India - Rajasthan Agricultural Extension and Research Project

FILE COPY The World Baok FOR OFFICIAL USE ONLY Report No. P-2010-IN REPORT AND RECOMMENDATIONS OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE GOVERNMENT OF INDIA FOR THE RAJASTHAN AGRICULTURAL EXTENSION AND RESEARCH PROJECT July 7, 1977 This document hs a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as at May 31, 1977) Rs 1.00 Paise 100 US$1.00 - Rs 8.81 Rs 1.00 US$0.1135 Rs 1 million US$113,500 CSince September 24, 1975, the Rupee has been officially valued relative to a "basket" of currencies. As these currencies are iow floating, the U.S. Dollar/Rupee exchange rate is subject :o change. Conversions in the Appraisal Report were made at JS$1 to Rs 9.00). FISCAL YEAR April 1 - March 31 List of Abbreviations and Acronyms Used in this Report AEO - Agricultural Extension Officer GOI - Government of India GOR - Government of Rajasthan VLW - Village Level Worker/s VEW - Village Extension Worker/s UOU - University of Udaipur  FOR OFFICIAL USE ONLY INDIA RAJASTHAN AGRICULTURAL EXTENSION AND RESEARCH PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President Beneficiaries: The State of Rajasthan Amount: US$13 million equivalent Terms: Standard Relending Terms: From GOI to GOR: As part of Central assistance for State development projects on terms and conditions applicable at the time. Project Description: The project would consolidate and strengthen Rajasthan's extension services, in 17 out of 26 Districts of the State, and help develop adaptive research facilities with the objective of achieving early and sustained improvements in agricultural production, particularly of foodgrains. The project components would include: - reorganization and strengthening of agricultural extension services; - development and strengthening of adaptive research; and - creation of project monitoring and evaluation facilities. This document has a restricted distribution and may be used by recipients only in the performance of their ofici duties. Its contents may not othefwise be disclosed without World Bank authorization.  Estimated Project (US$ million) Costs: Local Foreign Total Extension 16.06 0.48 16.54 Training 1.27 0.01 1.28 Research 3.74 0.12 3.86 Evaluation and Monitoring 0.45 0.01 0.46 Sub-total 21.52 0.62 22.14 Price Contingencies 3.66 0.15 3.81 Physical Contingencies 0.58 0.03 0.61 Total Project Cost 25.76 0.80 26.56 Financing (US$ million Plan: Local Foreign Total IDA 12.20 0.80 13.0 Government of Rajasthan 13.56 - 13.56 Total 25.76 0.80 26.56 Estimated Disbursement: (US$ million) FY78 FY79 FY80 FY81 FY82 FY83 Annual 0.9 2.2 4.7 2.9 1.4 0.9 Cumulative 0.9 3.1 7.8 10.7 12.1 13.0 Rate of Return: At least 50%. Appraisal Report: No. 1443a-IN, dated July 7, 1977  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE GOVERNMENT OF INDIA FOR THE RAJASTHAN AGRICULTURAL EXTENSION AND RESEARCH PROJECT 1. I submit the following report and recommendation on a proposed development credit to India for the equivalent of US$13 million on standard IDA terms to help finance a project to strengthen the agricultural extension service and upgrade and develop adaptive research in the State of Rajasthan. The proceeds of this credit would be channelled to the Government of Rajasthan in accordance with the Government of India's standard terms and arrangements for financing of state development projects. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation and Prospects of India" (1529-IN dated April 25, 1977), was distributed to the Executive Directors on May 3, 1977. 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 630 million speaking over 60 languages. Since Independ- ence the trend in growth of GNP has been about 3.5% per annum, or a little over 1% per annum in per capita terms, while over the five years 1971/72 - 1975/76 it fell to as low as 2.5% per annum, in spite of the record harvest of 1975/76. This unsatisfactory performance is in part the result of the low availability of investable resources: while India's domestic savings effort compares well with other countries at the same average income levels, the rate has very rarely exceeded 17% of GNP; similarly, the net transfer of resources from abroad has never been above 3% of GNP, and fell to as little as 0.8% between 1969/70 and 1973/74. The investment rate puts India in the lower third of all developing countries. More significant perhaps is the fact that in spite of a marked rise in the investment rate from about 10% in the early 1950's to about 18% over the past fifteen years, the trend in GNP growth has remained about the same. This indicates a marked decline in the efficiency of capital use, as a result of increasing capacity underutilization, long project gestation, and increased emphasis on relatively capital intensive projects and sectors. 1/ Parts I and II of this report are identical to Parts I and II of the President's Report for the Maharashtra Irrigation Project (Report No. P-2036-IN), dated June 30, 1977.  - 2 - 4. Since Independence the growth of the socio-economic infrastructure (transport, 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 of the world; in other regions there has been stagnation, and in some, decline. Although national income has increased in most years, there has been no rise in the living standards of the vast mass of rural and urban poor, conservatively estimated at 200 million people with per capita incomes of US$70 per annum (converted at the official exchange rate) and US$250 on a purchasing power parity basis. 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 manufacturing industry has increased only slowly and, since the late 1960s, has remained approximately constant at about 16%. There has, however, been a shift in the composition of manufacturing production, with consumer, inter- mediate, and capital goods now contributing about one third each, compared with an overwhelming preponderance of consumer goods 25 years ago. Recent Trends 6. In March, 1977, a party other than Congress formed a Government for the first time since Independence. The state of the economy was not a promi- nent election issue; in fact the economy was generally stronger than at any time in the last six years. Although the growth of GDP in 1976/77 is not expected to have exceeded 2%, this was on top of the very good growth of 8.8% in 1975/76. Agricultural production is expected to have fallen by about 3%, but only because of the return to a more normal harvest of 110-114 million tons of foodgrains after the record 121 million tons of the previous year. Industrial growth was around 10% in 1976/77, which is significantly above the rates achieved in the late 1960's and early 1970's. Exports continued their bright performance, rising by 25% in nominal terms. The overall resource position, with record foreign exchange and foodgrain reserves, is exception- ally strong, and gives the Government considerable room for maneuver. 7. In agriculture the bumper crop of 1975/76 was largely due to remarkably good weather conditions; the good crop in 1976/77 - a foodgrain harvest in the region of 110 million tons would be the second largest on record - was produced under generally normal weather. A conspicuous change was the increase in fertilizer use, which rose by more than 20% over 1975/76, following marked declines in fertilizer prices. Industrial production bene- fited from fewer labor disputes, fuller utilization of installed capacity in both private and public sectors, a more liberal import policy, relatively good power availability, and increased demand because of higher consumer incomes, expanded exports and higher public expenditures. However, whole- sale prices which had fallen 14% from September 1974 through March 1976,  - 3 - rose 11% from the end of March to December 1976. This upsurge may be a new inflationary trend or merely a correction of the previous sharp decline in the relative prices of a range of agricultural commodities. 8. The balance of payments situation has improved dramatically since the 1973-1975 period. In 1975/76 the trade deficit was $1,530 million, which was more than covered by US$1,560 million in net aid, US$205 million in net purchases of currency from the IMF, and US$559 million in net miscellaneous capital and invisibles (mostly private remittances); indeed, this large aggregate net resource inflow led to a US$794 million increase in foreign exchange reserves, to a level of almost US$2.2 billion. In 1976/77, the trade deficit is estimated to have fallen by US$1,130 million, due to a rise of US$1,145 million in exports. The decreased trade deficit, along with a further increase in the net inflow of miscellaneous capital and invisibles from abroad of US$470 million, more than offset the fall of US$350 million in net aid and the substantial repurchases of currency from the IMF, and allowed a US$1.5 billion addition to reserves, which reached a level of US$3.65 billion at the end of March 1977. Development Prospects 9. The favorable economic situation gives the Government the opportun- ity to address the longer-term constraints on growth. The basic task is to raise the overall rate of growth from its historic range of 3% to 4%. In the long run this will require raising more resources for investment. But it will also be important to achieve significantly better utilization of avail- able resources, partly through an immediate boost to industrial demand. 10. In agriculture, the basic problem remains that, despite the record foodgrain crop in 1975/76 and the good crop in 1976/77, the long-term growth rate of foodgrain production has been unacceptably low, at about 2.5% per annum over the last seventeen years, and only 2% in the last ten. This has meant that only in good years has there been any margin of production to cater to per capita growth in food consumption, and in normal years it has been necessary to import food. There is considerable scope for stepping up growth both by increasing the use of inputs and by raising the productivity of existing capacity. Three promising developments in regard to the first are the sharply higher outlays on irrigation in the Fifth Plan Period along with a renewed determination to complete projects expeditiously; the indica- tions that private investment in tubewells is picking up again after a slow- down in the early 1970's; and the recent recovery of fertilizer demand. With regard to more productive use of existing capacity, there is increased aware- ness in the Government that the benefits of irrigation projects can be much increased not only through command area development but also through more efficient design and operation of major surface irrigation infrastructure. Also, hopes have been generated for increasing productivity on both irrigated and rainfed farms through a reorganized and improved extension and research system, which has been recently introduced in several States in northern and eastern India.  - 4 - 11. A strong effort to raise agricultural growth is essential, not only to meet food requirements, but also because of the pervasive influence of agriculture on the levels of activity in other sectors of the economy. This effort must also be so structured as to increase the incomes of small and marginal farmers, in order to increase production since they operate 25% of the cultivated land and account for somewhat more than 25% of production, and for welfare reasons, since they make up about 70% of rural population and constitute the majority of those living below the poverty level. 