India - Agricultural Human Resources Development Project

Document of The World Bank Report No.13517-IN STAFF APPRAISAL REPORT INDIA AGRICULTURAL HUMAN RESOURCES DEVELOPMENT PROJECT MARCH 9, 1995 South Asia Department 2 Agricultural Operations Division  CURRENCY EQUIVALENTS (as of January 15, 1995) Currency Unit = Rupee (Re/Rs) US$1.00 = Rs 31.37 Re 1.00 = US$0.032 WEIGHTS AND MEASURES 1 sq foot = 0.093 sq meters 1 sq meter = 10.75 sq feet GOVERNMENT FISCAL YEAR April 1 to March 31  ABBREVIATIONS AEC Agricultural Education Council AHRDP Agricultural Human Resources Development Project APAU Andhra Pradesh Agricultural University DARE Department of Agricultural Research and Education (MOA) DGS&D Directorate-General of Supplies and Disposal ED Education Division of the Indian Council of Agricultural Research FA ICAR's Financial Advisor GOAP Government of Andhra Pradesh GOH Government of Haryana GOI Government of India GOTN Government of Tamil Nadu HAU Haryana Agricultural University HRD Human Resources Development HRM Human Resources Management ICAR Indian Council of Agricultural Research ICB International Competitive Bidding IDA International Development Association LCB Local Competitive Bidding MAC Manpower Advisory Council MOU Memorandum of Understanding MTR Mid-Term Review NARP National Agricultural Research Project NDO World Bank's New Delhi Office NGO Non-Governmental Organization OED Operations Evaluation Department PMIC Project Monitoring and Implementation Cell SAU State Agricultural University SDC Swiss Development Cooperation SDR Special Drawing Rights SOE Statement of Expenditure TNAU Tamil Nadu Agricultural University TNVASU Tamil Nadu Veterinary and Animal Science University TOTP Training of Trainers Program UGC Universities Grants Commission USAID US Agency for International Development VC University Vice-Chancellor   INDIA AGRICULTURAL HUMAN RESOURCES DEVELOPMENT PROJECT Table of Contents CREDIT AND PROJECT SUMMARY ......................................... i I. BACKGROUND ...................................................... 1 A. The Agricultural Sector .................................... 1 B. Human Resources Development .............................. 2 C. Lessons from Past Bank Lending and Other Assistance .............. 9 II. THE PROJECT ....................................................... 11 A. Rationale for Bank Involvement .............................. 11 B. Project Objectives and Approach .............................. 12 C. Summary Description ...................................... 13 D. Detailed Features ......................................... 15 E. Project Costs and Financing .................................. 23 F. Procurement ............................................. 26 G. Disbursements ........................................... 30 H. Accounts and Audit ....................................... 31 III. PROJECT IMPLEMENTATION .......................................... 31 A. Organization and Management ................................ 31 B. Project Benefits and Justification .............................. 36 IV. ASSURANCES AND RECOMMENDATION ................................. 38 This report is based on the findings of an appraisal mission which visited India in August 1994. The mission comprised: Messrs. William Nickel (Leader), A. Venkataraman, K. N. Venkataraman, Anthony Pritchard and Ms. Theodosia Karmiris. Messrs. Charles Maguire and Peter Ryan contributed substantially to the conceptualization and design of the project. Mr. Matthew McMahon and Ms. Karen Lashman were the peer reviewers for the project. The report is endorsed by Messrs. Heinz Vergin (Department Director) and Shawki Barghouti (Division Chief).  ANNEXES 1. Basic Data about India's State Agricultural Universities 2. Strengthening ICAR's Education Division 3a. ICAR Statement of Agricultural Education Strategy 3b. ICAR Action Matrix 3c. Accreditation Board Terms-of-Reference 3d. Memoranda of Understanding Among ICAR, Participating Universities and States 3e. University Common Action Matrix 4. Education-Related Financial Management System at SAUs--Draft Terms-of-Reference 5. Panel of Experts--Terms-of-Reference 6. State-Level Human Resources Development and Management 7. Summary Cost Tables 8. Procurement 9. Project Training Plan 10. Schedule of Estimated Disbursements 11. Project Implementation Plan 12. Project Supervision and Monitorable Indicators 13. Documents in Project File  i INDIA AGRICULTURAL HUMAN RESOURCES DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, Acting by its President Executing Agencies: Department of Agricultural Research and Education (MOA) (Coordination); Indian Council of Agricultural Research (ICAR); and the States of Andhra Pradesh, Haryana and Tamil Nadu Amount: IDA Credit of SDR 40.5 million (US$59.5 million equivalent) Terms: Standard, with 35 years maturity On-lending Terms: From the Government of India to the Governments of Andhra Pradesh, Haryana and Tamil Nadu as part of central assistance to the states for development assistance on standard terms and conditions applicable at the time. Project Description: The project would assist in India's drive to modernize its agricultural sector. It would promote changes in the way the Center and the states develop and employ human resources with the aim to make them, and thereby the sector, more productive. To achieve these changes, policy and institutional reforms would be carried out. The project would also foster changes in investment priorities resulting from policy and institutional reforms adopted. The project would begin a process of: (a) improving the quality and relevance of higher agricultural education and in-service training programs; and (b) strengthening the capacity of participating states to develop and manage agricultural human resources. The five-year project would be the first phase in a long-term program tc improve agricultural human resources development. To foster academic improvement, it would strengthen ICAR's capability to establish norms and standards in agricultural education, monitor compliance with these standards, provide selective assistance to non-participating state agricultural universities and ICAR universities, and prepare future projects. It would also include subprojects from three participating states  ii (Andhra Pradesh, Haryana and Tamil Nadu), selected for good demonstration effect to other states. Each state would carry out university programs encompassing: (a) curriculum and syllabus reform, (b) faculty quality improvement, (c) revitalization of teaching methodologies, (d) faculty exchanges within India and with foreign universities, (e) modernization of university administration and management systems; (f) upgrading of teaching laboratory equipment, computer systems, communications, farms, libraries and hostels, and (g) establishment of placement centers and student attachment programs to agroindustries. The project would promote a number of initiatives to involve university clientele more in university management and programs and to improve education-related financial management. To upgrade human resources management, the project at the state-level would support: (a) in-service human resources development and management programs (HRD and HRM) including: (i) training focused on job-oriented needs, (ii) systematic training needs assessments, (iii) training of trainers, (iv) evaluation of training effectiveness, (iv) better instructional facilities, and (v) improved management of state sector employees; and (b) manpower needs assessment involving the establishment of broad-based Manpower Advisory Councils (MACs) to sponsor rigorous studies of labor market requirements and trends, or labor market intelligence, within each state in order to provide state authorities and university officials with technically sound information for crafting public policy, academic programs, budgets and adjustments to university intake numbers. Bilateral Assistance: The Government of Switzerland through the Swiss Development Cooperation would finance an international Panel of Experts to advise ICAR and participating universities in carrying out reform programs in education and management.  Hi. Estimated Project Costs: Project Component Local Foreign TotWl -(------ (US$ mion) ------ ICAR Strengthening 4.8 5.3 10.1 University Programs 18.0 23.8 41.8 In-Service HRD/HRM 11.5 6.1 17.6 Manpower Needs Assessment 0.3 0.0 0.3 Total Baseline Costs 34.6 35.2 69.8 Physical Contingencies 2.6 0.4 3.0 Price Contingencies -0. la/ 1.5 1.4 TOTAL PROJECT COSTS' 37.1 37.1 74.2 a/ Includes foreign exchange contingency to adjust for projected changes in the value of the Indian rupee vis-a-vis the US dollar. It is assumed that because of the large capital inflows India is currently experiencing, there will be some real exchange rate appreciation in the early phase of the project. Financing Plan: Local I Foreign Total ----------(US$ million)-----------) IDA 22.4 37.1 59.5 GOI 1.9 0.0 1.9 GOAP 5.2 0.0 5.2 GOH 3.0 0.0 3.0 GOTN 4.6 0.0 4.6 Totals 37.1 37.1 74.2 Including taxes and duties of US$ 8.1 million equivalent.  iv Estimated IDA Disbursements: FY95 FY96 FY97 FY8 FY99 FYOG P81 -(US$ million ) ..... X Annual 1.5 6.8 17.8 14.7 8.9 6.7 3.1 Cumulative 1.5 8.3 26.1 40.8 49.7 56.4 59.5 Rate of Return: Not applicable Poverty Category: Not applicable Benefits: The project would support improved human resources development as a means of accelerating agricultural growth. By improving the quality and effectiveness of sectoral manpower, the project would protect and enhance the benefits derived from the considerable investments made and proposed in agricultural research, extension and other services. By strengthening the Center's capacity to set norms and standards in agricultural universities and to accredit such institutions rigorously, the project would foster a national upgrading in the quality of higher agricultural education. Because of policy, administrative, pedagogic and infrastructural improvements made under the project, better quality graduates would be produced at participating universities more compatible with labor market signals. The quality of teaching would improve at participating universities as a result of staff training received under the project, improved access to worldwide scientific information and enhanced teaching resources and systematic teacher/course assessments. The basic quality of life on campus for both students and faculty would be enhanced through upgraded housing, medical and recreational facilities. A key benefit of the project would be the establishment of worldwide orofessional contacts in scientific fields and the creation of a new cadre of Indian educators/scientists which would have received exposure to education, education technology and scientific research abroad. Academic inbreeding of both faculty and students would also be reduced. The project would foster greater interaction between the university and the  v outside community of entrepreneurs, government, farmers and NGOs. The management and administration of each participating university would become more efficient because of the policy changes made and the management information systems introduced. The project would begin a comprehensive examination of and improvement to financial management of higher agricultural education which could ultimately increase the chances for the financial sustainability of the system. The project would initiate the establishment of a much-needed national agricultural information system complete with computerized on-line databases at university-level and in ICAR. The project would improve management and operational performance of key agricultural institutions at the Center and state-level because of better, more efficient human resources management. In-service training would be strengthened and be made demand-driven. MACs would provide broad-based fora for substantive debate on agricultural human resources issues and for the formulation of reasoned advice to decision-makers. State policy-makers and university administrators would have access tc technically sound analyses of labor market requirements and trends on which to base policy, budgetary and academic planning. Risks: As a long term-goal, the project would foster the establishment of an Agricultural Education Council (AEC) with statutory powers to set norms and standards in agricultural education. Such a statutory body is required to ensure that uniform standards are established at the national level and enforced throughout the country, and given the statutory nature of the eventual council, that higher standards once achieved are more likely to be maintained. A risk exists that action to establish the AEC might experience delays because of the elaborate Center-state consultative and legislative process involved. As an interim measure, the project would strive to achieve many of the beneficial impacts of the AEC by strengthening ICAR's Education Division and by restructuring the existing Norms and Accreditation Committee as an Accreditation Board with enhanced function and support. An important activity in IDA supervision would be to track progress in setting up the Council.  vi The project fosters important changes in the way the states develop and use human capital. Progress in implementing these changes might be slowed by the traditional inertia present in agricultural development departments and SAUs. This risk is reduced by the widespread institutional and political support in India for reforms built into this project, as evidenced by the production of sound proposals by ICAR and the states. In addition, the mid-term review and other project fora, inc!uding supervision missions and seminars conducted by the Panel of Experts, would provide opportunities to assess progress in introducing changes, share experiences and take corrective actions to attain objectives. The project's monitoring and evaluation system should provide a reliable, ongoing gauge of project progress in its various components and thus help guide timely and appropriate corrective actions.  