India - Vocational Training Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 19367 IMPLEMENTATION COMPLETION REPORT INDIA VOCATIONAL TRAINING PROJECT (CREDIT 2008-IN/LOAN 3045-IN) May 31, 1999 Education Sector Unit South Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Fiscal Year Exchange Rate Comment (April 1- March 31) (Indian rupee- Rs./US$) 1989-90 16.66 Official Rate 1990-91 17.95 diito 1991-92 24.52 ditto 1992-93 26.41 ditto 1993-94 31.36 Unified Rate 1994-95 31.40 ditto 1995-96 33.46 ditto 1996-97 34.45 ditto 1997-98 37.13 ditto 1998-99 42.03 ditto Note: A dual exchange rate system was created in March 1992, with a free market rate for about 60% of foreign exchange transactions at a rate of US$1.00 = Rs. 30.65. The exchange rate was reunified at the beginning of March 1993 at the free market rate. ABBREVIATIONS AND ACRONYMS ATI - Advanced Training Institute AVTS - Advanced Vocational Training System BTC - Basic Training Center CII - Confederation of Indian Industries CPIU - Central Project Implementation Unit CSTARI - Central Staff Training and Research Institute DEA - Department of Economic Affairs, Ministry of Finance DGET - Directorate General of Employment and Training DGS&D - Directorate General of Supplies and Disposal EFC - Expenditure Finance Committee GOI - Government of India IBRD - International Bank for Reconstruction and Development IDA - International Development Association IF - Internal Finance division, MOL ITI - Industrial Training Institute MOL - Ministry of Labour MRC - Media Resource Center NCVT - National Council of Vocational Training NTPC - National Thermal Power Corporation NVTI - National Vocational Training Institute for Women NVTS - National Vocational Training System RIC - Related Instruction Center RVTI - Regional Vocational Training Institute (for Women) SDR - Special Drawing Rights SPIU - State Project Implementation Unit UT - Union Territory VT - Vocational Training WITI - Industrial Training Institute for Women Vice President : Mieko Nishimizu Country Director : Edwin R. Lim Sector Manager : Ralph W. Harbison Team Leader : Edward H. Heneveld Task Leader : Shashi Kant Shrivastava  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT INDIA VOCATIONAL TRAINING PROJECT (Cr. 2008-IN/Ln. 3045-IN) TABLE OF CONTENTS PREFACE EVALUATION SUMMARY ........................................................... i PART I: PROJECT IMPLEMENTATION ASSESSMENT ..................... 1 A. Project Objectives ........................................................... 1 B. Achievement of Project Objectives .......................................... 2 C. Implementation Record ...................................................... .. 6 D. Project Sustainability ......................................................... . 9 E. Bank Performance ........................................................... 9 F. Borrower Performance ......................................................... 10 G. Assessment of Outcome ........................................................ 10 H. Future Operation ........................................................... 11 I. Key Lessons Leamed ........................................................... II PART 2: STATISTICAL TABLES ................................................... 13 LIST OF TABLES Table 1 Summary of Assessents .13 Table 2 Related Bank Loans/Credits .14 Table 3 Project Timetable .14 Table 4 Loan Disbursements: Cumulative Estimated and Actual 15 Table 5 Key Indicators for Project Implementation .16 Table 6 Key Indicators for Project Operation .17 Table 7 Major Studies Included in Project .20 Table 8A Project Costs .22 Table 8B Project Financing .22 Table 9 Economic Costs and Benefits .22 Table 10 Status of Legal Covenants .23 Table 11 Compliance with Operational Manual Statements .25 Table 12 Bank Resources: Staff Inputs .25 Table 13 Bank Resources: Missions .26 ANNEXES Annex A Mission's Aide Memoire Annex B Borrower's Contribution This document has a restricted distribution and may be used by recipients only in the performance of their of ficial duties. Its contents may not otherwise be disclosed without World Bank authorization.  IMPLEMENTATION COMPLETION REPORT INDIA VOCATIONAL TRAINING PROJECT (Cr. 2008 IN/Ln. 3045 IN) PREFACE This is the Implementation Completion Report for the Vocational Training Project in India for which IDA Credit 2008-IN in the amount of SDR 189.2 million (US$250.0 million equivalent) and IBRD Loan 3045-IN in the amount of US$30.0 million was approved on April 27, 1989 and made effective on August 8, 1989. Although approved originally as an IDA/IBRD blended project, the IBRD loan component was cancelled on December 5, 1991 at the Borrower's request. Four cancellations in December 1991, May 1993, March 1997 and November 1997 reduced the total IDA credit to SDR 101.3 million. Devaluation of the national currency by over 250 percent during the project period led to most of this cancellation. The Credit/Loan closed on December 31, 1998 instead of the original closing date of December 31, 1996. The project was allowed a one-year extension to reach a satisfactory level of success, making up for the time lost in start-up difficulties and due to suspension of disbursements for six months following the mid-term review. In December 1997, IDA agreed for another extension of one year, but only for three critical components of the project. The last disbursement took place on May 24, 1999 after which time a balance of SDR 12.98 million was cancelled. The ICR was prepared by Messrs. S. K. Shrivastava (Task Team Leader), Y. Saran (Consultant) and G. S. Chandran (Consultant) of Education Sector (SASED) of South Asia Region. The report was reviewed by Messrs. Heneveld (India Education Team Leader), Harbison (Sector Manager, SASED), Hinchliffe (SASED), Marke (LOAAS), Krishnan (PDAT/SACIF), Bhandari (Operations Advisor, SACIF) and Ms. Imamura (LEGSA). It was peer reviewed by Mr. Middleton (EACTF) and Mr. Cambridge (SAROQ). The draft was also seen by Mr. Colletta (SDVPC), who led the project preparation team in 1988-89, and Mr. Skolnik (Sector Manager, SASPH), who guided the project from 1989 to 1997 as Division Chief. The Borrower provided comments and conducted a separate evaluation of the project that is included, in an unedited form, in Annex B. Preparation of the ICR was begun during IDA's final supervision-cum-ICR mission, January 28 - February 11, 1999. It is based on the materials in the project files, missions observations from the field trips, discussions with teachers, students and employers, and discussions with various institutions including the Central Project Implementation Unit (CPIU), State Project Implementation Units (SPIUs), and officials of the Government of India and State Governments.  NIA VOCATIONAL TRAINING PROJECT (Cr. 2008-IN/Ln. 3045-IN) IMPLEMENTATION COMPLETION REPORT EVALUATION SUMMARY 1. Introduction: The project was the first IDAJIBRD assisted project in the Technical Education and Vocational Training sector in India. It was appraised in November 1988 and approved by the Board in April 1989. It became effective on August 8, 1989 and closed on December 31, 1998 after two extensions of the closing date. 2. Project Objectives: It supported the Ministry of Labour's (MOL) long-term program to modernize and restructure the National Vocational Training System (NVTS), and ultimately, improve the productivity of skilled and semi-skilled workers in the industrial and service sectors. The primary objectives of the project were to: (a) improve the quality and efficiency of craftsman and apprenticeship training; (b) expand and diversify the advanced training programs; and (c) strengthen the NVTS planning and management capacity. The participation of women was to be increased in all these programs. 3. The project was timely and its objectives were clear, relevant to MOL's long-term program to modernise and restructure NVTS, and rightly aimed at revamping the system. Objective-wise, the financial allocations at appraisal were - Modernising the Craftsman and Apprenticeship Training, 75.5%; Advanced Training Programs, 17.2%; and NVTS Planning and Management, 7.3% of the total project cost (including contingencies) of US$429.8 million (Rs. 6877.9 million). 4. This project had its origins in the World Bank's efforts in the late 1980s to enter into the Education sector in India. This first project, though rather ambitious and highly centralised with many associated problems, led to a series of Bank-assisted projects in technician education and primary education with very large investments. 5. Implementation Experience and Results: The project review reports indicate slow progress during the first four years of project implementation but significant improvement during later stages in all components implemented by the States. Finally, all States reached their physical targets, with minor shortcomings in Bihar, Haryana, Assam and West Bengal. The State components accounted for about 85% of the project investments. 6. The project complexity and over-centralisation resulted in co-ordination problems and delays. The large number of project components - about 20 - covering most central institutions and 565 Industrial Training Institutes (ITIs) in 28 States and Union Territories made the implementation difficult. Creation of minimum infrastructure in the project implementation units at the Central (CPIU) and State levels (SPIUs) took about two years. Problems in timely release of State share of funds and the central control exercised by the MOL, requiring States to seek frequent approvals, made the project implementation difficult. The MOL's Directorate General of  ii Employment and Training (DGET) -- responsible for oversight and the CPIU responsible for project implementation at national level - themselves faced a number of operational constraints (with no powers for financial approvals, creation of posts, or staff appointments) limiting their capacity to make timely implementation decisions resulted in delays, especially in the central components. These difficulties persisted and led to restructuring of the project and re-setting of targets in December 1996. 7. The Credit had to be extended twice by a total of two years. After the first extension to December 31, 1997, IDA agreed to extend the closing date by another year for three critical components - Modernisation of Training Equipment, Hi-Tech Training, and Establishment of Management Information System (MIS). For the remaining sixteen components, the project closed on December 31, 1997. 8. In spite of the many problems listed above, the project has made critical contribution to the future growth of NVTS in the following two areas: (a) a draft paper proposing new policy initiatives for vocational training has been prepared and reviewed by an Expert National Committee comprising representatives of all stakeholders. The proposals are awaiting final review by NCVT and would then be sent to the Union Cabinet. The new policy includes decentralization, involvement of industry in the management and financing of vocational training (VT), and flexibility in program design and delivery. This goes much beyond the anticipated scope of the Industry-Institute Cooperation proposed in the project and is likely to establish a lasting partnership with industry in the management and financing of VT; and (b) output from the new Women's Industrial Training Institutes (WITI) exceeded the target by 52% - reported output is about 24,300 during the project period against the target of 16,000. The training capacity for WITIs increased by 119% (from 20,000 to 43,800) and some States have started reservations for women in general ITIs also. The project has thus been successful in increasing the percentage of women enrollment in vocational training and this trend deserves all support of MOL and the State Governments. 9. With the exception of the following, all covenants have been complied with fully or in a manner acceptable to the Bank (Table 10): (a) there were substantial delays in staff appointment and utilisation of technical assistance; this led to suspension of disbursements during July 1994- January 1995; (b) there were four occasions when audit report submissions from some States were delayed resulting in temporary suspension of the SOE (statements of expenditure) procedure for disbursements for the whole project (Table 11); and (c) completion of four studies agreed during project negotiations were delayed by a few months. 10. The total project cost at appraisal was estimated as US$429.8 million (Rs. 6877.9 million, with base cost of Rs. 4907 million) of which the Bank was to finance SDR 189.2 million as IDA Credit and US$30 million as IBRD Loan; GOI was to finance the remainder of the project cost. The significant Rupee devaluation (by over 250% during the project) increased the proceeds from the Credit/Loan, which were partially offset by: (a) increased percentage of disbursements against all categories of expenditure, requested by the Borrower; (b) the cancellation of SDR 29.5 million and the entire IBRD loan of US$30 million in December 1991. In May 1993, another cancellation of SDR 35.7 million was made. After project restructuring, further cancellations of SDR 13 million in FY97 and SDR 9.7 million in FY98 were made at the request of the Borrower. The total Credit/Loan was thus adjusted from SDR 189.2 million plus US$30 million to only SDR 101.3 million in the IDA Credit. The final project cost was about US$163.5 million (about  iii Rs. 5330 million equivalent). Final disbursement took place on May 24, 1999 after which time a balance of US$17.468 million (SDR 12.98 million) was cancelled. 11. The Credit agreements were amended at the request of the Borrower four times during the project. These included: (i) revision in ceilings for civil works and prudent shopping (April 1991); (ii) revision in percentage of expenditure to be financed by IDA (Dec. 1991) (iii) restructuring - revision of project description (Schedule 2) (April 1997); (iv) minor amendment to Schedule 2 (paragraph 3b) on Hi-Tech Training (December 1997). 12. In physical terms, the project reached most of its targets in the State components (Details in Table 5). In the Central institutions, targets remain partially achieved. It resulted in establishment of 100 new ITIs for women; introduction of 487 new trades at 268 ITIs; partial modernization of 378 ITIs; creation of maintenance system in 19 States - each with a State level workshop and maintenance cells in selected ITIs; creation of 18 Basic Training Centers and 44 Related Instructional Centers which have trained over 95,000 industrial workers; and introduction of Advanced Training Programs and some Hi-Tech Training programs at selected ITIs and central institutions. Some 33,000 trainees (against the project target of 17,000) have undergone advanced vocational training. The curricula for most trades are revised and instructional material developed and distributed for a few popular trades. Most of some 480 constructions are completed; however, all five major constructions planned for central institutions were dropped during project restructuring due to delays. Against a target of 4200 new instructors, 3784 are appointed. In instructor training, the target is exceeded; some 10,000 instructors (against the original target of 5500) have undergone training varying from two weeks to a year. 13. Major outcomes of the project, as expressed by sample beneficiary groups of students, teachers and principals, and representatives from industry during three workshops conducted by the ICR mission are: modernization of workshops; systematic faculty development; and interaction between industry and ITIs. The beneficiaries desired that these should all be continued during the operational phase. 