India - National Seed Project

FILE COPY Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-1849-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE GOVERNMENT OF INDIA FOR A NATIONAL SEED PROJECT May 17, 1976 This document has a restricted distribufion and may be used by -recipients only in the performance of their official duties. Its contents may not otherwlse be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as at May 4, 1976) Rs 1.00 = Paise 100 US$1.00 = Rs 8.97 Rs 1.00 = US$0.1115 Rs 1 million = US$111,500 (Prior to eptember 24, 1975, the Rupee was officially valued at a fixed Pound Sterling rate. Since then, it has been fixed relative to a "basket" of currencies. As these currencies are now floating, the US Dollar/ Rupee exchange rate is subject to change. Conver- sions in the appraisal report were made at US$1 to Rs. 8.75, which was the short-term average at the time of preparation.) UNUSUAL ABBREVIATIONS AND ACRONYMS USED IN THIS REPORT ARDC - Agricultural Refinance and Development Corporation CWC - Central Warehousing Corporation GOI - Government of India HLDC - Haryana Land Development and Reclamation Corporation HYV - High Yielding Varieties ICAR - Indian Council for Agricultural Research NSC - National Seeds Corporation PMMC - Project Management and Monitoring Committee SFCI - State Farms Corporation of India SSC - State Seeds Corporation(s) SSCA - State Seeds Certification Agency SWC - State Warehousing Corporation(s) TDC - Tarai Development Corporation FISCAL YEAR April 1 - March 31  FOR OFmFCIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR THE NATIONAL SEED PROJECT 1. I submit the following report and recommendation on a proposed loan to India in an amount equivalent to US$25 million to help finance expansion and development of India's seed industry. The loan would have a term of 20 years, including 5 years of grace, with interest at 8-1/2% per annum. The proceeds of the loan would be channelled two ways. The bulk of proceeds (US$18 million) would be channelled through the Agricultural Refinance and Development Corporation (ARDC, formerly ARC) to commercial banks for financ- ing sub-borrowers' investments in seed processing, production and storage facilities. Bank funds for seed technology research, quality control, train- ing and technical assistance, and canal remodelling (US$7 million) would be channeled by GOI to the institutions involved. Relending arrangements and terms are discussed below (paragraph 55) and in Annex III. 1/ PART I - THE ECONOMY 2. An economic report, "Economic Situation and Prospects of India" (1073-IN dated March 29, 1976), was distributed to the Executive Directors on April 2, 1976. Country data sheets are attached as Annex I. Background 3. India is exceptional among the Bank Group's member countries for its size and diversity; the country is divided into more than 20 states with a population of some 600 million and over 60 languages. The country's poverty and inadequate domestic savings, together with a net transfer of external resources averaging over the past five years only about US$1.20 per person per annum, have Imposed sharp limitations on the rate of growth. Account must be taken, also, of the uncertainties imposed by the erratic availability of water. A bad monsoon, which is likely to occur almost two years out of every five, has a pervasive influence over the entire economy and can wipe out the results of years of efforts. Thus, the annual growth of national income over the last five years (1971/72 - 1975/76), which included two consecutive mon- soon failures, has averaged only 2% per annum, less than the rate of popula- tion increase. 4. Since independence, progress has been impressive on many fronts, but disappointing on others, and generally has fallen short of India's mas- sive needs. The growth of the socio-economic infrastructure (transport, 1/ Part I of this report is identical to Part I of the President's Report for a Second Line of Credit to the Industrial Development Bank of India (Report No. P-1837-IN) distributed to the Executive Directors on May 6, 1976. 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.  - 2- education, health services, etc.) has been impressive, but has often been achieved at high cost and has yielded results of variable quality. Many industrial and agricultural investment schemes have been highly successful, but others have taken excessively long to be completed and have operated well below full capacity. In some regions of the country, growth and structural change have been rapid and compare favorably with developments in many other parts o'f the world, but in other regions there has been stagnation and possibly even decline. Although national income has increased in most years, there has been in general little impact upon the living standards of the vast masses of the urban and rural population. 'In recent years, the Government has initiated a variety of programs specifically directed toward helping the lower income strata, which - conservatively measured - consist of some 200 million people with incomes of less than US$60 per head per year. 5. The structure of the economy has been slow to change. Agriculture remains the. dominant sector, with its share of national product declining only gradually from about 50% to 42% over the last twenty years. The share of industry has increased only slowly and, since the late 1960s, has remained approximately constant at about 23%. There has, however, been a shift in the composition of industrial production, with consumer, intermediate, and capital goods now contributing about one third each, compared with an overwhelming preponderance of consumer goods 25 years ago. Recent Trends 6. India entered 1975/76 having been through one of the most difficult periods since Independence. Progress in dealing with long-term development problems had been limited by poor crops, the dramatic shifts against India in the terms of trade, and inflation. Adjustments to these immediate difficul- ties thus became the principal preoccupation in economic management. However, with the support of favorable weather and additional foreign assistance, it now appears that India has successfully weathered the problems of the recent past; once again there is hope for an upturn in the growth rate of the economy. 7. Most important among the favorable factors in 1975/76 was a bumper harvest which followed years of poor or modest agricultural 6utput. Food- grain production last year, estimated at around 114 million tons, exceeded the previous record of 1970/71 by 6%. Oilseeds, sugarcane and cotton also reached new production peaks and provided ample'supplies for the agro- industries. Secondly, deficiencies in the supply of basic commodities and of infrastructural inputs such as energy and transport, which had been prevalent in the past, have been eased. Electricity generatin,t and domestic production of coal, oil, cement and steel all increased by over 10% during 1975/76. Finally, the increased supply of agricultural and industrial products and of services, together with the demand restraint imposed by the Government since mid-1974, put a stop to inflation. In 1974/75 the Wholesale Price'Index had risen by 23%; in 1975/76 it remained unchanged. 