India - District Primary Education Project

Document of The World Bank Report No. 13072-IN STAFF APPRAISAL REPORT INDIA DISTRICT PRIMARY EDUCATION PROJECT NOVEMBER 2, 1994 South Asia Country Department II (India) Population and Human Resources Operations Division  CURRENCY EOUIVALENTS (as of May 1, 1994) Currency Unit = Rupee Rupee 32.00 = US$ 1.00 Rupee 1.00 = US$ .031 WEIGHTS AND MEASURES 1 Meter (m) = 3.28 Feet (ft) 1 Kilometer (km) = 0.62 miles FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS AWPB Annual Work Plan and Budget BRC Block Resource Center CABE Central Advisory Board for Education DIET District Institute of Education and Training DPEP District Primary Education Program DPEPPB DPEP Project Board EC European Community ECE Early Childhood Education GOI Government of India ICDS Integrated Child Development Scheme MIS Management Information System MLL Minimum Levels of Learning NCERT National Council of Education Research and Training NFE Non-formal Education NGO Non-Government Organization NIEPA National Institute of Education Planning and Administration NLM National Literacy Mission OBB Operation Blackboard PWD Public Works Department SC Scheduled Caste SCERT State Council of Educational Research and Training SDI Sub Deputy Inspector SIEMT State Institute of Educational Management and Training ST Scheduled Tribe TLC Total Literacy Campaign TRG Training Resource Group VEC Village Education Committee  INDIA DISTRICT PRIMARY EDUCATION PROJECT Contents CREDIT AND PROJECT SUMMARY ........................ v I. SUB-SECTORAL BACKGROUND. ISSUES AND OBJECTIVES .... 1 A. Background . .................................... 1 B. Issues ........................................ 2 Outcomes of Primary Education ...................... 2 Sub-Sector Constraints ............................ 3 C. Sub-Sector Objectives and Priorities ...................... 9 Policy ...................................... 9 Policy Implementation ........................... 10 IDA Strategy and Rationale for Involvement .... ......... 12 Extemal Financing .............................. 13 Lessons of Experience ........................... 13 II. THE PROJECT ... ................................ 15 A. Scope and Strategy .................. 15 B. Goals and Objectives .................. 16 National Objectives ............. 16 State Objectives ............................... 16 District Objectives ............................. 17 C. Project Summary .................... 17 This report is based on an appraisal mission that visited India in February-March 1994, and consisted of: World Bank Staff: John Middleton (Principal Education Specialist, Task Manager); Marlaine Lockheed (Principal Education Specialist, Co-Task Manager), Kevin Casey (Architect/Implementation Specialist), Meera Chatterjee (WID Officer). Consultants: Philip Cohen (Consultant - Textbooks), Keith Hinchliffe (Consultant - Economist), Warren Mellor (UNESCO - MIS), Vijay Rewal (Consultant - Civil Works) and A.B.L. Srivastava (Consultant - Statistics), Donna Bjerregaard (Consultant -ST Education), Naresh Arora (Consultant - Architect), Sanjev Sachdev (Consultant - Architect), Uday Mehta (Consultant - Database Management) and Vinay Oberoi (Consultant - Financial Flows). General Coordination and Support: Aruna Chandran and Gertrude Stubblefield assisted in preparing the document. Marilyn Chatterji and Jasvir Bhasin assisted in the mission's preparation. Peer Reviewers: Adriaan Verspoor (ESP) and Edward Heneveld (ADTHR). The project was endorsed by Richard Skolnik, Division Chief, India Population and Human Resources Division, and Heinz Vergin, Director, South Asia Country Department 2.  ii D. Building National Institutional Capacity ....... . . . . . . . . . . . . 19 National Management .......... . .. . .. .. . .. . .. . . . 19 National Technical Assistance Programs ...... . . . . . . . . . . 21 Preparation Facility ........... .. .. .. .. .. .. .. . .. . 25 Innovations Facility ........... . .. .. . .. .. .. . .. . . 25 International Cooperation ......... .. . . .. . . .. . . .. . . 25 E. Building State Institutional Capacity ........ . . . . . . . . . . . . . 26 Program Management .......... .. .. . .. .. . .. .. . . . 27 Improved Textbook Development and Production ..... . . . . . 27 Improved Teaching ........... .. .. .. .. .. .. .. . .. . 28 Improved Planning and Management ....... . . . . . . . . . . . 28 Improved Educational Research and Evaluation ..... . . . . . . . 28 F. Improving Quality and Access in Primary Education ..... . . . . . . 29 Building District Institutional Capacity ....... . . . . . . . . . . 29 Reducing Dropout ........... .. .. .. .. .. .. . .. .. . 30 Improving Learning Achievement ....... . . . . . . . . . . . . . 31 Improving Access ............ .. .. .. .. .. .. ... .. . 35 'II. PROJECT COSTS. FINANCING AND IMPLEMENTATION . . . 36 A. Cost Estimates ................................. . 36 B. Financing Plan ................................. . 38 C. State Investment Capacity, Additionality and Recurrent Cost Implications ............. .. .. ... .. .. . . 38 Investment Capacity ............... .. ... ... ... . . 38 Resource Additionality ............... ... ... ... .. . 39 Sustainability of Recurrent Costs ........ .. . . . . . . . .. . 39 D. Project Implementation ................... .... .... . . 40 Supervision ................................ . 41 E. Project Monitoring and Evaluation .......... . . .. . .. . .. . . 41 F. Status of Preparation .................... .... .... . . 42 Informational Aspects: Studies Program ....... . . . . . . . . . 43 Management Aspects .............. ... ... ... ... . . 43 Educational Aspects .............. ... ... .. ... .. . 43 Social Aspects ........................ ..... .. . 43 Civil Works Program ............. ... .. .. ... .. . . 44 G. Disbursements ................................. . 44 H. Procurement .................................. . 46 I. Audits and Accounting ............................ . 50 IV. BENEFITS AND RISKS ............ .. .. .. .. .. .. .. . 51 A. Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 B. Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Financing . . . . . . . .. . . . . . .. . .. . . . .. . ... .. . ... . 51 Implementation ............................. 52 V. AGREEMENTS REACHED .......................... . 56  iii TABLES 3.1 - Cost by Component ............................... 36 3.2 - Costs by Category of Expenditure ....... . . . . . . . . . . . . . . . 37 3.3 - Procurement Arrangements ......... . . . . .. . . . . .. . . . . . 