India - Second National Leprosy Elimination Project

Document of The World Bank Report No: 21751 PROJECT APPRAISAL DOCUMENT ON A PROPOSED IDA CREDIT IN THE AMOUNT OF SDR 23.3 MILLION (US$30.0 MILLION EQUIVALENT) TO INDIA FOR THE SECOND NATIONAL LEPROSY ELIMINATION PROJECT February 27, 2001 Health, Nutrition and Population Unit South Asia Region  CURRENCY EQUIVALENTS (Exchange Rate Effective January 25, 2001) Currency Unit = Rupee Rs. I = US$0.0215763 US$1 = Rs. 46.3 FISCAL YEAR April I - March 31 ABBREVIATIONS AND ACRONYMS BBC British Broadcasting Corporation CAS Country Assistance Strategy Danida Danish International Development Assistance DGHS (LD) Directorate General of Health Service (Leprosy Division) DGS&D Director General of Supplies and Disposal DLS District Leprosy Society EA Environmental Assessment EMP Environmental Management Plan GHS General Health Services GOI Government of India IBRD International Bank for Reconstruction and Development IDA International Development Association IEC Information, Education and Communication LEC Leprosy Elimination Campaigns LQAS Lot Quality Assurance Sampling MB Multi-bacillary MDT Multi-drug Therapy MLEC Modified Leprosy Elimination Campaign MOHFW Ministry of Health and Family Welfare NGO Non-Governmental Organization NLEP National Leprosy Eradication Project PAD Project Appraisal Document PIP Project Implementation Plan PB Pauci-bacillary PFMS Proiect Financial Management System SAPEL Special Action Projects for Elimination of Leprosy SLS State Leprosy Society SSL Single lesion Pauci-bacillary Leprosy WHO World Health Organization UT Union Territories Vice President: Mieko Nishimuzu Country Director: Edwin R. Lim Sector Director: Richard Skolnik Task Team Leader/Task Manager: Peter Heywood  INDIA SECOND NATIONAL LEPROSY ELIMINATION PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key perforrnance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2 2. Main sector issues and Government strategy 2 3. Sector issues to be addressed by the project and strategic choices 3 C. Project Description Summary 1. Project components 6 2. Key policy and institutional reforms supported by the project 7 3. Benefits and target population 8 4. Institutional and implementation arrangements 8 D. Project Rationale 1. Project alternatives considered and reasons for rejection 9 2. Major related projects financed by the Bank and other development agencies 10 3. Lessons leamed and reflected in proposed project design 11 4. Indications of borrower commitment and ownership 11 5. Value added of Bank support in this project 12 E. Summary Project Analysis 1. Economic 12 2. Financial 13 3. Technical 15 4. Institutional 15 5. Environmental 16 6. Social 17 7. Safeguard Policies 20 F. Sustainability and Risks 1. Sustainability 20 2. Critical risks 21 3. Possible controversial aspects 21  G. Main Loan Conditions 1. Effectiveness Condition 22 2. Other 22 H. Readiness for Implementation 22 I. Compliance with Bank Policies 23 Annexes Annex 1: Project Design Summary 24 Annex 2: Detailed Project Description 27 Annex 3: Estimated Project Costs 32 Annex 4: Economic and Financial Analysis Summary 36 Annex 5: Financial Summary for Revenue-Eaming Project Entities, or Financial Summary 39 Annex 6: Procurement and Disbursement Arrangements 40 Annex 7: Project Processing Schedule 58 Annex 8: Documents in the Project File 59 Annex 9: Statement of Loans and Credits 60 Annex 10: Country at a Glance 64 Annex 11: The Burden of Leprosy in India 66 Annex 12: Methods for Assessing Progress towards Leprosy Elimination 76 Annex 13: Surveys to Monitor Performance of Leprosy Elimination Program 81 Annex 14: NLEP Information System 89 Annex 15: Strategy for Tribal Populations 93  INDIA SECOND NATIONAL LEPROSY ELIMINATION PROJECT Project Appraisal Document South Asia Regional Office SASHP Date: February 27, 2001 Team Leader: Peter F. Heywood Country Director: Edwin R. Lim Sector Director: Richard Lee Skolnik Project ID: P067543 Sector(s): HS - Specific Diseases, including Malaria, TB, Others Lending Instrument: Specific Investment Loan (SIL) Theme(s): Health/Nutrition/Population Poverty Targeted Intervention: Y Project Financing Data [ ] Loan [X] Credit [ Grant []Guarantee [ Other: For Loans/Credits/Others: Amount (US$m): 30.00 (SDR 23.3 million) Proposed Terms: Standard Credit Grace period (years): 10 Years to maturity: 35 Commitment fee: 0.5% Service charge: 0.75% Financing Plan: Source Local Foreign Total BORROWER 12.20 0.00 12.20 IDA 30.00 0.00 30.00 Total: 42.20 0.00 42.20 Borrower: GOVERNMENT OF INDIA Responsible agency: GOVERNMENT OF INDIA Ministry of Health and Family Welfare Address: Ninnan Bhawan, New Delhi 110 001 Contact Person: Mr. Javid Chowdhury, Secretary Tel: 91-11-3018863 Fax: 91-11-3014252 Email: Estimated disbursements ( Bank FY/US$M): FY 2002 2003 2004 2005 Annual 13.00 11.00 5.00 1.00 Cumulative 13.00 24.00 29.00 30.00 Project implementation period: 3 years FY02-FY05 Expected effectiveness date: 07/01/2001 Expected closing date: 12/31/2004 X:S PAD F-n,: PN. M, 2X   A. Project Development Objective 1. Project development objective: (see Annex 1) * Transform the national leprosy control program to an effective and sustainable program through a decentralized and integrated approach which increases community access to multi-drug therapy. This transformation would assist India to eliminate leprosy as a public health problem at all levels. 2. Key performance indicators: (see Annex 1) * Decentralize leprosy control activities to the states over the course of the project. * Integrate leprosy control activities with general health services. * Reduce estimated 'actual' disease prevalence to less than 3/10,000 at the national level by the end of 2004. * Assist India in reducing the recorded national prevalence to less than 1/10,000 by the end of 2004. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 17241-IN Date of latest CAS discussion: 02/18/99 Board Discussion of the last full CAS (Report No. 17241 -IN) was on January 15, 1998 and Board Discussion of the CAS Progress Report (Report No. 20184-lN) on February 18, 1999. The proposed operation is fully consistent with the over-riding CAS objective of assisting India to reduce poverty. Leprosy disproportionately affects the poor and the most socially vulnerable groups including women, scheduled castes and tribal groups. Not only does leprosy target the neediest, it aggravates the suffering with devastating social ostracization and the economic burden on the victims through loss of employment opportunities. Reducing infection and disability from this disease is consistent with the CAS objective of enhancing equity and accelerating human development of the poor. The decentralization of leprosy control activities to states and the integration of the vertical program with general health services will support the CAS strategic objective of strengthening management and planning at the state level. Moreover, by making available to disadvantaged groups, a highly effective health intervention, the project would address a key health issue, as proposed in the Comprehensive Development Framework. Finally, the proposed operation is a follow-up to the recently closed first National Leprosy Elimination Project, also partially financed by Intemational Development Association (IDA). 2. Main sector issues and Government strategy: The major sector issues are: * poverty-related health problems, with health indicators (including for communicable disease) below average for the country's stage of development and income level * inadequate institutional arrangements and weak program management, including centralized management of disease control programs * inadequate framework for engaging private sector participation * low quality of HNP services in both the public and private sector * ineffective targeting of public subsidies to the poor and a low overall level of public expenditure on health -2 -  The government is addressing these issues as follows: * increased investments in economic growth and human development * increased efforts since the early 1990s to control the major communicable diseases * increased efforts to decentralize disease control efforts to the state and district levels * health sector reform to improve implementation capacity at the state and central levels, define the role of the private sector in the overall health system more clearly, and improve the quality of care in both public and private sectors 3. Sector issues to be addressed by the project and strategic choices: The international context of leprosy control When leprosy control efforts began after World War II, the overall outlook was pessimistic due to long treatment times and the consequent low compliance rates. Treatment times were reduced by the discovery and evaluation of new drug combinations, but gains made were dented by increasing drug resistance resulting from monotherapy with dapsone, the drug of choice at the time. The intemational leprosy community moved to multi-drug therapy (MDT) in an effort to contain the emergence of even higher levels of resistance. Encouraged by the success of MDT in curing leprosy patients, in 1991 the World Health Assembly adopted a declaration to 'eliminate' leprosy as a public health problem by the year 2000. Internationally, efforts were further intensified in 1995 through Leprosy Elimination Campaigns (LEC) and Special Action Projects for the Elimination of Leprosy (SAPEL). The Indian response Leprosy control efforts in India have very much been in step with the international pattern. The National Leprosy Control Program was launched by the Government of India (GOI) in 1955 using the treatment strategies of the time. In 1983, based on international recommendations, the treatment strategy was changed to multidrug therapy. However, coverage remained limited due to a range of organizational issues and fear of the disease. As in other countries in which leprosy was highly endemic, India committed itself to the 1991 World Health Assembly strategy and goal; as part of this commitment, GOI and the IDA collaborated on a national leprosy elimination project, which became effective in 1993. The project, which supported the vertical program structure used by GOI for National Leprosy Eradication Program (NLEP) and instituted large scale Modified Leprosy Elimination Campaigns (MLEC), achieved notable results: nationally recorded prevalence has fallen from 24 per 10,000 (in March 1993) to a reported 5 per 10,000; new case detection increased to reach 600,000 (from 300,000) in 1999; and there is indication that cure rates have improved. However, despite this impressive effort, progress in reducing the case load was less than expected - with prevalence settling at significantly above the elimination level of 1/10,000 and higher than the target for the project (as revised at mid-term) of 3-4 per 10,000. Based on the results of an evaluation of the NLEP undertaken by GOI, an expert group charged with estimating 'actual' prevalence of leprosy in the country, arrived at a midpoint estimate of 7 per 10,000 with lower and upper limits, respectively, of 5 and 9 per 10,000 population (see Annex 11 for details of the estimates and the methods used). The uncertainties surrounding leprosy indicators and trends make it difficult to estimate how long it will take to reach elimination levels. It appears at this time that the goal of elimination, as measured by the estimated 'actual' prevalence, can not be reached in 3 years - a more realistic target is an estimate of the' actual' prevalence rate of 3 per 10,000 for the country as a whole by the end of 2003. The project will -3 -  assist the GOI in acheiving its goal of reducing the recorded national prevalence rate to less than 1 per 10,000. From the experience to date, treatment strategies are likely to remain as they are now - early case-finding and treatment with MDT. Due to continued control efforts the workload due to leprosy is expected to decrease (as it already has in many areas) and there will be increased need to contain costs. These pressures, together with the need to ensure sustainability and increased state-specificity and responsibility for disease control activities will require new institutional arrangements - leprosy control activities will need to be integrated with the general health services (GHS) and responsibility for them decentralized to the states. Institutional and design issues: (i) time frame of the second project. A critical design issue for the second project is the period over which it will be implemented. On the one hand, it is clear that elimination levels will not be reached quickly, particularly in those states and districts where prevalence is high. Nevertheless, the total workload in these areas will be relatively low and cost pressures mean that it will not be feasible to continue with the current vertical program. The need is to transform the program in a way, which facilitates sustainability rather than achieves a particular level of prevalence. The time frame for the current project, then, is principally determined by the time needed for transformation of the program. (ii) an increased role for, and decentralization of leprosy control activities to, the states. The NLEP strategy and funding mechanisms provided for a facilitatory role for the state in leprosy elimination. The Program was centrally sponsored and controlled and implemented through district leprosy societies (DLS), which received money directly from the central government. As a result, the states have had insufficient involvement in the program. The direct involvement of the center in program supervision of the districts has limited development of the technical and supervisory capacity of the states. It is important, during the project period, to prepare the states to administer and manage leprosy control. (iii) improved integration of the staff of the vertical program with the GHS. GOI recognizes that separation of elimination activities from the GHS has hindered implementation - it has led to limited intervention in some geographical pockets with resulting limited access to MDT, low levels of compliance with treatment and subsequent re-registering of these cases as 'new'. Further, effectiveness of the vertical system is challenged by performance criteria which burden workers with annual case detection targets (reinforced by monetary incentives, since discontinued), and possibly reduce the accuracy of diagnosis, and low workloads. The maintenance of a vertical component in areas of high prevalence is justified in the short term only if it ensures integration of leprosy services into the GHS. Although merging activities of the vertical staff of the Program with the GHS was envisaged in 1993 as occurring once elimination as a public health problem occurred, very little has been done to achieve this. Technical issues: (i) uncertainty about the epidemiology of leprosy. The disease has not behaved as expected - despite large increases in case detection and a fall in recorded prevalence, new case detection rates have remained high. Because leprosy has a long incubation period a reduction in transmission may not be evident for some years after prevalence is reduced. Further, a significant, but uncertain, proportion of the reduction in prevalence has been due to the shorter treatment schedules and clearing of registers rather than a reduction in incidence. The MLECs and SAPELs, coupled with an unknown amount of over-diagnosis, have tended to increase prevalence but due to long incubation periods, the intended effect of MLECs on transmission may be much less than originally estimated. The relative importance of these conflicting pressures and, thus, their net effect is unknown. Consequently, fresh doubts have emerged about the value of the case detection - 4 -  rate as a proxy for incidence and about the extent to which MLECs have contributed to decrease in transmission. Overall, most leprosy epidemiologists agree that we have little information on incidence. (ii) improved and more accurate case finding. Even though the prevalence of leprosy has decreased during the last decade of leprosy control activities the number of new cases detected has remained relatively constant. This raises questions about the accuracy of diagnosis, extent of re-registering of old cases as new, and whether the incentive structure (annual targets and incentives for staff), rather than the incidence and treatment of the disease, have determined the annual case finding rate. In addition, it is important that the case finding strategies adopted ensure that all locations and social groups are adequately covered. (iii) determine the priority to be given to disability care and prevention in a new project. Despite its inclusion as a component, there was little emphasis on this aspect in the first project, the performance of the public sector was below expectations and disability care was subsequently dropped as a development objective. This raises the question as to whether the government is the best group to deliver, as distinct from finance, these services. At the same time, it is important that the balance between elimination and disability care is such that the overall goal of leprosy elimination is not compromised. (iv) improved and explicit role for non-goverment organizations (NGOs). Both national and international NGOs have played an important role in leprosy treatment and rehabilitation, information, education and communication (IEC) and training. However, their role in the leprosy control efforts of the government has not been amplified. This has limited their contribution to significantly less than their potential. There is potential for increased contribution by NGOs to leprosy control. (v) increased emphasis on, and explicit strategy for IEC activities, including interpersonal counseling skills. At the present time, the NLEP does not have a clear, well-articulated IEC strategy. However, it is recognized that the need for effective IEC activities will increase as the prevalence falls and case finding efforts are intensified. (vi) improved planning and evaluation of training. Although integration of the leprosy program staff with the GHS requires considerable training and was envisaged in the first project, it has been limited in its effect. As with IEC, there was no overall training strategy, little evaluation of efforts, and these activities received a much lower priority than required. (vii) strengthening and decentralizing monitoring and surveillance. This will become more critical to targeting of control activities as the overall number of cases decreases and, at the same time, may become more concentrated in clusters. In addition, the uncertainty about the epidemiology of leprosy and our lack of a suitable indicator for transmission means that it will be important to supplement routine surveillance with new case detection monitoring studies in sub-populations of, at least some, endemic states using standardized methods and diagnostic criteria. At the same time, validation of elimination will be dependent on an adequate surveillance system. In order to address these issues through the project the following strategic choices have been made (see Project Appraisal Document (PAD) Section D. 1 for a discussion of the reasons underlying the these choices): (i) time frame - the project will be implemented over a three year period with emphasis on creation of an effective, integrated and sustainable program. - 5 -  (ii) sustainability and effectiveness will be promoted through: * decentralization of responsibility for implementation of control activities to the states * integration of leprosy services with the GHS * emphasis on early case-finding (including ensuring that all locations and social groups are covered), treatment with MDT and prevention of disabilities * involvement of NGOs in leprosy control activities and their coordination with the GOI activities * increased emphasis on IEC as an integral part of control activities * strengthening human resource development and management * monitoring and surveillance, including special studies to assess the effect of the program on disease prevalence in selected endemic populations. C. Project Description Summary 1. Project components (sec Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The