporation of India (FCI) for repayment over 20 years including 4 years of grace, at 10.5% annual interest, with 0.25% interest rebate for timely repayment. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation and Prospects of India" (1529-IN dated April 25, 1977), was distributed to the Executive Directors on May 3, 1977. Country data sheets are attached as Annex I. Background 3. India is exceptional among the Bank Group's member countries for its size and diversity; the country is divided into more than 20 States with a population of some 630 million speaking over 60 languages. Since Independ- ence the trend in growth of GNP has been about 3.5% per annum, or a little over 1% per annum in per capita terms, while over the five years 1971/72 - 1975/76 it fell to as low as 2.5% per annum, in spite of the record harvest of 1975/76. This unsatisfactory performance is only in part the result of the low availability of investable resources: while India's domestic savings effort compares well with other countries at the same average income levels, however, the net transfer of resources from abroad has never been above 3% of GNP, and fell to as little as 0.8% between 1969/70 and 1973/74. More signi- ficant perhaps is the fact that in spite of a marked rise in the investment rate from about 10% in the early 1950s to about 18% over the past fifteen years, the trend in GNP growth has remained about the same. This indicates a marked decline in the efficiency of capital use, as a result of increasing capacity underutilization, long project gestation, and increased emphasis on relatively capital intensive projects and sectors. 4. Since Independence the growth of the socio-economic infrastructure (transport, education, health services, etc.) has been impressive, but has often been achieved at high cost and has yielded results of variable quality. Many industrial and agricultural investment schemes have been highly successful, but others have taken excessively long to be completed and have operated well below full capacity. In some regions of the country, growth and structural chang- have been rapid and compare favorably with developments in many other 1/ Parts I and II of this report are substantially the same as Parts I and II of the President's Report for the Orissa Irrigation Project (No. P-2124-IN), dated August 23, 1977.  - 2 - parts of the world; in other regions there has been stagnation, and in some, decline. Although national income has increased in most years, there has been no rise in the living standards of the vast mass of rural and urban poor, conservatively estimated at 200 million people with per capita incomes of US$70 per annum. 5. The structure of the economy has been slow to change. Agriculture remains the dominant sector, with its share of national product declining only gradually from about 50% to 42% over the last twenty years. The share of manufacturing industry has increased only slowly and, since the late 1960s, has remained approximately constant at about 16%. There has, however, been a shift in the composition of manufacturing production, with consumer, inter- mediate, and capital goods now contributing about one third each, compared with an overwhelming preponderance of consumer goods 25 years ago. Recent Trends 6. In March, 1977, a party other than Congress formed a Government for the first time since Independence. The Janata, or People's Party, is an amalgamation of a number of smaller heterogeneous parties. The state of the economy was not a prominent election issue; in fact the economy was generally stronger than at any time in the last ten years. Over the two years 1975/76 and 1976/77, the growth of GDP averaged 5.4% per annum. Agricultural produc- tion in 1976/77 did fall by about 3% but only because of a return to a more normal harvest of 111 million tons after the record 121 million ton output in 1975/76. In fact, the 1976/77 figure is the second largest harvest on record. The growth of industrial production accelerated over the past two years from 6.1% in 1975/76 to 9.2% in 1976/77. The volume growth of exports continued its impressive recent performance, and averaged approximately 13% per annum over the past two years. This export growth, together with hardly any in- crease in import levels, has resulted in dramatic balance of trade improve- ments with an estimated deficit for 1976/77 of less than US$500 million. In sum, the overall resource position with record foreign exchange and foodgrain reserves, is exceptionally strong, and gives the Government considerable room for maneuver. 7. In agriculture the bumper crop of 1975/76 was largely due to remark- ably good rainfall, both in amount and distribution, while the good crop in 1976/77 was produced under somewhat less than normal weather conditions. A conspicuous change was the increase in fertilizer use, which rose by about 25% over 1975/76, following marked declines in fertilizer prices. Industrial production benefited from fewer labor disputes, fuller utilization of in- stalled capacity in both private and public sectors, a more liberal import policy, relatively good power availability, and increased demand because of higher consumer incomes, expanded exports and higher public expenditures. Inflation re-emerged in 1976/77 as an important issue of economic management. During 1975/76 the wholesale price index had fallen by 8.5%; but in 1976/77 it rose by 11.6%. The key characteristic of this rise was that it occurred largely in a few agricultural commodities for which prices had dramatically fallen in the previous year. In the twelve months ending August 1977, the increase was about 5%. The overall price index has shown virtually no trend over the past three years taken together.  8. The balance of payments situation has improved dramatically since the 1973-1975 period. In 1975/76 the trade deficit was $1,530 million, which was more than covered by US$1,560 million in net aid, US$205 million in net purchases of currency from the IMF, and US$559 million in net miscellaneous capital and invisibles (mostly private remittances); indeed, this large aggregate net resource inflow led to a US$794 million increase in foreign exchange reserves, to a level of almost US$2.2 billion. In 1976/77, the balance of payments continued to improve, with exports provisionally, esti- mated to have increased by US$1,145 million against an imports increase of only US$85 million, so that the trade balance deficit is now estimated at only US$470 million. The sharply decreased trade deficit, along with a further increase in the net inflow of miscellaneous capital and invisibles from abroad of US$640 million, more than offset the fall of US$350 million in net aid and the US$365 million repurchases of currency from the IMF, and allowed a US$1.5 billion addition to reserves, which reached a level of US$3.7 billion at the end of March 1977. The developments have continued in the current year, with reserves estimated at US$4.5 billion in mid-August 1977. Development Prospects 9. The favorable economic situation gives the Government the opportun- ity to address the longer-term constraints on growth. The basic task is to raise the overall rate of growth from its historic range of 3% to 4%. In the long run this will require raising more resources for investment. But it will also be important to achieve significantly better utilization of avail- able resources, partly through an immediate boost to industrial demand. 