48 00 ANNEXES Annex 1 - Project Costs and Procurement Annex 2 - Disbursement Profile Annex 3 - Project Preparation Process Annex 4- Project Preparation Studies Annex 5 - Development Objectives, Indicators & Monitoring Annex 6 - DPEP Policies, Strategies and Operational Guidelines Annex 7 - Project Management Annex 8 - Management Development Plan Annex 9 - ST Education Annex 10 -Education for Girls Annex 11 -National and State Implementation Plans Annex 12 -District Implementation Plans Annex 13 -International Cooperation Annex, 14 -Civil Works Plans Annex 15 -Public Finances and Education Expenditures in the Six IDA DPEP States Annex 16 -Supervision Plan Annex 17 -Monitoring Report Formats Annex 18 -Selected Documents in Project Files MAP Map of Project States and Districts  I  v MIDIA: DISTRICT PRIMARY EDUCATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President. Beneficiaries: Government of India and the Governments of Assam, Haryana, Karnataka, Kerala, Maharashtra and Tamil Nadu Amount: SDR 180 Million (US$ 260.3 million equivalent) Terms: Standard, with 35 years maturity. Description: The project would support the GOI District Primary Education Program to build national, state and district managerial and professional capacity for sustainable primary education development. It would support district-based programs aimed at decreases in dropout, increases in learning achievement, and improved access to primary education. Priority would be given to female and SC/ST students through both targeting and special strategies, and to enhanced community participation. The project would include three components: Building National Institutional Capacity to support, monitor and evaluate a national, decentralized primary education development program by establishing a strengthened framework for national management and professional technical assistance. Building State Institutional Capacity in six states to appraise, supervise and manage district-level projects and institutions for improving the quality and effectiveness of primary education and to provide technical support for program management, textbook development, improved teaching, improved planning and management and research and evaluation. Improving Ouality and Access in Primary Education in 23 districts in 6 states through strengthened district institutional capacity, strengthened community participation and awareness, improved facilities, teacher in-service training, learning materials and teaching aids, targeted interventions for girls, SC and ST students, early childhood education and construction of new schools and classrooms.  vi Benefits and Risks: The project would be a first investment in a longer-term program to improve the literacy and numeracy skills of the citizens of India, particularly the rural poor, and hence increase their productivity and social welfare. It would establish the institutional framework necessary for the implementation of the District Primary Education Program over the medium term. It would provide access to primary education for an estimated 1.4 million additional children, enable more than 1.5 million children to complete primary education by reducing dropout, and improve the quality of instruction and learning achievement for approximately 14 million children. It is expected that 60 percent of children benefitting from the project would be girls. Implementation risk is high because the project would be supporting a newly created program. Although policy and political commitment is high at the national level, financial and managerial risks will need to be closely monitored at both national and state levels. The project would seek to address these risks through the development of project monitoring systems, annual planning and budgeting exercises, annual progress reviews involving all program donors, a program of evaluation studies, and a mid-term review. Intensive supervision would be provided by an expanded education team in the Resident Mission.  vii Estimated Project Costs: Local Foreign Total ------------- US$ Million--------- Build National Institutional Capacity 17.8 2.7 20.5 Build State Institutional Capacity 23.8 0.9 24.7 Improve Quality & Access in Primary Education Build District Institutional Capacity 12.0 0.5 12.5 Improve Retention 41.4 1.3 42.7 Increase Access 93.7 3.8 97.5 Improve Learning Achievements 70.4 2.0 72.4 Subtotal Improve Quality & Access 217.4 7.7 225.1 TOTAL BASE COST 259.0 11.3 270.4 Contingencies 38.1 2.0 40.1 TOTAL PROJECT COST 297.1 13.4 310.5 Financing Plan: Local Foreign Total ------------- US$ Million ------------- IDA 246.9 13.4 260.3 GOI 50.2 - 50.2 TOTAL PROJECT COST 297.1 13.4 310.5 Estimated Disbursements: IDA FY FY95 FY96 FY97 FY98 FY99 FY2000 FY2001 FY2002 Annual 8.0 32.3 35.7 42.6 45.8 42.3 33.6 20.0 Cumulative 8.0 40.3 76.0 118.6 164.4 206.7 240.3 260.3  viii Economic Rate of Return: Not Applicable. Poverty Category: Program of Targeted Interventions. One of the project's main objectives is to improve quality and access in primary education for tribal populations, scheduled castes and girls. *The project contains specific strategies for interventions targeted for these groups.  INDIA DISTRICT PRIMARY EDUCATION PROJECT I. SUB-SECTORAL BACKGROUND, ISSUES AND OBJECTIVES A. BACKGROUND 1.1 Substantial gains have been made in providing access to education to Indian children over the past four decades; however, much remains to be done. Forty-eight percent of India's population is still illiterate and the number of illiterates increased from 302 to 324 million between 1981 and 1991. While nearly all children have physical access to a school, the holding and teaching power of most rural primary schools is very weak. 1.2 About seventy-five percent of the 102 million children reported to be enrolled in primary school attend one of 565,000 schools that offer the lower primary cycle of education."' The balance are enrolled in primary sections of upper primary and secondary schools. A child is expected to enter grade 1 at the age of 6 and to complete eight years of schooling by age 14. States differ in administration and definition of the steps on the educational ladder, but most have adopted the national model of five years of lower primary plus three years of upper primary schooling; some states have adopted a four plus three structure for lower and upper primary schooling. Together, lower and upper primary cycles are referred to as elementary education. Lower secondary school, also called high school, comprises two or three years and higher secondary consists of two additional years of secondary education which is the Plus 2 stage. 1.3 While the stated gross enrolment ratio (GER) at the primary level is high, 102.7 percent in 1992, a proportion of the children reported as enrolled in grade 1 are listed on school ledgers but do not attend beyond a few days. In addition, the reported GER includes repeaters, who are not identified as such. The Government of India (GOI) thus discounts the reported GER by 20 percent for planning purposes. Internal efficiency is extremely low. Nearly one-fourth of children who are reported to be enrolled drop out before reaching the second grade and about half drop out before grade five. Although gaps in access and completion have been closing in recent years, nationwide a disproportionate number of non-enrolled and dropouts are from the poorest households, girls, members of Scheduled Castes (SCs) and Scheduled Tribes (STs). l' Elementary education in India consists of four or five years of lower primary school, depending on the state, plus three years of upper primary schooling.  