Document of The World Bank FOR OFFICIAL USE ONLY FILE COP Report No. P-3735-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$151.0 MILLION TO INDIA FOR THE DUDHICHUA COAL PROJECT February 27, 1984 This document has a restricted distribution and may be used by recipients only their official duties. Its contents may not otherwise be disclosed without Woi CURRENCY EQUIVALENTS (As of February 23, 1984) US$1.00 = RslO.694274 Rs 1.00 = US$0.093507 Rs 1 million = US$93,507 The US Dollar/Rupee exchange rate is subject to change. Conversions in the Staff Appraisal Report were, except as otherwise noted, made at the rate of US$1 to Rs9.75, which represents the projected exchange rate over the disbursement period. FISCAL YEAR April 1 - March 31 ABBREVIATIONS CCL - Central Coalfields Limited CIL - Coal India Limited CMPDI - Central Mine Planning and Design Institute FRR - financial rate of return GOI - Government of India IR - Indian Railways tpy - tons per year FOR OFFICIAL USE ONLY INDIA DUDHICHUA COAL PROJECT LOAN AND PROJECT SUMMARY Borrower: India, acting by its President. Beneficiary: Coal India, Limited (CIL) Amount: US$151.0 million, including the capitalized front-end fee. Terms: Repayment over 20 years, inckuding five years' grace at the standard variable interest rate. Re-lending Terms: GOI to CIL for a period of 15 years, including five years grace, at an effective interest rate of not less than 12.75% per annum. CIL to Central Coalfields Limited (CCL) for a period of 15 years, including five years of grace, at an effective interest rate of not less than 12.75% per annum. Project Description: The objective of the project is to meet the increasing demand for coal in the power sector through the planned development of the Dudhichua mine, thus contributing to an expansion of power generation, on which India's continued economic growth depends. It consists of construction and start-up of facilities for an open-pit mine in the Singrauli colfield in the States of Uttar Pradesh and Madhya Pradesh, and would provide equipment and necessary infrastructural facilities to estab- lish a production level of 5 million tons per annum. The project will also support institu- tional development of CIL in open-pit mining procedures, project management, budgeting and cost control. It will address important sectoral issues related producer-consumer linkages, and coal transportation and distribution. The project faces minimal technical and marketing risks. Any possible financial risk is mitigated by GOI's commitment to a pricing policy which ensures the continued financial viability of CIL. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -ii- Estimated Cost: (US$ millions) Item Local Foreign Total Equipment and Spares 34.7 80.3 115.0 Coal Handling Plant 23.9 7.3 31.2 Land and Civil Works 31.1 1.6 32.7 Engineering and Training 2.4 - 2.4 Preoperating Expenses 27.3 3.0 30.3 Technical Assistance 0.3 0.7 1.0 Sub-total 119.7 92.9 212.6 Taxes and Duties 46.1 - 46.1 Base Cost Estimate 165.8 92.9 258.7 Physical Contingencies 12.7 5.2 17.9 Price Contingencies 47.5 28.2 75.7 Installed Cost 226.0 126.3 352.3 Working Capital 9.3 1.0 10.3 TOTAL PROJECT COST 235.3 127.3 362.6 Interest During Construction 9.6 0.7 10.3 Front-end Fee on IBRD Loan - 0.4 0.4 Total Financing Required 244.9 128.4 373.3 Financing Plan: Equity: Government of India 141.9 - 141.9 CIL Cash Generation 44.8 - 44.8 186.7 - 186.7 Long-Term Debt: Government of India 35.6 - 35.6 IBRD 22.6 128.4 151.0 Total Financing 244.9 128.4 373.3 -iii- Estimated Disbursements: (US$ millions) FY85 FY86 FY87 FY88 FY89 FY90 FY91 Annual 18.2 34.0 17.5 39.0 10.3 16.0 16.0 Cumulative 18.2 52.2 80.7 108.7 119.0 135.0 151.0 Rate of Return: About 13%-14%. Appraisal Report: No. 4714-IN, dated February 28, 1983. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR THE DUDHICHUA COAL PROJECT 1. I submit the following report and recommendation for a proposed loan to India in an amount equivalent to US$151.0 million, including US$0.4 million as capitalized front-end fee, to accelerate the expansion of thermal coal production by developing a large scale open-pit mine to feed thermal power plants. Amortization would be over 20 years, including five years of grace at the standard variable interest rate. The Government of India (GOI) would onlend the proceeds of the proposed loan to Coal India Limited (CIL) for 15 years, including five years of grace at an effective interest rate of not less than 12.75% per annum. CIL would make available the proceeds of the proposed loan for Central Coalfields Ltd. (CCL) for 15 years, including five years of grace, at an effective interest rate of not less than 12.75% per annum. GOI would bear the foreign exchange and interest rate risks. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation of India and Resource Mobilization Issues" (4395-IN, dated April 11, 1983), was distributed to the Executive Directors on April 19, 1983. Country data sheets are attached as Annex I. Background 3. India is a large and diverse country with a population of about 700 mil- lion (in mid-1982) and an annual per capita income of US$250. The economy is dominated by agriculture which employs more than two-thirds of the labor force. However, the land base is not sufficient to provide an adequate livelihood to everyone engaged in agricultural activities, especially those with little or no land. Growth of value-added in agriculture -- 2.2% since 1950/51 -- has been slower than growth of industrial value-added (5.0% per annum). As a result, there has been a gradual decline in the share of agriculture in GDP (at factor cost) from 60% to just under 40%, while the share of industry rose from 15% to around 25%. But industrialization has not been rapid enough to absorb the growing labor force, or to bring about a rapid economic transformation, with significantly higher productivity and income levels. As a result economic growth has been slow over the past three decades, averaging about 3.6% per annum since 1950/51. 4. Nevertheless, there has been steady progress with per capita income rising by about 1.4% per year in the period 1950 to 1980. Despite the large population base and its relatively rapid growth, India has been able to eliminate persistent dependence on foodgrain imports through significant improvements in agricultural production. Savings and investment have increased 1/ Parts I and II of the report are substantially the same as Parts I and II of the President's Report for the Nhava Sheva Port Project (No. P-3724-IN), dated February 17, 1984. -2- markedly since 1950/51: gross national savings more than doubled from 10.8% of GDP (at factor cost) to 22.8% in 1982/83, while gross domestic investment rose from 12.5% of GDP to 24.9% in 1982/83. Foreign savings (balance of payments deficit on current account) have never financed a major portion oc3 domestic investment: a peak of about 20% was reached during the early 1960s. Surpluses arose for a few years in the late 1970s, and at the present time, foreign savings are about 8% of investment. External assistance has been low both as a percenta-e of GDP and in per capita terms, never rising above 3% of GDP and averaging below 1% for the past five years. Net foreign savings have never risen above 3% of GDP, and presently stands at 2.1%. 5. Before the 1970s, India placed relatively less emphasis on export promotion and more on import substitution. The volume growth of exports between 1950/51 and 1969/70 averaged only 2.2% per annum, while the volume growth of imports over the same period was 4.3%. In the early to mid-1970s, 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. As a result, the volume of India's exports grew on average about 7.3% per annum for the 1970s as a whole, a performance which demonstrates that sustained rapid growth is possible. While expanding world markets, particularly in the nearby Middle East, con- tributed to this growth, liberalized access to imported inputs and more effec- tive export incentives played a major role. 6. Moving into the second half of the 1970s, the Indian economy was buoyed by higher levels of investment and an expanding level of foodgrain output. As a result, growth in real GDP and in agricultural and industrial value-added, substantially exceeded the historical 30-year trends (paragraph 3) averaging 4.9%, 3.9% and 5.6%, respectively. In 1979/80, however, this momentum was broken when the worst drought in recent years, combined with a doubling of international oil prices and domestic supply shortages, led to a sharp fall in foodgrain production, a decline in GDP, and the opening up of a large trade deficit. Severe inflationary pressures also emerged after several years of virtual price stability. These setbacks in 1979/80 coincided with the prepara- tiori of the Sixth Five-Year Plan which laid down a program of adjustment that aimed at improving the trade deficit, removing infrastructural bottlenecks and ensuring price stability with an overall growth of the economy of 5.2%, 1.6 per- centage points above the trend growth of 3.6%. Recent Trends 7. In 1980/81 and 1981/82, the economy substantially recovered with real GDP growing by 7.9% and 5.2%, respectively. While industrial output expanded by 4% in 1980/81 and 8.6% in 1981/82, recovery was particularly robust in agriculture where normnal weather helped output to rise by more than 15% and 5.5%, respectively. The availability of power, coal, and rail transport, already improved in 1980/81, was even better in 1981/82, recording growth rates of about 10%, 9.6% and 12.9%, respectively. The easing of constraints on the supply of infrastructure and basic commodities was a determining factor in the improved performance of the industrial sector. This overall improvement in the Indian economy, combined with a more restrictive monetary policy contributed to a sharp decline in the rate of inflation. Wholesale prices rose by about 9% on an average annual basis in 1981/82 and by only 2.5% in 1982/83, reflecting a strong deceleration from a peak increase of 18% in 1980/81. -3- 8. After two years of fairly solid performance, the Indian economy faced a difficult year in 1982/83 due to the drought in mid-1982 which brought down the GDP growth rate to around 2% and put further strains on the already dif- ficult balance of payments and domestic resource situation. Besides a sig- nificant decline in the range of 4.5%-6.5% in agricultural production, GDP growth was also constrained by a slowdown in industrial growth from 8.6% in 1981/82 to about 4% in 1982/83. This resulted from a combination of several factors, notably the decline in agriculture income, persistent (though lessened) power shortages, a textile strike in Bombay, as well as depressed export markets and increased competition from imports. The Government was able, however, to protect the level of savings to a large extent and keep the momentum of the investment program through largely successful public sector resource mobilization efforts. Foreign savings played a crucial role in sup- port of this effort. Similarly, the timely implementation of various economic policies mitigated the otherwise very distressing effects of a poor monsoon. Continued improvements of the infrastructure sectors, although at a slower pace than in the previous two years, also reduced the negative effects of the drought. 