India - Madhya Pradesh Major Irrigation Project

Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Report No.P-3115-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MADHYA PRADESH MAJOR IRRIGATION PROJECT August 26, 1981 This document hbs a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (As of August 20, 1981) US$1.00 = Rs 8.958446 Rs 1.00 = US$0.1116 Rs 1 million = US$111,626 (Conversions in the Staff Appraisal Report were made at US$1.00 to Rs 8.00, which represents the projected exchange rate over the disbursement period). FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS CAD - Command Area Development CADA - Command Area Development Authority GOI - Government of India GOMP - Government of Madhya Pradesh HB - Hasdeo Bango Project ID - Irrigation Department of GOMP MP - Madhya Pradesh MRP - Mahanadi Reservoir Project  FOR OFFICIAL USE ONLY INDIA MADHYA PRADESH MAJOR IRRIGATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President Beneficiary: State of Madhya Pradesh Amount: SDR 195.2 million (US$220 million) Terms: Standard Relending Terms: As part of Central assistance to states for development projects on terms and conditions applicable at the time. Project The proposed project comprises a five-year time-slice Description: (July 1981 - June 1986) of the development of two major irrigation schemes in Madhya Pradesh: the Mahanadi Reservoir Project (MRP) and the Hasdeo Bango Project (HB). Construction of the planned storage reservoirs, needed to develop available water resources, is already underway and would be continued. Canal capacities would be enlarged to meet peak water requirements, and sufficient control structures would be provided so that the canal systems can respond to changing seasonal and annual water demands. All channels would be lined down to 40-ha outlets, and the conveyance system would be extended down to 8-ha outlets. The project would further provide surveys and investigations for the future Arpa Irrigation Scheme and improve the implementation and management capabilities of MP's Irrigation Department. The project would increase agricultural production and the standard of living of the farmers in MP. Possible risks under the proposed project are those normally associated with irrigation projects in India. Thi. docurment has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -ii-- (US$ million) Estimated Costs 1/: Local Foreign Total MRP Irrigation Infrastructure 89.5 17.4 106.9 HB Irrigation Infrastructure 116.5 22.6 139.1 Preparation of Arpa Scheme 2.0 - 2.0 Roads 16.0 2.8 18.8 Sub-chak Channels 2.0 - 2.0 Research, Hydrometeorology and Technical Services 9.1 1.9 11.0 Monitoring and Evaluation 0.5 - 0.5 Base Cost: 235.6 44.7 280.3 Engineering and Administration 34.8 - 34.8 Physical Contingencies 26.3 5.0 31.3 Price Contingencies 79.5 13.3 92.8 Total Project Cost: 376.2 63.0 439.2 ===== ===~ ===== (US$ million) Financing Plan: Local Foreign Total IDA Credit 157.0 63.0 220.0 Local Financing 219.2 - 219.2 376.2 63.0 439.2 Estimated Disbursement: (US$ million) FY82 FY83 FY84 FY85 FY86 FY87 Annual: 15 35 47 50 50 23 Cumulative: 15 50 97 147 197 220 Rate of Return: 21% Appraisal Report: No. 3458-IN of August 24, 1981 1/ Including taxes and duties, which are negligible.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MADHYA PRADESH MAJOR IRRIGATION PROJECT 1.. I submit the following report and recommendation on a proposed development credit to India in an amount of SDR 195.2 million (US$220 million) on standard IDA terms to help finance a five-year time slice of Madhya Pradesh's development program for the Mahanadi Reservoir and Hasdeo Bango Irrigation Projects and associated items. The Government of India (GOI) would channel the proceeds of the credit to the Government of Madhya Pradesh (GOMP) in accordance with GOI's standard terms and arrangements for financing state development projects. The exchange risk would be borne by GOI. PART I - THE ECONOMY 2. An economic report, "Economic Situation and Prospects of India" (3401-IN, dated April 15, 1981), was distributed to the Executive Directors on April 16, 1981. Country data sheets are attached as Annex I. Background 3. India is a large and diverse country with a population of about 688 million (in mid-1981) and an annual per capita income of US$190. Agriculture continues to dominate India's economy, employing over two-thirds of the labor force. However, the land base is not sufficient to provide an adequate livelihood to all those engaged in agricultural activities, especially the landless or nearly landless who have only an insecure grasp on the means of existence. Over the past 30 years, the share of agriculture in GDP at factor cost (measured in 1970/71 prices) has declined from 60% to about 40%, while the share of industry has increased from 15% to about 24%. But industrialization has not been rapid enough to absorb the growing labor force, nor to bring about the economic transformation that has led to significantly higher productivity in some other developing countries. 4. Economic growth has been slow in the past, averaging about 3.5% per annum over the past 30 years. Slow growth of value-added in agriculture -- 2.1% per annum over the three decades -- has constrained overall growth, not only because of the high share of agriculture in GDP but also because scarce foreign exchange has often been required to import food. Industrial value-added has grown more rapidly, at 5.4% per annum between 1950/51 and 1979/80. Over the same period, gross domestic savings more than doubled from 10% of GDP to 21.2%, while gross domestic investment rose from 10% of GDP to  -2- just over 21.8%. Foreign savings have never financed a large portion of domestic investment: a peak of about 20% was reached during the early 1960s; by the end of the 1970s, the proportion had returned to below 3%. External assistance has been low both as a percentage of GDP and in per capita terms. Net external assistance has never risen above 3% of GDP, and was less than 1% at the end of the 1970s. 5. Over the past 30 years as a whole, India has placed relatively little emphasis on exports and has tended to pursue a strategy of import substitution. The volume growth of exports between 1950/51 and 1979/80 averaged only 3.6% per annum, about the same as the volume growth of imports over the same period. Between 1970 and 1977, however, India's terms of trade, which had remained roughly constant during the 1960s, deteriorated sharply. In response, the Government introduced various policy measures designed to stimulate exports. The volume of India's exports grew on average about 9% per annum between 1971/72 and 1976/77. Although export growth has slowed in recent years, due in large part to domestic supply constraints, this experience demonstrates that sustained rapid growth is possible. While expanding world markets, particularly in the nearby Middle East, contributed to this growth, liberalized access to imported inputs and more effective export incentives played a major role. Recent Trends 6. Over the period 1975/76 to 1978/79, growth in real GDP (at factor cost), agricultural value-added and industrial value-added averaged 5.4%, 3.1% and 7.9% per annum, respectively. These trends represent a substantially better growth performance than the historical 30-year trends (paragraph 4). However, GDP declined by about 4.5% in 1979/80 due both to the severe drought which reduced agricultural production and to input constraints in other sectors. Agricultural output fell by about 16% in 1979/80. Industrial production stagnated, largely due to shortfalls in the production of major inputs such as coal, steel and cement, as well as infrastructural constraints, notably in power and transportation. As a consequence of these developments, the remarkable price stability that India had enjoyed after 1975 came to an abrupt end at the close of fiscal year 1978/79, with prices increasing 21% during 1979/80. 7. In 1980/81, the economy recovered substantially, so that real GDP growth for the year was about 6%-7%. During the summer and fall of 1980 foodgrain prices rose, but more slowly than other prices and more slowly than the drop in production in 1979/80 would have suggested. This was made possible through the drawdown of substantial buffer stocks built up by the Government in years of good harvests. These stocks ensured adequate supplies of grain to low-income groups in urban areas through the public distribution system and also provided resources for a large-scale drought relief employment program for low-income groups in rural areas. Aided by a normal monsoon in the summer of 1980, agricultural production rose by about 17%-19%. The industrial sector recovered more slowly, with production in 1980/81 rising only about 4% above the average for 1979/80, but output increased substantially during the year so that production in April 1981 was about 9% higher than in April 1980. The rise in prices slowed during the second half of 1980/81 so that by March 1981 the wholesale price index was 15.7% above its level a year earlier.  -3- 8. In agriculture the positive results of large investments and appropriate policies in the past years are becoming increasingly apparent. The rate of expansion of irrigation has increased significantly from 1.3 million ha per year in the early 1970s to about 2.3 million ha in 1980/81. Fertilizer use reached about 5.6 million tons of nutrients in 1980/81, more than double 1974/75 levels. Over the decade before 1979/80, foodgrain production grew at about 2.75% per annum -- sufficient to meet consumer demand, to eliminate imports (which had averaged nearly 5 million tons per year for the 15 years preceding 1976), and to reduce real foodgrain prices for consumers. At the same time, India was able to build up substantial foodgrain buffer stocks which made it possible to limit the effects of the 1979/80 drought, and to export a modest amount of grain in 1980. While the management of the foodgrain economy after the drought was a significant achievement, the effect of the drought on production re-emphasized the continued importance of the monsoon in India's agriculture. The normal monsoon of 1980/81 brought foodgrain production back to around the previous record level of 132 million tons. While the performance of the recent past and the probable future trends suggest that on average foodgrain supplies will exceed demand, the balance remains delicate and the need for foodgrain imports to maintain consumer supplies or adequate buffer stocks could arise from time to time. For example, some wheat imports are likely in 1981/82 to ensure adequate build up of stocks. Programs to expand irrigation, strengthen extension and encourage the efficient use of other agricultural inputs continue to receive high priority. 