INDIA AGRICULTURAL HUMAN RESOURCES DEVELOPMENT PROJECT I. BACKGROUND A. The Agricultural Sector 1.1 India's agricultural sector is vast. It supports 70% of the country's population and 80% of its poor, contributes 30-35% of GDP and generates about 20% of export earnings. India ranks second in the world in rice and wheat production and first in groundnut production. Since the 1950s, GOI's agricultural policy has emphasized food self-sufficiency and low and stable consumer prices. This policy has been pursued through large public investments in irrigation infrastructure and agricultural research, and transfer of land ownership to tenants and the landless. Coupled with the introduction of high-yielding seed varieties and expanded use of fertilizer, these initiatives have enabled India and its 880 million people to become self-sufficient in basic foods. In comparison to other developing countries, famines have been avoided successfully and rural poverty rates have declined, albeit slowly. Food consumption and nutrition indicators have improved, especially in the rapidly growing states. Notwithstanding these successes, the rate of agricultural growth overall has been relatively slow, at about 2.5% per year over the past 30 years and marginally above the 2.2% annual increase of population. Much of the growth in production moreover has been uneven, coming more from irrigated areas particularly in the Northwest. There are indications that future agricultural growth must rely on tapping the potential for raising yields of traditional crops, increasing diversification to higher-valued crops and to integrated farming systems. In contrast, other Asian nations have enjoyed annual agricultural growth rates of 5% or more, and substantial improvement in incomes and nutrition of the rural poor. China, Indonesia, Malaysia and Thailand, for example, have been able to manage successfully such transitions from agricultural self-sufficiency to agricultural diversification objectives for both domestic consumption and export. 1.2 In India, economic growth and poverty alleviation in the rural sector have been insufficient, both of themselves and considering the large and rapid growth of public expenditures on agriculture and food distribution schemes. Three main reasons explain this lackluster performance: (a) government interventions in pricing and trade regimes discourage private investment, technological change and diversification; (b) accelerating and poorly targeted public expenditures on subsidies crowd out public investments in rural areas that would be conducive to faster, sustainable and equitable growth; and (c) centralized decision- making adversely affects the sustainability and flexibility of public resource use. In addition, these factors result in extensive and inefficient use of natural, human and capital resources, translating into waste and environmental degradation. 1.3 India's national developmental goals of income growth, industrialization, poverty alleviation, employment and environmental protection all hinge on increased productivity in agriculture. Boosting growth must depend on diversification to higher-value crops and  2 integrated farming systems, facilitated by strategic infrastructural investments and policy liberalization to encourage private investment in the sector and to integrate the sectoral fabric of India both internally and with the global economic community. The following forces are emerging in Indian agriculture: market-led development, commercialization, environmental protection and a limited government role in sectoral services and resource allocation--all requiring a well-trained, motivated, well-managed manpower pool both in the public and private sectors in a wide range of new fields. 1.4 To propel Indian agriculture into the 21st century, the quality, technical skills and management of agricultural manpower must improve in consonance with rapidly changing labor market requirements. If the education imparted is not attuned to current and future realities, the national research, extension and agribusiness systems will perform below potential, despite large investments in infrastructure, extension networks and technology. India's manpower must have good analytical ability to anticipate and adjust to a changing environment increasingly affected by global forces. It must communicate sound technical and financial advice and information about profitable opportunities to farmers moving gradually into diversified, commercial agriculture. It must also be prepared to develop good public policy and make sound financial and managerial decisions. B. Human Resources Development Manpower Use, Efficiency and Effectiveness 1.5 As an integral part of India's national developmental efforts over the past four decades, both the Central and state governments have invested heavily in training of staff to improve competence and efficiency in delivery of field-level services, often with external assistance, including that from the Bank. The outcomes of these efforts have varied widely. Quality of output and cost-effectiveness of these training programs in general need further improvement, even through the need for staff improvement is keenly felt and there is a governmental willingness to commit public funds to right the deficiencies. 1.6 India has established a large number of centers to provide in-service training to staff. These include Management for Agricultural Extension (MANAGE), an apex training center for extension management, four extension institutes and fourteen advanced training centers, all managed by the Government of India (GOI) or the state agricultural universities (SAUs). In addition, there is a sizable number of staff training centers supported by the state governments. Staff are also deputed for higher academic courses, special seminars and workshops held within and outside the country. 1.7 Even though India has a wide network of training institutions, the facilities available at these centers, the competence of the teaching staff employed, the relevance of the courses offered and the methods of teaching followed are in need of improvement. Over time, providing staff training has become a routine activity with little or no analysis of: (a)  3 emerging field requirements, (b) knowledge and skill gaps of staff, (c) the kinds of courses needed, (d) the timings of these operations, (e) the costs involved, or (f) training effectiveness. Training activities generally are not demand-driven. 1.8 Much scope exists to make systems currently in effect in the state development departments more efficient through the adoption of modem human resource management methods. Adequate efforts are currently not being given to: (a) analyzing manpower needs in state departments charged with frontline extension responsibilities, (b) modifying staff recruitment qualifications and m-ethods, (c) reviewing and refining job descriptions, and (d) introducing better management systems and methods designed to improve efficiency and effectiveness. Manpower Production--Higher Education 1.9 Background. Much of the progress achieved in the agricultural sector over the last 30 years is attributable to Indian Council of Agricultural Research (ICAR) and the SAU system. The SAUs are institutions set up by the states for the purpose of carrying out the functions of agricultural education, research and extension support. The establishment, governance and objectives of each SAU are based largely on the Model Act developed by ICAR in 1966 and modified in 1981, which has been a reference to provide uniformity across states as well as a legal basis for development. The Model Act specifies that there should be only one agricultural university per state.2 The governor of the state is usually appointed as the chancellor, or nominal head of the university, with some states also having the agriculture minister as the pro-chancellor. The chief executive of the university is the Vice-Chancellor (VC), who is chairman of the Board of Management of the SAU. This board has representation from state members of the legislative assembly, ICAR, state government departments, teaching staff, progressive farmers and other private sector persons. SAUs are charged with carrying out three functions: (a) research within the state on problems of local agricultural significance, (b) undergraduate and some postgraduate education in various agricultural disciplines, and (c) extension education, principally through agricultural specialists in residence on SAU campuses or branch stations. In recent years, a number of advanced centers of postgraduate education and research have been established at SAUs with support from UNDP; special programs and facilities have been started in particular research areas which are too specialized or too expensive to duplicate throughout the country. 1.10 From 1955-72 six Land Grant universities in the US assisted in establishing eight SAUs with financing from USAID. Under this program, USAID provided the necessary funds and expertise for the introduction of a university system based on the US Land Grant 2 This has not been rigidly followed, however, since there are four in Maharashtra, three in Uttar Pradesh, and two each in Karnataka, Madhya Pradesh, Bihar, Himachal Pradesh and Tamil Nadu.  4 system.3 USAID funded physical infrastructure, equipment, facilities, and most importantly, training of faculty. This training was arranged through a twinning arrangement between each SAU and a counterpart Land Grant university. Over the 17 years of cooperation, more than 300 US faculty members were assigned to positions in India and more than 1,000 Indians received postgraduate degrees from US universities. I.11 There are currently 27 SAUs in India with a new university being formed--the Central Agricultural University for the Northeast Hill Region--which covers six states with a college in each state (see Annex 1, Table 1). This new university will be totally funded by ICAR. Of the 27 SAUs, two are specialized universities: the Tamil Nadu Veterinary and Animal Science University (TNVASU) and the Y. S. Parmar University of Horticulture and Forestry in Himachal Pradesh. The 27 SAUs have aggregate annual budgets of over Rs 4.0 billion (US$133 million), 22,500 sanctioned scientific staff positions and 161 colleges with an undergraduate and postgraduate admission capacity of 9,650 and 5,850 students, respectively, and with a total enrollment of about 44,500 students. There are four ICAR institutes which have the status of "deemed" universities.4 ICAR also provides financial support to three central universities for the development and strengthening of their agricultural programs.: Outside the SAU system, there are 35 agricultural colleges within general universities, with 24 of these in Uttar Pradesh alone. These agricultural colleges produce one-third of the total graduates in agriculture. They receive no assistance from ICAR and are generally considered to have substandard infrastructure and unsatisfactory educational standards. 3 The US Land Grant System is a triangle of research, education and extension with systemic links among the parts under one authority. This system was never introduced fully in India: First, unlike in the US where land grant colleges maintain a principal support and administrative function for front-line agricultural extension staff, the state departments of agriculture in India maintain responsibility for and control of extension. GOI, however, has encouraged SAUs to develop their own extension wings with their own qualified subject matter specialists and researchers/extension agents. This activity, however, is confined to extension of the technology releases by the research wing of each SAU. Second, as regards research, ICAR keeps central control over research content and research funding. Except for thesis work conducted by postgraduate students, SAU research is controlled by ICAR much more than by the Department of Agriculture in the US. SAU staff who participate in ICAR-sponsored schemes frequently have little impact over experimental design, treatments or analyses. The SAU is virtually limited to applied and adaptive research. In contrast, US universities are not so limited, and many concentrate on basic research at the cutting edge of new developments. ICAR has also expanded its role gradually in research through a parallel set of research institutes which competes directly with SAUs for funds. 4 Deemed universities are select, specialized institutions declared by the Universities Grant Commission as having the equivalent status as normal universities. This is a special arrangement to promote higher education in specialized fields in the absence of such programs in full-fledged universities. Deemed universities include the Indian Agricultural Research Institute, the National Dairy Research Institute, the Indian Veterinary Research Institute and the Central Institute of Fisheries Education. Banaras Hindu University, Vishwa Bharati University and Aligarth Muslim University.  5 1.12 India's Constitution ensures that the responsibility for higher education is shared between the Center and the states, but the coordination and determination of standards in higher education and research institutions, and scientific and technical institutions is exclusively the responsibility of the Center.6 The Universities Grants Commission (UGC) was formed in 1956 as a statutory body to fulfill on behalf of GOI the requirements of the Constitution to regulate academic standards and disburse central funds to the universities. To carry out its mandate, the UGC can inquire into the financial needs of the universities, allocate and disburse grants, recommend measures for improving university education and advise on allocations of grants and establishment of new universities. 1.13 ICAR's Role. ICAR is a national apex coordinating body providing overall guidance in agricultural research and in promoting agricultural education. Its Education Division (ED) strives to establish, strengthen and sustain an institutional system of higher agricultural education in order to provide the scientific and technical manpower required for research, educational, managerial and developmental activities within the sector. With respect to SAUs, ICAR in 1965 assumed the responsibility of UGC as part of a scheme begun in 1964 to strengthen agricultural education. In this capacity, ICAR maintains a Norms and Accreditation Committee to set standards in higher agricultural education. However, since this committee has no statutory authority to enforce them, the obligation for maintenance of standards rests effectively with each SAU, which increasingly lacks the needed resources to carry out this responsibility.7 ICAR also operates a number of schemes related to infrastructural development, manpower upgrading and quality improvement in the SAUs, deemed universities and selected institutes. 1.14 SAU Funding. Until the end of the Third Plan (1970), little support was received from the UGC or Ministry of Agriculture/ICAR for agricultural education. In the Fourth Plan (1969-74), Rs. 242.1 million (US$32.2 million) was provided following the UGC pattern of funding to general universities which required matching funds from the states for all items of assistance. This proved to be impracticable as the universities found that states could not meet their contributions, and consequently access to ICAR grants was thwarted. During this plan period, ICAR approved a new pattern of assistance with provision for 100% financing of specified items, subject to a ceiling of Rs. 20 million per SAU. During the Fifth Plan, a major change in the SAU system occurred with the establishment of more than one SAU in 6 Association of Indian Universities, Universities Handbook, 25th edition, New Delhi, March 1992. 