8. On the balance of payments front in 1975/76, some of the basic problems of the previous two years remained. In particular, the terms of trade, which had deteriorated significantly over the previous two years, did  not improve and most probably moved even further against India. Nevertheless, there were a number of encouraging developments. -Firstly, the build-up of foodgrain stocks during the year will provide a buffer against the impact of a future crop failure on the balance of payments. Secondly, although export earnings rose only 6%, with high volume growth being offset by falling prices, import growth was also less than expected. The value of petroleum imports was stabilized despite price increases during the year, and steel imports were substantially reduced due to increased domestic production. As a result, the value of India's imports rose only 2% during 1975/76 and the trade deficit was reduced to US$1.45 billion, US$150 million less than in 1974/75. Thirdly, the net transfer of aid was 20% higher than in 1974/75 and India also received substantial inflows of private remittances from abroad. As a result of these favorable developments, India was able to add over $800 million to foreign exchange reserves. These reserves will give India added flexibility in ad- justing to a higher rate of economic growth during 1976/77. Development Prospects 9. While many of the most acute problems were eased during 1975/76, longer-term constraints to growth remain. Many of these have existed for some time, but their importance had been temporarily overshadowed by the more overwhelming limitations imposed by supply shortages and balance of payments problems. One such constraint is the deficiency of demand for a large seg- ment of the manufacturing industry. Consequently, in the midst of adequate supplies during 1975/76, the use of manufacturing capacity - especially for consumer durables - remained low. In the short and medium term, the two most promising ways of stimulating demand are to boost public investment and ex- pand exports. Both avenues are currently being pursued by the Government. During 1975/76, real Plan outlay rose by 18-20%, after having fallen during each of the previous two years. The 1976/77 Budget proposes a further in- crease of 16% in real terms and introduces new measures to stimulate invest- ment in the private sector. Investment priorities remain the same as last year, namely agricultural development and increased production of critical industrial inputs, such as power, coal, oil, and iron and steel. The Budget also stresses the importance of exports as an essential condition for sus- tained stability in the balance of payments. 10. In agriculture, the basic problem remains that, despite the record foodgrain crop in 1975/76, the long-term growth rate of foodgrain production in India has been unacceptably low, at about 2.3% per annum over the last 15 years. This is about the same as the rate of population increase. Starting from a situation of def-icit, this has meant that only in good years has there been a significant margin of production to cater to any per capita growth in consumption, and even in normal years-it has been necessary to rely on stocks or imports to meet any growth in demand. With a major effort to expand the irrigated area and provide complementary inputs, the average growth rate of foodgrain production could be substantially increased. This is essential, not only because of the necessity to meet food requilements without unmanage- able consequences for the balance of payments but also because of the strong influence of agriculture on the levels of activity in other sectors of the  - 4 - econoiny. Even withi a higlher growth rate of foodgrain production, imports will still be required. However, in relation to India's total consumption of foodgrains, the dependence on imports has been and will remain small. In the past, domestic production has accounted for almost 100% of supplies in good weather years and about 90% when harvests were poor. 11. The energy sector in India was headed for its own crisis before the international oil crisis developed. The dramatic hike in oil prices, coinciding as it did with the accentuation of electric power shortages - caused in part by low hydroelectric generation due to poor monsoons - led to an acceleration of measures to improve performance of existing facilities and to a much higher priority for investments in the energy sector. The effects of these measures, aided by the good monsoon, are now starting to be felt. Coal production has increased by 10% or more in each of the last two years, and, partly as a result of this, power shortages and restrictions have been greatly reduced. The medium-term prospects for oil and natural gas have improved with the delineation of the offshore Bombay High field. Crude pro- duction from this field is expected to be I million tons in 1976/77 and to reach 6 million tons by the end of the Plan period. On this basis, petro- leum imports are projected to start declining in 1978/79, as increased crude production and expanded refinery output more than offset increases in demand. 12. In the past, export growth was affected in varying degrees by in- adequate profitability, lack of access to imported inputs, poor quality, instability of the policy environment and vulnerability to ad hoc decisions. In addition, for agricultural commodities export taxes were significant. For some homogeneous commodities, such as iron ore and tea, inadequate sup- plies or limited world demand have been important constraints. In recent years, mainly because of the large trade deficit, the Government's emphasis on export promotion has intensified. As a result, although the fundamental orientation of India's industrial and trade policy and the specific instru- ments of the export regime have, by and large, remained the same, a signi- ficant shift in emphasis and in the way these policies are operated has occurred. These are important both because they are likely to lead to a better utilization of current export potential and as an indication of the willingness to make policy adjustments, when necessary, to expand exports. 13. While it is difficult to assess the impact of the new measures in an area where policy is already very complex, some improvement has already taken place and further improvement in medium-term performance seems likely. An annual real export growth rate of about 7% should be feasible, compared to an average of 5% over the last five years. However. to achieve a higher export growth over the long run, more far-reaching po t-y measures will be required, including the introduction of a more uniform and more stable sys- tem of export incentives. Even so, the export drive might be impeded by controls in some developed markets. 