12. The industrial sector is poised for rapid growth, as the most serious constraints on the supply side have been removed by the improved situation with respect to power, coal and imported raw materials and components. There has been a progressive liberalization of controls and the 1976/77 Central Budget announced a reduction of some taxes on private industry. In many cases management of public enterprises has improved, as is reflected in their markedly higher production and profitability as a group. In the medium term it is the demand for industrial output that will determine industrial growth. In certain industries, export demand will provide a strong pull on production; this is true, for example, for iron and steel, certain chemicals, some electrical equipment, processed agricultural products, and vehicles. But the impact of increased exports on overall industrial demand will grow only slowly given the current low share of exports in sales. If the higher growth and productivity in agriculture discussed earlier were to materialize, it would provide a significant stimulus to industry. It is difficult to specify the linkages explicitly; but because of the large share that agri- culture holds in GNP, the coefficients do not have to be large for agricul- tural growth and the concomitant growth in demand for industrially produced inputs and mass consumption goods to boost overall industrial demand signi- ficantly. A higher public deficit and increased public investments are the instruments most directly under Government control, and also those that can increase demand for industrial products most immediately. The interim budget of the new Government moves strongly in this direction with a 240% increase in the planned budget deficit over 1976/77. 13. Improvement in the supply of energy augurs well for India's ability to meet the needs of a more rapidly growing economy. Organization- al and transportation problems in the coal industry have largely been over- come, production is sufficient to meet demand, stocks are comfortable, and the industry has good prospects for meeting both domestic and export demand. Supply of electricity continues to be a concern, because of the vulnerability of hydro power to variations in the monsoon and the continued existence of local shortages, even when the overall power situation is satisfactory. But several institutional improvements promise to reduce the future incidence of shortages: underutilization of capacity has been virtually eliminated in well-established power stations; progress has been made in the organized exchange of power between states thus relieving localized power shortages; and the problems of slow implementation of power investment due to delayed delivery of materials and equipment have virtually disappeared. In addition, the delays caused by the inability of State Electricity Boards to finance projects expeditiously have been eased by their improved financial position following tariff increases, and by increased Plan outlays by the Central  - 5 - further improved by major new finds of oil and gas near the large offshore Bombay High field. Crude oil from Bombay High was brought to shore for the first time in May 1976; production reached an annual rate of 2 million tons by March 1977, and will rise to a level of 12-13 million tons by 1984/85. Although India will continue to import crude at or somewhat above the current level, much of the foreign exchange burden of rapidly rising imports will be avoided by the development of these resources. Prospects are also bright for further discoveries offshore, given the current high level of exploration activity. 14. Underlying all other development issues is that of population. Al- though India's population growth rate of a little over 2% is not high in com- parison with most LDCs, the size of the absolute increment - 13 million annually - is daunting. It appears, however, that population growth may have passed its peak in the 1960's, and it is expected to continue to slow down, both because the birth rate will continue to decline and because the death rate will not fall as steeply as in the past. With a sustained family planning effort, it should be possible to lower the population growth rate to 1.1% per annum by the end of the century. Our "best guess" projection of India's population by 2000 is 880 million. Many of the benefits of family planning policy will only be felt beyond the turn of the century, but the decline in fertility will bring about an early change in the age structure of the popu- lation. The school age group will grow more slowly or not at all after 1981 thereby reducing the pressures on the primary and secondary education system. The labor force, however, will continue to grow at a fast rate until the end of the century. 15. India's balance of payments position should be comfortable for the next few years. The combination of past global inflation and increased ex- ports have reduced the proportion of export earnings needed for debt service from 30% in 1970/71 to 16% in 1976/77. The ratio is not likely to rise above this level in the next few years. Given continuing favorable policies, the volume of exports should continue to grow by 7% to 10% annually in the near future; and import needs for fertilizer, POL and foodgrains will continue to require a diminishing proportion of available foreign exchange. The large inflow of private remittances shows no immediate signs of declining and should continue to bolster the foreign exchange position in the medium term. Imports, including a variety of capital goods, have already been liberalized signifi- cantly. Increased public investment and a revival of the domestic economy is likely to generate substantial additional import demand. However, this should be quite manageable, given the currently comfortable foreign exchange position, bright export prospects, and continuation of the current real level of net aid. The present situation presents an opportunity to raise the level of investment and, consequently, reach a more satisfactory level of long term growth. PART II - BANK GROUP OPERATIONS IN INDIA 16. Since 1949, the Bank Group has made 50 loans and 85 development credits to India totalling US$1,762 million and US$4,338 million (both net  - 6 - of cancellation), respectively. Of these amounts, US$816 million has been repaid, and US$1,432 million was still undisbursed as of May 31, 1977. Annex II contains a summary statement of disbursements as of May 31, 1977, and notes on the execution of ongoing projects. 17. Since 1957, IFC has made 14 commitments in India totalling US$58.4 million, of which US$13.0 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$30.9 million, US$24.4 mil- lion represents loans and US$6.5 million equity. A summary statement of IFC operations as of May 31, 1977, is also included in Annex II (page 2). 18. 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. 19. 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, urban development and water supply 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, intensification and streamlining of extension systems, and seed production form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefitting small farmers. Projects supporting water supply, sewerage, and urban development also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infrastructure and industrial investments will focus on agriculture-, export- and energy-related projects. 20. 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. Thanks in large part to the response of the aid community, India has successfully adjusted to the changed world price situation. However, the basic need for readily usable foreign exchange assistance, to augment domestic resources, assure effective utilization of existing capacity, stimulate investment and acceler- ate economic growth, remains. As in the past, Bank Group assistance for projects in India should include, as appropriate, the financing of local expenditures. India imports relatively few capital goods because of the capacity of the domestic capital goods industry. The import component of  - 7 - 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. 21. 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. As of May 31, 1977, outstanding loans to India totaled US$973 million, of which US$494 million remained to be disbursed, leaving a net amount outstanding of US$479 million. 22. 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 58%, 24% and 29%, respectively, in 1975/76. On March 31, 1976, India's outstanding and disbursed external public debt was US$13.1 billion, of which the Bank Group's share was 25%. The Bank Group's share is expected to remain around this level in the future. Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1975/76, about 15% of India's total debt service payments were to the Bank Group. PART III - AGRICULTURE IN INDIA AND RAJASTHAN 23. Agriculture is India's most important sector. It provides employ- ment for approximately 70% of the population, contributes about 45% to GNP, and provides a major share of exports. GOI's emphasis in the agricultural sector has been on increasing foodgrain output through improved yields re- sulting from more intensive use of seed of high yielding varieties (HYV), fertilizer, pesticides and irrigation. With self-sufficiency in food as a national objective, investments in foodgrain production have been given top priority by Government and will continue to be the focus of national atten- tion for the foreseeable future. 24. Since independence, the overall growth of agricultural production has averaged 3% per annum. This rate has been very much affected by serious droughts in 1965 and 1966 and again in 1972 and 1973 and obscures considerable variations over shorter periods, between crops and between regions. The success of high yielding varieties produced increases in wheat production of about 20% per annum between 1967 and 1971. This "green revolution" primarily affected wheat, and was concentrated in north western India, very largely on account of the advanced state of agriculture in that area and the availability of irrigation. Efforts to spread the high yielding technology have been  - 8 - hampered by limited irrigation facilities and farm service and supply institu- tions operating at low levels of effectiveness. But the under-utilisation of modern inputs is first a demand problem rather than one of sheer availability. In much of India, where yields are low, farmers are caught in a cycle of low productivity, low income and low investment; they are poorly placed to take on the risks associated with the new technology which is costly, particularly as it tends to yield low returns when applied under traditional cultural practices. 25. A way to help break this cycle is to raise standards of cultural practices, using resources already available to farmers, in particular, abund- ant labor. The key to this approach is a strengthening and reorganization of existing agricultural research and extension services along the lines first tried on a limited area in three Bank Group assisted irrigation projects in Rajasthan and Madhya Pradesh (Ln. 1011-IN, Cr. 502-IN and Cr. 562-IN). These projects showed dramatic production increases are possible by widespread improvement in such basic cultural practices as seedbed preparation, control of plant population and weeding. This advice is carried by a reorganized extension service which puts great emphasis on concentration of efforts, systematic and regular training, close supervision of staff at all levels, and a fixed schedule of visits to farmers' groups. Coupled with an expanded program of adaptive research, the system has the capacity to transmit appro- priate recommendations from the researcher to the farmer quickly and effec- tively at little extra cost to Government. Once farmers increase their production and their confidence in the extension service grows, they can be expected to adopt the higher yielding and more costly technology based on purchased inputs and on-farm investments. 26. This approach to improving extension services has been introduced over a wide area of India through a number of Bank Group assisted projects. This project would extend the improved system to a large part of Rajasthan. 