9. Agricultural production in 1982/83 received a serious setback from the drought. Foodgrain production, which had reached a record 133 million tons in 1981/82, declined to 124-127 million tons. Production of most other major crops also declined in 1982/83. Corrected for weather variations, this st:ill represents a creditable performance. In 1979/80, with a broadly comparable monsoon, foodgrain production reached only 109 million tons. The Government was able to mitigate the effects of the 1982 drought through efficient manage- ment of foodgrain procurement and distribution, careful timing of foodgrain imports, and appropriate allocation of power to irrigation pumps. These policies helped to avoid disruptions in basic food supplies and contributed to price stability during the year. 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 performance of the recent past and probable future trends suggest that on average foodgrain supplies will meet demand. The balance remains delicate, and the need for foodgrain imports to maintain con- sumer supplies or adequate buffer stocks could arise from time to time. Thus, programs to expand irrigation, strengtlhen extension and encourage the efficient use of other agricultural inputs continue to receive high priority. 10. Basic infrastructure services performed generally well in 1982/83, although growth of coal, power and rail transport failed to maintain the momen- tum of the marked recovery of 1981/82. Despite lower hydro generation due to the failure of the monsoon, overall power generation recorded an increase of about 7%. This was due largely to an increase in capacity utilization in thermal plants resulting from improved overall management, stabilization of most of the new large units and better availability of coal due to the combina- tion of increased coal production and improved railway performance. Nevertheless, power shortages remain the major bottleneck in the economy. Railway traffic grew by only 3.7% in 1982/83 reflecting a slowdown from 1981/82. The lower growth was due not to a decline in the operational efficiency of the railways but rather to slack demand from core sectors like steel, iron ore, coal washeries and fertilizers. Coal production growth (4% in 1982/83), after 10% growth in the two preceding years was creditable. There were no major shortages and there were improvements in the quality of coal. Recent easing of shortages and bottlenecks in infrastructure has come primarily from better utilization of existing capacity, but in the future most improve- ment must result from added capacity. It is therefore critically important -4- that India maintain the pace of investment in these key sectors and mobilize sufficient resources to do so. 11. The Indian economy has reverted from a situation of resource surplus, which had been a temporary phenomenon of the late 1970s, to one of resource scarcity. Investment has again grown quicker than national savings, and the scope for further increases in the latter appears limited. India's gross national savings rate, which averaged 22.4% of GDP in the last three years, is high by any standard, particularly considering India's low income and the large proportion of its population living below the poverty line. Future increases in savings will depend heavily upon the enhanced profitability of public sector enterprises which would require better utilization of capacity, more efficient operations and adequate pricing policies. In 1981/82 there was a significant increase in public savings due to improved profitability of various public sector enterprises. This trend which was maintained in 1982/83 needs to be accelerated. The gap between gross investment and national savings which rose from 0.4% of GDP in 1979/80 to 1.8%, 2.3% and 2.1%, respectively in the first three years of the 1980s, has been financed by foreign savings. 12. India's ability to generate resources to meet its development objec- tives has become increasingly linked to the balance of payments. The current account balance which recorded surpluses between 1976/77 and 1978/79, sharply deteriorated to deficits of nearly US$2.9 billion in 1980/81 and US$3.8 billion in 1981/82 (1.8% and 2.3% of GDP, respectively). This was partly due to a sharp rise in the oil import bill as a result of both the disruption of oil production in northeast India in 1980 and significant oil price increases, and to a more liberal import policy aimed at providing producers with access to inputs for higher capacity utilization, greater efficiency, improved technology and capacity expansion. The current account deficit in 1982/83 declined to US$3.3 billion or 2.1% of GDP. The improvement would have been greater had not the drought resulted in the need to rebuild food stocks through imports and at the same time led to a lower level of GDP growth. This improvement in the balance of payments is to a significant degree the result of India's develop- ment and adjustment efforts over the past three years. It also reflects a reduction in the trade deficit as compared to the levels reached in 1980/81 and 1981/82. The trade deficit declined from US$7.6 billion in 1980/81 to US$6.0 billion in 1982/83 due to continued export volume growth (following the sub- stantial resumption in 1981/82) despite poor world imarket conditions, coupled with the containment in import growth due to import substitution of petroleum products, metals and fertilizers while allowing substantial growth in "other" imports through more liberal import policies. Nevertheless, it is expected that the balance of payments will be under strain for the next several years, for India's adjustment program will continue to require high levels of imports. 13. The high investment rate, about 25% of GDP, envisaged in the Sixth Plan coupled with the limited possibilities of raising domestic savings beyond the present high levels, necessarily implies a need for external resources. Faced with a reduction in the availability of bilateral and multilateral concessional assistance, India has begun to borrow significant amounts on commercial terms from the Euro-dollar market in addition to much greater utilization of suppliers' and export credits. India-s favorable debt service profile has enabled India to tap commercial capital markets at favorable spreads (over relatively high underlying rates). In the period 1980-82 India contracted commercial loans totalling over US$2,000 million and suppliers' credits oE about US$520 million. The bulk of the loans are linked to specific development -5- projects in the public sector while the credits are linked, by and large, to development projects in the private sector. India also reached an agreemernt with the International Monetary Fund for the use of the Extended Fund Facility for SDR 5 billion, of which SDR 2.5 billion have already been drawn. The transfer of funds under the EFF has stemmed the use of foreign exchange reser- ves which had fallen to less than four months of import coverage in 1981/82. In 1982/83, in addition to continued use of the EFF, financing requirements were met by increased non-concessional borrowing (about US$2,000 million in new committments) and a 10% increase in net aid disbursement. Development Prospects 14. The experience of recent years illustrates that India has 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, power, 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 reasonable access to foreign savings, India has the capability for managing these considerable resources to accelerate its long-term growth. 15. The medium-term framework for advancing India's development objectives is the Sixth Five-Year Plan (1980/81-1984/85), which is now in its fourth year. The Plan assigns priority to agriculture, energy development, the growth of exports and domestic import substitutes where appropriate, and the removal of infrastructural bottlenecks. Overall performance has so far been encouraging, although bottlenecks in key sectors such as power and transport are likely to persist. Moreover, fulfillment of the Plan targets will require additional resource mobilization. The efforts of the Central Government to raise resour- ces have so far been impressive and are likely to be broadly sufficient to meet the financing requirements of the Central Government's share in plan investment, even if some increase in inflation is experienced above current low levels. However, a shortfall in public savings is likely to occur in some States unless further measures are introduced. There will be a need also for continuous efforts to maintain the current level of private savings. Recent increases in interest rates and tax concessions on time deposits and the con- tinued dampening of inflationary expectations should stimulate such savings. 16. The higher capital formation rates of the past few years augur well for future income growth. However, returns to investment have so far been relatively low. Much of this phenomenon relates to India's stage of development, in which a large and growing proportion of investment has been needed to build up basic infrastructure. These services, such as power, t:ran- sport and irrigation, have inherently high capital-output ratios. However, there is scope to improve the sectoral capital-output ratios through greater efficiency and better management. Bottlenecks in basic infrastructural sectors clearly can prejudice growth in other sectors where large investments have been made. As demonstrated in the last three years, performance in the basic serv- ice sectors can be improved through better planning and management, thus lead- -6- ing to higher productivity and capacity utilization throughout the economy. At the same time, programs to expand domestic capacity are vital. In the case of tradeable commodities like coal, steel and cement, this is justified on the grounds of comparative advantage. For sectors such as irrigation, power and transportation, expansion of planned capacity in accordance with the require- ments of the rest of the economy will be vital to overall medium- and long-term development prospects. In the short term, however, achieving an adequate balance between supply and demand in these sectors will remain a difficult objective. 17. Under the Sixth Plan, India has an ambitious oil production program backed by substantial financial commitment. While the gap between domestic consumption of petroleum and production remains large, the prospects for progressive substitution of domestic petroleum for imports are quite bright. In 1981, and again in early 1983, resources for exploration and development were raised by successive price increases for domestic crude and products. India's dependence on oil imports dropped from 63% in 1979/80 to about 45% now and a scheduled expansion in production is expected to decrease oil imports (in crude equivalent terms) to about 33% of consumption by 1984/85. The rapidly expanding level of exploration activity, combined with the possibilities for accelerated offtake from known fields, offers much encouragement for India's longer-term energy prospects. IS. Despite an expected continued decline in its current account deficits from the current 2.1% to about 1.7% of GDP by the late 1980s, India will require growing access to world financial markets to complement concessional assistance. These commercial sources of funds will be important in the future since India-s current account deficits, though not large relative to the size of the economy, will nevertheless be large in absolute terms and will neces- sitate external borrowing beyond levels expected to be available from normal concessional sources. Given the favorable structure of India's external debt, which reflects the past reliance on concessional sources, India should remain creditworthy for a substantial growth in external borrowing. 