14. India's balance of payments problems should be manageable over the next few years, even with the repayment obligations resulting from re- cent short-term OPEC and IMF borrowings. The worldwide inflation has bene- fitted India by reducing the proportion of export earnings that have to be  - 5 - devoted to debt service. India's debt service ratio has come down from 31% in 1970/71 to 19% in 1975/76. Provided the real growth of exports remains at about 7% per annum, the debt service ratio is unlikely to rise much above 20% in the foreseeable future. On the import side, given the adequate level of stocks on hand at the end of 1975/76 and assuming normal weather condi- tions, annual foodgrain imports could be kept to 5-6 million tons during the next three years. Within the general category of non-food imports, India has substantial medium-term import substitution opportunities for three major items -- petroleum, fertilizer and steel -- which constituted more than 60% of imports last year. If the medium-term targets for production in these areas are achieved, the total expenditure on these three import items in 1978/79 need not be any higher than in 1975/76 and could quite conceiva- bly be less. Provided the Government is willing to liberalize imports and donors continue to respond to India's needs, the easing in the external payments situation presents an opportunity to raise the level of investment (complemented by larger imports of capital goods, components, and raw materials), and consequently, reach a more satisfactory level of long-term growth. PART II - BANK GROUP OPERATIONS IN INDIA 15. Since 1949, the Bank Group has made 44 loans and 80 development credits to India totalling US$1,436 million and US$4,112 million (both net of cancellation), respectively. Of these amounts, US$743 million has been repaid, and US$1,825.9 million was still undisbursed as of March 31, 1976. Annex II contains a summary statement of disbursements as of March 31, 1976, and notes on the execution of ongoing projects. 16. Since 1957, IFC has made 14 commitments in India totaling US$51.8 million, of which US$10.2 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$27.1 million, US$20.6 mil- lion represents loans and US$6.5 million equity. A summary statement of IFC operations as of March 31, 1976, is also included in Annex II (page 2). 17. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit opera- tions. Major irrigation, marketing, seed development, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capac- ity utilization in industry. The Bank Group has also been active in support- ing infrastructure development for power, telecommunications, and railways. Family planning, education, water supply development, and urban investments have also received Bank Group support in recent years.  - 0 - 18. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis of the program on agriculture, industry, power, transport and telecommunica- tions remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs such as credit for on-farm investments, command area development of existing irrigation schemes, and seed production form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to proj- ects benefitting small farmers. Lending in support of infrastructre and industrial investments will focus on energy-related projects. Repeater credits for power and railways have high priority in this context. 19. The need for a substantial net transfer of external resources in support of India's economy has been a recurrent theme of Bank economic re- ports and of the discussions within the India Consortium. The need for readily usable foreign exchange assistance is especially pressing at a time when output and investment have to be adjusted to a radically differ- ent price situation. Consequently, Bank Group lending for critical indus- trial raw materials and components continues to be an essential element within the overall program of assistance. As in the past, Bank Group assistance for projects In India should include, as appropriate, the fi- nancing of local expenditures. India imports relatively few capital goods because of the capacity of the domestic capital goods industry. The import component of projects tends to be especially low in such high-priority areas as agriculture, education, and family planning. For the Bank Group to be able to make an appropriate contribution to the financing of projects in these sectors, it is important to cover a proportion of local expenditures. 20. It is clear from the review of the Indian economy that as much as possible of India's external capital requirements should be provided on con- cessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support, and some Bank lending to India, for which the country is creditworthy, is appropriate. With this loan the grant element of Bank Group commitments to India during the current fiscal year, including Third Window, becomes 74%, as compared with the 83% grant element of standard IDA terms. As of March 31, 1976, the loans to India held by the Bank totaled US$711 million, of which US$275 million remained to be disbursed, thus leaving a net amount outstanding of US$436 million. 21. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. in 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with an estimated 41%, 24% and 30%, respectively, in 1974/75, and the contribution of the Bank Group is expected to continue growing. On March 31, 1975, India's outstanding and disbursed external public debt was US$11.8 billion of which the Bank Group's share was 24%. The Bank's Group's share is likely to grow, but not very rapidly.  Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will also rise slowly. In 1974/75, about 14% of India's total debt service payments were to the Bank Group. PART III - AGRICULTURE AND SEED IN INDIA General 22. Agriculture is the most important sector in India; it engages 70% of the labor force, has recently contributed an average of about 42% of GNP, and accounts for a major share of exports. Consequently, investments in agriculture, particularly to increase the output of foodgrains, have been given priority by GOI and the State Governments, especially since the mid- 1960s, and deserve continued emphasis over the next five years. 23. Since independence, the overall growth rate of agricultural pro- duction has averaged about 3% per annum. This low overall rate of growth in the agriculture sector obscures considerable variations over shorter periods of time, between crops and between regions. The overall rate has been very much affected by the serious droughts in 1965 and 1966 and again in 1972 and 1974. At the same time, the success of high yielding varieties of wheat produced increases in wheat production of about 20% p.a. between 1967 and 1971. Other foodgrain crops, notably rice, have enjoyed less success but some progress has been made towards developing high yielding varieties of rice and of other grains. 24. Unfortunately, production increases in wheat and other high yield- ing varieties have not been sustained. There has been a loss of momentum in recent years due in no small measure to the deterioration of seed together with the increasing susceptibility of the main wheat variety to rust attack. Reestablishment of the rapid growth of foodgrain production of the late sixties requires major new efforts to make high quality seed available to farmers together with organizational and research support to be able to re- act quickly to changing factors such as diseases and pests. Role of the Seed Industry 25. Prior to the early sixties, when plant breeding breakthroughs pro- duced the first high yielding varieties (HYV), the seed industry in India was little developed. The private sector produced small quantities of high value flower and vegetable seed while the public sector concentrated, with very limited success, on disseminating improved seed from small and scattered State government-owned Community Development Block farms. 