14. The services of professionals within and outside the NVTS were well utilised in monitoring, evaluation, and development of strategies. Some examples include: (a) a tracer study was completed by the Indian Statistical Institute in 1997 in the States of West Bengal, Tamil Nadu, Delhi, and Gujarat. This study confirmed gains in the external efficiency in comparison to non-project institutions; (b) an impact study, completed by the CPIU and SPIUs covering 7 States (Rajasthan, Maharashtra, Goa, Tamil Nadu, Karnataka, West Bengal, and Orissa), confirmed substantial internal efficiency gains in project institutions; and (c) in 1998, the DGET in close collaboration with the Confederation of Indian Industries (CII) assessed the curricula, facilities and the training process in 7 Northern and 4 Western States. This evaluation confirmed adequate use of modem equipment, closure of obsolete trades not needed by the labour market, and major gains in the percentage of equipment being operational. 15. The above-mentioned sample-studies showed: improvement in overall operational efficiency of project ITIs by 10%; improvement in pass- rate ranging between 6-20%; a decrease in drop-out rate by 3-20%; an increase in equipment being operational from a pre-project status of 50% to 92% at project closing; and employment rate of project ITI trainees improved from pre-project rate of 50% to about 65% at project closing. The employment rate of trainees from project ITIs was significantly better than those from other ITIs.  iv 16. Key factors which helped in project implementation were: (a) strong commitment and desire of concerned officials of GOI and many States to make a difference in the system; (b) appropriate leadership in many project institutions; (c) close interaction amongst States during joint reviews of all States by GOI and the Bank initiated from 1995; (d) significant involvement of industry in reviews and policy reform planning. Some key factors that affected project implementation adversely included: (a) lack of empowerment of DGET/CPIU/SPIUs and project institutions and over-centralisation; (b) non-familiarity with the Bank procedures and frequent changes in senior officials both in GOI and in the States; (c) delays in creation and filling of key posts; and (d) poor performance of construction agencies (State and Central Public works Departments) and central procurement agency/consultants (DGS&D and NTPC). 17. The MOL, DGET and State officials appreciate the Banks' performance in project preparation, and in supervision during the last 4 years. They feel that the Bank played a constructive role in identifying and addressing the implementation issues. The Bank, however, underestimated the issue of the project's complexity. Apparently, the appraisal process failed to identify the institutional and systemic weaknesses that delayed implementation for four years. It also did not attempt to suggest any alternative to the very complex internal project management and financing structure. The implementation problems that surfaced immediately after effectiveness were not foreseen. It is apparent that the project was prepared and appraised under extra-ordinary circumstances when India was facing a major financial crisis and the Bank wanted to respond quickly with a possibility of entry into the field of education and training in India. To a large extent, the Bank's decision to transfer the responsibility for project supervision to the New Delhi Office and to place a vocational/technical educator there mid-way through the project enhanced its capacity to respond to emerging problems and expeditious clearance of diverse procurement issues. 18. The DGET and the States are critical of the Bank on two counts: (a) the Bank's initial refusal to agree to extend the project when implementation had picked up momentum and then finally agreeing to give a one-year extension only two weeks before the closing date. This belated decision was made when States were winding up the SPIUs or the experienced senior staff were looking for other assignments. This slow down resulted in another one-year extension for some components; and (b) the Bank's interaction with the States and SPIUs was missing in the earlier stages (perhaps due to travel restrictions imposed by the Borrower) and could have accelerated progress as it did in the final 3-4 years. Overall, the project States and DGET considered the Bank's role to be highly professional, helpful and constructive 19. The Borrower's performance was deficient during the first four years and satisfactory in the later years. The Borrower's project preparation was effective with clearly defined objectives and programs. There were, however, noticeable mismatches between the Detailed Project Report (DPR) of MOL prepared in 1989 and the SAR/Credit Agreements. The Internal Finance treated the DPR attached to the EFC document with a defined total cost in Indian Rupees as a strict guide and did not allow flexibility. These led to different perceptions/interpretations between the Bank and the GOI during implementation that should have been resolved at the early stages of the project. 20. The project implementation staff in States and at the CPIU was professionally qualified, but lacked prior experience in project management and implementation of Bank projects with such a comprehensive and complex package of reforms. Project implementation suffered from frequent changes of the Director General of DGET and the senior State officials, from abnormal  v delays in creation of key additional staff positions, their selection and appointment, and from delays in Central approvals to schemes already agreed in the project. The changes in the Central Government and Governments in 28 State/ Union Territories added to delays in approvals and timely release of funds. However, despite all these factors the concerned officials at the Center and States ensured success of the project in large measure with their extra-ordinary efforts during the last three years of the project. 21. Assessment of Outcome: Assessment of the overall outcomes of the project is complex. If delays and cancellations are ignored, the project outcome for the State components covering 85% of project costs is satisfactory. In summary, the achievement of overall objectives is as follows: (a) the sectoral policy objectives were generally achieved. The reduction in staff vacancies, training of instructors, start of demand-driven courses in the States is close to targets. With the development of a revised policy framework, some important steps regarding governance and financing of VT are underway; (b) the Institutional Development objectives were partially achieved. Schemes such as Media Resource Centres, Trade Testing and Certification Cells, equipment maintenance system, and the MIS could take off only after long delays. Although most of these initiatives are in place, their continued effectiveness will only be known during the operational phase; (c) the Physical objectives were generally achieved in the States' schemes but only partially in the central schemes. Civil works, equipment procurement, training and recruitment of staff-all were successfully completed by the States whereas the schemes in the central sector were cancelled during restructuring due to land acquisition issues and significant staff vacancies; (d) Poverty reduction objective has been adequately achieved. Vocational Training is mostly availed of by the weaker sections of the society to improve their employment prospects and earning capacity. Introduction of new trades and the increase in output in numbers as well as enhancements in quality have contributed to poverty reduction; and (e) the gender concerns have been adequately addressed. Output from the NVTS in terms of number of women trained has exceeded the SAR targets by 52%. 22. Sustainability and Future Operations: The sustainability of most components of the project is likely. The MOL, as well as the States, strongly supports the view that a highly skilled technical workforce is necessary to maintain the country's competitiveness in the emerging global economy. All new ITIs and new trades will be supported fully by the States. Government of India is continuing the schemes of modernization, staff training, MIS, AVTS, and Hi-Tech training. It will take sometime before the new RVTIs and the Apex Hi-Tech Training Center are established as planned. Only the pilot scheme of training for self-employment may not continue in most places due to poor response. An operational plan with monitoring and impact indicators, acceptable to Bank, has been carefully prepared and summarized in Table 6. During the operational phase, adequate funds should be available to complete unfinished works and to continue quality improvement activities. 23. Recent efforts made by the MOL in improving governance and funding of training institutions to accelerate the quality improvement activities with the active participation from the industry have been successful in many States. Many new models have emerged resulting in a new draft policy for NVTS. Future support, if any, from the Bank, should focus on support to this new policy, which is now in the final stages of approval. 24. Key Lessons: Following is a summary of key lessons learned during this first Project in this sector in India:  vi (a) The project appraisal should have taken a closer look at the institutional capacity relative to project complexity and identified institutional and systemic weaknesses that delayed project implementation; (b) The EFC memo for such a comprehensive national project with interdependlent components should discourage selectivity in component approval by the MOL's Internal Finance during implementation. It should provide some flexibility during implementation and should also take into account normal price escalations and currency fluctuations, and should preferably be designated in SDRs. After approval of the EFC memo, further approvals of the project components should not be sought during the implementation stage; (c) The project could have achieved greater success with more decentralization and flexibility to States and ITIs in the selection of trades according to local needs, in the procurement of equipment, and in curriculum development; (d) In a national project with a high degree of complexity, participatory approaches during project preparation and implementation that involved States, ITIs and other professional institutions could have improved project ownership and outcomes; (e) Frequent changes in the senior implementation staff should be avoided. Technical assistance, especially training, should be provided to project implementation staff in Bank procurement whenever a first project is approved in a sector; (f) To avoid delays in project implementation, land acquisition and architectural design of buildings should start before negotiations. Any works not coming to the bidding stage within six months of the agreed schedule should be cancelled along with the other relevant components; and (g) A field-based supervision with close interaction with the client and project beneficiaries proved to be very effective and economical.  INDIA VOCATIONAL TRAINING PROJECT (Cr. 2008-/Ln. 3045-IN) IMPLEMENTATION COMPLETION REPORT PART I - PROJECT IMPLEMENTATION ASSESSMENT A. PROJECT OBJECTIVES 1. Background: The project was the first IDA/IBRD-assisted project in the Technical Education and Vocational Training sector in India. It supported the Ministry of Labour's (MOL) long-term program to modernize and restructure the National Vocational Training System (NVTS). During the late- 1980 when this project was prepared, substantial policy reforms were introduced by the Government of India (GOI) which resulted in higher growth rates (9% between 1985-88) in the manufacturing sector. Continued support of this policy required more relevant training for industrial workers so as not to constrain economic growth. To ensure that manufacturing and service sectors fulfill their expected role of generating higher incomes and reducing poverty, overall efficiency of the training system and the quality of education and training that workers bring to the job, both in organized and unorganized sectors, had to be improved. Main weaknesses were identified by DGET as: (a) the need to modernize/upgrade equipment, outdated curricula, shortage and limited skills of instructor and instructional resources to satisfy changing needs of the growing industrial sector; (b) weaknesses in NVTS to cope with trade testing to ensure standardization and quality control, inappropriate planning, management and monitoring which effects efficiency; (c) poor participation of women in the industrial labor force; (d) inadequate opportunities for organized employment of the workers from poor socio- economic background; and (e) lack of training which supports self employment of graduates. 2. To address these issues the MOL sought World Bank financing through the Department of Economic Affairs (DEA) of Government of India. A project proposal prepared by DGET with assistance from ILO and UNDP in 1983 was substantially modified and submitted to the Bank. The project was appraised in November 1988, approved by the Board in April 1989, and became effective on August 8, 1989. It closed on December 31, 1998 after two extensions of the closing date. 3. Project Objectives: The primary objectives of the project were to: (a) improve the quality and efficiency of basic craftsmen and apprenticeship training; (b) expand and diversify the advanced training programs; and (c) strengthen the NVTS planning and managerial capacity. The participation of women was to be increased in all these programs. 4. The quality improvement objective of craftsman and apprenticeship training was to be achieved through: (a) modernising workshops in Industrial Training Institutes (ITIs) established before 1969; (b) extending trade coverage in the ITIs, National Apprenticeship Training Scheme, Basic Training Centres (BTCs) and Related Training Centres (RTCs); (c) provision of audio- visual aids and strengthening instructor training programs; (d) establishing an equipment maintenance system; (e) introduction of post-ITI courses on a pilot basis; and (f) increasing women's access to training in modern sector trades by constructing new ITIs for women and  2 adding women's wings in existing ITIs; establishing new Regional Vocational Training Institutes (RVTIs) for women; and introduction of new trades in existing ITIs for women; and (g) strengthening the curriculum and methods development wing of NVTI. 5. The Expansion of Advanced Training Programs was to be achieved by: (a) introducing new trades at advanced skill levels in existing Regional Vocational Training Institutes (RVTIs), and National Vocational Training Institute (NVTI); (b) upgrading facilities at selected ITIs and existing Advanced Training Institutes (ATIs) for Advanced Vocational Training (AVTS); and (c) and establishing a new Hi-Tech Training Centre for electronics, computers and robotics. 6. The objective of Improving NVTS Management and Planning at DGET and corresponding State Directorates of Training was to be achieved through: (a) Improving NVTS Planning and Management capability; (b) strengthening of NVTS monitoring and evaluat;ion system; (c) improving the trade testing, certification and documentation processes; (d) strengthening DGET's Women VT unit; and (e) reorienting CSTARI to improve supervisory training and research in vocational training. 