10. In agriculture, the basic problem remains that, despite the record foodgrain crop in 1975/76 and the good crop in 1976/77, the long-term growth rate of foodgrain production has been unacceptably low, less than 3% per annum over the last twenty-five years, and less than 2% since 1967/68. This has meant that only in good years has there been any margin of production to cater to per capita growth in food consumption, and in normal years it has been necessary to import food. There is considerable scope for stepping up growth both by increasing the use of inputs and by raising the productivity of exist- ing capacity. Three promising developments in regard to the first are the sharply higher outlays on irrigation in the Fifth Plan Period along with a renewed determination to complete projects expeditiously; the indications that private investment in tubewells is picking up again after a slowdown in the early 1970s; and the recent recovery of fertilizer demand. With regard to more productive use of existing capacity, there is increased awareness in the Government that the benefits of irrigation projects can be much increased not only through command area development but also through more efficient de- sign and operation of major surface irrigation infrastructure. Also, hopes have been generated for increasing productivity on both irrigated and rainfed farms through a reorganized and improved extension and research system, which has been recently introduced in several States in northern and eastern India. 11. A strong effort to raise agricultural growth is essential, not only to meet food requirements, but also because of the pervasive influence of agriculture on the levels of activity in other sectors of the economy. This?  effort must also be so structured as to increase the incomes of small and marginal farmers, in order to increase production since they operate 25% of the cultivated land and account for somewhat more than 25% of production, and for welfare reasons, since they make up about 70% of rural population and constitute the majority of those living below the poverty level. 12. The industrial sector is poised for growth, as serious constraints on the supply side have been removed by the improved situation, particularly with respect to coal and imported raw materials and components; however, the power supply situation is once more somewhat worrisome (paragraph 13 below). There has been a progressive liberalization of controls and the 1976/77 Central Budget announced a reduction of some taxes on private industry. In many cases management of public enterprises has improved, as is reflected in their markedly higher production and profitability as a group. In the medium-term it is the demand for industrial output that will determine indus- trial growth. In certain industries, export demand will provide a strong pull on production; this is true, for example, for iron and steel, certain chemicals, some electrical equipment, processed agricultural products, and vehicles. But the impact of increased exports on overall industrial demand will grow only slowly given the current low share of exports in sales. If the higher growth and productivity in agriculture discussed earlier were to materialize, it would provide a significant stimulus to industry. It is difficult to specify the linkages explicitly; but because of the large share that agriculture holds in GNP, the coefficients do not have to be large for agricultural growth and the concomitant growth in demand for industrially produced inputs and mass consumption goods to boost overall industrial demand significantly. A higher public deficit and increased public investments are the instruments most directly under Government control, and also those that can increase demand for industrial products most immediately. While the first budget of the new government projects a relatively small deficit, it does maintain a 20-22% increase in spending over the likely outlay in 1976/77. The projected deficit is contingent on the utilization of foreign exchange reserves; to the extent they are not utilized though increased imports, the deficit will increase. 13. The general improvement in the supply of energy augurs well for India's ability to meet the needs of a more rapidly growing economy. Organ- izational and transportation problems in the coal industry have largely been overcome, production is sufficient to meet demand, stocks are comfortable, and the industry has good prospects for meeting both domestic and export demand. However, the supply of electricity continues to be a concern, since the power situation is not uniformly good. Power shortages affect a number of the more industrialized states, particularly Maharashtra in the west and Tamil Nadu in the south, and as a result, there is a continued constraint on the expansion of industry. This is despite a number of favorable factors: greatly improved capacity utilization in thermal power stations; more effi- cient exchange of power between states; accelerated implementation of power projects; and somewhat improved availability of finance for power investment. The underlying reason for the weak power supply position is that capacity shortages continue despite the improved investment program. In the short-term, the situation may improve somewhat if, as is hoped, reservoir replenishment is better than average during the last stages of the monsoon. The prospects for  the oil and gas sector have been further improved by new finds of oil and gas near the large offshore Bombay High field. Crude oil from Bombay High was brought to shore for the first time in May 1976; production reached an annual rate of 2 million tons by March 1977, and will rise to a level of 12-13 million tons by 1984/85. Although India will continue to import crude at or somewhat above the current level, much of the foreign exchange burden of rapidly rising imports will be avoided by the development of these resources. Prospects are also bright for further discoveries offshore, given the current high level of exploration activity. 14. Underlying all other development issues is that of population. Al- though India's population growth rate of a little over 2% is not high in com- parison with most LDCs, the size of the absolute increment - 13 million annually - is daunting. It appears, however, that population growth may have passed its peak in the 1960s, and it is expected to continue to slow down, both because the birth rate will continue to decline and because the death rate will not fall as steeply as in the past. It is apparent that India's family planning efforts suffered a setback following the end of the recent emergency period, and acceptor rates are at very low levels currently. How- ever, the new Government has announced its commitment to a voluntary family planning program and has maintained ambitious performance targets. Although it will take some time, adoption of family planning practices is expected to increase to higher levels. Over the longer term, with a sustained family planning effort, it should be possible to lower the population growth rate to 1.1% per annum by the end of the century. Our "best guess" projection of India's population by 2000 is 890 million. Many of the benefits of family planning policy will only be felt beyond the turn of the century, but the decline in fertility will bring about an early change in the age structure of the population. The school age group will grow more slowly or not at all after 1981 thereby reducing the pressures on the primary and secondary edu- cation system. The labor force, however, will continue to grow at a fast rate until the end of the century. 