7 For some SAU programs, statutory bodies set academic standards. Noteworthy in this regard is the Veterinary Council of India which sets minimum standards for veterinary courses though a statutory function. Similarly, some courses such as engineering and architecture are regulated by the All-India Council for Technical Education. These councils set standards for all India and have an ongoing role in monitoring compliance. There is no such statutory arrangement for standards of agriculture and related programs in the agricultural universities.  6 any one state, in contravention of the Model Act.8 SAU support levels were raised to Rs. 25 million for a single university per state; but in cases where there were 3-4 per state, the financial assistance was reduced to Rs. 15 million per university. In subsequent plan periods, total assistance allocations increased, the number of eligible items for support was raised and the per SAU support levels grew. Under the Eighth Plan (1992-1997), central funding of SAUs totals Rs. 750 million (US$26 million9). 1.15 Based on 1989/90 data, SAU budgets totalled Rs. 4.1 billion (US$247 million) with wide variation across SAUs (Annex 1, Table 2). Research consumed the highest percentage of SAU funds (41%), with education, administration and extension support claiming 38%, 15% and 6%, respectively. State governments assumed the major financing responsibility for SAUs, with assistance from GOI through ICAR for selected activities. About 3% of funding now comes from other sources such as tuitions, grants, contracts and proceeds from foundation seed and farm product sales. There are marked differences among states in the level of financial support accorded to SAUs (Annex 1, Table 2). In 1989/90, ICAR contributed Rs. 681.4 million (US$40.9 million) to the 27 SAUs, representing about 17% of SAU budgetary requirements. Only about 16% of ICAR assistance was for education-related activities; about 72% was for research, 11% for extension support and less than I% for administration (Annex 1, Table 3). ICAR's fund allocation policy has been based on spreading equally the total funds available to all SAUs, taking into account the number of SAUs in each state--a policy which has not necessarily yielded highest returns to ICAR assistance. A number of changes have been introduced to: (a) curb the establishment of new state-level institutions/colleges, (b) create linkage with state contributions, and (c) foster quality improvement programs such as those for libraries and student amenities. These, however, have proved difficult to implement. Finance is the only real mechanism ICAR currently has to influence SAUs, but given that the proportion of an individual SAU's budget coming from ICAR is small and that ICAR funding is virtually automatic, ICAR has minimal control. I.16 Constraints in Agricultural Education."0 Following a period of growth, development and international contact in the 1960-70s, the SAUs reached a plateau of achievement in the early 1980s and afterwards fell into serious decline. By 1989 there was widespread consensus that the quality of graduates in various disciplines of agricultural While there has been a proliferation of SAUs beyond the Model Act's intent of one per state and while some of this proliferation has defied reason and squandered scarce resources, under certain circumstances having more than one SAU per state is justified in view of the large physical size of selected states and the logistical difficulties imposed by the management of the complex networks of campuses. 9 Based on a 40-60% weighted average of the official and market rates, April 1992-March 1993. Peter Ryan, Academic Institution Accreditation Study: State Agricultural Universities in India, September 1993; Lawrence Busch, Universities for Development: Report of the Joint Indo-U.S. Impact Evaluation of the Indian Agricultural Universities, AID Project Impact Evaluation No. 68, USAID, September 1988.  7 sciences was falling and that there was an urgent need for SAUs to give attention to upgrading the quality and standards of higher agricultural education. Recommendations were made that the teaching and training responsibilities of scientists should be recognized in addition to research skills. With worsening job prospects, students realize that their studies may not lead to employment. This results in low motivation to work diligently in their academic programs. While exceptions exist, lowered overall academic standards are a matter of growing concern: (a) Mandate. The SAUs lack a culture in which the students are the prime reason for their existence; there is a pervasive attitude that the universities exist to provide life-long employment for their staff. Compounding this problem is the belief that research activities are the only route to professional recognition, promotion, adequate funding, facilities and self-satisfaction at SAUs. In addition, SAUs maintain an orientation toward irrigated food crop production--a vestige from the eras of severe food shortages--and often lack sufficient emphasis on the country's current and future needs, including major diversification into high-value crop activities and assumption of a role in the world agricultural and commercial communities. There is general recognition that the SAUs have neglected the social sciences, including agricultural economics, as well as environmental sciences (para 3.17). (b) Management. Falling management standards at the SAUs have been recognized for some time. A 1978 ICAR Review Committee on Agricultural Universities concluded that planning and evaluation were the weakest links in SAU management, and the Union Minister of Agriculture in 1985 stated that application of modern methods of education and management in agricultural education had not received adequate attention. This deterioration stems from a lack of managerial training, a culture of cumbersome bureaucratic managerial systems, an attitude that employment of staff is an important university function, the isolation of senior staff from international experience and knowledge, and the lack of evaluation of university performance, including management performance. (c) Academic Standards. Major problems facing SAUs are academic inbreeding and general academic isolation from both other Indian universities and from international institutions and information. There are no incentives to excel at teaching, gain external experience, acquire degrees from other institutions or cultivate contacts with other SAUs or foreign institutions. Students at most SAUs come from the same state, which tends to perpetuate parochialism. Frequently staff-members have received all their undergraduate and postgraduate education at the institution where they are employed. Since the 1960-70s when significant numbers of SAU staff were trained abroad, principally in the US through USAID-sponsored twinning arrangements, few  8 with international experience have been recruited. Many of the staff originally trained abroad are now either retired or close to retirement. Teaching methods and curricula are out-of-date, and physical facilities, equipment and teaching aids are in poor condition. The lecture method in teaching and rote memorization in learning are over-emphasized. Clear links between course work and practicals are often missing. Students fail to acquire good general problem-solving skills which would enable them to assess new and changing situations and to make rational judgments about options. University libraries are poorly equipped and funded and are rarely integrated into the learning/teaching experience. Libraries lack computer and telecommunications capacities for accessing and managing the growing number of international and domestic print and electronic products. Course loads are heavy, thereby leaving little time to cultivate general inquiry skills, class discussion or intellectual debate outside the classroom. Physical facilities such as lecture rooms and laboratories are overcrowded, uncomfortable, poorly lit and maintained, inadequately cooled/heated and generally are poor environments for learning. Teaching laboratories are old, out-of-date and sparsely equipped, and computing facilities are practically non-existent. Hostel, recreation, medical and dining facilities are deteriorating rapidly. (d) Education Funding. Financial support for SAUs from the states, particularly the less developed states, has been inadequate. Research--supported largely by ICAR, not the states--has been emphasized, to the detriment of teaching.' Limited funds typically go to finance excessive staffing levels and administration, leaving inadequate amounts for operating purposes and maintenance of equipment and buildings. This problem has been aggravated by the proliferation of SAUs and colleges within states over the last two decades, causing resources to be spread thinly, notably in poorer states. (e) Academic Administration. There are a number of cultural and organizational problems in India which mitigate against successful and effective academic administration. Often seniority is the more important determinant of appointments than ability, and the practice of rotating important posts like deans and heads of departments creates dislocations. Student unrest--a frequent feature of SAU campuses--is often the result of substandard administration. Financial backing for academic programs is severely restricted, and little managerial experience or training is offered to senior academic staff. Data processing facilities are too meager to handle even the basic necessities of university administration and fiscal controls. Proliferation of campuses under While across the entire SAU system funds expended on education and research are roughly equal, research typically receives a significantly higher proportion in those SAUs with the highest overall funding.  9 each SAU has led to diseconomies of scale in university administration, escalating costs and rationing of scarce resources. (f) Employability of Graduates. Historically the vast majority (80-90%) of SAU graduates has found employment in the public sector; however, this job opportunity stream is drying up. There is little emphasis in present curricula on preparing undergraduates for careers in agriculture or agribusiness outside government service, and there is no readily available mechanism in the university system to remedy this mismatch. Private employers often have to invest significantly in induction and on-the-job training for graduates to make up for education weaknesses. SAU graduates express concern about their lack of confidence in their ability to apply the skills necessary for self-employment. The general lack of employment prospects is well understood throughout the student community, and this breeds considerable cynicism about studies. C. Lessons from Past Bank Lending and Other Assistance 1.17 Bank experience indicates that levels of investment in project-related training have not declined and have frequently increased during periods of Bank involvement in agricultural sector development. A major reason for this has been that graduates from tertiary agricultural institutions have not met labor market requirements in terms of knowledge and skills, and therefore need large infusions of remedial induction and in-service training. Experience also indicates a lack of systematic human resources management in public sector institutions and services, thereby leading to wastage of resources and reduced returns on public investments. 1.18 Systematic training is an integral part of the Training and Visit extension system (T&V). In 1994 the Bank's Operations Evaluation Department (OED) released a second global study on T&V, based on an evaluation of worldwide experiences in which Indian T&V projects provided much of the case study data.'2 The report emphasized that staff quality was a major constraint in nearly all T&V projects/components. Most of the projects provided for continuous technical training for extension agents which was especially important due to their relatively low level of education and basic agricultural training. Serious difficulties also arose from the insufficient number of subject matter specialists having adequate technical and practical experience to participate effectively in regular staff training. This resulted in training being overly theoretical and too general. A recent draft Performance Audit Report covering two T&V projects--Madhya Pradesh Agricultural Extension Project - Phase II (Cr. 1138-IN) and Andhra Pradesh Agricultural Extension Project (Cr. 1219-IN)--reported that 12 OED, Agricultural Extension: Lessons from Completed Projects, Report No. 13000, April 29, 1994. The first T&V study was World Bank, Strengthening Agricultural Research and Extension: the World Bank Experience, Report No. 4684, September 1, 1983.  10 these global problems were clearly reflected in the MP and AP experiences and may have been the most damaging factors to project success and sustainability.'3 1.19 A second prospective on higher agricultural education is given in a 1992 OED study.'4 One-half of all education projects at the tertiary level during the 1964-90 period supported agricultural higher education. The report suggested that the Bank understood imperfectly the problems of higher agricultural education, which resulted in inappropriately staffed and designed projects. OED concluded that Bank projects have ignored factors which are key to the stability, relevance and effectiveness of agricultural higher education, including: (a) ensuring an adequate flow of resources to an institution; (b) engendering conditions-- including good governance and management at the university level--to promote institutional autonomy and accountability; (c) creating linkages between clients and universities; and (d) coordinating research and extension investments with those in agricultural universities to promote institutional synergies, responsiveness and adaptability in education institutions. OED recommended that to improve projects the Bank should: (i) upgrade its analytical capacity of problems and potential solutions; (ii) strengthen its expertise in university management, either in-house or through external know-how; (iii) involve a broad range of sectoral representatives in problem analyses and project design; (iv) improve project monitoring and evaluation; (v) focus project assistance on upgrading university management and developing appropriate governance; (vi) incorporate agricultural concerns and organizations into university decision-making; (vii) strengthen ties to local and international agricultural research institutions; and (viii) encourage donor coordination in supporting higher agricultural education. 