7. The project was timely and its objectives were clear, relevant to MOL's long term program to modemise and restructure NVTS and rightly aimed at revamping the system. Objective-wise the financial allocations at appraisal were - Modernizing the Craftsman and Apprenticeship Training, 75.5%; Advanced Training Programs, 17.2%; and NVTS Planning and Management, 7.3% of the total project cost (including contingencies) of US$429.8 million (Rs. 6877.9 million). 8. This project had its origins in the World Bank's efforts to enter into education in India. This first project, though rather ambitious and highly centralised with many associated problems, led to a series of Bank-assisted projects in technician education and primary education with very large investments. B. ACHIEVEMENT OF PROJECT OBJECTIVES 9. The project review reports indicate slow progress during the first four years of project implementation but significant improvement during later stages in all components implemented by the States. Finally, all States reached their physical targets, with minor shortcomings in Bihar, Haryana, Assam and West Bengal. All schemes except Modernisation of Equipment, Hi-Tech Training, MIS and Technical Assistance closed on December 31, 1997. However, progress in closed components (with Borrower inputs only) was regularly reported in reviews during the extended period for remaining components. Component-wise status is summarised below: OBJECTIVE 1: Quality Improvement of Craftsman and Apprenticeship Programs 10. The status of achievement of Quality improvement Objective has been satisfactory. Sample tracer studies co-ordinated by CSTARI and impact studies conducted in seven States (Goa, Kamataka, Maharashtra, Orissa, Rajasthan, Tamil Nadu, and West Bengal) provide evidence of quality improvement. However, due to delays in equipment procurement and installation, and teacher recruitment and training, the full impact on quality of training is yet to be assessed. The progress is as follows:  3 (a) Modernization of Equipment in existing ITIs: Against the revised allocation of Rs. 2873 million (appraisal estimate - Rs. 1590 million) for equipment, about Rs. 2500 million were utilized to replace obsolete equipment in 378 ITIs. While the States of Maharashtra, Rajasthan, MP and Orissa exceeded the targets, some States (AP, Bihar, UP) could not take advantage of additional allocations. (b) Introduction of New Trades: The targets for expanding the training capacity have been met with the introduction of 370 (of 376) new trades in 204 ITIs and to date some 28,000 students have completed their training in the new trades. The only shortages are in Assam and West Bengal, which plan to start new programs by end- 1999. (c) AV Aids and Media Resource Centers (MRCs): 387 ITIs have been provided with AV equipment. After considerable delays, 10 MRCs were established - 7 at ATIs, one each at a CTI, an NVTI, and an RVTI. About 80% equipment has been procured and is in use. These MRCs were to train 3200 ITI instructors in upgrading instructional capabilities of trainers in the use and development of instructional software through courses of 6. weeks duration. Because of the delays, the States utilized services of MRCs at ATIs and State institutions and trained some 6200 staff through courses of only 2 weeks duration with the Bank approval. Most States exceeded the revised targets. The major shortfalls were in Kerala (22%) and Assam (21.5%), due to restrictions on travel outside the State. Field visits and discussions with the instructors and the students confirmed use of AV equipment on a limited scale for enhancing the quality of instruction. (d) Equipment Maintenance System: To develop equipment maintenance capability in the NVTS, 6 Regional Service Centers, 19 Equipment maintenance Workshops in different States and 93 maintenance Cells (of 100 planned) have been established. Four Cells in West Bengal will be operational soon. Uttar Pradesh and J & K did not establish 3 Cells. All maintenance staff are trained. A study of 35 ITIs in 7 States commissioned by the DGET concluded that percentage of machines in working condition has increased from a pre-project status of 50% to 92% at project closing. (e) Post-ITI Courses for self-employment: Facing operational difficulties and lack of response from ITI trainees, the scope of this pilot scheme was scaled back after a study, in 1995, to 41 centers from the appraisal target of 100. Finally, 36 ITIs in 11 States have started these programs and trained some 1200 students during the life of the project. Other than recording reasons for lack of response from ITI graduates, no serious efforts were made to improve program design and delivery or to provide qualified instructors or appropriate infrastructure. It is highly likely that these courses will fade away and the pilot scheme will be considered unsuccessful. (f) Basic Training (BTC) and Related Instruction Centers (RI): To improve and expand Apprenticeship Training Programs, two components had varying degree of success with considerable delays: (i) as per the revised target 18 BTCs (in 17 States and one at the Regional Directorate for Apprenticeship Training, Kanpur) have been established, which have provided basic training to some 2800 apprentices in trades not adequately covered by ITIs; (ii) all the planned 44 RICs (38 in 18 States and 6 in Regional Directorates of Apprenticeship Training ) have been established and trained  4 some 95,400 apprentices. States have reported 5-23% increase in pass rates in apprenticeship programs. (g) Women's Training: To improve access to women for training in modem trades, four schemes have been implemented. Targets for the two State schemes (i and ii below) have been achieved and even exceeded in some States but the Central schemes (iii and iv) have met with only marginal success: (i) All 100 New Women ITIs/Wings (WITIs) have been established (estimated cost Rs. 615 million) and are functional with some 24300 (against a target of 16000) women having completed their training during the project; (ii) 117 (of 120) demand-driven courses in 19 new trades covering 64 existing WITIs have been introduced with reported output of 6,600 graduates; (iii) the target of establishing 4 new RVTIs could not be fully achieved due to delays in site acquisition. These centers are functioning in temporary locations with limited facilities and staff shortages; and (iv) the scheme of strengthening the existing RVTIs and NVTI could not get planned inputs due to delays but has still resulted in producing some 1600 graduates against the target of 1304. OBJECTIVE 2: Expanding Advanced Vocational Training Program 11. Overall, the objective of expanding advanced skill training for instructors and industry has been partially achieved as summarized below: (a) Expansion and Improvement of Advanced Vocational Training Programs: In the Central sector, training in six ATIs has been strengthened and expanded in new areas. Advanced training facilities exist in 30 (of 33) ITIs. The remaining three in UP and Haryana will start operations in 1999. Total outputs reached 33,000 against the revised target of 17,000. Training outputs from MP and Orissa are low while Maharashtra and Gujarat exceeded the targets. These institutions still suffer from inadequate staffing and equipment and will take some time and further investments to achieve the level of quality programs planned at appraisal. (b) Apex Hi-Tech Center and Units: The outcomes of a TA contract which was signed with GTZ in July 1995 include: (i) some 200 staff months of training (including 24 staff months in Germany) provided to staff; and (ii) curricula developed after careful need assessment; and (iii) equipment lists prepared. The Apex Hi-Tech Training Center (a key resource center) could not be established as planned. This is a major shortfall in the achievement of project objectives due to delays in decision making. The Apex Center is now functioning with limited capacity in a temporary location and one program for industry has been conducted recently. Some training has also been provided to staff from 19 Units (located in 10 ITIs, 7 ATIs, NVTI and 1 RVTI) which will start offering Hi-Tech training programs in 1999, after equipment installation is completed. OBJECTIVE 3: Improving NVTS Planning Management and Supervision 12. The objective of improving planning and management was marginally achieved. The status is summarized below:  5 (a) Improving NVTS Planning Management and Supervision: The Project Implementation Units at the DGET (CPIU) and 18 States (SPIUs) were established after some delay and initial training was given to the newly recruited staff at the Indian Institute of Management, Calcutta. In spite of adequate number of staff, these units have suffered from frequent staff changes at the senior level. A major achievement of the project has been in the development of closer interaction between industry and ITIs. Major developments include - appointment of Advisory Committees; MOUs between CII and State Directorates; partnerships between some ITIs and companies; and more recently the joint management of ITIs by Govermment and the industry in the northern States. These positive and expanding changes appear to be experimental in nature with support from the DGET. With appropriate policy changes, could provide a major breakthrough in the governance of ITIs. (b) Establishment of a Monitoring and Evaluation System: The lack of progress in this sub-component, in spite of keen interest and initiative by some States, typically represents the reasons for delays in project implementation. Efforts were made by some States (Maharashtra, Gujarat, Punjab and Karnataka) to develop and use MIS modules with their own efforts. According to Internal Finance (IF) of MOL this component required revision of the EFC even though it was included in the project description of the Credit Agreement. Establishment of MIS could, therefore start only in May 1997, after the revised EFC Memo was approved. Work was started by the CPIU and its status is as follows: The MIS has been designed by the National Informatics Center (NIC) and will cover 18 States, CPIU, and the NIC; equipment procurement faced problems during the final stages and could not utilize project funds; 5 core MIS modules are ready and field-tested; the remaining modules are under preparation; and staff training will start after equipment installation. The MIS will now be established with funds to be provided by the DGET for which there is a strong commitment. (c) Improving Testing, Certification and Documentation: The existing Trade Testing and Certification wing at DGET could derive only marginal benefits during implementation. Because of long delays in creation of key posts, the Documentation Center is still in a preliminary stage of development and has a long way to go before it provides useful service to the NVTS. The outputs include a seminar, field testing of two question banks developed by the MOL's Central Instructional Media Institute (CIMI), and plans to introduce objective type tests for one trade in July 1999 - hardly enough to initiate even a minor change in trade testing. (d) Strengthening DGET Women's VT Unit: This component has resulted in the appointment of 10 additional staff and creation of a Directorate of Women Occupation responsible for overall development, planning, and monitoring. (e) Reorienting CSTARI: The capacity for expected research role of CSTARI, agreed at appraisal, could not be developed and this might restrict research capability that was planned for the future developments in the NVTS. Although some additional staff and some equipment were provided, the TA provision (36 staff months of consultants and 22 months of training) to CSTARI was not utilized and an opportunity to reorient its activities has been lost. The activities performed during the project  6 implementation lag far behind the expectations at appraisal of 'a primary agent of organizational change within the NVTS'. 13. Major outcomes of the project, as expressed by sample beneficiary groups of students, teachers and principals, and representatives from industry during three workshops conducted by the ICR mission are: modernization of workshops; systematic faculty development; and interaction between industry and ITIs, which should all be continued vigorously during the operational phase. 14. Some Key Unanticipated Project Gains: In spite of the problems listed earlier, the project has achieved excellent results in two areas as summarized below. These developments go far beyond the expectations of the SAR and are important contributions to the future growth of the NVTS. These developments require careful support to be fully entrenched in the VT system. (a) A draft paper proposing new policy initiatives for vocational training has been prepared and reviewed by an Expert National Committee comprising representatives of all stakeholders. The proposals are awaiting final review by the National Council for Vocational Training (NCVT) and will then be sent to the Cabinet. The new policy includes decentralization, involvement of industry in the management and financing of VT, and flexibility in program design and delivery. This goes much beyond the anticipated scope of the Industry-Institute Cooperation proposed in the project and is likely to establish a lasting partnership with industry in the management of VT. (b) Output from New ITIs for Women exceeded the target by 52% - reported output during the project period is about 24,300 against the target of 16,000. In addition, 6,500 have been trained in new trades in existing WITIs and some States have started reservations for women in general ITIs also. The project has been successful in increasing percentage of women enrollment in vocational training and this trend deserves all support of MOL and the State Governments. C. IMPLEMENTATION RECORD 15. Implementation Experience: The large number of project components (about 20) covering central institutions and 565 ITIs in 28 States and Union Territories made the implementation difficult. The central control exercised by the MOL required approvals at each stage and further contributed to the complexity in implementing an already difficult project. In the earlier stages of implementation, therefore, the co-ordination problems slowed down progress and constrained the achievement of project objectives. The reality that DGET - responsible for oversight, and the CPIU - responsible for project implementation at the national level - faced a number of operational constraints (with no power for financial approvals, creation of posts, or staff appointments) limiting their capacity to make timely implementation decisions could not be foreseen during project preparation. These difficulties persisted and slowed down implementation and led to a restructuring of the project and resetting of targets in December 1996. 16. The Credit had to be extended twice by a total of two years. After the first extension to December 31, 1997, IDA agreed to extend the closing date by another year for three critical  7 components - Modemisation of Equipment, High Tech Training, and Establishment of Management Information System (MIS). For the remaining sixteen components, the project closed on December 31, 1997. 