15. India's balance of payments position should be comfortable for the next few years. The combination of past global inflation and increased ex- ports have reduced the proportion of export earnings needed for debt service from 30% in 1970/71 to 16% in 1976/77. The ratio is not likely to rise above this level in the next few years. Given continuing favorable policies, the volume of exports should grow by at least 7% to 10% annually in the near future; and import needs for fertilizer, POL and foodgrains will continue to require a diminishing proportion of available foreign exchange. The large inflow of private remittances shows no immediate signs of declining and should continue to bolster the foreign exchange position in the medium-term. Imports, including a variety of capital goods, have already been liberalized signifi- cantly. Increased public investment and a revival of the domestic economy is likely to generate substantial additional import demand. However, this should be quite manageable, given the currently comfortable foreign exchange position, bright export prospects, and continuation of the current real level of net aid. The present situation presents an opportunity to raise the level of investment and, consequently, reach a more satisfactory level of long-term growth.  - 6 - PART II - BANK GROUP OPERATIONS IN INDIA 16. Since 1949, the Bank Group has made 52 loans and 93 development credits to India totalling US$1,992 million and US$4,991 million (both net of cancellation), respectively. Of these amounts, US$850 million has been repaid, and US$1,775 million was still undisbursed as of September 30, 1977. Annex II contains a summary statement of disbursements as of September 30, 1977, and notes on the execution of ongoing projects. 17. Since 1957, IFC has made 14 commitments in India totalling US$58.4 million, of which US$13.2 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$30.7 million, US$24.2 mil- lion represents loans and US$6.5 million equity. A summary statement of IFC operations as of September 30, 1977, is also included in Annex II (page 2). 18. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit opera- tions. Major irrigation, marketing, seed development, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capac- ity utilization in industry. The Bank Group has also been active in support- ing infrastructure development for power, telecommunications, and railways. Family planning, education, water supply development, and urban investments have also received Bank Group support in recent years. 19. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis of the program on agriculture, industry, power, urban development and water supply remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs such as credit for on-farm investments, command area development of existing irrigation schemes, intensification and streamlining of extension systems, and seed production form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefitting small farmers. Projects supporting water supply, sewerage, and urban development also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infrastructure and industrial investments will focus on agriculture-, export- and energy-related projects. 20. The need for a substantial net transfer of external resources in support of India's economy has been a recurrent theme of Bank economic re- ports and of the discussions within the India Consortium. Thanks in large part to the response of the aid community, India has successfully adjusted to the changed world price situation. However, the basic need for readily usable foreign exchange assistance, to augment domestic resources, assure  - 7 - effective utilization of existing capacity, stimulate investment and acceler- ate economi-c growth, remains. As in the past, Bank Group assistance for projects in India should include, as appropriate, the financing of local expenditures. India imports relatively few capital goods because of the capacity of the domestic capital goods industry. The import component of projects tends to be especially low in such high-priority areas as agriculture, education, and family planning. For the Bank Group to be able to make an appropriate contribution to the financing of projects in these sectors, it is important to cover a proportion of local expenditures. 21. It is clear from the review of the Indian economy that as much as possible of India's external capital requirements should be provided on con- cessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support, and some Bank lending to India, for which the country is creditworthy, is appropriate. As of September 30, 1977, outstanding loans to India totaled US$1,173 million, of which US$474 million remained to be disbursed, leaving a net amount outstand- ing of US$699 million. 22. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with an estimated 58%, 24% and 29%, respectively, in 1975/76. On March 31, 1976, India's outstanding and disbursed external public debt was US$13.1 billion, of which the Bank Group's share was 25%. The Bank Group's share is expected to remain around this level in the future. Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1975/76, about 15% of India's total debt service payments were to the Bank Group. PART III - FOODGRAINS IN INDIA 23. Foodgrains, particularly rice and wheat, dominate the agricultural sector in India. About 75% of gross cropped area as well as of the labor, fertilizer and irrigation utilized in agriculture is for foodgrain production. India's agricultural development policy is largely focused around foodgrain production in an attempt to achieve its major economic goal of self-sufficiency. 24. The major determinant of year to year foodgrain production in India remains the weather. Although the extension of irrigation and greater use of improved technology (in wheat in particular) have given India greater immunity to the vagaries of the weather and may have imparted a steeper upward trend to production, fluctuations in output remain best explained by the weather. The good crop years of 1953/54, 1958/59, 1960/61, 1964/65, 1967/68, 1970/71 and 1975/76 were all characterized by good monsoon rain- fall, leading to a significant production increase over the previous year.  Similarly, the poor crop years of 1957/58, 1965/66, 1966/67 and the early 1970s were due to droughts of varying severity. 25. Total foodgrain production has grown at less than 3% per annum over the last twenty-five years, and less than 2% since 1967/68. This low growth rate and the wide fluctuations in foodgrain production from year to year have resulted in serious personal hardship for the population and difficulties in economic management for the government. During years of low grain production, prices have increased rapidly, beyond the means of low income families. During severe shortages, foodgrains have often been available only at a very high price and masses of people suffered malnutrition. On the other hand, during periods of abundant production, prices have fallen rapidly to the detriment and disincentive of producing farmers. 