1.4 Approximately 250,000 non-formal education (NFE) education centers provide equivalent primary education for an estimated seven million children in the 9-14 age group who do not enter or who drop out of school, and literacy programs are provided for adults in selected districts. 1.5 Primary education in India is the joint responsibility of the central and state governments, although most financing is provided by the States. In the Seventh Five Year Plan (1985-1990) the states provided 63 percent of the plan resources invested in primary education and 96 percent of non-plan recurrent costs. 1.6 After the National Policy on Education was issued in 1986, central government assistance for primary education expanded in the form of grants to states for specific programs. During the Seventh Plan, 70 percent of central government assistance was delivered through Operation Blackboard (OBB), through which grants are provided for an additional teacher and educational materials in single-teacher rural schools. An important provision is that one of the two teachers in OBB schools should be female. In addition, the GOI provides grants for non-formal primary education for girls and working children and for improved primary teacher education through the establishment of District Institutes of Education and Training (DIETs) in the states. DIETs are intended to provide training, curriculum and planning and management support for elementary education at the district level. A centrally financed National Literacy Mission (NLM) has been established to implement total literacy campaigns (TLC) in selected districts. 1.7 Two autonomous national resource institutions are financed by the GOI to provide professional and academic leadership in education. These are the National Council for Educational Research and Training (NCERT), and the National Institute of Educational Planning and Administration (NIEPA). Both are located in New Delhi. These institutions work closely with counterpart organizations in the states, providing training, research and planning support. B. ISSUES 1.8 The effectiveness and efficiency of primary education in India need to be improved. Weak outcomes signal low returns to investment or, from another point of view, failure to capture the significant benefits in poverty reduction, economic development and social returns that primary education has been shown to generate, internationally and in India. Addressing the principal constraints on sub-sector efficiency and effectiveness through expanded and better investment is a significant challenge to Indian education. OUTCOMES OF PRIMARY EDUCATION 1.9 Despite substantial improvements since 1986, the outcomes of primary education, as measured by literacy statistics, dropout and learning achievement are unsatisfactory. Available data also suggest that there is considerable variation on these  -3- indicators both between and within states, indicating a substantial degree of regional inequity. 1.10 Ten large northern states have overall literacy rates ranging from 38 to 55 percent, and female literacy rates from 20 to 40 percent, all well below national averages. By contrast, Kerala has achieved universal enrollment and comparatively high levels of completion of the lower primary cycle. Near universal literacy has been attained. Among other major states, dropout rates in grades 1-5 range from 21 percent in Tamil Nadu to 66 percent in Bihar. Female dropout rates are five or more percentage points higher than male rates in six large northern states and in Kamataka; they are lower than male dropout rates in a number of smaller states. 1.11 Within state disparities on basic indicators are also marked. For example, of Maharashtra's 29 districts, 20 have female literacy rates above the national average of 39 percent, but the rates in 9 fall below the average. For Assam, the comparable figures are 13 and 10 districts, respectively. In Haryana, 9 districts are above the national average and 7 are below. Three of Tamil Nadu's 20 districts have female literacy rates below the national average. 1.12 Many of the students who do complete primary school learn relatively little. Project studies of student learning achievement in the second and final year of lower primary school in seven states show that, on average, students have mastered fewer than a quarter of the curriculum objectives. Learning achievement is very low even in states that have achieved full enrollment and comparatively low dropout, such as Kerala and Tamil Nadu. 1.13 The effects of these disparities are readily seen in social indicators. The sex ratio is an indicator of gender discrimination. In a high literacy state such as Kerala, there are 1016 females for every 1000 males, and the infant mortality rate is 28 per thousand births. By contrast, in the low literacy state of Bihar there are 930 females for every 1000 males, and the infant mortality rate is 117 per thousand births. Nationally, household sample survey data show that completing primary education is associated with significant improvements in contraceptive use, pre-natal care and child immunization among rural women. On the basis of dropout rates alone, more than half of rural girls are leaving school ill-equipped to take advantage of these important development services. SUB-SECTOR CONSTRAINTS 1.14 With the issuance of the Revised National Policy on Education and a National Programme of Action in 1992, the GOI has accelerated central leadership and support for primary education development. The challenges are substantial. Historically, the ability of states to invest in primary education has varied widely, but limited federal resources have not been well targeted to offset these variations. The institutional mechanisms needed to manage expanded investment and to provide technical leadership have received little past attention. Reforms will now need to be carried out in a changing  -4- institutional environment caused by the implementation by states of the Seventy-third and Seventy-fourth amendments to the Constitution of India (1992) that provide for increased responsibility on the part of elected local governments (Panchayat Raj institutions) for social programs, including primary education. Having achieved the comparatively easy objective of putting schools in reach of most children, reforms will need to address the much less tractable problems of improving the quality of education in order to reduce dropout and improve learning achievement, and to improve the equity of access to and completion of primary education for girls, scheduled caste (SC) and scheduled tribe (ST) students. 