17. It appears that the Internal Finance Division (IF) of MOL was guided by only the EFC document and not by the Credit agreement in its strict financial control over the project. The need for approvals required at every stage was the single largest contributor to delays in the project. The price escalations and contingencies were not allowed and the components could not exceed the EFC approved ceilings. Project entities lost all flexibility and could not use additional funds that became available due to a stronger SDR without revision of the EFC memo and the first such revision in 1996-97 took about one year. 18. The services of professionals within and outside the NVTS were well utilised in monitoring, evaluation, and development of strategies. Some examples include: (a) a tracer study was completed by the Indian Statistical Institute in 1997 in the States of West Bengal, Tamil Nadu, Delhi, and Gujarat. This study confirmed gains in the external efficiency in comparison to non-project institutions; (b) an impact study, completed by the CPIU and SPIUs covering 7 States (Rajasthan, Maharashtra, Goa, Tamil Nadu, Kamataka, West Bengal, and Orissa), confirmed substantial internal efficiency gains in project institutions; and (c) in 1998, the DGET in close collaboration with the Confederation of Indian Industries (CII) assessed the curricula, facilities and the training process in 7 Northern and 4 Western States. This evaluation confirmed adequate use of modem equipment, closure of obsolete trades not needed by the labor market, and major gains in the percentage of equipment being operational. 19. The above-mentioned sample-studies showed improvement in overall operational efficiency of project ITIs by 10%; improvement in pass- rate range between 6-20%; decrease in drop-out rate by 3-20%; increase in equipment being operational from a pre-project status of 50% to 92% at project closing; employment rate of project ITI trainees improved from pre-project rate of 50% to about 65% at project closing. The employment rate of trainees from project ITIs was significantly better those than from other ITIs. 20. Project costs: The total project cost at appraisal was estimated as US$429.8 million (Rs. 6877.9 million) of which the World Bank was to finance SDR 189.2 million as IDA Credit and US$30 million as IBRD loan, GOI was to finance the remainder of the project cost. The significant Rupee devaluation (by over 250% during the project implementation) increased the proceeds from the Credit/Loan, which were partially offset by (a) increased percentage of disbursements against all categories of expenditure at the request of the Borrower; (b) the cancellation of SDR 29.5 million and the entire IBRD loan of US$30 million in December 1991. In May 1993, another cancellation of SDR 35.7 million was made. After project restructuring, further cancellations of SDRB 13 million in FY97 and SDR 9.7 million in FY98 were made at the request of the Borrower. The total Credit/Loan was thus adjusted from SDR 189.2 million plus US$30 million to only SDR 101.3 million in IDA Credit. The final project cost was about US$163.5 million (about Rs. 5330 million equivalent). Final disbursement took place on May 24, 1999 after which time a, balance of US$17.468 million (SDR 12.98 million equivalent) was cancelled. 21. Credit amendments: The Credit agreements were amended at the request of the Borrower four times during the project. These included: * Revision in ceilings for civil works and prudent shopping (April 1991)  8 * Revision in percentage of expenditure to be financed by IDA (December 1991) o Restructuring - Revision of Project Description (Schedule 2) ( April 1997) * Minor amendment to Schedule 2 (paragraph 3b) on Hi-Tech Training (December 1997). 22. Compliance with Covenants: With the exception of the following, all covenants have been complied with fully or in a manner acceptable to the Bank (Table 10): (a) there were substantial delays in staff appointment and utilisation of technical assistance; this led to suspension of disbursements during July 1994-January 1995; (b) there were four occasions when audit report submissions from some States were delayed resulting in temporary suspension of SOE (statements of expenditure) procedure for disbursements for the whole project (Table 1 l); and (c) completion of four studies agreed during project negotiations were delayed by a few months. 23. Procurement and Staff Appointments: Procurement of works and equipment, and staff appointment were completed with considerable delays which necessitated two project extensions. 24. Of 480 civil works in the States, 473 are completed. The States faced the problem of multiple State- evel as well as Central approvals before inviting bids and the final award of contracts. The DGET approved the scope and estimated cost for works under each scheme during the initial years of the project and transferred the Central shares on this basis. Many w.orks faced delays resulting in price escalation. Any modifications and subsequent cost escalation were not approved by the DGET for reimbursement purposes. However, with regular monitoring by DGET, all but 7 works (which are also nearing completion) were finally completed. Some Central schemes also could not take off due to abnornal delays in site acquisition, appointment of an implementation agency, or appointment of architects. This led to the cancellation of all five major works in the Central sector by the Bank 25. Despite all efforts made by the CPIU and SPIUs, and two-year extension, some equipment could not be procured in time. The involvement of highly experienced NTPC and DGS&D as the procurement consultants/agency did not prove very effective and probably added yet another layer of approval to the already complex and multi-layered approval process. However, the State level procurement was more efficient and even procured additional equipment when NTPC could not handle certain packages. Due to financial and power crises, sorne manufacturers could not deliver equipment in time. Timely preparation of the equipment specifications, bid packages and institution-wise lists of requirements, greater penalty for delays in equiprnent delivery, and removal of many layers of approval would have helped in minimizing some of the delays in procurement. 26. The project suffered from the long time taken in creation of posts and appointment of personnel through Public Service Commissions. Critical monitoring by the review missions and CPIUJ finally resulted in about 88% of the key posts filled. The central institutions continue to have larger percentage of posts vacant. 27. Studies: All the four studies agreed during appraisal have been completed after minor delays. CPIU has reported completion of ten additional studies covering a wide range of critical issues in the NVTS (Table 7). Some additional studies on Hi-Tech Training were carried out with German assistance outside the project funding.  9 28. Major Factors which Influenced Implementation: Key factors which helped in project implementation were: (a) Strong commitment and desire of concerned officials of GOI and many States to make a difference in the system; (b) appropriate leadership in many project institutions; (c) close interaction amongst States during joint reviews of all States by GOI and the Bank initiated from 1995; and (d) significant involvement of industry in reviews and policy reform planning. 29. Some key factors that affected project implementation adversely included: (a) lack of empowerment of DGET/CPIU/SPIUs and project institutions and over-centralisation; (b) non- familiarity with the Bank procedures and frequent changes in senior officials both in GOI and in the States; (c) delays in creation and filling of key posts; and (d) poor perfornance of construction agencies (State and Central Public works Departments) and central procurement consultants (DGS&D and NTPC). D. PROJECT SUSTAINABILITY 30. The sustainability of the project is likely. Project States have made provisions in the Ninth Plan to ensure that incomplete components, which closed on December 31, 1997, would be completed. Progress reports submitted by States indicate satisfactory progress with support from only State funds. All new ITIs and new trades will be supported fuilly by the States. Government of India is continuing the schemes of modernization, staff training, MIS, AVTS, and Hi-Tech training. It will take sometime before the new RVTIs and the Apex Hi-Tech Training Center are established as planned. Only the pilot scheme of training for self-employment may not continue in most places due to poor response. An operational plan with monitoring and impact indicators, acceptable to the World Bank, has been carefully prepared and summarized in Table 6. During the operational phase, adequate funds should be available to complete unfinished works and to continue quality improvement activities. E. BANK PERFORMANCE 31. The MOL, DGET and State officials appreciate the World Bank's role in project preparation, and in supervision during the last four years. They feel that the Bank played a constructive role in identifying and addressing the implementation issues. The Bank, however, underestimated the issue of the project's complexity. Apparently, the appraisal process failed to identify the institutional and systemic weaknesses that delayed implementation for four years. It also did not attempt to suggest any alternative to the very complex internal project management and financing structure. The implementation problems that surfaced immediately after effectiveness were not foreseen. It is apparent that the project was prepared and appraised under extra-ordinary circumstances when India was facing a major financial crisis and the Bank wanted to respond quickly with a possibility of entry into the field of education and training in India. To a large extent, the Bank's decision to transfer the responsibility for project supervision to the New Delhi Office and to place a vocational/technical educator there enhanced its capacity to respond to emerging problems and expeditious clearance of diverse procurement issues. 32. The DGET and the States are critical of the Bank on two counts: (a) the Bank's initial refusal to agree to extend the project when implementation had picked-up momentum and then finally agreeing to give a one-year extension only two weeks before the closing date. This  10 belated decision when States were winding up the SPIUs and the experienced senior staff were looking for other assignments slowed down progress and resulted in another one-year extension for some components; and (b) the Bank's interaction with the States and SPIUs was missing in the earlier stages (perhaps due to travel restrictions imposed by the Borrower) and could have accelerated progress as it did in the final 3-4 years. Overall, the project States considered Bank's role to be highly professional, helpful and constructive. F. BORROWER PERFORMANCE 33. The Borrower's project preparation was effective with clearly defined objectives and programs. There were, however, noticeable mismatches between the Detailed Project Report (DPR) of MOL prepared in 1989 and the SAR/Credit Agreements. The Internal Finance treated the DPR attached to the EFC document with a defined total cost in Rupees as a strict guide and did not allow flexibility or provisions for cost escalations or exchange rate variations during 1989-96. These often led to different perceptions/interpretation between the Bank and the GOI during implementation, which should have been resolved at early stages of the project. 34. The project implementation staff in States and at the CPIU was professionally qualified, but lacked prior experience in project management and implementation of such a comprehensive and complex package of reforms having inter-related components supported by the Bank. The project's implementation suffered from frequent changes of the Director General of DGET and the senior State officials, abnormal delays in creation of key additional staff positions and the selection and appointment of personnel, and in providing Central approvals to schemes already agreed in the project. The changes in the Central Government and Goverrnents in 28 State/ Union Territories added to delays in approvals and timely release of funds. However, despite all these factors, the concerned officials at the Center and States ensured success of the project in large measure with their extra-ordinary efforts during the last three years of the project. G. ASSESSMENT OF OUTCOMES 35. Assessment of the overall outcomes of the project is complex. In terms of timely implementation of components, the project did not give a satisfactory performance. If delays and cancellations are ignored, the project outcomes for the State components covering 85% of project costs are satisfactory. In summary, the achievement of overall objectives is as follows: (a) the sectoral policy objectives were generally achieved. The reduction in staff vacancies, training of instructors, and introduction of demand-driven courses in the States are close to targets. With the development of a revised policy framework, some important steps regarding governance and financing of VT are underway; (b) the Institutional Development objectives were only partially achieved. Schemes such as Media Resource Centres, Trade Testing and Certification Cells, equipment maintenance system, and the MIS could take off only after long delays and although most of these initiatives are in place, their continued effectiveness would only be known during the operational phase; Research, etc., did not reach critical mass to be sustained;  I1 (c) the Physical objectives were generally achieved in the States schemes but only partially in the central schemes. Civil works, equipment procurement, training and recruitment of staff-all were successfully completed by the States whereas the schemes in the central sector were cancelled during restructuring due to land acquisition issues and significant staff vacancies; (d) the poverty reduction objective has been adequately achieved. Vocational Training is mostly availed of by the weaker sections of the society to improve their employment prospects and earning capacity. Introduction of new trades and increase in output in numbers as well enhancements in quality have contributed to poverty reduction; (e) the gender concerns have been adequately addressed Output from the NVTS in terms of number of women trained has exceeded the SAR targets by 52%. H. FUTURE OPERATIONS 36. The MOL as well as the States strongly supports the view that a highly skilled technical workforce is necessary to maintain the country's competitiveness in the emerging global economy. Satisfactory future operation of the project would depend on the completion of remaining incomplete tasks and availability of State/GOI funds. Table 6 provides a summary of the operational plan prepared by the Borrower and gives details of expected provision of funds for project supported or project initiated activities after the project closing. Continuation of quality improvement activities (staff training, use of modern instructional aids and material, maintenance and up-gradation of infrastructure, advanced/hi-tech training, etc.) are an important part of this plan. The Operational Plan also provides indicators for monitoring and evaluation of future operation. 