9. The Indian economy has shifted back from a situation of resource surplus, which had been a temporary phenomenon of the late 1970s, to one of resource scarcity. Investment has again overtaken domestic savings, and the scope for further increases in the latter appears limited. Marginal savings rates have recently been well above 30% in the household sector. Future increases in savings will depend heavily upon the enhanced profitability of public sector enterprises. Impending resource scarcity is even more apparent in the foreign sector. Between 1975/76 and 1978/79, India's current account deficit had remained comfortably small in relation both to GDP and to a growing pipeline of aid commitments. This was due to favorable terms of trade movements after 1977 and to rapidly growing workers' remittances as well as to the growth of exports. In 1980/81, however, the balance of payments deteriorated sharply, with the current account deficit rising from US$850 million in 1979/80 to nearly US$3.4 billion in 1980/81. In part this was due to unique events during the year, such as the disruption of oil production in the Northeast, which, though the flows resumed again in February 1981, alone added over US$1 billion to the oil import bill. Combined with unprecedented oil price increases, this caused the oil import bill to rise by over 75%, to a level equivalent to three-fourths of India's merchandise export earnings. The deficit on current account rose to 2% of GDP. India was able to finance this gap through a substantial drawing on IMF resources (the Trust Fund and the Compensatory Financing Facility), and through an increase in aid disbursements and a modest drawdown in foreign exchange reserves. 10. The trends in the volume and terms of India's trade indicate that significant adjustments will need to be made in the economy to bring India's external accounts into reasonable balance at a high level of growth. In  -4- particular, there is a need to increase the growth of exports, to increase production of commodities such as fertilizer, cement and steel which India can produce efficiently in order to reduce imports of these items, to moderate the rise in oil imports through greater domestic production and slower demand growth, and to reduce the constraints in transportation and other infrastructural facilities which are retarding growth in a wide range of activities, including exports. It is encouraging that, in response to the present balance of payments difficulties, the Government has not reacted by placing more stringent controls on imports, but rather has left in place the more liberal policies evolved in the past several years. Recent improvements in the availability of power, a major constraint facing exporters, and the adoption of several new export policy measures have improved the prospects for accelerating export growth. Development Prospects 11. The experience of recent years illustrates that India does have the capacity to grow and develop at a more rapid pace. Although the industrial sector is small compared to the size of the economy, it nevertheless is large in absolute terms and has a highly diversified structure, capable of manufacturing a wide variety of consumer and capital goods. Basic infrastructure -- irrigation, railways, telecommunications, the power grid, roads and ports -- is extensive compared to many countries, although there is considerable need for additional capacity as well as improvement in the utilization of existing capacity. India is also well-endowed with human resources and with institutional infrastructure for development. Finally, India has an extensive natural resource base in terms of land, water, and minerals (primarily coal and ferrous ores, but also gas and oil). With good economic policies and sufficient access to foreign savings, India has the capability for managing these considerable resources to accelerate its long-term growth. 12. A new Sixth Five-Year Plan (1980-85) was approved in February 1981. The new Plan continues to assign priority to agriculture and power. Furthermore, the Plan reflects the Government's efforts to bring about the necessary adjustments in the economy by emphasizing several priority areas. These include: (i) expansion of exports and an investment program to support increased production to replace imports of goods such as fertilizer, cement and steel which India produces competitively; (ii) an investment program and policy framework for more efficient development and use of energy resources; (iii) removal of bottlenecks in infrastructure and related constraints on production of basic industrial inputs; and (iv) continuing emphasis on the development of agriculture. 13. The higher capital formation rates of the past few years augur well for future income growth. However, there are signs that the past programs and policies have led to relatively low growth in certain crucial sectors, namely power, coal, transport services, steel and cement. Potential output growth in sectors which have benefitted from large investments in the recent past may not materialize unless these input bottlenecks are alleviated. In the case of coal, steel and cement, domestic production appears to be clearly justified on grounds of comparative advantage, indicating an a priori case for policies to promote further investment. In 1980/81 these commodities were not imported in sufficient amounts to eliminate the shortages; increased  -5- short-term reliance on imports may be necessary to alleviate slowdowns and dislocation in user industries. In the case of sectors in which there is little scope to import the final product -- power and transportation -- the planning of capacity expansion becomes even more crucial. Although there is scope for improvement in the short-run performance of these sectors, major investments in balancing and modernization programs as well as in new capacity are essential for adequate growth in the medium term. 14. Despite the relatively large investment programs for the development of domestic energy resources such as coal and hydroelectricity, and the recent development of offshore petroleum resources, India has not been able to eliminate the gap between its total energy demand and domestic production. During the past year, India continued to face power and coal shortages, but the situation improved substantially during the year so that power generation in June 1981 was around 20% higher than a year earlier. India is entering the Sixth Plan period with an ambitious energy production program backed by substantial financial commitment. In the oil sector, GOI is now accelerating its oil exploration capabilities and is opening up prospective areas for exploration by foreign firms. Prices of petroleum products were raised substantially in 1980 and again in July 1981 to bring domestic prices into line with world market prices, to raise resources for further oil and gas development and to encourage efficient use of energy. India is now committed to an expanded power program that emphasizes exploitation of its large hydro potential and development of its transmission and distribution system. In the coal sector, a policy decision in favor of mechanization has been made in order to achieve more rapid growth of coal production. 15. Agricultural policies, development programs and secular trends all seem favorable for sustaining the past agricultural growth during the 1980s. India ended 1980 with grain stocks of about 12 million tons, without having imported foodgrains during the year. This reflects the trends of the last decade which point to an improvement in foodgrain availability in the economy. Growing output, combined with the projected fall in the population growth rate, suggest favorable long-run prospects for foodgrain supply and demand balances. An occasional need to import grains, particularly wheat, could arise, but if the efforts to develop agriculture over the past decade are sustained and intensified, as suggested in the new Plan, persistent shortage seems unlikely. This development could give rise to a range of policy options including a slowly falling real price of foodgrains to increase the affordability of foodgrains to low-income families, foodgrain exports, and diversification to the production of other, higher-value crops. 16. Foreign exchange reserves are providing a cushion that helps the Government of India in short-term supply management. In March 1981, however, gross reserves were $320 million lower than the level of a year earlier and, in terms of import coverage, fell below the six-month level for the first time since 1977. A much larger decline in the reserve level would have been necessary in 1980/81 had IMF Trust Fund and Compensatory Financing Facilities, amounting to over US$1 billion, not been available. India's reserves provide some limited scope for narrowing the financing gap over the next few years, but successful management of the balance of payments will depend mainly on improved export performance, on import replacement, on the maintenance of aid flows and workers' remittances, and on a moderation in  -6- price increases for oil imports. While India's current account balance of payments deficits are not expected to be large relative to the size of the economy (e.g., on the order of two percent of GDP), the absolute amounts are large and-will necessitate external borrowing beyond levels expected to be available from normal concessional sources. Accordingly, India has recently begun to undertake substantial borrowings in the financial markets to help finance selected major investment projects. 17. India's medium-term development prospects are mixed. Considerable progress continues to be made, particularly in agriculture, but the economy faces a period of difficult adjustments in the coming years. Investments required to relieve short-term supply constraints must compete with longer-term programs to accelerate growth and to develop India's considerable physical and human resources. The balancing of these objectives will place a difficult burden on those implementing India's Sixth Five-Year Plan. The primary focus must be on the implementation of appropriate domestic adjustment policies, although the aid community can and should play an important role in ensuring that India's efforts do not fail due to inadequate foreign resources. 18. Preliminary results from the March 1, 1981 Census, combined with 1971 Census figures adjusted for under-enumeration, suggest that the population growth rate declined from 2.3% p.a. in the late 1960s to about 2% at present. The rate of increase of population is expected to continue falling to around 1.8% by the first half of the 1990s. While the growth rate appears to be declining slowly, the 1981 Census population estimate was substantially higher than previous Government projections. The 1981 Census data are still incomplete but preliminary reports indicate that the rise in life expectancy was more than anticipated, suggesting that, on average, Indians can expect to live five years longer than they did a decade ago. This no doubt reflects improved availability of food and health services. This implies, however, an even greater need to reduce the birth rate to bring about the needed reduction in the rate of growth of population. The Census results, therefore, re-emphasize the need for continuing efforts to strengthen a broad range of family planning activities to develop a wider clientele and to provide that clientele with a professional, technically competent advisory service which can provide the full variety of available birth prevention methods. The new Plan continues the high priority given to these efforts in earlier Plans. The ambition of its targets - implying a rise in the proportion of protected couples in the reproductive age group from its present estimated level of about 23% to over 35% by 1984/85 - seems fully justified. Such targets imply a serious long term commitment to moderating the population growth rate through an improved family planning program. 