19. India's development prospects over the next few years will hinge on the extent to which the economy can be brought into both internal and external balance, while at the same time achieving more rapid growth than in the past. In the longer term, income growth represents the best strategy for achieving these needed adjustments, both by generating higher savings for url.'Lr investment, and by fostering the development of export: and import-substituting industry to improve the balance of paym.enus. In the short term, a relatively large external borrowing, includinig an increased emphasis on commercial borrowing, will be necessary to cope with the balance of payments consequences of such a growth strategy. However, an important element in providing India with the capacity to adjust flexibly will be adequate flows of concessional assistance. Although India is currently in a position to increase borrowing on commercial terms from the very low levels of the past, there are, of course, limits beyond which India will choose to sacrifice growth objectives rather than accept debt on unfavorable or unmanageable terms. The Government's effort to maintain an adequate rate of growth while adjusting the structure of the Indian economy to a more open and efficient environment requires foreign resources in addition to the level of commercial borrowing available to India. India is still a very poor country with a large rural sector and enormous investment requirements for human development and basic infrastructure. The fact that India has been able over the past seven years to maintain a rate of -.7- growth above the long term trend, despite the poor monsoons of 1979/80 and 1982/83, lends substance to the hope that a more open trade policy and con- certed efforts to remove constraints on the growth of productive capacity, supported by adequate mobilization of savings both foreign and domestic, can sustain a rate of growth closer to 5.0% per annum than the long-run trend of 3.6% per annum. Combined with a reduction in the rate of population increase to below 2.0% per annum, a 5.0% growth rate would mean a doubling of the trend rate of growth of per capita income of less than 1.4% per annum. Success in these efforts would make a significant difference to the prospects of easing poverty in India. 20. A large and growing population and severe poverty underline the need to accelerate India's development efforts. The 1981 Census placed India's popula- tion at 683.8 million, or about 12 million higher than official projections. The fact that there was no decline in inter-census rates of population growth, equivalent to about 2.2% per annum, is a cause for concern. While further analysis of the Census may suggest this rate of growth to be slightly overestimated, the expectation of a imeasurable decline in the population growth rate has not materialized. Until the results of the Census are fully analyzed, firm judgements about the reasons for this outcome are not possible. However, the results re-emphasize the need for continuing efforts to strengthen the health and family planning program in a broad range of activities and services. These efforts are given high priority in the Sixth Plan, which aims at a rise in the proportion of protected couples in the reproductive age group from its estimated 1979/80 level of about 23% to over 35% by 1984/85. 21. Reduction of poverty reinains 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 smnall farmers. About 51% of the rural population and 40% of the urban popula- tion subsist below the poverty line. Improvements in the living standards of the poor will depend to a large extent on the overall growth of the economy, particularly on increases in agricultural production and employment, and in non-farm rural employment. These developments will have to stem in large part from market forces which can 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 1981, resulting from India's sustained effort to raise agricultural production, 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. Operations 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. -8- PART II - BANK GROUP OPERATIONS IN INDIA 22. Since 1949, the Bank Group has made 76 loans and 160 development credits to India totalling US$5,183 million and US$11,851 million (both net of cancellation), respectively. Of these amounts, US$1,387 million has been repaid, and US$6,224 million was still undisbursed as of September 30, 1983. Bank Group disbursements to India in the current fiscal year through September 30, 1983 totalled US$286 million, representing a decrease of about 2 percent over the same period last year. Annex II contains a summary state- ment of disbursements as of September 30, 1983. 23. Since 1959, IFC has made 9 comumitments in India totalling US$224 million, of which US$30 million has been repaid, US$56 tmillion sold and US$18 million cancelled. Of the balance of US$120 million, US$113 million represents loans and US$8 million equity. A summary statement of IFC disbursements as of September 30, 1983, is also included in Annex II (page 5). 24. The thrust of Bank Group assistance to India has been consistent with the country s development objectives in its support of agriculture, energy and infrastructure. Of particular importance have been investments in irrigation, extension and on-farm development designed to increase agricultural productivity, and efforts to improve the availability of basic agricultural inputs to farmers through credit, fertilizer, marketing, storage, and seed projects. Major elements of the lending program have also been directed at helping to meet the energy needs of the economy while curbing the growth of oil imports, and to ease the infrastructure bottlenecks which have hampered economic growth in India, particularly through power generation and distribution, and railways and telecommunications projects. The Bank Group has also provided financiTig for a broad range of medium- and small-scale industrial enterprises, primarily in the private sector, through its support of develop- merLt finance institutions. Recognizing the importance of improving the ability to satisfy the essential needs of urban and rural populations, the Bank Group has supported nutrition and family planning programs, a rural roads project, as well as water supply and sewerage and other urban infrastructure projects. 25. This pattern of assistance remains highly relevant, and consonant with Government priorities, as reflected in the Sixth Plan. The continued active involvement of the Bank Group in agriculture, energy and infrastructure development will appropriately contribute to India's adjustment and growth prospects. Irrigation will need continuing support, with emphasis on improved efficiency in water conveyance systems to ensure reliable delivery to farmers fields. In addition, major investments to develop the large Narmada River basin will be vital to India's efforts to increase agricultural production. Important complements to these efforts, such as fertilizer production and distribution, agricultural credit and extension, will continue to receive support. A continued program of investments aimed at rapidly increasing the domestic supply of energy will clearly be necessary if India is to curb the cost of oil imports and alleviate the critical power shortages which constrain out;ut in both the agricultural and iadustrial sectors. Exploitation of oil and gas resources is a central element of this program, which should be supple- mented by investneuits in hydro and thermal power generation, and in the expan- sion of the transmission and distribution networks. Industrial projects to increase the domestic production of basic commodities, which have been in short supply and which India has a comparative advantage in producing, should also receive high priority. Finally, raising the efficiency and levels of transpor- -9- tation infrastructure would mitigate a key constraint to achieving higher levels of economic growth so that further support of the railways and for ports development will be particularly appropriate. 26. The need for a substantial net transfer of extec!aal resources it:. support of the development of India's economy has been a recurrent theme of Bank economic reports and of the discllssions 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 India, not only to help the economy adjust to the more recent oil price increases and the overall deterioration in the world trade environment but also to maintain the rela- tively higher growth rates achieved during the first two years of the Sixth Plan. 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. 27. 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. This requirement for additional assistance caa be met, in part, through Bank lending. Given its development prospects and policies, India is judged credit-worthy for Bank lending to supplement IDA assistance. A con- tinuation of efforts already underway to achieve growth in productive capacity, trade expansion, higher levels of savings, foodgrains self-sufficiency and a reduction in the rate of population growth should result in continued economic growth and improvement in the balance of payments. Despite recent setbacks, India's external payments position is still manageable. The ratio of India's debt service to the level of exports was about 11% in 1982/83 and is projected to remain below 20% through 1995/96. As of September 30, 1983, outstanding loans to India held by the Bank totalled US$3,932 million, of which US$2,100 million re,aatl to be disbursed, leaving a net amount outstanding of US$1,832 million. 28. 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 50%, 43% and 53%, respectively, in 1981/82. On March 31, 1982, India's outstanding and disbursed external public debt was about US$17.9 billion, of which the Bank Group's share was US$7.1 billion or 38% (IDA's US$5.9 billion and IBRD's US$1.2 billion). In 1981/82, about 16.0% of India's total debt service payments were to the Bank Group. -10- PART III - THE ENERGY SECTOR General 29. Commercial primary energy (coal, oil, gas, hydro and nuclear power) accounts for about 46% of total energy consumption in India, with the balance (53%) being derived from non-commercial sources such as firewood and agricultural and animal wastes. During the past ten years, the growth of energy consumption in India averaged 4% per annum, which was marginally below GDP growth for the period. Over the same period, commer- cial energy consumption increased by 5.3% per annum, but this was not sufficiently rapid to raise per capita consumption of commercial primary energy above 166 kg of oil equivalent, or about 330 kg of coal equivalent, which is half the average for low income developing countries. The share of oil products in commercial primary energy consumption at 23% is low for developing countries, but it is growing rapidly. On the other hand, the share of coal in commercial primary energy consumption is 66% and is high for countries with similar income levels. Firewood is the most widely consumed fuel in India, accounting for about 65% of total non-commercial energy consumption. Other sources of fuel, such as vegetable and animal wastes, account for the remaining 35% of non-commercial energy consumption. 