policy issues addressed under the project would prepare the country to shift from a cost intensive vertical system of delivery of leprosy to a sustainable system integrated into the general health services of states while assisting the country in the control of leprosy. IDA would finance about 71 percent of the incremental requirement of the project over three years. The Central Leprosy Unit would oversee investments throughout the country in association with state departments of health, with special attention to the five focus states. Additional support would be available from international donor NGOs and technical support agencies. No fonnal co-financing with other partners is planned, but all extemal agencies work under a common leprosy control framework. Specifically: Intemational Federation of Anti-Leprosy Associations agencies / Danish International Development Assistance (Danida) / World Health Organization (WHO) would provide management and technical support to the five highly endemic states and the centre. Danida would also support service delivery in the states of Orissa and Madhya Pradesh. Component 1. Decentralization and institutional development Decentralization is based upon the preparation of state-specific and central plans which redefine the roles and responsibilities of the center, states and districts; the development of skills and deployment of sufficient and necessary staff required at each level to implement these roles; central, state and district plans for the project activities which are consistent with these revised roles and responsibilities. Successful decentralization will also require complementary, supportive strategies in other areas and particularly in surveillance, procurement support, fund flow mechanisms and financial management. Component 2. Strengthen and integrate service delivery The MDT strategy has been widely implemented in the first project and, together with early case detection, will form the centerpiece of the technical approach to be used in the second. The service delivery strategy will emphasize a mix of active and passive case detection, integration of leprosy control activities with the GHS and attention to hitherto 'un-reached' segments of the populations within states and districts through special campaigns and drives. The Novartis Foundation will make drugs available free of charge, which will be procured and supplied by WHO. Component 3. Disability prevention This activity achieved only limited success in the first project and the government approach will be revised in the second to give much greater responsibility to those NGOs who have specific skills in this - 6 -  area. Thus, the state governments will increasingly provide the funds while the NGOs deliver the services. Component 4: Information, education and communication IEC activities will be strengthened to complement the service delivery strategy, including both active and passive case detection, reduction in stigma and an emphasis on the availability of safe and effective treatment. Component 5: Training Reorienting staff to an integrated approach and providing the new skills needed by the staff of the GHS will require a large and coordinated training effort in the second project. For this, a clear training strategy and timetable, has been developed. Retroactive financing. As the first project closed on September 30, 2000, there will be retroactive financing from that date. Retroactive financing to the extent of US$2.9 million equivalent (approximately 6.9 percent of the proposed Credit) would be provided for expenditures which follow the standard features of eligibility. This would include eligible project related expenditures accepted as consistent with appraised standards, procured in accordance with standard Bank guidelines and clearly accounted and subject to audit. Indicative Bank- % of CPomponent Sector Costs % Of financing 8 nk Decentralization and institutional HE 2.50 5.9 2.36 7.9 development Strengthen and integrate service HE 27.80 65.9 16.50 55.0 delivery Disability prevention HE 3.70 8.8 3.00 10.0 Information, education and HE 5.00 11.8 4.94 16.5 communication Training HE 3.20 7.6 3.20 10.7 Total Project Costs 42.20 100.0 30.00 100.0 Total Financing Required 42.20 100.0 30.00 100.0 2. Key policy and institutional reforms supported by the project: The project would support five key policy and institutional reforms: 2.1. Decentralization of implementation and management responsibility for leprosy control activities to the states and districts. This is explicit in the design of the project as set out in the project implementation plans furnished by the GOI. In addition, each state will provide a Memorandum of Understanding indicating their commitment to these state-specific plans and to credible mechanisms for guaranteeing flow of funds to the states and districts. 2.2. Integration of leprosy activities with the general health services of the states, with particular emphasis on case detection, treatment and surveillance. This will also be included in the Memorandum of Understanding from the states. -7 -  2.3. Phasing out of central funding of vertical staff and institutions that are agreed between the Bank and GOI to be superfluous and/or detrimental to the effort to integrate services. In addition, commitment by the Center to provide advice to states regarding the continuing need (or otherwise) of all categories of vertical staff employed by the government for the purposes of leprosy control. 2.4. Elimination of all incentive payments related to case finding. 2.5. Institution of independent surveys of program implementation, including progress in decentralization and integration of leprosy services with the general health services and monitoring and validating levels of leprosy prevalence in the community. 3. Benefits and target population: IDA credit extended to India in 1993 has helped make considerable inroads into reducing the leprosy burden in the country. It is expected that the proposed IDA project would enable India to transform the national leprosy control effort to an effective and sustainable program through a decentralized and integrated approach. Beyond the life of the project, this transformation would assist India to eliminate leprosy as a public health problem. The prevention of disability would alleviate human suffering and decrease economic loss and the social burden and stigma of the disease. Leprosy control generates high externalities and the project would have a high social return in terms of healthy life years saved. The impact of leprosy is highest amongst the poor. The project will reach underprivileged communities and it is estimated that 60 percent of those reached will be living below the GOI poverty line. With respect to tribal people, it is expected that the project would reach about 140,000 tribals all over the country with treatment for leprosy. 4. Institutional and implementation arrangements: The project, which will decentralize responsibility for project implementation from the center to the states, will be implemented over a period of three years. Implementation arrangements will be as follows: 4.1. Role of Central Govemnment. The Project would be coordinated by the Central Leprosy Unit of the Ministry of Health and Family Welfare (MOHFW), New Delhi. The Deputy Director General of Health Services for Leprosy will be the Project Director holding sole charge. S/he will be responsible for overall implementation of the project and its financial management, central level procurement, annual work-plans, management and technical support to states and an annual progress review of the program. GOI will be responsible for ensuring compliance by states with central policies and technical guidelines and will monitor Project progress. 4.2. Role of the States. The State Departments of Health through the State Leprosy Officer will be responsible for managing implementation of the leprosy control activities in conformity with NLEP guidelines. This officer will hold sole charge of this project. In his/her capacity as Secretary of the State Leprosy Society (SLS) through which funds for leprosy control will be channeled (of which the Health Secretary is the Chairperson), s/he will be responsible for financial management of the project within the state, state level procurement, annual work-plans, management and technical support to districts and annual progress review of the program in the state. On advice of the center, s/he will be responsible for reviewing continuation of vertical staff employed by the state for leprosy control activities. Where leprosy control activities are contracted to NGOs/private sector, this will be done - 8 -  through the SLS / other designated funding channel in compliance with guidelines agreed with the center. 4.3. District Leprosy Societies. Implementation of leprosy control work-plans at district level will be funded through DLS, under the overall supervision of State Department of Health. The DLS (through which funds for leprosy control will be channeled), through the District Leprosy Officer, will be responsible for district procurement and implementation of district annual work-plans and financial management systems, including review of vertical staff responsibilities as agreed by the State. 4.4. MLECs. SAPELs and LECs. Large scale MLECs and focused rural SAPELs and urban LECs will continue to be used. These were introduced in the last project and form an important strategy for reaching special groups and areas under this project. 4.5. General health services. States with relatively low prevalence of leprosy, will implement leprosy control activities through the general health staff and will undertake review of continuation of vertical staff and institutions established under the leprosy control program in year I of the project. High endemicity states will continue current rosters of vertical staff and institutions. Review of IDA funded rosters will be undertaken during the life of the project, with a view to reductions in the overall complement of vertical staff using agreed triggers. 4.6. NGOs. As in the past, NGOs will continue to play an important role, which will vary by district and state depending on capacity and disease burden. Activities that will be carried out by each NGO will be formalized through an appropriate agreed mechanism with each state. The formal undertaking will include the description of services to be provided, mechanisms and indicators of achievements and accountabilities of the NGO and commitments by the state. D. Project Rationale 1. Project alternatives considered and reasons for rejection: Whilst the first project achieved considerable gains, a number of important issues remain. These have been referred to in sections B.2 and D.3. The main project alternatives considered related, first, to the overall design; and second, to the length of the project. With respect to overall design, the first alternative considered was continuation of the same design as in the first project; and second, a modified design which stressed decentralization of leprosy control activities to the states, integration of the control activities with the general health services and strengthening complementary activities such as training, involvement of NGOs, IEC, and monitoring and surveillance. Experience with other centrally sponsored disease control programs in general, and with the first leprosy project, in particular, revealed a number of institutional and technical issues and the need for a revised design. Thus, the alternative of a revised design has been accepted by GOI and the Bank - its main characteristics (see Annex 2 for a more detailed description) are: * Revision of the roles of the center, states and districts as part of an explicit decentralization strategy, with the states having primary responsibility for project implementation * Increased emphasis, including state-specific plans, on integration of leprosy control with the GHS and decreasing emphasis on campaigns: immediately in low prevalence states and over the course of the project in high prevalence states * Explicit strategies for complementary activities - reaching special groups * Involvement of NGOs, IEC, training, financial management and monitoring and surveillance -9-  * Continue with MDT and supply of drugs by WHO With respect to the length of the project, a period of three years has been chosen for the following reasons: first, at this time, it appears that it is not possible to achieve elimination of leprosy as a public health problem in the next three years (as measured by estimated 'actual' prevalence; see Section B.2 and B.3); second, and given the longer time frame needed, the goal of the project is now to transform the leprosy control program to allow these levels to be achieved over a longer period of time than is usual for Bank projects; and third, given the changes that have occurred under the first project, three years is sufficient to complete the institutional changes required. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Latest Supervision Sector Issue Project I (PSR) Ratings .___ ____ ___ ____ ____ ___ ___________ (Bank-financed projects onlY) Implementation Development Bank-financed Progress (IP) Objective (DO) National AIDS Control II S S National Leprosy Elimination S S Cataract Blindness Control S S Malaria Control S S Tuberculosis Control U U Andhra Pradesh First Referral S S Health System Second State Health Systems S S Development Orissa Health Systems S S Development Maharashtra Health Systems S S Development India Population Project IX S S Integrated Child Development S S Services II Reproductive and Child Health S S Project Women and Child Development U U Immunization Strengthenine S S Other development agencies WHO Assistance to GOI's National Leprosy Eradication Programl DANLEP Danida-assisted National Leprosy Eradication Program IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) - 10 -  3. Lessons learned and reflected in the project design: The lessons learned derive from the experience of the first project and the resulting sector issues as outlined in section B.2. The main lessons, which are reflected in the revised project design, are: * need to include the state level in the project design * the campaign approach is not enough and there is a need to integrate leprosy control activities with the general health services * advantages of MDT * improve diagnostic accuracy and reporting * promote NGO/Private sector involvement * patient segregation should be discontinued * specific attention to ensuring that all locations and social groups are adequately covered. The project design also reflects the lessons from more than 20 IDA-supported HNP projects over the last 20 years including: * the primacy of good training * the need to assure the flow of essential supplies such as drugs D the importance of good monitoring and evaluation, especially to increase responsiveness of the health system to needs at the community level e the need for mechanisms to assure timely start-up * assured timely flow of funds to the project 3 most important of all, borrower commitment 4. Indications of borrower commitment and ownership: There are strong indications of borrower commitment and ownership. In 1991, India committed itself to the World Health Assembly strategy and goal of elimination of leprosy and collaborated with IDA in 1993 on the first national leprosy elimination project. Considerable progress has been made during the first project and by project close the full rupee allocation has been disbursed. During the life of the World Bank-assisted project, prevalence of leprosy fell from 24 per 10,000 to about an estimated 'actual' 7 per 10,000, short of the national goal of elimination of the disease as a public health problem. GOI continues to be strongly committed to this goal and requested IDA for support for a second project that would enable further progress toward this goal, while instituting important institutional changes that would permit leprosy to be addressed in a sustainable manner in subsequent years. The government has taken many steps which exemplify its strong commnitment to the goal of leprosy control, such as discontinuation of inappropriate staff incentive payments, preliminary plans to reduce numbers of vertical staff, rationalization of leprosy resources available from all donors and commitment to introduction of a revised WHO monitoring and evaluation system. A MOHFW Project Preparation Team drafted the detailed Project Implementation Plans (PlPs) after extensive consultation with states, donors and technical partners and detailed assessments of activities in the foregoing project. The preparation team has met regularly with the members of the Bank Task Team and is committed to the transformation of the leprosy control activities described in the project documents. - 11 -  5. Value added of Bank support in this project: IDA assistance in leprosy control was recommended by a 1992 World Bank health financing study and the first project commenced in 1993. Continuing IDA support will add value in three ways: first, it will allow acceleration in the process of leprosy elimination; and second, collaboration with IDA in this follow-on project will allow emphasis to be shifted to transformation of the program to an effective and sustainable one through a decentralized and integrated approach. This shift in emphasis is necessary as it is now evident, that while elimination of leprosy (measured by estimated 'actual' prevalence) as a public health problem is in sight, it is unlikely to be achieved in the 3 years of the project period. Therefore, by the end of the project, a structure that allows the control effort to be sustained for at least a decade should be in place. And third, this project will provide an example of the way in which the centrally sponsored disease control projects can be decentralized; with responsibility and authority for implementation moving to the states and, the center taking on the new role of providing overall policy guidance, technical support, national level surveillance, advocacy, and facilitating the transfer of lessons learned between states. Given the resources required and the previous Bank support, the Bank has a critical role to play through this second project. E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness 3 Other (specify) As a follow-on to an effective project, preparation and appraisal gained from a re-examination of the economic rationale for the public involvement and an analysis of the roles of the public and privates sectors in all aspects of the project. Included in the economic analysis were equity analysis of the burden of the disease and the expected benefits, simple market analysis, and analysis of the cost structure. Economic Rationale. Based on analysis of public finance criteria, there is a clear economic rationale for public involvement in leprosy control in India. Specifically, the strongest arguments for a public role in financing services relate to the poverty orientation and impact of interventions and the existence of public goods that would not be otherwise provided by the market. A critical and sizable element of the project relates to providing information to both potential patients and medical providers through information campaigns and training. These components of the project would not be provided by the private sector due to the strong characteristics of public goods (non-exclusionary, non-rival). Another form of market failure associated with leprosy control relates to the public externality due to spread and incomplete courses of treatment. Unlike other communicable diseases, however, the associated social externality is small. The most important economic justification for public involvement in leprosy elimination relates to poverty impact. Analysis of equity found the burden of leprosy to be mostly centered around the poor and socially vulnerable. Starting at the state level, the five most endemic states for leprosy, contributing 70 percent of the total patient load, are also five of the poorest states in India (Uttar Pradesh, Bihar, West Bengal, Orissa and Madhya Pradesh). At the individual level, equity analysis in the five endemic states, confirms that the most socially vulnerable groups shoulder the highest burden of the disease. Project resources will then be targeted to the poorest states, within states, to the poorer districts, and to the neediest populations within the districts. Not only does leprosy target the neediest in India, it also adds a social and economic burden on the victims. - 12-  Social and economic studies have documented the devastating social effect of leprosy and quantified the loss of income due to the disease. Detailed analysis of employability and earnings of leprosy patients in Tamil Nadu found the elimination of the deformity due to leprosy would: (i) raise the probability of gainful employment from 42 to 78 percent, and (ii) increase annual earnings per employed patient by 119 percent. The combined effect of increased employment and earnings would triple the annual earnings for all patients. Public and Private Roles. Basic market and institutional analysis provided the rationale for some re-orientation of services delivery responsibilities between the public and private sectors. Driving the re-orientation were factors relating to the availability of non-governmental providers, location of underserved populations, existence of specialized skills such as IEC, and the viability of for-profit operations. The project introduces a larger role for the private sector in a number of ways. While financing will continue to be primarily public, a number of delivery elements will be contracted out to the private sector (for and not for profit). Included will be contracting specialized NGOs for disability prevention, care and rehabilitation; contracting for the development of training materials; and, contracting professional media and IEC agencies to assist in developing and implementing and integrated IEC and involving NGOs and neighborhood committees of women for conmmunity mobilization and sensitization campaigns. Costs and Effectiveness. Project costs were analyzed with an eye for balance between inputs and for the breakdown by project outcomes. Outreach, information campaigns and training make up a large share of the total costs. Moreover, health services delivery focuses on interventions that have been identified internationally as highly cost effective and have a proven track record in India in the first project. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR= % (see Annex 4) Financial analysis considered the fiscal impact of the project and reviewed sustainability, incrementally, absorptive capacity, recurrent cost implications, and financial flows. Fiscal Impact: Taken in the context of a relatively smaller follow-on to an on-going project, little budgetary impact is expected in the short-run. Moreover, detailed analysis of the cost structure confirms that most investments are in human capital through training and information. With no new large investments, the main elements of recurrent costs relate to addressing the long-term placement of existing staff. This issue is linked to the shifting of the service delivery model from vertical to horizontal as more leprosy services shift to GHS in the states. Assisting project design on this issue is the on-going experiences from states that have successfully eliminated the public health threat of leprosy. A related issue is financial sustainability. Since the objective of the project is to assist GOI with the elimination of leprosy as a public health threat, there is little need for a sustainable structure. In fact, an important difference between the new and existing project is the institutional changes taking place in the states that are no longer endemic. Absorptive capacity for new expenditures is also not a critical issue in this project. The existence of an on-going project and the shrinking size and scope of the project minimize the risk of capacity problems. A remaining risk, however, is relatively weak implementation capacity of some of the endemic states. Management attention and technical assistance on issues relating to the procurement of contracted services is critical for mitigating these risks. Another small risk relates to incrementality of IDA financing. Project - 13 -  supervision will pay special attention to the sources of financing for the project. Financial reporting on the shares of the government, IDA, and other partner funds (WHO and Danida), should ensure that external funding does not substitute for domestic funds. While the move to the integration of service delivery at the state level and the new fund flow mechanisms strengthen the role of state implementing agencies, the basic funding roles of the center and states are not changed. As long as leprosy represents a public health concern, the center will continue to finance the bulk of the recurrent costs. In other words, the financial burden in not shifted to the states. Project Financial Management System Financial management arrangements for the project are detailed in Annex 6. The project will be budgeted under a single identifiable line item in the budget of the MOHFW, GOI. The implementing agency for the Project is the MOHFW Directorate General of Health Service (Leprosy Division) the finance and accounting department of which, headed by a Deputy Secretary who will function ex-officio as the Project Financial Coordinator will consolidate the Project accounts. DGHS(LD) will be supported in the execution of the project by the participating states. The flow of funds form DGHS(LD) will be to SLS and from SLS to DLS and financial reporting from DLS to SLS and from SLS to DGHS (LD). An integrated project computerized financial management system (PFMS) is being developed for the project. Consultants have been appointed to design, develop and institute a computerized financial management system. The key tasks that will be carried out to implement the integrated financial management system are: (a) procurement of hardware expected to be completed by March 31, 2001; (b) design and development of a PFMS software, expected to be completed by June 30, 2001; (c) appointment of accounting staff at SLS expected to be completed by July 31, 2001; and (d) training of the staff in the implementation of the PFMS, expected to be completed by September 30, 2001. The PFMS is expected to be fully operational by October 1, 2001. Disbursements: Disbursements from IDA credit would initially be made in the traditional system (reimbursement with full documentation and against statement of expenditure) and would be converted to the Project Management Report based disbursements after the successful implementation of the computerized PFMS. The target date for this conversion is October 1, 2002. Retroactive Financing: Retroactive financing up to an amount of US$ 2.9 million (SDR 2.25 million equivalent) would cover eligible expenditure for implementing activities after October 1, 2000 based on a Statement of Expenditure. Retroactive financing would support procurement of equipment, supportive medicines, materials and supplies, training and workshops, IEC, consultant and contractual services, and vehicle operation. Audit: DGHS(LD) accounts will be audited by the Comptroller and Auditor General of India. The SLS will be audited by firms of Chartered Accountant and the audit would include a statement on the audit status of the DLS in the state based on Chartered Accountant audits of the DLS. An audited annual project financial statement will be submitted by DGHS(LD) and all the participating states within 6 months of the close of GOI's fiscal year. All these audit certificates, i.e. that of DGHS (LD) and the SLS and the special account audit report will be monitored in Audit Reports Compliance System. Special Account: A Special Account will be maintained in the Reserve Bank of India; and will be operated - 14 -  by the Department of Economic Affairs of GOI. The authorized allocation of the Special Account would be US $ 2.5 million that represent about 6 months of initial estimated disbursements from IDA Credit. The Special Account will be operated in accordance with the Bank's operational policies. 3. Technical: Experience in India is consistent with that in other countries and indicates that MDT is highly efficacious in the treatment and control of leprosy. The main technical issues are epidemiological. Leprosy has a long incubation period (usually 2-5 years, but up to 20 years), and we know relatively little about leprosy transmission or its interruption. One implication is that leprosy will continue for many years (hopefully at low levels of endemicity), and that we need to sustain leprosy control efforts in India over the long term, most feasibly done through the GHS. 4. Institutional: The institutional assessment is based on knowledge derived from the long-standing relationship between IDA and the MOHFW, especially in relation to implementation of leprosy control activities. This included missions to supervise the first project; experience with other disease control projects; an identification mission for the second project; detailed discussions at the central, state and district levels with a wide range of stakeholders (including managerial and technical personnel, beneficiaries, community representatives and NGOs); and the findings of a number of reviews and studies by multilateral and bilateral agencies. The institutional assessment forms the basis for the following project response: 9 Continue a mix of campaign and routine case detection with emphasis on active case detection activities targeted to the high endemicity areas and states. i Continue and intensify efforts directed to special groups which have been missed so far - this will involve concentrating on the high endemnicity states and the use of SAPELs/LECs. * Dismantle the vertical structure and integrate with the GHS and proscribe re-institution of the incentive system. e Change the role of the state - it will be the "unit of account" and funds will flow through the state to the districts; the states will be responsible for program planning at the state level and for provision of supervision and technical support to the districts; districts' ability to respond to local needs strengthened through decentralized procurement of such goods and services which have less predictable patterns of requirement. * Strengthen state capacity to manage the prograrn. The states currently have limited management and technical capacity - therefore the center must play an important role in strengthening management and technical capacity at the state level and in becoming a source of technical expertise itself. * Stimulate a reciprocal change in the role of the center which will become primarily responsible for technical assistance to the states, monitor the elimination on a country and state basis, provide policy guidance and set goals for the country in the international context. * Introduce some separation of funding and provision as the state and district contract NGOs to deliver reconstructive surgery and, in some cases, the full leprosy control package * Support greater participation of NGOs in the path to full-scale integration of leprosy services with general health care services in India. In turn, NGOs will become more accountable through service contracts with the states and districts. 4.1 Executing agencies: Not applicable. 4.2 Project management: - 15 -  Not Applicable. 4.3 Procurement issues: 1. Procurement. The "Guidelines for Procurement under IBRD Loans and IDA Credits (January 1995, Revised in January and August 1996, September 1997, and January 1999 )" shall apply to all Goods and Works financed under the project. The "Guidelines for Selection and Employment of Consultants by World Bank Borrowers (January 1997, revised in September 1997 and January 1999)" shall apply to all Consultants' services financed under the project. Based on the experience of NLEP I and other health projects, decentralization of implementation including procurement is proposed under this project. Hence, the SLS /DLS would be responsible for procurement of most goods, equipment and services. Most of the contracts are of small value; therefore National Shopping method of procurement will be adopted for most goods and equipment. Since Intemational Competitive Bidding t National Competitive Bidding procedures are not involved, the DLS / SLS will be able to procure goods and services without much change in the existing capacities/capabilities. Items to be procured, services to be hired and procurement schedules for all the three years of the project have been prepared and are attached in the PIP of the Borrower. The procurement arrangements are summarized in Annex 6 which summarizes the NLEP II elements and their estimated costs and proposed methods of procurement. 4.4 Financial management issues: There are two major issues: (i) the timely flow of funds to the project implementing entities (viz. state society and district societies) and a quick turnover in submission of statements of expenditure to the GOI from these entities will be a crucial challenge. This will be specially important as this is a relatively short duration project; and (ii) timely submission of acceptable audit reports for all project implementing entities in time will be critical. Audit reports from all the participating states will need to be submitted to the Bank within 6 months of the close of the GOI fiscal year. Execution of the project through a society should considerably ease the flow of funds to the implementing agencies. It should also help in timely submission of audit reports as the audit reports for Societies will come from Chartered Accountancy firms instead of State Auditor Generals. A financial coordinator at the Central level and an effective financial management system should ensure that the expenditure reporting from the states is regular and timely and audit arrangements for the DGHS(LD) and SLS are properly set up. 5. Environmental: Environmental Category: C (Not Required) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The overall incremental medical waste generated due to this project is very limited. There are no significant environmental issues. 5.2 What are the main features of the EMP and are they adequate? Nevertheless, a simple medical waste management plan has been developed by GOI and consists of the following actions: 1. The volume of leprosy related medical waste generated at each facility is expected to be very low. Leprosy related medical waste will be disposed of according to the existing Government of India Bio-medical Waste (Management and Handling) Rules (1998). These rules provide for incineration/autoclaving/microwaving of solid waste and disinfection/autoclaving/microwaving and mutilation/shredding for sharps. The Gazette of India notification provides that the occupier of an - 16 -  institution generating medical waste shall be responsible for handling of such waste without harmful effect to human health and environment. 2. At home, patients will be counseled on first contact with health workers, to burn cloth that they have used for dressings, and to wash and sun dry cloth that they use for dressing before re-use. The compliance with this plan by health workers and facilities will form part of the routine project supervision. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: Not Applicable 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? Not Applicable 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? Not Applicable 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The key social issue to be addressed by the project is the physical and social access of poor and marginalized populations, particularly women, tribal groups, scheduled castes, the urban poor and migrants, to leprosy diagnostic and treatment facilities. The social development objectives of the project are to (i) improve information and encourage health seeking behavior and increased demand for reliable and effective leprosy services; and (ii) overcome social/cultural barriers and gender discrimination in access to diagnostic and treatment facilities. Through decentralizing and integrating leprosy services into the general health service, the project is expected to increase coverage and provide regular access to leprosy detection and treatment. State Implementation Plans have identified hard-to-reach groups and developed strategies to reach them with special interventions such as the Special Action Projects for the Elimination of Leprosy and the Leprosy Elimination Campaigns. Women: Women are particularly vulnerable to the myths and stigma associated with leprosy and suffer higher social costs of leprosy owing to fewer options open to them. Though women constitute 25 percent of the leprosy patients, it is more difficult for the service providers and public health information campaigns to reach them. The project seeks to address this by (i) case finding and treatment strategies with specific focus on reaching women through 'female searchers' in all areas, (ii) IEC plan for the project would specifically address the gender perspective, including the "what", "to whom" and "when" questions regarding the content, targeting and timing of the IEC campaign to most effectively address the needs of women, (iii) one-on-one counseling will address challenges faced by women in accessing services, and (iv) training programs planned under the project will be adequately "gendered" so as to sensitize field level staff to the special needs of women. Scheduled Tribes: There is evidence that tribal populations are less likely to access diagnostic and treatment services in a timely manner. Approximately 75,000 tribal persons are to be treated under the project from Uttar Pradesh, Orissa, Andhra Pradesh, Madhya Pradesh and West Bengal (70 percent of total) apart from other states. Focal active detection campaigns with trained tribal youth along with IEC - 17-  efforts using locally adapted models and formats and SAPEL, would be adopted. The project's tribal strategy that seeks to reach tribal populations in remote areas will be finalized by negotiations (annex 15). Health workers of primary health centres and sub-centers in tribal sub-plan areas would be trained to act as first point of referral for patients referred by tribal youth. Scheduled Castes, Urban Poor, and Migratory Groups: Mass active case detection strategies will be applied through out the country and to areas with high endemicity, through mobilization of departmental staff of several government departments and local volunteers. These campaigns will be supported by directed mass media and local publicity. Social Exclusion: The project's IEC plans have identified the key audiences and specific strategies to increase awareness and demand among the key target groups. IEC activities will be aimed at improved community awareness and at counseling to ensure that the information leads to (i) appropriate health seeking behavior through one-on-one communication, and (ii) greater social acceptability of leprosy patients. It is expected that the project would put in place an effective and sustainable program of detection and treatment that will assist India in eliminating leprosy as a public health problem. Early case detection and treatment, as well as the treatment of disability, would alleviate human suffering and decrease the social burden of the disease. Since an estimated 60 percent of those reached will be below the poverty line, the positive impact of the project in terms of healthy life years saved will be the highest among the poor. 6.2 Participatory Approach: How are key stakeholders participating in the project? Project preparation paid special attention to fostering a sense of ownership and commitment among stakeholders of the project. These include: (i) central and state governments, who have played a proactive role in project preparation and development. The states have increasingly taken ownership of the program by preparing individual PIPs, particularly the high-endemic states. Since an important initiative under the project is decentralization of implementation, both state- and district-level administrations have been included in the preparation process; (ii) beneficiaries and communities, who have been consulted to assess the outreach of the program and its impact, and to gain insight into the social factors influencing decisions to seek diagnosis and treatment; (iii) NGOs, which will now be more fully included as partners in implementation; and (iv) international donors, such as the WHO and Danida, who have provided technical assistance and will be involved in the implementation of the project. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? The evaluation of the first NLEP indicated that NGOs have played an important role and have the potential to increase their involvement in all aspects of the program, particularly in remote and underserved areas. Active case detection through a mix of strategies will be a priority to increase the access of underserved groups to diagnostic and treatment services. The SAPEL and LECs, set up specifically to implement the project in endemic tribal/hard to reach areas, will be continued and intensified. SAPELs implemented during Phase I were able to successfully involve community based organizations such as Mahila Swasthya Samitis, Panchayati Raj Institutions, Development of Women and Children in Rural Areas groups, etc. Community Based Organizations and NGOs will be involved in service delivery in various ways: for IEC activities, disability care, detection, rehabilitation and surveillance. The National and State PIPs for the five focus states have been reviewed with key NGOs. They provide information regarding the availability, level of involvement of NGOs and opportunities for involving NGOs in several areas, including case finding and treatment, monitoring, training and IEC. The role played by the NGOs will vary by state and district depending on NGO capacity and disease - 18-  burden. There are increasing consultations with NGOs on program design and implementation. NGOs are also a key partner of the Global Alliance for Elimination of Leprosy which is currently chaired by India. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The project emphasizes two key institutional initiatives which would improve coverage of vulnerable and excluded groups and elimination of leprosy among them. (i) decentralization of planning and implementation to the state and district levels. This would increase the involvement of states and then build capacities to manage and administer the leprosy program over the long term. Guided by local needs, states will prepare and implement state-specific annual plans with emphasis on the needs of special groups. This includes carrying out increased number of SAPELs and LECs to reach target groups; and (ii). integration of leprosy diagnosis and treatment facilities into general health services. This would lead to improved geographical coverage and increased access to MDT, particularly for poor areas. Both these initiatives will be supported by appropriate capacity building efforts, for government administrations to plan and manage such activities, and for staff to undertake case finding, treatment and rehabilitation programs. In addition, the project proposes to: (i) increase the outreach of health workers through training and other inputs, and also provide training to other field workers, such as Anganwadi workers to increase the availability of diagnosis and treatment channels for leprosy patients; (ii) increase involvement of NGOs, particularly to reach poor and marginalized groups and underserved areas; (iii) enhance IEC capacity by engaging professional media agencies; (iv) enhance capacity at state and district levels to monitor and track the disease burden of target groups, and thus strengthen capacity to respond in a timely and appropriate manner. Lessons from the first leprosy project and recommendations from the social and institutional assessments called for the project to include capacity building measures and close partnerships with Danida, WHO and NGOs. Danida has developed experience in SAPELs and gender sensitization, while WHO would assist in building capacity for monitoring project impact on the target groups. See C.4 and Annex 2 for details. 6.5 How will the project monitor performance in terms of social development outcomes? In order to increase the responsiveness of the health system to needs at the community level, the monitoring and evaluation mechanism will include assessments of program coverage of different social groups differentiated by age, sex, rural/urban location, and scheduled caste/tribe. Information collected will include the number of cases under treatment, number of new cases, number of cases cured and coverage. Special studies are planned to assess treatment completion rates, quality of diagnoses, and quality of care. In addition to information on case finding and treatment, the monitoring and evaluation mechanism will collect data on the progress of activities on the ground, status of logistics and drug supply, and funds flow and expenditures. This will become an integral part of the project monitoring and evaluation mechanism, repeated at reasonable intervals, and will facilitate monitoring of the impact of the project on socially disadvantaged groups. - 19 -  Baseline information on underserved areas and special groups has been collected for the five high endemic states and similar independent surveys will provide end-line data for impact evaluation. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the proiect? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes * No Natural habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 No Forestry (OP 4.36, GP 4.36) 0 Yes 0 No Pest Management (OP 4.09) 0 Yes * No Cultural Property (OPN 11.03) 0 Yes * No Indigenous Peoples (OD 4.20) * Yes 0 No Involuntary Resettlement (OD 4.30) 0 Yes * No Safety of Dams (OP 4.37, BP 4.37) 0 Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes * No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) 0 Yes * No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. The project specifically aims to benefit vulnerable groups and indigenous (i.e. tribal) populations. The national and state-level PIPs identify tribal populations as a target group with unique problems of physical and social access, requiring special culturally-sensitive strategies. The project's tribal strategy (detailed in Annex 15) is aimed at increasing the demand for leprosy services and include the following measures: detailed mapping of tribal groups, providing culturally compatible IEC to promote health education and publicize leprosy services, training volunteers in tribal communities, utilizing tribal youth as community mobilizers and communicators, and conducting SAPELs with the help of tribal leaders, community members and trained volunteers. Partnerships are being developed with the Tribal Development Departments for better information on these groups and channels to expand outreach. Population specific information will be used to develop culturally sensitive IEC materials for both the public and providers. The revised monitoring mechanism will provide data on provision of services to tribal groups. Additional data, qualitative and quantitative, will be obtained from SAPEL reports and special studies. F. Sustainability and Risks 1. Sustainability: Leprosy control activities will be sustained beyond the life of the project because * the GOI and the states are strongly committed to the project * the GOI and states are moving to a structure that will reduce the load on the exchequer due to rationalization of staff * the project enjoys support from all key stakeholders - 20 -  2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk 1atin9 Risk Mitigationt Measure- From Outputs to Objective GOI and the states not willing to S Continuing discussion with states and center or undertake changes in roles and roles; Memorandums of Understanding responsibilities under proposed decentralization and integration, and/or not have the capacity to do so. Leprosy cases will not come for M IEC campaigns, active case detection and follow treatment. up District level staff inadequately diagnose M Training and supervision from state level and treatment leprosy. Inadequate/irregular supply/distribution N Experience from first project and continuing of drugs. WHO involvement GOI/states not willing to support NGO M Memorandums of Understanding, project participation in rehabilitation, IEC or supervision training activities. From Components to Outputs Inadequate financial managment and S All states will be required to establish a state audits at SGHS (LD) level and irregular society through which funds will flow. This has funds from GOI to state level proved effective in other disease control projects. Delays in procurement M Procurement plans; relevant necessary procurement actions as condition of negotiations Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: None. - 21 -  G. Main Loan Conditions 1. Effectiveness Condition Nil. 2. Other [classify according to covenant types used in the Legal Agreements.] To fulfill the Conditions of Negotiations, the following actions have been taken: a) Project Implementation Plans for the Centre, 5 endemic states and other states and UTs have been completed and provided to the Association. b) The project has been cleared by the Expenditure Finance Committee of the Government of India. c) Memorandums of Understanding have been received from key participating states confirming their intention to implement the project in accordance with the Project Implementation Plans. c) The procurement plans for each year of the project have been satisfactorily prepared. The GOI confirms that it will use agreed quarterly procurement monitoring formats. d) The Bank has cleared procurement actions for the first year. e) Donor coordination mechanism has been initiated. At negotiations, Government of India provided assurances that it would: a) Undertake a mid-term review of the project by September 30, 2002 in accordance with terms of reference agreed with the Bank, using data from agreed surveys. b) Ensure adequate budgetary allocations at the centre, and release project funds in a timely manner to the states through agreed channels of funding, only after adequately trained accounting staff are in position, in order to carry out agreed project activities. c) Submit biannual project progress reports. d) Undertake annual financial and procurement audit under Terms of Reference agreed with the Bank. e) Reduce the numbers of regular and contract 'vertical' staff in accordance with the Project Implementation Plans. f) Ensure that incentives based on case finding shall not be instituted. g) Carry out routine reporting, independent third party surveys, validation of elimination surveys and end-line leprosy prevalence survey in accordance with terms of reference agreed with the Bank. h) Organize biannual meetings of the donor coordination committee. H. Readiness for Implementation O 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 1 1. b) Not applicable. 1 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. ! 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. O 4. The following items are lacking and are discussed under loan conditions (Section G): - 22 -  1. Compliance with Bank Policies 1 1. This project complies with all applicable Bank policies. LI 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. Peter F. Heywood Richard Lee Skoln dwin R. Lim Team Leader Sector Director Country Director - 23 -  Annex 1: Project Design Summary INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Key Performnce Hierarchy of Objectives Indicators Monitoring & Evaluation Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Improve access to and Increased coverage and * CAS discussions * Early detection and quality of health services utilization of national leprosy cure/disability care will elimination project improve the quality of life and earning capacity of those affected by leprosy * GOI household surveys * Prevalence of the disease is mainly among the poor, its elimination as a public health problem will impact poverty as well * Various Bank sector reports Project Development Outcome / Impact Project reports: (from Objective to Goal) Objective: Indicators: Transform the national Decentralization of leprosy Reports of the NLEP, * GOI and state leprosy control program to control activities from the observations and reports of governments support in an effective and sustainable center to the states Bank supervision missions overcoming program through a administrative and decentralized and integrated managerial problems approach which increases during decentralization community access to MDT. and integration Integration of leprosy control Reports of NLEP, * Continued inter-agency activities with the general independent surveys, (specifically GOI and health services observations and reports of WHO) support for Bank supervision missions NLEP, including supply of drugs State progress reports, surveys Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: Component 1 - Decentralization and institutional development Increased state role in, and Number of project related Quarterly progress reports, * States have required responsibility for, leprosy activities under state control reports of Bank supervision managerial and control activities which where and in state level reporting on missions technical capacity previously under central project progress e.g control monitoring and supervision, and financial reporting/auditing - 24 -  Increased support and Number of technical staff at Bank supervision reports * GOI willing to adopt technical assistance from the center with specific new roles center to states responsibility to ensure continued assistance to states and/or holding workshops to address state-specific technical requirement. Component 2 - Strengthen and integrate service delivery Number of vertical structure Supervision reports, * Center has capacity to Integration of leprosy control staff; out-reach of program independent surveys provide support and with GHS at the state and through GHS and sustained technical assistance to district levels program achievements states Improved extent and accuracy Improved sensitivity and Mid-term review and * States willing to of detection and successful specificity of diagnoses evaluation reports, integrate leprosy administration of MDT to all independent surveys services with GHS confirmed cases Service statistics, supervision * District level staff has reports, independent surveys adequate diagnostic skills for detection and cure of disease * GOI and states willing to eliminate case detection incentives Service statistics, supervision * WHO willing to Adequate procurement and Supply and distribution of reports, independent surveys continue supply of drugs distribution of drugs drugs in all states to the project * GOI and states able to improve distribution of drugs Component 3 - Prevention of Disability. Support for disability, Proportion of new cases with Service statistics * Willingness of states to particular those drawing on deformity grade II and above promote increased the substantial experience of receiving adequate care involvement of NGOs in NGOs disability prevention Component 4 - Information, Education and Communication Community awareness and Social assessments, surveys, Greater community awareness participation in case detection supervision reports * States willing to of leprosy and possibility of and disability prevention contract out/increase prevention; less negative resulting in timely treatment, own capacity for IEC image of the disease and fewer disabilities * States willing to involve NGOs in promoting community awareness and participation Component 5 - Training Reorienting staff to an Proportion of staff * Willingness of states to integrated approach and appropriately trained draw on NGO training provision of new skills experience in leprosy control -25 -  Key Performance Hierarchy of Objectives Indicators Monitoring & Evaluation Critical Assumptions Project Components / Inputs: (budget for each Project reports: (from Components to Sub-com ponents: component) Outputs) Decentralization and 2.50 Quarterly progress reports Adequate and timely flow of institutional development funds from GOI to state project Strengthening and integrating 27.80 Supervision reports Timely assignment of staff service delivery and consultants Disability care 3.70 On-going social assessments Timely procurement IEC 5.00 Mid-term review and evaluation reports Training 3.20 - 26 -  Annex 2: Detailed Project Description INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Leprosy is also called Hansen's Disease (the Norwegian physician G. Arrnauer Hansen discovered Hansen's bacillus in 1874). Leprosy is a chronic slow developing bacterial disease of humans caused by Mycobacterium leprae affecting mainly peripheral nerves and skin. The suffering of leprosy is caused by damage to the peripheral nerves, which leads to sensory loss, paralysis and loss of function of the hands, feet and eyes. It is feared because of its potential for crippling and disfigurement. The resulting deformities are the main cause of social stigma attached to the disease. * See PAD Section B.2 for discussion of the main sector issues and government strategy * See PAD Section B.3 for identification of the sector issues to be addressed by the project and strategic choices [The preparation of this project has, and the implementation will, involve collaboration between GOI, IDA, WHO, Danida and International Federation ofAntileprosy Associations (ILEP)] As summarized in Sections B.2 and B.3, this project (a follow on from the first IDA-supported project), aims to transform the national leprosy control program into an effective and sustainable program through a decentralized and integrated approach and to reduce the national prevalence of leprosy to less than 3 per 10,000 at the end of the project. The long term goal is to reach elimination levels in all states within the next 6-8 years - while this is much beyond the project period, reaching elimination levels in all states will be heavily dependent on transformation of the program, the immediate goal of the project described here. Leprosy control involves * Finding individuals who have leprosy by actively searching for them (active case detection) or encouraging them to self-report (passive case detection) * Treating diagnosed individuals with effective drugs * Provision and distribution of drugs - Prevention of disability * Monitoring the amount of leprosy in the community and the implementation of control activities The Leprosy Control Program in India commenced in 1955. Multiple drug therapy replaced the inadequate single drug regimen in 1983. At the commencement of the first IDA project in 1993, although low levels of leprosy had been reached in a few states, endemicity remained high in many states including the states of Bihar, Uttar Pradesh, Madhya Pradesh, West Bengal and Orissa. The first IDA project implemented as a centrally sponsored and controlled endeavor, reduced overall recorded prevalence of leprosy, greatly expanded the availability of MDT, assisted active (and continued passive) case detection, supported prevention of disability and placed greater emphasis on reducing stigmatization and increasing awareness that the disease could be treated. As the first project closes, technical capacity of the states to implement leprosy control remains low. Endemicity has been remarkably reduced in many states. But prevalence remains high in these 5 states (Bihar, Uttar Pradesh, Madhya Pradesh, West Bengal and Orissa) and elimination levels at the national level have not been reached. Consequently, the design of this project involves decentralization of project implementation to the states and preparation of state-specific plans. This design is consistent with the move to increased state - 27 -  responsibility and responds to recognition that central management of programs in a large diverse country has not been able to deal effectively with the local situation. Decentralization in this project is based on preparation of state-specific plans and plans for central control activities which * Re-define the role of the center, state and district * Strengthen management capacity all levels * Delineate a mix of active and passive case finding strategies (voluntary reporting, campaigns, general health service, and attention to special groups) considered appropriate to the state and district situation * Support leprosy control activities with high quality social marketing stressing that