Tocument of The World Bank FOR OMCIAL USE ONLY C R? '6TR-r-v 4- Repwt N.. P-3938-IN REPORT AND RECOWMENDAIION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOcIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED IDA CREDIT OF SDR 149.5 MILLION TO INDIA FOR THE NJARMADA RIVER DEVELOPMENT (GUJARAT) WATER DELIVERY AND DRAINAGE PROJECT February 6, 1985 This doemnb a rc d way b X byrecy e thi fib dti lb l ya aewse be_ didw wid WW B a CURRENCY EOUIVALEBS (As of February 4, 1985) US$1.00 - Rs 12.75 Rs 1.00 - US$0.078 Rs 1 million U$78,000 The US DolLarlRupee exchange rate is subject to cbarage. Conversions ix the Staff Appraisal Report were, except as othervise noted, made at the rate of US$1 to Rs 12. FISCAL YEAR April 1 - March 31 ABBREVIATIONS CAC - Construction Advisory Committee GEL - Central Electricity Authority CPU - Central Procurement Unit ERR - Economic Rate of Return COG - Government of Gujarat GOI - Government of India GOMP - Government of Madhya Pradesh GOR - Government of Rajasthan Ha - hectere ID - Irrigation Department (GOG) Km - Kilometers mISC - Management Information Systems Cell NDD - Narmada Developme7t Depertment. NC& - Narmada Control Authority laPC - Narmada High Povered Coruittee DPG - Ramada Planning Group NRC - Narmada Review Committee NDT - Narmada Water Disputes Tribunal SEB - State Electricit- Board FOR OFFICAL USE ONLY NARMADA RIVER DEVELOPMENT (GUJART) WAoER DELIVERY AND DRAINAGE PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President (GOI). Beneficiary: Government of Gujarat (COG). 11 Amount: IDA Credit: SDR 149.5 million (US$150 million equivalent). Terms: Standard- On-lendins Terms: From GOI to GOG as part of central assistance to States for development projects on terms and condi- tions applicable at the time. GOI would bear the exchange risk. Proiect Description: The proposed vater delivery and drainage project is part of an inter-state program for the development of multi-purpose hydropower and irrigation dAsm on the Narmada River and their associated irrigation canal networks. The program has been designed to (a) further the progress of India-s long-term power plan through the addition of generating capacity within the Western Region; (b) bring potentially valuable agricultural land in Gujarat and Rajasthan, now prone to drought and vater scarcity, under irrigation, and (c) supply domestic, municipal and industrial water for Gujarat. The proposed project consists of the first three year time slice of con- struction of a large main canal extending for about 440 km through Gujarat to Rajasthan and an extensive canal network. A separate, parallel operation sup- ported by the Bank Group would finance construction of a dam and power complex, including a storage reservoir extending about 210 kIs upstream of the dam in Gujarat, into Maharashtra and Madhya Pradesh. The projects would install 1,450 KW of hydroelectric generating capacity and associated transmission facilities, irrigate about 1.9 million ha in Gujarat and create the potential for the irrigation of about 70,000 ha in Rajasthan. and supply about 1,300 mil- lion cubic meters per annum of municipal and 1/ The Government of Rajastan would also benefit from the project, but will not be a recipient of credit funds. 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- industrial water. As part of the river basin development, the project would contribute to the eventual improvement of the lives of over 11 million people in ftur States. As one of the largest developments ever conceived of and designed as an iutegrated set of izvestments, it will pose major challenges to GOI and the participating States in ensuring its execution and operation to very high technical standards. There are risks that financial constraints and difficult and lengthy land acquisi - tion and resettlement proceedings could delay execu- tion ard the build-up of project benefits. These risks bave been mitigated through special measures by GO! in ensuring the availability of sufficient finan- cial resources for the project, the formulation of a comprehensive resettlement plan, and the use of foreign civil contractors on key civil works. Overall, the risks are acceptable. Estimated Cost jj: (USS millions) Local ForeiRn Total Comoonents: Main Canal 191.7 84.3 276.0 Branches 46.1 20.0 66.1 Distribution and Drainage Systems 28.6 3.8 32.5 Training and Technical Assistance 0.2 1.0 1.2 Total Base Costs 266.6 109.1 375.8 Physical Contingencies 34.3 14.9 49.2 Price Contingencies 72.0 24.0 36.0 Total Project Costs 372.8 148.1 520.9 jj Includes an estimate of US$29.3 million in taxes and duties. at Does not add due to rounding. - iii- Figngcing Plan: Cuss millionv) Local Foreitn Total GOG 332.9 - 332.9 GOR 38.0 - 38.0 Bank Group 1.9 148.1 150. Total 372.8 148.1 520.9 Estimated Disbursements (USS millions) FY85 FY86 iY87 FY88 Annual 1.3 32.3 84.3 32.1 Cumulative 1.3 33.6 117.9 150.0 Rate of Return: About 13Z APDraisal Report: No. 5108-IN, dated February 12, 1985. 1J BY Bank Group fiscal year. INTERNATIONAL DEVELOPMNET ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE NARNADA RIVER BASIN (GUJARAT) WATER DELIVERY AND DRAINAGE PROJECT 1. I submit the folloving report and recommendation on a proposed develop- went credit to India for SDR 149.5 million (US$150 million equ*ivalent) to help fianmce the construction of an extensive canal network in Gujarat. The IDA Credit vould be made on standard terms. The Government of India (GOI) would channel the proceeds of the credit to GOG in accordance with GOI's standard terms and arrangements for financing development projects. The exchange risk will be borne by GOI. PART I - THE ECONOMY 11 2. An economic report, "Situation and Prospects of the Indian Economy - A Medium Term Perspective" (4962-IN, dated April 16, 1984), was distributed to the Executive Directors on April 23, 1984. Country data sheets are attached as Annex I. Background 3. India is a large and diverse country with a population of about 750 mil- lion (in mid-1984) and an annual per capita income of US$260. 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 who own little or no land. Growth of value-added in agriculture - 2.2Z since 1950/51 - has been slower than growtb of industrial value-added (5.3Z per annum). As a result, there has been a gradual decline in the share of agriculture in GDP (at factor cost) from 52Z in 1950/51 to about 33% in 1981/82, while the share of industry rose from 20% to around 262. 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 1950151. 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 markedly since 1950/51: the gross national savings rate more than doubled from 10.8% of GDP (at factor cost) to 22.7% in 1983/84, while the gross domestic investment rate rose from 12.5% of GDP to 24.8% in 1983/84. Foreign savings 1/ Parts I and II of the report are similar to Parts I and II of the President's Report for the Bombay Urban Development Project (No.P-3920-IN), dated January 7, 1984. -2- (balance of payments deficit on current account) have never financed a major portion of domestic investment: a peak of about 20 was reached during the early 1960s. Currently, foreign savings account for about 8X of investment. External assistance has been low both as a percentage of GDP and in per capita terms, never rising above 31 of GDP and averaging below 1S for the past five years. Net use of foreign savings has never risen above 3S of GDP, and presently stands at 2.1Z. 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 4.3Z. In the early to mid-1970s, however, India's terms of trade, which bad 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 7.31 per anum 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, contributed to this growth, liberalized access to imported inputs and more effective 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) averagi'g 5.3%, 3.3Z and 8.1%, respectivelv, during the 1975/76 to 1978/79 period. 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 relatively large trade deficit. Severe inflationary pres- sures also emerged after several years of virtual price stability. These setbacks coincided with the preparation of the Sixth Five-Year Plan which laid down a program of adjustment that aimed at improving the trade deficit, remov- ing infrastructural bottlenecks and ensuring price stability with an overall grovth of the economy of 5.2% per annum. Recent Trends 7. Despite the effects of two severe droughts in 1979/80 and 1982/83, India's economy in the early 1980s continued to grow at the faster pace of the second half of the 1970s. Between the two droughts (from 1979/80 to 1982/83), GDP growth averaged almost 5Z per annum, while between the two recovery years (from 1980/81 to 1983/84), it was 4.5% per annum - substantially higher than India's long-term growth rate of 3.6%. Continued rapid economic growth has resulted from a development strategy which includes higher investment levels and liberalized policies on imports, industrial licensing, prices, and comer- cial borrowing. These policies, by easing constraints on the supply of infrastructure and basic commodities, were a determining factor in the improved performance of the economy and the industrial sector. This overall improvement in performance, combined with a more restrictive monetary policy in 1981/82 and 1982/83, resulted in a sharp decline in the rate of inflation. The growth rate of wholesale prices declined from over 18% in 1980/81 to only 2.6% in 1982/83, but rose to over 9% in 1983/84, mainly due to the effect of the 1982/83 drought on food prices. Further improvements in the policy environment will be required to maintain these higher levels of economic growth and investment -3- without putting undue pressure on the balance of payments or reviving infla- tionary expectations. 8. Economic growth in the early 1980s has not been steady, mainly because of the effect of uneven rainfall on agricultural production during the period. In 1980/81 and 1981182, the economy substantially recovered from the 1979 drought, with real GDP growing by 7.6% and 5.3%, respectively. While industrial output expanded by 4% in 1980/81 and 8.6% in 1981/82, recovery was particularly robust in agriculture where normal weather helped output to rise by more than 15Z and 5.5Z, respectively. The supply of power, coal, and rail transport, already improved in 1980181, was further expanded in 1981/82, recording growth rates of about 10%, 9.6% and 12.5%, respectively. This over- all improvement in the Indian economy was halted in 1982/83 by a severe drought in mid-1982 which reduced agricultural production by 4%, brought down the GDP growth rate to 1.8Z, and put further strains on the already difficult balance of payments and domestic resource situation. The timely implementation of various economic policies relating to foodgrain imports, procurement and distribution, and the allocation of power to irrigation pumps mitigated the otherwise very distressing effects of the poor monsoon. The economy recovered in 1983/84, led by a robust agricultural sector - GDP grew by about 6.5% to 7Z with agricultural production growth in the 9%-10% range and industrial grovth of 4.5Z. The major factors contributing to the good economic performance during 1983/84 were the excellent monsoon, combined with adequate agricultural policies and programs, and satisfactory performance of the coal and transport sectors. The power sector, however, emerged again as a constraint on higher growth, especially in industry. 