India - Gujarat Community Forestry Project

Document of FILE COPY The World Bank FOR OFCIAL USE ONLY Reper No. P-2650-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXEC'UTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE GUJARAT COMMUNITY FORESTRY PROJECT November 20, 1979 Thls bennKet bus a erieted ditdbuti nd may be _ad by reipients ony in the pefonmane of their ofiial duti. Its ontents may m otherwise be dbied withot World BmDk audb.iaton.  CURRENCY EQUIVALENTS (As of November 7, 1979) Rs 1.00 = Paise 100 US$1.00 = Rs 8.2575 Rs 1.00 = US$0.1211 Rs 1,000,000 = US$121,100 (Since September 24, 1975, the Rupee has been fixed against a "basket" of currencies. As these currencies are floating, the US Dollar/Rupee exchange rate is subject to change. Conversions in the Staff Appraisal Report were made at US$1.00 to Rs 8.60, which represents the projected exchange rate over the disbursement period). FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS CFW - Community Forestry Wing FLCS - Forest Labor Cooperative Societies GFD - Gujarat Forest Department GOG - Government of Gujarat aOI - Government of India KVIC - Khadi and Village Industries Commission CCF - Chief Conservator of Forests CF - Conservator of Forests GSFDC - Gujarat State Forest Development Corporation  FOR OFF-iAL UkE JNLY INDIA GUJARAT COMMUNITY FORESTRY PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President (GOI). Beneficiary: State of Gujarat. Amount: US$37 million. Terms: Standard. Relending Terms: As part of Central assistance to States for devel- opnent projects, on terms and conditions applicable at the time. Exchange risk to be borne by GOI. Project Description: The project would increase supplies of fuuewood in rural areas of each of the State's nineteen districts. It would also provide poles, bamboo, small timber and other minor products from the same plantations. Achievement of these objectives would be facilitated by the gradual shifting of responsibility for the establishment, maintenance, protection and harvesting of village woodlots from the Government of Gujarat (GOG) to village panchayats. The project would also introduce improved stoves and crematoria as fuelwood conservation measures, provide considerable paid employmnent to the poorest section of the population and he:Lp to stabilize the environment. The principal project risks are: (i) that the free distribution of seedlings might lead to excessive waste, (ii) that villages would be reluctant to assume responsibility for their woodlots, and (iii) that the better-off villagers would pre-empt most of the benefits of village woodlot production. Special care would be taken to minimize these risks through careful moni- toring, the provision of incentives, and public information and education. This document has a restricted distribution and may be used by recipients only in the performance of their ofVicial duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Cost: (US$ millions) Local Foreign Total Staff, Vehicles, Equipment, Housing, and Operating Costs 20.8 1.9 22.7 Training and Fellowships 0.9 0.1 1.0 Research and Seed Testing 0.3 0.1 0.4 Plantings 34.3 1.0 35.3 Farm Forestry 3.4 -- 3.4 Stoves and Cremation Facilities 0.5 -- 0.5 Monitoring and Evaluation 0.3 0.1 0.4 Sub-Total 60.5 3.2 63.7 Physical Contingencies 2.6 -- 2.7 Price Contingencies 9.3 0.4 9.7 Total 72.4 3.6 76.0 Duties and Taxes 2.3 -- 2.3 Project Cost Net of Duties and Taxes 70.1 3.6 73.7 Financing Plan: (US$ millions) Local Foreign Total IDA Credit 33.4 3.6 37.0 GOI/GOG 33.2 -- 33.2 Village Panchayats 3.5 -- 3.5 70.1 3.6 73.7 Estimated Disbursements: IDA FY FY80 FY81 FY82 FY83 FY84 FY85 FY86 Annual 0.2 1.8 5.0 7.5 9.5 10.0 3.0 Cumulative 0.2 2.0 7.0 14.5 24.0 34.0 37.0 Rate of Return: About 17%. Appraisal Report: No. 2601a-IN, dated November 20, 1979.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTI'VE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE GUJARAT COMMUNITY FORESTRY PROJECT 1. I submit the following report and recommendation on a proposed credit to India for the equivalent of US$37 million on standard terms, to help finance a community forestry program in the State of Gujarat. The project would increase supplies of fuelwood and other forest produce in rural areas, offer paid employment to the poorest segment of the population and help to stabilize the environment. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation and Prospects of India" (2431-IN dated April 9, 1979), was distributed to the Executive Directors on April 13, 1979. Country data sheets are attached as Annex I. Back.ground 3. India is a large, low-income country with 640 million people whose average income is US$150 per annum. The agricultural sector dominates the economy, employing over two--thirds of the labor force and contributing over 40% of value added. Although smallholder agriculture provides a fullsome subsistence to many, the land base is inadequate to provide all families in rural areas with an adequate livelihood under current conditions, and many who are landless or nearly landless have only an insecure grasp on the means of existence. Industrialization in India has not been rapid enough to bring about the economic transfonnation that has led to higher productivity and rapid urbanization in some other countries. The urban population was 18% of the total in 1960, 20% in 1970 and is 21% now. The share of manufacturing has grown slowly and since the late 1960s has remained roughly constant at 16% of GDP. 4. Economic growth has been slow in the past, with GDP growing at a trend rate of 3.6% per annum from 1950 to 1975. Agricultural output grew at 2.4% per annum over the same period. Slow growth in agriculture acted as a drag on overall growth, not only because of its sheer weight in the total, but also because of the need to use scarce foreign exchange to import food. Growth in industrial output has been higher at 5.2% per annum between 1950 and 1975, but not as high as in many other developing countries nor as high as can be expected. 