30. Installed electric generating capacity in 1981/82 is estimated at 33,000 MW, of which thermal electric plants account for about 60%. Potential demand for power has consistently exceeded supply in recent years. The estimated deficit (calculated as actual supply compared to potential unrestricted demand) stood at about 13% in 1980/81. 31. Inadequate supplies of energy have been a major constraint hindering India's economic growth. Although considerable indigenous resources of energy exist, their development has not kept pace with demand. In November 1979, a high-level Working Group on Energy Policy recommended measures to improve the efficiency with which energy resources are utilized, especially in the transportation sector, reduce the energy intensity of industrial investment, and promote inter-fuel substitution from commercial to non-commercial and renewable energy resources. These recommendations address the need to contain commercial energy consumption without impeding economic growth. More specifically, GOI's energy policy is centered on maximizing the development of domestic fuel resources. Consequently, development of domestic petroleum reserves through national oil companies and by production-sharing agreements with foreign oil com- panies has received priority attention. The development of domestic coal resources or electricity generated from coal or hydropower, is also a central element of the Government's energy policy. Coal 32. Coal remains the most important source of commercial energy in India. Total reserves are estimated at 112 billion tons, of which about half (equivalent to 30 billion tons of oil equivalent [toe]) are con- -11- sidered recoverable. In contrast, hydrocarbon reserves are in the order of about 6.5 billion tons of oil equivalent. 33. Of India's coal reserves, 78% are thermal coal, used primarily for heat and steam generation, and 22% are coking (i.e. metallurgical) coal used in steel making. The reserves are found mainly in Eastern India where extensive exploration has taken place in the past. More recently, the rapid growth of demand by consumers in western India, especially in the Bombay area and in Gujarat, has generated a need for developing new coal deposits in Central India. In order to meet this need, priorities have been adjusted to emphasize coal exploration in Maharashtra and west- ern Madhya Pradesh. There is a wide variation in the quality of thermal coal reserves. On the whole, however, most thermal coals are of extremely poor quality. Useful calorific value 1/ ranges from 1,300 kcal/kg to over 6,200 kcal/kg. The bulk of the thermal coal reserves are in the 3,500 kcal/kg to 4,500 kcal/kg range of useful calorific value. There is also a wide variation in the quality of coking coal reserves, with ash content varying from 18% to over 35%. 34. Coal production was 130.6 million tons in 1982/83 of which about 60% was from underground mines, and the balance from open pit mines. Total employment in the coal sector in India in December 1982 was about 723,000 employees, of whom about 50% were in clerical or unskilled manual grades. The degree of mechanization in Indian underground mines is low compared to the major underground coal-producing countries elsewhere in the world. Most Indian open-pit coal mines are presently small- to medium-size compared with the world coal industry (1-3 million tons per year [tpyl). The Indian coal industry is progressively moving towards larger mines and equipment. This is desirable, since larger operations offer economies of scale and lower unit production costs. Sector Institutions 35. In 1975 most Indian collieries were nationalized and their operations consolidated under a holding company, Coal India Limited (CIL), which accounts for close to 90% of India's coal production. The other producers are Singareni Collieries Limited, which is owned by the Central Government and the Government of Andhra Pradesh, and captive coking coal mines of the privately-owned Tata Iron and Steel Company and the Government-owned Indian Iron and Steel Company. Lignite mining in Tamil Nadu is concentrated in the hands of a Government-owned company. The Department of Coal, Ministry of Energy, is responsible for policy-making and the administration of production, supply, distribution and pricing in the coal sector, while the Planning Commission is in charge of reviewing production and investment programs in the sector and establishing linkages between new mines and major consumers. 1/ Useful calorific value is derived from the gross calorific value after adjustments for ash and moisture content. -12- Coal Transportation 36. Coal is transported primarily by rail (70%), roadways (25%) and, to a very limited extent, by coastal barges and ropeways. In 1981/82, the average haulage distance for coal was 566 km. The performance of Indian Railways (IR) in carrying coal and other bulk goods has often been disap- pointing so that coal traffic has had to be carried by road, a relatively more expensive mode of transportation and one which directly increases the need for imported petroleum products. Operational improvements have been introduced in the IR to increase train speeds and sizes, and major invest- ments made for the acquisition of new rolling stock, track renewal, track electrification, and workshop and plant modernization. Moreover, progress is being made in the installation of a real time computerized operating information system, and upgraded telecommunication systems. Nevertheless, there is a need for a systematic analysis to be undertaken of coal haulage which would indicate how the railway system can be best utilized for carrying coal, particularly to consumers in Northern and Western India. Such a study would need to (a) define improvements in systems for handling and transporting coal, including fixed loading and unloading facilities, wagon design and wagon utilization; (b) establish an optimal investment program based on reviews of investment priorities and payoffs; and (c) identify what alternative modes of transportation will be necessary to make up any shortfall in railway carrying capacity for coal. GOI would initiate the necessary study by April 30, 1984. GOI would exchange views with the Bank on the terms of reference of the study and on the findings of the study prior to their implementation (Section 3.02(a)(i), Loan Agreement). The Market for Indian Coal 37. India is the world's seventh largest producer and fifth largest consumer of hard coal. However, India's participation in the interna- tional trade has been minor. It has occasionally exported small quan- tities of thermal coal (0.1 million tpy to 0.7 million tpy) to neighboring countries. More recently, it has became a minor importer of coking coal (1.0 million tpy to 1.5 million tpy). In both cases, India's contribution to world trade is less than 1%. Despite its large thermal coal reserve base, there will be little surplus coal after domestic requirements have been met. Moreover, coal transportation infrastructure for exports is inadequate, while the quality of Indian thermal coals makes it unattrac- tive for consumers who have other international sources of supply. 38. International thermal coal prices rose considerably in the mid to late 1970s and early 1980s as consumers shifted to coal following the 1973 and 1979 oil price increases. Since 1982, coal prices dropped sharply due to oversupply and depressed demand. For the future, there are good long run supply prospects for coal and plentiful reserves available for development in Australia, South Africa, Canada and the United States. Therefore, thermal and coking coal prices are expected to increase only by 1%-2% in real terms over the next decade. 39. Total coal production in India has increased from 56 million tons in 1960/61 to about 130 million tons in 1982/83. Production is expected to reach 153 million tons by 1984/85, the end of the Sixth Plan period. Supply projections for 1989/90 indicate 224 million tons. The -13- most important consuming sector is the power sector which accounted for 34% of coal consumption in 1981/82. Other important consuming sectors are steel (for coking coal), whose share of consumption has remained constaLnt at 21%, and other industries (principally cement and fertilizer) and the railways. 40. Based on recent trends in the power and steel sectors, coal demand projections for 1984/85 have been assessed at 153-158 million tons. By that time, therefore, thermal coal supply and demand are expected to be broadly in balance, although some temporary shortages may occur. Coking coal imports of 1.0-2.0 million tpy are likely to be required. Current tentative estimates of demand by 1989/90 are for about 232 million tpy. Supply Allocation and Marketing 41. The supply allocation and marketing of coal in India are administered by the Government. Long-term linkages of suppliers to major consumers are set by a standing interministerial committee, while alloca- tion of coal to small consumers is undertaken by producers in accordance with guidelines established by the Government. The linkages which match new coal consumers with new large-scale mines on an incremental basis are made following a procedure which aims at ensuring the optimality of the linkages. However, only limited cross checks are made to see if, country- wide, the linkages need to be revised. Furthermore, because of the size of the system, no systematic cross check is available to ensure that, overall, the linkages are optimal. In order to systematize reviews of the linkages, GOI would complete by December 31, 1985 a study to develop analytical tools for the establishment of optimal production, transport and utilization linkages. GOI would exchange views with the Bank on the terms of reference of the study and on the findings of the study prior to their implementation (Section 3.02(a)(ii), Loan Agreement). 42. Given that supply allocations, linkages and pricing are administered by the Government, the main marketing functions undertaken by the coal producers relate to the booking of orders, dispatch of coal, invoice for orders, receipt of payment, monitoring coal quality and ensur- ing that grade and delivery specifications are satisfied. 43. Major consumers have reported a growing incidence of poor quality thermal coals resulting in operational inefficiencies, such as high equipment maintenance costs, and increased transportation costs for consumers, because of the need to ship extra quantities of coal to make up for lower qualities. The principal reason appears to be that insufficient attention has been paid to coal screening, deshaling, stockpiling and dispatch methods. Also, the economics of washing thermal coals have not been systematically studied. Recognizing the need to ensure the supply of coal of suitable and predictable quality, GOI set up a committee in July 1982 to carry out a study on coal quality focusing on these issues and their incidence on the power sector. The study was completed in late 1983 and is currently under review by GOI. Some of the main recommendations emphasize the need for reviewing linkages periodically, improving lcoading and transportation facilities, making more extensive use of coal prepara- tion plants, improving sampling arrangements and introducing quality- related bonus and penalties on supply contracts. GOI expects to complete -14- its review of the committee's report in May 1984, at which time it would be made available to the Bank for comment. Prices and Pricing Policy 44. Coal prices have been directly or indirectly administered by the Government since before independence. From 1944 to 1975, average prices increased from Rs 11 per ton to Rs 63 per ton and were generally suffi- cient for most producers to generate small profits. In July 1975, in an attempt to keep the price of coal low to the consumer, thereby encouraging the substitution of coal for oil, a new price schedule was issued by GOI which permitted producers to cover only their cash operating costs. No provision for depreciation was made. Large losses to producers resulted from this policy. Government loans were required to cover these losses. In addition, funds for investment needed to be provided from Central budgetary sources. 