1.15 Historically Inadequate Financing. With the introduction of new economic policies in 1991, and the launching of the Eighth Plan in 1992, India has substantially increased financing for elementary education.2' Projected Eighth Plan investments in elementary education by the Government of India and the states would be on the order of US$3 billion; in the Seventh Plan (1985-90), combined investment totalled less than US$1 billion. This sharp increase in planned investment comes after decades of gradual increases in both Plan (investment) and Non-plan (recurrent) expenditures on education and, within education, on elementary education (Annex 15 - Public Finances and Education Expenditures in the Six IDA DPEP States). Average annual state expenditures on elementary education have risen from 5.2 percent of total budgets in 1985/86 to 10.2 percent in 1990/91. 1.16 Recent trends are thus encouraging. However, the present primary education system shows the effects of past under-financing. In real terms, the rate of growth in expenditure per student at the elementary level was only 0.4 percent from 1980/81 to 1987/88, reflecting both the priority given to expanding enrollments and the continuing growth of population at 2 percent annually. More than 90 percent of expenditures continues to go to salaries. In consequence, expenditures on the quality of education -- in-service training, learning materials, maintenance of facilities, educational research and development, system planning and management -- have been severely constrained. Household survey data show that about 40 percent of dropout is explained by lack of interest in education and by failure in school; both factors can be attributed at least in part to the low quality of education. Very poor absolute levels of learning achievement across the states provide a further indicator of poor quality. 1.17 The challenge for the balance of the century is thus to target substantially increased resources on improving educational quality. This will require an enhanced leadership and management role for the GOI in a complex federal system of education in order to ensure equitable allocation of enhanced resources and to assist states in developing institutional planning and management capacity at state and district levels. 2/ Most financial data is reported for elementary education, and not separately for primary education. Proportion and relative changes in resources for elementary education, however, are reasonably accurate indicators of similar resource shifts for primary education.  1.18 System Management. Prior to the National Education Policy of 1986, the central government's role in primary education was marginal. States provided the largest share of investment and recurrent cost financing, but, with few exceptions, states gave low priority to primary education. State planning and management mechanisms were poorly developed, and primary education systems were characterized by routine administration of inadequate finances to districts, which in turn built and supervised schools. Change and improvement in primary education was limited to small scale pilot efforts in a few states. 1.19 Beginning in 1986, the central government has sought to expand its leadership and financing role in basic education through national grants schemes and mobilization of external assistance. The centrally sponsored grant schemes (OBB, Nonformal Education, DIETs) focus on one element of the education delivery system. They provide standard packages of inputs, regardless of the varying conditions of states and districts and targeting is imprecise. Other than DIETs, there has been little investment in the development of district, state or national institutional capacity for the planning and management of large scale education reform programs or for educational evaluation and research. Implementation difficulties have reduced the effectiveness of the OBB and NFE schemes. 1.20 External assistance has been mobilized for integrated state basic education development programs in Bihar, Rajasthan and Uttar Pradesh, and to expand the earlier ODA-assisted project in Andhra Pradesh. In these projects, most of which have been launched since 1990, the development of state institutional capacity has begun to receive attention. Registered "societies"3' have been established to manage the flow of resources and to provide a nucleus for the planning and management of reforms. In Uttar Pradesh, a State Institute of Education Management and Training is being established to provide technical planning, management and research services. In most states, however, institutional development has yet to begin. 1.21 At the national level, capacity to finance and manage a sustained, large scale program of financial and technical assistance to states for educational reform and improvement has yet to be developed. The bulk of technical, professional training and research resources of NCERT and NIEPA have been directed at secondary and higher education. A 1993 national survey of more than 130 universities and social science research institutions identified only four with any ongoing work on primary or elementary education. Less than one percent of the publications of NCERT and NIEPA have addressed issues in primary education. In the GOI Department of Education (DOE), supervision of existing state primary-level projects and planning for initiatives is being handled by a team of four persons, with assistance from a team of ten NIEPA and NCERT faculty. v Registered societies - separate legal entities registered under the Societies Registration Act of 1860 - have been used in India to undertake educational, scientific, literary and charitable activities; they have are being used as implementation entities for basic education projects in Bihar, Rajasthan and Uttar Pradesh.  - 6 - 1.22 The size of the country, the diversity and complexity of the federal system, and the scope of the task to be accomplished mandate the creation of a strong planning, monitoring and management function within the GOI to assist in the development of state institutional capacity and to support and supervise programs and projects aimed at improving the quality of primary education. 1.23 Decentralization and the Role of Local Governments. The 73rd and 74th Amendments to the Constitution of India (1992) mandate the creation of locally elected governments in all states. States have latitude in determining the structure and functions of these governments through enabling legislation. It is anticipated that such legislation will be passed and elections for local bodies held in all states by 1995. 