9. Agricultural production rebounded strongly in 1983/84 in response to the monsoon, improved use of inputs and continued expansion of irrigation. Overall foodgrain production rose by 102-12Z over .ie previous year, reaching a new record of 142-144 million tons, a substantial increase over the previous peak of 133 million tons in 1981/82. Corrected for veather variations, foodgrain production continues to grow at a trend of 2.6% per annum-sufficient to maintain a broad balance between supply and steadily increasing domestic demand. Nonetheless, the balance remains delicate, and the need for foodgrain imports to maintain consumer supplies or adequate buffer stocks could arise from time to time. Thus, adequate management of foodgrain stocks and programs to expand irrigation, strengthen extension and encourage the efficient use of other agricultural inputs continue to receive high priority. 10. Basic infrastructure services had a mixed performance in 1983/84, nartially because of sluggish demand from industry during the first half of the year but also due to a failure to maintain the productivity gains of 1980-82. Electricity generation grew only by about 3.7% due to low reservoir water levels during the first half of the year. delays in the commissioning of new capacity, and a deterioration of capacity utilization in thermal plants. As a result, power generation was about 11.5% below requirements and con- stituted a major bottleneck in the economy. Key industries which were adver- sely affected by power constraints included steel, fertilizers, cement, and coal. To improve performance in the power sector, the Government recently increased incentives for higher labor and management productivity in thermal plants. Railway freight traffic, measured in ton-kms, grew by only 0.5% in 1983/84, reflecting sluggish demand. Coal production increased by about 6.5% in 1983/84 reaching 139 million tons. When combined with stocks already avail- able this level of production was sufficient to meet the relatively slow demand -4- growth. Infrastructural constraints would have emerged much more sharply had the pace of industrial growth and demand been more rapid. It is therefore critically important that India maintain the pace of investment in these key sectors, mobilize sufficient resources to do so, and implement programs to enhance productivity. 11. The Indian economy has reverted from a situation of resource surplus in the late 1970s to an aggregate resource deficit. The gap between gross invest- ment and national savings increased from negligible levels during the late 1970s to an average equivalent to 2.12 of GDP in 1980-84. India's gross national savings rate, which averaged 22.6Z of GDP in the last four years, is high by any standard, particularly considering India's low income and the large proportion of its population below the poverty line. The scope for a substan- tial increase in the savings rate is therefore quite limited. Tf India is to maintain investment at about 25% of GDP, a major effort will be required to raise additional domestic resources particularly in the public sector. 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. This would also allow a marginal decline in the use of foreign savings from the recent 2.1X-2.3% of GDP to 1.5Z-1.8%, to ensure a sustainable external debt service burden. 12. India's external resource position has changed notably since the late 1970s. The current account balance, which recorded surpluses from 1976/77 to 1978/79, reverted to deficits averaging US$3.5 billion and 2.1% of GDP during 1980/81 to 1983184. Several developments contributed to these relatively larger current account deficits. First, the terms of trade deteriorated sharply in 1979/80 due to the second round of oil price increases and continued to move against India during the first three years of the 1980s. Second, a more liberal import policy towards industrial inputs was pursued. Third, net invisibles declined as travel receipts fell off, workers' remittances stagnated (reflecting slower development activity in the Middle East), and payment of interest on higher levels of foreign debt increased. Faced with severe infrastructural constraints and a deterioration in its balance of payments, India initiated an adjustment program in 1980/81 designed to raise the growth rate from its historical level of 3.6% to 5.2% while adjusting the country's external balance to the adverse price developments in the world markets. The main elements of this strategy, which is being successfully implemented, are export promotion, import substitution where economically justifiable, implemen- tation of a coherent energy policy designed to meet the energy needs of the economy while curbing the growth of oil imports, and continued movement toward a more liberal import policy aimed at providing producers with access to inputs for higher capacity utilization, greater efficiency, improved technology aud capacity expansion. 13. A positive development in India's balance of payments is the reduction in the trade deficit from US$7.7 billion in 1980/81 to US$5.9 billion in 1983/84 despite unfavorable world market conditions and import liberalization. Export volume growth and import substitution of oil and petroleum products, metals and fertilizers more than offset the substantial increase in "other" imports. These "other" imports consist mainly of industrial imports and capi- tal goods which historically have been in chronic short supply and which are of critical importance to capacity utilization, product quality, and plant modern- ization and expansion. A major factor in the decline of the trade deficit was the lower net import bill for petroleum, which dropped from US$6.7 billion in -5- 1980/81 to US$3.4 billion in 1983/84 in response to a successful oil develop- ment program that reduced import needs and allowed crude o.l exports, which totalled about US$1.5 billion in 1983/84. These structural changes in the balance of payments are to a significant degree the result of India's develop- ment and adjustment efforts over the past three years. It is expected that the balance of payments will continue to be under strain for the next several years, since the adjustment strategy will continue to require high levels of imports. 14. Even assuming a favorable export performance, India will need external cap'tal flows to augment its own resources for the foreseeable future, given the low per capita income level in the country, the already high savings rate, and the structural adjustment process. Faced with a growing need for external capital inflows and stagnation in the availability of :oncessional assistance, India decided at the start of the Sixth Plan to increase borrowings from the International Monetary Fund (IMF) and commercial banks to substantial levels. In the period covering the fiscal years 1981/82 to 1983/84, India drew SDR 3.9 billion from the Extended Fund Facility of the IMF. In addition, Itdi. bor- rowed significant amounts on commercial terms from the Euro-dollar market and increased the use of suppliers' and export credits. In the period 1980-84, India contracted commercial loans totalling over US$6,000 million and suppliers' credits of over US$1,000 million. The bulk of this borrowing has been used for specific development projects in the public and private sector (mostly for petroleum exploration and development, steel, power, aluminum and shipping). India's favorable debt service position and the nature of its borrowings, for project-related purposes instead of direct balance of payments 3upport, enabled it to tap commercial capital markets at favorable spreads. This larger commercial borrowing and transfer of funds under the arrangement with the IMF has stemmed the use of foreign exchange reserves which had fallen to less than four months of import coverage in 1981/82. Development Prospects 15. 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 tne utilization of existing capacity. India also has a wide range of institutions capable of fostering development and is well- endowed with human resources. 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. 16. The Government is currently preparing the Seventh Plan which will lay down the development strategy for 1985/86-1989/90. This strategy is expected to continue the emphasis of the Sixth Plan on agriculture, energy development, export promotion, domestic import substitution where economically justifiable and the removal of infrastructural bottlenecks. Overall Sixth Plan performance has been encouraging, with aggregate real investment projected to be about 30% higher than in the period 1975-80-a creditable performance indeed. The Sixth -6- Plan expenditure targets, however, will not be fulfilled as resource mobi- lization by the public sector vill fall short of the financing requirements of planned public investment. Actual aggregate real investment is projected to be about 72 below the original target for the period 1980-85, private investment being 5X to 10X higher and public investment about 20% lover in real terms than actually projected. In terms of meeting Plan expenditure targets, the perfor- mance of the Central Government is considerably better than that of the State Governments. The Central Government's Plan outlays are likely to reach about OZ to 9O% of the original Plan allocation in real terms, while the States' will probably achieve only about 50% of their targets, due principally to shortfalls in resource generation. Bottlenecks in key sectors such as power, transport and irrigation are likely to persist as a consequence of real invest- ment shortfalls relative to original Plan allocations. 17. Although Sixth Plan expenditure targets will not be met, India's capi- tal formation rates bave increased from 22.6% in 1975-80 to 24.7% of GD.' in 1980-84. Recent higher capital formation rates are encouraging for future income growth, but 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 services which have inherently high capital-output ratios. However, there is scope to reduce capital-output ratios through improvements in efficiency. As discussed in greater detail in our recent economic reports, performance in the basic service sectors can be improved through better plan- ning and management, thus leading to higher productivity and capacity utiliza- tion throughout the eccnomy. At the same time, programs to expand domestic capacity are vital. In the case of tradeable commodities like coal, steel and cement, this is justifiee on the grounds of comparative advantage. For sectors such as irrigation, power and transportation, expansion of planned capacity in accordance with the requirements of the rest of the economy will be vital for sustained growth. 