45. A new direction in energy pricing was introduced by the Government in the Sixth Plan document which states that "in the past, the pricing of energy has not always reflected either the true cost to the economy or helped to ensure the financial viability of the energy industries. This cannot be allowed to continue for long." Starting in July 1979, and continuing in February 1981, May 1982 and January 1984, GOI authorized four price increases amounting to 55% in real terms compared with the price levels prevailing during 1978/79. Current coal prices (at minehead) for the different grades of thermal coals range from Rs 61 to Rs 284 per ton and are based on useful heating value. For coking coal the range varies from Rs 175 to Rs 450 per ton, depending on ash content. The differentials for higher grades of both coking and thermal coal have been substantially increased compared with lower grades of coal in the latest price increase. This is considered an important improvement to bring relatively scarce better grades of coal in line with their oppor- tunity cost. Prices are set on a minehead basis with consumers paying freight costs from the mine to the point of consumption. Recent price increases have enabled CIL to become profitable in 1981/82 and 1982/83 after incurring losses over the previous five successive years. 46. The Government's pricing policy for public enterprises is to ensure their financial viability and to provide for a reasonable rate of return on capital employed under conditions of efficient operation. Consideration has also been given to permit such enterprises to generate sufficient funds to cover their financial needs, including servicing of long-term debt and mobilizing funds for future investments. With respect to CIL, the May 1982 price adjustment was based upon the principle of recovering the full cost of production, subject to satisfactory operating norms, and allowing for a 10% return on assets. 47. In order to examine more fully the implications of its pricing policies for the coal industry, to define mechanisms to implement those policies and to see if any alternative policies warrant consideration, GOI commissioned the Bureau of Industrial Costs and Prices (BICP) to undertake a detailed study of coal pricing in early 1982. BICP's preliminary find- ings recognize the need for coal prices to continue to increase in real terms in order to improve further CIL's financial position and resource mobilization in the sector, and to reflect more adequately the cost of -15- coal to the economy. A BICP draft report was submitted to GOI in July 1983. While the Government has accepted BICP's premises, it has not yet completed its review of the whole report. Therefore, the January 1984 price increase was not based on announced pricing criteria. In practice, however, the new price schedule will provide a reasonable rate of return and resource mobilization for the sector for 1984/85. GOI has also indi- cated that a further review of prices will take place by March 1985. 48. Most Indian thermal coals are extremely low in quality and are, therefore, not economically tradeable. However, such coals are economic compared with other possible sources of energy such as imported coal or oil, and it is therefore economic for India to produce them. In these circumstances and in view of the abundant reserves of this low quality coal, the economic efficiency price for thermal coals becomes their long run marginal cost. 49. With regard to coking coal, however, border prices represent efficiency pricing because domestic coking coal (about 20% of Indian production) can be directly substituted for imported coking coal. Current price schedules for coking coal do not fully reflect border prices. However, they reflect grade-wise differences by adding a substantial premium to higher grades, thus reducing considerably the gap with border prices. The introduction of premia for higher coal grades is expected to act as an incentive for improving quality control at the mines. 50. Under the project, GOI would review prices periodically with a view to ensuring, under conditions of efficient operation, the financial viability of CIL, as well as progressive mobilization of additional resources to cover an increasing proportion of capital expenditures in the coal sector (Section 4.02, Loan Agreement). Whether based on long-run marginal costs or the application of a 10% return on CIL's assets, prices would, by 1989/90, need to rise by 5.5% to 7.5% in real terms over current levels. Financial projections for the project have been prepared on the basis of prices being in line with long-run marginal costs. The results show that the project is financially viable, and that through the project period CIL will remain financially sound. Moreover, assuming that coal prices are consistently reviewed following the above principles, the proportion of CIL's investment requirements, which will be generated from within the coal sector, would rise from about 45% at present to about 70% by 1989/90. Therefore, GOI's approach to coal pricing is generally satisfactory, and is sufficient basis for the Bank to proceed with an investment in coal production. Project Sponsors 51. The CIL group of companies was established in September 1975, as a holding company and five wholly-owned subsidiaries. CIL operates semi-autonomously under the direction of an eleven-member Board of Directors, headed by a Chairman and Managing Director appointed by the President of India. 52. The CIL group is a very large and complex organization. Since its inception in 1975, and particularly during the last five years, it has made considerable strides in consolidating its organization and implement- ing accounting and other operational control systems. CIL is now able to play a major role in coordinating the implementation of sector policies. -16- Since CIL is responsible for decision-making on financial and administra- tive matters, and is the borrower of all long-term loans, including for- eign funds, for the coal sector, it has been considered as the primary beneficiary of the proposed Bank loan. 53. CIL introduced a cost control system for its operations three years ago, which generates standardized cost information at the mine level. However, by and large, the system is not being used as a manage- ment tool. Production managers' attention is mainly oriented towards meeting production targets, so that managers tend to view the cost control system as an accounting exercise. In order to make the cost control system a more effective management device, CIL would, by June 30, 1985, carry out a study of its procedures for formulating and controlling its operational budget and thereafter implement proposed improvements arising out of the study. Such a study would be carried out under terms of reference which have been reviewed by the Bank. The Bank would be fur- nished with and be given an opportunity to comment on the results of the study prior to its implementation (Section 2.16, Project Agreement). 54. Open-pit mining accounted for 47% of CIL production during 1982. In open-pit mines, operating efficiency of major equipment is below inter- national standards, particularly with respect to dump trucks. The reasons for this low efficiency appear to be inadequate field supervision, and poor service scheduling in relation to shift schedules. Other areas for improvement are blasting techniques, haul road construction and maintenance, truck dispatching, preventive maintenance routines and equip- ment overhaul schedules. In order to improve the operational efficiency of open-pit mines, CIL would carry out by June 30, 1985 a study of operat- ing practices with respect to open-pit mining. The study would be under- taken by consultants under terms of reference, and with qualifications, experience, and under selection procedures satisfactory to the Bank (Sections 2.03 and 2.14(b), Project Agreement). A study to optimize the size of dump trucks would also be undertaken by CCL, with consultant assistance (Sections 2.03 and 2.14(a), Project Agreement). The Bank would review and comment on the results of both studies prior to their implementation. 55. Up to 1980/81, CIL had incurred successive losses, which resulted from low coal prices, and an emphasis on increasing coal produc- tion without due regard to cost effectiveness and high production costs. Over the past two years, CIL's financial position has improved con- siderably as a result of the successive price increases referred to in para 45 above. Under the project, CIL would benefit from the application of an adequate pricing system. It will follow prudent financial practices and maintain financial ratios acceptable to the Bank (Section 4.03, Project Agreement). 56. Central Coalfields Limited (CCL) is the subsidiary of CIL that will own and execute the Dudhichua project. It operates 57 coal mines, coal washeries and two coke ovens. Since the formation of the CIL group, CCL has achieved the best production and productivity increases of any of the CIL subsidiaries. While this is partly explained by CCL having rela- tively easier mining conditions and a higher proportion of open-pit mine production than for the other CIL subsidiaries, CCL's development has also benefitted from a strong management team who have emphasized, on the one -17- hand, cost control measures in the labor intensive underground mines and, on the other hand, rapid development of new capital intensive open-pit mines. CCL has been profitable since 1979/80. It is currently in a sound financial position, made a small profit in 1982/83 and is expected to remain in a relatively healthy financial position during the project period. For the future, CCL is expected to almost double its production from 30.1 million tons in 1981/82 to 58 million tons in 1989/90, an annaual average growth rate of 8.5%. As in the case of CIL, the analysis of CCL investment program indicates that CCL's sequence of mine development generally follows least cost solutions. The investment required for these mines in the period 1981/82-1989/90 is of the order of US$1.5 billion. CIL's accounts and those of its subsidiaries are audited annually by statutory auditors (a partnership of independent chartered accountants) appointed by the Government of India in consultation with the Comptroller and Auditor General of India. These arrangements are satisfactory. CIL and CCL would submit audited accounts to the Bank within six months of the close of each fiscal year (Section 4.02, Project Agreement). Development Strategy and Investment Plan 57. In order to achieve its planned expansion of production, CIL has based its expansion program on opening and expanding open-pit mines. This is considered a sound approach. Total investment during the period 1983-89, associated with the expansion plan and for replacement of exist- ing assets, has been estimated at Rs 96 billion (US$9.9 billion) in 1982/83 prices, and includes an estimated foreign exchange requirement of about Rs 18 billion (US$1.9 billion). With respect to foreign financing, bilateral sources of assistance (British, Russian) are already earmarked for particular mining operations. CIL has also recently contracted a loan of L60 million from a consortium of commercial banks. While CIL's invest- ment program is a major undertaking by any standards, it is not anticipated that GOI or CIL will encounter any undue difficulty in raising the foreign exchange required to finance it. A substantial portion of the local currency financing required will be generated from within the coal sector (see para 50 above). Bank Group Activities in the Energy Sector 58. The principal focus of Bank Group lending for energy development has been the power sector which, over a period of 30 years, has benefitted from 29 operations, totalling more than US$3 billion. Four loans, totall- ing about US$938 million, have been made for petroleum development. In addition, the Bank made one loan for a coking coal project to the Indian Iron and Steel Company (US$35 million Loan 290-P-IN, dated August 9, 1961). It financed the foreign exchange costs of equipment for a variety of existing and new coal mines. Project execution took over five years, two years longer than appraisal targets, on account of delays in issuing import licenses and shortages of counterpart funds from participating mines. Since the loan closed well before the institution of evaluation procedures within the Bank, no completion or audit report was preparecL. Bank Group activity in the sector was resumed in 1980 with the Coal Sector Report 3601-IN, dated September 14, 1982. This comprehensive review covered critical areas of investment, exploration, production, implementa- tion and operating efficiencies, transportation problems, and financial and pricing issues. The sector review has been an important vehicle for -18- pursuing measures which will enhance sector planning capabilities. The Government accepted many of the recommendations made in it and has begun implementing measures to improve the efficiency of existing operations and rationalize the pricing regime. Subsequently, GOI requested Bank Group financing for projects which would increase the production of both coking and thermal coals. The Dudhichua (Thermal) Coal Project would be the first of these. The rationale for the Bank's further participation in the coal sector rests on the measures proposed under the project to support further improvements in the operating efficiency of open-pit mines, cost control and budgeting, project management, coal transportation and distribution, and to address pricing and resource mobilization issues. Moreover, financial support for projects of this kind will permit shifts to more mechanized modes of production. These issues are comprehensive and wide-ranging, so that solutions to them could take considerable time. It is intended, therefore, that the Dudhichua project be the first of a series of operations in the coal sector, which will be used both as vehicles for the successive resolution of the issues outlined above, and for the identification of further areas for improving sector planning and execution capabilities. PART IV - THE PROJECT 59. The project was identified in July 1982, and appraised in March 1983. The Staff Appraisal Report (No. 4714-IN, dated February 28, 1984) is being distributed to the Executive Directors separately. Negotiations took place in Washington, D.C. in January 1984. The Government of India, CIL and CCL were represented by a delegation coordinated by Mr. N. Misra, Director, Department of Economic Affairs, Ministry of Finance. Project Obiectives and Description 60. The proposed project supports the Government's policy of maxi- mizing the development of indigenous energy sources, and of accelerating thermal power generation considered essential for future economic growth. The strategy adopted by GOI for meeting the required increase in thermal power generation is to accelerate the expansion of thermal coal production by developing large-scale open-pit mines. The Singrauli coalfield is located about 500 km west of Calcutta, on the Madhya Pradesh/Uttar Pradesh border. The mining area has been divided into 11 separate blocks. Three coal seams, totalling 345 million tons of mineable reserves, have been identified for open-pit mining under the proposed project. At full development, the project area will cover about 8.7 sq km. The coal to be produced at Dudhichua is classified as Grade E coal with a useful calorific value of about 3,400 kcal/kg. The mining plan calls for the production of 5 million tpy by year 9 (Stage I of the project, supported by the proposed Bank loan) and of 10 million tpy at final capacity in year 14. The long development period is due to the topography in the box-cut area of the pit, which will require substantial overburden removal, prin- cipally of sandstone and shale, during the initial mining years. The overburden will be drilled, blasted and removed. Coal, after blasting, will be loaded and hauled to a crusher station outside the pit. After crushing, the coal will be moved by conveyor system to a coal handling plant for transport to the train loading station at a new railway spur. The project also addresses important sectoral issues through a number of -19- studies and/or actions designed to initiate improvements in the operating performance and further development of the coal sector over the long term. 61. The total manpower requirements at a production level of 5 million tpy is 2,340 employees. A satisfactory training plan has been prepared, which provides for the training of 304 persons annually for a total of 1,824 man-months. CCL would, commencing January 1, 1985, provide the Bank with an annual training report for Dudhichua which addresses, inter-alia, the past year's results compared with the planned target, and forecast enrollment for the coming year and measures to be taken to rec- tify any unsatisfactory performance, as required (Section 2.11, Project Agreement). Infrastructure Facilities 62. Maintenance, warehouse and service facilities will be con- structed south of the mine and adjacent to the existing railway. Water will be supplied by the integrated water supply system for the Singrauli coalfield, which draws water from the nearby Rihand reservoir. There is ample power available in the area to meet the project's requirement. It will be provided by the State Electricity Boards of Madhya Pradesh and Uttar Pradesh. CCL would make satisfactory arrangements with the State Electricity Boards and Water Authorities of Madhya Pradesh and Uttar Pradesh for power and water supplies to the project (Section 3.05, Project Agreement). A total of 1,638 dwellings and associated service facilities will be constructed on a new 200-acre residential site near the Jayant township. All land required for the project industrial sites and township, some 7,900 acres in total, has been acquired and is available. Marketing Arrangements 63. At full production, the first stage of the Dudhichua project will supply 95% of the coal requirements of three thermal power plants in Western India, namely, Wanakbori in Gujarat, Kota in Rajasthan, and Trombay IV in Maharashtra. All these plants are well under construction and will be commissioned in advance of the development of Dudhichua. These three plants are located at considerable distances from the project area. In the present circumstances and probably throughout the 1980s, the linkage of Dudhichua's output to these three plants provides the best alternative to meet their coal requirements. However, if viable project alternative sources of supply are found nearer the power plants, or if Trombay is switched to gas, which is feasible given its proximity to Bombay High, the linkages now established for Dudhichua's output would need to be re-examined. GOI would continue to review, at appropriate intervals, the linkages established from major coalfields to principal consumers, in particular those of Dudhichua, and revise them if necessary to ensure that optimal allocations are continually made (Section 3.04, Loan Agreement). 64. An analysis of the railway routes for transporting Dudhichua coal to the above mentioned three power plants in Western India has iden- tified several potential bottlenecks that will require improvement. Some steps have been taken by IR to improve capacity on the routes in question by adding track sections in critical areas, by completing electrification of certain links and by improvements in motor power and equipment. -20- Further improvement measures are included in the proposed Railways Electrification Project now under consideration by IR and the Bank Group. One bottleneck which requires special attention is a severe grade (ghat) north of Bombay where delays in the downward direction occur due to inef- ficient train braking systems. Measures have recently been taken to overcome the rail capacity problem and provide for more effective coal movement on the gradient section, including the utilization of improved braking systems. Some re-routing of traffic has also been undertaken. To ensure satisfactory delivery of coal to consumers, GOI would take all such action as may be necessary to provide adequate and timely railway facilities to transport the project's output to designated consumers (Section 3.03, Loan Agreement). Environment 65. Environmental protection measures for the project will be the responsibility of CCL and CMPDI, and will be in accordance with the Water (Pievention and Control of Pollution) Act of 1974 and the Air Act (Preven- tion and Control of Pollution) of 1981, both of which prescribe measures and tolerance limits in line with acceptable standards in the industry. Erosion control and prevention measures will be undertaken on waste dumps and exposed slopes. Water quality will be regularly monitored. Dust, the only air pollutant, and the air quality will be monitored weekly. CIL and CCL would design, construct and operate the project with due regard to satisfactory environmental and safety standards (Section 2.09, Project Agreement). Project Execution and Implementation 66. The project will be implemented by CCL, under the direction of a Project General Manager, reporting to the General Manager for Singrauli Coalfield. The Project General Manager will be supported by managers responsible for (i) mining and general engineering; (ii) cost and schedul- ing control; (iii) administration; and (iv) a Deputy Project Manager, directly responsible for project implementation. The Project General Manager has been appointed, and is adequately qualified and experienced. CCL would ensure that the organizational, structure, functions, staffing, funds, powers and responsibilities of the Project Management Unit will be such as shall be necessary for timely and efficient implementation of the project (Section 2.12, Project Agreement). 