leprosy can be treated, treatment is available and effective, and disability is avoidable and may be corrected. * Propose integration of leprosy control with the general health services immediately in low endemic and in a phased manner in high endemicity states and districts. * Include plans for re-deployment of staff from the vertical program, including to other parts of the health system * Ensure availability of drugs at the local level (donated by Novartis and procured and supplied by WHO) Particular emphasis will be placed on the five high-endemicity states of Bihar, Uttar Pradesh, Madhya Pradesh, West Bengal and Orissa. The project will contain the following components: By Component: Project Component 1 - US$2.50 million Decentralization and institutional development The main purpose of this component is to promote revised roles for the center, states and districts in implementing the new project; the new roles are spelled out in the PIPs. In general, the center will be responsible for an annual plan for central activities; technical assistance to the states; review of annual state plans; release of funds to state societies; supervision of progress in training and IEC plans and evaluation; coordination of financial monitoring and expenditure and disbursement reports and claims under the project; overall management of the drug supplies; overall coordination of monitoring and surveillance activities and special cross-state surveys; and dissemination of lessons learned across states. In turn, the states will prepare and implement state-specific annual plans and strategies with emphasis on the needs of special groups (including SAPEL, LEC projects); channel funds to district societies; provide technical assistance to the districts; monitor implementation; support the DLS in implementing district level activities; manage state level IEC and training; drug supplies; and preparation of physical and financial monitoring of project implementation; and coordination within the state. The district will prepare and implement annual plans which ensure financial monitoring, management of local level activities including IEC, drug supply, training, monitoring and surveillance and coordination with other sectors. The project will finance training and workshops, consultants, incremental staff, equipment and furniture. - 28 -  Project Component 2 - US$27.80 million Strengthening and integration of service delivery The MDT strategy was implemented widely in the first project and will form the centerpiece of the technical approach to be used in the second. The service delivery strategy will emphasize integration with the GHS from the start of the project. For the service delivery strategy, each state will determine the appropriate mix of active and passive case finding through voluntary reporting, campaigns, GHS and emphasis on special groups. While it may be necessary in some areas to continue mass campaigns, this is not a sustainable strategy and will, as soon as possible, give way to an integrated model of service delivery. Patient segregation will be discontinued. NGOs will be contracted to provide services; where feasible this will include provision of all leprosy control activities in a district. The actual mix of activities and their timing are shown for each state in the PIPs. The project will finance incremental operating costs, drug delivery, campaigns, training, activities to target special groups, service delivery by NGOs. Project Component 3 - USS 3.70 million Prevention of Disability Without the disability that is associated with longstanding leprosy infection, leprosy would be a somewhat unusual and infrequent skin disorder. However, the occurrence of disabilities resulting from nerve damage, makes leprosy a dreaded disease with significant social stigma and socio-economic consequence to individuals and families. Under this component major responsibility for service delivery will rest with general health services and NGO partners. NGOs will be responsible for taking up prevention of disability work in defined populations, training of general health staff in these activities, IEC activities in this respect and in carrying out re-constructive surgery for serious deformities. The project will finance purchase of services from NGOs, consultant services, training, purchase of equipment and operating expenses. Project Component 4 - US$5.00 million Information, education and communication The objective of this component is to carry out political advocacy, change society's attitude to leprosy and to increase demand by affected individuals for leprosy control services. An overall IEC strategy has been developed. In general, planning these activities will take account of the declining prevalence as elimination is approached, the need to support the campaign activities at specific times and encourage voluntary reporting as leprosy control is integrated with the general health services. The strategy will differ by state according to level of endemicity. In the moderate/low endemic states the main objective is to encourage early voluntary self-reporting. In the high endemicity states the LEC activities will, initially, also support the campaigns through general awareness of the signs and symptoms of leprosy. The IEC will build on the experience of the BBC World Service Trust whose campaign is coming to an end. The BBC mass media - 29 -  campaign aimed at improving voluntary self-reporting during the mass case finding and treatment campaign in 1999 carried out in all states of the Indian Union. The BBC campaign used materials produced by local producers of the state owned Doordarshan TV company and supported by BBC. A post campaign evaluation showed high viewership and impact. In addition to the media campaign, the BBC also worked with the Song and Drama division of the Ministry for Information and Broadcasting to carry out local and group forms of communication in these selected states. A professional agency/agencies will be appointed to manage the media campaign and political advocacy at the center. At the district level the District Leprosy Officer will be responsible for local IEC activities which will be coordinated with state and national efforts. The project will finance consultant services, workshops, training, technical assistance, IEC materials and media space and operational expenses. Project Component 5 - US$3.20 million Training Reorienting staff to an integrated approach and providing new skills needed by staff in the general health services and those who will be re-deployed will require a large and coordinated training effort. The training strategy (details given in the PIP) is based around the need for improved management at all levels, and the need for technical re-orientation of various categories of health workers (including those in the general health services as integration progresses). The training will be based on the specific problems faced by each state, needs and competency based, and include explicit evaluation activities. A core team for training will be established in each state and will be charged with detailed planning and implementation of training activities, and production/adaptation of appropriate training materials. Where feasible training activities will be contracted to outside agencies, including qualified NGOs. The project will finance workshops, review meetings, training activities, contractual services and operational expenses. In addition, there are a number of issues which cut across all of these components and have influenced project design. They are: Drugs will be donated by Novartis and procured and supplied by WHO. NGOs: the GOI plan for involvement of NGOs is spelt out in detail in the PIP. In summary, GOI's NGO strategy allows for increased involvement of NGOs in a range of leprosy control activities while increasing accountability for specified outcomes. Manpower: in the course of the project the GOI will significantly reduce the number of vertical staff in leprosy control. The details are shown in the PIP. Special groups: GOI recognizes that reaching the goal of this project will be dependent on reaching groups for whom access is currently limited for social, economic or geographic reasons. The GOI plan for reaching these special groups includes the following: use of local volunteers organized and trained during SAPELs and LECs, training and networking with private and other providers of health related services e.g.: Registered Medical Practitioners and local doctors, use of teachers, village health guides, forest guards etc., provision for accompanied MDT. - 30 -  Monitoring and surveillance: as discussed above, in Section B.2 of the PAD, while incidence is the preferred method of measuring trends in disease occurrence, it is not feasible to do so for leprosy. To date, programs have used case detection rate but it is becoming increasingly clear that it is flawed as a proxy for incidence rates; despite this and in the absence of an altemative, it will continue to be used as a program indicator. However, it is then important that monitoring and surveillance efforts supplement their use of case detection rate with: a) Baseline Data and Changes at the End of the Project (Annex 11). The estimated prevalence as of March 2000 with all available data is 7.2 per 10 000 and the most probable situation at the end of 2004 will be around 2 to 3 per ten thousand. At the end of the project, the same method will be used to estimate the prevalence of the disease. To achieve this, surveys will be conducted to collect information on: * Proportion of 'recycled cases'; * Proportion of examined cases among suspected and referred cases; * Proportion of confirmed cases among cases evaluated; and * Population coverage. WHO has agreed to assist GOI in undertaking this exercise. b) Methods for Assessing Progress towards Leprosy Elimination (Annex 12). Rapid assessment based on Lot Quality Assurance Sampling will be used to assist States to determine whether they have reached elimination level or not. c) Surveys to Monitor Performance of Leprosy Elimination Program (Annex 13) to assess levels of integration, quality care including cure rates, and availability of MDT drugs. Leprosy Elimination Monitoring has been designed to supplement routinely collected information on disease distribution with more detailed information on program performance and levels of integration. This exercise will be undertaken at the beginning of the project and at least every year thereafter in each of the priority States, and WHO has agreed to assist GOI to carry out these surveys. The last of these surveys will constitute the end-line leprosy prevalence (evaluation) survey. d) Collection and Analysis of Essential Indicators (Annex 14). Essential indicators will be collected at the local level and aggregated at district, state and national level. They include prevalence, detection by type of leprosy, by age groups, by sex, by scheduled caste and scheduled tribe, disabilities among newly detected cases, and cure. The already existing leprosy information system is to be modified to take into account the distribution of the disease in various population groups such that data is available at a national level on a quarterly basis. Patient cards and reporting forms will be adapted. WHO has agreed to assist GOI in adapting the system and computerizing it at State level. - 31 -  Annex 3: Estimated Project Costs INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Local Foreign Total Projec Cost By Component US $million US- $million US $million 1. Decentralization and Institutional Development 2.30 0.00 2.30 2. Strengthening and Integrating Services 25.70 0.00 25.70 3. Disability Prevention and Care 3.30 0.00 3.30 4. IEC 4.50 0.00 4.50 5. Training 3.00 0.00 3.00 Total Baseline Cost 38.80 0.00 38.80 Physical Contingencies 0.90 0.00 0.90 Price Contingencies 2.50 0.00 2.50 Total Project Costs 42.20 0.00 42.20 Total Financing Required 42.20 0.00 42.20 Local Foreign Total Project Cost By Category US $million US $million US $milllon Goods* 3.60 0.00 3.60 Works 0.00 0.00 0.00 Services 25.60 0.00 25.60 Operating Costs 13.00 0.00 13.00 Total Project Costs 42.20 0.00 42.20 Total Financing Required 42.20 0.00 42.20 * Drugs for the project of a value US $10.4 million (approximately) are being donated by Novartis Foundation through WHO. INDIA NLEP II 2001 2002 2003 Total Projects Components by year (US$million) I Decentralisation & Institutional Development 1.19 0.57 0.56 2.32 Strengthening & Integrating Services 10.41 9.44 5.83 25.68 Disability Prevention & Care 1.12 1.19 1.03 3.34 IEC 2.63 1.44 0.45 4.51 Training 1.58 1.32 0.06 2.96 Total BASELINE COSTS 16.93 13.96 7.93 38.82 Physical Contingencies 0.41 0.32 0.18 0.91 Price contingencies 0.75 0.96 0.79 2.49 Total PROJECT COSTS 18.09 15.23 8.90 42.22 - 32 -  INDIA NLEP IV 2001 2002 2003 :Total Projects Components by year (INRmillion)) Decentralisation & Institutional Development 55.98 26.83 26.23 109.04 Strengthening & Integrating Services 489.15 443.81 274.05 1207.02 Disability Prevention & Care 52.71 56.05 48.37 157.13 IEC 123.51 67.52 20.98 212.01 Training 74.26 61.89 3.01 139.16 Total BASELINE COSTS 795.61 656.10 372.65 1824.36 Physical Contingencies 19.33 14.81 8.54 42.68 Price contingencies 26.08 64.71 60.22 151.01 Total PROJECT COSTS 841.02 735.63 441.40 2018.05 BIHAR NLEP II 2001 2002 2003 - Total Projects Components by year (US$million) Decentralisation & Institutional Development 0.06 0.02 0.02 0.10 Strengthening & Integrating Services 2.02 1.80 1.15 4.97 Disability Prevention & Care 0.18 0.18 0.15 0.51 IEC 0.38 0.15 0.07 0.60 Training 0.24 0.24 0.00 0.48 Total BASELINE COSTS 2.87 2.40 1.39 6.67 Physical Contingencies 0.06 0.05 0.03 0.14 Price contingencies 0.13 0.16 0.14 0.43 Total PROJECT COSTS 3.07 2.61 1.56 7.24 WEST BENGAL NLEPl 1 2001 2002 2003 Total Projects Components by year (US$million) Decentralisation & Institutional Development 0.05 0.02 0.02 0.08 Strengthening & Integrating Services 1.13 1.03 0.61 2.77 Disability Prevention & Care 0.10 0.10 0.08 0.28 IEC 0.34 0.17 0.05 0.56 Training 0.17 0.17 0.00 0.34 Total BASELINE COSTS 1.78 1.49 0.76 4.04 Physical Contingencies 0.04 0.03 0.01 0.08 Price contingencies 0.08 0.10 0.08 0.26 Total PROJECT COSTS 1.91 1.61 0.85 4.38 - 33 -  MADHYA PRADESH NLEP Il 2001 2002 2003 Total Projects Components by year (US$million) Decentralisation & Institutional Development 0.05 0.02 0.02 0.09 Strengthening & Integrating Services 1.26 1.23 0.77 3.25 Disability Prevention & Care 0.14 0.14 0.12 0.40 IEC 0.35 0.13 0.06 0.54 Training 0.16 0.14 0.00 0.30 Total BASELINE COSTS 1.95 1.66 0.96 4.58 Physical Contingencies 0.05 0.05 0.02 0.12 Price contingencies 0.09 0.11 0.10 0.30 Total PROJECT COSTS 2.09 1.81 1.08 4.99 UTTAR PRADESH NLEP II 2001 2002 2003 Total Projects Components by year (US$million) Decentralisation & Institutional Development 0.06 0.02 0.02 0.10 Strengthening & Integrating Services 2.19 1.99 1.28 5.45 Disability Prevention & Care 0.21 0.22 0.18 0.61 IEC 0.45 0.21 0.08 0.74 Training 0.25 0.22 0.00 0.47 Total BASELINE COSTS 3.17 2.66 1.55 7.38 Physical Contingencies 0.08 0.07 0.04 0.18 Price contingencies 0.14 0.18 0.15 0.48 Total PROJECT COSTS 3.39 2.89 1.74 8.02 ORISSA NLEP II 2001 2002 2003 Total Projects Components byyear (S$million) Decentralisation & Institutional Development 0.04 0.02 0.02 0.08 Strengthening & Integrating Services 0.59 0.55 0.34 1.48 Disability Prevention & Care 0.06 0.06 0.05 0.16 IEC 0.29 0.12 0.04 0.45 Training 0.13 0.12 0.00 0.26 Total BASELINE COSTS 1.10 0.87 0.45 2.43 Physical Contingencies 0.03 0.02 0.01 0.06 Price contingencies 0.05 0.06 0.05 0.16 Total PROJECT COSTS 0.18 0.95 0.51 2.65 -34 -  27 STATES NLEP It 2001 2002 2003 Total Projects Components by year (US$million) Decentralisation & Institutional Development 0.78 0.35 0.35 1.48 Strengthening & Integrating Services 3.22 2.85 1.68 7.75 Disability Prevention & Care 0.44 0.48 0.45 1.38 IEC 0.39 0.22 0.11 0.71 Training 0.60 0.37 0.01 0.98 Total BASELINE COSTS 5.43 4.28 2.60 12.31 Physical Contingencies 0.11 0.10 0.06 0.27 Price contingencies 0.24 0.29 0.26 0.80 Total PROJECT COSTS 5.79 4.65 2.92 13.36 GOIICLU NLEP II 2001 2002 2003 Total Projects Components byyear (US$million) Decentralisation & Institutional Development 0.15 0.13 0.11 0.39 IEC 0.43 0.42 0.04 0.90 Training 0.03 0.05 0.04 0.13 Total BASELINE COSTS 0.62 0.60 0.20 1.42 Physical Contingencies 0.02 0.02 0.00 0.05 Price contingencies 0.03 0.04 0.02 0.09 Total PROJECT COSTS 0.67 0.67 0.22 1.56 Identifiable taxes and duties are 0 (US$m) and the total project cost, net of taxes, is 42.2 (US$m). Therefore, the project cost sharing ratio is 71.09% of total project cost net of taxes. - 35 -  Annex 4 INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Economic and Financial Analysis Summary I. Introduction To assist in project preparation and appraisal, a number of basic economic and financial studies and analyses were conducted following World Bank guidelines [see Operational Manual OP/BP 10.04 (1994)]. Specifically, analyses focused on expected benefits, links to poverty reduction, sustainability, risks, and extemalities. Since this is a follow-on to a successful project, the analysis focused on ensuring the continued rationale for investments and appropriate adaptation to the shrinking burden of leprosy in India. At issue are long-term sustainability and risk issues of re-organizing interventions from a vertical to a horizontal approach and the shifting of responsibility from the center to the states. II. Economic Justification Public finance economics provides a simple framework for analyzing the economic rationale for public involvement. The framework is based on the market's failure to provide a socially optimal quantity of a good or a service. Typical market failures are due to the nature of the good (public goods or extemalities) or the nature of the demand for the goods (e.g. low demand due to poverty or asymmetric information). The rationale for public involvement in leprosy control has both elements of market failure. A substantial element of the project relates to the provision of information to potential patients and providers. This takes the form of information campaigns and training. Such project components, especially IEC campaigns would not be delivered without public involvement because of strong public good characteristics (non-exclusionary and non-rival). Like most communicable diseases, there are some elements of extemalities involved in disease control that also result in less than optimal provision of services. Unlike most other communicable diseases, however, the social extemality related to leprosy is limited. The strongest argument for public involvement in leprosy control relates to the nature of demand for services and the burden of the disease on the most vulnerable in the population. Analysis of equity found the burden of leprosy to be mostly centered around the poor and socially vulnerable. Starting at the state level, the five most endemic states for leprosy, contributing 70 percent of the total patient load, are also five of the poorest states in India (Uttar Pradesh, Bihar, West Bengal, Orissa and Madhya Pradesh). Project Resources were then targeted to the poorest states. Individual level equity analysis in the five endemic states, confirms that the most socially vulnerable groups, scheduled Castes, and women below the poverty line, shoulder the highest burden of the disease. In Bihar for example, prevalence rates for leprosy were 50 percent higher for men and women below the poverty line than the state average. The prevalence rate for scheduled castes were even higher, at twice the state average. In Uttar Pradesh and Orissa, prevalence rates for scheduled castes were 2 to 2.5 times that of the state average. And in West Bengal, prevalence rates for women below the poverty line were 4 times the state average. Not only does leprosy target the neediest in India, it also a social and economic burden to the victims. Social and economic studies have documented the devastating social effect of leprosy and quantified the loss of income due to the disease. Detailed analysis of employability and eamings of leprosy patients in - 36 -  Tamil Nadu found the elimination of the deformity due to leprosy would: (i) raise the probability of gainful employment