26. However, the release of India's first maize hybrids in 1961, fol- lowed by hybrids of sorghum and pearl millet, high yielding dwarf rice varie- ties and finally by the high yielding dwarf wheats, began to change the seed  - 3 - industry. These new seeds were highly responsive to higher input use, gave greater profits, and created a strong demand for quality seed. 27. In response there was a rapid growth of private sector seed compa- ies. In the public sector, the Government of India (GOI), recognizing that a wide scatter of small Block seed farms was inappropriate to the technologi- cal needs of hybrid seed production, decided to create a central seed organi- zation. GOI also decided to promote legislation to establish seed quality control. Thus in 1963 the National Seeds Corporation (NSC) was established and in 1966 a Seeds Act was passed. NSC was charged with promoting seed in- dustry development and establishing a system of quality control. 28. Through the mid sixties seed output expanded rapidly. The certi- fied seed producing area increased from 360 ha to 35,000 ha between 1963-64 and 1968-69. This was mainly in the private sector, with the Bank-supported Tarai Development Corporation (TDC) (Loan 614-IN) coming in towards the end of the period. During this period NSC was concerned mainly with foundation seed production and, after the passing of the Seed Act in 1966, with seed certification. 1/ 29. Demand for seed grew more slowly than expected in the late sixties. In the self-pollinated crops - wheat and rice - farmer retention and farmer to farmer transfer accounted for much of the seed used; some of the HYV were inferior in grain quality to traditional types and thus lost favor. Substan- tial overproduction occurred and large stocks accumulated with State govern- ments. Thus, 1968-1971 was a period of retrenchment with State governments curtailing their seed production and many private companies withdrawing from seed production. 30. Demand for certified seed began to pick up again in 1971-72, but the industry lacked the resources and confidence to meet it. NSC stepped in and developed a program which in 1974/75 produced 73,000 tons of seed (about 50% of national output), making NSC by far the largest seed producer in the country. Seed was produced almost entirely through contracts with progressive farmers. A feature of this NSC program was the introduction of scientific seed processing. Previously seed had little or no processing, to the detriment of quality. National Seed Program 31. Against this background, the Government of Tndia began about eighteen months ago to take steps to reorganize and improve tl: seed sub-sector to make 1/ The definition of the different terms for seed used in this report are as follows: Breeder Seed - seed of high genetic purity, produced by the plant breeder. Foundation seed - progeny of breeder seed (or of first generation foundation seed), produced to statutory quality control standards. Certified seed - progeny of foundation seed, produced to statutory quality control standards.  -9- it more responsive to the growing requirements of Indian agriculture. A na- tionally coordinated seed development program was prepared by the Government to support all facets of seed production, from production of breeder and foundation seed through production, processing, storage and marketing of certified seed. 32. The main features of the program include changing NSC's role from that of a seed producer to an agency responsible for overall coordination and development of the seed industry. NSC would also be responsible for interstate marketing of certified seed. NSC's seed production activities would devolve upon State Seed Corporations (SSC) to be established in States with a comparative advantage for producing certain crops. Agricultural universities would be closely integrated into the program to produce improved quality breeder and foundation seed. The program would also address problems in seed technology research, quality control, and buffer stocks. 33. The program design takes advantage of the experience gained under the Tarai Seeds project, signed in 1969. The Tarai Development Corporation has been successful in establishing itself as a producer of quality seed and its products are in wide demand. Many of the concepts which have proven to be successful in the case of Tarai have been incorporated in the national seeds program. These concepts include a compact area approach where seed would be produced in compact areas around each processing plant by growers with a shareholding in the SSC. This approach would improve efficiency in quality control, supervision and transport. Quality is also expected to benefit from the vested interest shareholder growers would have in seed industry success. The proposed project would represent the first phase of implementation of the national seeds program. PART IV - THE PROJECT 34. The project was prepared by a GOI/Bank working group during 1975 with assistance from the FAO/WB Cooperative Program. It was appraised by the Bank in October/November 1975. The appraisal report (No. 1064-IN; dated May 17, 1976) is being distributed separately to the Executive Directors. Negotiations were held in Washington in April 1975. The negotiating delega- tion for India was headed by Mr. K.S. Narang, Secretary Agriculture. Attached as Annex III is a loan and project summary. Project Description 35. The main purpose of the project is to increase foodgrain production through increasing the availability of high quality cereal seed. However, cotton and vegetable seed are also included in the project. It would cover development of seed production and processing facilities in four States; Andhra Pradesh, Haryana, Maharashtra and Punjab. It would improve storage, marketing, breeder and foundation seed production, and seed technology research.  It would also provide for expansion of seed quality control facilities at the state and national level, and provide training and technical assistance. Project components include: - reorganization of the National Seeds Corporation (NSC) to carry out its major responsibilities for overall coordina- tion and development of India's seed industry and interstate seed marketing; provision of equipment for NSC's vegetable seed operation; - expansion of seed storage capacity and establishment of a reserve stock for certified and foundation seed; - establishment and equipment of 4 State Seed Corporations (SSC); - development of about 8 large-scale farms of agricultural universities, State Farms Corporation of India, and Haryana Land Development and Reclamation Corporation for certified seed production; - development of university facilities for foundation seed production, processing and storage; - improvement of breeder seed production facilities at agricultural universities and ICAR institutes; - development of seed technology research programs at agri- cultural universities; - provision of equipment and other facilities for private seed processing corporations; - expansion of quality control and certification facilities; and - provision of training and technical assistance. Project Implementation 36. Implementation of this multi-faceted project would require consid- erable coordination. A Project Management and Monil ring Committee (PMMC) has been created for this purpose chaired by the Secretary for Agriculture, GOI. NSC's planning cell, of which the Deputy Secretary (Seeds), GOI, would be ex-officio director, would provide the PMMC's Secretariat. PMMC would monitor and coordinate project activity, including procurement, and would report progress to the Government and the Bank.  