27. Rajasthan. Rajasthan is India's second largest state in land area, tenth in population and eighth in foodgrain production. Agriculture is the dominant economic activity, employing about three-fourths of the population and contributing 45% of the state's product. Large areas of the state are desert, with low average rainfall, occasional severe drought and extensive tracts of sandy soil. These areas contain sparse populations which exist partly on nomadic livestock herding and partly on settled agriculture based on the naturally drought resistant crops of millet and pulses. The eastern part of the state, while still dry, is better placed both for rainfall and for potential of surface irrigation. However, only 15% of the state's net sown area is under irrigation and the cropping intensity is only 113%. The crop- ping pattern differs greatly between the western part of the state, where essentially only millet and pulses are grown, and the eastern part where wheat is the single largest crop but coarse grains and pulses command sizeable areas. Rice is a minor crop. Statewide, over 75% of cropped area is under foodgrains of which pearl millet alone accounts for over 40%.  - 9- 28. Foodgrain yields in Rajasthan are generally low. As might be ex- pected, yields of coarse grains and pulses grown in the drier areas are very low, about half their All-India average. But even wheat and maize grown in the wetter areas have yields below the All-India average. Fertilizer con- sumption per hectare is less than one fourth of the All-India average. How- ever, yields have increased faster than in some other low productivity areas. From 1952 to 1961, the total cropped area expanded at an annual rate of 3.4% but the rate of expansion dropped sharply to 0.7% in 1962-1971. The annual growth in crop production rose from an average annual rate of 2.7% from 1952 - 1961 to 3.6% from 1962 - 1971, indicating a spurt in productivity brought about by increases in irrigated area. Yields nonetheless remain low and there exists considerable potential for increases in productivity. 29. In the past, emphasis has been placed on raising production through use of inputs, including HYV seeds, fertilizer and irrigation, thereby limit- ing the impact on areas which had no access to irrigation or had difficulty in organizing the complementary inputs. To redress this balance and to raise foodgrain production in the short run, emphasis needs to be placed on raising yields largely through transferring to farmers the knowhow of proven, simple improvements. This can be achieved by improvements in agricultural extension methods backed by an effective and responsive adaptive research program. Existing technology will suffice for the next two or three years but additional research is needed to bring new techniques forward after that time. The pro- posed project is designed to do this. Other Bank Group Activities in Rajasthan 30. The first Bank Group projects in Rajasthan were a US$52 million loan (Ln. 1011-IN of June 19, 1974) for the development of the Chambal Irrigation Canal command area and a US$83 million credit (Cr. 502-IN of July 31, 1974) for development in the Rajasthan Canal command area. These projects pioneered the new extension and research systems in India with encouraging results. Other components of these projects are also proceeding satisfactorily. In addition, a Rajasthan Dairy Development Project (Cr. 521-IN of December 18, 1974) is currently being implemented, with satisfactory results. The Bank Group is also assisting two low-rainfall districts of northwestern Rajasthan under the Drought Prone Areas Project (Cr. 526-IN of January 24, 1975). The Drought Prone Areas Project, designed to increase and stabilize production in the project districts, is also proceeding satisfactorily. Additional information on these projects is contained in Annex II. PART IV - THE PROJECT 31. The project was prepared by the Government of Rajasthan (GOR) and a proposal was submitted to the Bank Group in June 1976. It was appraised in October 1976. A report entitled "Appraisal of the Rajasthan Agricultural Extension and Research Project", Report No. 1443a-IN, dated July 7, 1977, is being circulated separately to the Executive Directors. Negotiations took place in Washington in May 1977. The Borrower's delegation included Mr. Vineet Nayyar, Director, Department of Economic Affairs, Government of India, and Mr. B. Hooja, Agricultural Production Commissioner, Government of Rajasthan.  - 10 - Project Description 32. The project would consolidate and strengthen agricultural extension services in 17 out of Rajasthan's 26 districts, covering a total cropped area of 9.6 million ha, and develop adaptive research facilities. The main ob- jective is to achieve early and sustained improvements in agricultural pro- duction, particularly foodgrains. The proposed five year project would consist of the following: - consolidation and strengthening of the agricultural extension services by providing additional staff, training, housing, offices, equipment and transport. - development of adaptive research, by establishment of five Adaptive Trial Centers and seven sub-stations under the Department of Agriculture and by supporting basic and applied research at the University of Udaipur, through provision of staff, staff training, equipment, operating costs and buildings. - establishment of project monitoring and evaluation facilities through provision of staff, equipment and funds for studies. Project Implementation 33. Implementation of the project would be the responsibility of exist- ing agencies. Overall coordination would be through a Project Coordination Committee (PCC), headed by the Agricultural Production Commissioner of Rajasthan. GOR has agreed to establish PCC by December 31, 1977; it would meet at least twice a year (Section 2.02 (a) of the Project Agreement). It would include senior representatives of all relevant Central and State Govern- ment organizations and the University of Udaipur. In addition to overall super- vision and coordination, the PCC would assess the implications of proposed extension recommendations for credit, inputs, storage and marketing and ensure that measures were taken by relevant agencies to meet requirements. 34. The Director of Agriculture, under the Agricultural Production Com- missioner, would be responsible for implementation of the extension program and for adaptive research to be carried out at Adaptive Trial Centers. The Director of Research, Agricultural University of Udaipur, would be responsible for basic and applied research at the University's research stations. Close coordination between extension and research would be ensured through an exist- ing State Level Extension and Research Coordination Committee chaired by the Director of Agriculture, which would meet at least twice a year (see Section 2.02(b) of the Project Agreement). This Committee, which includes the Director of Research and other key officials, would assess inputs and credit supply requirements, and approve future research and extension programs submitted by Regional Committees. Regional Research Coordination Committees, to be estab- lished at each research station under the regional Joint Director of Agricul- ture, would include the Associate Director of Research, the District Deputy  - 11 - Directors of Agriculture and subject matter specialists as members. The Regional Committees would meet at least twice a year to review and formulate extension and research programs and submit proposals for ratification by the State Level Committee. Agricultural Extension 35. Under the project, a well-trained, highly motivated, and technically competent extension organization would be given the means to provide farmers with relevant and practical technical guidance aimed at increasing production and incomes. The new system would replace over the next three years pre- vious extension arrangements which have proven ineffective. Under the previous system, each village level worker (VLW), who was responsible for extension at the farm level, was expected to cover some 2,000 families. However, most VLW were employed as multipurpose workers, responsible for many duties unrelated to agriculture. They worked under the Community Development Department, were administratively responsible to Block Development Officers while technically backed by the Department of Agriculture. Hence, while VLW were locally res- ponsible for agricultural extension, their effectiveness was dissipated by the many functions expected of them, the complex lines of technical control and supervision, and the large number of farmers each VLW was expected to reach. This resulted in little time being devoted to agricultural production, few and sporadic farm level contacts, and low impact on yields, particularly of small farmers. 36. Under the project, the entire extension staff in the project area is being reorganized into a single line of command under the Department of Agriculture. Some 4,000 village level workers would be required under the project. The Government of Rajasthan has issued an order to transfer to the Department of Agriculture about 980 VLW previously working under the Community Development Department, and to redeploy most of the other low level agricul- tural workers under the Department of Agriculture, for agricultural extension work. This would provide about 1,800 agricultural extension workers, who would be redesignated as Village Extension Workers (VEW) to reflect their exclusive extension role. The remaining 2,200 VEW would be new recruits. There is an adequate supply of qualified candidates to ensure that all dis- tricts would be fully staffed within three years. When all districts are fully staffed, there would be one VEW to every 500 to 900 farmers, the actual numbers in each case depending on population density and the communications network. 37. To ensure satisfactory supervision, training and control of field staff, the 17 administrative districts under the project would be divided in- to 50 sub-districts, each headed by a Sub-District Extension cum Training Officer. Each Sub-District Officer would supervise 10 Agricultural Extension Officers (AEO) who, in turn, would supervise 8 VEW. To strengthen technical support, two subject matter specialists would be appointed at each sub-district, one each in agronomy and plant protection. Subject matter specialists would spend their time equally between field visits (with VEW), research and train- ing. In addition, at district level, there would be specialists in informa- tion and training, water management, farm implements, entomology, pathology  - 12 - and horticulture. Total professional staff requirements would be 540 AEO, 210 subject matter specialists and 35 supervisory staff. Of these, about 260 AEO, 93 subject matter specialists and 21 support staff are presently available. The rest would be new recruits. These new staff members would undergo special induction training and the project would finance the costs of salaries, allowances and training. 38. Under the new agricultural extension system, an intensive farm visit program would be introduced. An estimated 2.9 million farm families in the project area would be divided into some 4,000 units of 500 to 900 families each, and one VEW would be allocated to each unit. Each unit would be further divided into 8 sub-units of 60 to 110 farmers. From each sub-unit VEW would select 8-10 contact farmers in consultation with the farmers them- selves. Selection would be from among farmers of all categories who are known to be of potential influence and willing to adopt the new extension methodology. The VEW would visit each sub-unit once every two-weeks on a fixed day of the week. At each location, he would convey extension messages primarily through the contact farmers, concentrating on the most important crops of their local- ity and initially on a few improved cultural practices of immediate relevance. In the morning VEW would tour farmers' fields and in the afternoon would hold a meeting in the village at a predetermined hour. In irrigated areas the visits may be more frequent. 