from 42 to 78 percent, and (ii) increase annual earnings per employed patient by 119 percent The combined effect of increased employment and earnings would triple the annual earnings for all patients. III. Public and Private Roles Economic rationale for public involvement need not necessarily mean that the public sector finance and deliver services. Project appraisal reviewed public and private roles as identified in project documentation and reviewed changes in the responsibilities between the center and the states. Due to the nature of the market failures (public goods and low demand) and the concentration of the disease in economically vulnerable population groups in the poorest states, it is important to maintain the financing role of the public sector. Provision of health services need not necessarily be completely delivered by the public sector. The project introduces a larger role for the private sector. A number of delivery elements will be contracted out to the private sector (for and not for profit). The list of contracted activities includes: * contracting specialized NGOs for disability prevention, care and rehabilitation; * contracting for the development of training materials; * contracting professional media and IEC agencies to assist in developing and implementing and integrated IEC and involving NGOs and neighborhood committees of women for community mobilization and sensitization campaigns; and 3 a larger reliance on contracted technical staff in management and service delivery roles. IV. Budgetary Impact Typical concerns about the budgetary impact of externally financed projects relate to how budgetary processes are influenced by, and adapt to, injections of external funds. A function of the appraisal process is the review of issues of sustainability, absorptive capacity, incrementality, and flow of funds mechanisms in order to minimize distortions and ensure that project objectives are aligned to, and are supported by, long-term program budgetary directions. Since this project is a follow-on of an existing project, appraisal was assisted by the available evidence on budgetary outcomes. Sustainability Analysis of the expenditure estimates by input categories for the new project confirmed that most investments are in disseminating information and human capital. The recurrent cost implications of such investments are minimal, especially as leprosy is eliminated as a public health risk. With no new large physical capital investments, the main elements of recurrent costs relate to addressing the long-term placement of existing staff. This issue is linked to the shifting of the service delivery model from vertical to horizontal as more leprosy services shift to GHS in the states. The largest component of recurrent costs in the new project is salaries of regular staff, representing 18 percent of estimated total project costs. Detailed analysis of budget plans for the 5 endemic states finds the wage bill distributed between regular and contracted staff with regular staff accounting for 79 percent of positions. Of the regular staff, paramedical workers account for 74 percent of the positions. The critical issue with recurrent staffcosts is the ability of the states to absorb staff into general health services. Since the objective of the project is the elimination of leprosy as a public health threat, there is little need for a - 37 -  sustainable structure beyond elimination. In fact, an important difference between the new and existing project is the significantly increased emphasis on institutional change. Table 1: NLEP staffing plans for the 5 endemic states Position Regular Staff % of Total Contract Staff % of Total % Contracted Medical Officers 435 4.5% 117 4.5% 21.2% NMS 1489 15.3% 120 4.6% 7.5% Paramed Workers 7245 74.5% 2085 79.9% 22.3% Lab Tech 417 4.3% 43 1.6% 9.3% Other non-med. 139 1.4% 244 9.4% 63.7% Total 9725 100.0% 2609 100.0% 21.2% Absorptive capacity Absorptive capacity for new expenditure is also not a critical issue in this project. The existence of an on-going project and the shrinking size and scope of the project minimize the risk of capacity problems. A remaining risk, however, is relatively weak implementation capacity of some of the endemic states. The size and scope of contracting for services highlights the need to strengthen implementation capacity. Management attention and technical assistance on issues relating to the procurement of contracted services is critical for mitigating these risks. Incrementality of IDA Funds Another small risk relates to incrementality of IDA financing. Trend analysis over the last 7 years of the NLEP shows the share of domestic spending (GOI funds) currently accounts for about 20 percent of total costs with IDA financing and contributions from WHO and Danida completing the expenditure picture. Project supervision will pay special attention to the sources of financing for the project. Financial reporting on the shares of the government, IDA, and other partner funds (WHO and Danida) should ensure that extemal funding does not substitute for domestic funds. - 38 -  Annex 5: Financial Summary INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Years Ending Year 1| Year2 | Year3 Year4 r Year 5 Year6 | Year 7 Total Financing Required Project Costs Investment Costs 12.9 10.6 5.8 0.0 0.0 0.0 0.0 Recurrent Costs 5.2 4.6 3.1 0.0 0.0 0.0 0.0 Total Project Costs 18.1 15.2 8.9 0.0 0.0 0.0 0.0 Total Financing 18.1 15.2 8.9 0.0 0.0 0.0 0.0 Financing IBRDIIDA 13.0 11.0 6.0 0.0 0.0 0.0 0.0 Government 5.1 4.1 3.0 0.0 0.0 0.0 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User Fees/Beneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 18.1 15.1 9.0 0.0 0.0 0.0 0.0 Main assumptions: - 39 -  Annex 6: Procurement and Disbursement Arrangements INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Procurement The procurement arrangements to be undertaken in the project will be the responsibility of the implementing agency - Directorate General of Health Services (Ministry of Health and Family Welfare, Government of India) and the State and District Societies - in accordance with the Bank Procurement Guidelines and Procedures. The project would be nation wide. The focus of this project is on decentralization of leprosy control activities to States through the transfer of financial and administrative authority to State governments by forming SLS. There will be DLS also. The process of decentralization is being adopted so that the States own the project and take active part in meeting the objectives of the project. Most project activities will be in five major States which are Bihar, Madhya Pradesh, Orissa, Uttar Pradesh, and West Bengal. Activities in the other 27 States/Union Territories (UTs) will comparatively be at a very small level. Total number of districts in these States are: 53 in Bihar, 58 in Madhya Pradesh, 20 in Orissa, 81 in Uttar Pradesh, 18 in West Bengal and 300 in 27 States/Union Territories (Overall 530 districts). Major procurement will be in the above five major states. State/District Leprosy societies would be responsible for procurement of most goods, equipment and services. A. Civil Works. There are no civil works under this project. B. Goods. Procurement of goods (equipment, furniture, drugs and supplies) would be phased on an annual basis in accordance with the requirements of the project activities. Furniture IUS$178,5001: Fumiture involves procurement of tables, chairs, steel almirah and other items to equip the State Leprosy Societies, Sample Survey Assessment Units, and Regional Leprosy Training Institutions etc. There will be 216 packages ranging from US$156 to US$1445 and one package of US$6,930 approximately. Contracts for these packages will be awarded under national shopping procedures by the above mentioned organizations and at national level by MOHFW, GOI. Equipment [US$121,5001: This involves (i) procurement of minor and major reconstructive surgery instruments to equip District Hospitals and Medical colleges; and (ii) Computer systems for Sample Survey Assessment Units and SLS. There will be 530 packages for minor reconstructive surgery equipment, each costing US$110 and 111 packages for major reconstructive surgery equipment each costing US$160 approximately. Similarly there will be 24 packages of computer systems each costing US$1670 approximately. These items will be procured by DLS following national shopping procedures. Vehicles IUS$400,0001: The only vehicles to be procured under this project are four wheel drive jeeps (about 42 vehicles) for all SLS and Sample Survey Assessment Units. Procurement would be done by SLS through National Shopping procedures (DGS&D rate contracts are acceptable under National Shopping) with 5 packages of US$19,050 each and 32 packages of US$9,525 each. Supportive Medicines IUS$700,0001: These are required for use of patients at the time of reconstructive surgery. Cost of these supportive medicines per district per year will only be US$440 approximately and would be procured by DLS and SLS under National Shopping or Direct contracting procedures to meet the demand. Total number of packages are 530 per year. Multi Drug Therapy drugs in this project will be donated by Novartis Foundation and supplied by WHO free of charge. Materials & Supplies 1US$2,200,0001: These include Micro-cellular rubber and other footwear, splints and crutches, lab reagents, patient case cards, training manual and patient welfare items (like blankets etc.) - 40 -  and will be provided to the patients as and when the need arises. However, total number of packages and value of each package is indicated in Attachmnent I to this Annex 6. Each of these items/packages will be procured through National Shopping procedures and/or by direct contracting by DLS. C. Services. Procurement of services is planned for a range of project activities which include medical & surgical services, information, education and communication, training and workshops, campaign for case detection, contractual services, research & studies including thesis support and other consultant services. Medical and Surgical Services [US$300,0001: These services are required for performing reconstructive surgery and shall be procured by the DLS under contracts awarded to designated healthcare centers selected for their suitability to perform such services on sole source basis. Provision has been made for 50 operations per year in each of the 31 centers in endemic areas during the project period of three years at a flat rate of US$65 approximately per surgery. Total cost per center per year will be US$3,250 approximately. Information, Education and Communication [US$5,000,0001: Production and implementation of mass media activities in educating the people through Television, Radio, Newspapers etc. will be carried out by hiring the services of an agency following Quality and Cost Based Selection procedures. Total estimated cost of this consultancy service is US$2.45 million approx. Outdoor IEC services i.e. hoarding, painting/hoarding on bus shelters, kiosks, etc., will be carried out by each district separately on sole source basis value of each contract being small. Total value of these services per State per year in 5 major states will be in the range of US$6,770 to US$19,150. In each of the other 27 States/Union Territories cost per year will still be much lower. Total cost of these services is estimated at US$354,000 approximately. Rural activities i.e. wall paintings, leaflets, posters, etc., will also be carried out by each district on the same basis as for Outdoor activities. There will be at least two packages per district per year - one package for wall paintings and the other for leaflets/posters. Total number of districts are 530. Value of these services per state per year in 5 major States will be in the range of US$34,670 to US$97,280 equivalent. In the other 27 States/UTs cost per state per year will be much lower. Total cost of these services is estimated at US$1.651 million approximately. Production of spots for radio and television will be arranged by MOHFW at the national level. This activity will be for the first two years of the project only and will cost US$118,000 per year. Since contracts will be awarded for radio and television spots separately, value of each contract will be less than US$100,000 equivalent and therefore these services will be procured under sole source method of selection. Political advocacy efforts would comprise activities like publicity services for Asian Leprosy Congress in year 2000 and Gandhi Jayanti on 2 October and Martyr's Day on 30 January every year against stigmatization of those affected by leprosy. In addition meetings will be held with members of the State legislatures to sensitize them about the leprosy program. Total cost of this activity at national level will be US$47,000 and in all the 32 States/UTs put together at US$250,000 approximately with cost in any State/UT not exceeding US$11,800. These services will also be procured on sole source basis, value per contract being very small. Consultant Services: These services will be hired at national level and will include (i) development, installation and training in computerized financial management system to be procured under sole source costing US$47,000 approximately; (ii) individual consultant to be appointed for developing strategic plan for IEC including advertisement and publicity at a cost of US$11,790 approximately per year; (iii) individual training consultant for second and third year of the project costing US$11,790 approximately each year; (iv) hiring of an agency for independent survey during year one and two of the project costing US$47,000 each year; and (v) hiring of an agency for independent final evaluation in the third year of the -41 -  project at a cost of US$47,000 approximately following Quality and Cost Based Selection procdures. Consultancy services for Research and Studies which includes (i) data validation at a cost of US$25,950 per year for all the three years of the project; (ii) study on organizing model camps for prevention of disability at a cost of US$9,400 in the second year of the project; and (iii) operations research on general health services staff at a cost of US$13,900 in the second year of the project shall be procured following sole source method of selection, value of each contract being small. As part of research and studies, the project also intends to support thesis of scholars (individuals doing MD/Ph.D in the field of leprosy) at a total cost of US$26,100 approximately @ US$235 per student over a period of three years under the project. Tenrs of Reference, irrespective of value, would be subject to prior review by the Association. NGO services: NGOs will provide services and technical support in training, monitoring and surveillance, independent assessment, operations research, disability prevention and care and rehabilitation. NGOs shall be provided grant-in-aid by the GOI which will not be financed under this project (Mostly NGOs will be selected on the basis of terms of reference agreed to by the Association). Training and workshops LUS$3,200,0001: This includes expenditure on (i) training of health staff, Anganwadi Workers and other community workers, Panchayati Raj members etc. for MLEC, IEC, Prevention of Disability, Community Participation and Orientation. Cost pertains to arranging meetings, training materials, expert services and related fees; (ii) co-ordination workshops with State Officers and NGOs; (iii) workshops for review of the performance of program districts every year; (iv) review meetings at regional level with District Leprosy Officers, Chief Medical Officers, etc.; and (v) training of trainers. The training and workshops will be arranged at State and District level on sole source basis, value of each contract being less than US$100,000. Contractual Staff 1US$10,500,0001: Large number of individuals such as medical officers, para medical workers, non medical supervisors etc. for deliver of services on a contract basis shall be hired to manage the works of newly formed State / Districts Leprosy Societies and Sample Survey Assessment Units in all the 32 States and Union Territories. At the beginning of the project these will number 3500 which will get reduced to 1800 by the end of the project period. Each contract will be less than US$10,000. The job description, minimum qualifications, terns of employment, range of remuneration payable and selection procedures shall be agreed with the Association. Letter of agreement for short term assignments for individual consultants to be entered by the project authorities will follow the Bank's model format. Campaigns for Leprosy Case Detection [US$ 5,500,000: These services include MLEC, SAPEL, and LEC in each year of the project for leprosy case detection in tribal endemic pockets and in relatively inaccessible areas, including urban slums of the districts in the States/UTs. For this large numbers of individuals (searchers, helpers, and confirmators for a limited period of 6 days or so and volunteers) will be hired on contract basis with aggregate counseling fee of US$4,750,000 approximately. The job description, minimum qualifications, terms of employment, range of remuneration payable and selection procedures shall be agreed with the Association. Letter of agreement for short term assignments for individuals to be entered by the project authorities will follow the Bank's model format. This activity also includes other services like procurement of diagnostic cards, learning materials, patient travel cost, supportive medicines and mobility support at a total cost of US$750,000 approximately. Value of these items for each of the five major States and 27 States/UTs are indicated in Attachment I to this Annex 6. Diagnostic cards and mobility support required for MLEC and Voluntary Reporting Centers will be procured during first and second year of the project whereas leaming materials, patient travel cost, and supportive medicines under SAPEL/LEC will be procured during all the three years of the project. These items will be procured every year as mentioned above under sole source (by direct contracting) by the - 42 -  SLS/DLS and value of each item per State/District per year will be less than US$30,000. D. Miscellaneous. This involves operational expenses for all the components of the project and would include honoraria (awards) for health workers, office operations, vehicle operation (maintenance of vehicles, vehicle hire and mobility support) and consumables. These would be procured on the basis of direct contracting, or three quotations depending upon the situation. E. Since all the contracts for goods, equipment, medicines, vehicles etc. shall be below US$30,000 and contracts for consultancy services shall also be of small value except one contract of IEC, prior reviewed by the Association will be for this IEC contract and the terms of reference for all consultancy services. For National shopping Bank's New Delhi Office model document E-5 and format of letter of agreement for short term assignments of individual consultants given in Bank's New Delhi Office model documents C-10 (Time-Based) or C-8 (Lump Sum) shall be adopted. For supportive medicines, furniture and other items to be procured under national shopping and/or direct contracting, the norms for such procurement i.e. acceptable range of prices and acceptable/preferable brand names shall be clearly indicated either in the PIP or in the guidelines to the States/UTs so that these are followed by the SLS/DLS while procuring these items. F. Cost estimate of the items to be procured, estimates of Bid packages for procurement of goods/ equipment/consultancy services, details of value of goods/equipment/consultancy services for each year and Procurement Schedule of goods/equipment!consultancy services for all the three years of the project including Retroactive Financing are attached with the PIP of the Borrower. Procurement Methods (Table A) IDA financed works and goods will be procured in accordance with Bank Guidelines - Procurement under IBRD Loans and IDA Credits (January 1995, Revised January and August 1996, September 1997 and January 1999). IDA financed services will be procured using Bank Guidelines - Selection and Employment of Consultants by World Bank Borrowers, (January 1997, Revised September 1997 and January 1999). For procurement under the project, the Bank's standard bidding documents shall be used. Attachment II to this Annex 6 summarizes procedures for undertaking procurement on the basis of National Competitive Bidding. Specific Procurement arrangements summarized in table 'A' are as follows: * Contracts for the purchase of goods/equipment valued at more than US$200,000 equivalent each would be procured through Intemational Competitive Bidding. * Contracts valued more than US$30,000 but less than US$200,000 may be awarded on the basis of National Competitive Bidding procedures acceptable to IDA. Items or groups of items valued US$30,000 equivalent or less per contract may be procured on the basis of national shopping procedures. Other items or small groups of items such as supply of fumiture, equipment, medicines, materials and other supplies valued at less than US$10,000 equivalent per contract may be procured through direct contracting. - 43 -  * Contracts estimated to cost the equivalent of US$10,000 or less per contract for maintenance of vehicles, hiring of vehicles and consumables may be awarded through: - Direct Contracting; or - National Shopping. Prior Review Thresholds (See Table B) * All contracts for goods/equipment except vehicles with an estimated value of more than US$200,000 equivalent. * All contracts of procurement for vehicles with an estimated value of more than US$ 100,000. * The first National Competitive Bidding contract for goods / pharmaceuticals regardless of the value. * Consultants' contracts with an estimated value of US$100,000 or more for firns and US$50,000 or more for individuals. Procurement methods (Table A) TaJeA: Proec Cosa byvPrvcuremenrArranRement& (US $ million eamv'nt_ ICB NCB Other N.B.F Total Cost 1 Goods Furniture and Equipment - 0.30 0.30 = = (0.24) (0Q24) Vehicles - 0.40 0.40 (0.32) (0.32) Supportive Medicines - 0.70 0.70 (056 (0-* Materials & Supplies - 2.20 2.20 = =_ (1.77) (1.77) 2 Services ._. IEC & Carnpaign for case detection - 10.50 10.50 _ ___________________________________ ______ (10.50) (10.50) Training & Workshop, Research & Studies - 3.30 3.30 = =__ (3.30) (3.30) Consultant Services & Contractual Services - 10.70 10.70 (10.70) (10.70) Medical/Surgical Services - 0.30 0.30 __________________________________ (0.30) (0.30) NGO services - - 0.80 0.80 3 Operatinng Costs Salaries etc - - 7.30 7.30 Honoaria - 0.40 0.40 __________ _ =__ (0.16) (0.16) Velicle opeation - 4.60 4.60 (1.84) (1.84) Office operation and consumables - 0.70 0.70 _____ _____ _____ _____ _____ (0.30) _ (030) Total 30_ - &10 . Z20 _____ ____________________________________ .