1.20 In a 1988 assessment of USAID's worldwide experience in assisting agricultural universities, Bawden and Busch'5 concluded that: (a) many universities have not adapted their curricula to focus more on the knowledge and skills needed for employment in the private, commercial sector; (b) the developmental focus or perceived mandate at many institutions is narrow; and (c) the most effective universities have developed strong linkages with outside organizations including farmer organizations and ministries of agriculture, education, planning and finance. The study noted that agricultural universities worldwide are finding themselves in local and global environments which are changing rapidly; the universities must adapt appropriately and promptly. Recommendations included: (i) universities must adapt to their changing environment by emphasizing agricultural systems and adopting new methods of teaching, research and learning; (ii) universities must rethink 3 OED, India - Madhya Pradesh Agricultural Extension Project - Phase II (Cr. 1138-IN) and Andhra Pradesh Agricultural Extension Project (Cr. 1219-IN) Performance Audit Report (Draft), August 2, 1994. '4 OED, World Bank Assistance to Agricultural Higher Education 1964-1990, Report No. 10751, World Bank, Washington, June 18, 1992. '5 Richard Bawden and Lawrence Busch, 'Agricultural Universities for the Twenty-First Century", a paper prepared for USAID, Washington, 1988.  11 the ways in which they function so as to recognize impacts rather than outputs as the criteria of success; (iii) continuing education for faculty is essential if agricultural universities are to keep pace with the rapid changes in science and agriculture; (iv) universities should improve the monitoring and evaluation of their programs; and (v) universities must build constituent groups as a means of garnering political support and receiving feedback from university graduate employers. 1.21 Over the past 15 years, the Bank has been funding two National Agricultural Research Projects (NARP I (Cr. 855-IN) and II (Cr. 1631-IN)); the latter is still under implementation. Carried out by ICAR and the SAUs, these projects have aimed at establishing zonal research stations and strengthening a field problem-oriented approach to research. Another goal of the projects has been to bring about closer functional linkage between extension and research systems. Experience in implementing these projects shows that leadership from the ICAR system could be improved in promoting qualitative changes, and the SAUs in general have been slow to establish and operate new institutions and introduce improved methods of planning and implementation. However, wherever leadership of the SAUs has been good, project implementation has been better. The states participating in the proposed project have had good records under NARP I and II. A National Agricultural Technology Project is currently under preparation to: (a) improve the congruence between agricultural policy goals and overall resource allocation to research; (b) establish rational methods for agenda-setting, prioritization and resource deployment; (c) increase farmer participation and develop client orientation and accountability in technology generation and transfer processes; and (d) enhance skills and provide opportunities for creativity among research and extension staff. II. THE PROJECT A. Rationale for Bank Involvement 2.1 In 1991, GOI embarked on a program of stabilization and reform focused on the investment regime, trade policies, financial sector, taxation and public enterprise. The new strategy aims at reducing fiscal and balance of payments deficits, promoting rapid and sustainable growth in incomes and employment through a broad-based liberalization of the economy, and more effective and efficient public interventions to reduce poverty and to deepen India's human capital. The Bank's country assistance strategy for India is focused on supporting GOI's efforts to promote an enabling environment for broad-based, efficient, private sector-led growth while accelerating poverty alleviation and the development of human resources. An important element in this strategy is modernizing India's agricultural sector and increasing its growth. In addition to market reforms to improve the incentive framework for agriculture, this transformation must depend on institutional strengthening and improved resource management. The proposed project is consistent with these objectives by fostering policy and institutional reforms complemented by investments to upgrade the quality, management and use of the sector's most important input--human capital.  12 2.2 To date the Bank has made heavy investments in infrastructure and institution-building in Indian agriculture, often with mixed results. Despite substantial investment in training, these have often yielded returns below expectations due in part to poor human performance and management. The proposed project would begin to address this deficiency by adopting a more comprehensive approach to human capital formation, management and use. The Bank can play a catalytic role in: (a) encouraging a rejuvenation of the Indian agricultural education and in-service training systems--which have become tradition-bound and insular; (b) fostering comprehensive human resource development and management as mechanisms for growth; and (c) building consensus among suppliers of education and in-service training and "end-users" on priority actions needed. As planned, the project would be the first phase in a long-term program to improve the quality of agricultural human resources. The Bank is probably unique within the donor community in being able to provide the long-term support needed to ensure the success of this manpower development enterprise. B. Project Objectives and Approach 2.3 The project would introduce meaningful changes in the way the Center and the states develop and employ human resources in efforts to modernize the agricultural sector and achieve greater sectoral productivity. It would also encourage changes in investment priorities which would reap higher returns because of the policy and institutional reforms adopted. The project would begin a process of: (a) improving the quality and relevance of higher agricultural education and in-service training programs, and (b) strengthening the capacity of participating states to develop and manage agricultural human resources. The project is considered by GOI and the states as the first phase in a long-term program to improve agricultural human resource development. With a five-year time horizon, the project would be an aggregation of subprojects from the Center and three participating states (Andhra Pradesh, Haryana and Tamil Nadu), selected to demonstrate to other states the advantages of sound human resource generation and management. In total, four universities would participate in the project: Andhra Pradesh Agricultural University, Haryana Agricultural University, Tamil Nadu Agricultural University and Tamil Nadu Veterinary and Animal  13 Sciences University. A total of 14 state development departments involved in agriculture and agriculture-related fields would implement human resources development/management (HRD/HRM) activities under the project."' Because of the long-term nature of human resource development, it is expected that future projects would encompass additional states and ICAR deemed universities as well as first-project states as they move through progressive stages of HRD. Future projects would also continue to strengthen the Center's capability to establish and enforce norms and standards in agricultural education. C. Summary Description 2.4 The project would be implemented over a five-year period and would have four components as summarized below: (a) ICAR Strengthening. At the Center, the project would support the strengthening of ICAR's capacity to set, enforce and monitor compliance with norms and standards for agricultural education in the country. The project would finance specialist services, information systems, incremental staft', staft' training, computing facilities, new office accommodation, office equipment and related studies for ICAR(ED), and selective support for non-participating SAUs and ICAR deemed universities. (b) University Programs. At each of four participating SAUs, the project would foster a series of policy and institutional changes to improve the quality of higher agricultural education by focusing on student education, better faculty teaching skills and efficiency of university management. To complement the action matrix adopted by each university (Annex 3), the project would finance equipment needed for teaching programs and university maintenance, staff training, fellowships, related travel and subsistence, student welfare (e.g., 16 Andhra Pradesh: Agriculture Department Fisheries Department Horticulture Department Animal Husbandry Department Haryana: Agriculture Department Fisheries Department Horticulture Department Animal Husbandry Department Tamil Nadu: Agriculture Department Fisheries Department Horticulture Department Animal Husbandry Department Agricultural Engineering Department Forestry Department  14 recreation and health services), faculty exchanges, library modernization, computerization for teaching and university administration (record-keeping and fiscal management), specialist services and selected civil works. Each university has developed its own investment program to suit its unique requirements. In addition, each participating state would carry out a comprehensive study of the sources and uses of funds at its SAU(s) as regards higher agricultural education (para 2.11(d)). (c) In-Service Human Resources Development and Management.'7 The project would endeavor to: (i) improve the effectiveness of state agricultural employees by increasing the capacity of each participating state to carry out systematic HRD, (ii) enhance training quality, and (iii) establish a human resources management (HRM) approach to the direction and supervision of extension staff of participating departments. Technical assistance would be provided for introducing HRD/HRM techniques and developing the necessary systems and procedures to institutionalize HRM in each participating department. The project would also foster training of trainers from in-service institutes, field-testing of new courses, selective establishment/renovation of training centers and an adequate equipping of these centers for needs-based training programs. The project would provide for staff study visits and participation at professional seminars. (d) Manpower Needs Assessment. In the three project states, broad-based Manpower Advisory Councils (MACs) would be established to sponsor technically rigorous studies meant to provide decision-makers with sound data and advice on agricultural labor market requirements and trends on which to base manpower-related policy directives, budgeting and curriculum reform. The project would foster systematic data collection, analysis and discussion of labor market issues. The project would finance studies of agricultural manpower trends and requirements, specialist services and secretariat expenses for operating MACs. 7 HRD refers to the process of selecting, posting, training and rewarding employees. HRM refers to the systematic management of those employees in a manner which leads to maximum employee effectiveness. HRM includes matching employee skills with job needs, selection for training based on needs assessments, evaluation of training impact on employee performance, limiting transfers and identifying employees with potential for more responsibilities.  15 D. Detailed Features ICAR Strengthening (US$10.1 million)'8 2.5 As a long-term goal, the project would foster the establishment of an Agricultural Education Council (AEC) with statutory powers to set norms and standards in agricultural education and their implementation.'9 In the interim, the project would strengthen ICAR's Education Division (ICAR(ED') to carry out the functions envisaged for the AEC. The reorganization and staffing of the strengthened ICAR(ED) supported by the project would be consistent with those proposed for the eventual AEC. ICAR's initiatives under the project would include activities and investments needed to establish a capability to set, monitor and enforce norms and standards and to formalize a sound accreditation system regulating higher agricultural education nationwide. 2.6 Until an AEC with statutory powers is established, ICAR(ED) would be reorganized and strengthened as an interim measure. As an overarching policy framework for academic initiatives supported by the project, ICAR furnished a Statement of Agricultural Education Strategy acceptable to IDA as a condition of negotiations. This statement was accompanied by an agreed action matrix for ICAR improvements supported under the project (Annex 3). As a condition of negotiations, each university and state participating in the project signed an MOU with ICAR agreeing to abide by .hie norms and standards set by ICAR until the AEC comes into existence. These MOUs and common SAU action matrix are given in Annex 3. The project would strengthen ICAR(ED) to carry out its enhanced role. It would also support measures to expand professional contacts with the global scientific community and stimulate similar contacts across states within India. 2.7 Norms and Standards. ICAR(ED) would set up an independent Accreditation Board to: (a) establish a national course classification, length, standard and nomenclature to be used by all SAUs delivering agricultural programs; and (b) evaluate all existing programs to determine standards and to identify deficiencies.20 Proposed programs would be evaluated prior to being offered. Under the proposed system, a course could not be conducted until it was accredited by the Board, which should be based on proper assessment of demand for the program, graduate employment prospects, compliance with set standards and availability of adequate resources--financial, physical and human. ICAR(ED), and later the AEC, would ensure SAU quality through both standard-setting and funding roles, and would be able to require that the respective SAUs, and their state governments, provide the minimum staffing, 18 Base costs. 19 Similar councils exist in India to set and maintain standards in medical, veterinary and technical education. 20 While the Accreditation Board would focus principally on SAUs, universities outside the SAU system could apply for such accreditation for their programs to receive appropriate recognition.  16 f.acilities, equipment and other resources to enable them to meet the required academic standards as determined by the Board (para 3.4). 2.8 Under the project, ICAR would also set national norms covering: (a) subjects for entry into SAUs, (b) undergraduate teaching, (c) selecting faculty for postgraduate teaching, (d) teacher assessment, (e) entry requirements for M.Sc. and Ph.D. studies, (f) examination systemiis, and (g) establishing Centers of Excellence in teaching. All-India examinations woultd be established for junior fellowships and postgraduate selection. The project would finance specialist services to assist ICAR in formulating sound norms and standards. 