67. The Project Management Unit will be directly responsible for all activities related to detailed engineering, procurement of local goods and services, equipment erection and commissioning, construction and mine development. Procurement of imported items will be carried out by the CIL central procurement orgarization, in direct collaboration with the Project General Manager. CCL has a good record of project implementation, and is experienced with the mining methods and equipment to be used for the project. However, slippage in timetables for other projects has occurred in the past due to delays zegarding import approvals and foreign exchange allocations, and other external factors beyond CCL's control. In order to minimize the impact of such external factors, GOI would issue blanket waivers for import licenses and ensure all foreign exchange requirements for all project items to be financed by the Bank loan (Section 3.05(a), Loan Agreement). Although the CIL group has experience in implementing -21- large open-pit mines, some strengthening of project monitoring and control procedures is required. Accordingly, CIL would prepare a project implementation manual for discussion with the Bank, and adopt it prior to September 30, 1984 (Section 2.15, Project Agreement). Project Costs and Financing 68. The total financing required for Stage I (5 million tpy) of the Dudhichua project, including physical contingencies, price escalation, working capital and interest during construction is estimated at US$373 million, of which about US$128.4 million is in foreign exchange and US$46.1 million represents taxes and duties. 69. The capital cost estimates were prepared by CMPDI, based on cost information from recent orders for similar equipment and actual cost data for on-going projects. A provision for physical contingencies of 5% over base cost is provided for mining equipment, and 10% for all other items. Local costs have been estimated to increase at 7% annually through 1985/86, and 6% thereafter. Foreign costs are estimated to increase 8% for 1983, 7.5% for 1984, 7% for 1985 and 6% thereafter. 70. In line with current Government policy, the overall financing of project costs will be provided in the ratio of 50% debt and 50% equity. The proposed Bank loan of US$151.0 million will provide about 40% of project financing requirements, with an additional US$35.6 million equiv- alent provided by GOI in the form of long-term debt. With respect to equity contributions, CIL will provide US$45 million equivalent from internal cash generation, and the balance of US$142 million will be provided by the Government. GOI would provide the debt and equity requirements as indicated, and whatever additional debt and equity funcls (both local and foreign currency) which might be needed to complete the Dudhichua project promptly (Section 3.01(a)(ii), Loan Agreement). 71. The proposed Bank loan will be made to the Government of India at the standard variable Bank interest rate for a period of 20 years, including 5 years of grace. GOI would on-lend project funds to CIL for a period of 15 years, including 5 years of grace. The on-lending rate will effectively be 12.75% per annum, the standard Government rate for lending to industrial enterprises in the public sector. CIL will, in turn, make the funds available to CCL on the the same terms and conditions as those of GOI to CIL. Domestic inflation in India is not expected to exceed 8% over the project period, so that the on-lending rate will be positive in real terms during this time. GOI would bear the foreign exchange and interest risk for the on-lent funds. The conclusion of a satisfactory Subsidiary Loan Arrangement between GOI and CIL and a satisfactory Financial Arrangement between CIL and CCL will be conditions of effective- ness of the proposed Bank loan (Section 6.01, Loan Agreement). Procurement and Disbursement 72. Equipment and erection services financed by the Bank will be procured by international competitive bidding (ICB) in accordance with Bank Guidelines. These goods and services consist mainly of a dragline, shovels, trucks, dozers, rotary drill rigs and a coal handling plant, and are grouped in 27 separate bidding packages, averaging US$5.2 million -22- each. For bid evaluation under ICB, qualified local suppliers/manufacturers will receive a margin of preference of 15% or the applicable customs duty, whichever is less. It is expected that for those items to be financed under the Bank loan, about US$59 million will be for contracts awarded to local suppliers following ICB. 73. The Bank loan of US$151.0 million will be used to finance a coal handling plant (US$29.0), mining and communication equipment (US$112.4 million), and technical assistance (US$0.9 million). In addition, US$8.3 million will be unallocated, and US$0.4 million will be for the capital- ized front-end fee. Loan proceeds will be disbursed against 100% of foreign and 100% of (ex-factory) local expenditures for all project components, except for the coal handling plant against which disbursements will be at 100% of foreign expenditures and 70% of local expenditures. Although Stage I of the Dudhichua project is scheduled to be completed in 1993/94, disbursements are expected to be completed by March 1989, when all Bank financed items would have been physically delivered or completed. Financial Evaluation 74. The Dudhichua project represents only about 2% of CIL's total investment program for the period 1981/82-1991/92. By 1992, when Stage I of the Dudhichua project reaches production of 5 million tpy, this will represent about 7% of CCL's total coal production for that year. 75. It is expected that GOI will continue to provide 50% of CIL's investment needs through long-term debt, and the remaining investment requirements will be met from CIL internally generated resources (approximately 12%) and GOI equity contributions. The average coal price for CIL has been projected on the assumption that it will gradually increase in real terms, and that in any year the full cost of production would be covered, and by 1989/90, CIL would earn a 10% return on net worth 1/ providing certain production, labor productivity and unit operat- ing cost standards are achieved. The projected average coal price for 1989/90 (Rs.261.4fton, in current terms) based on these criteria is higher than prevailing prices and is in line with the estimated long-run marginal cost of production. 76. To ensure that the consolidated financial position of the CIL group of companies remains sound, CIL would maintain at all times a debt service coverage ratio of at least 1.3, a long-term debt-to-equity ratio not greater than 60:40, and a current ratio of at least 1.2 (Section 4.03, Project Agreement). 77. The base case financial rate of return (FRR) for the Dudhichua Project is estimated at 10% for its final capacity of 10 million tpy, and at 7% for Stage I capacity of 5 million tpy. The lower rate for Stage I is due to the relatively long period (11 years) required to reach its 1/ Defined as average net fixed assets (excluding work-in-progress) plus working capital less long-term liabilities, (excluding those allocated to work-in-progress). -23- rated production capacity because of the geological configuration of the deposit. Economic Analysis and Risks 78. The Dudhichua project represents the least-cost alternative for meeting the increased coal demand from the Singrauli Coalfield. The base case economic rate of return (ERR) is over 16% for the final capacity of 10 million tpy, and 13.6% for the Stage I production of 5 million tpy. Even over a range of adverse assumptions, 1/ the ERR remains acceptable at nearly 12% and over 14%, respectively, for the Stage I and Stage II production levels. The difference between the FRR and the ERR results primarily from the exclusion of taxes and duties from the calculation of the latter. The economic rent accrues to the Central and State Governments. 79. Power shortages are acute throughout India and, in particular, are a constraint on economic growth in western India. By supplying coal to three large and important power stations, the proposed project would help alleviate such shortages and associated losses in industrial and agricultural output. The project will provide additional benefits through institutional development of CIL in open-pit mining procedures, project management, budgeting and cost control. Finally, several important issues, particularly coal transportation and distribution, will be addressed in studies to be conducted under the project,and as such, sec- toral planning and execution capabilities would be considerably strengthened. 80. The project faces minimal technical risks since coal reserves are well-established and mining plans and equipment selection are based on proven technologies now being used in other open-pit mines in the Singrauli coalfield. There is minimal marketing risk to CIL, since project output has been fully allocated to three specific power plants, and therefore only minor fluctuations would be expected in sales volume. If some reallocation is required, it could easily be accomplished, since production from Dudhichua could be redirected and absorbed by other power plants in the power expansion program. With regard to coal pricing, there is some risk that GOI's commitment to an appropriate pricing policy may not be implemented in a timely manner, which could adversely affect the financial position of both the project and CIL. However, the financial risk is considered acceptable in view of the Government's policy to ensure the continued financial viability of entities in the energy sector and the mobilization of an adequate level of resources for coal investments from within the sector. 1/ Including any one of the following: 10% increase in capital or operating costs, 10% decrease in revenues or a one-year delay in project implementation. -24- PART V - LEGAL INSTRUMENTS AND AUTHORITY 81. The draft Loan Agreement between India and the Bank, the draft Project Agreement between the Bank, CIL and CCL, and the draft Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement are being distributed to the Executive Directors separately. 82. Special conditions of the project are listed in Section III of Annex III. The signing of a Subsidiary Loan Agreement between GOI and CIL and Financial Arrangement between CIL and CCL would be additional condi- tions of loan effectiveness (Section 6.01, Loan Agreement). 83. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATIONS 84. I recommend that the Executive Directors approve the proposed loan. A. W. Clausen President February 27, 1984 ANNEX I Page 1 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b lb lb IRECENT b LOW INCOME MIDDLE INCOME 1960- 1970.- ESTnIATE/ ASIA & PACIFIC ASIA 6 PACIFIC ARILA (THOWSAN SQ. EK) TOTAL 3287.6 3287.6 3287.6 AGRICULTURAL 1760.7 1780.5 1811.3 GNP PEF CAPITA (US$) 70.0 100.0 260.0 276.7 1028.6 ENERGY CONSUNPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 114.0 165.0 210.0 398.4 792.8 POPULATION AN VITAL STATISTICS POPULATION,MID-YEAR (THOUSANDS) 434850.0 547569.0 690183.0 URBAN POPULATION (X OF TOTAL) 18.0 19.8 23.7 21.5 32.9 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILL) 1001.3 STATIONARY POPULATION (MILL) 1838.3 YEAR STATIONARY POP. REACHED 2140 POPULATION DENSITY PER SQ. KM. 132.3 166.6 205.3 161.7 260.7 PER SQ. KM. AGRI. LAND 247.0 307.5 372.7 363.1 1696.5 POPULATION AGE STRUCTURE (7) 0-14 YRS 40.9 42.7 39.7 36.6 39.4 15-64 YKS 54.5 54.2 57.2 59.2 57.2 65 AND ABOVE 4.6 3.1 3.0 4.2 3.3 POPULATION GROWTRH RATE (%) TOTAL 1.8 2.3 2.1 1.9 2.3 URBAN 2.5 3.3 3.7 4.0 3.9 CRUDE BIRTH RATE (PER THOUS) 43.7 40.0 35.4 29.3 31.3 CRUDE DEATH RATE (PER THOUS) 21.8 16.7 13.3 10.9 9.6 GROSS REPRODUCTION RATE 2.9 2.7 2.4 2.0 2.0 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUS) 64.0 3782.0 6826.0 USERS (X OF MARRIED WOMEN) .. 12.0 23.0 48.1 46.6 FOOD AND NUTRITION INDEX OF FOOD PROD. PER CAPITA (1969-71=100) 98.0 102.0 107.0 111.4 125.2 PER CAPITA SUPPLY OF CALORIES (7 OF REQUIREMENTS) 96.0 90.0 87.0 98.1 114.2 PROTEINS (GRAMS PER DAY) 54.0 50.0 47.0 56.7 57.9 OF WHICH ANIMAL AND PULSE 17.0 15.0 13.0/c 13.9 14.1 CHILD (AGES 1-4) DEATH RATE 26.2 20.7 17.0 12.2 7.6 EEALTH LIFE EXPECT. AT BIRTH (YEARS) 43.2 48.1 52.2 59.6 60.2 INFANT MORT. RATE (PER THOUS) 165.0 139.0 121.2 96.6 68.1 ACCESS TO SAFE WATER (%POP) TOTAL .. 