1.24 Primary education is to be one of the major areas of responsibility for elected local governments. A committee of the Central Advisory Board for Education (CABE) has recommended the functions to be performed at district, block and community levels with respect to primary education. Long-standing national policy for the creation of effective school/community organizations has been strengthened. The CABE report has been endorsed by state ministers of educationA' In a nation of the size and diversity of India, moving responsibility for primary education to lower levels of administration holds considerable promise, as does expanded community involvement. However, patterns of authority and financing are likely to vary across states and are at present undecided. District-level tax-based financing is unlikely in most states in the near future. District- level planning and management capacities are largely undeveloped. There are risks that state education agencies would be unable to provide the technical support needed at lower levels of government, and that changing patterns of fund administration may result in inefficient administration of investment programs, including those for primary education. 1.25 Gaining the potential benefits of decentralization poses an additional challenge to state and national education agencies. International experience shows that effective decentralization requires not only real transfer of authority, but also training and technical support to enable officials to carry out new responsibilities. 1.26 Education Quality. While universal access to basic education remains elusive, high primary gross enrollment rates suggest that the system has at least largely caught up with the backlog of unenrolled children. However, expansion of facilities to meet population growth, to improve equity of access for girls, SC and ST students, and to reduce overcrowding in classrooms will continue to be needed. The major challenge at this point is to improve internal efficiency and learning achievement in schools that serve the 100 million children who appear on the enrollment ledgers at the beginning of the school year. 1.27 The large scale, sample-based learning achievement studies conducted in 33 districts in seven states in the past three years support the conclusions of extensive 4 Report of the CAB Committee on Decentralized Mana2ement of Education. New Delhi: Ministry of Human Resource Development, 1993.  - 7 - observations of rural primary schools. The basic inputs for learning are found in most schools across India: students, textbooks, a blackboard, and teachers. This is, by itself, a notable achievement. However, as results demonstrate, it is not sufficient. 1.28 Students are poorly prepared for school. In low-literacy districts, two-thirds or more of students are first-time learners from illiterate homes. Early childhood education (ECE) reaches about 40 percent of such children through the Integrated Child Development Services (ICDS) and other state-run pre-primary education programs. Research in India and elsewhere has demonstrated that high quality ECE improves primary school attendance and learning achievement. But project learning achievement studies failed to find a positive relationship between attendance in ECE as offered in these districts and learning in school. Observations indicate that the potential of ECE is constrained by inappropriate curricula and learning materials, untrained teachers, and inadequate supervision. 1.29 The quality of school inputs is low. Textbooks are overly difficult, with many students unable to read them; their publication quality is low, and state textbook publication systems suffer, in varying ways and to varying extent, from inefficient practices. While there are blackboards, consumable supplies and educational aids are conspicuous by their absence and, when present, by low utilization. Although most teachers are highly educated and have formal pre-service training, they have not been trained for multi-grade teaching in rural schools. Less than 6 percent of teachers had received any in-service training in 1986/87. In some states, weak supervision leads to high rates of teacher absenteeism; in small schools, this results in high effective student- teacher ratios and, too often, children without teachers. Buildings are poorly designed, inadequately maintained, and largely unfurnished. According to a 1986/87 national survey, 44 percent of lower primary schools did not have proper buildings; 66 percent had no furniture for students; 74 percent lacked libraries; and 95 percent lacked toilets. While the situation has improved in intervening years, conditions are still poor in many places. Project baseline studies in three districts in Tamil Nadu, for example, revealed that more than 90 percent of schools lacked toilets, a quarter lacked furniture for students; in four districts of Assam, 80 percent of schools lack safe drinking water and fewer than 10 percent have toilets. In such circumstances, it is not surprising that many students lose interest in education, or leave school because of academic failure. 1.30 The challenge to national, state and district education authorities is thus to improve the quality of basic services: pre-primary education, textbooks, learning materials, teacher competencies, and facilities. Nationally-sponsored research and development work aimed at improved curricula and textbooks began in response to the 1986 Policy. Known as Minimum Levels of Learning (MLL), this program has identified basic competencies in language, mathematics, and social/environmental studies. With trials largely completed, the challenge is to implement MLL standards through improved textbooks and in-service training of teachers. This will be a massive task, requiring substantial investment and greatly strengthened institutional capacity for implementation, for supervision and monitoring, and for evaluation and research to determine the cost-effectiveness of alternative intervention strategies for achieving MLL.  - 8 - 1.31 Equity. Priority given in the 1986 National Policy on Education to increasing the enrollment of girls in lower primary school has begun to pay off. Female enrollment grew at 3.7 percent annually from 1981 to 1991; male enrollment grew at 2.5 percent annually during the same period. However, the national Gross Enrollment Rate for girls and boys in 1991 still stood at 88 percent and 116 percent respectively. Nationally, average female dropout rates are roughly equivalent to boys. But despite relative overall progress for girls, considerable variation across states on both enrollment and dropout indices remains. In 1991, female GERs in lower primary school ranged from 56 percent in Bihar to 128 percent in Tamil Nadu. Female dropout rates ranged from zero percent in Kerala to 60 percent in Rajasthan and 70 percent in Bihar. Studies of learning achievement, however, show relatively equal average levels of learning for boy and girls. On three tests administered in 21 districts to students in the final year of primary school, boys outscored girls 40 to 23, but the differences are small (Annex 5 - Development Objectives, Indicators & Monitoring). In three districts in Haryana and one in Karnataka girls outscored boys on all tests. Consistent with national policy, states have sought to reduce gender disparities by reviewing curricula and textbooks to eliminate gender bias and by increasing the proportion of female teachers. 