39. Each Agricultural Extension Officer would supervise about 8 VEW and, at least once every two weeks, would participate in part of each VEW pro- gram of visits to farmers, following such a pattern as would enable him to reach every farmers group at least twice each season. He would check that the VEW visits and meetings were being carried out on schedule and would assist both VEW and farmers in technical matters. He would also assist the VEW in carrying out demonstrations and simple trials. Training of Extension Staff 40. Regular one-day training sessions for VEW would be held once every two weeks and would be an integral part of the system. In these sessions, extension staff would be instructed in the most important recommendations for their next round of field visits. Messages consistent with recommenda- tions of the research and extension coordination committees (see paragraph 34 above) would be taught to VEWs by subject matter specialists and a train- ing officer who would be assigned at the district level. Subject matter specialists would maintain close contacts with researchers at the regional research stations and would also maintain contact with the Adaptive Trial Centers. Once every four weeks, on pre-determined days, District Agricultural Officers would hold 2-day seminars for senior staff, including Sub-District Extension Officers, Subject Matter Specialists, Training Officers, and all Agricultural Extension Officers (AEO) of the district. Trainers at these sessions would be research workers from regional stations, district specialists and occasionally subject matter specialists themselves.  - 13 - 41. At the start of the project new staff would have to be trained and others upgraded in order to improve the quality of extension and research staff. Agricultural Extension Officers are direct recruits from colleges, and VEW are generally secondary school leavers recruited after a two-year pre-service course. In the past, in-service and in-field training has been inadequate. Under the project, two training centers would be developed to provide pre-service training for future VEW, upgrading courses for older VEW and short term training of other field staff. Buildings, transportation and equipment would be provided and classrooms added. A limited number of scholarships would also be provided for advanced training of VEW, AEO and subject matter specialists. Housing and Transportation 42. The proposed extension methodology would require the field staff to live near their place of work and to be sufficiently mobile to function effectively. At present, housing in rural areas is limited and public trans- portation is inadequate, thus extension workers spend much of their time travelling. The project would provide modest housing for about 20% of field level and sub-district staff. Satisfactory housing is available for the remainder of staff. The project would also finance construction of 50 sub- district office - cum - training buildings. Equipment and furniture would also be provided. Assurances have been obtained from the Government of Rajasthan that: (i) it would provide such housing and other buildings as may be necessary to ensure that the extension staff will live in the area assigned for their operations; and (ii) it would complete, by December 31, 1978, a sur- vey to determine the location of the housing and buildings to be financed under the proposed Credit (see Sections 2.08 (a) and (b) of the Project Agree- ment). The project would also provide equipment and vehicles at headquarters, district and sub-district levels, including motorcycles for AEO and bicycles for VEW. GOR has undertaken to provide credit facilities to staff to purchase motorcycles and bicycles and necessary financial incentives to ensure optimum utilization of such transport (see Section 2.12 (a) and (b) of the Project Agreement). Agricultural Research 43. In Rajasthan, basic and applied agricultural research is undertaken at research stations of the University of Udaipur for all major crops grown in the State, with emphasis on breeding and testing of suitable varieties, improved cultural practices, and pest and disease control. Past work has seen some progress in these areas but has largely concentrated on producing recommendations for irrigated crops, using high yielding varieties and high levels of fertilizer application. Insufficient attention has been paid to rainfed crops and to providing small farmers with recommendations as to how they might maximize yields given little or no access to credit. There are also centrally sponsored schemes under the Indian Council of Agricultural Re- search, but they are more oriented towards national requirements than those of the State and regional needs. In addition, research workers under the University devote much of their time to teaching, resulting in insufficient attention to research. Resource limitations have often resulted in a lack of research to evaluate and adapt agronomic practices under different agro- climatic conditions.  - 14 - 44. Under the project, adaptive research facilities would be strengthened by establishing a network of five Adaptive Trial Centers and seven sub-stations covering the main agro-climatic regions to be found throughout the project districts. These stations would provide the extension service with simple and relevant technical messages suitably adapted to locality, size of farm and ability of the farmer to invest and take risks. The extension advice would be based initially on low-cost methods of yield improvements using better cultural practices and later, as farmers' income and skill develop, on more costly techniques. These stations would also provide for training of extension staff. 45. The commodity-oriented research program of the University would continue to identify and select improved varieties of the most important crops obtained from national and international research institutions, with a package of economically significant practices directed to substantially increasing crop production and at the same time minimizing farmers' risks. Selected varieties and production packages would be forwarded to the adap- tive trial stations for further testing in each of the different agro- climatic zones, concentrating initially on food crops. At the adaptive trial stations, the most promising practices and varieties would be identi- fied and recommendations prepared for the extension service in response to needs of the local extension staff and farmers. 46. The project would provide at the adaptive trial stations, civil works, including construction of laboratory, office buildings and modest dormitories. Training facilities, equipment, vehicles, incremental staff salaries and research operating expenses would also be provided at these stations. The project would also provide for staff, equipment, land develop- ment and operating costs for the basic and applied research at the University to ensure that it would continue to furnish recommended production practices to the Adaptive Trial Centers. These facilities would be adequate to meet the research requirements of the extension service over the next several years. Furthermore, to safeguard against any shortfall of agricultural research in the future, GOR has agreed in consultation with the Indian Council of Agri- cultural Research to formulate, by June 30, 1979, and subsequently to carry out a program satisfactory to the Association to strengthen the University's research facilities. (see Section 2.03 of the Project Agreement). Monitoring and Evaluation 47. An essential feature of the project would be monitoring and eva- luation of project progress and impact. This would provide guidance to those responsible for project implementation and permit in-depth evaluation of longer term effects brought about by the project. Project monitor- ing, including reporting on physical and financial inputs, would be carried out through the normal reporting systems of the Department of Agriculture. This information would be supplemented by an independent assessment of the performance of project organizations. For this purpose, and to provide con- tinuous evaluation covering the economic, institutional and technical impact of the project, a separate evaluation unit would be set up at the headquarters supported by small units at district level. This on-going evaluation would  - 15 - be supplemented with in-depth ad hoc studies as required. The project would provide for staff, equipment and funds to enable this work to be carried out. Assurances have been obtained that GOR would carry out continuous monitoring and evaluation of the Project in a manner that would be acceptable to the Asso- ciation, and the results of such monitoring and evaluation would be sent to the Association at least once a year (see Section 2.11 of the Project Agreement). Project Cost and Financing 48. The total project cost is estimated at US$26.56 million (including duties and taxes estimated at about US$1.06 million), of which the estimated foreign exchange component is US$0.80 million or 4%. The proposed credit of US$13 million would finance about 51% of project costs, net of duties and taxes, and cover the whole of foreign exchange costs plus about US$12.20 mil- lion of local costs. Local cost financing is justified in India for projects such as this for the reasons discussed in paragraph 20. The remaining local costs of US$13.56 million would be financed by the Government of Rajasthan (GOR). The proceeds of the credit would be channelled through GOI to GOR on standard terms as part of Central assistance provided to the State Government for development purposes. 49. The principal components to be financed are: strenghtening of extension services (US$16.54 million), upgrading training (US$1.28 million), agricultural research (US$3.86 million), project monitoring and evaluation (US$0.46 million), and contingencies (US$4.42 million). Physical contingen- cies average about 4% of costs and price contingencies about 16%. To ensure timely project implementation and facilitate early training and appointment of critical staff, retroactive financing up to US$200,000 would be provided from March 1, 1977 to the date of Credit signing (see paragraph 4 of Schedule 1 to the Development Credit Agreement). Procurement and Disbursement 50. Contracts for civil works (US$2.4 million) would be awarded on the basis of local competitive bidding in accordance with procedures satisfactory to the Association. Civil works contracts would be small and dispersed, both geographically and over time, and would not be suitable for international com- petitive bidding. There are numerous qualified local contractors to carry out civil works. About 120 motor vehicles of various types (US$0.9 million) would be required under the project. They would be purchased in small quantities over four years. It would be difficult to ensure adequate maintenance and spares for a variety of imported vehicles. These would, therefore, be procured by local competitive bidding under procedures which are satisfactory to the Association. Orders for purchase of equipment and furniture (US$0.96 million) would be bulked wherever possible and would be purchased following satisfactory local competitive procedures, except where valued at US$50,000 or less, when they would be purchased by prudent shopping. Motorcycles and bicycles (US$0.6 million) would be purchased by individual staff, according to their prefer- ence as they would be expected to repay the purchase price. The balance of the project costs (US$21.7 million) would consist of local training costs (US$1.06 million), incremental salaries and travelling allowances (US$10.8 million) and operating costs of research stations, offices and vehicles (US$9.8 million).  - 16 - 51. Disbursement of IDA funds would be as follows: (a) 100% of foreign expenditures or 80% of local expenditures for equipment and vehicles; (b) 80% of civil works costs; (c) 80% of staff training costs; and (d) 40% of total staff costs. Disbursements against expenditures for locally procured equip- ment and vehicles costing Rs 20,000 (about US$2,200) or less, civil works contracts for one or more progress payments not exceeding Rs 50,000 (about US$5,500), and against staff salaries would be on the basis of certificates of expenditure. The supporting documentation of these expenditures would not be submitted for review but would be retained by the project authorities and would be available for inspection by IDA during project review missions. Pro- vision has been made for the periodic local auditing of these certificates of expenditure. Disbursements against all other items would be fully documented. Project Benefits and Risks 52. The main project benefit would be an increase in yields as a con- sequence of the impact of the new extension and research system. Experience in the Chambal and Rajasthan Canal Command Area Development Projects currently being implemented in the State indicates that, within two years of the intro- duction of new methodology, more than 50% of farm families followed some or most of the extension recommendations. It is estimated that the project would directly benefit about 290,000 contact farmers and through them at least 1.5 million of the 2.9 million farm families living in the project area. Small farmers with limited financial resources but excess labor would be the primary beneficiaries of the project's emphasis on efficient use of existing resources rather than the use of purchased inputs often too expensive for small and marginal farmers. 53. Attributing a precise level of benefits to this type of project is difficult since the expected benefits of improved agricultural practices, which also require additional inputs, cannot be attributed solely to exten- sion and research. However, there is no doubt that the substantial improve- ment in the efficiency of utilization of resources, which would be brought about by the project, would generate a high rate of return. Given the present cropping pattern (wheat 17%, pulses 17%, lower valued cereals 43% and other minor crops 23%), it would be reasonable to expect that by year 7, crops yields over at least 50% of all land under food crops would increase by an average of 30 kg per ha, or less than 4% over the "without project" situation, giving an economic rate of return of 50%. There is little risk that these yield increases would not be attained, since the best farmers and research stations in Rajasthan are already obtaining much higher yields than the current average yields. This high rate of return should, however, be treated with caution since, as improved agricultural practices spread, further investments in infrastructure and services would become necessary. 54. The most significant risk lies in the fact that the effectiveness of the new extension methodology is highly dependent on an efficient organi- zation and management of extension and research services as well as on farmers' response. Experience with ongoing projects (see paragraph 25) has already demonstrated, however, that the new system can work efficiently in formula- tion and delivery of messages, and in motivating farmers. The proposed  - 17 - project is different from the ongoing activities in that it mainly concen- trates on rainfed, rather than irrigated, areas and for this reason there is a somewhat higher degree of risk of yield increases falling short of expecta- tions. However, there are a significant number of improved practices and research findings suitable for dissemination which can substantially improve yields, even under rainfed conditions. Furthermore, farmers in rainfed areas tend to be less affluent and in greater need of technical advice. Thus, even though benefits may be lower in rainfed than in irrigated areas, these would still be considerable, both in economic and social terms. A second generation risk would be faced when the success of the new methodology generates demand for additional inputs. If this were not met, the resultant farmer frustration could adversely affect the success of the extension effort. However, at this juncture and for some time to come, the deficiencies in the existing network for supplying farmers' inputs are related to the lack of demand and there is slack in the network which can be taken up to meet additional demand. The Project Coordination Committee, which is charged with overseeing the planning and execution and extension effort, is also responsible for assessing seasonal input requirements and should be able to ensure the development of arrange- ments capable of coping with increased demand. PART V - LEGAL INSTRUMENTS AND AUTHORITY 55. The draft Development Credit Agreement between India and the Asso- ciation, the draft Project Agreement between the Association and the State of Rajasthan, the Recommendation of the Committee provided for in Article V, Section 1(d) of the Articles of Association and the text of a draft Resolution approving the proposed Development Credit are being distributed to Executive Directors separately. 56. Special conditions of the project are listed in Section III of Annex III. 57. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 58. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President Date: July 7, 1977  * 0I p~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ - a. . .. ... *1** n C (C *. . . * IL -0 L o-.W' ii 25U.0 A ..fI, OSA01 - - 1 3iv -. a.. 0 -" I~~~~~~~~~~~~~~a Z a 0 c & Z I N I~~~~~~~~~~~~~~~~~2i : w - C ,IL M 0 asC- Z z- sw:. aV Q SI- 2 Cl WI~~~~~~~~4 I ~ - V2T A &1 21 a * ~~~~~=Xw2 C'4a ,- CZI"f 1-I I, -g~~~~~~~~~~~~Z C 22:0 Li i*O 0 Cia VIiNOSC CC S o Wu aftOil CO 000 *l* Z *A c--. --0.. Iii Xl> .in0 C 210U' WLA aWlfli IL- 2*14ouSNgo C &M n. 0 to" a s. C W . f -1Sb LI *A . W a . .-CU (i 11 It I aIIL 3 ' I IIA 5 A OAI C. S~z - 2I C A.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~: r w -hI I 5,09 bI*6 S a .01 UIO  pass 2 of 4 unless otherwise noted, data for 1960 -efer to soy year betw-.o 1959 end 1961, for 1970 between 1968 aod 1970 and for Most Recant Estimate between 1973 end 1975. 0 Braseil has bean selected as en objective coutry because of it. isa end cooperebla problem of regional inequality. I"A1960 I.1951-61 average; /b 1951-60; Ic Ratio of population under 15 and 65 end over to l.bor force age 15 sod over; /d Registered appliceota for work; Is 1962; /f Regiatered, not oil practicing in tha coutry; /A Including nidwiveas /h 1958; /L 1960-62. 1970 / RatIo of population under 15 and 65 and over to labor force age 15 sod over; /b 1967-68; Ic Inluding nidwivee Id 1967. MOST RECENT ESTIKATE; Ia 1971; /b Redo. of population under 15 and 60 end over to labor force ago 15 end -ovr; /c 1976; Id Including midwivee; /a 1969-71 avercgp; If Population 10 yaars and over. SSfIOS EIA 1970 / 1961-71; /b 1971; /a Including nidivdvs; Id Total hoepitel bada incraplate. PHILIPPINES 1970 / Ac Percentage of soploynset; /b Not including private vocational echoo1a. SRAUI n 1970 /a Economically active Population; lb Hospital personnel; /c Inside only. RIO, April 18, 1977 ODEINITIONS OP SOCIAL IlNDIC&5938 Lend Acne (thee ic27 Poculation oar nroin a neeno - Pepulatien dicidod by tuobor of practl- Total -Tural surfaer area conprising land ace& and inland watora. cin ale ndfuala graduate nurses, trained" or ce.rtifiedl- ARrne. - Net recant eatinat.oef agricultural r.a used teporarily er n-rea, and ausiliary pecooncel with training or ecprionc.t peranntly fur erpt, poatures, machot & kitchen gardens or te lie Pecu:lation P P hnetal bed - Pepulatien divided by number ef bhospital fallo. bd aalal in public and privato general and opccialiced hospital and rhebiblitatien centers; ecliude- nuraing bunco and estoblish.enta GNP per cacti. (US$) - ISP pen caPite -atl-tee acurront narket pricto, for c..atdia1 and prevecti-a care. calculated by cane c-nvrelon cothod as World Sank Autla (1973-75 basin); Per capita supply of cal rino (7 of -evuireenta) - Cooputed icon 19 60, 1970 and 1975 data, energy equivalent of net feud oupplion. avalable in country per capita Per day;aaioe -upln cnpetne denrotir production inpocto less Peculation cad,dial etatistics eprie, an hue . in toch; net aupplica e-cide oin-l feed, oneda, Pecultiebid-r. ciliec - A of July first: if cot avilable, quantities uned in focd proceocing and I..... in diotrihutict; require- *-avr.ag of two end-year cattiate_; 1960, 1971 and 1975 data. note were conntetd by FAO baoed on phyoieIogica1.. codo for normal activty and health considering cnvirooente1 tnopertatrn, body weights, Pouaindensity -por suar .i - jid-pear population p- square kilo- cue and 00 dlstriheLiono of pepelatioc, and allowing 1IZ for woe te meter (100 hecrc fttlac.at beusebeld loon. Population density - per square km f cest,r land - Computed an abve for Per capita supply of Otetei (crane nor day) - Protein content of per agietrlland only. capita cot oupply of food per day; cut aupply of fond ia defined as Vital statlotlos e~~~~ ~ ~~bev; neinn o fr all counrire eniablinhed by USDA Econocic Vital t.tistfr. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ acrch Serolcee provide for a immcc all ..wnoce of 60 grams of Crude birthct c thousand Avrc -A a Line bithba per the..oand total protein per ycv ad 20 grms of actel and pulse proteIn, of of ad-yer ppelcico toovener hboe icaeagoOdtnf in 1960 anod which 10 frng hud beaimal protein, those standards ace lew 1970, and -r-ea vraga ending in 1975 for nest recent acti.tna . than thoce of 75 gresa, of total protein ond 23 grant of enical protein Crude death,rats e thousa id avrne - Annual deaths per thousand of mid- cs on -oerage fur the werld, propon..d by FAO in the Third World Poond yerpoeaie,te-er a~riZti i oversgon ending in 1960 and 1970 and S-rnY. flo-peat ovrage ending In 1975 fec neat rccnt eatiteat. 9er capita proteinsupyfo animal and pulse - Protein supply of feed Infant -tilitty rtai f/thou) - Annual d-nthe ofi.f ante unde ron year drvdfreeaiml and1P1 pulro ngatprdy of ag per the...and Live birth0.. lea lf.r. th rate (1/thou)iaeo 1-4 - Accent1 dnetha per theen.d.. ag.g.o Lifeecc nc at birth (r)-Avrg umeifyernflierct- 1-4 yeas tocidren in thin g group, noggeoted . an enIndicator of togatbrh usiy fiv-Year u-ctre ending in 1960, 1970 and caln-tritioc. 19)75 for devloping ..oentrien Cross. eeceoic rat- Acreag number of live daughter. ssoaw i1du-tioo bear iheneol reprductive honed if uhe -ep-i-t- presnt gag- adiueted anrelleent celloa rce Ecol nroicent of ati aget no spe f -cfrtitty eae,uo Y five-year average e.di.g in i960, percentae of prinary schoel-age population, include- children agd 1970 and 1975 for d-voilo co6re.fUyaehtad juated fee different langibo of prtcary edecution; Popuiation erewih ccv(7)-toic - Coopuoud ennufi growth eaten of cid- for countrien ctb oivereal education, enroll cnt cay occed 100% Year pepul4tion foe 1950-60, 1960-70ad1970-75. afnce ouco papil are below cr above the official school ae Pecuatio greib tai (7. - urban -CevPoted like growth rato of total Adjusted enrollcent cctio - aecendasho - Conputed cc abort; peuato,diffeenv ...ftiitlons of erban areas nay affect compara- econdary education requires at ieaot four veare of approved primary bility ofndtamon oec _r. instruction, providesgenl vctoa or teacher training Urban poulatiec(. o-f Ltetl) - Riatio of urban to total population, biu ie for PuPils of 12 to 17 year of age; c-crepndence different definitiena of urban ocean.nY affect -opa-bility of date coures are generally encluded. anog _ontrieolerso a abe rnc prvdd (first and nec-n le-nl) - Total yeara of AA es2tructr er Hroe-t) - Children (I-t4 yeare), worhieg-uge (15-44 yearn), scvln,a nedr ee,vctoa notructtin cay be par- and retired 65 yearo aed over) an percentages uf id-year population. tially or completelyeclded Agoa docendencyratto - iatic of popolation coder 15 and 65 and over to Voca.tlecal Itnrollnent (7. of secondary) - Vfoc.tiena.l institutions ,bhec. ees1 through 6b. icid ehnia,idsrial or other prograna which opertat cE,nceic decendencp ratio - Ratlo of population under 1) end 65 and ove itedpendnl or en depeemcno ocoayrnttten to tbe labor force in gag group of 15-64 yecrs. Aduljt,litre.rac r tat WI - Litertat a delta (able to read and write) an famil planning - accepron (cunulnitve t~hou) -Cumulative nube- of perc; eata of total adult Ppoplatin aged 15 Years and voer. arceptero of bteth-control de _o ceder aeices of natinal family PI ien g program since inception. Seusina FamIly plannhIna us re (7 f marrIed women)- uPercoctages ofrcncetd escd per teen (erban) - Av-rge number of person Per roc in woe fcid-bea:rIng ae 1544peae)wh ce irth-noteLdeices occupied convectional d-el1ingo In urbacar..an; dwellings e-lude te all earned womn in name age Sc-p. ne-emnn truc turee and anecc-Pied parts. E.pl.y,..t 11,t~~~~~~~~~~~OcupIed dvellls" withou pip d water (.) - Occupied c..n-tni..caI Toalclabore dwellingsn inE.mi.ly..iv -os,~ urban and cucL area wIthout ain-d0 or outnide piped Total labr force (heucand) iocncciclly ectiv pernens,including voter facilities as peccentngo of all eccupied dnic amd forces and utmapluyed but encluding housewive, otudenta, etc.; Acstoe criIy(.caldw lng)-Coenr i.lnadwltg defiittea i varcuecounriesarenet oepcabi. w th etletifip n Ivngqrtreanprcent of total dwelltnga in Labor force in agrielIture (7) - Agreucturual lbor force (in farmIng, urban and rural ae feroocry, huottng and fishing) aspercentage of total Labor forte. he.ra1 deel 1icca connected to elo-tritity (7.) - Cooputed an uhov for Unonpleyedl (7 of Labor fern0) -U.Ilomp ald are usually defined asrural dwelIngs eny. persons wo are able and willici to tkhe a job, nout of a job o givon dap, r_iamd out of a jcb, and ovnking week fur a spocifiedCeomtn ci e period co -eceding one e-k; cay cut he comparable beicce.n hai eevr c rth upo )-All types of ecirafor rodle broad.. coun.tries doe to different defiiiotlns of enoploynd and noe.r.e of c.aer to general pubi per thousand nf Pp.peition; sceldna dat, e.g. nv- p1oYe-t office tclatitatc, aopie -rveyn, ompeinory uc1icecoed enceivers in coutries and in Yecra when regintratico of aomplovote in...rcnce. radio onto wan in effect; data foe recent Yearn eny net be co,parahle acccetcon tries abolished Ilcenslng. Income Rli .rikutlen - Percetage of private in--c (both in c-K and Pance a e(e ho o)-Psegrcrs coopriae omtorcerr hind) received by eibbed 5%, richest 20%. poorest 20%, and pooret ..ecting Ieee thaneih pean;eoudeahlnon err 407. of hc...nhelde. cilitary vehicle.. ilectrietty (bob/ye Pee cap) -Annual vns.u.ptitonof induntria1, con- Distrtcib no a d wo i P- Pretagen ci lend owned by coalthiest eerca.L.,publlc and prIvate electr.icty in kilu..ati bourn per capita; 10% cod pocees.t LO% of land onr,generally based on production data, without allowance fur .eans in grids hut allowing for iports and eapocts of clectricity. Health and Sotritio-Nwpit(c/rp rIn Pee capita .. annul clnuptivn in kilograna Popultion beer physician - Population divided by number ci peacticlog etnrdfo eetcproduction plus net ioPoeto of S-prin t. phyaicinan quelifitad iron a oedina1 school a t universtry level.  ANNEX I Page 3 of 4 ECONOIC _WEXT 0IAA GEP PM CAPITA IN 1975 Ul 190 GROSS NATION PRODUCT 3II 1975/76 b/ BAI. RATE o0 G d (N. constant prics) . / us$ Blnn 1960/61-1964165 1965/66-1969/70 t170/71-1974/7s GNP at Market Prices 82.8 100.0 3.8 3.7 2.6 Gross Docgstio Investmnt 46.7 20.1 Gross National Saving 16.0 19.3 Current Account Balance -0.7 -0.8 Resource Gap -1.5 -1.8 OUTPUT, * LAN! 7C0 AND PRODUmITY IN 1971 Rila.,ddd (at Jafotr cost) Labor Porc A. Per Worker cst Biln, % llKil. 16 m l % of lIational Avrage Agriculture 24.5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Services 16 31A1 -A.2 16.7 sU 186 Total/average 52.6 100.0 180.4 100.0 292 100 GOVERNMENT FINANCE General Government Central Goverment (B - Bin) of of C3P (RB Bli) % of GoP 197-5776 1975/76 tg75/74t975/76 t975/ 1975/76 1977/7451975/76 Current Receipts 133.34 18.5 16.7 79.11 11.0 9.8 Current Expenditures 118.77 16. s 09 8,8 Current Surplus/Defioit 14-57 2.0 1.4 9.06 1.3 1.0 Capital Expenditures ./ 54-27 7.5 6.2 40.75 5.6 4.6 External Asistance (net) 13.89 1.9 1.3 13.89 1.9 1.3 NO10NS. CREDIT AND PRICES 1965/66 9 72 1972/7 197fl/74 1974/7s 1975/76 September 1975 September 1976 Billion Rs outstanding at and of period) Money and Quasi Money 61.4 122.4 142.2 169.1 187.2 213.6 199.0 238.3 Bank Credit to Public Sector 40.8 69.o 82.5 92.9 102.6 108.5 112.8 112.7 Bank Credit to Private Seotor 28.1 64.4 76.0 90.1 109.5 134.2 106.0 143.8 (Percentage or Index Numbers) January 1976 Janry 1977 Money and Quasi Money as % of GOP 24.0 26.4 27.9 27.1 26.2 27.9 Wholesale Prioe Index (1961/62 = 100) 131.6 188.4 207.1 254.2 313.0 302.8 290.0 320.5 Annul peroentage changes in. Wholesale Prio Index 7.7 4.0 9.9 22.7 23-1 10.5 fl Bank Credit to Public Seotor 12.9 21.3 1g.6 12.6 10.4 5.7 4 7 Bank Credit to Private Sector 12.8 13.6 18.0 18.5 21.5 22.5 24.6 A/ The per oapita GNP estimate is at market prices, calculated by the conversion technique used in the World Atlas. All other conversions to dollars in this table are at the average exchange rate prevailing during the period covered. Q2/ Quick Estimates. / Computed from trend line of GNP at factor cost series, including one observation before first year and one observation after last year of listed period. / Transfere between Center and States have been netted out. / All loans and advances to third parties have been netted out. N/ Net bank credit to Govermnent Sector. A/ Bank Credit to Commercial Sector.  zannc DirE.OHAN! DA ANNEX I Page 4 of 4 I&UJCZ ay PA U 198 in4L 4 19%,77 imw" W" 197 /74.191/76) Naports of Goods 5,239 4,174 4,555 5,400 Sugar 542 9 ports of Geods -5,971 -5,794 -4,5 -5, Jute Manufacturea 31T 8 TX hia - 7It -1 -,S 450 e 249 6 218 (net) .1/ m.a. a... m.a. a... Aette tiles 415 10 ho Orm 206 5 R1s0<b 0Ama, a.. . m.a. a.a oneer Goods 391 10 Interest FP ( - 25a -z0t) 32 - 0 22 l0 Total 539 100 O rh Fter PAmo (not) 260'. r.^. A.l. A.G. Jo'k transfws Y R.&. n.a. t a. n.& Al laulen a on xt Aoo*nA. e.g . a... a. .. U MIL -M, MUR0 31. 1976 USS Billion Offioial Aid Difbu rsoasts 1,249 1.76 2,526 2,050 RepO1abl* In foreig orency 12.5 Amortizatimn - 459 - 519 - 516 - 560 Repq'mble tbrouA azport of goodo 0.7 raensaotio with 75 515 205 - 565 Total Outstanding and Disbursed 13.0 All Other It_m 205 80 559 1,100 m/l 1 iC2i RUXO POII i976/77 15.5 peroet Inareas La ere (-) -105 58 - 794 -1.495 Gro.. Resres ( n yar) 1,416 1,576 2,172 3,667 ID /ML L . DNemosr 31. 1976 (Ut Min.) Net Reserves (mad ye) 1,541 785 1,552 3,202 IRD IDA Fuel and Reaated Mterials Outstanding sed Disbursed 452.7 3208.4 Import. 720 1,451 1,417 1,625 UndisJ sed 510.3 1140.5 of whiees Petroeum 719 1,451 1,417 1,625 Outstandin imal ding 15xpert 20 X6 41 *.-6. Undisbosed 963.0 4348.9 of whihs Petroleu 16 17 22 ne Prior to aid-oDsaom r 19T7 a 01 .00 - Rs 7.5 After end Juns 1972 a Flating Rato Rs 1.00 - U50.133333 Spot Rate March 31, 1976 lid_Dooeber 1971 to -a 31.O00 - Rs 7.27927 appre. USIJ1.00 - R. 8.80475 and Jun 1972 Ns 1.00 . JStO.157376 appror. Rs 1.00 = 1St 0.113575 F Astimated. J,/ Included with 'All other Itma'. j/ Aid end trade figus converted to US dallers using e*xhange rates as indiested in inside front ooer of this report or notes to individual tables. ,/ Including gsents. 1/ Amortization and interest paymWts excluding IlW trasmotions) am a peresatsp of ereoandise export.  ANNEX II Page 1 of 12 THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of May 31, 1977) Loan or I/ Credit No. Year Borrower Purpose (Net of Cancellation) BANK IDA Undisbursed 39 Loans/ 1,089.2 43 Credits fully disbursed 2,344.8 614-IN 1969 India Tarai Seeds 13.0 - 3.7 203-IN 1970 India Punjab Agricultural Credit - 27.5 3.6 226-IN 1971 India Andhra Pradesh Agricultural Cr. - 24.4 0.6 250-IN 1971 India Tamil Nadu Agricultural Credit - 35.0 3.8 264-IN 1971 India Cochin II Fertilizer - 20.0 0.8 267-IN 1971 India Wheat Storage - 5.0 3.7 278-IN 1972 India Mysore Agricultural Credit - 40.0 1.2 294-IN 1972 India Bihar Agricultural Markets - 14.0 U.1 312-IN 1972 India Population - 21.2 8.7 342-IN 1972 India Education - 12.0 11.1 356-IN 1972 India IDBI - 25.0 12.4 377-IN 1973 India Power Transmission III - 85.0 27.6 378-IN 1973 India Mysore Agricultural Markets - 8.0 7.2 902-IN 1973 ICICI Industry DFC X 70.0 - 9.2 390-IN 1973 India Bombay Water Supply - 55.0 37.8 392-IN 1973 India Uttar Pradesh Agricultural Credit - 38.0 7.4 403-IN 1973 India Telecommunications V - 80.0 15.6 427-IN 1973 India Calcutta Urban Development - 35.0 15.1 440-IN 1973 India Bihar Agricultural Credit - 32.0 17.6 456-IN 1974 India hP Apple Processing & Marketing - 13.0 10.7 481-IN 1974 India Trombay IV - 50.0 18.3 1011-IN 1974 India Chambal (Rajasthan) CAD 52.0 - 40.3 482-IN 1974 India Karnataka Dairy - 30.0 29.6 502-IN 1974 India Rajasthan Canal CAD - 83.0 56.6 520-IN 1974 India Sindri Fertilizer - 91.0 30.2 521-IN 1974 India Rajasthan Dairy - 27.7 27.4 522-IN 1974 India Madhya Pradesh Dairy - 16.4 15.8 526-IN 1975 India Drought Prone Areas - 35.0 28.8 1079-IN 1975 India IFFCO Fertilizer 109.0 - 88.1 1097-IN 1975 India Industry DFC XI 100.0 - 57.3 532-IN 1975 India Godavari Barrage Irrigation - 45.0 32.4 540-IN 1975 India ARC Credit - 75.0 32.1 541-IN 1975 India West Bengal Agrc. Dev. - 34.0 31.0 562-IN 1975 India Chambal (Madhya Pradesh) CAD - 24.0 21.1 572-IN 1975 India Rural Electrification - 57.0 54.6 582-IN 1975 India Railways XIII - 110.0 46.0 585-IN 1975 India Uttar Pradesh Water Supply - 40.0 39.5 598-IN 1975 India Fertilizer Industry - 105.0 97.5 604-IN 1975 India Power Transmission IV - 150.0 150.0 609-IN 1975 India Madhya Pradesh Forestry T.A. - 4.0 4.0 610-IN 1976 India Integrated Cotton Development - 18.0 18.0 616-IN 1976 India Industrial Imports XI - 200.0 7.0 1251-IN(TW) 1976 India Andhra Pradesh Irrigation 145.0 - 145.0 1260-IN 1976 India IDBI II 40.0 - 40.0 1273-IN 1976 India National Seed 25.0 - 25.0 1313-IN 1976 India Telecommunications VI 80.0 - 60.2 1335-IN 1976 India Bombay Urban Transport 25.0 - 25.0 680-IN 1977 India Kerala Agric. Dev. 30.0 30.0 682-IN 1977 India Orissa Agric. Dev. 20.0 20.0 685-IN 1977 India Singrauli Thermal 1 150.0 150.0 687-IN 1977 India Madras Urban Dev. 24.0 24.0 695-IN 1977 India Gujarat Fisheries 4.0 4.0* 1394-IN(TW) 1977 India Gujarat Fisheries 14.0 14,0* Total 1,762.2 4,338.0 of which has been repaid 789.2 27.0 Total now outstanding 973.0 4,311.0 Amount Sold 114.6 of which has been repaid 111.5 Total now held by Bank and IDA 973.0 4,311.0 Total undisbursed 493.8 937.8 1,431.6 1/ Prior to exchange adjustments. * Not yet effective.  ANNEX II Page 2 of 12 B. STATEMENT OF IFC INVESTMENTS (As of May 31, 1977) Fiscal Amount (US$ million) Year Company Loan Equity Total 1959 Republic Forge Company Ltd. 1.5 - 1.5 1959 Kirloskar Oil Engines Ltd. 0.9 - 0.9 1960 Assam Sillimanite Ltd. 1.4 - 1.4 1961 K.S.B. Pumps Ltd. 0.2 - 0.2 19>3-66 Precision Bearings India Ltd. 0.7 0.3 1.0 1964 Fort Gloster Industries Ltd. 0.8 0.4 1.2 1964-75 Mahindra Ugine Steel Co. Ltd. 11.8 1.0 12.8 1964 Lakshmi Machine Works Ltd. 1.0 0.3 1.3 1967 Jayshree Chemicals Ltd. 1.0 0.1 1.1 1967 Indian Explosives Ltd. 8.6 2.9 11.5 1969-70 Zuari Agro-Chemicals Ltd. 15.1 3.8 18.9 1976 Escorts Limited 6.6 - 6.6 TOTAL 49.6 8.8 58.4 Less: Sold 6.0 1.6 7.6 Repaid 13.0 - 13.0 Cancelled 6.2 0.7 6.9 Now Held 24.4 6.5 30.9 Undisbursed 5.6 - 5.6  ANNEX II Page 3 of 12 I/ C. PROJECTS IN EXECUTION- Generally, the implementation of projects has been proceeding reasonably well. Details on the execution of individual projects are below. The level of disbursements was US$551 million in FY76 or 62% of Bank Group commitments to India in that year. The undisbursed pipeline of US$1,432 million as of May 31, 1977, corresponds roughly to com- mitments over the preceding two-year period and reflects the leadtime which would be expected given the mix of fast and slow-disbursing projects in the India program. Ln. No. 902 Tenth Industrial Credit and Investment Corporation of India Project; US$70.0 million loan of June 8, 1973; Effective Date: August 16, 1973; Closing Date: December 31, 1978 Ln. No. 1097 Eleventh Industrial Credit and Investment Corporation of India Project; US$100 million loan of April 2, 1975; Effective Date: July 1, 1975; Closing Date: December 31, 1980 These loans have supported industrialization in India through a well-established development finance company. Loan 902-IN is fully committed and commitments are progressing satisfactorily for Loan 1097-IN. Disburse- ments under Loan 902-IN are ahead of schedule. Ln. No. 614 Tarai Seeds Project; US$13.0 million loan of June 18, 1969; Effective Date: September 12, 1969; Closing Date: Dec- ember 31, 1977 This loan to the Tarai Development Corporation is to assist in the production, processing and marketing of certified seeds of high yielding varieties. The corporation is working effectively and has developed an ex- cellent reputation for quality seed. Expansion of three processing plants is well under way. Delivery of some equipment in damaged condition, and retendering, because of poor response for some others, has delayed delivery schedules necessitating an extension of the Closing Date by one year to December 31, 1977. 