26. GOI's foodgrain pricing, procurement and distribution policy has evolved in response to these problems. GOI foodgrain policy has three major objectives: (a) self-sufficiency in production; (b) price stability; and (c) an equitable foodgrain distribution to low income consumers. Through the annually announced procurement price (which usually functions as the sup- port price as well), backed by a readiness to purchase any amount of grain at that price, GOI policy is intended to assure foodgrain producers a stable, reasonably attractive price in order to encourage increases in foodgrain production, leading to self-sufficiency. The production effect of the pro- curement price depends on the price elasticity of supply and whether the price covers the cost of production. A recent Bank-sponsored study has shown that wheat and paddy production in India is quite price responsive. This price responsiveness of supply is thought to be more pronounced where high yielding varieties are involved because their success depends crucially on the provision of associated outlays, which farmers would be reluctant or un- able to incur unless assured attractive prices for their produce. The study also showed that, broadly speaking, the procurement price during the past decade did cover the cost of production. The present procurement price of Rs 1,100 per ton for wheat appears to provide an adequate incentive for in- creasing production; this may not be the case for paddy, whose procurement price is Rs 740 per ton. 27. Market prices have generally been above procurement prices so that, until April 1977, food zones were used, in which grain surplus areas were cordoned off to restrict private grain trade, in order to facilitate govern- ment procurement. The government distribution of domestic and imported grains at concessional prices is intended to safeguard the interests of low income consumers. Although the ration cards entitling their holders to government distributed foodgrain are issued to all those living in the urban areas regard- less of their income, it appears that the location of the distribution shops, the queues, the limits on quantities available, and the lower quality of pub- licly distributed grain effectively ration it to lower income groups. Follow- ing the foodgrain shortages of 1973 and 1974, the government decided on the policy of building up 12.0 million tons of buffer stocks. This policy is under review, the situation having changed completely; two successive good harvests in subsequent years have resulted in foodgrain stock levels being reported at 20.7 million tons in July 1977.  - 9 - 28. To carry out its foodgrain policies, the Government established the Food Corporation of India (FCI) in 1964. FCI operates under the jurisdiction of the Department of Food, Ministry of Food, Agriculture and Irrigation. Its procurement prices and quantities are determined by GOI on the basis of recom- mendations of the Agricultural Prices Commission, which continuously analyzes foodgrain supply and demand conditions. FCI's role is to procure, store and dispatch foodgrains to State governments for concessional distribution through licensed fair price shops, and to hold buffer stocks on behalf of GOI. In 1976, there were about 240,000 fair price shops in India. Total public dis- tribution of foodgrains during normal years now ranges between 8 and 14 million tons. Of this, FCI supplies about 80%, the balance being supplied by state governments. The rest of the marketable surplus of foodgrains, estimated at about 30% of total net production, or about 25 million tons, is distributed through private merchants. 29. FCI operates as a large national public sector business organization. However, as GOI sets both the domestic procurement and issue prices for grain on the basis of public policy objectives, FCI's margin has not been sufficient to show a profit or to even break even. GOI makes up the difference in the form of an annual budget subsidy to FCI. In 1976-77, a year of very high stock, the amount of subsidy exceeded US$500 million. 30. GOI intends to pursue the present public foodgrain procurement and distribution policy until it is no longer necessary. It is willing to sub- sidize FCI's operations because the support prices promote price stability and expansion of production and because it considers the provision of lower priced foodgrains to low income consumers to be an essential social objective. The program as it is now operating through FCI and the fair price shops is rela- tively efficient and entails less administrative work than a system of direct rationing or money grants. 31. From 1980/81 onwards, public procurement and distribution of wheat and rice is expected to be about 12.0 million tons or more per year. Since FCI's share of this joint Center/State activity is expected to be about 80%, FCI would be handling 9.6 million tons by 1980/81. The peak storage require- ment, occurring in June, for this 9.6 million tons would be 6.0 million tons. Procurement is concentrated during the harvest months while off-take is more evenly distributed. At any given peak, there would be some storage facili- ties that cannot be fully loaded because they are located in pockets of poor harvest or are temporarily inaccessible or because there is imperfect substi- tution between wheat and paddy storage and consumption. Taking these factors into account, it is estimated that at peak, the storage facilities on average would be only 80% loaded, so that 7.5 million tons of storage capacity would be necessary to handle FCI's normal June peak of 6.0 million tons. 32. The above calculations assume no year-to-year fluctuations in pro- curement and demand for the public distribution system. In fact, fluctuations do occur and in such a way that procurement is high when off-take from the public distribution system is low, resulting in rapid stock buildup, as occurred in 1975/76 when peak stocks rose to 18 million tons. Rapid stock drawdown on the other hand can occur when procurement is low; maintaining supplies to vulnerable groups then requires larger than normal quantities of  - 10 - grain either from stocks or imports. GOI's policy is to build storage capa- city to hold 12 million tons of grain in addition to those needed for normal operational purposes; FCI's requirement under this policy would then be about 20 million tons. With the proposed project FCI would own 9.4 million tons of capacity by 1980/81. FCI would continue to make use of storage space rented from other public and private entities. Only about 2 million tons of the 5.5 million tons currently rented is of acceptable standard; the substandard re- mainder is being hired because it is better than open, cover and plinth (CAP) storage. After 1980/81, therefore, FCI will have access to 11.4 million tons of secure storage capacity, about 4 million tons above that needed simply for operations in a normal year but 8 million tons less than needed to fulfill GOI's buffer stock goals. Stock accumulations above 11.4 million tons will have to be accommodated in substandard rented storage or CAP storage. 33. In addition to FCI, there are five other main categories of entities which together comprise the remainder, about 13 million tons, of India's grain storage capacity. The Central Warehousing Corporation owns about 1.24 million tons; state governments 1.8 million; state warehousing corporations 0.9 million; cooperatives 1 million; and the private sector 8 million. However, much of the private sector capacity is substandard for storing grains. There is no major grain storage construction program envisaged by entities other than FCI for the next several years. 