1.32 Gross enrollment rates for SC boys are comparable to national averages, though GERs for SC girls lag substantially. SC students also tend to score lower than average on achievement tests, although again differences are small and SC girls outscored the average for all girls on two or more tests in two districts in Maharashtra and one each in Kerala, Karnataka and Tamil Nadu. For the most part, SC students are enrolled in integrated schools and speak the regional language. With the exception of Assam, project states have sought to increase enrollment and retention through a variety of incentive programs, including scholarships for SC girls and attendance allowances. Less attention has been given to educational strategies such as teacher sensitization. 1.33 Enrollment rates for ST boys approach national averages, but those for girls lag substantially. Dropout rates are higher than average for both boys and girls. ST children outscored district averages about 45 percent of the time on learning achievement tests, suggesting that they do not lag behind others on this indicator.5' Tribal children are found both in integrated schools and in coherent tribal communities, the latter often found in isolated locations with little access to social services. 1.34 As established by the Seventh Amendment to the Constitution, states and local authorities are to provide instruction in the mother tongue at the primary stage for all linguistic minorities, including tribal children. Policies seek both to preserve minority languages and to facilitate participation in the dominant society and economy. However, tribal languages are not widely used as the medium of instruction. In Assam, for example, the instruction at primary level is offered in Assamese, Bengali, and Hindi; in areas inhabited by the Bodo tribe, instruction is provided in the Bodo language. Other 5' It is possible, of course, that because of high dropout rates for all ST students and relatively low enrollment rates for ST girls, the ST students tested in schools are relatively advantaged on such factors as academic potential and home support for learning in comparison with the average of all students.  tribal languages are offered as second languages when requested by the parents of at least 10 students. In districts with heavy ST population concentration, autonomous District Councils have the authority to choose the medium of instruction, and they often choose the regional language. 1.35 Implementation of the policy also has been constrained by the presence of over 400 tribal languages and dialects, 60 of which are written, inadequate financing, and the lack of a coherent approach to policy implementation at national and state levels. Project studies of ST education indicate that ST parents generally would prefer the use of regional languages as the medium of instruction, but the baseline learning achievement studies indicate that language difficulties are a major constraint on classroom processes not only for ST children, but also in areas with multiple regional languages (Annex 4 - Project Preparation Studies). Textbooks and learning materials have been developed in relatively few tribal languages. Historic lack of access to and completion of primary and secondary school severely limits the potential number of teachers able to provide instruction in tribal languages, and the remote nature of many tribal communities reduces the willingness of teachers to accept or persist in posts. The dominant role of Tribal Welfare Departments in providing schools in tribal areas, with teachers and materials provided by state education departments, has led to division of authority and responsibility in states. Tribal Welfare Departments also provide scholarships and other incentives for ST students. 1.36 Improving equity of access to and completion of primary education for girls, SC and ST students thus remains a significant challenge. The data on learning achievement indicates smaller disparities than have commonly been thought to exist. While the comparisons suggest that a degree of equality in learning has been achieved, it is equality at a very low level of achievement. Rural primary students tend to learn equally little, regardless of gender or caste. 1.37 For girls, the potential of intensified training for teachers, enhanced roles for women in school/community organizations, and a greater role for women's development groups in encouraging enrollment and attendance needs to be realized. Similar strategies for SC students, especially SC girls, need to be developed and tested. For ST students, a substantially increased state commitment to policy implementation, backed by adequate resources and appropriately involving state Tribal Welfare Departments, is needed. National technical and managerial leadership and support for this effort will be important. C. SUB-SECTOR OBJECTIVES AND PRIORITIES POLICY 1.38 The Revised National Policy on Education (1992) and the 1992 Programme of Action provide the basic policy framework for central and state investment in primary education development. The objectives for primary education, in order of priority, are  - 10 - to (a) reduce dropout, (b) improve learning achievement, and (c) expand access for unserved students. Girls, SC and ST students are to be given priority attention. Decentralization of responsibility for planning and management of primary education development programs to the district level, and strengthening of school/community organizations, are advocated as means of developing locality specific strategies and implementation plans and of increasing ownership of schooling by communities. The policy framework is thus well-aligned with principal sub-sectoral constraints. POLICY IMPLEMENTATION: THE DISTRICT PRIMARY EDUCATION PROGRAM 1.39 To achieve these policy objectives, the GOI has established the District Primary Education Program (DPEP) as a cabinet-approved, centrally sponsored program of financial and technical assistance to states and districts for primary education reform.6' Developed through extensive consultations with states, DPEP would finance primary education development programs in selected districts and the strengthening of both state and national institutional capacity for planning, management and technical support. It is the intention of the GOI to channel the bulk of external assistance to primary education through the DPEP to ensure consistency with policy and equitable allocation of resources. 