19. Reduction of poverty remains the central goal of Indian economic growth. More than one-third of the world's poor live in India, and more than 80% of the Indian poor belong to the rural households of landless laborers and small farmers. About 51% of the rural population and 38% of the urban population subsist below the poverty line (estimated at about US$114 and US$132 per capita per year for rural and urban areas, respectively). Improvements in the living standards of the poor will depend to a large extent on the overall growth of the economy; the circumstances require increases in agricultural production and employment, in non-farm rural  -7- employment, and also in employment opportunities in urban areas. These developments will have to stem in large part from market forces which, however, must be encouraged and reinforced by appropriate Government policies and the strengthening of basic services and infrastructure. The declining trend in real foodgrain prices between 1970 and 1979 reflects such developments. There is also a role for direct Government action in faster implementation of land reform (though the scope for significant reduction in poverty through land redistribution is quite limited in India), in increasing the supply of credit available to small farmers and rural artisans, and finally in broadening the provision of those services which enhance the human capital of the poor and improve living standards. Many of the latter are elements of the Minimum Needs Program, which has been an integral part of Indian planning for the past decade. Progress has been slow but steady in the expansion of primary education, the extension of rural health facilities and the provision of secure village water supplies. Innovations such as the community health volunteer program and the national adult literacy campaign provide encouraging evidence that well-targetted, relatively low-cost programs can lead to enhanced prospects for India's poor. PART II - BANK GROUP OPERATIONS IN INDIA 20. Since 1949, the Bank Group has made 61 loans and 141 development credits to India totalling US$2,833 million and US$9,323 million (both net of cancellation), respectively. Of these amounts, US$1,168 million had been repaid, and US$4,494 million was still undisbursed as of June 30, 1981. Bank Group disbursements to India in fiscal year 1981 totalled US$962 million, representing an increase of about 32% over the previous year. Annex II contains a summary statement of disbursements as of June 30, 1981, and notes on the execution of ongoing projects. 21. Since 1959, IFC has made 24 commitments in India totalling US$148.7 million, of which US$22.2 million has been repaid, US$27.7 million sold and US$7.5 million cancelled. Of the balance of US$91.3 million, US$82.3 million represents loans and US$9.0 million equity. A summary statement of IFC operations as of June 30, 1981, is also included in Annex II (page 4). 22. In recent years, Bank Group lending has emphasized agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit operations and in providing direct support to major and medium irrigation. Marketing, seed development, agricultural extension, dairying, and forestry 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. The Bank Group has also been active in supporting infrastructure development for power, telecommunications, and railways. Family planning, water supply development, urban investments and the development of oil and natural gas have also received Bank Group support in recent years. 23. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis  -8- of the program on agriculture, power, water supply and other infrastructure sectors remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs, particularly water and credit for on-farm investments, will continue to receive emphasis. Improved water management and intensification and streamlining of extension systems form an important institution-building aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefitting small farmers. The Bank Group's continuing role in the fertilizer sector assists India in the more efficient provision of another key input in the agricultural growth process. Projects supporting water supply, sewerage, urban development and investments in the petroleum sector 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 those subsectors which have recently emerged as key constraints on India's overall growth, primarily power and transportation. 24. The need for a substantial net transfer of external resources in support of the development of India's economy has been a recurrent theme of Bank economic reports and of the discussions within the India Consortium. Thanks in part to the response of the aid community, India successfully adjusted to the changed world price situation of the mid-1970s. However, there is now a need for increased foreign assistance to adjust to an even greater deterioration in balance of payments anticipated during the 1980s by augmenting domestic resources and stimulating investment. As in the past, Bank Group assistance for projects in India should aim to include the financing of local expenditures. India imports relatively few capital goods because of the capacity and competitiveness of the domestic capital goods industry. Consequently, the foreign exchange component tends to be small in most projects. This is particularly the case in such high-priority sectors as agriculture, irrigation, and water supply. 25. India's poverty and needs are such that whenever possible, external capital requirements should be provided on concessionary 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. Therefore, India should be eligible and regarded as creditworthy for some supplemental Bank lending. The ratio of India's debt service to the level of exports was about 10% in 1980/81 and is projected to remain below 20% through 1995/96. As of June 30, 1981, outstanding loans to India held by the Bank totalled US$1,742 million, of which US$874 million remain to be disbursed, leaving a net amount outstanding of US$868 million. 26. Of the external assistance received by India, the proportion contributed 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 49%, 36% and 44%, respectively, in 1980/81. On March 31, 1981, India's outstanding and disbursed external public debt was about US$17 billion, of which the Bank Group's share was US$6.2 billion or 36% (IDA's US$5.3 billion and IBRD's US$0.9 billion). Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1980/81, about 18.0% of India's total debt service payments were to the Bank Group.  -9- PART III - AGRICULTURE AND IRRIGATION IN MADHYA PRADESH 27. Madhya Pradesh (MP) is India's largest state. It covers an area of 442,800 km2 and has a population of about 52 million. Although MP is rich in natural resources -- minerals, fuel, timber, iron ore, etc. -- they are as yet relatively unexploited. The State's economy depends largely on a low-productivity agricultural sector, which contributes about 55% of the State Domestic Product. The encouragement of agricultural growth, particularly through the expansion of irrigation and improved water management, is thus a precondition for economic progress. By most indicators, MP is one of the poorest states of India. 28. The per capita income of MP was Rs 896 in 1977/78, compared to Rs 1,163 for the country as a whole. Between 1970/71 and 1977/78, the State's income grew at an annual rate of 1.8%. Because of the population increase, the per capita income actually declined in the same period by 0.9% per annum. The zero growth rate of primary net domestic product is mainly due to the stagnation of foodgrain production, which increased at only 0.2% per annum over the period; this contrasts with the 3.4% p.a. growth rate of the primary sector in the Indian economy. Production in the industrial sector, which started at a low base, grew rapidly, at 6.2% per annum (11% per annum nationwide), but contributed only about 20% of the State Domestic Product. MP is estimated to possess 44% of the country's bauxite reserves, 50% of its manganese, 30% of its high grade iron ore, 25% of its coal, and 27% of India's total forest resources. Recently, rich deposits of copper have been discovered. The State is estimated to be endowed with 11% of the country's total hydro-electric power potential, second only to Assam. However, the per capita industrial power consumption in MP is only 80% of the all-Indian per capita consumption. 29. MP's estimated population of 52 million (1980) is growing at about 2.6% per annum, which is one of the highest growth rates among Indian states. The population density of 94 persons per km2 is low, compared with the national average of 167. The population is predominantly (84%) rural, and is scattered in small villages.with an average population of 430 persons per village. Just over 20% of the population is tribal. One-third of the State's inhabitants belong to the so-called backward classes, which include scheduled castes and tribes. About 37% of the total population constitute the State's labor force; about 80% of the labor force is employed in the agricultural sector. Cultivators and agricultural laborers account for 53% and 27% of the labor force, respectively. The average farm size in MP has decreased from 4.0 ha in 1970/71 to 3.6 ha in 1976/77, with wide variations among districts. About two-thirds of all holdings are owner-operated. In a normal year, about two-thirds of the population has incomes below the poverty line (estimated at US$114 for rural areas). However, there are large regional variations in the incidence of poverty. In the eastern and southern parts of the State, about 90% of the population live below the poverty line, while the proportion in the western part of the State is about one half. 30. Wide differences in climate, soil and topography create varying conditions for agriculture in different parts of the State. Seven major agro-ecological zones are distinguished on the basis of climate, topography and prevailing soil type. Rainfall varies from less than 800 mm in the West  -10- and Northwest to over 1,600 mm in the Northeast and Southeast. Winter temperatures also vary throughout the State according to latitude and altitude. Frosts are recorded in some northern areas. The agro-climatic conditions in the various zones determine predominant crops (rice, wheat, jowar, cotton and bajra, or a combination of those). 