34. The proposed project would be the second Bank Group financed proj- ect to assist in the development of India's grain storage sector. The first project, Credit 267-IN (Wheat Storage Project), is jointly financed with the Kingdom of Sweden. Total project costs are about US$15 million, of which IDA, Sweden, and GOI are each contributing US$5 million. The project originally consisted of construction of ten 10,000 ton capacity bag storage warehouses and ten 20,000 ton capacity bulk storage silos, consulting and engineering services, training and an all-India grain storage study. Implementation of the first project got off to a slow start due to problems in selecting and hiring engineering consultants and in acquiring suitable sites for construc- tion of silos. Delays also resulted from the original bidding procedures, which required bulking of silo contracts for bidding purposes. These proce- dures proved to be impractical and had to be changed. Delays were further compounded by substantial cost escalation which resulted in a reappraisal of the project in early 1975. The number of silos was reduced from 10 to 5 to keep costs in line with appraisal estimates. The Closing Date of the project was extended by three years, to September 30, 1978. Progress of the project is now satisfactory. The warehouse storage component has been fully disbursed and silo construction is proceeding well. The all-India grain storage study has been satisfactorily completed, and has provided much of the information on grain production and storage and distribution requirements upon which the proposed se~cond project is based. Disbursements of the first project are expected to be completed by the revised Closing Date.  - 11 - PART IV - THE PROJECT 34. The project was prepared by a committee of GOI which includes rep- resentatives from the Ministries of Food and Agriculture, Railways, Finance, the Planning Commission, the Food Corporation of India and the Central Warehousing Corporation. It was appraised in February/March 1977. Negotia- tions took place in Washington in September 1977. The Borrower's delegation was headed by Mr. R. Balasubramanian, Secretary, Food Department. A report entitled "Second Foodgrain Storage Project," Report No. 1643a-IN, dated November 3, 1977, is being circulated separately to the Executive Directors. Project Description 35. The project would assist GOI in constructing storage facilities required for foodgrain procurement, storage and distribution operations. It would introduce improvements in foodgrain handling practices, particularly in bulk handling and transport of grains. The project is designed to help GOI cut substantial losses due to inadequate storage facilities and inefficient handling and transport of grain. The four year project would include the following: - construction of 3.5 million tons of foodgrain storage ware- houses and 75,000 tons of port silos, and provision of ancillary facilities for grain handling and transport; - provision of six rural grain procurement centers and ancillary facilities; - training of management and key technical staff; and - technical assistance, including engineering consultants and operations research support. Storage Facilities 36. The proposed project would include construction of about 3.5 million tons of additional grain storage capacity in 16 states of India. This would include 2.5 million tons of conventional warehouses for grains stored in bags, 1.0 million tons of flat warehouses for grains stored in bulk and 75,000 tons of port silos to handle imported foodgrains. 37. The conventional warehouses would be constructed with reinforced concrete columns, curtain brick and mortar walls, and concrete floors. Each would have a rated static storage capacity of 5,000 tons of wheat in gunny bags and would be built in complexes ranging from 5,000 to 50,000 tons. The bulk warehouses would be constructed with reinforced concrete in complexes of 52,000 tons capacity including 2,500 tons of work bin space. Some of the bulk warehouses would be bag-cum-bulk convertible type. The bulk warehouses would have mechanical grain handling facilities equipped with conveying, aera- tion and bagging facilities. The port silos would be constructed at Haldia and Madras, where grain imports have ranged from 250,000 to over 1.0 million tons annually since 1973/74.  38. Although the estimated investment costs of a 50,000-ton complex for bulk storage are somewhat higher than for bag storage, the operating costs and grain losses of the bulk warehouses are much lower and their estimated economic rates of return higher -- about 30% for bulk storage compared to 19% for bag storage. Nevertheless, bag storage constitutes the greater part of the project because: (i) flat bulk storage would not be suitable at most of the project sites because the matching bulk transportation and handling facilities would not be available for some time; (ii) many of the project depots would have throughputs not large enough to warrant bulk handling; and (iii) flat bulk storage is still relatively untried in India and should be regarded as a pilot development. Rural Grain Procurement Centers 39. The project would finance two large and four small grain procure- ment centers equipped with mechanical handling facilities, and would also pro- vide portable grain handling facilities for about fifty grain markets. These facilities would be located in three Northern States (Punjab, Haryana and Uttar Pradesh) and two Southern States (Andhra Pradesh and Tamil Nadu), where most of the Food Corporation's wheat and rice procurement is concentrated. These facilities are estimated to reduce the Corporation's handling and transport costs by nearly US$4 per ton of grain procured from the farmers. Under exist- ing practice, most farmers deliver their grain in bulk to the primary markets where it is placed in a heap on the market floor, priced, cleaned, bagged, weighed, purchased by the Food Corporation (or other buyers) and then de- livered to the warehouse. The proposed facilities would eliminate the need for intermediate heaping, cleaning and bagging; the grain would be procured in bulk and transferred to the procurement centers. At the centers, the grain would be graded, weighed and forwarded to larger warehouses or to the points of distribution. Grain Transport Equipment 40. Transportation is the largest category of operating cost of the Food Corporation - one-third of all costs. One of the objectives of the project is to reduce these costs through more efficient bulk transport facilities. The proposed project would provide 50 trucks especially equipped to transport grains in bulk for delivery to storage facilities or from storage to flour mills. Railwagons (60) specially designed to handle grain would also be pro- vided to improve transportation by railway. At present, most of the wheat and rice procured in bulk and imported wheat received at the ports in bulk are bagged for transportation by rail and trucks. Some of these bags are again emptied and the grain is stored in bulk. Although the Food Corporation of India has been moving from 7 to 15 million tons of foodgrains by rail trans- port each year since 1965/66, improvement is needed to smooth the transport of grain. The Corporation and the Indian Railways would develop and execute an operations research program to evaluate alternative systems of handling and transporting grain (see paragraph 42). Technical