1.40 DPEP Guidelines were issued in April, 1993. In a major departure from previous vertical schemes focused on specific inputs, such as OBB, DPEP would provide grant financing for integrated sub-projects developed at district and state levels aimed at improving the quality of basic education services. DPEP would thus emphasize improved and expanded non-salary inputs for primary education; institutional development; more and better textbooks and educational materials; improved classroom teaching and facilities; strengthened community/school organizations; and expanded technical and managerial support. Incentives and scholarship programs already in place would continue to be financed by state governments outside of DPEP. (Annex 6 - DPEP Policies, Strategies and Operational Guidelines). 1.41 Key managerial features of the program include: (a) targeting of resources; (b) decentralized planning at the district level with substantial popular participation; (c) appraisal of district and state proposals against DPEP criteria and categories of assistance; (d) flexible implementation arrangements at the state level; (e) incremental implementation and expansion based on performance; (f) intensive technical support and supervision from strengthened national agencies and resource institutions; and (g) substantially increased financing through the budget of the GOI DOE. 1.42 Targeting. DPEP financing would be targeted to districts with female literacy rates below the national average of 39 percent, as well as to districts where Total Literacy Campaigns have generated substantial enrollment increases in primary education. 6 Policies and enhanced resource allocations for DPEP have been supported by IDA through the Program to Strengthen the Social Safety Net (Credit 2448-IN).  - 11 - 1.43 Decentralized Planning. Proposals for DPEP financing would be developed first by district planning teams, following DPEP criteria and guidelines, with technical support from state and national agencies. Proposals for institutional development at the state level to provide enhanced support to district projects would then be developed. Parents, teachers, NGOs and education officials would be consulted and involved in the preparation of district and state proposals. 1.44 Appraisal by DPEP. DPEP program staff would appraise both district and state proposals against program criteria and guidelines. Appraisal would focus on conformance with program objectives and priorities, and technical and managerial feasibility. During appraisal, DPEP would assess the capacity of the states to finance their share of the investment program and to sustain the recurrent costs of program investments on non-plan budgets when sub-projects are completed. 1.45 Flexible Implementation Arrangements. States would establish registered societies to receive, disburse and account for funds, and to manage the implementation of sub-programs. These state implementation societies would be closely modeled on precursors established to manage externally-assisted state projects in Bihar, Rajasthan and Uttar Pradesh. Societies are governed by Councils representing key state and national agencies, NGOs, and educationists, and are directly managed by Executive Committees. 1.46 Incremental Expansion Based on Performance. Participation in DPEP is voluntary on the part of states. Initially, a limited number of districts (3-5) and investments in state institutional capacity would be considered. Assessment studies would be conducted in each program district to establish baseline indicators for enrollment, dropout and learning achievement.2' These studies would be replicated every third year to gauge progress against program objectives. Funds would be released through an annual review of district and state progress reports and proposals for the subsequent year. Depending on progress, states would be eligible to propose additional districts for financing over time. Major reviews of performance would be conducted following the completion of the periodic assessment studies. DPEP could drop non-performing districts from the program and, with appropriate appraisal, shift resources to other districts. It is intended to launch the project in approximately 8 states that do not currently have externally assisted basic education projects. These latter states, as well as additional states, could apply for DPEP financing as the program expands. 1.47 Initially, DPEP would focus on building national, state and district institutional capacity, and on reform of lower primary education. Once satisfactory progress is being made at the lower primary level in low-literacy districts, states could apply for financing of sub-projects aimed at upper primary education. 1.48 Supervision and Technical Support. The program would be managed by the DPEP Bureau in the GOI Department of Education, which would be responsible to 2/ The designs methodologies of the baseline studies of learning achievement have been developed from the model used in the UP Basic Education Project (Credit 2509-IN).  - 12 - an empowered committee representing key GOI Departments, including Finance and the Planning Commission (DPEP Project Board). The DPEP Bureau would be fully staffed and equipped to provide appraisal for and regular supervision of state and district sub- projects, to manage flow of funds and disbursements, to oversee procurement, and to provide liaison with international donors. It would be supported by substantial technical and professional consultant services. The DPEP Bureau would develop national technical assistance, training and research and evaluation capacity through contracts with national and state resource institutions. 1.49 Increased Flnancing. The Finance Ministry and the Planning Commission have approved an increased allocation for primary education of US$650 million to the DOE for implementation of DPEP over the balance of the Eighth Plan period. These funds would finance 85 percent of district and state projects through grants, with the balance being provided as additional allocations in state elementary education budgets and, for national components and activities, the budget of the DOE. IDA STRATEGY AND RATIONALE FOR INVOLVEMENT 1.50 Promoting economic reform for broad-based, efficient economic growth, accelerating poverty alleviation and developing human resources are the focus of IDA's country assistance strategy. Education development is central to strengthening human resources, and primary education is a necessary foundation. Low educational achievement, especially among the poor, Scheduled Tribes, Scheduled Castes and women is a major constraint to their social and economic improvement. IDA's strategy for education is to focus medium-term assistance exclusively on