31. Because of the limited rainfall throughout the State, which comes almost entirely from the Southwest monsoon, irrigation development is a prerequisite for a significant increase in agricultural production. The arrival of the monsoon and the time interval between sowing rains and the next realization of a significant rain are erratic. With irrigation, the planting can be done on schedule, without guess work, and in amounts sufficient to establish a good seed bed and to ensure good seed germination and initial growth. The short duration of the monsoon season or an earlier than normal receding of the monsoon rains further aggravates the problems of equating moisture with plant needs. 32. A major part of MP's irrigation potential is yet to be exploited. Despite the fact that within MP are the catchments of all eleven of the major rivers of Central India, only 11% of the net cropped area (about 2.2 million ha) in the State is irrigated, compared to the national average of about 26%. At present, only about 15% of the groundwater and surface water potential is utilized. Of the 2.2 million ha net irrigated area, about half is served from canals and half from (largely privately owned) wells. About one-third of the canal-irrigated area is under major schemes (defined as over 10,000 ha), about one-third under medium schemes (2,000 - 10,000 ha), and about one-third under minor schemes (below 2,000 ha). Without storage, irrigation is almost exclusively limited to one season; less than 5% of the irrigated area receives irrigation in both seasons. The potential for groundwater development is fairly limited. The unexploited groundwater potential has been estimated at 1.7 million ha, compared with a surface water potential of 9.0 million ha. Thus, most of the increase in irrigation in MP will have to come from surface water resources. 33. Madhya Pradesh accords a high priority to irrigation and has been allocating a large share of Plan budgets to this sector, currently about 30%. Given the priority in Plan allocations and the apparent rate of utilization, the growth in the benefits from irrigation in MP has been somewhat disappointing. The two principal constraints to the development of irrigation have been long construction periods for major and medium projects, and the slow and uneven uptake of irrigation once the facilities have been created. In many cases, dams have been built and water stored, but distribution systems not completed, with outlet command areas ranging from 40 ha to over 100 ha. Because of this lag in the construction of the distribution systems, the water has been preempted at the head of the system. This fact combined with the ability of influential groups to monopolize water, has resulted in large areas, especially at the tail end of the commands, being left unirrigated. Other factors in the slow and uneven uptake of irrigation have been the low level of technology adopted in irrigation planning, design, construction, operation, and maintenance, and over-optimistic design assumptions about crop water requirements and irrigation losses in the system.  -1 1- 34. The Bank Group has contributed directly to the development of MP's agricultural sector through previous IDA credits. The Madhya Pradesh Agricultural Credit Project (US$33 million credit of June 8, 1973; Cr. 391-IN) provided long- and medium-term agricultural credit to farmers through credit institutions for such on-farm investments as tractors, minor irrigation and land shaping. The credit was fully disbursed by 1977. The MP Dairy Project (US$16.4 million credit of December 18, 1974; Cr. 522-IN) is supporting dairy development organized along the lines of the successful AMUL dairy cooperative scheme in neighboring Gujarat. Farmer response has been excellent and the Government is under considerable producer pressure to speed up the establishment of dairy cooperatives throughout the State. The Chambal (MP) Command Area Development Project (US$24 million credit of June 20, 1975; Cr. 562-IN) is designed to improve the efficiency of water utilization in the command area of the Chambal River in MP and bring additional areas under irrigation. This project started slowly, but is now completed. The major constraint was the slow acceptance by the farmers of on-farm development, which was meant to be carried out, and paid for, by the farmers themselves with agricultural credit available to them from the proceeds of the credit. The reduction of the outlet command size from some 40 ha to about 8 ha in MP as elsewhere in India, as a matter of policy, has meanwhile virtually eliminated this problem. The MP Forestry Technical Assistance Project (US$4 million credit of February 26, 1976; Cr. 609-IN) provided the funds for a feasibility study, completed in November 1979, for the establishment of a saw-mill and a pulp factory based on the forest resources of southeastern MP. The MP Agricultural Extension and Research Project (US$10 million credit of June 1, 1977; Cr. 712-IN) is designed to strengthen agricultural supporting services, particularly extension and research in MP. Staff shortages, especially in supervisory and managerial posts, have delayed implementation of the extension component, but results in areas where regular extension visits are being made attest to the effectiveness of the extension system introduced under the project. The program would be expanded to cover the whole State by 1983, through a recently approved follow-up project (MP Agricultural Extension and Research Project - Phase II; SDR 30.3 million credit of May 7, 1981; Cr. 1138-IN). The Madhya Pradesh Medium Irrigation Project (US$140 million credit of March 26, 1981; Cr. 1108-IN), which has just become effective, will finance a five-year time slice of MP's investment program for medium irrigation projects. PART IV - THE PROJECT Project Formulation 35. The project's main objectives are to complete planned storage reservoirs needed to fully develop available water resources and serve the projected command areas in two major irrigation schemes (Mahanadi Reservoir Project - MRP - and Hasdeo Bango - HB), and to redesign the conveyance system to meet peak water requirements and to allow adequate and efficient response to the changing seasonal and annual water demands. For the proposed project, improved planning, design, construction, and operational criteria would be used. Research activities and a program for the development of sub-chak channels (i.e. channels below the 8-ha turn-out down to the farm-gate) have been incorporated in the project to promote better water use at the farm  -12- level. Monitoring and evaluation under the project would provide continuous feedback to project designers and operating personnel. 36. Both irrigation schemes that essentially make up the proposed project are designed for a modern irrigation service which should result in a gradual transformation from the traditional broad-cast method of planting kharif (i.e., monsoon or main growing season) paddy to the transplanting of high-yielding varieties and an added impetus to the growing of a second (rabi season) crop. The change in practices and varieties is expected to about double the present crop yields. Water stored in the reservoirs would be used to mature late kharif paddy, to meet industrial and municipal water demand, and to facilitate an earlier transplanting of paddy in the following kharif season. Residual water quantities in the reservoirs at the end of the rainy season that are not needed for priority users (industry, urban water supply) would be allocated for rabi (i.e., winter or secondary growing season) crops. The conveyance systems to be constructed under the project would be designed so that water could be supplied in a timely and reliable manner to all areas of the command. The design would also reduce the inequity that normally exists when large farmers have their holdings at the head reaches of the distribution system, with a heavier concentration of small and poor farmers at the tail ends where water supply is unreliable and insufficient. 37. The project was prepared by GOMP assisted by local consultants (Water and Power Consultants, WAPCOS), with substantial assistance by Bank staff. It was appraised in December 1980. A Supplementary Project Data Sheet is attached as Annex III. A report entitled "India-Staff Appraisal Report - Madhya Pradesh Major Irrigation Project", Report No. 3458-IN, dated August 24, 1981 is being circulated separately to the Executive Directors. Negotiations were held in Washington in August 1981. The Borrower and GOMP were represented by a delegation coordinated by Mr. S. C. Jain, Director, Department of Economic Affairs, GOI. The Project 38. The proposed project would assist the ongoing development of two major irrigation schemes in Madhya Pradesh, the Mahanadi Reservoir Project (MRP) and Hasdeo Bango (HB). It would comprise a five-year time-slice, from July 1981 to June 1986, of construction work for these schemes, which are expected to be completed to full development in about 15 to 20 years. The project would also include planning and design of Arpa, a third major irrigation scheme in the State. All project schemes are located in the predominantly rice-growing Chattisgarh region of eastern MP and, together, will serve about 702,000 ha at full development. The project schemes would be carried out in accordance with appropriate criteria, standards and procedures adopted by GOMP (Section 2.01 of the Project Agreement) which are acceptable to the Association. Uncertainties still exist in estimating: actual conveyance and operational efficiencies achievable with the new design standards and operational procedures; crop water requirements; and the changes that farmers would introduce in the design cropping patterns as a result of a more reliable and timely water supply. A flexible approach to project design has been adopted and the initial project criteria would be adjusted as appropriate to take account of revised estimates. Construction of the main canal networks would be carried out in stages, with initial canal capacities based on water requirements  -13- calculated from the projected cropping patterns, but allowing for the projected gradual increase in the areas irrigated. However, the structures along the canals would be designed to allow passage of larger flows. The design of the conveyance system is such that, if necessary, the canals can be enlarged in the future at relatively low cost to carry larger peak flows. 39. The proposed project would include: construction work on six dams and a diversion weir; construction, remodelling and lining of feeder, main, and branch canals totalling about 217 km; block development (covering about 154,000 ha) of canal distribution systems lined down to 40-ha outlets (except where lining is proven to be unnecessary or uneconomical) with subminors to 8-ha turn-outs, lined on 8,000 ha and unlined in the remaining 146,000 ha area; minor drainage work covering 154,000 ha; and construction of about 48 km of new, and improvement of about 624 km of existing, rural roads. After the end of the five-year time-slice covered by the project, GOMP would complete the MRP and HB schemes as soon as technically feasible (Section 2.02 (ii) of the Project Agreement). 