18. Under the Sixth Plan, India has an ambitious oil development program backed by substantial financial commitment. Performance under the program has been excellent with real investment and oil production levels running well ahead of Plan Targets. In 1981, and again in early 1983, resources for exploration and development were raised by successive price increases for domestic crude and products. While the gap between domestic consumption of petroleum and production remains large, India's dependence on oil imports dropped from 63% of consumption in 1979/80 to about 41% in 1983/84 and is expected to decrease 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. At the same time, the increases in domestic petroleum prices have helped encourage conservation and slow demand growth. 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. This will require the continuation of the c-_rrent development strategy which arsigns high priority to export promotion, public finance discipline, improve- ment of economic efficiency, and investment in infrastructure, supported by adequate flows of external borrowing and aid. In the short term, a relatively large level of external borrowing, including an increased emphasis on commer- cial borrowing, will be necessary to cope with the balance of payments conse- -7- quences of such a growth strategy. However, an important element in providing India with the capacity to adjust flexibly will be adequate flows of conces- sional assistance since India is still a very poor country with a large rural sector and enormous investment requiremerts for human development and basic infrastructure. Although India is currently in a position to increase borrow- ing 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. Nevertheless, with a morc open trade policy and expanded efforts to remove constraints on the growth of productive capacity, supported by adequate mobilization of both * foreign and domestic savings, India is demonstrating that at can sustain a rate of growth closer to 5.0% per annum than to the long-run trend of 3.6Z per annum. If the rate of population growth can be brought to below 2.02 per annum, a 5.0X growth rate would mean a doubling of the trend rate of growth of per capita income of 1.4% per annum. Success in these efforts would make a significant difference to the praspects 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 indicated there was no decline in the rate of population growth, which remained about 2.2% per annum in the 1970s despite a measurable decline in fertility rates. The population growth rate failed to decline in the past decade due to a reduction in the infant mortality rate and an increase in life expectancy, reflecting larger availability of food and health services. While this is a welcome development, it implies a greater strain on the economy and re-emphasizes the need for continuing efforts to strengthen the health and family planning programs 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. The Government is reviewing its population policy for the Seventh Plan, with indications of a determination to retain the emphasis on the implementation of family planning, health, education and literacy programs aimed at reducing fertility rates. 21. Reduction of poverty remains the central goal of Indian economic and social policy. More than one-third of the world's poor live in India, and more than 80% of the Indian poor belong to the rural households of landless laborers and small farmers. About 51% of the rural population and 40% of the urban population subsist below the poverty line. Significant reductions in poverty will depend primarily on an acceleration of economic growth, particularly in agriculture, combined with effective implementation of poverty alleviation programs. India's poverty alleviation strategy appropriately recognizes that production-oriented programs, which aim at accelerating the overall pace of eccaomic growth, and poverty alleviation programs, targetted at those least able to participate in the general growth of the economy, can be mutually reinforcing rather than substituting for each other. Major poverty programs operating on a nationwide basis at present include: the Minimum Needs Program (MNP), the Integrated Rural Development Program (IRDP), and the National Rural Employment Program (NREP). The IRDP and NREP are targeted programs aimed at increasing the incomes of the poor rapidly, either through the transfer of productive assets or direct employment. The MNP, aims at broadening the provi- sion of social infrastructure and basic services which enhance the human capi- tal of the poor and improve living standards. These programs represent a vitally important commitment of the Government to address the needs of the poorest. The scale of the poverty problem in India, combined with the inherent -8- difficulties in implementing poverty programs in any country, imply the need for continued efforts to enbance the effectiveness of these programs. PART II - BK GROUP OPERATIONS IN INDIA 22. Since 1949, the Bank Group has made 82 loans and 165 development credits to India totalling US$6,526 million and USS12,268 million (both net of cancellation), respectively. Of these amounts, US$1,524 million has been repaid, and USS6,207 million was still undisbursed as of September, 30, 1984. Bank Group disbursements to India in the current fiscal year through September 30, 1984 totalled USS171 million, representing a decrease of about 40 percent over the same period last year. Anzel II contains a summary state- ment of disbursements as of September 30, 1984. 23. Since 1959, IFC has made 29 commitmente in India totalling US$223 million, of which USS34 million has been repaid, USS56 million sold and US$34 million cancelled. Of the balance of US$98 million, US$91 million repre- sents loans and US$7 million equity. A sumary statement of IPC disbursements as of September 30, 1984, is also included in Annex II (page 4). 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 h2ve hampered economic growth in India, particularly through power generation and distribution, and railways and telecommunications projects. The Bank Group has also provided financing for a broad range of medium- and small-scale industrial enterprises, primarily in the private sector, through its support of develop- ment 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 pr!bjocts. 25. This pattern of assistance remains highly relevant and consonant with Government priorities as rcflected in the Sixth Plan. Continuation of the Bank's Group current priorities can be strongly justified on the basis of the approach that is being taken by GOI in the preparation of the Seventh Plan. First, continued support of GOI-s agricultural program is warranted. While India has made significant progress in agriculture, productivity growth will have to be sustained to improve the balance between food demand and supply and to contribute to poverty alleviation and employment. Thus, we will continue our support to irrigation, fertilizer production and distribution, and agricul- tural extension and credit. Second, the review of performance under the Sixth Plan confirms the high priority that should continue to be given to the expan- sion and more efficient use of basic infrastructure capacity and to the development of India-s indigenous hydrocarbon resources. Accordingly, the Bank will continue to support the development of the energy, transport and telecom- munications sectors to alleviate critical shortages which constrain output in both agricultural and industrial sectors. Third, support of urban development and other GOI basic social services programs for the poor must also continue in -9- light of the growth in population which, despite successes in lowering birth and death rates, still increases by about 16 million each year. Finally, the major departure from our previous strategy will be a substantial increase in the Banzks assistance to Iudia's industrial development substantially aimed at supporting GOI's efforts in promoting greater efficiency and faster development of the indnstrial sector. 26. The need for a substantial net transfer of external resources in support of the development of India's economy has been a recurrent theme of Bank economic reports and of the discussions within the India Consortium. Thanks in part to the response of the aid community, Iudia successfully adjusted to the changed world price situation of the mid-1970s. However, India continues to require a substantial level of foreign assistance both to offset the overall deterioration in the world trade environment, and to sustain the relatively higher investment and growth rates achieved during the first four years of the Sixth Plan. As in the past, Bank Group assistance for projects in Inlia 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 and irrigation. 27. India-s poverty and neel's are such that whenever possible, external capital requirements should be provided on concessional terms. Accordingly, the bulk of the Bank Group assistance to India in the past was provided from IDA. However, IDA lending to India is declining from a peak of US$1.6 billion in FY82, mostly due to funding constraints related to IDA. The amount of IDA funds available to India is likely to remain small in relation to India's needs for external support. Thus, this requirement for additional assistance will have to be met, in part, through larger Bank lending. Given its development prespects and policies, India is judged creditworthy for Bank lending to sup- plement IDA assistance. A continuation of efforts already underway to achieve growth in productive capacity, trade expansion, higher levels of sa-,ngs, 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 its total cur- rent account was about 12.9Z in 1983/84. Over the next several years this ratio is projected to rise to around 20Z and remain around that level through 1995196. As of September 30, 1984, outstanding loans to India held by the Bank totalled US$5,176 million, of vhich US$2,713 million remain to be disbursed, leaving a net amount o:tstanding of US$2,463 million. 28. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969170, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with 62%, 33% and 37%. respectively, in 1983184. On March 31, 1984, India's outstanding and disbursed external public debt was estimated to be about US$26.9 billion, of which the Bank Group's share was US$9.6 billion or 36% (IDA's US$7.8 billion and IBRD's US$1.8 billion). In 1983184, about 19.0% of India's total debt service payments were to the Bank Group- -10- PART III - IRRIGATION IN INDIA Agriculture and Irrigation in India and in Gujarat 29. Agriculture is the dominant sector of the Indian economy, con- tributing some 40Z to GDP. GOI development plans have sought to raise foodgrain production through the expansion and improved reliability of irrigation water supplies, fertilizers, plant protection, and seeds of improved variety. Projections of demand for foodgrains by the end of the Seventh Plan Period (1989/90) call for foodgrain production in excess of 150 million tons compared to production in 1983/84 of 145 million tons, which represents an annual growth rate of about 3% compared to the post- "Green Revolution" (1966-67) growth rates of about 2.5% per annum. Shortages of cultivable land will dictate the need for increasing produc- tion through more intensive cropping. This in turn requires, inter-alia, the extension of irrigation systems into large drought-prone areas where it is feasible to do so, through investments such as those contemplated for the Narmada River Basin. Bank Group lending for Indian agriculture has been, and continues to be, consonant with GOI objectives of raising agricultural growth and productivity, focussing on areas where technical constraints, including the provision of reliable water supplies, are most severe. Bank Group investments in irrigation essentially aim at expandirg and improving the efficiency of irrigation infrastructure, and promoting optimal and co-ordinated resource use through improved water management. 30. Gujarat's population is 36 million and growing at an annual rate of about 2.5%. Agriculture accounts for more than 30% of the GDP and employs more than 60Z of its working population. Much of Gujarat is characterized by low and highly variable rainfall, with consequent suscep- t-bility to drought and famine. GOG therefore allocates high priority to irrigation development. While only 54Z of Gujarat's ultimate irrigation potential has been developed to date, most water surface available for irrigation outside the Sardar Sarovar service area will have been developed within a decade. Three-quarters of the undeveloped water poten- tial is located in areas whose requirements can be met by transfers from the Narmada Basin. Therefore, the only feasible means of sustaining an adequate level of agricultural growth in Gujarat is through the develop- ment of wate- supplies from the Narmada River. The project will also create the potential for the irrigation of about 70,000 ha of drought- prone land in Rajasthan, a state which contains large areas of desert with low foodgrain yields. The Bank Group has provided significant support to Gujarat for the development of its irrigation systems beginning in 1961 and- since 1979, of its agricultural extension and research system (details are in Annex IV). -ll- The Narmada Basin 31. The Narmada is the largest westward-flowing river in India. It rises in eastern Madhya Pradesh and discharges into the Gulf of Cambay, draining about 98,800 km2 in Hadhya Pradesh, Gujarat and Maharashtra. Its average annual flow is greater than the total of the Ravi, Beas and Sutlej flows that feed the Indus Basin. Previous plans for the development of Narmada's resources could not be implemented due to inter-State disputes over the allocation of water. In December 1979 the GOI-appointed Narmada Water Disputes Tribunal (NWDT) made an award covering most aspects of the basin developments, including the scope of the main investments, water allocations, cost and benefit sharing, resettlement and rehabilitation of the oustees, and institutional mechanisms for implementation and operation of project facilities. The NWDT's award has created the potential for a very significant development of water and power resources in India. The Basin plan calls for the construction of 30 major (21 irrigation, 5 hydropower and 4 multipurpose) projects, some 400 medium schemes and several thousand minor schemes which would bring under irrigation 4-5 million ha of potentially valuable agriculturaL land which are currently drought-prone. It would provide at least 2,700 MW of hydro power capacity and enhance domestic and industrial water supplies. The basin-wide program of development would take 40-50 years to complete. The first critical investments in the Narmada Basin will be the Sardar Sarovar Dam and Power Project, described in the accompanying President's Report No. P-3937-IN, dated February 6, 1985 and an associated Water Delivery and Drainage Project in Gujarat, the subject of this report. Bank Group involvement in the Narmada Basin to date has consisted of providing funds under the project preparation facilities attached to the Gujarat II Irrigation Project (Credit 1101-IN, dated May 12, 1980) and the Second UP Tubewells Project (Credit 1132-IN, dated March 31, 1983) for preparation of the high priority investments in the basin. In addition, Bank staff and consultants have contributed substantially to optimizing the basin plan and the design of the initial project investments. PART IV - THE PROJECT 32. The Water Delivery and Drainage Project was appraised by missions which visited India in March, June and September, 1983. A post-appraisal mission on the resettlement component of the related dam and power project visited India in August 1984. Negotiations were held in Washington, D.C. in November, 1984, and in January 1985, with the Indian delegation coor- dinated by Mr. A. Thapan, of the Government of India's Department of Economic Affairs, Ministry of Finance. The complexity of the project and the need for interstate coordination explain the time taken for appraisal and negotiations. A President's Report pertaining to the Sardar Sarovar Dam and Power Project is being distributed simultaneously. The Staff Appraisal Report No. 5108-IN, dated February 12, 1985, is being circulated to the Executive Directors separately. A Supplementary Data sheet is attached at Annex III. -12- Project Objectives 33. The project, together with the Sardar Sarovar Dam and Power Project, being considered simultaneously, would provide storage and regulation of the Narmada River flows needed to establish efficient, reliable and equitable irrigation and municipal and industrial water supplies coupled with effective drainage, to very large, dry and drought- prone areas in Gujarat and Rajasthan. These investments would create a State-wide water conveyance network and thus be a major engine of growth for Gujarat's whole economy and be the principal basis for its agricul- tural developmpnt in the 21st century. Water would be supplied to urban and rural population centers and to industries in Gujarat. Development of a large untapped water resource, such as the Narmada River, would comple- ment on-going efforts to improve utilization of existing irrigation facilities through upgrading of water delivery systems and improved management practices. The projects would also establish a reliable and efficient supply of hydroelectric power, particularly long-term peaking capacity, to tie Western Region grid. Rationale for lank Group Involvemenc in the Narmada River Development 34. The Sardar Sarovar Dam and associated canal networks would be the largest Indian irrigation system planned and designed as one unit. It has been designed and planned, and would be constructed to standards not hitherto used in India and thus permit higher levels of reliability and timeliness of water delivery than previously achieved. It thus represents a break with traditional modes of Indian irrigation development. The Bank's influence to date has been instrumental in five ways: (a) the establishment of a high-level planning agency (the Narmada Planning Group); (b) the conduct of key studies in systems planning, design, implementation and operation, and in resettlement; (c) the use of foreign expertise to suppLement local resources for formulating systems designs, studies and planning methodoLogies; (d) the resoLution of unique technical and institutional issues, thereby assisting in the optimal development of large and hitherto untapped water resources; and (e) the formulation of a comprehensive and equitable resettLement and rehabilitation program for oustees. Further Bank Group involvement is justified to ensure the con- tinued adoption of new technologies in systems communications, operation and control, including ensuring the introduction of dependable rotational water supplies to individual farmers spread over large areas, thus con- tributing to the increased reliability and efficiency of water use over very large areas. It would also be instrumental in facilitating inter- state coordination, which is essential if the basin resources are to be developed in optimal fashion, given the interdependence of the projects. Bank Group participation is justified to ensure that new technologies are adopted in the construction, operation and maintenance of other critical basin investments. It could also catalyze the attraction of suppliers' credits and other forms of commercial financing to the project. Finally, Bank Group involvement in the basin would set new standards and thus spur the modernization of large parts of the Indian irrigation sector. -13- Project Description 35. The project consists of a three-year time-slice of construction of the following major water supply components in Gujarat: (a) Irrigation System. Construction of 438 kms of main canal with a head capacity of 1133 cubic meters per second. Construction of a head regulator, cross regulators, aqueducts, cross drainage structures, canal crossings, road and railway bridges. Where aquifer conditions permit, centrally controlled augmentation tubewells would infuse groundwater supplies conjunctively with surface supplies to the delivery system at locations above the 200-500 ha service areas, and thence to farms through extensive networks. Water releases from the reservoir would be made through a hydroelectric power plant or through an irrigation bypass tunnel on the rim of the Sardar Sarovar reservoir and would be re-regulated in four interconnected ponds above the main canalhead regulator. A lined main canal, branch canals and distributaries, which form the conveyance system to 200-500 ha irrigation service areas, would be concrete lined and equipped with cross-regulators to maintain appropriate water levels at all take-out structures. Conveyance structures would be designed for remote control. The canal delivery system, within the irrigation service areas, would be tied to outlets, each serving about 8 ha, and would be free- draining. (It is anticipated that farmers, through their own organizations, will construct, operate and maintain the system below the 8 ha turnout.) (b) Drainage Facilities. An open channel flood drainage system con- sisting of improved natural and artificial drains would be constructed to the 40 ha level concurrently with the conveyance and distribution system. Where and when appropriate, tubewells would perform a groundwater drainage function. (c) Roads. Service roads would be constructed and the existing road network would be enhanced by improving farm-to-market access. (d) Other Infrastructure. A communication and remote control system (and back-up systems) would be provided between the project control center, area control centers, and all flow control points; in addition, offices, stores, workshops and residences would be constructed in support of system operation and maintenance. (e) Command Area Development (CAD). Land shaping, development of on-farm drainage facilities and agricultural support services would be provided. (f) Training and Technical Assistance. Funds wouLd be provided for training programs on environmental protection, project operation and maintenance (including the establishment of a permanent O&M training unit), and the development of minor irrigation systems. Technical -14- Assistance would be needed for a variety of activities during project construction and initial operations. Bank Group financing is proposed for the first three-year time slice of the canal network, consisting essentially of canal earthworks and lining, control structures and branch canal construction, development of the drainage and distribution systems, and training and technical assistance. 