Assistance and Training 41. The Food Corporation's engineers and local contractors have had considerable experience in constructing conventional warehouses. The layout,  - 13 - design and auxiliary units have been standardized and are acceptable to IDA. Nevertheless, the Corporation would need assistance of outside engineering services to construct 2.5 million tons of such storage within the project period. Hence, engineering services of the Central Warehousing Corporation and GOI's Central Public Works Department would be engaged to assist in the preparation of designs and tender documents and the supervision of construc- tion. Local experience in the design and construction of bulk grain storage warehouses and silos is very limited. Internationally recruited consultants would, therefore, be engaged for 60 man/months to assist the Corporation in the planning and execution of the bulk storage and silos (Section 2.02 of the Project Agreement). The Corporation would need additional staff, trained in grain handling, quality control and accounting, to manage the new grain stor- age complexes. The project would provide for both domestic and overseas train- ing of staff for these purposes. Agreement was obtained from the Corporation that plans for training acceptable to IDA would be prepared (Section 2.08(b) of the Project Agreement). Operations Research 42. The project would assist the Food Corporation in strengthening its Planning and Research Unit and in developing operations research studies to ascertain comparative costs of receiving, handling, storing and transporting grain in bag and bulk. These studies would review costs and benefits of dif- ferent types of storage facilities when used in different centers (procurement, intermediate storage and urban distribution centers) and for varying periods of storage. Similarly, alternative transport facilities and usage would be evaluated. The studies are expected to help in optimizing the use of exist- ing storage and transport facilities and in planning and designing more effective facilities in the future. Assurances were obtained that the Corporation would draw up plans acceptable to IDA for carrying out such operations research studies (Section 2.08 (a) of the Project Agreement). Project Implementation 43. Implementation of the project is expected to take four and one-half years beginning July 1, 1977 (including the provision made for retroactive financing, are paragraph 46). Overall responsibility for coordinating project implementation would lie with the Secretary of Food in the Ministry of Food, Agriculture and Irrigation. The Food Corporation of India, under the general direction of its Chairman and Managing Director, would be directly responsible for the implementation of the project. The Corporation would establish a Project Implementation Division with experienced management. The Division would have three sections: (i) conventional warehouse section; (ii) bulk warehouse section (also in charge of port silos and rural procurement centers); and (iii) finance and administration section. Currently, the Corporation has a total staff of about 1,750 in its two warehouse engineering sections -- one for construction and maintenance of its conventional warehouses and the other for silos and bulk storage. Under the project, the Project Implementation Division's staff would be increased to about 4,450 persons. In addition, the Division would be assisted by the engineering services and consultants to be engaged under the project (see paragraph 41). The establishment of the Division and the appointment of a division chief and three section managers would be  - 14 - conditions of Credit Effectiveness (Section 5.01 (c) of the Development Credit Agreement). Project Monitoring and Evaluation 44. The chief of the Project Implementation Division would be respon- sible for continuously monitoring project progress against the implementation plan. This would facilitate identification of problems and devising solutions early --ugh to avoid slippage (Section 2.11 of the Project Agreement). The operations research studies (see paragraph 42) would constitute an ex-post evaluation of relative costs and benefits of the various types of warehouses. This would help in the planning and design of future projects in India. Project Cost and Financing 45. The total cost of the project is estimated at US$215.5 million of which about US$16.1 million (about 7%) is the estimated foreign exchange con- tent. The proposed credit of US$107 million would finance about 50% of proj- ect costs, net of duties and taxes, and cover the whole of foreign exchange plus about US$90.9 million of local costs. Local cost financing is justified in India for projects like this for the reasons discussed in paragraph 20. The remaining costs of US$108.5 million would be financed by GOI as equity in the Food Corporation except for US$2.4 million which would be used directly by Indian Railways to procure special bulk transport railwagons. GOI would on-lend the proceeds of the Credit to the Corporation for 20 years, including a four-year grace, at an annual interest rate of 10.5% (with 0.25% interest rebate for timely repayment). This interest rate (with the rebate) is GOI's standard practice for lending to the Corporation. 46. The principal components of the project comprise: conventional bag warehouses US$95.4 million; bulk warehouses US$42.7 million; port silos US$18.6 million; rural procurement centers US$1.7 million; transport equip- ment US$6.3 million; operations research and training US$0.9 million; tech- nical assistance US$9.0 million, and contingencies US$40.9 million. Physical contingencies average about 7Z, and price contingencies have been computed at about 7% per annum. 47. In 1976-77, to alleviate the sudden acute shortage of grain storage space resulting from a good monsoon harvest, FCI began construction of 900,000 tons of additional warehouse capacity, estimated to cost Rs 259.0 million (US$29.6 million). At that time, preparation of the proposed Second Foodgrain Storage Project was already close to completion and the 900,000 tons capacity of warehouse construction was included in the proposal. However, GOI felt that it had to act quickly to meet urgent storage needs rather than wait for the project to be appraised and approved. By July 1, 1977, about Rs 73.5 mil- lion (US$8.4 million) of construction cost had been expended or tendered. The remaining Rs 185.5 million (US$21.2 million) represents works to have been tendered after July i, 1977 but prior to anticipated credit signing. It is proposed to include these latter works under the project in the light of the exceptional circumstances described above provided satisfactory procurement procedures have been followed. Expenditures against these works up to a maximum of US$5.0 million would eligible for retroactive financing.  - 15 - Procurement and Disbursement 48. All civil works contracts for bulk storage facilities (US$24.5 mil- lion) and the two port silos (US$8.1 million) would be awarded on the basis of international competitive bidding. Contracts would be bulked to the extent practical. Civil works contracts for conventional storage facilities (US$75.5 million) would be awarded on the basis of local competitive bidding satisfactory to IDA. Such contracts would not be suitable for international competitive bidding, because the construction sites would be scattered across the country and the value of each contract relatively small. Competitive bidding would not be appropriate for civil work contracts for railway sidings (US$18.4 million) because the works involved are highly specialized and would need to be coordinated closely with the existing railway system. Contracts for each location would be awarded by the Food Corporation to the Indian Railways under procedures which are satisfactory to IDA. 49. All malor equipment (US$21.0 million) would be procured on the basis of international competitive bidding. To the extent practical, equipment would be bulked. Minor equipment (US$6.5 million) not lending itself to bulking, or expected to cost less than US$100,000 when bulked, would be procured following local competitive bidding procedures, which are satisfactory to IDA. Prudent shopping would be used for items costing less than US$10,000. Grain trucks (US$0.8 million) would be procured on the basis of local competitive bidding from suppliers able to provide spare parts and maintenance services. Consul- tants (US$0.4 million) would be recruited in accordance with IDA Guidelines. The balance of the project cost would consist of contingencies, local engi- neering services, training, operations research and land acquisition. 50. Disbursement of IDA funds would be as follows: (a) Civil works - 40% of expenditures; (b) equipment procured under ICB - 100% of foreign ex- penditures, or 100% of local expenditures (ex-factory); (c) equipment procured locally - 50%; and (d) consultants' services, training and operations research - 100% of expenditures. Expenditures incurred on the project after June 30, 1977, but prior to Credit signing would be eligible for disbursement up to a limit of US$5 million (see paragraph 47). Disbursements would be made against appropriate documentation. Project Benefits and Risks 51. The project would enable the Food Corporation of India to store, handle and transport foodgrains more efficiently. Without the improved stor- age facilities, foodgrains would have to be stored in the open (under cover and plinth) and storage losses would be extensive. The project facilities would reduce storage losses by 180,000 tons of wheat and rice per year valued at about US$23 million. At full development, savings from the reduction in operating costs and grain storage losses would range from US$54.0 to US$60.0 million annually. A more efficient procurement and distribution operation would benefit farmers through the support prices of grains they sell, and it would benefit low income consumers by ensuring access to low priced foodgrains. The estimated economic rate of return is about 20% for the entire project; it is about 19% for the warehouse component and 24% for port silos.  - 16 - 52. The major project risk is the possibility of excess storage capacity due to low procurement and low imports. It is, however, unlikely that the Food Corporation's operational storage capacity would be underutilized for a prolonged period because the circumstances leading to stock depletion - harvest shortfalls, high market prices, low public procurement and rapid offtake of grain - also would lead to increased imports as the GOI tries to maintain or increase levels of Governmental distribution of grain. The chances that the relatively small capacity to hold contingency stocks would not be used as planned are remote since weather induced fluctuations in harvest size, price, and therefore in GOI procurement and distribution are likely to continue. PART V - LEGAL INSTRUMENTS AND AUTHORITY 53. The draft Development Credit Agreement between India and the Asso- ciation, the draft Project Agreement between the Association and the Food Corporation of India, the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Association and the text of a draft Resolution approving the proposed Development Credit are being dis- tributed to Executive Directors separately. 54. The features of the draft agreements of special interest are listed in Section III of Annex III. 55. The additional conditions of effectiveness, specified in Section 5.01 of the Development Credit Agreement, would be the execution of the Project Agreement, the execution of the Subsidiary Loan Agreement between GOI and Food Corporation of India, and the establishment and management staffing of its Project Implementation Division by the Food Corporation of India. 56. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART IV - RECOMMENDATIONS 57. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President By: J. Burke Knapp November 3, 1977  iI~~~~~~~~ I-. o % -'-'I-,-. S~ ~ - t - CC) I 0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C-1 ~ ~ ~ ~ ~ ~ I~ a. - a, I '-M'I I a~~ - C -g ~ ~~s 5 w~w CC tCI 0 14C 4 C ad -M. at Cr IC max.1 Ca - N fl a S.aL Z 5411 ~ ~~~~~~~~- .C I0 '41 4 - , , , WI 1 ItI all ale o Ce 04 *CEtj CC CC Cr152 a * 1C% *.. Z'4 W o =1 I . CC C C .C0 N Co* CC2C C-S 01.'. -~ la 414* U - WM CC1 aC Z lo a a 4x- N CS ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~- W . V J C N * C'S adC C 09 r W-W 345 I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Wr5V :tw B I II  ANN'EX I Page 2 of 4 Unless odtherwise noted, d.te for 1960 refer to aley year bet,,-o 1959 cod 1961, for 1970 bet. n 1968 and 1970 cod for Moo Recen futtisotn between 1973 ad19 75 na BratIl ba. been aeleted as an bjettine country beo.ue. o f its cite atd roap-rble probloi of reinli...u. lity mINA 1960 /c 1951-61 averae, 1951-60 /0 oct10 of popu iction onder 15 cod 65 and ont to labor forc ngn 15 and ovr, __ d Regitere d appioe ion wek. Ic 1962, /f negloterd. not eli practicing in the ooontry, /9 Inolodtng nidwiven, /h 1959; /1 1960-6 1970 /a Pa1i of population under 19 end 65 and ove to labor force agn 15 cod ovnr, /b 1967-68, Ic locludlg nidwi-e, /d 1967. MOS T_ EC N O TE ST UiITt ET 'a 1971, /b satilelo population onder, 15 and 65 and over to labor form age 15 and ovr c 1976, /d leluin idwive, Ic 1969-71 --crai, /f Population 10 yearn cod over sNDONlESIA 1970 /c 1961-71; /b 1971, Ic ITloWdtng nid.i-loe; Id Total boopita1 beds incomplete. HsI(1.iTP P5I ES 19~70 I sa per-etage of espIloyscent, /b 1Net inolodi.8 private ve-tiona1 sobool. BRAZH .4 / EooncmioaIly acive .popoitio,n; /b Hoapitci porcoonel, /o Inside only. R10, AP"Il 18, 1977 DEFEINlTIONS OF SOCIAL INDICATORS LAnd Area ithoo in } PoPulatio Per nurc-n Peorov- fy co dinidod by -onber of pr-cci total -TccL1 sufocoatoaco-prononi land am- and ibland water- clog nab and fonalo f.-c(-ot s o . trained" r '_etiied" Ag-oc M-M t r-cnt rutinalte of ogiclurlarsundto..rr.yorne .c and nu.ilfary pot conn I-Lih ci -niono, oyr 0000-. y-rnasvlp(r vs -otu nrbot 4 korhe pidoco to lie ooatupehooto1 brd - fpoaion di-cded by nonher of boepita1 falna boelavailable in yablocan p .nt gon..n . ad epeoLioued hospltcl and rhbilitato I Itou,nolod e u nnrng bnsand sstablihel,nntc GNf pet ,api,a (55$) - GNI~ Por topota esto-aton at cotsent -arbt pnion, for oa.cndlaI and prlent m- onto. racltdby nae ooor hnoobd an World Bonk AsI la (1973-75 baste.), Per caPita caPply of rafr-o (7 of rtnuirvpints) - Conputnd firon 1960. 