2.9 National Integration and International Linkage. To foster the introduction of sabbatical leave by core teaching staff, ICAR would provide honoraria (including housing and medical allowances) and cover travel expenses to sabbatical assignments. It would encourage senior education managers to make short-term study visits within India and abroad to observe good management and delivery of education programs. The project would encourage participation of teachers/scientists in conferences/symposia abroad and in India. ICAR(ED) wouldl also promote and coordinate inter-institutional linkages between SAUs and foreign ulliversities and institutes designed to broaden exposure of Indian universities to advances in educational methodologies and scientific knowledge. It would be constructive if bilateral donors encouraged their countries' educational institutions to forge professional contacts with Inidian agricultural universities to enhance the relevance and quality of their agricultural edLucation and research programs.2' 2.10 Institution-Building. ICAR(ED) would spearhead an initiative to establish the AEC throughl consultations with both the states and the Center. It would conduct and commission speciali.zed studies of labor market requirements and trends in the agricultural sector and provide assessment and advice to GOI on such subjects. ICAR(ED) would build a national agricultural information system enabling nationwide informational networking. It would also rcview SAUs' progress in meeting ICAR norms and standards in agricultural education. ICAR(ED) would also review project implementation progress and prepare future HRD pro.jects. University Programs (US$41.8 million) 2.11 The project would support a range of policy and institutional changes as well as complementary investments meant to: (a) enhance teaching standards through staff imnprovement; (b) upgrade student education; and (c) improve university administration. As a condition of negotiations, each of the participating states furnished to IDA a confirmation letter stating that its university(ies) included in the project will implement policy and institLitionial improvements according to an agreed action matrix (Annex 3). 21 Bilateral assistance could offer matching funds to its home universities to enter into such arrangements. This matching requirement should encourage a university's commitment to multi-year programs of high quality Support.  17 (a) Teaching Quality Enhancement. Under the project a number of important actions would be carried out to raise teaching quality. Teachers would be provided with orientation and periodic refresher training on teaching technology, technical subjects, management and administration, all as part of integrated, career-long training developed for staff. Participating universities would establish educational technology cells to review, plan and develop educational systems and programs. In consultation with ICAR, they would also implement systems of teacher assessment, including evaluations of teachers and courses by x1udents Participating institutions would develop teaching programs in specialized fields in accordance with their respective comparative advantages. The project would finance selected fellowships for Ph.D. studies abroad and short- to medium-term visits to participating universities by foreign scientists and teachers with specific and special skills to conduct courses and provide training in management as well as technical fields. To expose teachers to modern educational methods and systems, senior teachers and educational managers would be encouraged to make short overseas visits to examine alternative educational methods and systems. To combat academic inbreeding, participating universities would recruit teachers on an All-India basis. To stimulate global linkage and interaction of university faculty, the project would foster inter-institutional cooperative arrangements and staff exchanges with overseas universities and institutions. University staff would be encouraged to take consultancies with industries and other institutions for exposure to practical problems and the wider sectoral community. Teachers would be given opportunities to take sabbatical leave at other universities within the country. Postgraduate teachers would be encouraged to contribute to undergraduate courses. To reduce dislocations from the present short-term rotational system of staff among teaching, research and extension support, good teachers would be able to remain in teaching for at least five years. The number of core teaching staff would be fixed according to norms to be established by ICAR. Postgraduate teachers would be selected based on norms set by ICAR. (b) Student Education. The project would foster the production of graduates more work-ready and job-compatible. This improvement in turn would eventually lead to decreases in remedial induction and in-service training by both the public and private sectors (para 1.17). Curricula would be assessed for relevance and revised as appropriate. This assessment would use data and advice received from manpower assessments sponsored by MACs. Special agribusiness programs would be developed, and students would be encouraged to gain entrepreneurial skills though attachments to local industries. Curricula would also be enhanced to provide better hands-on practicals, including strengthened village visit programs. Universities would strive to improve the quality of seminars, term papers and group discussions to develop students'  18 analytical skills. To reduce institutional insularity, at least 15% of postgraduate seats would be reserved for All-India students. For more selection transparency, universities would publish entry requirements for M.Sc. and Ph.D. programs. They would conduct entrance examinations for applicants, and in states where there is more than one SAU, would hold a common entrance examination. Periodic student examinations would be conducted according to norms provided by ICAR. Learning facilities (e.g., teaching laboratories, teaching farms, computer laboratories, library facilities, classrooms) would be upgraded and ancillary facilities (hostels, recreation, dispensaries, cafeterias) improved; in particular, additional accommodation would be provided for women students. Universities would develop on-line library databases as part of a national information system/database sponsored by ICAR. They would also enhance CD ROM capability to access the international body of technical literature. Participating universities would establish or strengthen student counselling services and job placement centers. (c) University Administration. The project would foster the adoption of modern computer-based recording systems for university administration and fiscal management. Management information systems would be established, and inventory controls, accounts and budgets would be computer-based. Provision would be made under the project to finance incremental O&M of investments made. The project would encourage the establishment of necessary infrastructure to properly maintain the physical plant of the university. Central facilities would be set up at participating universities for instrument repair, maintenance and demonstration. Assurances were obtained at negotiations that participating states will provide adequate and earmarked funds to the SAUs on an annual basis to adequately maintain buildings, facilities and equipment. Specialist services would be provided under the project to modernize university administration, develop curricula, computerize records and improve financial management, including accounting and budgeting. (d) University Financing. Funds would be provided under the project for detailed studies of the SAUs' financial management systems related to education. These studies would entail examination of the sources and uses of funds, the extent to which staff expenditures are crowding out other, often more productive, expenditures for developmental programs and maintenance of physical plant, establishment of monitorable indicators of staff-related expenditures and concrete proposals regarding tuition levels and other internally generated income. These studies would be sponsored by the participating states during the two years of the project and would be carried out by qualified consultants. Upon completion of the studies, state and SAU representatives would meet with ICAR officials to prepare a common strategy for presentation at the Mid-Term Review (MTR) at which time an action plan would be agreed for implementation (para 3.11). Assurances were obtained  19 that subsequent to the completion of project-financed studies of higher agricultural education financial management, the participating states, SAUs and ICAR will develop by June 30, 1997 a common strategy for discussion at the MTR and at that time agree on an action plan for implementation. Draft terms-of-reference for these state-sponsored studies are given in Annex 4. (e) Greater Clientele Involvement. The project would encourage the university system to be more open and accountable to its sectoral clientele, to obtain feedback about the qua!i/v, preparedness of its graduates and relevance of its research products and to :-eceive advice regarding future directions for education and research thrusts. As public sector employment in agricultural extension has diminished and university graduates are increasingly forced to seek self/private sector employment, the SAU's clientele has changed accordingly, creating the need for stronger links particularly with agroindustrialists and other entrepreneurs, including self-employed graduates. The project would foster greater university-clientele linkages through the following initiatives: (i) Participating states and SAUs would expand the SAU Boards of Management to include more private sector representation. Such action will require modification to the Agricultural University Acts by the State Legislative Assemblies, and in the case of Haryana, India's President must approve (because of the two-state University Act). Assurances were obtained at negotiations that by December 31, 1995 the participating states and SAUs will expand the SAU Boards of Management to include at least two additional private representatives from the sector, preferably from agribusiness. Such expansion could be on a non-voting basis until the legal change is effected; (ii) Each SAU would establish in consultation with IDA a broad-based advisory group to meet at least once each year, made up of 25-30 private representatives from the agricultural sector, including NGOs, to obtain feedback about the preparedness of university graduates and relevance of its programs and to solicit advice about future directions for university activities. Assurances were gotten at negotiations that such advisory groups will be established in consultation with IDA and convened at least once each year starting on or before September 30, 1995; (iii) Prospective employers would be canvassed to ascertain skill requirements in graduates and actual employers would be surveyed to obtain information about the work-ready capability of new graduate- employees. SAU graduates would be surveyed through tracer studies  20 by the SAU guidance and placement cells strengthened or established under the project; (iv) Resource persons from the private sector would be engaged to provide specialist lectures to SAU students, and students would make class visits to private industry and be attached part-time for "hands-on" training and experience; (v) Private representatives from the agricultural sector would participate on each state-level MAC to debate manpower issues, sponsor related studies and advise the state government and the SAU(s) on labor market needs and trends; and (vi) Private representatives from the sector would participate on each state's committee to review and approve annual implementation plans for the project (para 2.21). (f) State Support. A special unit would be formed at one university per state to provide secretarial support for the state MAC responsible for advising on manpower needs assessment and development (para 2.16). Additionally, facilities would be provided to enable the participating universities to train state in-service personnel in specialized fields. 2.12 Panel of Experts. The Government of Switzerland through the Swiss Development Cooperation (SDC) has agreed to fund a Panel of Experts to advise ICAR and the SAUs as they carry out the project. This Panel would provide a core of technical excellence, continuity and objectivity over a three-year period. Specifically, Panel members would: (a) assist ICAR and the SAUs to develop a plan of action to assist them in their transitions to modern accreditation, educational and management systems; (b) conduct seminars on good education policy and university management practices; and (c) contribute assessments of project progress to facilitate the mid-term review which is meant to enable mid-course corrections to design and provide guidance for design of second-phase operation (para 3.11). In addition, short-term technical assistance would be provided as required over the three-year period to advise the ICAR and SAUs in special topics to be identified by the Panel. Such short-term assistance would also include seminars sponsored by panel members to stimulate discussion of key educational and administrative issues and present findings/recommendations. Panel members would not undertake any role or responsibility in project implementation. SDC would fund the Panel on a grant basis through its existing Special Studies Consultant Trust Fund administered by the Bank. This would be untied assistance. The total cost of the Panel and associated short-term assistance is estimated at US$575,000.22 Terms-of- Reference for the Panel are presented in Annex 5. 22 Costs of the Panel of Experts have not been included in project cost estimates.  