36. The project would be implemented in conjunction with Sardar Sarovar dam, hydropower generating facilities, storage weir, rockfill dams, channels and irrigation bypass tunnels, pum.7-back power transmission lines, hydrometeorological network, resettlement and rehabilitation, and training and technical assistance. These components are described in an accompanying document entitled "President's Report and Recommendation on the Narmada River Development (Gujarat) Sardar Sarovar Dam and Power Project", dated February 6, 1985. The two projects have synchronized implementation schedules. It is essential to commence work on the canal network so as to ensure that water available upon completion of the dam could be used for municipal and industrial purposes. Project Organization and Management 37. The Government of Gujarat (GOG) has primary responsibility for planning, design, implementation, and operation and maintenance (O&M) of the project. Several agencies within Gujarat have been established to plan and execute the project. These are described below in paragraphs 38-41. Because of the interstate nature of the project, a number of coordinating institutions were set up to guide project implemen- tation (see paragraph 42). Gujarat State Agencies 38. The Narmada Development Department (NDD). The NDD, to be headed by an Additional Chief Secretary, was recently created under the Minister of Irrigation to implement all Narmada-related investments, and will be responsible for the implementation of both the Dam and Power Project and the Water Delivery and Drainage Project. It would have the necessary staff strength, assisted by consultants. Current staff strength of Gujarat's total irrigation organization, including the Irrigation Department, 1/ is 7,516 engineers of whom 1,370 (including 94 at senior level) are presently assigned to the NDD. Staff requirements will peak in 1938/89 at about 6,630 (technical and engineering staff), including 230 at senior level. COG would maintain the NDD at all times with such powers, functions, responsibilities, organization, staffing and funds as are 1/ The Irrigation Department, headed by Secretary, will continue to be responsible for all other State irrigation and command area development activities outside the NDD. -15- required to implement and manage the project (Section 2.08, Gujarat Project Agreement). 39. Centralized Procurement Unit (CPU). In order to efficiently perform the complex procurement tasks necessary for the Narmada development, procurement responsibilities would be centralized in one organizational unit responsible for the procurement of all goods, works, and services for the entire scheme, reporting directly to the Additional Chief Secretary of the NDD. The CPU would engage all the financial, commercial, legal and engineering talents needed to manage procurement activities, and would service all engineering aspects of the project in selecting the source, arriving at a price, and preparing the contracts for all works, goods, and services. The CPU would also monitor the progress of the contracts. COG has established the Central Procurement Unit for the project within the NDD and would maintain it during project implemen- tation with such powers, functions, responsibilities, staffing, organiza- tion and funds as shall be required (Section 2.10(a), Gujarat Project Agreement). 40. Narmada High Power Committee (NHPC). This committee is respon- sible for coordination and ensuring timely interaction between various GOG departments and provides guidance on policy issues related to the project. The NHPC is chaired by the Chief Minister and includes the Ministers of Finance, Irrigation, Power, and Agriculture among its members. 41. Narmada Planning Group (NPG). The NPG, within NDD, reports directly to the NHPC and is responsible for the carrying out major plan- ning studies of the overall project ir. Gujarat and of the Narmada River Basin. It is chaired by the Irrigation Minister. Its Executive Vice Chairman is in charge of NPG's day-to-day operations. Gujarat would maintain the NHPC and NPG with such powers, functions, responsibilities, staffing and organization and funds as shzll be required to enable them to carry out their respective responsibilities (Section 2.09, Gujarat Project Agreement). 42. Other Gujarat Agencies. Because of the magnitude of the project and its statewide importance, a number of other COG departmental agencies have been and would continue to be involved in planning and implementing the project. These include the Departments of Finance, Agriculture, Forestry, Public Works, Transportation, Communications, and the Water Supply and Sewerage Board. 43. Other interstate agenciec have been established as follows: (a) Narmada Control Authority (NCA). The NCA is a coordinating and decision-making entity consisting of seven high-ranking engineers from each participating State and GOI as members, and a supporting staff. It is expected to play a key part in coordinating the future operation of the project and other major irrigation and power projects in the basin, would play a key role in the implementation of the hydrometeorological network -16- and in the daily operation of the Sardar Sarovar Dam and Reservoir and, through GOI, would have overall responsibility for monitoring and evalua- tion of the resettlement and rehabilitacion program. Upon project commissioning, the NCA would issue periodic directives concerning the interstate allocations of water and power, functioning along the lines of the Bakhra Management Board, which has been successful in guiding the irrigation and power operations of the Indus Basin in Punjab, laryana, Himachal Pradesh, and Rajasthan. The NCA would also review designs and coordinate the construction program for the main canal. (b) The Sardar Sarovar Construction Advisory Committee (CAC). This advisory committee was formed to review and make recommendations concern- ing the planning, design, and construction of the dam and power complex. It is chaired by the Secretary of Irrigation, GOI, and has representation from Central Government authorities handling irrigation and power and from the States. It would be actively involved in reviewing designs, cost estimates, contract proposals and implementation progress of the main canal. (c) Narmada Review Committee (NRC). This committee is chaired by the Union Minister of Irrigation, and includes the concerned chief ministers of each State as members. It has the right to review and suspend any decisions made by the NCA. GOI and the concerned States would at all times maintain the above inter- state agencies with such powers, functions, responsibilities, staffing, funds and membership as shall be required for the accomplishment of their purposes (Sections 3.03, Development Credit Agreement, 2.07, Gujarat Project Agreement, and 2.03, Madhya Pradesh and Maharashtra Project Agreements). Training and Technical Assistance 44. To acquaint the project engineers at all levels with the project concepts and policies, and to facilitate the absorption of large numbers of staff into the project organization, one or two week courses would be designed and conducted in conjunction with Gujarat's Water and Land Management Institute. The project would also finance the costs of travel abroad and in India, and the acquisition of training equipment. Project training would be supported by an allocation of US$550,000 from the IDA Credit. GOG would by June 30, 1985 prepare plans agreed with IDA for training programs covering: environmental effects and preventive measures; block development of minor irrigation and drainage network including field surveys, layout, design estimates, and related activities; and project operation and maintenance (Section 2.02(d), Cujarat Project Agreement). Training would be conducted concurrent with requirements of Gujarat Medium Irrigation II Project implementation in the development of minor irrigation systems. Canal project O&M training would also be coor- dinated with the O&M training needs of the Sardar Sarovar Dam and Power Project. -17- 45. In addition, a small permanent O&M training facility would be established and staffed early during project construction to orient staff and farmer representatives to the project operations. The NDD's new O&M planning unit would complete plans, schedules, and budgets for the proposed training facility and coordinate with the proposed extension and training accivities of the Agriculture Department. 46. GOG has recognized the need to use foreign and local consultants for the project's special design and construction features. The NDD would institute a Consultancy Board to independently review design and construc- tion plans of the main canal and its earthworks, lining and major in-line and cross-drainage structures, and to recommend modifications as required. Foreign and local technical experts would . :st the Board in overall project procurement, supervision, design and management, including instal- lation of a quality control system and development of centralized data and management systems; systems operation and maintenance; and for the selection, design and instalLation of project-wide communication and remote control systems. 47. These technical assistance requirements would entail a minimum of 75 man-months of consultancy services. COG would establish by April 1, 1985 and thereafter maintain a Consultancy Board constituted by consult- ants on specific technical tasks. The qualifications, experience, terms of reference and procedures for selecting the members of the Consultancy Board shall be satisfactory to IDA (Sections 2.03 and 2.04, Gujarat Project Agreement). Design and Operation Criteria 48. Water would pass sequentially through the conveyance network (main canal, branch canals and distributaries) and the delivery network (minors, subminors and field channels). A technologically appropriate system was needed to provide quick, reliable and equitable response to irrigation demands to the tailends of the system, which could be more than 700 kms from the main canal head regulator. Traditional free flowing and upstream scheduled operations, which would have taken too long to adapt to changes in demand and would not meet the needs of the tail-enders, were sub- stituted in the conveyance network by a controlled volume operation, and in the distribution system by predetermined rotational deliveries based on oon" or "off" operating modes. This conveyance system requires that all canal cross regulators are operated nearly simultaner,usly during changes in flows. Whenever water demand changes, the flow rates, and thus sup- plies throughout the system, are immediately adjusted to meet demand. 