37. Recent efforts made by the MOL in improving governance and funding of training institutions to accelerate the quality improvement activities with the active participation from industry have been successful in many States. Many new models of governance have emerged resulting in a new draft policy for NVTS. Future support, if any, from the Bank should focus on support to this new policy, which is now in the final stages of approval. I. KEY LESSONS LEARNED 38. Following is a summary of important findings and key lessons learned during this first Project in this sector in India: (a) The project appraisal should have taken a closer look at the institutional capacity relative to project complexity and identified institutional and systemic weaknesses that delayed project implementation; (b) The EFC memo for such a comprehensive national project with interdependent components should discourage selectivity in component approval by the MOL's Internal Finance during implementation. It should provide some flexibility during implementation and should also take into account normal price escalations and currency fluctuations, and should preferably be designated in SDRs. After approval of  12 the EFC memo, further approvals of the project components should not be sought during the implementation stage; (c) The project could have achieved greater success with more decentralization and flexibility to States and ITIs in the selection of trades according to local needs, in the procurement of equipment, and in curriculum development; (d) In a national project with a high degree of complexity, participatory approaches during project preparation and implementation that involved States, ITIs and other professional institutions could have improved project ownership and outcomes; (e) Frequent changes in the senior implementation staff should be avoided. Technical assistance, especially training, should be provided to project implementation staff in Bank procurement whenever a first project is approved in a sector; (f) To avoid delays in project implementation, land acquisition and architectural design of buildings should start before negotiations. Any works not coming to the bidding stage within six months of the agreed schedule should be cancelled along with the other relevant components; and (g) A field-based supervision with close interaction with the client and project beneficiaries proved to be very effective and economical.  13 INDIA: VOCATIONAL TRAINING PROJECT Table 1: Summary of Assessments I|A. Achievementofobjectives Substantial Partial | Negligible Not __ [applicable Macroeconomic policies X Sector policies X . Financial objectives _ ____X_ _ Institutional development X Phv_sical o_biectives X Poverty reduction X Gender concerns X Other social objectives . X Environmental objectives X Public sector management X Private sector management X Other (Specify) _ ._ . . _ X L -- - - - _~~~~Lkely Unlikely Uncertain B. Project sustainability L X Uneti C. Bank performance 1i; satisfacto Satisfay Deficient Identification X Preparation assistance X Appraisal __ __ __X Spervision _ _ X D. Borrower performance Highly Satisfactory Deficient __________________________ _ | satisfactory _ _ _ _ Preparation ___I_ I X I _I Implementation X (the last four years) X (during the ____________________________ _________. _________ ._. ____. __ --_ ----_--- _ first four years) Covenant compliance X (the last four years) X (during the I ________________________ I ________________ I _____________I_____ first four years) Operation (if applicable) L X ._x_1_ I Highly Satisfactory Unsatisfactory Highly _ satisfacto_ unsatisfacto E. Assessment of outcome X  14 INDIA: VOCATIONAL TRAINING PROJECT Table 2: Related Bank Loans/Credits Credit Purpose/Achievement Year of Status I I approval Past Operations Cr.342-IN To support university level agricultural education and 1973 Closed in 1982 Agricultural reasearch at Assam Agricultural University, Rajendra Education Agricultural University in Bihar and Institute of Project Agriculture Research in Delhi. PAPR noted that noted that most of the objectives had been achieved. Cr.3093-IN To improve the quality of instruction in Departments 1989 Closed in 1996 Electronics of Electronics in selected engineering colleges and Industry polytechnics through modernization of equipment, Development staff development, learning resources development Project and industrial training of students. Project objectives were achieved. Cr.2130-IN First To support the GOI's 10 year Investment program, 1990 Closed on Technician aimed at capacity expansion, improvement of Sept. 30, 1998 Education quality and efficiency of the technician education Project system, in selected states. Project objectives were _ fully achieved. _ Ongoing Operations Cr. 2223-IN To support GOI's 10 year Technician Education 6/14/05 To close on Second Investment program aimed at capacity expansion, June 30,1999 Technician quality improvement and efficiency improvement of Education Project the technician education system in 10 project states Cr. 2699-IN To improve the quality and relevance of higher 1995 To close on Agricultural agricultural education and in-service training Dec.31,2000 Human Resource in Andhra Pradesh, Haryana and Tamil Nadu. Develop. Project I I Table 3: Project Timetable Steps in Project Cycle Date Planned Estimate Identification Sep-87 Sep-87 Preparation Jan-88 Feb-88 Appraisal Sep-88 Nov-88 Negotiations Jan-89 Apr-89 Board Presentation Feb-89 Jun-89 Signing Mar-89 Jun-89 Effectiveness May-89 8/8/89 Mid Term Review 12/31/94 6/1/93 Project Completion 12/31/96 12/31/98 Loan Closing 4/30/99 4/30/99  15 INDIA: VOCATIONAL TRAINING PROJECT Table 4: LoanlCredit Disbursements: Cumulative Estimated and Actual (US$ million) IFY90 FY91 IFY92 FY93 IFY94 FY95 FY96 FY97 FY98 FY99 Appraisal Estimate 11.20 42.001 98.00 140.00 196.00 224.00 266.00 280.00 280.00 280.00 Revised Estimate 29.68 30.07 45.00 57.00 69.00 84.00 100.00 114.00 126.00 138.89 Actual 27.82 30.07 44.41 53.73 64.67 80.80 94.04 111.38 122.31 121.42 Actual as % of revised estimate 93.73 100.00 98.69 94.26 93.72 96.19 94.04 97.70 97.07 87.42 Date of final 5/24/99 disbursement Loan/Credit Disbursements 300.00 250.00 - 200.00 - * Appraisal X Estimate O 150.00- * Revised Estimate 100.00 - O Actual 50.00- D3Actual as % of revised estimate 0.00 i_ _ _ _ _ _ _ _ FY FY FY FY FY FY FY FY FY FY 90 91 92 93 94 95 96 97 98 99 Financial Year  16 INDIA: VOCATIONAL TRAINING PROJECT Table 5: Key Indicators for Project Implementation Project sub-components and Target as in SAR Modified * Achievernents key indicators (or in DPR of GOI) Target 1 Modemization and Replacement of Obsolete Equipment Number of ITIs modemized About 400 378 378 2 Establishing a equipment maintenance system: Maintenance Centres in ATIs 6 6 6 Maintenance Workshops in States 19 19 19 Maintenance Cells in ITls 100 100 93 Specialized staff trained 552 450 574 3 Introduction of new basic training trades Additional new trade courses 376 courses in 205 376 courses in 205 370 courses in introduced ITIs ITis 204 ITIs 4 Provision for AV equipment, AV aids, creation of Media Resource Centres and staff training in AV equipment Number of ITis provided with AV equipment about 400 387 387 Number of MRCs established 10 10 10 Number of staff trained 3200 ( 6 weeks) 6000(2-3 weeks) 6222(for 2-:3 weeks) 5 Upgrading of instructors (State Sector) Number of staff trained 1750 (12 months) 3500(6-12 months) 3784(6-12 months) 6 Expansion of pilot post ITI training for self employment Number of ITIs offering training 95 41 36 Number of persons trained 9000 4000 1175 7 Creation of new BTCs & RICs Number of BTCs established 24 16 18 Number of RICs established 44 44 44 Number of persons trained in BTCs & RiCs 98410 96450 95474 8 Creation of new WITIs/Wings Number of WITIstwings created 100 100 100 Number of women trained (cumulative) 16000 16000 24300 9 Introducing new trades in exisUng WITIs Number of WiTis/Number of courses 72 ITls,18 trades 641Tls, 18 trades 64 ITIs, 18 trades introduced (120 courses) (120 courses) (117 courses) Number of additional training places created in existing and new WlTlslWings 12000 12000 11908 10 Establishing new RVTls for women Number of RVTIs established 4 4 (Provision of staff 4 (running at & equipment only) temporary locations) Number of training places created 784 400 484i 11 Introduction of new trades at NVTI/RVTls Number of advanced level trades 17 Advanced at basic & 4 advanc 17 at basic & 5 advanced Number of training places created 936 780 575 12 Introducing new advanced skill training in AVT centers Number of AVTS Centres 34 33 6 ATIs & 30 ITIs Trainees output during the projecttyear 21576 21500 34014 13 Introduction of high-tech training courses Establishing High-Tech Center' preparing to introduce Number of Locations 1 High-Tech Center 10 ITls & 9 ATIs Hi-Tech training programs & 19 ATIs/lITIs (TA/Equipment only) at 19 ITIs/ATIs 14 Establish linkages with industry Assign Industrial Liaison Officers in ITIs 400 400 Principals/ Apprenticeship Officers act as Liaison Officers Setting up Industry Advisory Boards in ITIs 400 400 24() 15 Establishing Project Management Units SPIUs 18 18 18 CPIU I 1 1 Training of staff in management 42 42 79 No. of staff in Women's Cell in DGET 50 staff 12 key staff 12 key staff 16 Introduction of computerised MIS for 5 core software modules monitoring and evaluation prepared by NIC Number of States with MIS for VTS 18 18 18 17 Filling up instructor & other staff posts Number of posts to be filled 4500 4200 3756 Targets modified on restructuring in 1996  17 INDIA: VOCATIONAL TRAINING PROJECT Table 6: Key Indicators for Project Operations A. Completion of unfinished components Ai. State Sector Components Components Actions proposed and time frame for completion Civil Works Bihar proposes to complete remaining 7 civil works in 1999 Staff Training Andhra Pradesh (14), Bihar (82), Kerala (11), Meghalaya (7), Nagaland (2), Himachal Pradesh (9) and Pondicherry (1) propose to complete the targets (deficiencies of number of staff to be trained are given in brackets) by 1999 AVAids Training Assam (31), Bihar (9), J&K (13), Kerala (82), Mizoram (4), Tamil Nadu (27) and West Bengal (28) propose to complete the training in 1999 Filling up key staff posts Andhra Pradesh (19), Assam (20), Bihar (83), Gujarat (2) Haryana (61), Karnataka (25), Kerala (1), Orissa (19), Punjab (10) Tamil Nadu (1), Uttar Pradesh (40), West Bengal (18) have have initiated steps to fill up remaining (x) vancancies Establishment of J&K (1 cell), Uttar Pradesh (2 cells) and West Bengal (4 cells) are Equipment Maintenance taking action to set up the remaining (x) cells in 1999. System Introduction of new trades 3 trades in Assam and 3 in West Bengal to be started in 1999 Expansion of AVTS AVTS in 2 ITIs in Haryana and 1 ITI in Uttar Pradesh will be started in June 1999 New Trades in existing Remaining 2 trades in Assam and 1 trade in West Bengal will be Women ITls introduced by August 1999 A2. Central Sector Components Components/Schemes Actions proposed and time frame for completion Trade Testing and Will be taken up for implementation during IX Plan and beyond, by Certification the Government of India Hi-Tech Training Will be continued with Central and State funds. External assistance is also being tied up for setting up Apex Institute. New RVTls Construction of RVTI buildings at 2 locations has been approved, activities will continue during IX Plan B. Continuation of Operations B1. Funding Provisions Schemes Financial allocations made to continue operations Central Sector A plan outlay of Rs.1 140.5 million for all 14 Central Schemes and Rs.729.5 million for 7 Centrally sponsored schemes, from GOI approved under IX Plan. State Sector States have proposed IX Plan allocations for continuing operations: Andhra Pradesh Rs.165m, Assam Rs.186.8m, Bihar Rs.121.3m, Delhi Rs.270m, Goa Rs.142.2m, Haryana Rs.229.9m, J&K Rs.320.9m,Karnataka Rs.370.2m, Kerala 214.0m, Madhya Pradesh Rs.841.1m, Mizoram Rs.24.2m, Punjab Rs.602.7m, Rajasthan Rs.900m, Tamil Nadu Rs.138.2m, U.P. Rs.820.0m, West Bengal Rs.560m B2. New Initiatives Actions proposed Status Setting up Skill Dialogue with employers' groups is in progress, by a DGET Development Fund for constituted Tripartite Committee CTS and ATS Partnership with industry Some states have initiated steps to involve industry more in ITI activities and strengthen linkages with industry New Policy framework for Draft Policy paper developed by an expert committee to ensure NVTs long term, sustainable development of NVTs in under circulation to _________________ states for their comments  18 C. Key Indicators for Prolect Operations Key Area Activity Proposed Performance Indicators Targetted Monitoring Agency & Value (Method Proposed) Cl. Improving Upgrade training and improve Student Admission Rate 100% DGET, State Directorate Efficiency and internal efficiency Student Drop Out Rate <10% (SD) Cross Sectional Effectiveness of Student Pass Rate >80% Analysis (CSA) and Time CTS OutputUCapacity Rate >75% Series Analysis (TSA) Cost/student/year - would be employed. Industry assessment of training - Periodic sample surveys effectiveness Maintain and upgrade physical Maintenance level of buildings/utilities DGET, SD infrastructure Equipment in working condition >95% Sample surveys Effectiveness & efficiency of maintenance CSArTSA cells Staff Training % of instructors deputed for training/year >10% SDIDGET (MIS) % of teachers deputed for industry >10% - Do - orientation % teachers receiving awards etc. Expenditure on training as a % of salary expenditure Preparation of annual Staff Development Plans Use of modem instructional % teachers trained in the use of AV aids >80% DGET/SD (MIS) aids and resources % teachers trained in pedagogy >75% (Sample surveys) Evidence on the use of instructional aids in teaching/leaming Availability of AV equipment in working condition No. of OHP/number of training units in ITI Availability of CIMI material Performance of MRCs in training and MIS, studies production Availability of raw Expenditure on raw material per trainee As per DGET/SD (MIS) materials/consumables per month NCVT norms Actual availability of raw materials for (Surveys) training Enhance relevance and % of graduates getting employed within 6 DGET/SD (MIS) extemal efficiency months, in each trade % of graduates becoming self-employed (Tracer studies, sample surveys) Comparison of employment rates of graduates from new trades, and conventional trades Level of involvement of industry in course development, testing etc. C2. Strengthening Provide facilities for practical % of apprenticeship seats filled >90% DGET/SD Apprenticeship training for trades which do not % of apprentices passing tests >80% Training have them. % of apprentices getting employed within CSArTSA 6 months of passing tests Tracer studies & aurveys Industry rating of quality of practical training Provide facilities for related Industry training of quality of instruction Surveys theory instruction % ublization of BTC seats _ % ublization of RIC seats MIS  19 Key Area Activity Proposed Performance Indicators Targetted Monitoring Agency & __________ ________________ _________________________ Value 'M ethod oro Dosed) C3. Advanced Skills Establish AVTS and provide % of Govt. ITIs having AVTS Training relevant training Number of manweeks of Advanced Skill >90% DGET/SD (MIS) Training conducted/Designed capacity Establish High Tech Training % of manweeks of training provided to >50% Sample surveys Centres industry sponsored trainees Evidence of employer partidpation in running AVTS Revenue generated from courses against >25% recurring expenses for AVTS C4. Increased New ITis for Women % increase of women trainees in CTS, DGET, Women's Cell, SD Access to Skill ATS, AVTS, RVTI Trade-wise annually Development of Women New RVTIs and strengthening Capacity utilization, Drop-out rate, pass (MIS, Tracer studies) existing Institutes out rate, employment rate, self Sample surveys employment rate for trades offered. Equipment availability for training Existence of special schemes, facilities to promote women's paricipation C5. Improved Establish Special Cells (PMUs) Number of PMUs in full operational state, DGET, SD Planning & in each major state (MIS) Management Establish computerised MIS Developing an effective Monitoring & Sample studies Capacity of NVTS Control system and its use at Central and Strengthen research capacity Adherence to prescribed standards in State levels ITIs, WiTIs, AVTS, ATS, RVTI, NVTI, etc. Strengthen Testing & Operational level of MIS Certificabon process % utilization of CSTARI training and research capacity Strengthen Industry Institute Number of research studies interaction conductedlyear Quality of research studies conducted Peer review of studies by DGET appointed groups Effectiveness and efficiency of testing Review Committee of DGET and certification process installed Number of ITIs and other institutions MIS having IMCs with industry participation Evidence of involvement of industry in Surveys course development testing, training and curricular decisions Number of labor market studies MIS conducted and utilization of information in Review Committee of DGET curricular decisions.  