National Seeds Corporation (NSC) 37. NSC would be reorganized to carry out its new role and broadened responsibilities envisaged under the National Seeds Program. Its Board would be reconstituted to include the Managing Directors of SSC. In turn, NSC would be represented on the Board of each SSC. This interlocking arrangement would help to ensure that NSC could properly coordinate SSC production programs with national demand and interstate marketing require- ments. Other members of NSC's Board include 2 GOI representatives from the Ministry of Agriculture, the Managing Directors of NSC and State Farms Cor- poration of India (SFCI), 3 representatives of seed growers and NSC's Chair- man. 38. GOI would continue to hold all NSC equity, and provide additional equity as required to enable NSC to invest in the share capital of the SSC, and to borrow for working capital and for its vegetable seed unit. NSC would continue to carry out its vegetable seed business as it would not be prudent to transfer this responsibility to the newly established SSC. Production and processing of vegetable seed is a much more complex task than of cereal seed and would be an unnecessary burden and distraction from the main task of producing cereal seed. 39. The major responsibilities of NSC would be to participate in the share capital of the SSC and actively assist them in becoming viable seed production agencies. The NSC would assess demand, coordinate SSC seed pro- duction programs, and arrange for interstate marketing of certified seed. NSC would help plan and organize production of breeder and foundation seed through liaison with the Indian Council for Agricultural Research (ICAR) and agricultural universities. NSC would also operate a buffer stock scheme to protect seed users against demand fluctuations caused by the adverse effects of weather and disease. The scheme would include foundation and certified seed. Breeder seed reserve stocks would be held by the producing institutions since quantities would be small. NSC would arrange with the Central and State Warehousing Corporations for construction of project storage facili- ties. Designs would be approved by the Central Warehousing Corporation. State Seed Corporations (SSC) 40. The SSC in Andhra Pradesh, Haryana, Maharashtra and Punjab have been established. Under the project, SSC would organize production of certified seed through SSC shareholder growers. The SSC would buy the seed from growers and process it for marketing. Intrastate marketing of certified seed would be handled by SSC; interstate marketing would be handled by NSC on a commission basis. 41. The State government, NSC and seed growers would subscribe to the capital of the SSC approximately in the proportion 35:30:35. To ensure that SSC have sufficient capital to begin early operations, it would be a condi- tion of loan effectivess that NSC and the State government had paid in a certain minimum amount of share capital to the SSC (see Section 6.01(f) of  the Loan Agreement). Where possible, shareholding seed growers would initially be recruited from the ranks of growers who have been associated with NSC on a contractual basis. Shares allocated to growers but not sub- scribed within three months would be subscribed equally by NSC and State government as necessary depending upon the need of an SSC for cash. Such shares would, however, be transferred to eligible seed growers upon request. Given the profitability of seed growing and the success with the shareholder grower concept under the Tarai Seeds project, no difficulty is expected in attracting farmers to participate. Only those farmers in the project area who operate land suitable for seed production and purchase one share of SSC would be eligible. Institutions with large farms, i.e. the agricultural universities, SFCI and Haryana Land Development and Reclamation Corporation (HLDC) are also expected to become shareholder growers. 42. The development of these large farms would be supported under the project subject to the provision of satisfactory farm development plans. (See Schedule 1, paragraph 4 (b) of Loan Agreement). Three of these farms (of about 8 in total), are located in Haryana, and the irrigation canals serving them would be remodelled to increase water flow capacity which would increase seed production and make it more certain. 43. SSC would be run in accordance with normal commercial practice. To operate efficiently they must have good staff, which would require attractive personnel policies. Continuity in the post of Managing Director would also be important in the formative years of the SSC. Suitable provisions to im- plement these policies were agreed and would be contained in project agree- ments to be concluded between NSC and SSC (See Section 4.05 of the Loan Agreement). Role of Other Institutions 44. Responsibility for foundation seed production would rest with the agricultural universities which would establish special seed production units. Both Andhra Pradesh and Punjab agricultural universities at pres- ent lack sufficient land for foundation seed production. The state govern- ments agreed to transfer additional land to them and it would be a condi- tion of disbursement, against the Andhra Pradesh and Punjab components of the project, that land satisfactory to the Bank had been transferred (see Section 2.10 of Punjab and Andhra Pradesh Agreements and Schedule 1, paragraph 4(d) of the Loan Agreement.) To the extent land would still not be sufficient to produce the required amount of founzation seed under the project, NSC would ensure that seed supply would be -upplemented from other institutions with large farms (i.e., SFCI or HLDC). 45. Breeder seed production to be carried out by agricultural universities and ICAR institutes would be coordinated by ICAR. A senior official of ICAR would be responsible for assessing demand (with the help of NSC and SSC) and ensuring that the production program was sufficient and properly supported (see Section 4.04 of the Loan Agreement). Actual production of breeder seed of each variety would be the responsibility of  - 13 - the originating breeder or institution. To safeguard quality, breeder seed plots would be examined by a committee of officials representing ICAR, NSC, the State Seed Certification Agency and the breeder. Shortages in supply of breeder seed would be detrimental to the remaining links in the seed mul- tiplication chain and could adversely affect food production. To prevent this, a reserve stock of breeder seed would be carried over each season in controlled environment storage. 46. The agricultural universities in Andhra Pradesh, Haryana, Maha- rashtra and Punjab would intensify and reorient their seed technology re- search activities. The emphasis would be on applied research in support of the major project objective - production and supply of adequate quanti- ties of quality seed at an economical price. 