49. Water allowances -- categorized as Class A, B and C water reflect- ing levels of reliability -- would be strictly administered. Class A water is what farmers could normally count on for their cropping plans from surface water resources at 75% dependability, as well as from project groundwater resources, as defined by the Narmada Water Disputes Tribunal. Class B water is water surplus to and allocated in the same proportions as, Class A supplies in any given year at full project development. -18- CLass C water consists of surplus supplies during the project build-up period to be similarly allocated as the surplus occurs. All lands desig- nated as irrigable and reasonably contiguous within the command area would be served. The system would permit the delivery of municipal and industrial supplies for a minimum of nine-and-one-half months in the year. All reasonabLe demands for water for irrigation, and for municipal and industrial purposes, would have priority over releases for power generation, according to the stipulations of the Tribunal. 50. Each irrigation service area (200-500 ha) would be served by a single outlet from the conveyance system. Water would be delivered 24 hours per day to a service area, thence to farms, for a fixed period of time - at intervals to be established for each season and commencing on a given day and hour of the week. Agricultural extension advisers would assist in determining and informing farmers of the schedules for delivery of allocated water in terms of size of flow, number of irrigations and dates and times of delivery. The scheme of operation, based on rotational concepts, constitutes a significant advance in reliability and in accom- modating farmer needs above those found in most systems in India. 51. The design and operation principles of the minor distribution system in the project would be similar to those adopted for the Gujarat Medium II Irrigation (Cr. 1496-IN), with the service area chaks and subchaks being the elementary operating units. To enable reliable delivery of water to some 4,000 service areas, and to minimize the nega- tive impact of human errors, which could have devastating effects in a project of this magnitude, the conveyance system has been designed for remote monitoring and operation. This would enable the delivery of water to the service area outlet by similar methods as in the individual sub- projects in the Gujarat Medium II Irrigation Project. Within the service areas, the problems of delivering water reliably and equitably to each field would be similar in both projects. By the time irrigation would begin (about 1992), over 300,000 ha in subprojects completed under Gujarat Medium II Irrigation Project would be irrigated under rotational water supplies, some of them for over four years. Experience would have been gained also in farmer organizations, such as in establishment and opera- tion of water-user associations at various levels. Thus, the project operating organization would benefit considerably from the experience gained in the medium irrigation schemes, and the Narmada system operation would be in accordance with criteria and procedures which would have been tried and tested in Gujarat. The standards and criteria to be applied by GOG in the planning, design, construction, operation and maintenance of the project's irrigation and drainage system have been agreed with IDA. Evaluation and Monitoring 52. In order to provide adequate monitoring control and evaluation capabilities to manage the project, a Management Informacion Systems Cell (MISC) within the NDD with adequate computer facilities will need to be established. The MISC would produce data to control, plan, monitor, and forecast financial, material, and staff requirements for design and -19- construction, so as to ensure effective overall managemenL of project imp'.ementation. The MISC would be responsible for preparation of progress reports, and subsequently also manage and monitor water allocation scheduling, agricultural progress, water rates and crop trends as the project becomes operational. The MISC would be fully staffed and opera- tional by December 31, 1985 (Section 2.10(b), Gujarat Project Agreement). Reporting 53. GOG would submit to IDA semi-annual and annual reports, within three months after the end of each reporting period. The reports would compare planned and actual implementation in physical and financial terms, describe deviations from plans and explain the reasons therefor, and provide revised implementation schedules. COG would submit to IDA a project completion report not later than six months after the Closing Date of the Credit (Section 2.11, Gujarat Project Agreement). Furthermore, GOG would furnish to IDA semi-annual reports on the implementation of the project (Section 2.12, Gujarat Project Agreement). Operations and Maintenance Planning 54. Responsibility for O&M planning has been assigned to the NPG. Those responsible would thus form the nucleus of the O&M organization for the project and will formulate proposals for a permanent O&M organization. Initially, NPG will perform tasks such as analyzing and preparing plans and requirements of the proposed O&M training facility. Thereafter it will be responsible for reviewing the detailed organization, facilities, equipment, and staffing needs for the initial and full development stages of the project and to recommend permanent organizational arrangements. It wilL prepare detailed plans to guide the operation and maintenance of the power facilities constructed under the Dam and Power Project. The plan- ning unit will also prepare specifications, responsibilities and arrange- ments for power sharing among the benefitting states. Project Operation and Maintenance (O&M) 55. The NDD would be responsible for overall O&M of project facilities until the completion of an approved O&M plan and the establishment of a permanent O&M organization. Clear concepts required for the O&M organiza- tion of O&M have already been formulated. Recognizing the type of facilities and the sophisticated operation inherent in the water supply and drainage systems, a project O&M organization would be structured, in order of decreasing area, into units containing a project office, regions, divisions, districts and irrigation service areas. There would be approximately 16 irrigation divisions, plus one division for the main canal, and one for the dam and power complex. Regional offices would be estabLished for coordination of irrigation divisions. The project office would allocate water and oversee all water and power operations. During a transition period the government agency would have to operate the dis- tribution system down to the 8-ha subchak. It is anticipated that at a -20- later stage the farmers, through their own organizations, would operate the system below the irrigation service areas turnout. 56. Farmers would link with the O&M organization at various levels. At the chak (25-65 ha outlets) level, farmers would select one of their members to represent the chak on the Service Area Irrigation Committee. Of primary importance would be the committee's participation in the deter- mination of the size of the service area's seasonal irrigation allotment and delivery schedule with the help of the agricultural extension advisors. 57. As mentioned above, the O&M plan will be established early during project implementation. GOG would cause NPG to develop a detailed plan for O&M of the project along the lines described above and submit it to IDA for approval prior to December 31, 1987. By December 31, 1988, GOG would establish a permanent agency within the NDD to operate and maintain project facilities in accordance with the agreed plan. The O&M agency would be staffed with experienced and qualified personnel and be assigned all necessary functions, responsibilities, organization and funds (Section 2.08, Gujarat Project Agreement). Separate accounts would iden- tify the funds to be collected as part of the O&M portion of water charges (see paragraph 68), and allocated to cover the cost of project O&M. Environmental Effects 58. The environmental effects of the irrigation and drainage networks would be considered concurrently with the overall studies required in connection with the Sardar Sarovar Dam and Power Project. In particular, a two-year study would assess, inter-alia, the long-term effects of groundwater use, water logging, salt accumulations, proliferacion of weeds and of water borne diseases, and the effects of possible deterioration of soil and water qualities. The study would include proposals for the mitigation of any adverse effects of the project on the environment. GOG would take all measures considered necessary to minimize the risk of malaria, filaria, schistosomiasis and other water-related diseases that may result from the implementation of the project (Sections 2.16, Gujarat Project Agreement). Project Costs and Financing 59. The total financing requirements of the three-year timeslice of the canal and drainage network which constitutes the project are estimated at US$520.9 million equivalent, including an estimated US$29.3 million in taxes and duties. Foreign exchange costs are estimated at US$148.1 million. Physical contingencies were estimated separately for each com- ponent and average about 13% of base cost estimates. Price contingencies account for about 26% of project costs (including physical contingencies) and are based on local rates of 8.5Z. Foreign inflation rates used are 9.75Z in 1984/85, 8.75Z in 1985/86, 7% in 1986/87, and 6% thereafter. -21- 60. The cost of constructing the main canal would be shared between Gujarat and Rajasthan in accordance with the cost-sharing formula mandated by the NWDT, which is based on water flows to each State. Rajasthan's contribution is about 10% of the total cost of the main canal, or about US$38 million equivalent. The remaining costs of the main canal, branch canals, and distribution and drainage systems would be borne entirely by Gujarat, whose contribution to the project would total about US$333 million, net of IDA assistance. Rajasthan's obligation to the project is a small part of its planned irrigation investments, so that the State should face no difficulty in raising the resources required to meet it. With respect to Gujarat, however, investments in the Narmada Basin will be major undertakings which will absorb considerable financial resources. Given the long gestation period of the Narmada investments, cost recovery from them is excluded as a source of revenue for the State. Gujarat's prospective budgetary resource availablities and its investment program in irrigation for the Seventh Plan period (1985/86 - 1989/90) have been analyzed to ensure that Narmada investments can be accommodated without undue displacement of investments in other sectors, or of critical opera- tion and maintenance expenditures in the State. Cujarat is expected to allocate approximately one-third of its overall plan resources to the irrigation sector. Total contributions from Gujarat to the Water Delivery and Drainage Project, to the Dam and Power Project, and to the upcoming Narmada Sagar Project in MP are expected to absorb about 65% of Gujarat's irrigation investment budget over the Seventh Plan Period. Since Gujarat has stated under the Seventh Plan its intention of according the highest priority to Narmada investments, Narmada investments are expected to be supportable under the State's Plan. Furthermore, since Narmada invest- ments are interstate projects of considerable national importance, GOI has indicated that special provision could be made, if needed, for additional funds to ensure that sufficient resources are available to ensure timely completion of the investments. In any event, GOI would provide Gujarat with sufficient funds to ensure timely implementation of the project (Section 3.01, Development Credit Agreement). 