21 In-Service Human Resources Development and Management (US$17.6 million) 2.13 The project would strive to improve the use and effectiveness of sectoral manpower in public service within the three participating states. To optimize the use of scarce resources for in-service training, three related activities would lay the foundation for systematic HRD, supported by quality training. These activities are described in greater detail in Annex 6. Staff recruited and trained would be carefully supervised and managed to ensure that the most appropriate candidates are matched to assignments, needs-based training supported, and performance evaluated. (a) Human Resources Development. Systematic HRD would include the development of capability to: (i) write accurate job descriptions, (ii) carry out skill and knowledge gap analysis, (iii) design training programs, (iv) contract for training delivery, (v) supervise training implementation, and (vi) evaluate training impact. The project would fund a long-term HRD specialist in each state who would plan and implement HRD capacity-building with the assistance of project-financed consultants. The latter would be hired on short- term bases as and when needed. The HRD specialist would be located in the Project Monitoring and Implementation Cell (PMIC) located in the office of the Secretary (Agriculture) of each state (para 3.6). This specialist would be responsible for designing HRD systems, managing training in each area of HRD and putting in place a sustainable system of HRD in each of the State Development Departments participating in the project. (b) Training of Trainers. Systematic HRD creates demand-driven training needs and requires flexible and responsive training agencies to satisfy identified requirements. The project would support the establishment of a cadre of skilled trainers capable of communicating well and imparting technically sound messages effectively. The HRD specialist in the PMIC would implement a practical program of training for trainers of state training institutes and centers through qualified companies or institutions. (c) Human Resources Management. A key to enhanced human performance is improved management. No amount of training, even good training, substitutes for good management. The project would finance training for managers to raise awareness of the importance of HRM and training in techniques of applying HRM. The core elements in managing human resources effectively include: (i) Selecting candidates for employment based on their compatibility with up-to-date job descriptions; (ii) Appointing candidates to jobs where their skills can be used best;  22 (iii) Assessing employees in terms of performance and where gaps in knowledge and skill exist, providing appropriate training; (iv) Assessing training in terms of post-training job performance; (v) Keeping employees in given posts for sufficiently long periods to enable them to develop expertise and contribute effectively;23 and (vi) Identifying employees with potential and encouraging them to take additional responsibility and receive appropriate training. 2.14 HRD, HRM and quality training depend for their effectiveness on adequate training infrastructure. The project would support the establishment, expansion and improvement of training facilities and the purchase of equipment, audiovisuals, models and other teaching aids, and training consumables. Under the project six new training centers would be established, and existing centers would be renovated. It would also foster professional contacts within and outside the country by funding attendance at professional seminars/symposia and visits to centers of excellence. Manpower Needs Assessment (US$0.3 million) 2.15 Currently no mechanism exists either in the states or at the Center to systematically analyze labor market requirements and trends in the agricultural sector. In addition, no forum exists to enable a dialogue among the diverse sectoral representatives regarding professional requirements and needed directions for manpower development. The project would encourage both rigorous analysis (i.e., labor market intelligence) and broad-based dialogue on manpower issues. It would promote the establishment of state-level Manpower Advisory Councils (MACs) to sponsor independent studies of labor market requirements and trends, develop state-specific agricultural manpower databases, discuss manpower issues and constraints and make recommendations to state governments and universities on needed directions in manpower-related policies and development. A principal focal area for the MACs would be analyses of state agricultural labor markets, based on emerging technologies and growth areas for the future.24 State-derived data would flow to the enhanced ICAR(ED)'s Human Resources Development Section which would be responsible for studving sectoral manpower issues at the Center (para 3.3). 23 In agriculture, the minimum period is normally five years during which a person is likely to experience good and bad crop seasons, understand the specific nature of the area, follow through on interventions, establish client trust and gain confidence as a professional. 24 A recommended guide to the theoretical justification for and practical implementation of such studies is: John Middleton, Adrian Ziderman and Arvil Van Adams, Skills for Productivity: Vocational Education tand Training in Developing Countries, Oxford University Press, New York, 1993.  23 2.16 Each state government would establish by executive order an MAC (para 3.7). The MAC would organize studies through independent consultants and submit reports to the state government. On the basis of study results and recommendations from the MAC, the state government would formulate action plans, issue policy directives and allocate resources. Additionally, thc SAUs would base curriculum revisions on, and adjust student intake according to, study results and MAC recommendations. While formal studies and surveys would be conducted approximately every three years, special studies on specific topics would be carried out as required. State action plans emanating from the studies would be revised annually. The MAC would be supported by a secretarial unit located at an SAU. The project would finance manpower-related studies sponsored by the MACs, publication of their recommendations and the associated operating costs of secretarial units. E. Project Costs and Financing Project Cost Estimates 2.17 Total project costs are estimated at US$74.2 million (Rs. 2,759.7 million) including US$8. 1 million (Rs. 297 million) in duties and taxes. Of this total, 50% (US$37. 1 million) are foreign exchange costs. Investment costs and recurrent costs amount to 80% and 20% of base costs, respectively. Incremental recurrent costs would include operation and maintenance of civil works, vehicles and equipment; incremental salaries; and laboratory and other educational/training consumables and office supplies and utilities. The base costs are those obtained at the time of appraisal (August 1994) and were adjusted for inflation to the time of negotiations. Physical contingencies amount to 4% of base costs, and price contingencies, 2%. Price contingencies were added to the foreign exchange component at 1.5% for 1995, I .8'oi 14 1996. 2.6%(o for 1997 and 2.5% for subsequent years (calendar year basis). For local costs, price contingencies were added at 9.0% for 1995, 8.5% for 1996, 8.0% for 1997, 7.0% for 1998, and 6.0% for subsequent years (calendar year basis).25 2.18 The table below presents a summary of project costs by component. Additional summary tables of project costs by year, by component and by expenditure account are presented in Annex 7. 25 Source: World Bank Guidelines for India as of January il, 1995. The estimates for international inflation are CoJISiS,fl[ t\it \ih the 13atlk's latest G-5 MUV Index, which is updated periodically.  24 Project Cost Summary Project Component Local | Foreign Total Foreign I____________ ____ _ 0 Exchange ------(US$ mnillion) (%) ICAR Strengthening 4.8 5.3 10.1 52 University Programs 18.0 23.8 41.8 57 In-Service HRD/HRM 11.5 6.1 17.6 35 Manpower Needs Assessment 0.3 0.0 0.3 Total Baseline Costs 34.6 35.2 69.8 50 Physical Contingencies 2.6 0.4 3.0 15 Price Contingencies a/ -0. 1 1.5 1.4 60 TOTAL PROJECT COSTS26 37.1 37.1 74.2 50 a/ Includes foreign exchange contingency for projected changes in the value of the Indian rupee vis-a-vis the US dollar. It is assumed that because of the large capital inflows India is currently experiencing, there will be some real exchange rate appreciation in the early phase of the project. Proposed Financing Plan 2.19 The proposed IDA Credit of US$59.5 million equivalent would finance 90% of total project costs, net of taxes, or 80% of total project costs, including taxes. The Credit would finance 100% of the direct and indirect foreign exchange costs and 78% of local costs, net of taxes and duties. GOI and the three states would finance the US$8.1 million of estimated taxes and duties. IDA would fund an average of about 65% of incremental recurrent costs, which amount to US$14.6 million (excluding taxes and duties) over the five-year period. There would be a phased increase in the contributions of GOI and the states to cover incremental recurrent costs: IDA would finance 90% during the first year of the project, but this contribution would decline to 50% by the fifth year. Retroactive financing totalling SDR 1.0 million (US$1.47 million equivalent) would be permitted for procurement services, off- the-shelf purchases of equipment and small civil works to be done through force account. The financing plan below presents the IDA, GOI and state contributions to the project. 26 Including taxes and duties of US$ 8.1 million equivalent.  25 Proposed Financing Plan by Foreign Exchange and Local Costs Local | Foreign Total ------(US$ million)---------- IDA 22.4 37. 1 59.5 GOI 1.9 0.0 1.9 GOAP 5.2 0.0 5.2 GOH 3.0 0.0 3.0 GOTN 4.6 0.0 4.6 Totals 137.1 37.1 74.2 2.20 Assurances were obtained at negotiations that GOI will make Credit funds available to ICAR and participating states according to its standard arrangements for developmental assistance to central agencies and the states. All ICAR(ED) activities would be funded through ICAR's budget. ICAR's budget would be approved as part of the Ministry of Agriculture's overall budget on an annual basis by a vote of the Parliament. Assurances were obtained that an annual implementation plan for the ICAR component of the project acceptable to IDA would be approved by a committee consisting of the ICAR Director- General, Deputy Director-General (ED) and the FA by April 30 of each year starting in 1996. The implementation plan for 1995 would be approved in this way not later than May 31, 1995. Assurances were also obtained that the ICAR Deputy Director-General (ED) would be empowered to utilize project funds once the annual implementation plan and budget for the ICAR component are approved without recourse to item sanction from ICAR's Financial Advisor (FA). 2.21 An understanding was reached at negotiations that GOI will release in advance those funds necessary for about four months of anticipated project expenditures to GOAP, GOH and GOTN, subject to periodic adjustment of such advances. Another understanding was reached that, upon receipt of these funds from GOI, the state governments will transfer the funds, together with their own quarterly allocations for the project, to agencies responsible for project implementation, to be used exclusively for eligible expenditures under the project. Project activities of each participating state would be funded out of its budget. The heads of development departments would follow the established budgetary procedures of their state for project activities. Expenditures of the university would be governed by established SAU budgetary procedures and would be regulated on the basis of an approved state annual implementation plan. Assurances were obtained that by April 30 of each year starting in 1996, an annual plan for the State acceptable to IDA, including the participating universities, development departments and MAC, would be approved by a state-level committee consisting  26 of the Secretaries of Agriculture and Finance, the VCs of participating universities, the heads of participating development departments and four eminent persons nominated by the Government representing education and agroindustries. The implementation plan for 1995 would be approved in this way not later than May 31, 1995. F. Procurement 2.22 Civil Works (US$12.86 million equivalent). Works would be procured following Local Competitive Bidding (LCB) or Force Account procedures as specified below: (a) LCB. Civil works in the project would consist of construction of several training institutes with hostels and residential quarters and renovation and upgrading of existing buildings. Works valued at US$11.2 million equivalent would be procured under contracts awarded on the basis of Local Competitive Bidding (LCB) procedures acceptable to IDA. The justification for proposed LCB for civil works is that they consist of rehabilitation and modernization of existing buildings or the construction of new buildings in widely scattered locations spread over three states, four universities with multiple campuses and ICAR during the first three years of the project. The works would be grouped together into convenient packages for bidding, but the largest contract is likely to be less than US$1.4 m;llion equivalent. Therefore, it is unlikely that foreign firms would find such contracts attractive. Nevertheless, bids from foreign contractors would not be precluded. Detailed design of the works with specifications and bills of qualities would be completed before negotiations for the prior-review packages to be awarded in the first two years of the project. These would be reviewed by the Bank's New Delhi Office (NDO) technical staff, and the commercial conditions, by the procurement staff of NDO. For other contracts, detailed design would be completed prior to invitations to bid. Contracts would be entered into using Standard Bidding Documents and following procedures acceptable to IDA. (b) Force Account. Force Account would be used for all small civil works valued at US$20,000 equivalent or less, up to an aggregate amount of US$1.66 million equivalent, and would be carried out by the state governments, ICAR and participating universities or let out on the basis of invited quotations from three qualified contractors. These works are not suitable for competitive bidding due to the small amounts involved. Monitoring of works carried out under Force Account would be done under procedures acceptable to IDA. Materials for works carried out under Force Account valued at an aggregate of US$0.9 million equivalent would be procured following Local Shopping procedures acceptable to IDA. 2.23 Goods, Equipment and Furniture (US$23.67 million). Goods--in particular, laboratory and other scientific equipment and computers--would be procured using  27 International Competitive Bidding (ICB) procedures. However, equipment estimated to cost less than US$200,000, up to an aggregate of US$3.9 million equivalent, would be procured using LCB procedures. Standard Bidding Documents and procedures acceptable to IDA would be used for ICB and LCB procurement. Small items of equipment and furniture would be procured by the development departments of the three states, four universities and ICAR in small lots over the five-year project period. Individual contracts are not expected to exceed US$25,000 and as such, would be procured using Local or International Shopping procedures satisfactory to IDA, up to an aggregate amount of US$6.04 million equivalent. Rate contracts of Directorate General of Supplies and Disposal (DGS&D), New Delhi, would only be acceptable as a substitute for procurement under Local Shopping. Books, periodicals, proprietary equipment/software and spare parts compatible with existing equipment valued at about US$2.18 million would be procured under Direct Contracting procedures. Livestock valued at US$0. 