17.0 33.0/d 32.9 37.1 URBAN 60.0 83.072 70.8 54.8 RURAL .. 6.0 20.07o 22.2 26.4 ACCESS TO EXCRETA DISPOSAL (7 OF POPULATION) TOTAL .. 18.0 20.0/e 18.1 41.4 URBAN .. 85.0 87.0/e 72.7 47.5 RURAL .. 1.0 2.077 4.7 33.4 POPULATION PER PHYSICIAN 4850.0 4890.0 3640.0/f 3506.0 7771.9 POP. PER NURSING PERSON 10980.0/g 8300.0 5380.07? 4797.9 2462.6 POP. PER HOSPITAL BED TOTAL 2180.0 1650.0 1310.0/d 1100.6 1047.2 URBAN .. .. 370.072 298.4 651.1 RURAL .. .. 10410.072 5941.6 2591.9 AOMISSIONS PER HOSPITAL BED .. .. 27.0 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 5.6 5.2/e . URBAN 5.2 5.6 4.87.. RURAL 5.2 5.6 5.T37 . AVERAGE NO. OF PERSONS/ROOM TOTAL 2.6 2.8 . URBAN 2.6 2.8 RURAL 2.6 2.8 .. . ACCESS TO ELECT. (7 OF DWELLINGS) TOTAL .. .. URBAN .. .. RURAL .. .. ANNEX I Page 2 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b /b lb RECENT LOW INCOME MIDDLE INCCME 1960- 1970-_ ESTIMAIT/b ASIA & PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 73.0 76.0/f 96.1 101.2 MALE 80.0 90.0 90.07 107.8 106.0 FEMALE 40.0 56.0 61.07d 82.9 97.5 SECONDARY: TOTAL 20.0 26.0 28.0/f 30.2 44.9 MALE 30.0 36.0 37.07T 37.3 50.0 FEMALE 10.0 15.0 18.07? 22.2 44.6 VOCATIONAL (I OF SECONDARY) 2.8 1.0 O.7/e 2.3 18.5 PUPIL-TEACHER RATIO PRIMARY 46.0 41.0 43.0/f 34.4 32.7 SECONDARY 16.0 21.0 , 18.4 23.4 ADULT LITERACY RATE (5) 27.8 33.4 36.0 53.5 72.9 CONSUMPTION PASSENGER CARS/THOUSAND POP 0.6 1.1 1.3/f 1.6 9.7 RADIO RECEIVERS/THOUSAND POP 4.9 21.5 44.4 96.8 113.7 TV RECEIVERS/THOUSAND POP 0.0 0.0 1.7 9.9 50.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 10.6 16.2 19.7 16.4 54.0 CINEMA ANNUAL ATTENDANCE/CAPITA 3.2 4.1 3.7/e 3.6 3.4 LABOR FORCE TOTAL LABOR FORCE (THOUS) 185951.0 219194.0 271179.0 FEMALE (PERCENT) 30.7 32.5 31.8 33.3 33.6 AGRICULTURE (PERCENT) 74.0 74.0 69.3 69.0 50.9 INDUSTRY (PERCENT) 11.0 11.0 13.2 15.8 19.2 PARTICIPATION RATE (PERCENT) TOTAL 42.8 40.0 39.3 42.5 18.6 MALE 57.0 52.4 51.9 54.4 50.7 FEMALE 27.3 26.9 25.9 29.8 26.6 ECONOMIC DEPENDENCY RATIO 1.1 1.1 1.1 1.0 1.1 INClME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5% OF HOUSEHOLDS 26.7 26.3/h 22.2/e 16.5 22.2 HIGHEST 20% OF HOUSEHOLDS 51.7 48.97W 49.47e 43.5 48.0 LOWEST 20% OF HOUSEHOLDS 4.1 6.77W 7.07e 6.9 6.4 LOWEST 40% OF HOUSEHOLDS 13.6 17.27h 16.27e 17.5 15.5 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 132.0 133.9 194.5 RURAL .. .. 114.0 111.6 155.0 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. .. 178.0 RURAL .. .. .. .. 164.8 ESTIMATED POP. BELOW ABSOLUTE POVERTY INCOME LEVEL (%) URBAN .. .. 40.3 43.8 24.4 RURAL , 50.7 51.7 41.1 NOT AVAILABLE NOT APPLICABLE N O T E S - |a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. lb Unless otherwise noted, "Data for 1960" refer to any year between 1959 and 1961; "'Data for 1970" between 1969 and 1971; and data for "Most Recent Estimate" between 1979 and 1981. /c 1977; /d 1976; /e 1975; /f 1978; /g 1962; /h 1964-65. May 1983 ANNEX I Page 3 of 5 DEFsiITtoOI OP SOCIAL OOOItdIOt_ Notes: Although the dora Are "Iall tro nac I -enrlly judge the Iost Iuthlri..iae and re1losO, I bodas be otd that they may ntb nentoo coprhl eaus fte aka -tandar -ed denitons on conept used bydItrrtc. nris ncad ctnI telao.Tedt e,nstees mtt: The f_ rerrnc grops ar (1) the tam --y gruv ttesbes.aer"n 2 core ru obunehthge aeg Intac thn th.bontr g-ny t th schi- -ctc -rt y eo,y toe 1High 1oose" 001 Enypr-ero grou.p eher "h..o taetrt dla a lol oE'htcor becaueyt.e..g....O-ctrura at strie I hohe elarece rop doa he oeage ar ppultio eighte arlhmnl rar orI eacMindac o In ho apoe aIodyattecIIreui d1-t " (Tho_d qIs APo_atmart aolla -ypaatI doalded b noh ra pae o Too I"Ttlsutc ores atprsh.glad ares ord aIhclecaoer .I, hohnu Ad-1 inhdia -aa aimdical. naa lie oniaerIhy --nIl d tool and 1980 dsta.. P oo o eOriePro "Iapolor hoci divdedbyy. tb ralpreniin tar cops, astor , arh-pend itche gardens ard toaI hOeCol; 1961, nueho ac 7 tches.i-I _. 0071 and 1980 data. Pocciotion pee Oaopbtsl aed -A toat,uba,I I ua -tylaln (oal, INP PER CAPITA (US$) I'll~~~~~~~~~~~urat, ad rural: divIded by the1 Ir reseain tobea hsia ede ClOyPit aPiO 10)1 -IGNPeecyt instsatcuret sekr ries V-a_la;blei ul:adposegteI aod specialieed hospital and 096 190, end 0900 data, ya es r tmca.ttbihenspun o enia yccs a ENERGY CONSr IO\ gK C~~~~~~~~~~~~~~Icreaeoatincloded. uR-al h..mpitao bIed r,Itoude health ted INOt t _OOIO Pt CAPIad Jg nuleaee coanplc tcoorla ee1colcensroto pe -ally scatted by a physlciar btb eo yeoeeeey(ol.-srdy lnslte ieelu,sttlgosdhdo- ula tlta ot,mdalte, etc.) shlcn otte in-p-ai-t ac-uoe a and 1960, 1970, and 00980 data. u.h.... inuo _ncud AlfI priti pal general hsptas end,rorb _ -b-ospat its,lacaInrtcttIIopHtAlitalsondmd-cla mst delt ..eteea POPULATdION All VITAL hTTaISItCt hpcilir IasItals are ~ inloded, onl ondeetoal .d - Total Paolatlae.bad-Yea ..toosoIV) -A Osf July 01 1960, 1970, std 19005u1ic eeHoia r Tot~al ea:Ie If _dmomoAtsra cc: data,'2- '-' te-asbol-ahls IvIdea, dyb h ubta beds. hba`;PIacouiat(crcntoltoa I R atla at urban totoal popolas- 0001I a.ia-a1-b d h-d dittren deloinoasat tba.arendny itecdcombreiliyntIefalbtlth Papulantti ye :rcebcnsi .,: -TI- Ah.obo ausoa agapa a adaooh hc lgqabe PaaaitIt pa 2000 - Cor-a lpoylati_t frjcin r ae t00 n hi atmao I hoacdro lde rap11i orlay sach.he linclde 'tota populaion by age sod sd _tei tnraltIb aod ter 11Iyth hueodtancitielpros cates PeaIjIotnprrrr ouraISyrts-aepioeaIftttro Aerageuueetgrsn peeaootl.can leua aeadam leash aotanbo Ilte opec tncy dthOrn bito--iug ithcanr'ope tpro e roan btSall uranaad url ccpid c-aoanl aa camitaloo atearolty nd ertlis teod to pr(aoha popasu.at,t5al uban ...rualIwelins rtpeol-ly cons-tant.Thi --is, cIea vonyote teet ity rates Ifjonedtatier Raio eachge-iatln of -00cm repdlacriItuelt et. dy. Thf oaliaarferaleonoal ll-b ageo atth d- elsar . ae. aty.cntgp-tiotpot pa- ulatloy ohoeaose- b Imotd in te asi o thea". ra Ictdcrrce-ycoroha-geppltos;tra-yar ue hhde gdb itlc -tahlplb at-n a- The yara 000,-d therat Iat detilty at pdj aro rE-ladjse tar otrc lrtsa piayeucsIn.o pd-lists shoe sIlpl--he - reached.-- he -aa2schoo - tta, male atd te-al - Co... o-ed as sbaned fe:-sa Per u. hm.Ood-pat pauletor pe squae kolset- lootII'. h -ecer-o at p Ioolde geerl 2 acal rtahrtrligiercbn a tonal.Iarea:i961 1971, II ,i,a end 1980 dna. ..... usuall ot.. ... no 7yatsata gu are poodence ourse seed iPtecuq I.lc puricputl.lard-Catph ccY.aoabanetoIIIage fulcrllsoygneally IAcdI-d.F f-;"IIaIfpi yd t.;F toulro Iae IrIcu I.prcn T II-1 C Tidce (I-I yh-o) o-iakugaa- ccoe ehncl Odaute-al, oroterpr gII susf ohlctb ap c -odpe- hO yearsl,a~tdltot(kysraoooea prensgaati-ya-etlaaseacto--erto f ascdayor- ituI idns pouain 96, 1970, and 0901 data, Pui-ote al-rmao n eadr atlouer roldl yr-1aplala lo6 906,16-h o 097-8.ias andn l-1a1neto.a f.,;-I pd- - Crod toro late (ar i- osnd- lactal onelIleh-1peytb-sad ataid yer 6oultut 19701ad 1970,sd10 d ata.CO9I9PTI2I"11 - Cruely;s Oas(eI hoad ut, otocrtosn rndya aone al(e ohaunsd coruaauac - osagccr coeprte-aar d populel- ; 162 19h0,and ld0-daa. yoso.setIng estktan schg yasoa encludosamblnesb t. sad Ptacollaty easer;usuall tIc-ys soeagee prd-n t19t1g 172 -Y.. -ilyd a dst gnrlpulcye -aan tpoua a o-u t 19P. llceasod9 racatnadrs91 d. in coloe atd un ,years ehenIa reisraIon at e~d ia ratilplati og-cccn Id_cua Ittl aoInt-dalnoa-ouahotat-stceya.. a.roo -ctfc Id-FT-atoreeo pearo sacreamparableslc os- ot Iet-ota eiosudeasie a altlts ylaraitg-oauoirpedagoli-eylceOg pragra.1ibC., t _ ,, ., - f-a Ac Iteceoto- I )prn poad-papalasoo-rOrcrcsr t dchradc -st a. daiytariahse lecsntcrotseel Prenae tarcd serlcrl pehasnP_alsonet_dsclcetdIr:aar naeaclldhf t,a go 19IS-7cacoaen)u7no81 -:nrnotaleoza If,'taoeu -cae adoaorti nstosa otlosArsa ote anulyantOna lol-otto 1dch-om-aIdocyOeo-,IC.. Pautunalde p-cdtltaoyio hanpdacoptlsas-st -oPtlms-saoe(Iot pparduadi 197a0eo addy 19rbasdt.. -asdtisas playoose -aiuea II--l on hnaocsp-Chpotp--, la-Oen-edab tb-ne-e-add h.,e ad e are suclu -d) aggregate. pradotha aI.t each cIontey Isdi.olec-i-. ( h,,dp,Ii, I y- Ir..I ,1 beodllor --caral.. aclyg produce p-rIce a -ghi; iIh1-b0, 1970, otd 1981-t g - .l~g l.I Pplti. -.V Ists, LloPitCh I-y,:h,:ilIl-I .i FquilyiPlasused it- odU.- soia,(adbnne-i dnttht on Pnae pecet)- enl.laor..csaspecicee t otl shr-ore actiste b th usd t hyooagOalredota crol ta Ioiur I pecent - hao,,fei ttst, oenoy ot r ag n e lorhtinaOopibo,sdaioig1 rrn a at .Oudos-try - Iperfo - lbr aosi clung costdt l-d- sanot -c d- ransop1 bad t1ad,,per de . Net sop. ad. loditis i as e...s Pidarocp lngt o - toal,tsid,aod 3mad II Patbicpais f tequ are fr_t_ tar al c_c r srbihdd byI SIA pr __sto._i bout attklolty. r d-eo are cptd as, os, ae ltdd gdi.i.ateml labor. ~io-aas altoscd .. . I:oaltotl roeI pscdayti-ifg-ho-alacisuar prcenage - at oa,elsdtmoppltcoalgtsptial yus rti,a hc 2gotutadh nnlpasa hs 9f,07,ad00 os hs r hoda t' atcete ae noedars ae lueetha tOst t 7 gcms t ntalprarinand23 roa re ito 1g ae-st orucorot te ypc,etho, nd ongris tred ChP-Idhoe a-k) Ihneut Oat (per. N.,ouse pld - atuldeaths a per drua-d. or_Prcetag at. Pinat lnc9 ee (bar inF cathsdbnd eele ysibu ag arup12yer,t chilren. Or this lugr grup daibr ast enlpl ecet rIchest 211 percent poores 20d.a p-ecet, adI paare1 00 perrfnto cauceb- data dete 'tram tot nobls; OhO.191-ad,18h.eta iosehidd ta;,itT V.d Paohi igaf-l-yr-_factrt'iib aaO-"totyt . 1l.,l 11 at birth; 1960, 1970 a 5d 1981 dana. O a badd he Iicirey,e -d slo .c.uod.a Or.. cagr oar. b,fa 190 Sntet-pialtrpy eafelprtbaoosg dl-arouay)deartholonnI__oIfdo_aoe tsdoeai IduhaoeatasryicmtnlO trccpr(uhaoe peso YgAl nann o beh;ld,17 ad,18 danab,,acalP epar- Rrn. oIeiA e.s hnOnor re halos ohichani. Factesattstewasrlpercntra-paulaflan-_aral-rio.ly crlttrotaya-e -patedieps tsontaltotod ceqo resens..... ruhro pol ttl tbc n curIO sIfreaons i' sIcest at tadte saters.app fyt60ud frreoedartp-c-acpdrec arddr2asbgdha bsteotdaltisyncstloadd f ilSOpscai.)o.annd1rl sashnoe sels asheceta at F th I ceo -cn pauaian..I a pecora .1Onad ot8 the. Th-ney O ba - e in deiLnd tea e thei. euro orboartapuhd ctaanaO aernpslctdomrT's 210etrlolobdocmttahgsas ott.'I .lbcidoglnoohaose r-ds rural f, ..l . .- iarobeol ttl urbon, pandesay) s96e6ec97e.d 1y97r7O pr Ilts so t.d nim ia onrolfIorl 196oos70 d19apd- 198h1da AXNEX I Page 4 of 5 ECONOMIC DEVELOPMENT DATA GNIP PER CAPITA IN 1981 US$250 GROSS NATIONAL PRODUC'r IN 1981/82 bt ANNUAL RATE CO GROWTH (X, constant prices) - US$ Bin . % 1955/56-1959/60 1960/61-1964/65 1965/66-1969/70 1970/71-1974/75 GNP att Market Prices 165.38 100.0 3.7 3.6 3.6 2.9 Gross Domestic Investment 41.74 25.2 Gross National Saving 37.66 22.8 Current Account Balance -4.08 -2.4 OUTP1JT, LABOR FORCE AND PRODUCTIVITY IN 1978 Value Added (at factor cost) Labor Force i/ V.A. Per Worker US$ BIn.. % Mil. % %S of National Average Agriculture 39.8 39.6 180.6 70.7 220 56 Industry 25.2 25.1 32.2 12.6 783 199 Services 35.5 35.3 42.6 16.7 833 211 Total/Average 100.5 100.0 255.4 100.0 394 100 GOVERNMENT FINANCE General Government e/ Central Governrment Rs. Bln. % of GDP Rs. Bli%. X of GDP 1981/82 1981/82 1977/78-1981/82 1981/82 1981/82 1977/78-1981/82 Current Receipts 285.77 19.4 19.1 149.2
Группа Всемирного банка · Memorandum & Recommendation of the President
India - Dudhichua Coal Project
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Основные сведения
Организация
Группа Всемирного банка
Тип документа
Memorandum & Recommendation of the President
Страна
Индия
Источник
Всемирный банк