61. The !DA contribution of SDR 149.5 million (US$150 million equivalent) will finance about 30% of total project costs (incLuding foreign exchange costs of about US$148.1 million) net of taxes and duties. The IDA credit would be on standard terms, and would be channeLed by GOI to GOG in accordance with GOI's standard terms and arrangements for financing development projects. Procurement and Disbursement 62. Annex V to this report details the manner in which items will be procured under the project. Civil works contracts to be let during the three-year credit period would cost an estimated total of US$461 million. However, these works contracts would not be completed during the time slice designated for the credit. Therefore, only a part of these con- tracts would be eligible for financing under the credit. The value of expenditures on the work contracts within the time slice is estimated at -22- US$246.0 million. Final design preparations are completed or underway for major work segsents covered by the credit. 63. Nine civil works contracts on the main canal, three contracts on the branch canals, and three contracts on the distribution and drainage syscems with a total value of about US$397 million, would be let through ICB procedures. Contractors to execute parts of the main canal and cer- tain branch canals, as well as certain blocks on the drainage system will be pre-qualified. Pre-qualification procedures are underway. Civil works contracts estimated to cost less than US$6 million equivalent (totalling about US$64 million equivalent) will be let after local competitive bid- ding procedures acceptable to IDA. Contracts in excess of US$100,000 would be subject to pre-action review by IDA with all other contracts subject to IDA's post-action review. Over 95Z of the works, by value, would be subject to the Bank's pre-action review. Qualified Indian con- tractors would receive a preference of 7.5% in the evaluation of works bids. 64. Disbursements would be made against 60Z of expenditures for civil works and against 100Z of eligible expenditures for technical assistance and training. Disbursements for all payments on training and for payments of less than Rs 300,000 for works would be made against certificates of expenditures_ Documentation related to the certificates of expenditure would be retained by GOG and made available for inspection by IDA. Full documentation would be required for all other disbursements. The credit is expected to be fully disbursed by March 31, 1989. Accounts and Audits 65. CoG would maintain separate accounts for project expenditures, ensure that such project accounts are audited annually and that copies of such accounts, certified as to their accuracy by an independent auditor acceptable to the Bank, are submitted to the Bank not later than nine months after the end of its fiscal year. They would also have final audits prepared for projec- accounts for each fiscal year by an auditor acceptable to the Bank and forward such audit reports to the Bank immediately after their finalization, and make complete accounts and financial statements available for inspection during Bank review missions. Certificates of expenditures would be audited annually, and the audited statements would be submitted to the Bank once a year along with the audited accounts (Sections 3.01 and 3.02, Gujarat Project Agreement). -23- Cost Recovery 1/ 66. Water charges in Gujarat are among the highest in India. They are uniform throughout the state and vary by crop and season and currently range from Rs 120 per irrigated ha of paddy to Rs 1,250/ha of sugarcane. For the projected cropping patterns the average water charge under these rates would be about Rs 280-330/ha of net CCA. The level of charges is determined with consideration to the investment and operatnonal costs, and the repayment capacity of the fa.'uers. With respect to the latter, COG considers 5% to 12Z of the gross value of produce per ba as the target level for charges (the lower percentage is for food crops and the higher -or cash crops). A standing Interdepartmental Water Rates Review Board was constituted in 1976 to review the rate structure and make recommenda- tions to GOG. The Board conducts such reviews every two years. However, under Gujarat Medium Irrigation TI Project, GOG undertook to review water rates annually. In recen- years, water charges were increased in 1981 and 1983. The percentage increases ranged from 13% (paddy) to 337% (cotton). The recovery of water charges is satisfactory, and is currently sufficient to meet the O&M requirement of existing irrigation systems. 67. The rate of direct agricultural taxation is relatively modest. Land revenue tax and associated cesses vary with the district and the quality of the land. On the average, farmers pay between 10-25 Rshta of dryland of medium soil quality and double that amount for irrigated land. Indirect agricultural taxes, especially sales taxes, are more important from a .-evenue viewpoint. Sales tax is levied at a rate of 4.4Z for cash crops such as cotton and oilseeds, and a sugarcane purchase tax is made at 6.6Z. 68. In the case of municipal, industrial and domestic water users, the level of charges will on average cover the entire O&M and capital costs (Section 3.03(b), Gujarat Project Agreement). GOG is anxious t- maximize cost recovery from irrigation projects and is ready to experiment with alternative methods of charging for irrigation services such as volumetric charges and selling water to water-user associations. The latter will be tried under Gujarat Medium II and, if successful, will be extended to other areas, including Narmada. There is a general agreement in Gujarat that farmers would be wiiiing to pay more for better irrigation services. This is demonstrated in areas irrigated from public tubewells, where farmers pz- volumetric water charges that are three to four times higher than in surface irrigation projects. A stud will be undertaken and submitted tc the Bank Group by September 30, 1987 to determine the level of water charges. Given the reliability and equity of water to be sup- plied under the project, GCOG would, under the project, recover the entire 1/ This se_tion addresses cost recovery for irrigation, municipal and industrial and domestic water supplies. Recovery of costs of the Sardar Sarovar Dam and Power Project are contained in the President's Report pertaining to that project. -24- cost of O&I and, to the extent possible, project capital costs (Section 3.03(a), Gujarat Project Agreement). COG would also establish, by April 1, 1989, and thereafter maintain a separate account within its budget to record o&M costs of the project and water charge collections (Section 3.04, Gujarat Project Agreement). Benefits, Justification and Risk 1/ 69. The power facilities would form part of the least-cost capacity erpansion sequence in India's western region grid even when carrying 100% of the -ost of the dam and reservoir. The benefits from power generation have been assessed bv attaching ar. estimate of the sociai value of energy to the volume of energy to be produced. An attempt was made to estimate the maximum willingness to pay for power in the industrial and agricul- tural sectors, which together make up for some 75X of energy demand in the western grid. Based on these estimates and on average tariffs paid by consumers in these and other sectors an estimate of the average financial willingness to pay was calculated and then adjusted to the economic value of energy generated. The resulting economic price of energy at generation is Rs 0.66/kWh, whereas the average financial revenue (at present tariffs) would be about Rs 0.45/kWh. All energy (firm and spill energy) has been valued at this economic price. As upstream abstractions increase over time, power generated from the riverbed powerhouse would change from a dual baseload and peaking operation to a prime peaking operation. Due to its low daily plant factor (15Z-30Z) and the downstream storage provided in the canalhead regulating reservoir, the canalhead powerhouse would be operated to meet daily peak loads. 70. Most benefits would result from a replacement of rainfed by irrigated crops and a corresponding intensification of cultivation. Under this project, the value of agricultural output (in constant financial prices) would rise by over 370Z over a 20-25 year period; without it, production would rise by less than 30%. Incremental production at full development (mainly wheat, but also cotton, paddy, sorghum, pearl millet and pulses) is estimated at 3bout 2.5 million tons annually. Overall the project would transform Gujarat's economy by increasing its agricultural production by 45%. About 340,000 farm families would benefit directly from this project. The project vould generate an additional 0.7 million man-days of full on-farm employment, while project construction activities would generate a further 125,000 seasonal iobs annuaLly. 71. Projections of future water demand and supply for urban centers, villages and industries reveal substantial deficits of suitable supplies. Under the project 1,300 million cubic meters of municipal and industrial 1/ Since the costs of the dam and reservoir cannot be strictly allocated between power generation and water supply, this section analyzes the economics of the Sardar Sarovar Dam and Power Project, together with the water Delivery and Drainage Project. -25- water would be supplied to population centers containing (in the year 2021) over 29 million people. The project represents (by about Rs 2.50 per cubic meter) the least-cost way of providing these water supplies to the population centers. In addition there would be considerable non- quantifyable benefits to health and living standards resulting from improved water quality. 