40. Of the dams included in the project, the Sondur Dam (in MRP) is already about one-third complete and will be fully completed within the five-year project time-slice. Construction of the Bango High Dam (in HB), which is on-going, would be continued, and preliminary work on the Pairi Dam (in MRP) would commence under the project. A new diversion weir at Rudri would be constructed nearly to completion under the project. On the existing Murumsilli and Dudhawa Dams (in MRP), the construction of parapet walls under the project would increase the freeboard. Works on the existing Sikasar Dam would include rehabilitation of the spillway section and erection of radial gates, as well as the construction of a parapet wall to improve dam safety. To ensure the safety of the dams included in the project, GOMP would maintain its panel of experts (already set up), with acceptable qualifications, experience, and terms of reference, which would review the plans and designs of the dams and their associated structures, and would conduct periodic reviews, during design and construction, to examine whether any new grounds for making changes in the designs of the dams have become apparent (Section 3.07 (a) of the Project Agreement). After completion, GOMP would have the dams and related structures periodically inspected to determine any deficiencies that might endanger their safety. GOMP would propose appropriate inspection arrangements for the Association's review not less than one year before the expected completion of each dam or related structure (Section 3.07 (b) of the Project Agreement). For each dam, a comprehensive resettlement plan, including an implementation schedule agreed with the Association, would be prepared not less than two years before the submergence of any affected land, for the relocation of residents in the reservoir areas. People ousted from the submerged area would be offered compensation in the form of cultivable land (Section 3.06 of the Project Agreement); as far as possible, irrigated land would be used for this purpose. 41. Feeder canals would be lined to reduce losses and to provide a cost-effective cross section. Adequate control structures would be provided to allow reliable service to command areas. All main and branch canals in the project would also be lined in order to reduce seepage losses, to reduce maintenance needs, to improve operational efficiency, and to reduce the cost of land acquisition, structures and earthworks. The type of lining for main and branch canals would depend on channel capacity, availability of  -14- materials, and the construction methods most appropriate to the site. Distributaries and minors, which bring the water down to the "chak" 1/ outlets would also be lined - except where found unnecessary as a result of tests and observations that would indicate that lining is uneconomical in these reaches (solid rock, impermeable soils, etc.). Field testing of various types of lining would continue throughout the project period, and specifications would be adjusted if necessary. Since the benefits of lining sub-minors - which take the water from the 40-ha outlet further down to 8-ha turn-outs - in paddy areas have not been confirmed, the program of lining sub-minors would initially be limited to about 8,000 ha under the project so that design specifications, costs, and benefits of this program can be evaluated. Natural waterways would provide main drainage; minor drainage channels would be constructed under the project for about 154,000 ha of completed irrigation blocks. 42. Roads included in the project would be designed and constructed as all-weather roads. They would be planned so that all parts of the command area are brought within about 3 km of an all-weather road and all villages with 1,500 or more population are linked by all-weather roads to existing main road systems. 43. Within the chaks, the project would provide for the construction of "sub-chak" 2/ channels which convey the water from the 8-ha turn-out to individual farms or to 2-ha borders where individual holdings are small. Sub-chak drains will also be included in the project as required. The program of sub-chak channels and drains would be limited to about 13,500 ha in MRP and 2,000 ha in HB so that the benefits of delivering irrigation supplies to individual farms in the kharif and rabi seasons can be evaluated and demonstrated. Furthermore, a program of adaptive research to identify and demonstrate new agricultural techniques and better farm practices would be introduced under the project. This program would be conducted principally on farmers' fields; two field sites of at least 40 ha each would be established in both MRP and HB for the purpose. Funds are also included in the project to establish a Statewide network of recording rain gauges, stream gauging, and silt recording stations. Modern operation and maintenance facilities for both MRP and HB, especially radio communications and telemetering equipment, are also included in the proposed project. Project Implementation 44. Planning, survey, design, construction, operation and maintenance of surface water irrigation and drainage works down to the 8-ha turn-outs would be the responsibility of GOMP's Irrigation Department (ID). The Secretary of Irrigation is the head of the ID. He is assisted by an Engineer-in-Chief and 16 Chief Engineers with regionally and/or functionally specified responsibilities. Each Chief Engineer has several Circles, each 1/ A "chak" is an irrigation service area of about 40 ha on average, com- manded by a Government outlet. 2/ A "sub-chak" is an irrigation service area of about 8 ha on average, commanded by a Government turn-out.  -1 5- headed by a Superintending Engineer, who in turn is responsible for three to five Divisions, each headed by an Executive Engineer. To implement the proposed improvements in planning, design, construction and operation, the ID would be strengthened. In both schemes, MRP and HB, three additional units, each headed by a Superintending Engineer, would be established: a new Planning and Design Unit to work with local consultants, who would be retained by the ID to provide general planning assistance and to undertake the survey, planning and design of the irrigation and drainage systems below the distributary canal head regulators (Section 2.03 of the Project Agreement); a Quality Control Unit to check the quality of construction and to ensure that site testing of construction materials and works are carried out systematically; and a Performance Monitoring and Evaluation Unit to monitor project implementation and to undertake experimental and research programs on design standards, work procedures, etc. As a basis for monitoring and discussion by IDA review missions, GOMP would inform the Association, separately for the HB and MRP schemes, of annual financial and other allocations for operation and maintenance. 45. The Agriculture Department would be responsible for sub-chak development below the 8-ha turn-outs. It would also be in charge of extension service and farm inputs. The Public Works Department would be responsible for design, construction, supervision and maintenance of the project roads. Two existing Road Circles in the Department, which are charged with implementing the project road program, would be strengthened with additional staff as and when required as the project gets underway. Farming systems research under the project would be executed by the Agricultural University at Raipur. 46. Command Area Development (CAD) programs are designed, monitored and evaluated at the State level by a CAD cell, created in 1980 to support the State's Coordination Committee which, together with a high level Cabinet sub-committee, is responsible for policy decisions with regard to CAD. At the project level, a Command Area Development Authority (CADA) has been set up for HB and two nearby completed schemes. A CADA for MRP is scheduled to commence operations later in 1981. Monitoring and Evaluation 47. Monitoring and evaluation activities would be conducted on two fronts. The Performance Monitoring and Evaluation Units of the ID would focus on technical aspects, system water management, and routine monitoring of operation and maintenance of the reservoirs and irrigation systems. Water management studies would be undertaken in several areas within MRP and HP such that sufficient data can be collected to reflect typical farmer response in both kharif and rabi seasons. Within the CADAs, monitoring and evaluation of project benefits at the farms would be carried out by improved use of data that is being collected regularly in on-going crop-cutting surveys. These surveys, which are conducted annually, primarily for estimating crop production and yields, would be upgraded to provide the additional data required.  -16- Agricultural Support Services 48. Agricultural research is the responsibility of the Jawaharlal Nehru Krishni Vishwa Vidyalaya Agricultural University in MP. It controls six agricultural colleges in different regions of the State which act as regional research stations and, in association with 16 research sub-stations, provide coverage of all main agricultural zones of the State. The Raipur College of Agriculture lies within the MRP command and also maintains a research farm at Bilaspur near the HB command area. It is being developed as a regional center under the IDA-assisted National Agricultural Research Project (US$27 million credit of December 7, 1978; Cr. 855-IN). 49. Agricultural extension is the responsibility of the Department of Agriculture. The Training and Visit (T & V) System of extension was first introduced in the Chambal command area in northern MP in 1976 and later expanded to 15 districts throughout the State under the MP Agricultural Extension and Research Project (US$10 million Credit of June 1, 1977; Cr. 712-IN). The extension program has given good results. Under the recently approved MP Agricultural Extension Project - Phase II (SDR 30.3 million credit of May 7, 1981; Cr. 1138-IN), the whole State will be covered by 1982/83. The entire HB command has been under the T & V system since 1979. Most of MRP has been included in the first stage of the new Phase II Project. Under the T & V system, village level workers (who are the primary contact with the farmers) would work only on extension and not be involved in coordinating input supplies and credit requirements, nor associated with administrative and regulatory duties. 