INDIA: VOCATIONAL TRAINING PROJECT Table 7: Studies Included in the Project Study Purpose as defined at appraisallredefined Status Impact of Study 1 An evaluation study on a) To build and enhance in-house research All studies (1-4) have The results of all the studies helped in self-employment scheme. capacity on vocational training with DGET been completed and the formulation of new policy paper institutions (CSTARI, NVTI and RVTWs) their outcomes shared on Vocational Training Policy 2 A Tracer study of ITI certificate with the Bank in 1996 framework under development. holders in the labor market. b) To gain further knowledge and insight & 1997. which could contribute to the overall 3 A study of quality and efficiency performance of the vocational training These studies were of instruction in ITIs. system. carried out using Discussion on a Vocational Training in-house capacity and Policy Framework draft prepared by 4 A review of accreditation external consultants a tripartite committee, is underway standards and their application with Bank approval. within the MOL. It will be taken up with particular reference to for Government approval and managing the growth and quality adoption. of government and private ITIs. 5 Evaluation of quality and To identify major weaknesses of the Studies 5-12 were efficiency of NVTs. system affecting internal and external conducted using an efficiencies and to suggest reforms for external consultant on upgradation. suggestions of the Bank during mid-term review. Outcomes have been shared with the Bank. 6 A review of the Advanced To gain information for quality and efficiency Study completed in Vocational Training System improvement of AVTS. January 1996 (AVTS) 7 Critical Review of the testing and To take steps for improving the testing and Study completed in certification scheme for certification process. January 1996 designing and developing an efficient, appropriate and sustainable system.  Study Purpose as defined at appraisallredefined Status Impact of Study 8 Review and analysis of To improve the quality of apprenticeship Study completed in As above Apprenticeship Training System training. January 1996 9 Systematic identification of staff To bring about qualitative changes in the Study completed in training needs and design of an Staff Development programs. January 1996 upgraded Staff Development System. 10 Upgrading women's training To identify and analyse employment Study completed in program potential for women's programs. January 1996 11 Staff Development and Training To review staff development programs and Study completed in for Women's Program validate them. January 1996 12 Training needs analysis, course To ensure relevance curricula development Study completed in and curricula development and January 1996 specification of equipment 13 Trainers Training Demand Survey To develop infrastructure for existing State In addition to S.Nos. Studies have been discussed with and Central Institutions for implementing 13 & 14, ten more concerned Institution heads and Hi-Tech Training Scheme studies were approved for adoption during the completed by the operation phase for implementing the consultants (GTZ) out scheme. of project funds. 14 Development of a proposal for establishment of Apex Hi-Tech Training Institute Note: Another 5 studies/proposals were carried out by GTZ (outside project funds) to formulate implementation plan for development of Hi-tech Training Schemes to be implemented in identified State and Central Institutes, and for setting up an Apex Hi-Tech Training Institute at Bangalore.  22 lndia:Vocational Training Project Table 8A: Project Costs ITEM Appraisal estimate S$M) Actual/Latest estimate (US$ML Local Costs IForeign Cost Total I Local Costs IForeign CostQ Total I) Investment Cost 1.Civil works & Furniture 42.900 7.600 50.500 19.4701 0.0001 19.470 2. Equipment & Books 180.400 69.600 250.000 101.500 1.600 103.100 3.Local/Overseas Training 13.800 4.100 17.900 2.020 0.000 2.020 4.Specialist Services 1.800 2.000 3.800 0.260 4.300 4.560 TOTAL of I I 238.900[ 83.3001 322.2001 123.2501 5.9001 129.150 II) Recurrent Costs 5.Honoraria & Travel 9.900 0.000 9.900 1.760 0.000 1.760 6.1rncremental Salaries 63.600 0.00C 63.600 22.820 0.000 22.820 7.Consumable Materials 11.600 0.600 12.200 1.780 0.000 1.780 8.1ncremental Maintenance 17.200 0.900 18.100 0.000 0.000 0.000 9.Miscellaneous 3.600 0.200 3.800 7.990 0.000 7.990 TOTAL of _ 105.900 1.700 107.6001 34.350 0.000 34.350 TOTAL OF I & 11 | 344.8001 85.0001 429.8001 157.6001 5.9001 163.500 Note: 1) US$1=Rs.16 (at appraisal); US$1 =Rs.32.67 (Average over Project Period) 2) There are foreign cost component (indirect cost) in equipment, books and consumables. However, this is difficult to estimate hence not been indicated in actual cost. Table 8B: Project Financing Source Appraisal estimate ( S$M) Actual/latest estimate (US$M) Local cost Foreign costs Total Local costs Foreign costs Total IBRD/IDA 195.000 85.000 280.000 116.950 4.470 121.420 Cofinancing institutions 0.000 0.000 0.000 0.000 0.000 0.000 Other extemal sources 0.000 0.000 0.000 0.000 0.000 0.000 Domestic contribution 149.800 0.000 149.800 40.650 1.430 42.080 TOTAL 344.800 85.000 429.800 157.600 5.900 7 63.500 Table 9: Economic Costs and Benefits Not Analysed  INDIA: VOCATIONAL TRAINING PROJECT Table 10: Status of Legal Covenants Agreement Section Covenant Present Original Revised Description Comments type Status fulfilment fulfilment of date date Covenant CREDIT Article IV, 01 C Maintain records and accounts Fulfilled Credit Section 4.01 (a) which reflect Project operations, Number: resources and expenditures. IDA-20080 Article IV, 01 C Maintain records for the Special Fulfilled Section 4.01 (b)(i) Account for each fiscal year to be audited annually by an independent auditor. Article IV, Section 01 CD Provide a certified copy of the audit Audit certificates for 4.01 (b)(ii) to IDA no later than nine months some project entities after the end of each fiscal year delaved. Article IV, Section 01 C Provide other information on records, Fulfilled 4.01 (b)(iii) accounts and audits as IDA may ._________ _________ ________ _____ request. Article IV, Section 01 C For all expenditures from the Fulfilled 4.01 (c)(i) Credit/Loan which are made by SOE, the Borrower shall maintain records and accounts of such expenditures in accordance with _ Section 4.01 (a). Article IV, Section 01 C For all expenditures from the Fulfilled 4.01(c)(ii) Credit/Loan which are made by SOE, the Borrower shall retain all records of expenditures until at least one year after the FY audit has been received by IDA. Article IV, Section 01 C For all expenditures from the Fulfilled 4.01(c)(iii) CreditVLoan which are made by SOE, the Borrower shall allow IDA representatives to examine such records. Article IV, Section 01 C The Borrower shall ensure that Fulfilled 4.01(c)(iv) records and accounts referred to in para (b) are included in the annual audit, which must also contain an opinion of the auditors as to the I____________reliability of these records. Schedule 1, Para 3 03 C No withdrawals will be made from Fulfilled any category unless the State or Union Territory has satisfactorily provided a Letter of Undertaking to IDA.  Agreement Section Covenant Present Original Revised Description Comments type Status fulfilment fulfilment of date date Covenant Schedule 4, Part Al 05 C Maintain a Central Project Fulfilled Implementation Unit (CPIU) within DGET to coordinate, supervise and .________________ ________ _Imonitor project implementation. Schedule 4, Part A2 04 C Ensure adequate funding for Fulfilled equipment maintenance during proiect duration. Schedule 4, Part A3 05 C Submit proposed implementation Fulfilled plan for the following project year to include, without limitation, plans for staffing and training, land acquisition, and financial procurement and construction plans. Schedule 4, Part A4(i) 10 CD 12/31/94 8/1195 Undertake and provide the following Report received in July studies: an evaluation of the self 1995 employment scheme. Schedule 4, Part A4(ii) 10 cc 9130195 5/20196 Tracer study of ITI certificate holders Report received in May in the labour market. 1996. Another study completed in December 1997. Schedule 4, Part A4(iii) 10 CD 12/31/94 7/31/96 Sample study of ITI instruction. Report received in December 1995 but not accepted by IDA. Another report submitted in July 1996. Schedule 4, Part A4(iv) 10 CD 7/31/95 7/31/96 Application of accreditation Final report received in standards in selected ITIs. July 1996. Schedule 4, Part A5 09 C Provide a mid-term review of the Fulfilled progress of the Project to identify implementation problems and actions required to strengthen subsequent project execution. Schedule 4, Part A6 10 C Continue a policy of establishing Fulfilled local level advisory committee and the appointment of industrial liaison officers at each ITI assisted under the Project to ensure adequate linkages between industry and the project ITIs.  25 INDIA: VOCATIONAL TRAINING PROJECT Table II: Compliance with Operational Manual Statements Statement Number and Comments Title OP/10.02 Para 9 of OP 10.02 states that if within 4 months after the due date the Bank Financial does not receive acceptable audited financial statements, the Bank normally Management discontinues the use of the SOE procedure. For non-receipt of acceptable audited SA financial statements from some States, the Bank suspended disbursements using the SOE procedure on three occasions: Date of suspension Fiscal year for which Date of reinstatement on of SOE procedure audited statements were receipt of audited statements not received May 6, 1996 1994-95 June 17, 1996 June 5, 1997 1995-96 July 28, 1997 May 12, 1998 1996-97 June 30, 1998 OP/13.40 Para 2 of OP 13.40 states that the Bank may decide to suspend disbursements as Suspension of of a specific date unless the borrower takes certain remedial action, by a specific Disbursements date, for reasons unrelated to payment. Pursuant to Section 3.01 of DCA, read with Section 6.02 of the general conditions applicable to DCA, the right to make withdrawals was suspended, effective July 6, 1994, due to unsatisfactory progress in key project components. On achieving the specified benchmarks for progress in these components (specified by the Bank), the suspension was lifted on January 13,1995. India: Vocational Training Project Table 12: Bank Resource Staff Inputs Stage of Project Cycle Planned Revised Actual Weeks US $K Weeks US $K Weeks US $K Through Appraisal NA NA NA NA 105 240.00 Appraisal through Board NA NA NA NA 15 35.00 Approval Board approval through NA NA NA NA 12 28.00 effectiveness Supervision 25 550.00 302 675.00 283 643.40 Completion 17 43.50 19.1 44.00 15 30.00 TOTAL 430 976.40 Note: Complete information not found in available records.  26 INDIA: VOCATIONAL TRAINING PROJECT Table 13: Bank Resources: Missions Stage of Month/ Number Days Specialised Performance rating Types of problems Project cycle year of in skills Implemental Development Persons field represented status Impact Through 9/87, 2/88, 7 60 GEd, Arch, Ec, Appraisal 5/88, 8/88 TE, VITS, Mec, lPrE Appraisal 3/89 5 GEd, Con, through Arch, DS, TE Board Approval Supervision 9/89 3 7 TE, IS, IRS 1 1 1/90 3 7 TE, IS, Con 1 1 Staff appointments and creation of infrastructure for implementation 9/90 3 11 TE, IS, TS 1 1 ----do-- 2/91 3 16 TE, IS, TS 2 2 CPIU Staffing 4/92 3 20 TE, IS, TS 2 2 Women's cell in CPIU undersrtaffed 1/93 2 17 VTS, IS 2 2 Procurement delay Mid-Term 5/93 3 18 VTS, IS, TE 2 3 Delay in Staff appointment. Review Delay in use of TA 9/93 3 19 VTS, IS, TE 3 3 Delay in filling of staff posts 6/94 3 12 as above U U Disbursement suspended due to unsatisfactory _________ _ _I _ progress Supervision 2/95 3 20 TE, MTE, Arch U U Slow progress in Central I_______ components 10/95 3 26 TE, MTE, Arch U U Implementation progress not satisfactory 5/96 3 32 TE, MTE, Arch U U as above 11/96 3 21 M, MTE, ES S S, S, U Slow implementation of Central components 5/97 3 24 TE, MTE, Arch S S, S, U as above 1198 3 17 ES, Arch, MTE _ __ =____ 6/98 3 __ _ MTE, ES, TE S S, S, U Procurement delay 11198 4 13 MTE, ES, TE S S, S,U - Completion 1/99 3 15 MTE, ES, TE I I Abbreviations: GEd - General Educator, Arch - Architect, Ec - Economist TE - Technical Educator, VTS - Vocational Training Specialist MEc - Manpower Economist, PrE - Procurement Engineer TTS - Technical Training Specialist, Con - Consultant DS - Disbursement Specialist, IS - Implementation Specialist, IRS - Industry Relations Specialist TS - Training Specialist, MTE - Management & Technical Educator ES - Education Specialist, M - Management  The World Bank New Delhi Officc Phone: (11)4617241/ 4619491 INTERNAnONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 70 Lodi Estate Cable Address: INTBAFRAD INTERNATIONAL DEVELOPMENT ASSOCIATION New Delhi 3, India Mailing Address: P.O. Box 416 Telex: 3161493 IBRD IN Facsimile: (I 1) 4619393 February 12, 1999 Mr. L.D.Mishra Secretary to Govenment Ministry of Labor Shram Skakti Bhavan New Delhi I 10(QI Dear Mr. Mishra, INDL4: Vocational Training Project (Cr.2008-IN) I would like to express my thanks for the assistance and support provided by your colleagues and State officials to the IDA ICR Mission during January 28 to February 11, 1999. Attached is a copy of the mission's aide-memoire which incorporates the discussions during the wrap-up meeting held on February 1 t, 1999. The mission's has informed me that it is still going through the detailed material provided and the final findings could undergo some minor changes. We propose to send our draft ICR for your comments by April 15, 1999 and would expect your own evaluation report of the project by the end of April 1999. Regards, Sincerely, Edwin R. Lrim Country Director, India Attachment cc: Mr. V. Govindaraj an, Additional Secretary, Department of Economic Affairs, Ministry of Finance, North Block, New Delhi 110 001 Headquarters: Washington, D.C., U.S.A  ANNEX A INDIA VOCATIONAL TRAINING PROJECT (Credit 2008-IN) IMPLEMENTATION COMEPLETION REPORT MISSION (January 28-February 11, 1999) AIDE-MEMOIRE INTRODUCTION 1. An IDA mission comprising Messrs. S.K. Shrivastava (Task team leader), Y. Saran (Education specialist, Consultant), and G.S. Chandran (Technical educator, Consultant) participated in a mission to prepare the Implementation Completion Report (ICR) of the Vocational Training Project. The mission wishes to thank Messrs. A. Nimbalkar, Additional Secretary, MOL; S. Krishnan, DGET; G. S. Sethi, Director, Central Project Implementation Unit (CPIU) and his colleagues for their participation and valuable inputs in discussions with the project States throughout the mission. 