72. For the project as a whole, considering the scale of transforma- tion of the Gujarat and western region economies that would be effected through the Narmada development, the quantitative analysis will understate secondary income and employment effects of the investments. The project's three functions of power generation, irrigation and municipal and industrial water supplies are inter-dependent. Therefore, while calcula- tion of separate ERRs for each component would be possible, such calcula- tions would not have operational or decision-making significance. The base case economic rate of return (ERR) of the projects is about 13Z. While it should be noted that a "power-only" project yields an ERR higher than that of the overall project, a power project alone would not meet the main objective of the Narmada deveLopment which is to provide the basis of State and regional plans to provide irrigation and municipal and industrial water supplies for large sections of population currently living in drought-prone conditions. The ERR is sensitive in relatively minor respects to delays in dam construction and reservoir filling. A delay of some two years in completion of the dam would reduce the ERR to 12% the estimated opportunity cost of capital in India. The ERR is also sensitive to shortfalls in irrigated crop yields and to crop prices but is somewhat less sensitive to factors such as cost overruns and lower irriga- tion efficiencies. Sensitivity tests performed on many parameters demon- strate that the economic viability of the project is maintained even with very significant (but unlikely) adverse movements in those parameters. A risk anaLysis calculated under 500 different sets of assumptions with respect to key project variables, demonstrates that the chances of the ERR falling below 10% are about one in six. 73. The project, however, does face greater risks than normal irrigation, power, and water supply operations in India, given its immense size and complexity. As one of the largest investments of its kind built anywhere, and the largest in India to date, its implementation could be subject to delays and cost increases. It will absorb large amounts of human and financial resources of the benefitting States. Having been designed to meet Gujarat's requirements in the 21st century, it will use modern designs and state-of-the-art technology and systems operation in both water supply and power components, and will require considerabLe interstate coordination to ensure timely execution. Moreover, its benefits will be maximized only with the timely construcEion of critical investments upstream in Madhya Pradesh. To mitigate these risks, a number of features have been incorporated into the project. Institutions charged with project execution responsibilities will be strengthened by additions of staff and by the acceptance of a Centralized Procurement Unit and a Management Information System Cell. Financial resources from Central Government and suppliers' credits will supplement local resource -26- availabilities. Pursuant to the decision, Madhya Pradesh would execute a critical investment, the Naruada Sagar Project, so as to maximize power generation from the Sardar Sarovar Dam . Project authorities would con- tinue the practice that has been adopted throughout project preparation of relying considerably on consultant expertise, both local and foreign, to supplement their design, planning and execution capabilities. Suitably qualified contractors will be associated with the major civil works items. The intricate interstate coordination committees initiated by the Tribunal will be continued. The Dam Safety Panel and Canal Consultancy Board will ensure the adoption of appropriate design and construction standards. Overall, given the excellent performance to date during project prepara- tion and design, the project authorities, with continued use of private sector consultancies, are considered to be able to execute the project in timely fashion. It is thus considered highly unlikely that delays in project execution and consequential cost escalation could jeopardize the viability of the project. PART V - LEGAL INSTRUMENTS AND AUTHORITY 74. The draft Development Credit Agreement between India and the Association, the draft Project Agreement with the State of Gujarat; and the Recommendation of the Committee provided for in Article V, Section I(d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 75. Special conditions of this project are listed in Section III of Annex III. 76. A special condition of effectiveness of the Credit is that all conditions precedent to the effectiveness of the Loan and Credit Agreements related to the Narmada River Development (Gujarat) Dam ar.d Power Project will have been fulfilled (Section 5.01, Development Credit Agreement). 77. 1 am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 78. I recommend that the Executive Directors approve the proposed credit. A.W. Clausen President February 6, 1985 AMUN I Page 1. of 5 tAULE 31 111* - SOCIAL DICTaC DATA R INDIA S10Zxg MXWS _ GROUPS ARfl AEGES Ia MOST (COST URCE E I) l o960h 19701b t: k ASL PACIC ISI N PACIC a ( 1 (T S.AM SQ. _ ) TOTAL 3287.a 3281.6 3287.0 AGItCULTMRAL 1763.5 1780.5 1812.3 SW NS CAP (ASS) 60.0 1t0.0 260.0 278.6 191.2 (KILOGRAMS OF OIL EKOIYALN) 79.0 113.0 158.0 27L0 567.3 Er 1ATIS - VITAL STATSTI POPULATIOS.PIO-YEAR ( STIISM) 434849.0 547569.0 716985.0 URBAN POPULATION C OF TOTAL) 18.0 19.6 24.1 21.7 34.7 V POPCLATIOf PROJECTIONS POPULATION I MA 2000 (HILL) 994.4 - STATIOSA POPUATIONF (KILL) 1707.2 POPULATION !OIETU t.7 POPULATION DENSITY PER sr. 10. 132.1 166.6 213.4 16.6 201.9 PER SQ. IQ. ACRI. LAND 246.6 307.5 387.1 345.5 1735.1 POPULATION AGE sMUCTlRE CU O-1. IRs 40.9 42.7 39.3 35.6 39.0 15-64 IRS 54.5 54.2 57.6 56.8 57.6 65 ND ASOVE 4.S 3.1 Ll 4.3 3.3 POPULATIO# CGROWI RATE (:1 TarAL 1.8 ZI 1.2 1.9 2.3 URBAN 2.5 313 3.9 '.1 4.3 CRUDE EIRIE RATE (PER rHOUS) 47.7 41.4 34.2 27.1 30.1 aCDE DEATH RATE (PER THWOS) 23.6 17.8 12.7 10.1 9.5 CROSS REPRODUCrlTO RATE 2.9 2.8 2.2 1.8 2.0 FAMILY PLAJSING ACCEPTORS. ANSUL (TiOCUS) 64.0 3782.0 6826.0 - USERS (: OF HARIED UQIEN) 11.7 28.0 .. 52.7 FOOAID mmoN3 LUDER OF FOOD PROD. PER CAPITA (1969-1-100) 98.0 102.0 101. o 12.8 123.c PER CAPITA SUPPLY OF CALORIES (: OF REQUIR2IENTS) 96.0 91.0 86.0 97.7 114.0 PROTELNS (CRAMS PER DAY) 54.0 50.0 44.0 56.8 57.0 OF UHICH ANIMAL AND PLLSE 17.0 15.0 13.0 Ic 14.9 14.1 CHILD (ACES 1-4) DEAlS RaTE 26.2 20.7 11.0 9.8 7.2 LIFE EXPECT. AT BIRTH (YEARS) 42.5 47.5 54.6 60.0 60.4 INFANT MORT. RATE (PER THOUS) 165.0 139.0 94.0 83.8 66.3 ACCESS TO SAFE HATEt (ZPOP) TOTAL ., 17.0 33.0 /d 32.9 37.0 LRBAW .. 60.0 83.0 Id 70.9 54.8 RURAL .. 6.0 20.0 /d 22.1 26.4 ACCESS TO EXCRETA DISPOSAL (t OF POPLLATION) TOTAL .. 18.0 20.0 IS.1 41.3 A .. 85.0 87.0 l. 72.8 47.4 RIRAL .. 1.0 2.0 I 4.6 33.3 POPULATION PER PHYSICLIN 4850.0 4890.0 3690.0 if 3484.2 7749.4 POP. PER NURSING PERSON O196O.0 fc 74Z0.0 5460. 0 *- 4793.1 2460.4 POP. PER HOSPITAL BED OTAL 2160.0 1650.0 1290.0 if 1066.5 1 44.2 ,N .. ., 370.0 Id 298.0 651.2 RURAL ''10410.0 ' I 5993.4 2594.6 ADMISSIONS PER HOSPITAL BE .. .. .. .. 27.0 sxa AV-RAGE SUE OF HOUSEHOLD TOTAL 5.2 5.6 5.2 fI URBAN 5.2 5.6 4.8 7. RURAL 5.2 5.6 5.37 AVERACE NO. OF PERSONSIROOl" TOTAL 2.6 2.8 URBAN 2.6 LI8 RURAL 2.6 2.8 ACCESS TO ELECT. (: OF WlELLINCS) TOTAL .. .. LR. . .. .. RURAL .. .. ANNEX I Page 2 of 5 T A S L R 3A IIIDA -SOCIAL 7IDiCAOS DATA SEE INIDIA WRRFENC GHOUS (VEIGHTE AVERAGE) ro* mOST (MS NCECt ETTE) {b BECuT LW C MIDDLZ INCUR! 1960Ab 19701- ESTiATLk ASIA A PACIC ASIA & PACIFIC ADJUSTED ESRIOLLJ(IN RATIOS PMARy: TOTAL 61.0 73.0 79.0 97.4 102.0 HALE 10.0 90.0 93.0 110.5 105.9 FALE 40.0 56.0 66.0 83.7 93.2 SECAIIMAR: TOTAL 20.0 26.0 30.0 35.9 46.0 I M 30.0 36.0 39.0 44.6 48.7 FEKILUZ 10.o 15.0 20.0 26.8 43.1 VOCAXIOKAL (t Of SECONDA) Lo 1.0 0.7 /a 2.2 17.5 PUPIL-TEACHER RAM PDEART '6.0 41.0 54.0 38.5 31.8 SECONDI 16.0 21.0 .. 18.7 23.5 ADULT L 1rERACY RATE t:) 27.8 34.1 36.2 53.4 72.9 CO_SUZN PASSENGER CARS/ITOUSAr4D POP 0.6 1.1 1.4 /h 0.9 10.1 RADO RECEIVERS/TUMSMAD POP 4.9 21.5 *3.6 112.1 113.6 TV RECEIVERSIITOUSAND POP 0.0 0.0 1.7 15.7 50.1 NEUSPAPEE (-DA= GENERAL INTEREST") CIRCULATION PElt HOUSALMD POPULATION 10.6 16.2 19.4 /h 16.2 53.9 CL'EI ANHUAL ATIENIDANCEICAPIMA 3.2 6.2 3.7 77 3.6 3.4 TOTAL LUAR FORCE CTOUS) 185951.0 219196.0 282169.0 FIKALE (PERENr) 30.7 32.5 31.8 33.3 33.5 AGRICULTURE CPERCEUT) 74.0 74.0 71.0 69.6 52.2 1OUS[tE CPEM VI) 11.0 11.0 13.2 15.8 17.9 PARTICIPATIS RATE (PERCENT) TOrAL 2LS 40.0 39.4 42.6 38.7 MA;Z 57.0 52.4 52.0 54,7 50.9 FIAULE 27.3 26.9 25.9 29.8 26.6 ECOHOIC DEPENENCY RA.-O 1.1 1.1 1.1 1.0 1.1 Da DISUUXSIUE PERMEN OF PRIVATE CUR RECEIVED Sr HIGtHEST 5: OF HO!mOLDS 26.7 26.3 Il 22.2 Is 22.2 22.2 HIGHEST 20: o IOHOUSEHOLDS 51.7 48.9 1 69.6 7w 48.0 68.0 LOWIST 20? OF HDUSERDLDS 4.1 6.77W 7.07T 6.4 6.4 L05UST 40: OF HOLSEHO.DS 13.6 17.2 Z 16.2 a 15.5 15.5 ESTMATE ABSOLUTE POVERTY ENCOR LEVtL CUSS PER CAPITA) URBAN .. .. 132.0 lh 133.9 188.6 RMRAL .. ,. 114.0 W 111.6 152.0 ESTIMATED RrLATIVE POVERTY IC LEVEL CUSS PEA CAPITA) oRAn" .. .. .. .. 177.9 RIUAL .. .. . . 164.6 ESTIMAIED POP. BELOi ABSOLUTE POVERTY L'NCGlE LEVEL CZ) cuRN m ' 40.3 lh 43.6 23.4 RURAL ,. . 50.7 I 51.7 37.7 . SO AVAILABLE rT APPLIABLE NO0T E S a The group averaps for each Indicator are populatian-veaghted artltltic means. Coerage of countries mong the indicators depends on availability of data and ti not unifors. 1 UIlec othervise noted, "Data for 1960" refit to any year bet.asc 1959 and 1961; "Data for 1970" between 1969 a*d 1971; and data for "'oet Veaent Estimate" between 1980 and 1982. /c 1977; Id 1976; /o 1975; /f 1978; /L 1962; lb 1979; IL 1966-65. J.I 1936 ANNEX I PaWge 3 of 5 E~NOW Duh--E ar.9 54. In. i .sccM40FOLuI4ME11 5ins cn Sm imIftam ansll. I s.55ci514. VW dhl. lS. dcl..... am.sEEc.. nE-d! W IN qitsqmrm E iagn c-ES). $am" CiaSt* PIN 1454. alici *WSGLE ( . ci4ncas, OWcicp .1bmac b- tn i ft kcaldSc . b isbis calt eadsice IZMi 5 E.....4N tc4 . In lm ist Mwms~m Id c .c.iim.n.cc.cic gm m ai s.. h b ug nEtim, .. a-Ptml 5.rists OILmba SBiL csi.USm. .9d. at E-EE 5.9 scp.. tcI.a. in ,WEtm It-4c t ic RI44 I.9 c - LIE ciMsIcudEPtO W-MV nt . 24cci.11EE.tcm E- caml. .c.cqi .- c..t go i 4 ci. Er da E,cd14.t... U c c . tEE 5k tui cl ga Ibcccdm cc.4.' I i4 !l0~ictit 4mu... Wu 'al ii :_.ttlde` .1 - -tttit 4-4.4 a-. 9%0. c.bs.- .1.4 Sci m 1 ....g Icl a c cmtl- tw o -A lEms - cr
World Bank Group · Memorandum & Recommendation of the President
India - Narmada River Development - Gujarat : Water Delivery and Drainage Project
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World Bank Group
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Memorandum & Recommendation of the President
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India
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World Bank