50. Improved seed is being produced on seven State seed multiplication farms in or near the project area, and on three farms of the Agricultural University. In order to remedy the still existing shortage of quality seed, a State Seed Farm Corporation has been set up recently. Certified seed is distributed through the State Marketing Corporation, which also distributes fertilizer. About 60% of the fertilizer is sold through the cooperative sector and the remainder through licensed private dealers. A widespread reluctance of cooperatives to procure stocks of fertilizer in advance of the growing season frequently results in difficulties for farmers in obtaining timely supplies. In order to overcome this problem, GOMP plans to subsidize transport and storage of fertilizer. The present level of fertilizer demand in the project area is low. Pesticides are being procured and marketed by the Agro Industries Development Corporation and a network of private dealers. 51. Although marketing of agricultural produce is less developed in MP than in many other Indian states, the present marketing facilities in the project area, 25 regulated markets and sub-markets, are adequate for the project. Processing facilities are also considered as satisfactory. 52. The organization of institutional credit to farmers follows the usual pattern in India. Short- and medium-term credit is provided by Primary Cooperative Societies. Long-term loans are available to farmers through the Land Development Banking system. Credit is also available through the Commercial Banks and the Regional Rural Banks.  -17- Project Cost and Financing 53. The estimated total cost of the project, over the five-year time-slice, is US$439.2 million. Taxes and duties included in the cost estimate are negligible. The foreign exchange component of project cost is estimated at US$63.0 million (14%). The principal cost components, net of physical and price contingencies and of engineering and administration, are: irrigation components of MRP (US$106.9 million) and HB (US$139.1 million), research, hydrometeorology and technical services (US$11.0 million), and roads (US$18.8 million). The balance is made up by surveys and investigations for Arpa (US$2.0 million), sub-chak channels (US$2.0 million), monitoring and evaluation (US$0.5 million), engineering and administration (US$34.8 million), physical contingencies (US$31.3 million) and price contingencies (US$92.8 million). 54. The proposed credit of US$220 million would cover 50% of total project cost, including all foreign exchange cost and 42% of local cost. GOMP would finance the remaining project cost. The proceeds of the credit would be used to finance: civil works (US$190 million), equipment and vehicles (US$22 million), and technical assistance (US$2 million). The remaining US$6 million would be left unallocated. Procurement and Disbursement 55. The proposed project includes about US$322 million worth of civil works (net of engineering and administration). Of these, contracts totalling US$94 million for dams and main canals in excess of US$6 million per contract would be let following international competitive bidding. To encourage participation of larger contractors, similar works would be packaged for bidding where practical. However, to gain the interest of smaller contractors, the bid package would be designed to allow bidding for all or any part of the works. Indian contractors would be entitled to a 7.5% preference for the purpose of bid evaluation. Tender documents would specify this preference and the manner of its application. The remaining civil works (US$228 million) are individually small, scattered over large areas and carried out intermittently as-determined by weather conditions and agricultural activities. Therefore, US$151 million worth of these works would be carried out by local contractors on the basis of standardized competitive bidding procedures and guidelines developed by GOI's Central Water Commission and approved by the Association. About 6 of these contracts were let between December 1980, when the project was appraised, and July 1981. Works outstanding after July 1, 1981 under such on-going contracts, estimated at US$9 million, would be eligible for financing from the proposed credit. Since for these contracts only those expenditures that occur after the signing of the proposed Loan Agreement would be eligible for financing from the proposed credit, no retroactive financing is involved. The balance of the civil works (US$77 million) would involve a variety of technical constraints which would make these works impractical for tendering. They would be carried out under small piece-work contracts. When required by safety or quality considerations or when the quantities of works are difficult to estimate in advance, small works may be implemented by GOMP's departmental forces. Works executed on the basis of piece-work contracts would be limited to an aggregate of 15% of all civil works, and works  -18- implemented departmentally would be limited to an aggregate of 10% of all civil works. 56. The estimated cost of vehicles, instruments and equipment to be procured under the project is approximately US$18 million (net of price contingencies). All heavy equipment, with an estimated cost of US$9 million, would be procured through international competitive bidding. A preference limited to 15% or the prevailing customs duty, whichever is lower, would be extended to local manufacturers in the evaluation of bids. The equipment and vehicles will be grouped to promote efficiency and attract competition; however, bids will also be accepted on individual schedules to attract small manufacturers. The balance (US$9 million), comprising light equipment, instruments and vehicles, would be procured locally in order to benefit from existing servicing and spare parts supply facilities. Standardized procedures and bidding documents developed by the Central Water Commission and approved by the Association would be used for their procurement. 57. The proceeds of the credit would be disbursed against the foreign exchange cost of directly imported equipment and vehicles and against the ex-factory price of locally procured items. Where the ex-factory price is not readily available, 70% of expenditure would be reimbursed. Disbursements for civil works would be 60% of expenditures. For technical assistance (training, farming systems research, irrigation management, monitoring and evaluation, and the hydrological network) all approved expenditures would be reimbursed. Full documentation would be required for all disbursements, except for payments of up to Rs 300,000 for civil works and Rs 150,000 for equipment and vehicles, and for force account, for which disbursements would be made against certificates of expenditure. The supporting documents for these payments would not be submitted to IDA but would be retained by GOMP for inspection by IDA review missions. It is expected that disbursements would be completed by June 1987. Benefits and Economic Justification 58. The proposed project would assist in expanding the area under irrigation in MP by 360,000 ha and in rehabilitating an additional area of about 235,000 ha. It would also ensure operational and management improvements in the State's irrigation sector. Expected incremental annual production of major commodities at full project development is estimated to be about 1.3 million tons of foodgrains, about 1.1 million tons of sugarcane, and about 150,000 tons of bananas. The agricultural value added to the local economy is estimated at nearly US$190 million equivalent per annum. About 500 tons of fish would be produced annually in the reservoirs, and water 3 supply for industrial and domestic use would increase by about 810 million m annually. The project would generate year-round employment opportunities for an estimated 206,000 farm workers and an additional 47,000 full-time jobs in the non-farm sectors such as marketing, transport and processing. Construction work for the project would create 120,000 additional jobs over the next 15 to 20 years. These estimates of project impact apply to the project schemes at full development. An estimated 20% of these result directly from the five-year time-slice of the project. 59. The net farm income for the 116,000 directly benefiting farm families in the project areas, which at present averages Rs 2,100 for the typical 2 ha  -19- farm, is expected to increase to an average of Rs 9,540, of which about Rs 6,420 would be due to the project (after full development). Thus the increase of net farm incomes over what they would be without the project would average 206% (ranging from 126 to 310%, depending on location and whether or not the area is presently irrigated). The project would significantly reduce the incidence of poverty in the command areas. The percentage of farm families below the poverty line of US$114 per annum, presently about 70% in MRP and 85% in HB, should decline to about 24% and 20%, respectively, in the two schemes. 60. The economic rate of return has been calculated for the full development stage of both MRP and HB schemes, rather than for the time-slice financed under the project, since works financed under the time-slice are closely related to, and dependent on, works that would be implemented under follow-up phases. Implementation schedules and costs and benefits to full development of the schemes are based on a careful assessment of GOMP's implementation capability. Sunk costs were excluded in the base calculation of the economic rate of return, but their effect was tested in the sensitivity analysis. Discounting cost and benefit streams over 50 years, the economic rate of return is estimated at 20% for MRP, 22% for HB, and a weighted average of 21% for the two schemes combined. Cost Recovery 61. Discounted capital costs to full development of the two major project schemes are estimated at Rs 4,850/ha for MRP and Rs 6,480/ha for HB, on average. Discounted costs of operation and maintenance would be Rs 268/ha and Rs 288/ha, respectively, for the two schemes. Thus, total public sector outlays would amount to Rs 5,118/ha for MRP and Rs 6,768/ha for HB. The "project rent" (net incremental income less the necessary rewards to the farm family for its labor, entrepreneurship, and cultivation risk) is estimated to average about Rs 4,690/ha in MRP and Rs 7,760/ha in HB. Discounted direct and indirect revenue due to the fully developed project would total Rs 1,416/ha in MRP and Rs 2,666/ha in HB, equivalent to a total cost recovery index of 28% and 39%, respectively, for the two schemes and in a project rent recovery index of 30% and 34%. Largely as a result of the poor irrigation service, the recovery rate of water charges in the State is low. GOMP has a policy of reviewing and revising the water charge every two to three years. The rates have been reviewed recently, and a significant increase has been recommended to the legislature. However, it would be politically difficult to make farmers pay the higher charges before irrigation benefits increase considerably and their distribution becomes more reliable and equitable. 