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 4 of 12 Cr. No. 250 Tamil Nadu Agricultural Credit Project; US$35.0 million credit of June 11, 1971; Effective Date: November 2, 1971; Closing Date: December 31, 1977 Cr. No. 391 Madhya Pradesh Agricultural Credit Project; US$33.0 million credit of June 8, 1973; Effective Date: October 10, 1973; Closing Date: December 31, 1977 Cr. No. 392 Uttar Pradesh Agricultural Credit Project; US$38.0 million credit of June 8, 1973; Effective Date: October 31, 1973; Closing Date: December 31, 1977 Cr. No. 440 Bihar Agricultural Credit Project; US$32.0 million credit of November 29, 1973; Effective Date: March 29, 1974; Closing Date: June 30, 1978 Cr. No. 540 Agricultural Refinance and Development Corporation (ARDC) Project; US$75.0 million credit of April 28, 1975; Effective Date: August 5, 1975; Closing Date: Dec- ember 31, 1977 Cr. No. 715 Second Agricultural Refinance and Development Corporation (ARDC) Project; US$200.0 million credit of June 1, 1977; Effective Date: August 1, 1977 (proposed); Closing Date: December 31, 1979 All the above agricultural credit projects are similar in structure, being designed to provide long- and medium-term credit to farmers through credit institutions, for on-farm investments, primarily in minor irrigation. Credits 540 and 715 are a continuation nationwide of the previous program of agricultural credit projects, which were confined to individual states. Apart from initial start up problems with the individual state projects, mostly due to the introduction of new lending criteria and lending terms, progress under these projects has been satisfactory. Cr. No. 267 Wheat Storage Project; US$5.0 million credit of August 23, 1971; Effective Date: November 14, 1972; Closing Date: September 30, 1978 The Food Corporation of India is making satisfactory progress in the execution of this project. Piling and foundation work for silos is nearly completed and some silo construction has begun. Staff training is also in progress. Cr. No. 456 Himachal Pradesh Apple Processing and Marketing Project; US$13 million credit of January 22, 1974; Effective Date: September 26, 1974; Closing Date: December 31, 1978 This project was designed to promote the development of apple processing and marketing in Himachal Pradesh, and comprises grading and  ANNEX II Page 5 of 12 packing centers, cold storages, a juice processing plant, road improvements and cableways. The project encountered initial delays due to managerial and technical problems, however, remedial measureo have been taken to over- come these difficulties. A recent review mission found substantial improve- ment in project implementation. Cr. No. 403 Telecommunications V Project; US$80.0 million credit of June 25, 1973; Effective Date: July 30, 1973; Closing Date: December 31, 1977 Material supply problems which delayed the start of this project have been resolved and physical achievements were at record levels during fiscal year 1976. However, to cover the delivery and installation of im- ported transmission and switching equipment, the closing date was extended by one year to December 31, 1977. Ln. No. 1313 Sixth Telecommunications Project; US$80.0 million loan of July 22, 1976; Effective Date: September 14, 1976; Closing Date: March 31, 1980 Disbursements have commenced and the project is progressing satis- factorily. Cr. No. 377 Power Transmission III Project; US$85.0 million credit of May 9, 1973; Effective Date: October 10, 1973; Closing Date: September 30, 1977 Cr. No. 604 Power Transmission IV Project; US$150.0 million credit of January 22, 1976; Effective Date: October 22, 1976; Closing Date: June 30, 1981 For Power Transmission III all equipment has been ordered; there will be a substantial cost overrun due to international price increases, part of which is being met from Power Transmission IV. For Power Transmission IV, bids for most of the equipment have been invited. Cr. No. 481 Trombay IV Fertilizer Expansion Project; US$50.0 million credit of June 19, 1974; Effective Date: August 21, 1974; Closing Date: December 31, 1977 Cr. No. 520 Sindri Fertilizer Project; US$91 million credit of December 18, 1974; Effective Date: February 27, 1975; Closing Date: September 30, 1978 Ln. No. 1079 IFFCO Fertilizer Project; US$109 million loan of January 24, 1975; Effective Date: April 28, 1975; Closing Date: March 31, 1979  ANNEX II Page 6 of 12 Cr. No. 598 Fertilizer Industry Project; US$105.0 million credit of December 31, 1975; Effective Date: March 1, 1976; Closing Date: June 30, 1980 Progress on the Trombay IV project has been good although project completion may be delayed by about four months because of longer than expected delivery times for critical equipment. Under the Sindri project plant con- struction and erection is proceeding generally according to schedule except for a one-month delay due to anticipated delays in receipt of some materials. Commencement of commercial production is expected by March 1978. The anti- cipated cost to complete the project is presently running within budget. The IFFCO project was delayed by about a year as a result of a change in feedstock from fuel oil to naphtha and delays in completion of engineering contracts. The project is now progressing satisfactorily based on naphtha as feedstock. Site work has begun, process- and time-critical equipment is being ordered, and engineering work is well under way. Credit 598-IN is designed to increase the utilization of existing fertilizer production capacity. The project has encountered delays in sub-project preparation and investment approvals by the Government. Further, some of the sub-projects identified earlier may not materialize because of reconsideration by the Central and State governments. The Central Government has submitted a list of sub-projects to replace the ones that are likely to be dropped. Because of the above, the project is likely to be delayed by 6-12 months. Cr. No. 294 Bihar Agricultural Markets Project; US$14.0 million credit of March 29, 1972; Effective Date: July 31, 1972; Closing Date: December 31, 1978 Cr. No. 378 Karnataka Wholesale Agricultural Markets Project; US$8.0 mil- lion credit of May 9, 1973; Effective Date: September 7, 1973; Closing Date: December 31, 1979 These projects were designed to help with establishment of whole- sale markets in a number of towns in Bihar and Karnataka. Progress under the Bihar project has generally been satisfactory. Markets construction in Bihar was delayed due to legal challenges arising out of the state's acqui- sition of land for market sites; however, these difficulties have been satis- factorily resolved. Construction of markets is well advanced and a number have opened for business. Progress under the Karnataka project is much less satisfactory, however, largely due to deficiencies in market planning, design and construction. These problems and remedial actions have been brought to the attention of the State and Central Government. The project is being mon- itored closely to try and bring about the necessary improvements in implemen- tation. Cr. No. 312 Population Project; US$21.2 million credit of June 14, 1972; Effective Date: May 9, 1973; Closing Date: June 30, 1978 This credit is designed to finance an experimental and research oriented population project in Karnataka and Uttar Pradesh. The project's  ANNEX II Page 7 of 12 infrastructure, which would provide the optimum facilities (buildings, equip- ment, staff and transport) according to GOI standards in selected districts in each state, is almost complete. The two Population Centers, which will design and monitor research aimed at improving the family planning program, are now functioning. Cr. No. 342 Agricultural Universities Project; US$12.0 million credit of November 10, 1972; Effective Date: June 8, 1973; Closing Date: December 31, 1979 The project involves the development of the agricultural uni- versities in Assam and Bihar. Initial lag in implementation on account of late appointments of project staff has been overcome. Campus plans have been approved, and construction has started in Assam and is scheduled to start in Bihar by mid 1977. Disbursement which has been slow because of initial delays should accelerate now that construction and equipment procurement are under way. Cr. No. 356 Industrial Development Bank of India Project; US$25.0 million credit of February 9, 1973; Effective Date: June 22, 1973; Closing Date: September 30, 1978 Loan No. 1260 Second Industrial Development Bank of India Project; US$40.0 million loan of June 10, 1976; Effective Date: August 10, 1976; Closing Date: June 30, 1981 The first IDBI Project (Cr. 356) had a slow start mainly due to institutional problems in the participating State Financial Corporations. However, the credit is now fully committed. In order to continue Bank Group's involvement in assisting small and medium scale industries, the second operation (Ln. 1260) was approved on June 10, 1976, and more than 10% of the loan amount had been authorized by mid-May 1977. Cr. No. 390 Bombay Water Supply and Sewerage Project; US$55.0 million credit of January 22, 1974; Effective Date: March 13, 1974; Closing Date: December 31, 1978 A substantial cost overrun on the project from US$158 million equivalent to about US$375 million equivalent has been caused by inflation and price increases resulting from delays in appointment of engineering con- sultants and redesign of certain project components. The project has been redefined and rephased to fit the financing available from the Credit, local loans and bonds, and internal cash generation of the project entity. The revised cost estimates for the implementation period 1975/76 to 1979/80 amount to US$266 million equivalent excluding interest during construction. All major contracts for civil works, equipment and materials have been awarded. This is expected to considerably speed up disbursements which has been slow. Financial performance of the project entity during 1975/76 was satisfactory, and major rate increases from April 1, 1976 should ensure continuing financial viability of the project entity.  