____ (30.00) (30.00) Note: Figures in the Parenthesis are the respective amounts financed by IDA/IBRD. "Other method of procurment includes Direct Contracting, Comparison of price quotations(Shopping) and Consulting services. - 44 -  Table Al: Consultant Selection Arrangements (optional) (US$ million Equivalent) Consultant Selection Method Services Expenditure QCBS QBS SFB LCS CQ Other N.B.F. Total Cost Category______ A. Firms 2.57 0.00 0.00 0.00 6.91 0.00 0.00 9.48 (2.57) (0.00) (0.00) (0.00) (6.91) (0.00) (0.00) (9.48) B. Individuals 0.00 0.00 0.00 0.00 0.00 15.32 0.00 15.32 (0.00) (0.00) (0.00) (0.00) (0.00) (15.32) (0.00) (15.32) Total 2.57 0.00 0.00 0.00 6.91 15.32 0.00 24.80 1 (2.57) (0.00) (0.00) (0.00) (6.91) (15.32) (0.00) (24.80) I\Including contingencies Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Credit. - 45 -  Prior review thresholds (Table B) TABLE B: THRESHOLDS FOR PROCUREMENT METHODS AND PRIOR / POST REVIEW Expenditure Value per Contract Procurement method Contracts Subject to Prior Value of Prior Category (Threshold) / Post Review Review 1. Civil Works There are no civil works under this project 2. Goods (a) Equipment, (a) US$30,000 or less per Furniture, Supportive contract, up to an aggregate Medicines, Materials amount not exceeding & Supplies. US$2,400,000 equivalent as under: (i) Furniture up to an National Shopping Post review only. aggregate not exceeding Procedures (includes US$160,000 DGS& D Rate Contracts) (ii) Equipment up to an National Shopping Post review only. aggregate not exceeding Procedures (includes US$ 110,000 DGS& D Rate Contracts) (iii) Supportive medicines National Shopping Post review only. up to an aggregate not Procedures (includes exceeding US$150,000. DGS& D Rate Contracts) (iv) Materials & Supplies up National Shopping Post review only. to an aggregate not Procedures (includes exceeding US$1,980,000 DGS& D Rate Contracts) (b) Less than US$]0,000 per Direct Contracting Post review only. contract up to an aggregate not exceeding US$800,000. (c) More than US$30,000 National Competitive First goods NCB contract None but less than US$200,000 Bidding from any one State estimated anticipated at per contract. to cost more than US$30,000 this stage. but below US$200,000 equivalent and each contract of goods estimated to cost more than US$200,000 equivalent each by prior review in accordance with paragraphs 2 and 3 of Appendix-] to the Guidelines. - 46 -  (d) Above US$200,000 International Competitive Contracts valued at more than None equivalent per contract. Bidding US$200,000 equivalent each anticipated at by prior review in accordance this stage. with paragraphs 2 and 3 of Appendix- I to the Guidelines. All others: By post review. (b) Vehicles US$ 100,000 equivalent or National Shopping Post review only. less per contract, up to an Procedures (includes aggregate not exceeding DGS& D Rate Contracts) US$400,000 equivalent. Above US$ 100,000 Intemational Competitive All ICB contracts of vehicles None equivalent per contract Bidding irrespective of value by prior anticipated at review in accordance with this stage. paragraphs 2 and 3 of Appendix-I to the Guidelines. 3. Services (a) IEC Services Above US$200,000 Quality and Cost Based Prior review of all consultant US$2.45 equivalent per contract up to Selection contracts shall be govemed by million an aggregate of the provisions of paragraphs US$2,450,000 (i), (ii), and (iii) below: (b) Professional Quality and Cost Based (i) With respect to each Services Contract, US$200,000 or less per Selection with Short List contract for the employment None Mass Media/lEC, contract (may be comprised entirely of consulting firms estimated anticipated at Training & Workshops of national consultants) to cost the equivalent of this stage. and MedicallSurgical US$100,000 or more, Services. procedures set forth in paragraphs 1, 2 [other than the third sub-paragraph of paragraph 2 (a)] and 5 of Appendix I to the Consultant Guidelines shall apply. - 47 -  (c) Training & US$100,000 equivalent or (i) Quality and Cost Based (ii) With respect to each Workshops, Mass less per contract up to an Selection with Short List contract for the employment Media/IEC, Research aggregate amount not (may be comprised entirely of individual consultants and Studies, exceeding US$7,030,000 of national consultants); estimated to cost the Evaluation, equivalent. and equivalent of US$50,000 or Medical/Surgical more, the qualifications, Services and Financial experience, and terms of Management Services. employment of the consultants shall be furnished to the Association for its prior review and approval. (ii) Single Source (iii) Terms of Reference Selection in accordance (TOR) in all cases. with paragraphs 3.8 to 3.11 of the Consultant All Other Cases: Post Guidelines. Review. (d) Service delivery US$10,000 equivalent or (i) Selection in accordance Job description and contractors for less per contract up to an with paragraph 3.19 of the experience, minimum campaigns for case aggregate amount not Consultant Guidelines; and qualifications, terms of detection, contractual exceeding US$15,320,000 employment and selection and individual procedures shall be agreed consultants with the Association. (ii) Selection of Individual Job description and Consultants in accordance experience, minimum with paragraphs 5.1 to 5.3 qualifications, terms of of Consultant Guidelines employment and selection procedures shall be agreed with the Association. 4. Miscellaneous Incremental Incremental operating costs, Operational Costs, vehicle hire, maintenance of vehicle operation and vehicles and consumables consumables estimated to cost the equivalent of US$ 10,000 or less per contract, up to an aggregate not exceeding US$4,840,000 may be executed by: (i) direct contracting up to Direct contracting Post review only an aggregate not exceeding US$1,000,000; or (ii) on the basis of Solicitation of three bids Post review only comparison of price quotations obtained from at least three qualified suppliers eligible under the guidelines. - 48 -  Disbursement The proposed allocation of loan proceeds is given in Table C. The disbursement will initially be made in the traditional system (reimbursement with full documentation and against statement of expenditure) and will be converted to Project Management Report based disbursement after the financial management system has been demonstrated to be operating satisfactorily. The target date for this conversion is September 1, 2002. Financial Management Current Financial Management System The project is a follow-on project to the on-going National Leprosy Elimination Project (Cr. 2528) which closed on September 30, 2000. The implementing agency for both the Projects is Directorate General of Health Service (Leprosy Division) in the Ministry of Health and Family Welfare. DGHS(LD) will be supported in the execution of the project by participating states. DGHS(LD), which has considerable experience of running the NLEP in India has the following strengths: (i) a budgeting and accounting system has been established and is operational (ii) staff are trained to carry out basic accounting functions; and (iii) a system of periodic financial reporting from the districts to DGHS(LD) is operational. However, it must be emphasized that although DGHS(LD) has experience in the project management, the State Leprosy Societies who are going to be key partner in the project are at an initial stage of inception. In fact, out of the 24 SLS proposed to be created, only 15 have been established so far. Nonetheless, at the district level, the District Leprosy Societies are already in place. Considerable effort will need to be made by DGHS(LD) to build capacity quickly in the State Societies on financial management. Specific areas to be strengthened: The following aspects need to be addressed to ensure that a satisfactory financial management system commensurate with the size and scope of the project is established: (a) satisfactory staffing and training: Financial functions should be staffed by suitably qualified accounts professionals. DGHS (LD) should be supported by a full-time financial controller who can actively aid in setting up the financial management system in the project. The SLS also need to be suitably staffed with accounts staff. At the district level, there is a need to identify accounts personnel who will be working exclusively on the project. The entire financial staff at Central and state level needs to be trained in the operation of the computerized financial management system. Project managers and financial staff need to be sensitized to the importance of financial management for effective project management. (b) there is a need for a good financial monitoring system at the GOI level. Currently the financial monitoring of the districts is poor and the review of district audit reports not focussed. There is not much of a concept of funds management. Funds to the districts are released once in a year and there is no mechanism designed to track the amounts advanced to and expenditure reported by the DLS. (c) the need to analyze financial information and use it as a decision making tool: Financial reports which provide timely and quality information on the financial performance of the project should be prepared. (d) ensuring satisfactory audit arrangements including timely submission of audit reports. (e) ensuring linking of physical progress with the financial progress. - 49 -  (f) need for enhanced clarity and consistency of activities and expenditures which are being charged as project expenditure DGHS(LD) will develop and implement a comprehensive computerized financial management system which will address all these issues in detail. The project financial management system (PFMS) would, inter alia, include: (i) funds flow process; (ii) detailed accounting system (including the Chart of Accounts; formats of financial reports; linkages between the Chart of Accounts and financial reports; inputs of budget and other data; data capture, information flow and processing;) (iii) internal control mechanisms; (iv) budgeting and forecasting system; and (v) auditing arrangements. The Financial Management System will be supported by an operations manual which would serve as a reference document for all project staff. Budgeting and Flow of Funds The funding to DGHS(LD) would be through the Ministry of Health Budget with project funds as a special allocation. Flow of funds from DGHS(LD) to SLS will be on a semi-annual basis through banking channels. The initial allocation will be based on the cash flow forecasts of SLS (which in turn would be based on their work programs and budgets). The funds from the SLS to the DLS will also be transferred on a half yearly basis Subsequent funding will be based on performance of key indicators and the projected funds requirement of the SLS / DLS respectively. Accounting and Internal Controls The overall framework of the system is given below: * The PFMS would cover all project-related transactions, i.e., all sources of funds would be accounted for and reflected in the project financial statements; and similarly all project expenditures would be reflected in the project financial statements. * A chart of accounts will be developed. The chart of accounts will enable the expenditure data to be captured and classified by project components and expenditure categories. The chart of accounts will have linkages to: (i) government budget heads/categories; (ii) disbursement categories and (iii) project components. * The financial management system is being computerized. The computerized system will be installed and operated at DGHS(LD) and the participating SLS. The participating DLS in the states will be expected to feed the SLS with the financial information on a manual basis. * The consolidation of accounts will be done first (i) at the SLS level by consolidating the expenditure of the SLS and all the DLS in the state and then (ii) at DGHS(LD) in MOHFW by consolidating the accounts of DGHS(LD) and all the SLS. * Standard books/records of accounts (cash and bank-books, joumals, ledgers, trial balance, etc.) will be maintained at the DGHS(LD) and SLS using an integrated computerized accounting system. A register of fixed assets, indicating assets created through the project or acquired under the project, will also be maintained using the computerized system. - 50 -  Transaction Information Flow and Accounting DGHS(LD), SLS and DLS will generate and maintain the transaction vouchers for their various receipts and expenditures made at DGHS(LD), SLS and DLS levels respectively. Data transfer would be handled through: (i) an integrated computer network; or (ii) periodic data transfer through Electronic Mail or floppy diskettes. Internal Controls Internal control mechanisms would include the following: I . the establishment of appropriate budgeting systems, and regular monitoring of actual financial performance with budgets and targets; 2. development and adoption of simple, clear and transparent financial and accounting policies which would govern financial management and accounting for the project. These policies and procedures would include identification of expenditures which can be charged to the project, and the categories under which the expenditures would be charged; the policies and procedures for transfer of funds and accounting of expenditures; etc. 3. at the transaction level, the establishment of procedures and systems for ensuring standard internal controls such as checking of expenditures, appropriate documentation, levels of authorization, segregation of incompatible duties, periodic bank reconciliation, physical verification, etc. Staffing The finance and accounting department at DGHS(LD) would be headed by the designated Deputy Secretary who will function ex-officio as the Financial Coordinator for the project. His team will include two finance officers and 3/4 accountants/data entry operators. The Finance and Accounting Department at large SLS (viz. Bihar, MP, Orissa, UP and West Bengal) will comprise of a Budget and Finance officer, 1 data entry operator and 1 accountant. In the other 19 SLS, the financial and accounting staff will comprise of 1 Budget and Finance Officer supported by a data entry operator. The funds wil be transferred to the state only after the accounting staff is in position and has been adequately trained. At the DLS level, for the 300 societies which are in high endemic region, the accounting will be done by an accounts supervisor supported by an accounts clerk, where as in the 250 low endemic societies, the accounting function will be assigned to an existing staff in the department who will maintain accounts for the DLS. An intensive training program will be developed to ensure that the staff at all the levels are adequately trained in the computerized PFMS. The initial training will be imparted by the consultants developing the computerized PFMS. - 51 -  Financial Reporting Quarterly Financial Management Reports will include: * comparison of budgeted and actual expenditure and analysis of major variances, including on aspects such as sources of funds (indicating separately funds from beneficiaries) and application of funds (classified by components, sub-components, summarized expenditure categories, etc.); * comparison of budgeted and actual expenditure and analysis of major variances on key physical parameters; * forecasts for the next 2 quarters; and * information on procurement management for major contracts. Project Financial Statements and Financial Management Reports would be generated from the computerized financial management system. DGHS(LD) would generate quarterly financial management reports from the integrated computerized PFMS for the whole project. The SLS will also have the capability of generating these reports for their own monitoring needs. These reports and the Withdrawal Application (which would be based on the financial forecasts and actual expenditures classified by disbursement category) would also be used by the Bank for quarterly disbursements in accordance with the disbursement procedures under Loan Administration Change Initiative. The reporting from DLS to the SLS and from SLS to DGHS(LD) will be quarterly. Auditing Arrangements DGHS(LD) Accounts will be audited by the Comptroller and Auditor General of India. The SLS will be audited by firms of Chartered Accountant and the audit would include a statement on the audit status of the DLS in the state based on Chartered Accountant audits of the DLS. An audited annual project financial statement will be submitted by DGHS(LD) and all the participating states within 6 months of the close of GOI's fiscal year. Thus the following audit reports will be monitored in Audit Reports Compliance System: Implementing Agency Audit Auditors DGHS(LD) SOE/Project Audit Comptroller and Auditor General All SLS SOE/Project Audit Chartered Accountant firms Department of Economic Special Account Comptroller and Auditor General Affairs/GOI In accordance with the World Bank's Operational Policies, the Terms of Reference of the firm of Chartered Accountants auditing the SLS should be reviewed by the World Bank. The firms of Chartered Accountants would be appointed before the start of the project. Under the previous project there were lapses on the part of DGHS(LD) on timely submission of audit reports to the Bank which was a cause for suspension of Statement of Expenditure disbursements. DGHS(LD) will need to ensure that in the upcoming project, special attention is paid to this aspect of the - 52 -  project and the audit reports are submitted in time. Time Table for implementation