47. The project would also support the continued expansion of the private sector. All relevant activity, from plant breeding through to pro- cessing and storage, would be eligible for project financing. Individual investment proposals would be financed through, and subject to the appraisal of, commercial banking channels. In addition, it would be a condition of disbursement against any investment proposal that it had been subject to the technical scrutiny of NSC (see Schedule 1, paragraph 4(e) of Loan Agreement). Also, past experience has shown that the private sector has had difficulties when competing with State governments for access to seed supplies, quality control services, credit, and other items. It was agreed that all parties under the project would be treated equally with respect to supplies of breeder and foundation seed; quality control services; variety trials; credit; and seed movement (see Section 4.06 of Loan Agreement and Section 2.05 of ARDC Agreement). 48. Quality control and seed certification responsibility would rest primarily at the state level but would be monitored and coordinated at the national level. Seed certification would be undertaken by independent State Seed Certification Agencies (SSCA) which have been established. Also, to coordinate seed certification at the national level, and to ensure inter- state uniformity of operation, a Central Seed Certification Board would be established with composition satisfactory to the Bank (see Section 4.03 of the Loan Agreement). 49. A seed testing service is required to determine compliance with the regulatory aspects of the Seeds Act. One state, Maharashtra, has a well staffed and equipped seed testing laboratory. The project would provide for similar facilities in the other three states. GOI operates a Central Seed Testing Laboratory which would act as referee in case of disputes over decisions by the state laboratories. The central laboratory would also continue to develop and standardize seed testing procedures and monitor performance of state laboratories. 50. A National Seed Development Council has been established by GOI as an advisory and policy formulation body for the seed industry. At  a tLme of Institutional clhange and rapid expansion in the industry, such a body Is Important to provide continuing policy guidance to GOI, State governments and private Industry. The Council would be chaired by the Secretary of Agriculture for GOI and would include representatives of NSC, State governments and private industry. Training and Technical Assistance 51. Training under the project would consist of short overseas study tours for staff of NSC, SSC, state certification agencies and seed testing laboratories to study methods and operations in use in developed countries. One candidate would be sent from each of the five universities developing a seed technology program for advanced degree training overseas. Some tech- nical assistance would also be required under the project. Universities would require assistance to design seed technology research programs. NSC engineers would need short-term assistance with processing plant design. State Seed Certification Agencies would need help to develop administrative procedures commensurate with greatly expanded activity, and NSC's marketing department would be supported by consultant services to redirect efforts from distribution to promotion, to establish training programs to that end and to assist with seed demand surveys. Assurances were obtained that consultants would be employed in consultation with, and on terms and conditions satis- factory to, the Bank (see Section 3.02 of Loan Agreement). Pricing 52. Under the project, steps will be taken towards a more economic pricing policy for seed, which, in turn, should help increase use. Grain prices in India vary considerably between deficit and surplus foodgrain producing states. Up to now, however, seed has been sold at a uniform na- tional price. This has meant that, in foodgrain deficit areas, the price of seed is only a little more than the price of grain, while in foodgrain sur- plus areas, the price of seed has been, in some cases, several times the price of grain. This has tended to distort demand and depress the use of commercial seed in many areas. Under the project, a pricing system would be adopted to correct this situation. Prices would be set to reflect costs plus a reason- able return on capital. The pricing system would also take into account how- ever, that in years of grain scarcity, seed prices in deficit areas will need to be set at a premium above the grain price to prevent consumption as grain. The following criteria would be taken into account when setting prices: (i) ensure the financial viability of SSC; (ii) prevent consumption of seed as grain; and (iii) within these constraints, maximize s-,,d sales. These cri- teria would be embodied in SSC/NSC agreements which would be subject to approval by the Bank (see Section 4.05 of Loan Agreement). Project Cost and Financing 53. The total project cost is about US$52.7 million equivalent (in- cluding duties and taxes) of which the foreign exchange component is US$11.1 million or 21%. The proposed loan of US$25 million would finance about 50% of project costs net of duties and taxes, and cover the whole of foreign ex-  - 15 - change costs plus about US$14 million of local costs. The remaining local costs would be financed by GOI (30%), state governments (9%), ARDC and parti- cipating banks (8%), and sub-borrowers (20%). Details of cost estimates and financing are given in Annex III. 54. The loan proceeds under the project would be applied as follows: (a) US$11.8 million - Processing facilities, including civil works and equipment, for SSC and NSC. (b) US$3.0 million - Processing facilities, including civil works and equipment, for private seed processors. (c) US$1.4 million - Development of HLDC and SFCI farms. (d) US$2.0 million - Bulk and transit storage facilities. (e) US$5.9 million - Equipment and facilities for agricultural universities, seed technology research operations, and canal remodelling. (f) US$0.6 million. - Equipment and facilities for quality control agencies. (g) US$0.3 million - Training and technical assistance. 55. The bulk of Bank funds (US$18.2 million) would be channelled through the ARDC to commercial banks for financing sub-borrowers' investments in seed production, processing and marketing facilities. GOI would make Bank proceeds available to ARDC repayable partly over 9 and partly over 15 years at interest rates of not less than 6.5% and 7%, respectively. GOI would bear the exchange risk. ARDC would on-lend the funds to banks at an annual interest rate of not less than 8%. The banks, in turn, would lend to SSC, NSC, HLDC, SFCI, private processors and State and Central Warehousing Corporations (SWC, CWC), at a minimum annual rate of 11% for periods of from 5 to 15 years. Lending rates under the project are in line with prevailing interest rates, and the spreads reasonable in relation to the risk element involved, and the cost of appraisal and supervision of individual loans. Bank funds (US$6.8 million) for agriculturc universities, quality control, training and technical assistance, and canal remodelling would be channelled by GOI to the various institutions involved according to the Borrower's standard arrangements for development assistance to ICAR and the States. 56. In order to expedite project implementation, a limited amount of retroactive financing for procurement of selected items is appropriate, provided such procurement was consistent with Bank guidelines. Accordingly, it is proposed to provide retroactive financing under the loan for such expenditures from November 1, 1975 up to a maximum amount of US$500,000.  