62. It is anticipated that, at full development, the average net income per irrigated ha of cultivable command area will increase from the present level of Rs 1,050 to Rs 4,770 and the average rent per ha of cultivable command area will increase from Rs 120 to Rs 2,540. In addition, the improved design standards under the project will result in a more reliable and equitable water supply and therefore reduce the differences in net returns between fields at the head and tail reaches of the distribution systems. Consequently, there will be a considerable potential for increasing irrigation charges in the project areas and other areas providing similar standards of irrigation service. However, the current principle of uniformity of water rates throughout the State as well as timing  -20- considerations (risk to farmers' cooperation in case of untimely large rate increases during project implementation and the risk that premature increases would burden disadvantaged farmers at tail-end reaches proportionately more severely than better-off head-reach farmers) make it unlikely that GOMP would be able to increase the water rates in real terms considerably before reliability and equity of water supply are substantially improved. As the method of water allocation and charges would have a considerable effect on the economic efficiency of water use at the farm level, the implication of alternative methods needs to be assessed before rate changes can be recommended. A set of studies and investigations covering these as well as legal aspects of factors affecting recovery of irrigation charges and estimates of the incremental net income and rent accruing to farmers in modern irrigation projects would be required to provide a reliable data base for a comprehensive modernization of the water charge system. GOMP would include these considerations in a review of water and water related charges in the State that it would carry out by December 31, 1983. As soon thereafter as possible, and after paying due regard to IDA's comments, GOMP would implement a system of charges that would ensure recovery of annual 0 & M costs and, to the extent possible, cost of infrastructure investments (Section 3.04 of the Project Agreement). In establishing the level of charges, due consideration would be given to the incentives to, and payment capacity of, the farmers. Project Risks 63. The results of the sensitivity analysis indicate that only large (and quite unlikely) adverse deviations from cost estimates and implementation schedules of the basic project components would make the project economically unviable. There is a risk that GOMP could have difficulties in recruiting the staff required for implementing the project; however, this risk is considerably reduced as a result of GOMP's decision to involve the private sector in design work and to use the assistance of consultants. The risk that GOMP will discontinue the development of the HB and MRP Schemes after the end of the five-year project time-slice has also been assessed but is considered minimal because of GOMP's internal political commitment to develop the project area and because of the increasing economic viability of remaining works as the project progresses and becomes "sunk cost". Overall risks associated with the project are small and acceptable. PART V - LEGAL INSTRUMENTS AND AUTHORITY 64. The draft Development Credit Agreement between India and the Association, the draft Project Agreement between the Association and the State of Madhya Pradesh and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement are being distributed to the Executive Directors separately. 65. Special conditions of the project are listed in Section III of Annex III. 66. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association.  -21- PART VI - RECOMMENDATION 67. I recommend that the Executive Directors approve the proposed credit. A. W. Clausen President August 26, 1981   ANNEX I TABLE 3A Page 1 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVERAGES LAND AREA (THOUSAND SQ. KM.) HOST RECENT ESTIMATE- TOTAL 3287.6 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 1809.5 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC ASIA & PACIFIC GNP PER CAPITA (USS) 60.0 100.0 190.0 232.3 1136.1 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 111.1 152.5 241.8 499.4 1150.6 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUS.) 434850.0 547569.0 659217.0 URBAN POPULATION (PERCENT OF TOTAL) 17.9 19.7 22.0 17.3 40.8 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 974.7 STATIONARY POPULATION (MILLIONS) 1621.0 YEAR STATIONARY POPULATION IS REACHED 2115 POPULATION DENSITY PER SQ. KM. 132.3 166.6 200.5 153.6 373.1 PER SQ. KM. AGRICULTURAL LAND 246.7 308.0 355.8 360.3 2382.8 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 40.1 42.4 41.1 37.4 39.8 15-64 YRS. 56.8 54.7 56.0 59.2 56.7 65 YRS. AND ABOVE 3.1 2.9 2.9 3.5 3.5 POPULATION GROWTH RATE (PERCENT) TOTAL 1.8 2.3 2.1 2.1 2.3 URBAN 2.5 3.3 3.3 3.4 3.8 CRUDE BIRTH RATE (PER THOUSAND) 44.2 40.3 34.0 27.7 29.7 CRUDE DEATH RATE (PER THOUSAND) 22.7 17.4 13.5 10.2 7.5 GROSS R EPRODUCTION RATE 3.1 2.8 2.3 2.5 1.9 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) 64.0 3782.0 5619.0 USERS (PERCENT OF MARRIED WOMEN) .. 12.0 22.6 20.4 44.1 FOOP AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 98.0 102.0 93.0 107.1 123.7 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 93.0 92.0 91.0 98.6 112.6 PROTEINS (GRAMS PER DAY) 52.0 51.0 50.0 56.9 62.5 OF WHICH ANIMAL AND PULSE 17.0 15.0 13.0 14.2 19.7 CHILD (AGES 1-4) MORTALITY RATE 27.1 20.4 14.8 14.6 4.8 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 42.2 47.5 51.9 57.7 64.0 INFANT MORTALITY RATE (PER THOUSAND) .. 134.0 125.0 89.1 50.2 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 17.0 33.0 30.1 45.9 URBAN .. 60.0 83.0 65.8 68.0 RURAI *- 6.0 20.0 20.1 34.4 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 18.0 20.0 17.6 53.4 URBAN .. 85.0 87.0 71.0 71.0 RURAL .. 1.0 2.0 4.8 42.4 POPULATION PER PHYSICIAN 4850.41c 4889.0 3617.4 3857.7 4428.7 POPULATION PER NURSING PERSON 9630.07 8296.5 6429.4 6411.8 2229.7 POPULATION PER HOSPITAL BED TOTAL 2149.0/d 1612.9 1311.1 1132.8 $88.5 URBAN .. .. 363.5 322.3 579.6 RURAL .. .. 10429.1 5600.5 1138.5 ADMISSIONS PER HOSPITAL BED .. .. HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 5.6 5.2 URBAN 5.2 5.6 4.8 RURAL 5.2 5.6 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 2.6 2.8 URBAN 2.6 2.8 RURAL 2.6 2.8 ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAN .. .. RURAL .. ..  ANNEX I Page 2 of 5 TABLE 3A INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVE flES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE lb ASIA 4 PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 73.0 79.0 85.9 99.8 MALE 80.0 90.0 94.0 94.4 100.6 FEMALE 40.0 56.0 63.0 64.5 98.8 SECONDARY: TOTAL 20.0 26.0 28.0 38.0/as 53.5 MALE 30.0 36.0 37.0 34.6f/as 58.4 FEMALE 10.0 15.0 18.0 18.0/aa 48.6 VOCATIONAL ENROL. (X OF SECONDARY) 8.0 1.0 1.0 3.8 21.1 PUPIL-TEACHER RATIO PRIMARY 29.0 41.0 41.0 32.8 34.2 SECONDARY 16.0 21.0 .. 19.9 31.7 ADULT LITERACY RATE (PERCENT) 28.0 33.4 36.0 52.8 86.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.7 1.1 1.3 1.7 12.7 RADIO RECEIVERS PER THOUSAND POPULATION 4.9 21.5 32.5 35.3 174.1 TV RECEIVERS PER THOUSAND POPULATION 0.0- 0.0 1.0 3.7 50.6 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 16.0 16.9 14.6 106.8 CINEMA ANNUAL ATTENDANCE PER CAPITA 4.0 6.3 3.8 3.4 4.3 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 189761.4 220670.5 256699.4 FEMALE (PERCENT) 31.2 32.4 31.9 29.3 37.4 AGRICULTURE (PERCENT) 74.0 74.0 71.0 69.8 50.2 INDUSTRY (PERCENT) 11.0 11.0 11.0 14.1 21.9 PARTICIPATION RATE (PERCENT) TOTAL 43.6 40.3 38.9 39.7 40.2 MALE 58.0 52.6 51.3 51.5 49.8 FEMALE 28.2 27.1 25.7 23.3 31.1 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.1 1.1 1.1 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY hIGhEST 5 PERCENT OF HOUSEHOLDS 26.7 26.3/e 22.2 hIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 48.97e 49.4 LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 6.77e 7.0 LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 17.27T 16.2 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LRVEL (US$ PER CAPITA) URBAN .. .. 132.0 134.1 248.6 RURAL .. .. 114.0 111.6 193.7 ESTIMATED RELATIVE POVERTY INCOME LEVEL (USD PER CAPITA) URbAN .. .. .. .. 249.8 RURAL .. .. .. .. 234.3 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 40.3 41.7 21.2 RURAL .. .. 50.7 51.7 32.2 Not available Not applicable. NOTES la The group averages for each indicator are population-weighted arithmetic mans. Coverage of countries among the indicators depends on availability of data and ia not uniform. /aa China included in total only. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1976 and 1979. /c 1962; /d 1958; /e 1964-65. May, 1981  ANNE" I Page 3 of 5 DEFINITIONS OT SOCIAL INDICATIOR Noons; Althuagh the data err dren fr sou.ce generall1y ludged ohe mast authoriati-e sod relibi, it should also be cooed that they nap Not betoer nationally comparobIe because of the lack of sterdardised definitioes aod --toPte used by diff-eet cuntries in colIlecting the deta. The fats are, none- theless uset..f to des..olba ardere of agnitude, iditoate neetdo, aed charecteeee -ertato sujon differences bet..n. utres The' "" eeetcc tapsa (1) the sm ocoor gas of tha tuhi. non ..ousnyaed (2)1 socutey group with sosrehet higher -orrege loo rhso the coectry grouP of the tab- ..... oetoy lneryn. tfor Caitol Sorples Oil Eapartene" 9ru-p rheo 'Middle I e..ee North Afnlou. sod M11ddle, teso" I5 o because oftorngow 1ogocururs effinitiee). Do ohs .efreoe. gou de.-% ta.Ih the .. anognear pau oelghted arlo atlol feso toosh' udicator sd sho onohy obe maoity of .th o tuoeos ecu goc..p has actsfo cs urieo. otc he.ocraso ocutr.. ...cg the endOneNoe depends cc ohs soeilebility of data ned isct elfr ..cno mas h,e e.ercised in rela~tIng onge of cne ditnd t-sec -oooher. Thr.e average ar only -euttl icon -peelgnteoa-u- of LI,AN AmA fobas..s.d sa.)PMyp_itouo per Pospivol ho-toal Ars,ned ruer -yal anon'OtaI, Total - Toct.ersnaen yiiogland srea nd inland oste.t. urbt, end nura) dividef hy thlen resp..t ice nashen of hosplie~l leOnt Aelonl-isrmneo aecutna rs sd ntsp--aily on peroarently avilable in publin and private garra and ssiled hospio1eden for crcps, Pasturen, narit and kioohen gardens on to lie tslln; 1Dm8 dace. b ilo ic eset-. Ifespital ar Issbhein.t per-acntly moffed by Iapns n htonn othihen r-ihding reirviralyo -ut- GNP POER CAFITA E - GNP pee onpica estlen- at.....etonariet prIes el dial ..... orraniroladn. turo bospifls,i%nhecee, ecdehealth oaleted bytas ieenic nethod at hWnild Bach Atlas f19fdy-79 Issu); 9601 sd medical -,o,ers not Pe etytefd .b phyIcis (hut bya 197D, end 1979 dsca. medoel s.ssn. o nurse midaife, et.-) which offer ic-pet iect soc-- detian end prnn:de lislted renge of erdina1 ftailitits. Par tatie- ENERGY CONSUMfPTION PER CIPlTA- cata --ptnyine of cosrce esgyfca Ion parp en. ea opnl nld epieplgnrlhsias and lignite perla,atelgseoyd-,uoeradgehraes- and rursi hotyPita1i bad. or rura hospital nd ndol end ateeiy trio ity) in kilngnsns of -ns eqeinaleot pee Ospita; 1960, 1970, and 1979 ceterst .NSPeiel ieed hospiattlaee Icoluded only undar etatl. dete. Admi-tinn pee lOepit_1 Esi - T.te oushber of adeinsia.t to or discharges manhospialtl divided by nhe ..urhen of bedn. POPULATION ANl VITAL STATlDTICS Total Papulanico, Mid-Star oassd)-As of Jaly 1; 1960, 1970, end 1979 HOUSING dacs. acreag liar of HE.usehold fpeesoe per houehld -' oc,ura,ad ua rbanPplto pren ofttl)-ctia of sobseC to toca populatioc; A hnahidhnistn ntccrifioul nosir iIning ..uac..s diffeent efintico ci uhar reasmey ffect -ops..ahility of deta n their main ra. 0 hore org ndnomapa ma otbeildad it tnnngoouonies; 196. 