1/ Parts I and II of this report are substantially the same as Parts I and II of the President's Report for the Second Maharashtra Irrigation Project (Report No. P-2624-IN), dated September 26, 1979.  - 2 - 5. This slow growth has persisted despite a quite creditable domestic saving and investment performance. Domestic saving has grown from 9% of GDP in 1951 to the current high level of 22%. Gross domestic investment has risen from 10% to 21% of GDP over the same period. Foreign savings have never financed a large portion of domestic investment and have financed no more than 5% of investment since 1970. Foreign savings have been important in financing imports, and a shortage of foreign exchange has acted as a constraint on the economy for most of the period. External assistance has been low both as a percentage of GDP and in per capita terms. Net external assistance is less than 2% of GDP now, has never risen above 3% and fell to less than 1% in the early 1970s. Exports have grown relatively slowly--5.4% per annum in US dollar terms and 2.8% per annum in volume terms between 1950/51 and 1975/76. So far during the 1970s, exports have grown much more rapidly, by 18% per annum in US dollar terms and 8% in volume terms over the period 1970/71 to 1976/77. During the same period imports grew by 17% per annum in US dollar terms but only by 2% per annum in volume terms, reflecting a 28% fall in India's terms of trade over the period. 6. India has the capacity to grow and develop at a more rapid pace than has been achieved so far. Although the industrial sector is small compared to the size of the total economy, it nevertheless has a highly diversified struc- ture and is capable of manufacturing a wide variety of consumer and capital goods. Basic infrastructure--irrigation, railways, telecommunications, roads and ports--is extensive compared to many countries, although considerable gaps remain. India is rich in human resources and institutional infrastruc- ture, although there is much scope for improvement. India is reasonably well-supplied with natural resources, not only land and water but minerals, including oil, gas and coal. With good economic policies and sufficient access to foreign savings, India should be able to manage these considerable resources to accelerate the longer-term growth trend. Recent Trends 7. India has managed faster growth during the recent past. Growth of GDP in 1978/79 is estimated to be between 3% and 4%; this is a strong perform- ance coming on top of the previous year's 7.2% growth in GDP and considering agricultural output grew less than 2%. Even this agricultural growth is highly creditable given the previous years' record harvests in most crops. Industrial output grew by 8-10% in 1978/79. Over the four years, 1975/76 to 1978/79, growth in real GDP, agricultural output and industrial output has averaged 5.3%, 4.4% and 6.9% per annum, respectively. Although these rates represent growth over the depressed base of the early 1970s, they are signi- ficantly higher than the longer-term past trend and comparable to the target growth rates for the medium-term future. Buoyant domestic demand, upward adjustment of depressed agriculture prices and world inflation have lead to significant increases in prices during the first half of 1979. The wholesale price index increased by 16% between mid February and September. Together, food, food products, crude petroleum and mineral oils contributed over two- thirds of this increase. However, prices of almost all commodities have moved up significantly during the first months of 1979/80. Although in part reflecting a seasonal rise in food and food products, the trends observed do  - 3 - indicate a distinct departure from the relative price stability of the past four years. The inflationary trend is likely to continue during the second half of 1979/80, although at a slower rate, given the July 1979 price in- creases in oil, steel and coal and continuing world inflation. Although the current inflationary pressures need not seriously impair medium-term growth prospects, given available aggregate resources and production capacity, sig- nificant improvements are likely to be required in the organization of key sectors if an economic slowdown is to be avoided. 8. I'he 1978/79 foodgrain crop exceeded the 1977/78 record crop of 126 million tons, and many non-food crops did well. The 1978 monsoon rains were timely and adequate, although severe flooding in some areas destroyed both lives and property and ruined some crops. The basic inputs into agricultural production continued their rapid growth of the recent past. Additions to area under irrigation have dloubled from 1.3 million hectares a year during the five-year period ending 1973/74 to 2.6 million hectares a year during 1977/78 and 1978/79. Fertilizer consumption in 1978/79 reached 5 million nutrient tons, an increase of 18% over 1977/78. This growth is impressive, particular'ly since it follows two successive years of very high growth--18% in 1976/77 and 26% in 1977/78--so that fertilizer consumption is now 75% higher than it was in 1975/76. However, prospects for sustaining the record crop levels of the past two years in 1979/80 do not look good. The onset of the monsoon was delayed this year and subsequent rainfall has been defi- cient throughout much of the country. Early indicators are that jute, rice and sugar cane output have already been adversely affected. Continuing power cutbacks and recent shortages in diesel fuel for irrigation pumps are also likely to contribute to the shortfall. 