primary education, given its underdeveloped status in India, its high returns, and its importance to the poor. IDA assistance for this project would provide the financing and technical experience needed to establish DPEP program management and technical support capacities, as well as to initiate sub-projects in a substantial number of districts and states. Previous support for basic education in India, consistent with the objectives of this program, has been provided by IDA through the Social Safety Net Adjustment Program (Credit 2448-IN), and through the Uttar Pradesh Basic Education Project (Credit 2509-IN). Without continued IDA involvement, the proposed DPEP mechanisms for management, supervision and evaluation would be less well developed, and the quality of sub-project implementation reduced. IDA has advanced the analytical underpinnings of is work through studies of student learning achievement and primary school effectiveness in Uttar Pradesh and Tamil Nadu and a public expenditure review for education. The analytical basis for the project is further strengthened by studies of education for girls, scheduled caste and tribal students completed by Indian scholars, as well as the 1986/87 national survey of education. Additional project studies have been carried out in collaboration with UNICEF, NCERT and NIEPA during project preparation, including: baseline beneficiary assessments in the six IDA DPEP states; textbook production, distribution, and costs; girls' education; tribal education; teacher training, education and motivation; and state education finance.  - 13 - EXTERNAL FINANCING 1.51 The first substantial external assistance for primary education was provided by ODA for a project in Andhra Pradesh; approximately US$35 million was provided through 1992. UNICEF has disbursed around US$5 million from agency funds for the Bihar Education Project, and has pledged to raise up to US$92 million more from other donors. In Rajasthan, the Swedish International Development Authority has provided or pledged approximately US$100 million for basic education projects. The Netherlands have provided and pledged approximately US$30 million for Mahila Samakhya, the women's empowerment program managed by the GOI DOE. IDA approved a credit of US$165 million for the Uttar Pradesh Basic Education Project in 1993 (Credit 2509-IN). Under the agreements of the Program to Strengthen the Social Safety Net (Credit 2448- IN), the European Community (EC) has agreed to provide ECU 150 million as program support to DPEP; this is the first program of external financing for DPEP. EC funds would be released through two mechanisms. First, an annual fixed grant would be made contingent on adequate budget provision for elementary education by the GOI; tranche releases would be tied to issuance of annual budget documents. Second, grants of approximately US$1.7 million would be made on the initiation of DPEP assisted district sub-projects.Y In addition, the EC program earmarks US$5 million for external technical assistance and training. ODA and UNICEF have agreed to place future financial assistance through the DPEP program. GOI would keep separate all donor funds by earmarking them to different districts. LESSONS OF EXPERIENCE 1.52 While India has long employed central grant programs as a mechanism for GOI investment in state-managed development activities, the DPEP would incorporate a number of structural innovations. The DOE has gained four years of satisfactory experience with the use of registered societies for project implementation (Bihar, Rajasthan, and Uttar Pradesh), and lessons learned have been incorporated into the model Memorandum of Association and By-Laws that are to be used by each participating DPEP state. For other innovations, including decentralized planning, formal appraisal and supervision mechanisms, and performance management, there are few lessons of experience, other than implementation difficulties associated with their absence. The presence of these structural innovations underlines the need for phased start of the program and effective monitoring and management. 1.53 From experience with previous vertical schemes such as OBB, the GOI has learned the importance of integrated education development programs that address inter- related constraints through coordinated efforts to improve basic services. Experience with state projects in Bihar, Rajasthan and Uttar Pradesh has demonstrated the importance of formal annual reviews and work program proposals, and the importance 1 These funds would not be used in districts assisted by other donors.  - 14 - of focusing on improving the quality of ECE, textbooks and learning materials, and strengthening teacher in-service training. 1.54 Experience with IDA-assisted Population and Human Resources Projects in India has demonstrated the importance of strong project management arrangements, annual budget financing sufficient to cover anticipated project expenditures, clear mechanisms for the advance of funds and for timely completion of disbursement requests, and supportive supervision from IDA, especially in start-up phases of projects. The development of effective supervision activities by project agencies also emerges as significant given the geographic scope of highly decentralized social service delivery programs. 1.55 The program would also draw on wider international experience in primary education development.2' This experience substantially validates the DPEP emphasis on ECE, improved textbooks and learning materials, intensified in-service teacher training, and enhanced community participation in the operation of schools. 2' These lessons have been summarized by the World Bank in Marlaine E. Lockheed and Adriaan Verspoor. Improving Primary Education in Developing Countries, New York: Oxford University Press, 1991. Additional lessons of experience from World Bank Project Completion Reports and Audits, and ongoing lending experience for primary education, have been discussed with the GOI and taken into account in program design. Finally, India has played a leading role in follow-up international activities to the Jomtien Conference on Education for All, including hosting of the regional EFA Forum in September, 1993 and the Large Country Initiative Conference in December of the same year. Through these consultations the GOI has been able to systematically review lessons being learned by other countries.  - 15 - II. THE PROJECT A. SCOPE AND STRATEGY 2.1 The proposed IDA credit is for a specific investment project that would finance the development and operation of the DPEP Bureau in the GOI DOE to serve as a financial and technical program intermediary organization, as well as an initial set of state capacity building and district sub-projects in 23 districts (3-5 per state) in the states of Assam, Haryana, Karnataka, Kerala, Maharashtra and Tamil Nadu.2