2. Shortly after assembling in New Delhi, the mission discussed the scope of work with the DGET and the CPIU officials and agreed on a schedule of activities. These activities included visits to Pune and Bangalore for detailed discussions at regional meetings with the employers, teachers and the students and to get a better picture of project implementation through field visits to some institutions. The findings of this mission are subject to further refinement and endorsement by the Bank Management. These are based on the comprehensive progress report prepared by the CPIU, reports prepared by the State Project Implementation Units (SPIUs), materials in the project files, mission's observations from the field trips, discussions with teachers, students and employers, and discussions with various institutions/ project units including CPIU, SPIUs, and senior officials of the MOL. The mission acknowledges with deep gratitude the assistance and courtesies extended to it by numerous central and State agencies with which it met. Special thanks are due to the officials of Delhi, Karnataka, and Maharashtra for the excellent arrangements for the regional meetings and the warm hospitality extended to the mission. PROJECT BACKGROUND 3. The project was the first IBRD/IDA assisted project in vocational training in India. It was intended to support the Ministry of Labour's (MOL) long-term program to modernize and restructure the National Vocational Training system (NVTS). Main weaknesses identified by DGET were: (a) need to modernize/upgrade equipment, outdated curricula, shortage and limited skills of instructors and instructional resources to satisfy changing needs of the growing industrial sector; (b) weaknesses in NVTS to cope with planning, management, monitoring and trade testing to ensure higher efficiency, quality and standardization; (c) poor participation of women in industrial labor force; (d) inadequate opportunities for employment in the organized  2 sector to workers from poor socio-economic background; and (e) lack of training which supports self employment of graduates. 4. To address these issues the MOL sought Bank financing through the Department of Economic Affairs (DEA) of Government of India. A project proposal prepared by DGET with assistance from ILO and UNDP in 1983 was substantially modified and submitted to Bank. The project was appraised in November 1988, approved by the Board in April, 1989, and became effective on August 8, 1989. Project costs: 5. The total project cost at appraisal was estimated as US$ 429.8 m (Rs.6877.9m) of which Bank was to finance SDR 189.2m (about US$250 m) as IDA Credit and US$30.0 m as an IBRD loan, GOI was to finance the remaining US$149.8 m equivalent. The significant Rupee devaluation increased the proceeds from the credit which were partially offset by the cancellation of some US$69.0 m in FY 92, which included the entire IBRD loan of US$30.0 m. In FY 93 another cancellation of SDR 35.7 m was made. After project restructuring further cancellations of SDR 13.0 m in FY 97 and SDR 9.8 m in FY 98 were made bringing the available credit down to SDR 101.3 m. The mission estimates a further saving of about SDR 10 m at project closing. The project would thus close utilising only about 45% of the original credit/loan amount. 6. The credit was extended two times by a total of two years. The first extension to 31 Dec 1997 was made consequent to continued concerns expressed by Review missions about the achievement of all developmental objectives by the original closing date -- 31 Dec 1996. The Borrower had agreed to complete the components during the extended period through revised action plans and close monitoring. In December 1997 IDA agreed to extend the closing date by another year for three critical components- Modernisation of equipment, Hi-Tech Training and MIS. For the remaining 16 components the project closed on 31 Dec 1997. Project Objectives 7. The primary objectives of the project were to: (a) improve the quality and efficiency of basic craftsmen and apprenticeship training (b) expand and diversify the advanced training programs; and (c) strengthen the NVTS planning and managerial capacity. The participation of women was to be increased in all these programs. 8. The project had three major components: (a) Modernising craftsman and apprenticeship training through re-equipping about 400 selected Industrial Training Institutes (ITIs) and developing related training systems, extending trade coverage of the National Apprenticeship Training Scheme at 24 Basic Training Centres and 44 Related Training Centres and increasing women's access to training in modern trades by constructing about 100 new ITIs for women (WITIs) and introducing about 18 new trades in about 72 existing WITIs/ Women's Wings in ITIs. (b) Expanding, Advanced Training Programs by introducing about 17 new trades at the advanced skill level in existing Regional Vocational Training Institutes (RVTIs) and at the National Vocational Training Institute (NVTI), establishing about 34 new  3 Advanced Vocational Training System Centres and establishing a new High Technology Training Centre for electronics, computers and robotics; and (c) Improving NVTS management and planning at DGET and corresponding State Directorates of Training through strengthening the monitoring and evaluation system, improvement of the testing and certification processes, reorientation of management/supervisory training, and strengthening of research in vocational training. 9. Project objectives were clear, highly relevant and important to MOE's long term program to modernise and restructure NVTS and rightly aimed at revamping the system. Objective-wise the financial allocations, as stated in the SAR were: Modernisation of training - Rs.3726 million (75.9%); Advanced Training Programs-Rs.825.7 million (16.8%); and NVTS Planning and Management -Rs.355.8 million (7.3%). Project Restructuring 10. The CPIU and the DGET were subjected to a number of operational constraints hindering its capacity to implement a project of such magnitude and complexity. These deficiencies persisted in spite of an action plan agreed during mid-term review. This led to the restructuring of the project and resetting of targets in December 1996. The restructuring of the project made the following changes in its scope: (a) Expansion of the post- ITI training for self employment to cover only 41 ITIs against an earlier target of about 100 ITIs. (b) Creation of 18 new BTCs and 44 RlCs in trades and theoretical areas, against an original target of 24 new BTCs and 44 RICs. (c) Introduction of 18 new trades in non-traditional areas in 64 WITIs and Wings against the earlier target of about 72 WITIs/ Wings (d) Provision of staff and equipment for 4 new RVTls for women in place of construction, staffing and equipment for the same. (e) Introduction of about 10 new trades at the basic level and 4 at the advanced level skill training in RVTIs and NVTI in place of 17 new trades at the advanced level (f) Provision of only technical assistance for establishment of an Apex Hi-Tech Training Centre for Electronics, Computer and Robotics (and cancellation of the provision of works and equipment for this Centre). Through another amendment in December 1997, provision of equipment for Hi-Tech training at 19 ITIs and Advanced Training Institutes (including the NVTI and one RVTI) was added. PROJECT PROGRESS SUMMARY 11. The Project Review Aide-Memoirs report very slow progress during the first four years of implementation. However, the implementation improved gradually in later years and resulted  4 in accelerated progress during the last 2-3 years. The project components were implemented through 20 central or centrally sponsored (State sector) schemes of GO01. Their status is summarized below: OBJECTIVE 1: Quality Improvement of Craftsman and Apprenticeship Programs 12. The status of achievement of Quality Improvement Objective according to the achievement of physical targets has been satisfactory. A sample tracer study coordinated by CSTARI and impact studies conducted on a limited scale by some States provide evidence of quality improvement. However, due to delays in equipment procurement and installation, and teacher recruitment and training, the full impact on quality of training is yet to be assessed. The status is summarized below: (a) **Modernization of Equipment in existing ITIs: Against the revised allocation of RS 2873 million (appraisal estimate - Rs. 1590 million) for Equipment, about Rs.2500 million were utilized to replace some obsolete equipment in 378 ITIs established before 1969. Some modem equipment are also added in selected ITIs. While the States of Maharashtra, Rajasthan, MP and Orissa exceeded the targets, some States (AP, Bihar, UP) could not take advantage of additional allocations. (b) Introduction of New Trades: The targets for expanding the training capacity have been met with the introduction of 370 (of 376) new trades in 204 ITIs. With the exception of Assam and West Bengal all States have met the targets and to date some 28,000 students have completed their training in the new trades. (c) AV Aids and Media Resource Centers (MRCs): 387 ITIs have been provided with AV equipment. After considerable delays, 10 MRCs were established -- 7 at ATIs, one each at a CTI, an NVTI, and an RVTI. About 80% equipment has been procured and is in use. These MRCs were to train 3200 ITI instructors in upgrading instructional capabilities of trainers in the use and development of instructional software through courses of 6 weeks duration. Because of the delays, the States utilized services of MRCs at ATIs and State institutions and trained some 6200 staff through courses of only 2 weeks duration with the Bank approval. Most States exceeded the revised targets. The major shortfalls were in Kerala (22%) and Assarn (27%), due to restrictions on travel outside the State. During discussions, the instructors as well as the students reported use of AV equipment on a limited scale for enhancing the quality of instructions. (d) Equipment Maintenance System: To develop equipment maintenance capability in the NVTS, 6 Regional Service Centers, 19 Equipment maintenance Workshops in different States and 93 Cells (of 100 planned) have been established. Four Cells in West Bengal would be operational soon and J & K (1 Cell) and UP (2 of 12 Cells) did not establish 3 Cells. About 85 % of the maintenance staff has been trained. A study of 35 ITIs in 7 States commissioned by the DGET concluded that percentage of machines in working condition has increased from a pre-project status of 50% to 92% at present. lComponents marked ** closed on December 31, 1998 while others closed on December 31, 1997.  5 (e) Post-ITI Courses for self-employment: Facing operational difficulties and lack of response from ITI trainees, the scope of this pilot scheme was scaled back after a study, in 1995, to 41 centers from the appraisal target of 100. Finally, 36 ITIs in 11 States have started these programs and trained some 1200 students during the life of the project. Other than recording reasons for lack of response from ITI graduates, no serious efforts were made to improve program design and delivery, provide qualified instructors or appropriate infrastructure. (f) Basic Training (BTC) and Related Instruction Centers (RI): To improve and expand Apprenticeship Training Programs two components had varying degree of success with considerable delays: (i) as per the revised target 18 BTCs (17 in States and one at RDAT Kanpur) have been established, which have provided basic training to some 2650 apprentices in trades not adequately covered by ITIs. Another BTC will start in Bihar by end- 1999; (ii) all the planned 44 RiCs (38 in 18 States and 6 in Regional Directorates of Apprenticeship Training ) have been established and trained some 70,000 apprentices. States have reported 5-23% increase in pass rates in apprenticeship programs. (g) Women's Training: To improve access to women for training in modem trades four schemes have been implemented. The two State schemes (i and ii below) have achieved and some even exceeded the target while Central schemes have met with marginal success: (i) 96 (of 100) New Women ITIs/Wings (WITIs) have been established (estimated cost RS 615 million) and are functional with some 24300 ( against a target of 16000) women having completed their training during the project. The remaining 4 in Bihar are expected to be fully operational in 1999 after completion of civil works and appointment of staff; (ii) 117 (of 120) demand-driven courses in 19 new trades covering 64 existing WITIs have been introduced with reported output of 6,500 graduate; (iii) the target of establishing 4 new RVTIs could not be achieved due to delays in site acquisition. These centers are, however, functioning in temporary location with limited facilities and staff shortages and conducting the courses as per revised target; and (iv) the scheme of strengthening the existing RVTIs and NVTI, in spite of less than planned support due to delays resulted in producing some 1600 graduates against the target of 1304. OBJECTIYE 2: Expanding Advanced Vocational Training Program 13. Overall, the objective of expanding advanced skill training for instructors and industry has been partially achieved as summarized below: (a) Expansion and Improvement of Advanced Vocational Training Programs: In the Central sector, training in 6 ATIs has been strengthened and expanded in new areas. Advanced training facilities exist in 30 (of 33) ITIs; the remaining 3 in UP and Haryana will start operations in 1999. Total outputs reached 33,000 against the revised target of 17,000. Training outputs from MP and Orissa are low while Maharashtra and Gujarat did very well. These institutions still suffer from inadequate staffing and equipment and will take some time and further investment to reach the planned level of quality programs at appraisal.  