197i, ad 1909 data ohs bosnehd fon tenuinoinai purposes.~ Popaleton Pradetlare ce9satonbr of persnerro-i alabs,ndual-crgeam Pepaintion orse 11- Cucen PopuLaion projections are hasl -n 9Dt be of persons per roan in stl noban, nod nun-I -nopte cner m toa auointi h gead e adthi soslyed fril ity retes. dslg,respe-ticely. Derlliogfsssilodeenc.-peessnentsrueeod PnIstc auntr o atllty r-tI onspris- of three .en. aeas-uaouis oes lee ,ad Orn-nliO If. ytnso-y atabiliefat n 77.5 Tests. The Para- Inn-et ina" d-ellitt neith elootrloity in linin qurtere atP. -' _etrs- for fertillty rate elso bans three Ieenis asauing daInein at t.t, ur-ban, end rural dwellings enny-tloely. fertiit iy s--cding tc i- I.-e le elnd pest fsmilyplanigprotne Ouch. coutry Is then essig-d one of these nine oominatinns of enntolity EDUCATDIO sod froth hey creeds don ycjs-i-c puepses. Adiusted Enrollnst Rtoics st.iteensyy ecynlnclcr-Inae tatinnaey pupolation ther Is nor genobsnc Prim-ro sh-l - total, sae _ and t_nale-ira tontale. sal atd f l thn birth race is equal ton the deeth rate, and also the. ag st_ronre on- erinen cfal gesat the priary eI aspretges of resprte muino constant hi is ac.hieve.d only after fertility raten deolten no peinary echIu_-ge popsiutni.ns; noeseglly Icue chiltdrn aged h-il the replceetI an1ata it net rprpedaentin rste, whin -ho esnrrion y..e utadoe: foe differeon lenghsfprimary rdacatie; foe of ons.. neplsce iteelt eactlp. The statione.ry PoPuleino niencatriesnith unIversa adoc.t.. ena .sn ray eneefeo .100 psenert estimated an the honis of the peojentednhroeetief the yn.Pueticn mino tom pup..ils see heln or anothe offoisI sno ag.. in the ysae 1011, and the race af d-liins of fertilunyon.te to r-plsc- Sec-ndary .ohen! - otl aeadfele ,- Coepoted en abac; ne-odery sent I eeI' nds...nian rnqirerset ..an tor. ers f eroedprimary instooccice; Tes neene-ar pnpulatiar Isreacbed - Th. yesr shat etattocaty popuistice pre-ides general, nnran or tsanher tcsioing nt ..n.n f or pupib. siee has been macbed. os..elly of 12 to 17 yeses ofage; -oreepondenienue art g-e-saly Per an. ka.- Mid-yea population pee sqa k ilometnr flI hctre) f tic-tinaI enrollen nerneo of s-ccrdary) 1- Ooaions instintient1 ttlae;161,1190117 and 1979 dat.. include techaica1. iedatoi_, orotyher prcet shioh oporate Indeed Pes.h. aneoal-ra leod -C.eputsd en alon foe tgi-u1nur1 land netp o a departmetsosenayintitunct. only; eMil, 1970 ned 197f data. Punil-tearher -atis - psisury. and ....ondary - Total studeni -1naild in Poeul.ttlne Ass Stranture fpsrnrnt - Children (0-14 yeses), terhing-afe f 11- primaY and s..c.ndery lene1t diolded by -esb.er of teacheem in che 64 yesem), and entered f 61 years end noner) as Perue..tages of sid-ysar pops- cerrapending I.ne.. istin 19019, end 1979 dat, Adult liter-cy ste. fecn - Literate edolts (able to rend and nine) .Ponelation le-noh te _fRernn- - natl - annua 9rcech retes of total mid- napeenentege of teta1 eduli pnpulatinn aged 15 ersadoe. Year pnpaIlsi..s fan 1950-if,,1960-70, sod197 0-79. FPoysleian ..rowiBemte (Per.ontn - urhe -a-'..I gr..nh rtent of urbnt papo- CfNUTDTItOND lati.n. foe 1950-60, 1960-70,. ad 1970-79. DPs.engeR. Cans fper the..send population) - P...sseger -aon -ayise satar Crude Birtb late fpeeth .h...and) - une-1 ItIe hirths per tho....ed of nid-yser car.s. tteg les he eihtpe .s enlodes bma nt earsesnd Popultion; 1960, 1170,.1ad 979 deta. mil nary _ehiles.t-egtpr roude Desth la- fPeet h..sandi - Oaaual ds-hs pen chou....ds of RO-ee adio Remceinen fpr eeheu-nd rrlno)-All cypes of renni-ers fan radio Opopulating;,1961.,197, snf.. 1979 dane. broedoesan gser pob1ia e oos od.fofppatc eadean bes eroductiat lene-Averege number of da-ght.remscm ill bear Co lesd_rcivr tn anriead inyears he'e regitstrin of oadia hernomlepdnsr period if she seperienca. present ge-sp-if to frr- sets -a in effeot; data foe .....n years nay nonb heneparable tine niliny rase uual fisyar -mSse andsnn in 1960, 197i, sod 1979. mostbnao 1iesahlihef linsts.tnt. PemlI'll P lagin-hone..tars. A.nea fotousends) - Ase.a. number of a...pI reTV Deneiners (Per thane-n pocalatie)- -- rninee for heoudoset no ofhtnhantro1 dscoe une apine cf national femily planning progen. g.n.e-1 pabil yr thousand pepua.tin enoiden unliasnoed 7e recIvers PFmily PIla..ine -gee ynor f m--rud n-en - Ps-tcsngs at artied i......teieae.d in pears .henrgseteeo st ass in MfeT. asesatoil-feithi a- . n ,ege f5-Aa psare ahe us bieth-noanrul dectoes tteestCrnlnn feper thousn na1'.palseinni - iee es veag`nt all mrried _wim n itsstegou.cltniaof"daily geelinrs eeepr,dfedaseidica puhlinstinn deented priesrily to reanrdingtgeonrl nw.It Is nonsiderad POOl ANDf NUiTRITION no he "daily" if it appsarm en less fou tIme wah loden of Pond Penduoo Do Ceitne fl969-71-100) - ides of pen napit. atonl Cinem annual hntsndaecs nr CepitE : esyea-tamedon he sanbet at prndutiae of all fand -osmditie. Pnat..ne e ...ud . m,esA nd fsm ed ticiet sald daeing the yee..r naie disin to dyiv--ie ci_e in e oslandar pear besis. Cnsnnitrae peimary god eg. agcsne and mobile units. inetna.d of .safri whichere ndible and coenain .steetsf.g.8 ..ffe aend tee are nolae,d).1 lagtegne p-adu-ci.of.at inh...ntsnryis bes,d en LABlE FORDCE _tninma areis prd..e. Drice weights; INtl-h6, 1971, andi79 dets .. Voe Lbalr Parce ftnh.s.ads) - Ea....cally eniepersens, i-clodi.g Per capita tu,pelyo osoie perenr sofrnaeaee - Computd ter aemdi f.e....efI...mpleyedhat e-clnding h-ueine,stdnt,et. _enrgy eqin_let of na fend supplies uneileb1e is an-nry Per cPita _ ocnig P-plain f el ege. Definiti... i.vriso.ntis.r Dee day. o-ilahle suppliesnops damestin prdodution, lmDnrts lees not -eep-rabI 19601, 1970 aed 1979 data. _ny_rI, ad cheag- Io seo_ni. tNt snyplies emldeaimal fend, seeds, Pem_le rrce _i- l laher f-no em penenenge of total le.b;r fore.o quan tities used In fond pnneiag, end lossin distrihatino. tRquire- Aeri-ltare fesroennt - Labor fae. In farmieg, 9fn-try, hoein. nd _nti nret estimated by DuO bh..nd on physlalginsi eneeds for normal anti- fishing em percentsge of tonal1 Lahon forne; 1901, 1970 ned 1979 dnta. ity and helh ....sideriegeviemna nepntre, body weights, ege Indanrys fper-nrt - Lebno forte inminng o stru..tin, manfa-t-rig,. as esdisteibutian of pplta,sd nlest 10 per-ore fores.est ad elseteinity, water edgaasPernentge of ntal. labor forc; 191 hanehld lenel; 1961-65, 1970, an 97dn,1970 ted 1979 dens. Pe opnasppl i pfrattl (erase 9eedad -t Peetnin nonte-n at pen .apita Dar~ticiatne late f-roent - tons, ml,adfme Partoiptin or ta sapply of fond Per day. Net supply of fend is defined bshon. Res- actiyrtsteanpeda ea,mle,tad feaelboir frte quireme.r_ for all -outrtee eseshithed by tSDA -moido fo nimus pe'renrages of itel,. . maennd femal pspuletSet of sIl a ge reepotiotly; Illsanc If 60 goneo totm poirPer day and 20 grasfanimal and 1960, 1970, end 1979 fags. These are bh...d an ILOgm pnrtinipstien rates pleprotein,oef whiob 10 grm shoud be animal prti.Tb .. .ad- refla-tilgae-e srnusof the pepsistiun, and long time tmend, A ardsI an laser thanthObos of 71 genm of tets1 protein tad 23 gran:tof tfen eetiman a.re ro etinn..l --se.. sni"es prncinaaenn-sge e he-wrld Propose.d by PAO it the Third fEtamhc. _teendeny. Retiu - latin of ppuenennder 11 and 65 and ever W.end Psad Survey; 1961'-67, 1970 an'd 1977 deta. tn the tonal lahot for-n Per ,epit. pratein spply feon enma _edpuet-Pesei supply of f nod d- rice free animals ned paises in Sta pr doy; 196i-65, 1970 and 1977 date. INCIOM DISTRIBTCION Child insee 1-47 Mnrtsl1 taRe, fpee =bausnd -An .n..uI deashe per thea-sd in Per-ot..asf Printeo boon fboth in nash nod bindy - le-ei-d hy riches age gop 1-4 p-rr, no childras in shim age group; foe ostadeveloping noun- ecen tichest 2f percent. t,porest 20 pere...t, and poorest ID pero..er tries dne.t derived team life nablme; 1960, 1970 end 1979 data. of hopeer ds. HEILTH POVERTY TAOOT GROgUPS Lets Itysotency an airll bans). '- Acerage namer of pears of life ren-lalg The fa11inig estimate ar .. ee.y apponieste maanres of penerty lenet, atbirth; 1961, 1'D970ed197 ae e adb intepee st ssdnsl otae Infant Mrtarlity Rane (pe tiecassod) - Annosil deuths of infseteun.deo ate yea teiand Aheoldb e rPovrtyd incom levee id1gbl ne osits ors nrra ofaeprfesedln.ine Abenlnte p-qrf itnma level is then. ne level balee huh minimal Anosnolteios receto anltin ttl,abI .ad ure - Cm-ntrit in...llyadsqnate diet pIn. e.seatis toe-feed reqairemees Is net Inn of peaplo (tmist, arben, and orsl.) with reasnoable saness t5 ante sfordable, waerspply fInaludes trea..tedsrc esters r ....satedbut ... unoeametod Eteinned Ralati-e Peneron Ion- L-1e fUSl pra cmeit.) - urban ned -el1 petermnragns oftheir "r...potheepaclrtnt learerhat arena rt1 h. fi-rg lionit f ..t...o. tedat oae noth'mare lthen. T 101 bten frame housemaih pereeml in- sof tIn natey. Vbe level is drived free the -ate ..e.t.. or .ndp.t I .. td t -r.the. 00 ...,:,fo- h... -ybleval cith adjienmet for higher onest of living ha nohsae ronsiereda beig ninie resnoein sonet f tha leas. Inratelnees Ostiered oenlnien eIn Aealnr Povrtotnran eve_ eeo... y -Irla reanoonleancssaould iply cht te assif. or noslare of t-he boeseid as d esral - DWeten ef ppaltrion fnrbsr and mes she.r "ahenlote do u. aen s.po.d.a diny-r-yetioote Purr of tha day It fetchieg ohs fonily'aeaened.on A-encntea-tfyrirneon Os yclticc-cotsal .urbs, and rurl itubehe of penpifocl. ott n, but, ar ora) .1served bysN-rets dispsl.. me pcetseof their s-pe-ti-e popolatians. la-en dimpoes1 maY leiads the culleonia and diepa...l, with on nith-atnoesnast, frbent nnretst 0 .onain and Snnia1 Deta Dinisfan end wan-et-r by ester-boone systems or the use atfPit pivies and imi- E-eosic Aoalysis nO P-cj-cion. Irpr t arI.s, llttens. Mtay 1981 Populsene re Phypieian - Poyslatine dividnd by ..mbee at prs-tining physi- nests qualified from a endloa1 sotn1 at un-rsity lenel. Paeulatinn per NursiRs Person - Pepalatia dinided by t-ber of pronnicing mal eand fem1l tredeat.a..rs... pre-tio1...... nures,an amistanonrsn  Annax I Pans 4 of 5 CUON0IC DKVZWPHZT DATA GNP POR CAPITA TM 1979 U5S190 GROSS MATIOPAL PIOWJCT IN 1979/80 LIAEAL RAT& OF GICROWSN . constnt pricesl) Us$ Sn % 195/56136 1960/61-1964165 196S/66-1969170 1970171-1974/75 1975176i-1978179 CNP at Market Prices 134.16 100.0 3.7 3.6 3.6 2.8 4.5 Groa Domestic Investment 29.24 21.6 Gross National Saving 28.55 21.3 Curr.nt Account BSl.nce d/ .0.65 - 0.6 OUTPUT. LAbOR FORCE AND PODUCTIVITY IN 1978 Vito. Added (at factor cost) Labor Force VA er Worker U5S 61n MJ.L 7 U. I of National Averag* Agricult.r. 39.8 39,6 181.3 71 220 56 Industry 25.5 25,3 28.1 11 906 230 Services 35.3 35.1 46.0 18 767 195 Total/aver g 100.6 100.0 255.4 100 394 100 GOVERNMENT FINA4CE General Govero.ent COntcrl Coverrment Rc. Al_ 7 otCDP Ito. Uln. % of GDP =998 ifu 17/0 1975/7v-1979/50