Procurement and Disbursement 57. Procurement would be coordinated by the Project Management and Monitoring Committee (PMMC). For the public sector, which represents the bulk of procurement, contracts for equipment and farm machinery valued at US$50,000 or more and totalling an estimated US$15.1 million would be procured on the basis of international competitive bidding in accordance with Bank guidelines, except in cases (totalling about US$2.0 million) where procurement would be widely dispersed among institutions and over time and it would not be practicable to bulk items. In these cases, procurement would be on the basis of competitive bidding advertised locally and in accordance with local pro- cedures, which are satisfactory to the Bank. Some items of minor equipment would be needed on an urgent basis, and would be procured by prudent shopping (total value US$1.0 million). 58. Procurement for the private sector (US$3.4 million) would be left to customer choice. Individual purchases would be too small, varied and widespread to permit bulking for competitive bidding. The equipment re- quired is widely available and competitively priced. 59. Bulking would not be practicable for civil works, buildings and furnishings (US$16.5 million), since individual items are small and scattered over a wide area. Contracts would be let after competitive bidding advertised locally. An exception would be canal remodelling in Haryana (US$2.4 million). Because of the need to minimize disruption of water supplies the work would be frequently interrupted and delayed and would not attract contractors. Consequently, it would be carried out by force account. Vehicles (US$1.1 million would also be procured on the basis of competitive bidding advertised locally since only a few would be purchased at a time and purchases would be spread over the project period. Motorcycles (US$0.5 million) would be purchased by individual staff members according to their preference direct from dealers. Employment of consultants and overseas training (US$0.3 million) would be on terms and conditions satisfactory to the Bank. Thie balance of project costs (US$10.4 million) would consist of reserve stocks, permanent working capital and operating costs not involving procurement. 60. The proceeds of the loan would be disbursed against the full c.i.f. costs of imported equipment; against the full costs of training and technical assistance; against the full ex-factory cost of locally procured equipment; against 60% of expenditures on civil works; and agair-t 70% of ARDC refinanc- ing of commercial bank loans to private sector processors. Risks and Economic Benefits 61. The seeds market in India is already fairly well established and there is little risk that seed quantities produced under the project would not be fully utilized. The most significant risk to the project lies in the fairly complex organizational arrangements involved in project implementation  - 17 - which, unless carefully managed, could result in some aspects of the project moving more slowly than others. Measures to monitor and expedite all phases of implementation have been discussed with GOI, State governments and the other institutions involved in the project. A critical path chart of key project activities has been developed to assist project managers in system- atically addressing key activities on a priority basis. These measures, together with the considerable momentum already built up towards implement- ing the project, should help to ensure that project delays are minimized. 62. The project would provide a number of important economic benefits. The main project benefit would be increased crop yields resulting from the improved availability and quality of seed. Projected annual incremental cereal production at full development would be 200,000 tons of wheat, 170,000 tons of paddy, 95,000 tons of maize, 200,000 tons of sorghum, and 250,000 tons of pearl millet. Total value of these crops would be about US$145 million per year. The project would also increase and improve the production of cotton seed, estimated to be worth about US$3.7 million per year at full development. Since most of the cotton seed would be used in the Integrated Cotton Development Project (Credit 610-IN), its value has been taken as the economic input price assumed in the economic analysis for that project. About 3 million farmers would benefit from the use of project seed. Since small farmers suffer most from supply constraints and high prices, they should benefit substantially from the improved seed supply and lower prices which should result from the project. Employment effects would be the crea- tion of about 14,000 man years of seasonal work during harvesting and about 800 jobs to carry out the work of the State Seed Corporations and Certifica- tion Agencies. Based on the quantified incremental costs and benefits, the economic rate of return to the project is about 65%. A sensitivity analysis to test the effects of different investment costs, operating costs and benefit levels indicates the project is economically justified under any realistic set of assumptions. PART V - LEGAL INSTRUMENTS AND AUTHORITY 63. The draft Loan Agreement between India and the Bank, the draft Agreement between the Bank and ARDC, the draft Project Agreements between the Bank and, the States of Andhra Pradesh, Haryana, Maharashtra and Punjab and the Bank, the Report of the Committee provided for in Article III, Sec- tion 4(iii), of the Articles of Agreement and the text of a draft Resolution approving the proposed loan are being distributed to the Executed Directors separately. 64. The features of the draft agreements of special interest are de- scribed in paragraphs 41 through 52 of this report. 65. The additional conditions of effectiveness, specified in Section 6.01 of the Loan Agreement, would include:  - i8 - (a) The completion of arrangements satisfactory to the Bank for the transfer to the SSC of suitable processing plants of NSC; (b) The completion to the satisfaction of the Bank of lending arrangements between ARDC and the Participating Banks for loans to the SSC. 66. Additional conditions of disbursement, specified in paragraph 4 of Schedule 1 to the Loan Agreement, would include: (a) That satisfactory farm plans had been completed before disbursements would be made in respect of that farm; (b) That the Bank had approved SSC processing plant designs before disbursing against an SSC's expenditures; and (c) That, in respect of each State, the State had established its SSC with articles of association satisfactory to the Bank and the SSC had signed a project agreement with NSC. 67. I am satisfied that the proposed Loan would comply with the Arti- cles of Agreement of the Bank. PART VI - RECOMMENDATION 68. I recommend that the Executive Directors approve the proposed Loan. Robert S. McNamara President Attachments May 17, 1976  ArmexI 24M DTA - NDIAPage 1 3,200,4.83 hal2 ,; b.u (..id.19,73) 30 Po, haof arabl. len W l M OAU MI* (ATLA MMSI) n .fo La 90 /a 220 La 2,600 / 2M APthI rat (per tomnand) 38 383L2 41.8 1.I 5 4A 1~3.9/ meftd. bth rate (pew thnjeod) 13 166L4aA 19 /d. 12 Id0 12:.0 I Wnant mortality rate (per toosted liv births) 139 1k20-l14o/ ..d 80 17.54 Life S032etwMafo t birth (years) 41./ 50 4.8 58 7 Ore.. gepradootime wets ~~~~~ ~ ~~~~2.7 &, 2.932 33 13 2.3 2320~ . Popuolation powth rate - urban3A 4 40 a Age atruou"'e (percent) D-li. 11 4.0 f .. '13 /6 3.7 a 15-61 56 5 7 f4 53 /6 54. /6 2.7/ 65 end omer 3036 3/ 113. A,go dependency ratio 06 O 0./ 0. ~ 0.9 /6 0.6 6 Economic dependency ratio /61.0 I.7/ .Z 1.5 0.8 / Urban ypopalatio an peroent of total 18 20 /m.k 18 4. 