6 (b) **Apex Hi-Tech Center and Units: Although a TA contract was signed with GTZ in July 1995, some 200 staff months of training (including 24 staff months in Germany) was provided to staff, curricula were developed after careful need assessment and equipment lists was prepared, the Apex Hi-Tech Training Center (a key resource center) could not be established as planned. This is a major shortfall in the achievement of project objectives due to delays in decision making. The Apex Center is now functioning with limited capacity in a temporary location and one program for industry has been conducted recently. Some training has also been conducted for staff of 19 institutes ( 10 ITIs, 7 ATIs, NVTI and RVTI) which will start offering Hi-Tech training programs from 1999/2000. In these institutes, renovations to buildings have been completed and equipment installation is in progress. OBJECTIVE 3: Improvine NVTS Plannin2 Management and SuDervision 14. The objective of improving planning and management were marginally achieved. The status is summarized below: (a) Improving NVTS Planning Management and Supervision: The Project Implementation Units at the DGET (CPIU) and 18 States (SPIUs) were established after considerable delays (about 2 years) and were adequately staffed but suffered from frequent staff changes at senior level. Staff of these Units were trained at the IIM Calcutta. A major achievement of the project is closer interaction between industry and ITIs. Major developments include formulation of Advisory committees, MOUs between CII and State Directorates, partnerships between some ITIs and companies, and work started in the northern States for reaching an understanding on joint management of ITIs by Government and the industry. The outcomes, supported by DGET and the MOL, are positive and rapidly expanding require continued support. With appropriate policy changes, there could be a major break through if the current trend continues. (b) **Establishment of a Monitoring and Evaluation System: Efforts were made by some States (Maharashtra, Gujarat, Punjab and Karnataka) to develop and use MIlS modules with their own efforts. According to Internal Finance (IF) of MOL this component required revision of the EFC even though it was included in the project description of the Credit Agreement. Establishment of MIS could, therefore start only in May 1997, after it was included in the revised EFC. The MIS, designed by the National Informatics Center (NIC), will cover 18 States, CPIU, and the NIC. Equipment procurement faced problems during final stages; 5 core MIS modules are ready and field tested; remaining modules are under preparation; and staff training will start after equipment installation. The MIS will now be established with funds to be provided by the DGET for which there is a strong commitment. (c) Improving Testing. Certification and Documentation: The existing Trade Testing and Certification wing at DGET could derive only marginal benefits during implementation. Because of long delays in approval of creation of key posts, the Documentation center is still in a preliminary stage of development and has a long way to go before it provides any useful service to the NVTS. The progress so far includes appointment of (4 of 6) professional staff; completion of minor civil works; and initiation of the procurement process of equipment. The outputs include a  7 seminar, field testing of 2 question banks, and plans to introduce objective type tests for one trade in July 1999 - hardly enough to initiate a major change in trade testing. (d) Strengthening DGET Women's VT Unit: This component has resulted in the appointment of 10 additional staff and creation of a Directorate of Women Occupation responsible for overall development, planning, and monitoring. Details of future plans, and staff development activities of this directorate are awaited and will be incorporated in the ICR. (e) Reorienting CSTARI: The capacity for expected research role of CSTARI, agreed at appraisal, could not be developed and this might restrict research capability that was planned for the future developments in the NVTS. Although some additional staff and some equipment was provided, the TA provision (36 staff months of consultants and 22 months of training) to CSTARI was not utilized and an opportunity to reorient its activities has been lost. The activities performed during the project implementation lag far behind the expectations at appraisal of 'a primary agent of organizational change within the NVTS'. (f) Studies: All the four studies agreed during appraisal have been completed after minor delays. CPIU has reported completion of 8 additional studies covering a wide range of critical issues in the NVTS. Procurement and Staff Appointments 14. Procurement of works, equipment, and technical assistance (TA) were completed with considerable delays which necessitated two project extensions; the second was given in December, 1997, to facilitate procurement of modem and hi-tech equipment and TA. Could the delays in procurement have been avoided? Probably yes, but even the qualified staff responsible for project implementation and procurement succumbed to red tape. 15. Civil Works: Of 438 civil works in the States, 431 are completed. The States faced the problem of multiple State level as well as Central approvals before inviting bids and the final award of contracts. The DGET approved the scope and estimated cost for works under each scheme during the initial years of the project and transferred the Central shares on this basis. Many works faced delays resulting in price escalation. Any modifications and subsequent cost escalation were not approved by the DGET for reimbursement purposes. However, with regular monitoring by DGET, all but 7 works (which are also nearing completion) were finally completed. Some Central schemes also could not take off due to abnormal delays in site acquisition, appointment of an implementation agency, or appointment of architects. This led to the cancellation of all 5 major works in the Central sector by the Bank 16. Equipment: Abnormal delays in equipment procurement resulted in two postponements of the closing date and even with these postponements, about 20% equipment could not be procured. The involvement of highly experienced NTPC and DGS&D as the procurement consultants/ agency did not help and probably added yet another layer of approval to the already complex and multi-layer approval process. However, the State level procurement was more efficient and even procured additional equipment when NTPC could not handle certain packages. Timely preparation of the equipment specifications, bid packages and institution-wise lists of requirements, and removal of many layers of approval would have helped in minimizing some of the delays in procurement.  8 17. Staff appointments: Delays in appointment of staff resulted in the availability, during the last stages of implementation, of 3756 of 4250 created posts after considerable difficulties. Because of this and some other failures, project disbursements were stopped once and another likely stoppage was averted by timely actions taken by the DGET/MOL to meet the Bank's requirements. These delays resulted in: (a) belated introduction of new courses; (b) most staff training taking place during the end of the project for shorter than planned duration; and (c) benefits from quality improvement initiatives being passed on to the students much later than planned. 18. **Technical Assistance: Technical assistance utilization has been delayed and is much below the appraisal estimates. These delays reduced the capacity of central project institutes/centers like CSTARI, NVTI and MRCs, to provide adequate services to NVTS for improvement of quality. The project restructuring done in 1996 reduced and rescheduled TA according to feasibility of implementation and urgency of needs in the States. New targets set for State sector staff training have been generally achieved. DGET organised foreign training and consultancy services in hi-tech areas through a contract with GTZ (The contract closed on July 15, 1998 with partial achievement). DGET have reported utilising bilateral and multilateral assistance for foreign training and consultancy support. Overall, the TA component, because of its reduced scope, has only marginally improved the capacity of NVTS to provide leadership and expertise in setting up new thrusts. Implementation Experience 19. The project was plagued with delays since inception. In the early stages of implementation, State commitment and ownership was lacking and because of the large number of States and agencies involved in implementation, there were many co-ordination and management problems. Creation of minimum infrastructure in CPIU and in project States took about two years. Lack of timely release of funds also contributed to delayed progress in timely achievement of most project objectives. Bank missions expressed repeated concerns about: (a) appointment of key staff; (b) failure to utilise technical assistance provisions; (c) lack of progress in women's training; and (d) overall unsatisfactory performance led to a suspension of disbursement in July, 1994. The suspension was lifted in January 1995. on satisfactory progress in reaching benchmarks set by the Bank and the acceptance of conditions set for continued support. In addition, disbursement was suspended four times due to delays in receipt of SOE audit certificates. From 1995 State components of the project started showing steady progress. Slow progress continued in Central components which included Hi- Tech Training Centre, AVTS, RVTIs, NVTI. 20. It appears that IF was guided by only the EEC document and not by the Credit agreement in its strict financial control over the project. Because of approvals needed at every stage, this was the single largest contributor to delays in the project. The price escalations and contingencies were not allowed and the components could not exceed the EFC ceilings. Project entities lost all flexibility and could not use additional funds that became available due stronger SDR without revision of the EFC memo that took about 2 years. 21. Major outcomes of the project, as expressed by sample beneficiary groups of students, teachers and principals, and representatives from industry during 3 workshops conducted by the ICR mission are: modernization of workshops; systematic faculty development; and interaction  9 between industry and ITIs, which should all be continued vigorously during the operational phase. Some Major Unanticipated Project Gains 22. Some areas where the implementation resulted in unanticipated gains or exceeded SAR targets include: (a) A draft paper proposing new policy initiatives for vocational training has been prepared and reviewed by an expert committee comprising representatives of all stake holders. The proposals are awaiting final review by NCVT and would then be sent to the Cabinet. The new policy includes decentralization, involvement of industry in the management and financing of VT, and flexibility in program design and delivery. This goes much beyond the anticipated scope of the Industry-Institute Cooperation proposed in the project and is likely to establish a lasting partnership with the industry in the management of VT. (b) Output from New WITIs exceeded the target by 52% -- reported output is about 24,300 against the target of 16,000. In addition, 6,500 have been trained in new trades in existing WITIs and some States have started reservations for women in general ITIs also. KEY LESSONS AND FUTURE OPERATIONS 23. At the final closing, the commitment of States is high and repeated requests were made by officials and industry to the Bank to continue support through another project as there is a lot of work yet to be done. The mission was explained the well drafted operational plan. During the operational phase, adequate funds would be available to complete unfinished works and to continue quality improvement activities. 20. Following is a summary of important findings and key lessons learned during this first Project in this sector in India: (a) The EFC memo for such a comprehensive national project with interdependent components should discourage selectivity in component approval by the IF during implementation. It should provide some flexibility during implementation and should also take into account normal price escalations and currency fluctuations, and should preferably be designated in SDRs. After approval of the memo, further approvals of the project components should not be sought during the implementation stage. (b) The project could have achieved greater success with more decentralization and flexibility to States and ITIs in the selection of trades according to local needs, procurement of equipment, and curriculum development. (c) In a national project with a high degree of complexity, participatory approaches during project preparation and implementation, involving States, ITIs and other professional institutions, could have improved project ownership and outcomes.  10 (d) Frequent changes in the senior implementation staff should be avoided. Technical assistance, specially training, should be provided to project implementation staff in Bank procurement whenever a first project is approved in a sector. (e) To avoid delays in project implementation, land acquisition and architectural design of buildings should start before negotiation. Any works not coming to the bidding stage within one year of effectiveness should be cancelled along with the other relevant components. Time Table for ICR: The following time table for completion of the ICR was agreed during the mission: Draft ICR sent to the Borrower ---------------- April 15, 1999 Borrower's draft ICR given to the Bank-------- ---- April 30, 1999 Borrower's comments received on Bank's ICR---- April 30, 1999.  Tele: 3710265 Fax: 3355679 _3T9 7fmq TtI 1 Ministry of Labour . fTT F{r9 SECRETARY Shram Shakti Bhavan T fNi8-e909 Govemment of India New Delhi-l 10001 D.O.No.26(3)/97-CPIU (Vol.IV) May 28, 1999 I would like to thank you for your letter dated 1 lth May, 1999 enclosing a copy of the draft Implementation Completion Report (ICR) of the World Bank assisted Vocational Training Project. I agree with Bank's assessment that the outcome of the project has been satisfactory. Sample studies indicate substantial improvement in internal and external efficiency of the project ITIs. There has been improvement in pass rate, retention rate, employment rate and operational efficiency in the Institutions assisted by the project. The institutional development and physical objectives have been mostly achieved except for a few central schemes. It gives me satisfaction that Bank's ICR has commended the extra-ordinary efforts made by the concerned officials at the Centre and States to ensure success of the project. It has also lauded their strong commitment and desire to make a difference in the system. I also agree that services of professionals within and outside the NVTS have been well utilised in monitoring, evaluation and development of strategies. Apart from impact study in seven States,. tracer study and evaluation of training in ITIs with Confederation of Indian Industries quoted as examples in Bank's ICR, formation of Institute Managing Committees and draft National Policy paper on Vocational Training are also good examples of favourable outcomes of the project, which were not originally envisaged. The reasons for slow progress in the implementation of the project during the initial period could be attributed to the fact that it was the first project in this sector both for the Ministry of Labour and the World Bank. The Project was highly complex involving 20 different schemes and 2B States/UTs apart from central institutions. There were differences between Bank's and  Government's procedures. Once the initial bottlenecks were sorted out, the pace of implementation picked up. However, delays in granting approval for extension of the project by the World Bank and ban on disbursements in July, 1994 despite gaining momentum :in procurement of equipment and civil works hampered achievement of objectives. In fact, it had been a good learning experience for design and implementation of projects of this nature and magnitude. OuLr view is somehow corroborated by the Bank's view mentioned in its ICR that "This project had its origins in the World Bank's efforts in the late 1980s to enter into the Education sector in India. This first project, though rather ambitious and highly centralised with many associated problems, led to a series of Bank assisted projects in technician education and primary education with large investments." In consideration of the circumstances, constraints and extraneous factors brought out above, it would perhaps not be appropriate to term Borrower's performance during first 4 years as deficient. I would like to place on record our deep appreciation for the support and cooperation provided by the members of the World Bank's missions and other staff associated with the project, in particular by Dr.S.K.Shrivastava. He has significantly helped in accelerating the progress of implementation. In the ultimate analysis it can be said that the project was timely and relevant to Ministry of Labour's long-term objective to modernize and expand NVTS. The outcome of the project has been satisfactory. We are committed to build upon the gains from the project and complete the remaining tasks. We appreciate Bank's view that future support, if any, from the Bank should focus on support to proposed National Policy on Vocational Training. Yours sincerely, (Dr. L. Mishra3 Mr.Ward Heneveld, Education Sector, Team leader for India, World Bank, 70, Lodhi Estate, New Delhi - 110 003.  OWJ OlO C;DZCD ~DO~f ~ i~ ~~o tn P M I