ANNEX II Page 8 of 12 Cr. No. 585 Uttar Pradesh Water Supply and Sewerage Project; US$40.0 million credit of September 25, 1975; Effective Date: February 6, 1976; Closing Date: June 30, 1980 The project had a slow start due to delays in preparation of techni- cal reports for regional and local water authorities. The technical reports for about a third of the project have now been finalized and construction works started in October 1976, about one year behind schedule. All consul- tants for engineering, organization, management and accounting services for the Jal Nigam (Water Supply Development Corporation) and the Jal Sansthans (water authorities) have been engaged. Significant institutional develop- ment can be expected only after the consultants submit their final recommenda- tions. The project is expected to be completed by March 1980, approximately 9 months behind schedule. Cr. No. 616 Eleventh Industrial Imports Project; US$200.0 million credit of February 24, 1976; Effective Date: April 1, 1976; Closing Date: June 30, 1978 This credit was signed on February 24, 1976, and became effective on April 1, 1976. Utilization of the Technical Development Fund has been slower than anticipated and the closing date has been postponed by one year to allow completion of disbursements from the Fund which has been fully committed. Cr. No. 427 Calcutta Urban Development Project; US$35.0 million credit of September 12, 1973; Effective Date: January 10, 1974; Closing Date: December 31, 1978 Following considerable increases in project costs, GOI and IDA finalized a project redefinition in April 1976, to accommodate the project to funding available. It is now expected to be substantially completed by March 1979. Agreements have been reached on consultants services and technical assistance, as provided for under the project. Cr. No. 687 Madras Urban Development Project; US$24.0 million credit of April 1, 1977; Effective Date: June 30, 1977 (expected) Closing Date: September 30, 1981 Cr. No. 482 Karnataka Dairy Development Project; US$30 million credit of June 19, 1974; Effective Date: December 23, 1974; Closing Date: September 30, 1982 Cr. No. 521 Rajasthan Dairy Development Project;; US$27.7 million credit of December 18, 1974; Effective Date: August 8, 1975; Closing Date: December 31, 1982  ANNEX II Page 9 of 12 Cr. No. 522 Madhya Pradesh Dairy Development Project; US$16.4 million credit of December 18, 1974; Effective Date: July 23, 1975; Closing Date: June 30, 1982 These three credits totalling US$74.1 million support dairy devel- opment projects organized along the lines of the successful AMUL dairy coop- erative scheme in Gujarat State. The Karnataka Project which got off to a slow start has begun to show improvement under new management appointed recently. Farmer response has been good and about 250 dairy cooperatives with small farmer participation are functioning effectively. Two Dairy Unions have been established. Close supervision is being maintained. In Madhya Pradesh good progress has been made. About 110 new dairy cooperatives societies have been established. Detailed design studies for plant construc- tion are complete. Technical services investments are being made. Contracts have been placed for livestock imports. The Rajasthan project is also doing well. Four milk unions have been formed and excellent progress has been made in organizing the servicing of nearly 350 dairy cooperatives at the village level. Plant-designs are ready, and procurement is to start soon. KDDC decision to procure plant equipment jointly with RDDC and MPDDC on the same tender should lead to a recovery of considerable time lost earlier. Cr. No. 532 Godavari Barrage Project; US$45 million credit of March 7, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1980 Both the civil works and equipment tenders have been awarded after international competitive bidding. Work is in progress. Ln. No. 1011 Chambal (Rajasthan) Command Area Development Project; US$52 million loan of June 19, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 502 Rajasthan Canal Command Area Development Project; Us$83 mil- lion credit of July 31, 1974; Effective Date: December 30, 1974; Closing Date: June 30, 1981 Cr. No. 562 Chambal (Madhya Pradesh) Command Area Development Project; US$24 million credit of June 20, 1975; Effective Date: September 18. 1975; Closing Date: December 31, 1979 Ln. No. 1251 Andhra Pradesh Irrigation and Command Area Development (TW) Composite Project; US$145.0 million loan (Third Window) of June 10, 1976; Effective Date: September 7,1976; Closing Date: December 31. 1982  ANNEX II Page 10 of 12 Cr. No. 720 Periyar Vaigai Irrigation Project; US$23.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 These projects, based on existing large irrigation systems, are designed to improve the efficiency of water utilization and, where possible, to use water savings for bringing additional areas under irrigation. Canal lining and other irrigation infrastructures, drainage, and land shaping are prominent components of these projects. In addition, provisions have been made to increase agricultural production and marketing by reforming and upgrading agricultural extension services and by providing processing and storage facilities and village access roads. Progress of these projects is generally satisfactory and particularly successful with respect to agricultural extension. Cr. No. 541 West Bengal Agricultural Development Project; US$34 million credit of April 28, 1975; Effective Date: August 28, 1975; Closing Date: March 31, 1980 The project became effective on July 31, 1975. Successful reor- ganization of agricultural extension services has been a major achievement, but preparations for lending operations have been slow mainly due to poor coordination of project agencies. IDA and the government of West Bengal have agreed on measures to improve coordination and on a timetable covering a range of project activities. Progress with preliminaries for procurement of equipment, markets construction and riverlift completions are satis- factory. Cr. No. 680 Kerala Agricultural Development Project; US$30 million credit of April 1, 1977; Effective Date: June 29, 1977; Closing Date: March 31, 1985 Cr. No. 682 Orissa Agricultural Development Project; US$20 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 728 Assam Agricultural Development Project; US$8.0 million credit of June 30, 1977; Effective Date: September 30, 1977 (proposed); Closing Date: March 31, 1983 Cr. No. 690 West Bengal Agricultural Extension and Research Project; US$12.0 million credit of June 1, 1977; Effective Date: September 1, 1977 (proposed); Closing Date: September 30, 1982 Cr. No. 712 Madhya Pradesh Agricultural Extension and Research Project; US$10.0 million credit of June 1, 1977; Effective Date: September 1, 1977 (proposed); Closing Date: September 30, 1983  ANNEX II Page 11 of 12 Cr. No. 526 Drought Prone Areas Project; US$35.0 million credit of January 24, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1980 Progress varies among components but overall is satisfactory. Expenditure to date is less than anticipated but is reasonable because price inflation has been much less than expected. Disbursement perform- ance is poor and the Borrower has been requested to expedite claims. Greater attention is now being paid to data collection to measure project performance. This is essential since several components are innovative. The Systems Research Institute of Poona has been contracted to design an information system to facilitate monitoring and evaluation. Cr. No. 572 Rural Electrification Project; US$57.0 million credit of July 23, 1975; Effective Date: October 23, 1975; Closing Date: December 31, 1979 Eleven states have now fulfilled the conditions of eligibility for on-lending under this project [compared with six at the time of appraisal] The project got off to a slow start, due principally to the need to adapt specifications and tender documents to international competitive bidding procedures, but these problems have been overcome. As of April 1977, orders had been placed for 60 approved rural electrification schemes, and tenders had been invited or were in the course of preparation for others. Cr. No. 582 Railways XIII Project; US$110.0 million credit of August 26, 1975; Effective Date: October 10, 1975; Closing Date: September 30, 1977 The project-is intended to cover most of the foreign exchange requirements of Indian Railway's (IR) investment program from April 1, 1975, through March 31, 1977. Since the approval of the project, increased pro- duction in steel products in India and further developments in IR's indigen- ization program have resulted in a less than anticipated foreign exchange requirement. It is expected, therefore, that of a total Credit of US$110 million, some US$30-40 million may be undisbursed at the end of the current project period. During the year 1975/76, IR carried 223 million tons of freight traffic, 6% more than forecasted. The project is being implemented satisfactorily. Cr. No. 609 Madhya Pradesh Forestry Technical Assistance Project; US$4.0 million credit of February 26, 1976; Effective Date: May 26, 1976; Closing Date: December 31, 1981 This project will identify a sound resource base for pulp and paper manufacture and related industries, develop suitable logging systems, and undertake a feasibility study to determine optimal use of the existing wood resources in the Bastar District of southern Madhya Pradesh. It also includes a study of ways to integrate the area's tribal population with future develop- ment. After initial delays due to difficulties in employing key personnel,  ANNEX II Page 12 of 12 project implementation is now satisfactory. For the feasibility study, proj- ect authorities have prepared a short list of three foreign consulting firms, who are now being asked to prepare detailed proposals. On the basis of these proposals, the final selection will be made shortly. Cr. No. 610 Integrated Cotton Development Project; US$18.0 million credit of February 26, 1976; Effective Date: November 30, 1976; Closing Date: December 31, 1981 Ln. No. 1273 National Seed Project; US$25.0 million loan of June 10, 1976; Effective Date: October 8, 1976; Closing Date: June 30, 1981 Good progress has been made since negotiations. The National Seeds Corporation (NSC) has withdrawn from seeds production as planned, having handed over to State Seeds Corporation (SSC). Detailed production pro- grams, by variety and responsible institution, have been prepared for breeder, foundation and certified generations. GOI and State Governments have made equity contributions to SSC thus ensuring financing of major project activity. Orders will shortly be placed for processing machinery to provide bridging capacity pending the construction of new processing plants. Tender documents for the first purchases of farm machinery have been finalized. Ln. No. 1335 Bombay Urban Transport Project; US$25.0 million loan of December 20, 1976; Effective Date: March 10, 1977; Closing Date: June 30, 1980 Procurement work is well in hand. Contracts for 275 single and 175 double deck bus chassis have been awarded and bidding for corresponding bus bodies is in progress. Civil works for bus facilities have been partly commissioned and bidding for 18 of 31 traffic engineering schemes is in progress. Preparations for technical assistance envisaged under the project are under way. Ln. No. 1394 Gujarat Fisheries Project; US$14 million loan and US$4 (TW) and million credit of April 22, 1977; Effective Date: Cr. No. 695 July 22, 1977 (expected); Closing Date: June 30, 1983 Cr. No. 685 Singrauli Thermal Power Project; US$150.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Ln. No. 1473 Bombay High Offshore Development Project; US$150.0 million loan of June 30, 1977; Effective Date: September 28, 1977 (proposed); Closing Date: December 31, 1980  ANNEX III Page 1 INDIA - RAJASTHAN AGRICULTURAL EXTENSION AND RESEARCH PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken by the country to prepare the prolect Less than a year. (b) The agency which has prepared the project Government of Rajasthan (GOR) (c) Date of first presentation to the Association and date of first mission to consider the project June 1976. October 1976. (d) Date of departure of appraisal mission September 29, 1976. (e) Date of completion of negotiations May 31, 1977 (f) Planned date of effectiveness September 1, 1977 Section II: Special IDA Implementation Actions None Section III: Special Conditions (a) GOR to establish Project Coordination Committee by December 31, 1977 (para. 33). (b) GOR to provide housing and office facilities to the field level agricultural extension staff as necessary (para. 42). (c) GOR to provide credit facilities to extension staff to purchase suitable means of transport and to provide financial incentive to ensure optimum use of these means (para. 42).  ANNEX III Page 2 (d) GOR to formulate a program to strengthen research facilities at the University (see para 46); (e) GOR to carry out project monitoring and evaluation and submit results to the Association annually (see para 47).  IBRD 12538 t f < A e c.os.#ll. 1,^+ 72- 74- 76 JANUARY 1977 .-*' 1> N choa INDIA Pl lj >^ 9 8^ .k.......... n >s RAJASTHAN RAJAS-THA ' AGRICULTURAL EXTENSION AND RESEARCH PROJECT lrda 0a o 25 50 75 100 125 150 175 200 Z