15 million would be procured following the usual government procedures. 2.24 Vehicles (US$1.48 million). Vehicles for the project would consist of four-wheel drive vehicles, cars, light trucks, min-buses and ambulances. The requirement of vehicles covers the fourteen departments of the three states, four universities and ICAR(ED), is spread over the project period and thus would not be amenable to central and lumped procurement. Individual contracts are not likely to be more than US$100,000. Hence, these would be procured using Local Shopping Procedures/DGS&D rate contracts. 2.25 Technical Assistance (Specialist Services, Studies and Training) (US$21.0 million). Technical assistance and consultancy services for studies estimated in the aggregate at US$3.73 million equivalent would be hired following procedures prescribed in "Guidelines: Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" (August 1981). Training, aggregating to an amount of US$17.26 million, would consist of placement and support of faculty members of four universities, training institutes of three state governments and ICAR for short- to long-duration courses in identified foreign and local institutions. 2.26 Operating/Recurrent Costs (US$14.64 million). These would include salaries, incremental operating and maintenance costs of vehicles and equipment, teaching consumables, office and computer supplies and running costs of the state-level HRD cells. 2.27 Contract Review. All civil works, goods and equipment contracts valued at US$200,000 equivalent and above, all computer contracts and the first three contracts of each state government, SAU and ICAR regardless of value, would be subject to prior review by IDA. In respect of consultancies, the model documents used for inviting proposals, terms-of-reference for all consultancies irrespective of value, all single source contracts regardless of value, all contracts for assignments of a critical nature and all contracts valued at US$100,000 or more awarded to firms and US$50,000 or more awarded to individuals would be subject to prior-review by IDA. This would result in prior-review of about 80% of all contracts awarded under ICB/LCB. Selective post-review of awarded contracts below the threshold levels would be carried out by visiting IDA review missions. Although this would  28 result in about 40% of project procurement being subject to review, the nature of the project with its emphasis on training and human resources development is such that a higher level of IDA review would not have a significant impact on procurement quality. 2.28 Procurement Information. Procurement information would be collected and recorded as follows: (a) Prompt reporting of contract award information by the PMICs under the state Secretaries (Agriculture), SAUs and ICAR; (b) Comprehensive semi-annual reports by the PMICs and ICAR to IDA indicating: (i) revised cost estimates for individual contracts and the total project; (ii) revised timing of the procurement actions including advertising, bidding, contract award and completion time for individual contracts; and (iii) compliance with aggregate limits on the specified methods of procurerrent; (c) a completion report by the Borrower within three months of the Credit closing date. 2.29 The proposed packages and the Procurement Schedules for the project are given in Annex 8. The project's Training Plan is presented in Annex 9. The project elements, their estimated costs and proposed methods of procurement are summarized below. Figures in parentheses are the respective amounts to be financed through the IDA Credit.  29 Summary of Proposed Procurement Arrangements Project Element Procurement Method Total Cost ICB I LCB I Other a/ - --------- (US$ million)-------------- Works Buildings, Water Supply 11.2 1.7 12.9 (7.8) (1. 1) (8.9) Goods Equipment and Furniture 11.4 3.9 6.0 21.3 (9.2) (3.1) (4.8) (17.1) Books, Periodicals, Proprietary 2.2 2.2 Equipment/Software and Other Print (1.8) (1.8) Material Livestock 0.2 0.2 (0.0) (0.0) Vehicles 1.5 1.5 (1.2) (1.2) Consultancies and Training Policy Support 0.5 0.5 (0.5) (0.5) Implementation Support 2.0 2.0 (2.0) (2.0) Capacity-Building 18.5 18.5 (18.5) (18.5) Miscellaneous Operating Costs 14.6 14.6 (9.5) (9.5) Building Rentals b/ 0.5 0.5 ((.0) (0.0) Total 11.4 15.1 47.7 74.2 (9.2) (10.9) (39.4) (59.5) a/ Other methods include torce account, prudent shopping, engagement ot consultants an training. b/ May include some renovation of existing ICAR(ED) facilities.  30 G. Disbursements 2.30 Disbursements under the Credit would be made as follows: (a) 75% on civil works for buildings; (b) 100% of foreign expenditures, 100% of local ex-factory costs or 80% of other local costs of equipment, furniture, vehicles, books, journals and proprietary equipment/software; (c) 100% expenditures on consultant services, training and studies; and (d) incremental operating costs on a declining basis as follows: 90% through December 31, 1997, 70% through December 31, 1999, and 50% thereafter (including incremental salaries and wages, operation and maintenance of equipment, vehicles and works, educational/training consumables, office supplies and utilities). 2.31 Disbursements against civil works on contracts exceeding US$200,000 equivalent and against equipment and supplies on contracts exceeding US$200,000 equivalent would be fully documented, as would disbursements for all consultant service contracts with firms over US$100,000 (US$50,000 for individual consultants), training and studies. Disbursements for other expenditures would be made against Statements of Expenditure (SOEs). Supporting documentation for SOEs would be retained by GOI and the states and be made available to IDA staff during supervision. Expenditures for project activities incurred after August 22, 1994 would be eligible for retroactive financing, up to a maximum of SDR 1.0 million (US$1.47 million equivalent). All contracts and items to be financed retroactively would be procured in a manner acceptable to the Association. Disbursements are projected over a period of six calendar years (seven IDA fiscal years), from June 1995 to December 2000. The disbursement schedule is presented in Annex 10. It is shorter than the historical disbursement profile for agricultural sector projects in India, but is considered realistic in view of the facts that all implementing agencies/states have past experience implementing Bank-supported projects and that an important project objective is to improve management capability. The project would be completed by June 30, 2000, and the Closing Date of the IDA Credit would be December 31, 2000. 2.32 To expedite project implementation and reduce the volume of withdrawal applications, a Special Account in US dollars would be established in the Reserve Bank of India with an authorized allocation of US$4.0 million, equivalent to an estimated three months average estimated disbursements.  31 H. Accounts and Audit 2.33 The Department of Agricultural Research and Education of the Ministry of Agriculture (DARE), ICAR(ED), the participating states and agricultural universities (including the Tamil Nadu Veterinary and Animal Sciences University) would establish separate accounts for the project. These accounts, together with supporting documentation, including evidence of contributions from GOI, participating states and IDA, would provide a comprehensive record of project financing and expenditures. Assurances were obtained at negotiations that these accounts and the Special Account will be maintained and audited annually according to appropriate auditing principles consistently applied by independent auditors acceptable to IDA, and that the auditor's report, which will include a separate statement on SOEs and certified copies of project accounts, will be submitted to IDA not later than nine months after the close of each fiscal year: (a) by the Department of Agricultural Research (DARE) for ICAR and its own expenditures, and (b) by each participating state for its own expenditures and those of the universities duly aggregated. III. PROJECT IMPLEMENTATION A. Organization and Management 3.1 Management Strategy. A Project Implementation Plan is presented in Annex I 1. The project would be implemented through the existing management system responsible for agricultural development and education at the national and state levels. The major implementors of the project would be ICAR(ED) at the national level, and the Secretaries (Agriculture), the participating agricultural universities and the Development Departments in the three states. DARE27 would be the nodal agency responsible for overall project coordination. While implemented within the existing state and national frameworks, the project would endeavor to improve the efficiency of the existing management systems by introducing requisite changes in structure and methods. Reforms would be mainly through policy and institutional revision, continuous upgrading of staff competence and introduction of improved management tools and facilities. A guiding principle would be the need to develop institutional capacity and efficiency for addressing present and emerging issues related to HRD in the sector. The projec. would be- liberal in providing support for improving the 27 DARE is the government department charged with development of agricultural research and education at the national level. It is part of the Ministry of Agriculture but with a separate Secretary answerable to the Minister of Agriculture. ICAR is an autonomous organization responsible for agricultural research and education and maintains a separate board to control its activities. The chief executive of ICAR, the Director-General (DG), is also the Secretary for DARE. All field operations in agricultural research and education are operated through ICAR with budgetary support provided through DARE. DARE functions as the representative of the Government, while ICAR, an autonomous body, operates with more flexibility and deals with technical issues with the support of DARE. A government directive can be issued by DARE, not by ICAR.  32 management skills of staff; it would be selective and restrictive in creating new staff positions. 3.2 Structure and Roles. At the national level, DARE, represented by its Secretary, would be the nodal agency responsible for coordinating project activities. All of its field responsibilities, such as supervision and technical assistance, would be done through the services of ICAR(ED). Until an AEC becomes 2 reality (para 2.5), ICAR(ED) would spearhead the effort to improve the quality of agricultural education: It would set and enforce norms and standards for accreditation and release of Central funds for SAUs; it would also foster faculty improvement, promote coordination among SAUs and assist in establishing contacts with institutions outside the country. ICAR(ED) would assess periodically the performance of the SAUs, promote infrastructural development, hire technical assistance, maintain a database on supply and demand for agricultural education and promote networking of information among institutions. The project would strengthen the ICAR(ED) as an interim measure and require MOUs between ICAR and participating universities/states to facilitate enforcement of standards. 3.3 The strengthened ICAR(ED) would be reorganized for the purpose of setting and maintaining standards, and continually improving higher agricultural education. The functional parts of the organization would be: (a) The Accreditation Board responsible for setting and monitoring standards (para 2.8); (b) The Education Planning and Development Section in charge of university development, information systems and education development; (c) The Human Resources Development Section responsible for SAU/ICAR staff development, manpower planning, examinations and awarding of scholarships and fellowships; and (d) The Administration and Finance Section responsible for the efficient and timely administration of the Education Division as well as the release of funds and auditing of account.,,. 3.4 Details of ICAR's role under the project and its proposed reorganization are given in Annex 2. The strengthened ICAR(ED) would require the employment of special talent and expertise to carry out proposed responsibilities. About thirteen higher-level positions would  33 be created for this purpose within the new organizational structure.28 It is crucial for the effective operation of the strengthened ICAR(ED)--as well as to the success of the project--that appropriately experienced and qualified professionals be appointed to newly created posts. It is important that such appointees have solid education credentials, together with stature, innovation and leadership qualities. Additionally, qualified appointees should remain in their jobs sufficiently long to obtain desired results. Terms-of-Reference satisfactory to IDA for the Accreditaticn Board were a condition of negotiations (Annex 3). Establishment of a Board satisfactory .:. IDA would be a condition of Credit effectiveness. Assurances were received at negotiatio:--i that the Accreditation Board and the sections of the strengthened ICAR(ED) will be staffed with senior persons acceptable to IDA and would be fully operational by September 30, 1995. 3.5 Participating universities would strive for academic excellence by enhancing the quality of graduates and improving faculty competence and university management. The VCs would be responsible for implementing project activities at participating universities. The Academic Council of each university would assist the VC in improving education quality under the project.29 In addition, to support the VC in implementing an academic improvement program, the project would foster the establishment of an education technology and development cell at each university. To improve the quality of performance, each participating university has endorsed a common action matrix providing the necessary framework for project implementation (Annex 3). 