1970 u-d 1975 data. noerny nquinlnnc of not fond nay n o lboOeutypr copita per day;anibl soypli_n _onyicodn i prodatoo nprale PooLacoo an no ol satitics enpotL, andcbaoges in stoti; oltt epplie _o oood anma food, ceds fo ain(ni d-or. illin) - As of July fsrst. of not available, qo..ntitove nend ilv food proc-snin anld loss_ _vdostrohaclion, inquire- anorolgo of coo rod-your osctinacoc, 1960, 1970 and 1975 data. nnts oere nstiloatod by FAG hbud onl phyvo-logi-al vondo for norma actunsty and hoalibh conusd o-g eno -ro -tor talinporatoe,fbody ssogbit,, Poninio ana o.... gur in k - 9o,d-y-u popuietoo per ossekilo- ogo and cndIstrito tiosn ponlcon,ad Iawi nan I0. orcate vote (100 boctar-s 7f canal 0_00.at~ h...aobo1d len-1. e y I.i.otnnso -l q ssaer in, ofaro land - Conpultod as above fot Ptc uPca suPPlY of protect igrats Pot don) - fr-toen roc-t of per ag IoIuo ladol.cpice noet supply of food yp- day, net -oyply of mo.d is dfi ond as above, roqoirsnoto for all -nutri-n vstablinhnd by LISDA E-oo-ic Vital acaocio sorob Servies proiefoe- icu oao of60 ron f Crudo bortb oct opor connd,.-averac-An-oa Line birth. pnrthibouccd ntaf. yrocnin pvc dny, and zigaso aia n y.,'. protoo, of ot nod-ynar yoaois o-year . arhtboto a.....goc endinlg is 1960 cnd ohsch 10 goons should b.oan.na p-otnln; obese -cdrd-s are Iert- 1970, and fin-year a-erae enigin 75 for oust c oceoccctint.ta os ~ 5i uo to.a..Prctoio anld 23grsofana yren C-dt, death -tac Per Lio -av, nna - 101d-otbcpa yth ....ed ci aid- As as -neragc for tke o-rd, proyacod by FAO fn the Third World Fond year population.ton-yost aithunetic. a.. g.c. on dingR In 1960 andI1970 and Survey. O on-y-a aver ag ndooc us197 icr noat reroo osict o Per capita proto upl iron aninol and poise - Protnn nayyly of food tot.. a _ rta lic'y Pato 1/tboo - Ane-u1 deatbo of coflavin ande- on yeso dorned ftto ata and poiso on grant yet day. of age yen thousand line hirth- Deatb ratlo (/thou) aces1-4 - Aln... I dea-hn yet thousand on Age grou.p ilte _pe_c_y cc birtb (Yos) - Aorrage nunb-rf yeara of lift rnan1-4 Lt, t childlcnn on chn ago group, cuSgentrd a- on indicator of ing atboh, oail fiac-ynur --nroBo -nd-c iv- 1960, 1970 and nanurojtoon 1975 o d-nipying .ont ionL Gr- unnp-d-ti-vrutc - A-cocgenu t- of Isa da-gbt-on aco.nonill Iducation hear o Ierno...al roproductono pootod if nhes per .e..o prsnt ego- Adiactodeti -rtio-Privacy school_ - Eor. IIoot of oil ais as nyotlti motiliy tacs sallyti-yea anrgscdn n1960, poctg ofpiay sobool-ae --sato, includes obolld-o aged 9/an 195f,op doo-lopiogIr-utr o 6-li y...c but ad jatd for difierent lengthn of pri-ay ouufc Populatics orcuth taco L-.) - total - Cu"poa,nd atnol g-atb raten of old- foe .oonttes with ln_nor.a I odu..atin enorulIooE -oy _-od107 yll, opuiatlio " foe 950-60, 196i-70 and 1970-7 5. ..i.. .oa. poplin co hoe, or above thn, ,Ofina nehuci age. Inyl -oo orot rtaco 17. - -rb- - Cosputod liko gro-th rate, oftotal Adiuctod enroll te eati-n_o_ndcrty -hn-1 - C..Pac,ell As bo-c, po pulaton, difoo oucin f a-b- areas nap affct c,npara- .o.undary ydutio requires at lecst four yr.an of appe-d prinary Iolit ofIdaa nui outron tn trntin poi des genoro1, voctional or toa-her tra-osg Uoba pPoiat... (7.. s.,ttI) - Rstc ci aeban tn total popsiatu.o. ivotr-ctio frpuil f ISto17 years cf ag; ovor-pondeonoe dilffe.soc dof'ni'coon of rkan Areas nay effect tooparahility of data tcooreec 000 gonorallPy on-iudo,dt A 3 Cglre.(-b.eas)nweksgao-1564yers, Years of -h-cling providod fifr.t aud --cud 1e-ei) - Total yearsnf AgE tH , Iper,,a,) - Children(0-14 year.), .skbouling;(1at4nyeardaty loosd , soI.a.foncit instructiono.nayybeepar- andr _tro h5 yearn and over) as peocetagon of -sd-year popolatoon. t_allyor ipeoyeontldo'd. A,ge dpood ...y ratslo - Ratio of popuiction aunder I and 65 ond over .. otoacoa e.. rol-o1ot (7 fi octodary) - On-a-iov1 oncicotsonu sbooo of sges 11 ithough 64. inclndo to-hnita1, ildu-tr-a or othco poogros eioh oPerato nnt.dopoodoy rati - lRti of oP-Patu.. under 15 anod 65 and ner, inde,pendeocil -u an deparietoo etnay Isutit cato_. Lutelbrfr-enaegop i1-byas Adult Utora-y rate (7. - 1Ltorato a,dalto (ai bl v torad ond write)a farfi can on-aoeeptor (iaoltivo, thou) - C-la tone n-nber ofP -ocntago olf total udult popolIation g,,d 15 yearn andovn accptors of kircb-co-t-o dnioec olndor a..epi-e of ontiual family planning program ninc incption. Bouso-g family yliasoin-oer (7. of taried caeo) - Poroo tagno of tarried Persons Pn mo.. (urban) - A-orain unhbr of pot.non Per coon iv w-o, of chiId-boatig ago (1I-4 years) oho us hirchb-ot-I de--o ...opled ono.ntio nal d-o1l ,,gu to -tba cros, dwiiign n-ido to oil o tried -ent in can ae gcu. .c-P _noanes ottucturco and onon-uyod yarts. Lcaped danlon-os cithot lpipd ator (7. - O-cpind co-voti..oaI inyloy-et d-eiusi orban andrua ar uithout ac,do or otidepyiped Totl.1l1I,o fIrt tehoueand) -Etoosonbcaly active poosoc inlodig cater facilities us poroontage ofalocye wlIns arned forcec and unnplayod hut ..ocuding bou.so,ivesl, nltudo,,ts, etc.; Acteec to electeicity (7. of all doollino) C- Cnvniona1 duvilungi, deffniti..n so variou ...ou.tr icc are no,t_cop..ablo. with electricity -v lioiog q..artoru an percent of to tal d-olcngn o Labor farco isnsiote (7.) - AgrioultoralI labo fore (In faming, lr bao and rural.areas fureatr,y,(bootin an ihn)a ptoage f toa lbor fo-o. ucld iige enecdto 1 elcicito (7.) - Conpotod os bone for linamplood (1 oflabor forte) 11- i ploye,1 are u.aa ily d efined as rua dweling onlIy. peranoc who are able an,d wIll-g to tab . aJobl, ..L of a jobo gi-en day, raccod ot of a jobl, and soc king work inn a specifiedCoamtn aisialean periold no ....edtng no -Ie, -vn no ho co,partable bot..o.ai.rcisr (per thoa pec) - All types of --uin-ro for radio broad- conresdctoifferent dofu_tiuns ol .onylydadnoreo atst eea pbi n honn fppuaio nlus dctao.~, enyanut off-ie ta.t-uiio, nayle convoys, topalo-ry unlit,onsd reev rs nonottios a'ndOs y,ears hon regis.tration of unamlployneolt isnurnp.- radi soc can.. in effect; data far -oot y-ors nay n.at be -op-rblo -ote oust ...uotr-o abvlin,cd 1i-oning. Inco- Distribstion - Per-tnige of prcotnu...... (both i cash.andfan P.... r corn (per thupp egor coo aoyronstt core. kind) ...teised by ric,hest 57., rsobent 207., poorest 207. ,and pores ooatcog ls.. tban o,gIt .or.o.n; -n,ides abuincou, hnsrso and 40. nf hoocehods ihtarp -ehirlesl. El-ctrl,tty (keh(yr Per cap) - Annual consueptin of induatola:l, con- Dialtribatiun af land --nehio - Perceotages of land owned by -nithieslt nriall pbhii and privoteclo t coyinkiowt hour peccpita; 107 ..ad poorest 10. of land ocir.geoiyhased on production dt, without aown, for luc.ee in gridc bat alloing for inpurts nod nspors of eioctrtcity. Health and N.tritilno Nesprint (ku/y'r Pot -p) - Pot cpita. ensou l coap tinn In kblcgr-m Poeclatios -c ehocicias - Ponalation divided by nanbr of p-atioinoo ostlinated Boon dnnectic produotion PI.c not i.psots f ne_sPe Lo.  ANNEX I Page 3 at 4 EONOMIC DEVELOPMENT DATA RNP PER CAFITA IN 1975 4 aUS 150 GROSS NATIONAL PRODuCT rN 1975/76AN/ NUAL RATE OF GROWTH (%. constant prices) GROSS RATIONAL PRODUICT IN4 147S/76 U3S Bln. % 1960/61-1964/65 1965/66-1969/70 1970/71-1974/75 CNP at Market Prices 82.8 100.0 3.8 3.7 2.6 Gross Domestic Investment 46.7 20.1 Gross National Saving 16.0 19.3 Current P nft Balance -0.7 -0.8 Resource Gap -1.5 -1.8 OUTPUT. LABOR FORCE AND PRODUCTIVITY IN 1971 Value Added (at factor cost) Labor Foroe V.A. Per Worker USt Bin. uS Mi US J of National Average Agriculture 24.5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Services 16.3 31.1 5,02 16.7 542 186 Total/average 52.6 100.0 1S0.4 100.0 292 100 GOVERNMENT FINANCE General Government _4/ Central Government (Re. Rin) A of GDP (rs BInN ' of GDP 1975/76 1975/76 1973/74-1975/76 1975/76 1975/76 1973/74-1975/76 Current Receipts 133.34 18.5 16.7 79.11 11.0 9.8 Current Expenditures 118.7 16.5 15