32Iw 78 a Faodl Plaoniog, NC of coosptor cumulative (theua.) 1oo/ . 17510 No. of user. (% of married women) . .. 8 BW M Ibo fowo. (thou..ando) 189,000 /6 221,000 4dq 40,100 /6 13,200 / 25,700 / Paer entege employed in egricoltowa 73 & 71 L8A 62 /6 56 /6 3 P-rmtega o,eplny.d ..3/6 2 7 c 3.6 V INURor,ii8 tiii8al income reosived by higteet 5% 27 / 25 4rA . 25 or 15 Percent of ntiooal inco reoived by highest 20% 52 Lr 53 4. 51.39 Percenot of nationul income received by lowest 20% 4. 5 a 4,c 6 r Pewoent of otioool income received b,y lowest 4.0 14Ar-1 19 r t M8S0RIB8TIO8 OF L.ANDOolegRBAW S owned by E;top 10 ofo~a. . % owned by amall..t 10% of owner a... NIALTHE AND WnlaTXo8 Population Pe'w phyician 5,800 46 1.,0 27,380 /c 2,7110 / 790 Popolation Par oursing peron ,10 6 ,U8,32 /6 190 6 20 j Ppltion per hospital bad 2,600 /6 1,620o6, 1,4.50c/6 850 n06 / Por oapit. calorie mopp3y as % of -eqoi-rm.tso 95 93 - 93 85 125 Per oopita pwotein 00pply, total (grao per d.yT/6 55 53 53 1.5 90 Of whioh, colmal and polse 19 /B 16 Lab 11. /d 227~ Death rato 1-4. years /7 1105 EDUCATION I733"Td /b pri,ory school awomlsmeot ratio 1.2 79 ao 71 U-2 /ay.d 110 Adjusted eeoo,Loy echool e,,rllot ratio 10 28 BEg 12 1.5 . 72 Years ofabiooling proided, firat end meaod level 12 12 1210 13 Vooatiooal enrollment as % of seeo. schoo1 enrollment 1. 6/8f 28 10 5g, Adult literacy rate % 24 .gg 36 73.kd ah / 7 ' 7 NOUSIED 7Average No. of parsooe par woo,, (urban) 2.6 La4.ak 2.8 /c .. .. 0.8 /c.oJ Parount of acu pied omit, without, piped wator ... .66 Acooeo to sleotrioity (00 % of -total popoletio.) ... .23 Percent of fur.1 popolation connected to electricity .... 6 22djo reivor per 1000 Population 5 23 La 111.1.646 672 / Pecomager oare per 1000 popalotime 0.8 2 4 6 231L Elotrie Po.e oo-Bomption (kha p.c.) 1.6 108 23a 25 6 ,75/ Newsprint ooooospion p.c. kg Par yeor 0.25502 . /6 28.5 Not.a. Figurc refer either in the lateat periodo or to aoowot of envir-omentml to-ampraov, body weights, and the lateet year.. lateet periods reLfer in principle to distribution by age Bade eox of nationl 5opuiatioe. the yearo 1956-60 or 1966-70; the lateat yoars in prin- A Protein atAarded (requobennto) for all oautri.o as eatab- .ole to 1960 end 1970. liahed by USDA Boononl Reoearh Service provide for a ali,no 4 The Per Capita GNP eatioote ia at nokat pric.e for Clloaenc. of 60 gam. of total protein Par day, and 20 gvaeo of y.aao othcr thou 1960, calculated by the Cone convereion, animal and pulse protein, of which 10 geao should be animal technique ao the 1972 World Book Atlon. protein. Thmee standards "ar someehat later than thoee of 25 L2 Average numbe of daughters per eoamn of raproduotive green of total proteo and 23 grams of animal protin Ba an age. rt,aefrAverage far the -nId, proposed by 7A0 in the Third World Food iPopulation growth M. -f the deaad.o ending In Survey. 1960 end 1970. 4 Son,. etdise haer suggeoted that crdod demth ratse of children 4 ktio of population under 15 end 65 end over to popula- aege 1 thruoug . may he ceed asafirt approalaation inde. of tion of ogeo 15-64. for age dependency ratio and to labor malnotrition. foroe of -ges 15-61. for economic dependency ratio. /8 Percentage enrolled of eaoreponaing population of sohool age /6 PAO referene Otadndard represent physiological ra- as defied for each country. quireomoto for norol activity end health, taking 197?2; A Estimate anual oea- ge for 1963-&1 booed on rneults of the national eample survey; /0 l9,71; /d Botimate; 1965-70; /f 1973; Z6 Estlnated annual average for 1951-61 baoed on anailysis of deceonlal 0"0000; h 1951-60; Bateio etiamt.3 based on birth. obtained by application of emraev eurvivele method to reeulte of 1951 and 1961 ceouee / 1960-72; A6 Par the definition of urban seec p 1.; 4 Municipalities, regecy capitale ond other, places with urban characteristics, eldngW tIr n;6 or t-hie definition of urban oee UN Denoxraphic Yearbook 1973, P. 127; /. Are ol"anified as urbon for local governont purpo.es, i.e. county boraugho , nunicipal borug.s hend urban districts; /6 1961.; /6 1cludes all indidrduala who participate in any, type of econodic activity; /6 AID eetimate of labor force in age group 15-59. 0888 report giove a figure of 180.1. million based on the 1971 ppulation caenen. The differancee i. due to change in the definition of anrc . I tha 1971 .cane persons were classified only on the boot, of their main activities. This led to the eacluolon of neverl categories, ouch ao houewives; /r Households, /6 1967-68; /t 1968; /u 1962; /v Percenel in g-ovrnment nervices only; /w 1957; /x 1969, /6 Including rural hospitals; /Z Government, hospital establieheento only; /88. 1960-62; /ab 1969 70, /_t EstImate Which includea ovrage otudente; /ad 1967; /a. Not including -oati-1a ahort-tere cou-eco; /8f 1965; /gg 1961, Zp8h Population, of 10 years and over booe d on one pe-r-eot ... plo dato of 1971; 4a8j 15 yenre end over; /6%j tate refer to houmeholda; /.k Data base d on oaple tabulation of c-nsu rturns; Lai Deta refer to h.-oholds In conventional dwellingo; L- Iports only; /on tegsttr-d applicocto for oorh. Sloe end population cob. Iodoneoia a relevont reference country, although it io in the per capita loc... grop hbeow lndi.. noThe United Kingdom hoc boon ne1ected hecaus of the important redo of public sector enterpria,, and the highly developed oyetem of ...cio1 aelfare .  Annex I KIC 10TM NTM DATA Page 2 GNP Pta CAPITA IN 1973 E usSl2O GROSS IATIONAL PRODUCT IN 1974/75 Ah ADUAL RET1 OF GEOV!1I (%. oonstant prices) US$ B1A. j 1961/62-1964/65 1965/66-1969/70 1970/71-1973/74 GNP at Market Prioee 87.4 100.0 3.4 3.7 1.9 Grove Domestic Investment 14.8 16.9 Grosa National Saving 12.8 14.6 Current Aocount Balano -2.0 -2.3 Resource Gap -1.8 -2.1 OUTPUT. LABOR FORCE AiD PRODCTIIVITY IN 1971 Value Added (at factor coat) Labor Force V.A. Per Worker uS Bln. * Av Ne Agriculture 24-5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Servioese 16.3 .ia. 30.2 16.7 542 186 Total/average 52.6 100.0 180.4 100.0 292 100 GovERNMENT FINANCE . General Government Central Governmnt (Re. Bln) of GDP (Re. Bln) of GDP 1974/75 1974/75 1972/73-1974/75 1974/75 1974/75 1972/73-1974/75 Current Reoeipte 107.63 15.4 15-7 64.02 9.1 9.2 Current Expenditures 98.91 4.2 15.2 57.78 8.2 8.7 Current Surplus/Deficit 8.64 1.2 0.5 6.24 0.9 0.5 Capital Expenditures e/ 40.40 5-8 5.4 30.17 4.3 4.1 External Assistanoe (net) 10.17 1.4 1.0 10.t7 1.4 1.0 MONEY. aREDIT AND PRICES 1965/66 1970/71 1971/72 1972/3 1.2nL14 1974/75 August 1974 August 1975 (Billion Re outstanding at end of period) Money and Quasi Money 61.4 105.7 122.4 142.2 169.1 187.4 176.8 198.2 Bank Credit to Public Sector 40.8 56.9 69.0 82.5 92.9 102.0 98.8 115.3 Bank Credit to Private Seotor 28.1 56.7 64.4 76.0 90.1 100.5 90.0 104.7 (Percentage or Index Numbers) Jalnury 1975 January 1976 Money and Quasi Mloney as % of GDP 24.0 24.4 26.3 27-9 27.2 25-5 Wholesale Price Index (1961/62 = 100) 131.6 181.1 188.4 207.1 254.2 313.0 316.0 290.5 Annual percentage changes in: Wholesale Price Index 7.7 5.5 4-0 9.9 22.7 23.1 -8.1 Bank Credit to Public Sector 12.9 8.6 21.3 19.6 12.6 9.8 4.8 8/ Bank Credit to Private Sector 12.8 17.4 15.6 18.0 18.5 11.5 22.9