3.6 The Secretary (Agriculture) in each participating state would organize, coordinate and monitor project activities at the state-level. A small PMIC has been created and attached to the Secretary to manage these tasks. Main responsibilities at the state-level would be: (a) manpower management and adjusting public policies on investments in agricultural education and HRD/HRM; (b) monitoring project implementation and providing adequate and timely funding to support project activities; (c) approving annual state-level project implementation plans; (d) sponsoring a study of financial management at the state's SAU(s); (e) supporting necessary action to amend the state's University Act to expand private representation on the SAU Board(s) of Management; and (f) through the HRD specialist located in the PMIC, designing and coordinating HRD programs in the participating Development Departments. 28 ICAR(ED)'s total personnel would likely increase from 45 currently to 100 with the project, including about 13 new higher-level positions. This is not considered a large number taking into account the size of ICAR(ED)'s present and future tasks of setting standards, coordinating and monitoring 27 SAUs, four deemed universities and three Central universities, employing over 20,000 academic staff in more than 160 colleges. 29 In accordance with the statutes of the State Agricultural University Act, all academic matters require prior approvals by the Academic Council. Therefore, all project-supported changes related to academic matters would need Academic Council clearances.  34 3.7 The project would foster the establishment of two broad-based committees in each state: (a) A committee would be constituted for reviewing and approving annual implementation plans for project activities. It would consist of the Secretaries of Agriculture and Finance, the VCs of participating SAU(s), the heads of participating development departments and four eminent persons nominated by the government representing edu_altion and agroindustries (para 2.21); and (b) Each state government by executive order would set up a MAC. MACs would generally consist of 9-10 members made up of three from the state government (one from Finance, the Agricultural Production Commissioner and one other state official, preferably the Chief Secretary), three from the SAU (VC(s), Dean (Postgraduate) and Director of Research), three representing non- governmental agencies (NGOs) and trade interests, to be nominated by the government in consultation with the SAU VC(s), and one expert in manpower needs assessment.30 Assurances were obtained at negotiations that by June 30, 1995, an MAC acceptable to IDA will be established in each participating state. The MAC would be supported by a secretarial unit located at one SAU in each state. 3.8 The heads of Development Departments of the states would be responsible for all in- service training of staff. They would encourage all managers and supervisors to assume responsibility for systematically managing staff assigned to them with a view to enhancing each staff-member's effectiveness and improving the transfer of technology to farmers. Continuous support for HRD would also be required from the heads of the Development Departments who would encourage high quality, demand-driven and carefully evaluated in- service training based on regular needs-assessments. HRD cells in each of the participating departments would be set up for this purpose. The HRD specialist in the PMIC would coordinate the activities of these cells. 3.9 Project Supervision. Project s-.:pervision would be linked closely to project objectives and the annual implementat;ii plans of ICAR and the states (paras 2.20-2.21). It would involve monitoring of a .umbei of key inricators and assessing both quality and quantity aspects of project implementation and impact. Details on the timing of supervision missions and key skills which are likely to be needed for supervision are presented in Annex 12. There would be two missions during each year of the project; however, in the first year there would be an additional mission to provide assistance at the critical start-up phase. The main supervision mission would coincide with the review of annual plans for various project activities which would take place early in the last quarter of each year. The second annual mission would be in the second quarter of each year. The first mission would 30 State-specific composition of MACs w'u!;d vary.  35 focus on planning and funding issues, and the second would review field operations and address implementation issues and mutually agreed topics of special HRD interest. To the extent possible, a senior staff-member of the ICAR(ED) and a representative of the respective state government would participate on every mission. As part of its enhanced regulatory function, ICAR(ED) would carry out a separate review of SAU performance on an annual basis. Supervision would be facilitated in each of the states by specialized procurement cells or procurement agencies to assist with he procuring and supervising of works or with the acquisition of goods (Annex 8); 3.10 Monitoring and Evaluation. The ultimate goal of the project would be to improve agricultural performance by introducing institutional and managerial changes in manpower development and use. This goal would likely be realized well beyond the project's life. The project, however, would start long-term, broad-based HRD initiatives meant to launch a process of behavioral and institutional reform. During project implementation, two principal sets of indicators would be monitored: commitments and behavioral changes. Commitments of institutions and governments to HRD would be gauged by appointments of sound personnel, conducting of studies, allocations of resources, strengthening of agencies (structural apparatus), instituting of reforms and investments. Behavioral changes would be assessed by how well reforms are being implemented and incorporated into the management culture of each implementing agency. Project implementation progress would be monitored regularly by the PMIC in each of the states and the Education Planning and Development Section of ICAR(ED). Key monitorable indicators developed for the project are presented in Annex 12. In addition, ICAR would organize specific evaluation studies using specialists to assess the effectiveness of the policy and management changes supported under the project and their effectiveness for application to other states and universities in India. The project would provide funding support for these evaluation studies. The Panel of Experts (para 2.12) would offer periodic, in-depth evaluation of ICAR and SAU efforts to carry out project reforms. 3.11 Reporting, Mid-Term and Completion Reviews. Semi-annual reports would be submitted by the states' Secretaries of Agriculture and Deputy Director-General (ICAR(ED)) not later than April 30 and October 31 of each year. These reports would provide information on the physical and financial progress of the project for the periods April to September and October to March. Additionally, the states and ICAR would submit to IDA copies of their project annual implementation plans, component-wise budget provisions, procurement plans, staff training plans, and civil works plans by end-June of each year. It is expected that agencies/cells assisting with the procurement/supervision of works and goods would also contribute to status reporting (Annex 8). Assurances were obtained at negotiations that a joint mid-term review (MTR) will be held no later than December 31, 1997 involving DARE, ICAR, GOAP, GOH, GOTN and IDA. The MTR would enable mid-course corrections to improve project performance and give guidance for the design of the proposed second-phase project. A common strategy developed among the states, SAUs and ICAR on university financing based on state-specific studies would be presented and discussed at the MTR and an action plan for implementation would be agreed (para 2.1 1(d)). At the MTR the  36 Panel of Experts would provide assessment of implementation progress and recommend needed adjustments to education-related reform programs. 3.12 The Implementation Completion Report for the project would focus on the achievements of the project, its impact in relation to objectives and lessons learned for introducing changes in human resources development and management and in the national agricultural education system. This wc,u.d also be a joint exercise with the involvement of the implementing agencies, DARE and sDA following standard Bank guidelines for completion reporting. B. Project Benefits and Justification 3.13 Benefits. The project would support improved human resources development as a means of accelerating agricultural growth. By improving the quality and effectiveness of sectoral manpower, the project would protect and enhance the benefits derived from the considerable investments made and proposed in agricultural research, extension and other services. By strengthening the Center's capacity to set norms and standards in agricultural universities and to accredit such institutions rigorously, the project would foster a national upgrading in the quality of higher agricujltural education. Because of policy, administrative, pedagogic and infrastructural improvements made under the project, better quality graduates would be produced at SAUs more comoatible with labor market signals. The quality of teaching would improve at the SAUs as a result of staff training received under the project, improved access to worldwide scientific information and enhanced teaching resources and systematic teacher/course assessments. The basic quality of life on campus for both students and faculty would be enhanced through upgraded housing, recreational facilities and health services. A key benefit of the project would be the establishment of worldwide professional contacts in scientific fields and the creation of a new cadre of Indian educators/scientists which would have received exposure to education, education technology and scientific research abroad. Academic inbreeding of both faculty and students would also be curtailed. The project would foster greater interaction between the university and the outside community of entrepreneurs, government, farmers and NGOs. The management and administration of each participating university would become more efficient because of the policy changes made and the management infcrrnation system: int, duced. The project would begin a close examination of and improvement to financial management of higher agricultural education which could ultimately increase the chances for financial sustainability of the system. The project would initiate the establishment of a much-needed national agricultural information system complete with computerized on-line databases at university-level. 3.14 The project would improve management and operational performance of key agricultural institutions at the Center and state-level because of better, more efficient human resource management. In-service training would be strengthened and be made demand- driven. MACs would provide broad-based fora for substantive debate on agricultural human resources issues and for the formulation of reasoned advice to decision-makers. State policy-  37 makers and university administrators would have access to technically sound analyses of labor market trends on which to base policy, budgetary and academic planning. 3.15 Risks. As a long-term goal, the project would support the eventual establishment of an AEC to set norms and standards in higher agricultural education. AEC would have statutory powers to enforce thc,:e standards through its certification of SAUs and their courses and through their funding of educational programs at the universities. Such a statutory body would help ensure that uniform standards are established at the national level and enforced throughout the country, and given the statutory nature of the eventual council, that higher standards once achieved are more likely to be maintained. A risk exists that action to establish the AEC might experience delays because of the elaborate Center-state consultative and legislative process involved. The implementation of the project would not be adversely affected by delay in establishing the AEC since as an interim measure the project would achieve many of the beneficial reforms by implementing the project through a strengthened ICAR(ED). This division would be responsible for monitoring and shepherding the process of state and Central legislative action to establish the AEC. An important activity in IDA supervision would be to track progress in setting up the Council. 3.16 The project promotes important changes in the way the states develop and use human capital. Progress in implementing these changes might be slowed by the traditional inertia present in agricultural development departments and SAUs. This risk is reduced by the widespread institutional and political support in India for reforms built into this project, as evidenced by the production of sound project proposals by ICAR and the states. In addition, the mid-term review and other project fora, including supervision missions and Panel seminars, would provide opportunities to assess progress in introducing changes, share experiences and take corrective actions to attain objectives. The project's monitoring and evaluation system should provide a reliable, ongoing gauge of project progress in its various components and thus help guide timely and appropriate corrective actions. 3.17 Environmental Effects. SAUs have expressed interest in including environmental courses as integral components of curriculum development. Greater dialogue between the SAUs and the wider community, includir.g NGOs, would enable grassroots concerns for environmental issues to be raised for SA7J action, both in the classroom and in research. In the long-term, the project would foster the production of higher quality graduates more attuned to environmental choices and issues, better prepared to communicate technical/business options and opportunities to the farming community and better equipped to develop public policy and sound managerial decisions based on efficiency and environmental considerations. The project could have beneficial environmental impact by encouraging training for staff in public service in environmental topics for agriculture and around specific environmental issues (e.g., integrated pest management, environment impact studies, pesticide management and control, sustainable agricultural management). 3.18 Impact on Women. Women traditionally have entered home science programs at SAUs (which would be strengthened under the project as part of a general university  38 upgrading program), but in recent years have branched out into other disciplines formerly the preserves of male students. Over the last decade, enrollment of women has increased significantly to the point where female students often represent one-half of the student body, such as in Tamil Nadu; in some states like Haryana, however, female enrollment remains at less than 5%. Accommodations have not kept pace with the increase in enrollment by women, and existing hostel facilities are taxed severely. Lack of adequate facilities is often cited as a reason for limited levels of fem-