of Project Financial Management System and next steps The proposed computerized PFMS will be developed for DGHS(LD) with the help of consultants specifically appointed for the purpose of designing, developing and instituting the computerized project financial management system in the project. The following key activities will need to be completed to successfully implement the computerized PFMS: Activity Target Date Procurement of computers March 31, 2001 Development and installation of the Project Financial Management System software June 30, 2001 Appointment of accounts personnel at SLS July 31, 2001 Training on financial management system in the PFMS software September 30, 2001 Implementation of the computerized financial management system October 1, 2001 Conversion to PMR-based system of disbursement October 1, 2002 - 53 -  Disbursement Allocation of credit proceeds (Table C) Table C: Allocation of Credit Proceeds I Expenditure Category Amount in US$million J Financing Percentage 1. Goods: 2.90 80% Includes: US$0.24 million: Fumiture&Equipment US$0.32 million: Vehicles US$0.56 million: Supportive medicines US$1.77 million: Materials & Supplies 2. Services: 24.80 100% Includes: US$5.00 million: IEC US$5.50 million: Campaigns US$3.20 million: Training &Workshops US$0.10 million: Research & Studies US$0.20 million: Consultant Services US$10.50 million: Contractual services US$0.30 million: Medical & surgical services 3. Incremental Operating Costs 2.30 60% of local expenditures incurred until July 31, 2002; 40% of expenditures Includes: incurred from August 1, 2002 until July, US$0.16 million: Honoraria 2003; 20% of expenditure incurred US$1.84 million: Vehicle hire & thereafter, i.e. 40% overall. maintenance. US$0.30 million: Office operation & consumables. Total Project Costs 30.00 Total 30.00 Note: Amounts are inclusive of contingencies Use of Statement of Expenditures (SOE) - 54 -  The Bank may require withdrawals from the credit to be made on the basis of statements of expenditure for: (a) goods and works under contracts not exceeding US$ equivalent; (b) services under contracts not exceeding US$ equivalent for employment of consulting firms and US$ equivalent for employment of individual consultants respectively; (c) training and fellowships (d) incremental operating expenses Special Account: A Special Account would be maintained in the Reserve Bank of India; and would be operated by the Department of Economic Affairs of Government of India. The authorized allocation of the Special Account would be US $2.5 million which represents about 6 months of initial estimated disbursements from the IDA Credit. The Special Account would be operated in accordance with the Bank's operational policies - 55 -  Attachment I A. Materials & Supplies: Item No. of Packages Approximate Cost per package Footwear 530 per year US$285 Splints and Crutches 530 per year US$145 Lab Reagents 530 per year US$285 Patient Welfare Items 530 per year US$285 Training Manual 530 packages US$955 Patient Case Cards 230 packages US$335 Patient Case Cards 300 packages US$110 B. Campaign for Case Detection: [Cost in US$1 Madhya Orissa Uttar Bihar West 27 States/ Pradesh Pradesh Bengal UTs Diagnostic Cards* 5,940 1,660 14,220 13,760 5,990 - (Year I & 2) Learning material ** 15,590 12,240 37,840 34,500 17,810 42,290 (Year 1, 2 & 3) _ Patient Travel ** 15,590 12,240 37,840 34,500 17,810 42,290 (Year 1, 2, & 3) Supportive Medicines** 31,170 24,480 75,690 69,000 35,620 84,580 (Year 1, 2 & 3) Mobility support 8,140 2,940 16,630 11,020 3,610 - (POL)* (Year I & 2) 1 1 I I * Under modified Leprosy elimination campaign (MLEC) and voluntary reporting center (VRC). ** Under Special Action Plan for Elimination of Leprosy (SAPEL) - 56 -  Attachment II With reference to the procedures for undertaking procurement on the basis of National Competitive Bidding referred to in Part C of Section I, Schedule 3 of the Development Credit Agreement, all National Competitive Bidding contracts shall be awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelines for Procurement under IBRD Loans and IDA Credits published by the Bank in January 1995 and revised in January and August 1996, September 1997 and January 1999 (the Guidelines). In this regard, all NCB contracts to be financed from the proceeds of the Credit shall follow the following procedures: [1] Only the model bidding documents for National Competitive Bidding agreed with the Government of India Task Force [and as amended from time to time], shall be used for bidding. [2] Invitations to bid shall be advertised in at least one widely circulated national daily newspaper, at least 30 days prior to the deadline for the submission of bids. [3] No special preference will be accorded to any bidder when competing with foreign bidders, state-owned enterprises, small-scale enterprises or enterprises from any given State. [4] Except with the prior concurrence of the Bank/Association, there shall be no negotiation of price with the bidders, even with the lowest evaluated bidder. [5] Except in cases of force majeure and/or situations beyond control of Ministry of Health & Family Welfare, Government of India and State / District Leprosy Societies, extension of bid validity shall not be allowed without the prior concurrence of the Association [i] for the first request for extension if it is longer than eight weeks; and [ii] for all subsequent requests for extension irrespective of the period. [6] Re-bidding shall not be carried out without the prior concurrence of the Bank/Association. The system of rejecting bids outside a pre-determined margin or "bracket" of prices shall not be used. [7] Rate contracts entered into by DGS&D will not be acceptable as a substitute for NCB procedures. Such contracts will be acceptable for any procurement under National Shopping procedures. - 57 -  Annex 7: Project Processing Schedule INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT Project Schedule Planned Actual Time taken to prepare the project (months) 11 First Bank mission (identification) 11/22/99 Appraisal mission departure 09/30/2000 11/15/2000 Negotiations 02/19/2001 02/20/2001 Planned Date of Effectiveness 07/01/2001 Prepared by: Directorate General of Health Services (Leprosy Division), Ministry of Health and Family Welfare, Government of India Preparation assistance: WHO: Denis Daumerie, Vijay Pannikar, Mika Kawano Danida: Bouwedjin Peters Bank staff who worked on the project included: Name Speciality Peter Heywood Lead Health Specialist (Team Leader) Suneeta Singh Senior Public Health Specialist David Peters Senior Public Health Specialist Mam Chand Senior Procurement Specialist Rajat Narula Senior Financial Management Specialist Abdo Yazbeck Senior Economist Rashmi Sharma Social Development Specialist Shreelata Rao-Seshadri Consultant Supriya Mukherji Consultant Mohammad Nawaz Consultant, LEGOP Nina Badgaiyan Consultant Nira Singh Office Administrator - 58 -  Annex 8: Documents in the Project File* INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT A. Project Implementation Plan Project Implementation Plan Part-A: National Plan, Part-B: Plans for Five High Endemic States, Part-C: Plans for 27 Low Endemic States: National Leprosy Eradication Program for Phase II of World Bank support, Ministry of Health and Family Welfare, Government of India, Dec 5, 2000 B. Bank Staff Assessments IDA. Identification Mission: Second National Leprosy Elimination Project. Aide Memoire, Nov 1999. IDA. Second National Leprosy Elimination Project: Project Information Document. IDA. Second National Leprosy Elimination Project: Environmental Data Sheet, Dec 2000. Heywood, P. and Singh, S., Institutional Assessment, Sept 2000. Sharma, R. and Rao-Seshadri, S., Social Assessment, Oct 2000. Yazbeck, A., Economic Assessment, Sept 2000. C. Other NLEP Phase II: Review of Contracting Mechanism for NGOs: PriceWaterhouseCoopers, Sept 2000. Action Plans for 2nd Phase Project, National Leprosy Elimination Program: Uttar Pradesh, Bihar, MP, Maharashtra, Aug/Sept 2000. Report on Independent Evaluation of National Leprosy Eradication Program, India: National Institute of Epidemiology, Chennai, Aug 2000. Leprosy Elimination: Track Records and Prospects: Ed. David K. Wamdorff, Tropical Medicine and Intemational Health, Vol.5, Jun 2000. Mycobacterium Leprae - Millennium Resistant Leprosy Control on the Threshold of a New Era: Visschedijk et al, Tropical Medicine and International Health, Vol.5, No.6, Jun 2000. Leprosy After the Year 2000: Ben Naafs, Tropical Medicine and International Health, Vol.5, No.6, Jun 2000. NLEP PHC Synergy, Process & Impact of Integration of Leprosy with Primary Health Care - An Evaluation: Community Health Department, Christian Medical College, India, Jun 2000. Working Together for Better Results - Integration of Leprosy with Primary Health Care Services: DANLEP, Orissa, Mar 2000. The Source of Infection: An Unsolved Issue: Symposium Paper, Indian J Lepr, Vol. 72(2), 2000. Impact Evaluation of the Modified Leprosy Elimination Campaign (BBC): ORG Centre for Social Research, Nov 1999. The Final Push: The Global Alliance for Leprosy Elimination, WHO, Nov 1999. Minutes of Annual Conference of Voluntary Organizations involved in Leprosy (RLTR Raipur), Directorate of Health Services, Government of India, Jul 1999. Report on the Modified Leprosy Elimination Campaign under NLEP: Directorate General of Health Services (LD), Nirman Bhawan, New Delhi, 1999. Gender and Health, A Handbookfor Health Workers: Directorate of Public Health and Preventive Medicine, Chennai, 1997. *Including electronic files - 59 -  Annex 9: Statement of Loans and Credits INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT 20-Sep-2000 Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig Frm Rev'd P045051 1999 2ND NATL HIVIAIDS CO 0.00 191.00 0.00 166.81 3.17 0.00 P049301 1997 A.P. EMERG. CYCLONE 50.00 100.00 0.00 95.50 93.05 0.00 P010407 1993 ADP - RAJASTHAN 0.00 106.00 0.00 13.57 16.86 0.00 P010503 1995 AGRIC HUMAN RES DEVT 0.00 59.50 0.00 17.38 20.53 0.00 P010489 1995 AP 1ST REF. HEALTH S 0.00 133.00 0.00 43.01 20.14 0.00 P045049 2000 AP DPIP 0.00 111.00 0.00 106.85 0.00 0.00 P049385 1998 AP ECON RESTRUCTURIN 301.30 241.90 0.00 401.16 92.44 0.00 P010449 1994 AP FORESTRY 0.00 77.40 0.00 5.97 6.97 0.00 P035158 1997 AP IRRIGATION III 175.00 150.00 0.00 232.16 83.13 0.00 P049537 1999 AP POWER APL I 210.00 0.00 0.00 147.82 48.16 0.00 P010522 1995 ASSAM RURAL INFRA 0.00 126.00 0.00 80.02 50.79 3.13 P010455 1994 BLINDNESS CONTROL 0.00 117.80 0.00 68.58 51.93 0.00 P010480 1996 BOMBAY SEW DISPOSAL 167.00 25.00 0.00 103.01 96.58 0.00 P043310 1996 COAL ENV& SOCIAL MITIGATION 0.00 63.00 0.00 35.04 25.93 0.00 P009979 1998 COAL SECTOR REHAB 530.00 2.00 268.70 36.67 139.94 139.94 P009870 1994 CONTAINER TRANSPORT 94.00 0.00 15.00 42.81 57.81 53.54 P010464 1995 DISTRICT PRIMARY ED 0.00 260.30 0.00 94.27 63.77 0.00 P035821 1996 DPEP II 0.00 425.20 0.00 204.77 18.65 0.00 P038021 1998 DPEP III (BIHAR) 0.00 152.00 0.00 122.69 61.46 0.00 P036062 1997 ECODEVELOPMENT 0.00 28.00 0.00 19.11 11.20 0.00 P043728 1997 ENV CAPACITY BLDG TA 0.00 50.00 0.00 39.46 24.47 0.00 P010563 1995 FINANCIAL SECTOR DEV PROJ. (FSDP) 700.00 0.00 301.30 88.43 0.00 0.00 P010448 1994 FORESTRY RESEARCH ED 0.00 47.00 0.00 11.66 30.67 0.63 P010566 2001 GUJARAT HWYS 381.00 0.00 0.00 381.00 0.00 0.00 P035160 1998 HARYANA POWER APL-I 60.00 0.00 0.00 28.06 23.40 0.00 P010485 1996 HYDROLOGY PROJECT 0.00 142.00 0.00 71.85 72.47 0.00 P009977 1993 ICDS II (BIHAR & MP) 0.00 194.00 0.00 96.41 100.83 100.18 P039935 1996 ILFS-INFRAS FINANCE 200.00 5.00 0.00 178.79 153.86 0.00 P067330 2000 IMMUNIZATION STRENGTHENING PROJECT 0.00 142.60 0.00 139.54 0.00 0.00 P010463 1995 INDUS POLLUTION PREV 143.00 25.00 1.64 141.63 129.85 4.00 P010418 1993 KARNATAKA WS & ENV/S 0.00 92.00 0.00 0.43 1.04 0.00 P049477 1998 KERALA FORESTRY 0.00 39.00 0.00 27.79 1.22 0.00 P010461 1995 MADRAS WATSUPII 275.80 0.00 189.30 34.27 215.85 5.84 P050651 1999 MAHARASH HEALTH SYS 0.00 134.00 0.00 122.96 130.75 0.00 P010511 1997 MALARIA CONTROL 0.00 164.80 0.00 137.38 68.11 0.00 P009946 1992 NAT. HIGHWAYS II 153.00 153.00 0.00 74.85 60.30 21.56 P009869 1989 NATHPAJHAKRIHYDRO 485.00 0.00 0.00 80.50 80.50 18.29 P009972 2000 NATIONAL HIGHWAYS III PROJECT 516.00 0.00 0.00 516.00 0.00 0.00 P010561 1998 NATLAGR TECHNOLOGY 96.80 100.00 0.00 185.33 63.65 0.00 P010424 1993 NATL LEPROSY ELIMINA 0.00 85.00 8.70 13.32 23.70 14.22 P009982 1990 NOR REG TRANSM 485.00 0.00 35.00 105.16 140.16 0.00 P010496 1998 ORISSA HEALTH SYS 0.00 76.40 0.00 70.37 17.86 0.00 P035170 1996 ORISSA POWER SECTOR 350.00 0.00 0.00 261.10 154.44 0.00 P010529 1996 ORISSA WRCP 0.00 290.90 0.00 121.51 38.58 0.00 - 60 -  Difference between expected Original Amount in US$ Millions and actual disbursements Project ID FY Purpose IRD IDA SF GEF Cancel. Undisb. Orig Frm Rev'd P010416 1993 PGC POWER SYSTEM 350.00 0.00 75.00 37.46 112.46 0.00 P010457 1994 POPULATION IX 0.00 88.60 0.00 39.25 28.81 0.00 P009963 1992 POPULATION Vil 0.00 79.00 0.00 40.82 42.76 0.00 P045050 1999 RAJASTHAN DPEP 0.00 85.70 0.00 78.83 14.04 0.00 P010505 2000 RAJASTHAN DPIP 0.00 100.48 0.00 97.21 0.36 0.00 P049770 2000 REN EGY II 80.00 50.00 0.00 127.93 0.00 0.00 P010410 1993 RENEWABLE RESOURCES 75.00 115.00 0.00 64.67 94.26 0.00 P010531 1997 REPRODUCTIVE HEALTH1 0.00 248.30 0.00 169.10 85.47 45.76 P009959 1993 RUBBER 0.00 92.00 36.61 13.22 50.70 4.22 P044449 1997 RURAL WOMEN'S DEVELOPMENT 0.00 19.50 0.00 16.07 12.02 0.00 P009921 1992 SHRIMP & FISH CULTUR 0.00 85.00 50.02 14.58 62.95 14.34 P035825 1996 STATE HEALTH SYS II 0.00 350.00 0.00 188.14 153.53 0.00 P009995 1997 STATE HIGHWAYS l(AP) 350.00 0.00 0.00 267.98 76.32 0.00 P045600 1997 TA STS RD INFRADEV 51.50 0.00 0.00 1B.65 14.49 15.65 P059501 2000 TA for Econ Rerorm Project 0.00 45.00 0.00 43.55 0.00 0.00 P010476 1995 TAMIL NADU WRCP 0.00 282.90 0.00 142.20 113.47 0.00 P050637 1999 TN URBAN DEV II 105.00 0.00 0.00 87.72 18.24 0.00 P010473 1997 TUBERCULOSIS CONTROL 0.00 142.40 0.00 111.79 76.64 0.00 P055456 2000 Telecommunications Sector Reform TA 62.00 0.00 0.00 62.00 0.00 0.00 P050638 1998 UP BASIC ED 11 0.00 59.40 0.00 12.85 11.05 0.00 P009955 1993 UP BASIC EDUCATION 0.00 165.00 0.00 9.48 4.88 0.00 P035824 1998 UP DIVAGRC SUPPORT 79.90 50.00 0.00 116.17 47.74 0.00 P050667 2000 UP DPEP III 0.00 182.40 0.00 164.86 -7.50 0.00 P035169 1998 UP FORESTRY 0.00 52.94 0.00 36.59 11.97 0.00 P050657 2000 UP Health Systems Development Project 0.00 110.00 0.00 105.82 1.18 0.00 P035172 2000 UP POWER SECTOR RESTRUCTURING PROJECT 150.00 0.00 0.00 145.88 0.00 0.00 P010484 1996 UP RURAL WATER 59.60 0.00 7.20 37.60 25.90 0.00 P050646 1999 UP SODIC LANDS It 0.00 194.10 0.00 171.88 28.40 0.00 P009961 1993 UP SODIC LANDS RECLA 0.00 54.70 0.00 2.36 2.35 0.00 P009964 1994 WATER RES CONSOLID H 0.00 258.00 0.00 100.01 82.30 0.OC P035827 1998 WOMEN & CHILD DEVLPM 0.00 300.00 0.00 282.91 15.58 0.00 P041264 1999 WTRSHD MGMT HILLS II 85.00 50.00 0.00 119.34 4.25 0.01 Total: 6820.90 7370.22 988.47 7891.94 3678.62 441.30 - 61 -  INDIA STATEMENT OF IFC's Held and Disbursed Portfolio 20-Sep-2000 In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1997 20TH Century 8.50 0.00 0.00 0.00 8.50 0.00 0.00 0.00 1993 20th Century 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1989 AEC 6.76 0.00 0.00 0.00 6.76 0.00 0.00 0.00 1994 Ambuja Cement 2.67 4.94 0.00 0.00 2.67 4.94 0.00 0.00 1992/93 Arvind Mills 0.00 10.18 0.00 0.00 0.00 10.18 0.00 0.00 1997 Asian Electronic 0.00 5.50 0.00 0.00 0.00 5.50 0.00 0.00 1984/91 Bihar Sponge 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00 1997 CEAT 19.80 0.00 0.00 0.00 19.80 0.00 0.00 0.00 1990/92 CESC 21.00 0.00 0.00 46.90 21.00 0.00 0.00 46.90 1995 Centurion Bank 0.00 4.67 0.00 0.00 0.00 4.67 0.00 0.00 2000 Chinai 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 Chowgule 12.63 4.58 0.00 19.38 12.63 4.58 0.00 19.38 1997 Duncan Hospital 7.00 0.00 0.00 0.00 7.00 0.00 0.00 0.00 1997 EEPL 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 1986 EXB-City Mills 0.48 0.00 0.00 0.00 0.48 0.00 0.00 0.00 1986 EXB-STG 0.31 0.00 0.00 0.00 0.31 0.00 0.00 0.00 1995 EXIMBANK 11.37 0.00 0.00 0.00 11.37 0.00 0.00 0.00 1995 GE Capital 6.25 5.00 0.00 0.00 6.25 4.39 0.00 0.00 1986/92/93/94 GESCO 0.00 1.86 0.00 0.00 0.00 1.86 0.00 0.00 1988/94 GKN Driveshafts 0.00 0.33 0.00 0.00 0.00 0.33 0.00 0.00 1994/97 GVK 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Gesco Corp. Ltd 0.00 1.18 0.00 0.00 0.00 1.18 0.00 0.00 1994/98/00 Global Trust 0.00 5.00 0.00 0.00 0.00 2.78 0.00 0.00 Gujarat Ambuja 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 HDFC 0.00 0.50 0.00 0.00 0.00 0.50 0.00 0.00 1978/87/91/93 HOEL 0.00 0.28 0.00 0.00 0.00 0.28 0.00 0.00 1990 Hindustan 0.62 0.00 0.00 0.00 0.62 0.00 0.00 0.00 1987 IAAF 0.00 6.50 0.00 0.00 0.00 0.98 0.00 0.00 1998 ICICI-IFGL 0.00 0.14 0.00 0.00 0.00 0.14 0.00 0.00 1990/94 ICICI-SPIC Fine 0.00 2.79 0.00 0.00 0.00 2.79 0.00 0.00 1990/95/00 IDFC 0.00 15.46 0.00 0.00 0.00 15.46 0.00 0.00 1998 IL & FS 0.00 3.12 0.00 0.00 0.00 3.12 0.00 0.00 1990/93/94/98 IL&FS Venture 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 1992/95 ITW Signode 0.00 0.34 0.00 0.00 0.00 0.34 0.00 0.00 1981/86/91/93/96 India Direct Fnd 0.00 7.47 0.00 0.00 0.00 6.29 0.00 0.00 1996 India Equipment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1986/93/94/95 India Lease 0.00 0.30 0.00 0.00 0.00 0.30 0.00 0.00 1984/90/94 Indo Rama 0.00 2.14 0.00 0.00 0.00 2.14 0.00 0.00 1993/94/96 Indus 11 0.00 5.00 0.00 0.00 0.00 4.50 0.00 0.00 1996 Indus Mauritius 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1996 Indus VC Mgt Co 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 1992 Indus VCF 0.00 0.93 0.00 0.00 0.00 0.93 0.00 0.00 1992 Info Tech Fund 0.00 0.64 0.00 0.00 0.00 0.64 0.00 0.00 1992 Ispat Industries 0.00 3.64 0.00 0.00 0.00 3.64 0.00 0.00 1992/94/97 Total Portfolio: 188.28 151.33 5.00 75.28 154.77 135.27 5.00 75.28 - 62 -  Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic 2000 APCL 7100.00 0.00 1900.00 0.00 1999 Carraro 10000.00 0.00 0.00 0.00 2001 GTB SME Facility 20000.00 0.00 0.00 0.00 2000 IndAsia 0.00 0.00 15000.00 0.00 2001 Internet Express 0.00 0.00 5000.00 0.00 2001 Jetair 0.00 15000.00 0.00 0.00 2000 SREI 11 10000.00 0.00 0.00 0.00 1999 Sarshatali Coal 30000.00 0.00 5000.00 0.00 Total Pending Commitment: 77100.00 15000.00 26900.00 0.00 - 63 -  Annex 10: Country at a Glance INDIA: SECOND NATIONAL LEPROSY ELIMINATION PROJECT POVERTY and SOCtAL South Low- India Asia tnCome Development dlamond 1999 Population. mid-vear Wt'ilbns) 997.5 1.329 2.417 Life expectancy GNP per capita (Atfes method, US$I 440 440 410 GNP lAtis method, USS btlions) 441.8 58t 98S Averag, annual growth, 19S3i99 Population f(% 1t7 1.9 1.9 G Labor force I%) 21 2.3 2.3 GNP r Grosa per I primary Most racent estimat, Ilatest Vwar availaIle. 391, capita ' , enrollment Poverty (% of populetfin below national poverty line0i 3$ Urban oopulation I% oft0otlDpopulation) 28 28 31 Life expectancy at birth Ivears) 63 62 60 Infant rmortality (per 1,000 five bifths) 70 75 77 Child malnutrition e% of children under 5) 53 51 43 Access to safe water Access to improved water source (% Of QpuotiPW*n) 81 77 64 Illiteracy (% o population seo 15-) 44 48 39 Gross primarv enrollmnte 1% Of schooNae-e 0orulellon) 100 100 96 - India - Low-income group Mae 109 110 102 Female 90 90 86 KEY ECONOMtC RATIOS and LONG-TERM TRENDS 179 1 198 1998 1999 Economic ratloas GDP (U$ billions) 150.1 290.5 419.1 447,3 Gross domestic investmentlGDP 22.S 24.1 21.8 22.9 Trade Exports of goods and serviceslGOP 6.7 7.3 11.3 12.1 Gross domestic savinoelGDP 20.7 21.8 19.2 20.0 Gross national savings/GDP 22.2 21t4 20.8 22.1 Current account balance/GOP -0.5 -18 40.8 4.8 Domestic Inveatment Interest pavments/GQP 0.3 1.1 11 1.2 Saings Total debtlGDP 11.9 26.0 23.4 22.9 aviga Total debt servicelexvota 10.1 28.6 17.0 15.6 Present value of debt/GOP 20.1 Present value of debtexoorts 143.3 Indebtedness 197949 1989-99 19S9 199 t999-03 laverage annual Growth) GDP 5.7 5.8 6.8 o.5 64 - India - --Low-income group GtNP ver apita 3.3 3,9 4.9 4*9 4 a ExPortt of oods and services 4.9 11.8 12.5 1.7 7.5 STRUCTURE of the ECONOMY 1979 1989 1998 1999 Growth of Investment and GDP (%) I% of GDP) 30 Aqriculture 36.8 31.6 29.1 27.7 Industrv 25.0 27.6 25.7 26.3 1s Manufacturinq 17.4 17.4 15.6 15.9 Services 38.3 40.8 45.2 46.0