9. [he growth of industrial output in 1978/79 came from a sharp rise in the output of food industries, particularly sugar, a modest increase in textiles, important increases in the hitherto depressed engineering sector and the revival of demand for consumer durables. Production would have been still higher but for recurring shortages of steel, coal, railway wagons and electric power and capacity constraints in fertilizer, cement, vegetable oils and petroleum products. Labor unrest also constrained output in some indus- tries, particularly in textiles, steel and mining; man-days lost in 1978 ex- ceeded the high level of 1977 and only in 1974 were the number of days lost higher. Power production increased by 12% but continuing shortages in many States necessitated power cluts and curbs on new demand. During the first quarter of 1979/80 supply bottlenecks in basic industrial inputs began to retard overall industrial production. In addition to coal and steel, cement, sugar, cotton textile and cotton yarn output fell below last year's levels. Strong demand has continued to sustain other important industries such as fertilizers and chemicals, but it appears increasingly unlikely that these can counterbalance the constrained sectors. 10. The trade deficit grew and both the current account surplus and the balance of payments surplus of recent years shrank in 1978/79. The import bill is expected to reach US$8.4 billion, which brings the average rate of increase in US dollar terms to 19% per annum since 1976/77. Non-foodgrain imports rose even more dramatically by 28% per annum over the past two years. The growth  - 4 - of imports and the liberalization of import control policies represents a desirable adjustment to enhanced foreign resources. Although exports grew much faster during the 1970s through 1976/77 than earlier, export growth in 1977/78 and 1978/79 has slowed somewhat. After rising by 12% in 1975/76 and 23% in 1976/77 in US dollar terms (virtually all growth in export volume), export earnings rose by only 9% in 1977/78 (with little or no volume growth) and an estimated 8% in 1978/79 (with 5-8% volume growth). Although part of the decline is attributable to unfavorable conditions in foreign markets, export profitability has been allowed to deteriorate somewhat. With net invisible receipts in 1978/79 estimated the same as in 1977/78--US$2 billion-- the widened trade deficit resulted in a significantly reduced current account surplus, from US$1 billion in 1977/78 to US$400 million in 1978/79. Despite some increase in net aid disbursements from their low level in 1977/78, the increase in reserves declined from about US$2 billion in 1977/78 to about US$1.5 billion in 1978/79 to reach US$7.4 billion. Exports during the first three months of this fiscal year are 32% higher than the same quarter of last year. Although part of the increase is due to the dollar depreciation and recovery in coffee prices, the prospects of sustaining a volume growth of at least 7% during 1979/80 appear good. Imports in the first quarter of 1979/80 are around 7% higher than the same period of the previous year. How- ever, the impact of recent increases in petroleum prices are only partially reflected in this figure. India's total POL import bill for 1979/80 is likely to reach $3.2 billion, $800 million higher than earlier estimates. As a result, there should be a sharp deceleration in the rate of growth of reserves sufficient to significantly reduce the number of months of imports covered by reserves during 1980. Development Prospects L1. The circumstances that have brought about the currently favorable economic situation hold the promise of continuing into the future given conti- nued policy improvements. The faster growth of the recent past has been made possible by the much-increased inward flow of foreign exchange from increased exports, workers' remittances and external assistance; greatly improved agri- cultural performance; the impressive saving effort; the liberalization of import controls; and expanded public expenditure on development programs. Although sustaining the high growth rates of the recent past into the future is by no means automatically assured, India has a level of resources with which to manage the economy that had never existed before. The comfortable foreign exchange position, the large foodgrain stocks and the absence of strong inflationary pressures have eased the pressures to deal with short- term crises and freed India's economic managers to plot a more ambitious course for the economy. The policy improvements needed to achieve the better performance now possible have begun in some important areas but in others have yet to be initiated. 12. The Draft Plan, which was released in March 1978 and is expected to be finalized and approved by the National Development Council later this year, sets out India's development strategy for the five years 1978/79 to 1982/83. The principal objectives of the Draft Plan are to achieve within a period of ten years: (i) the removal of unemployment and significant  - 5 - underemployment, (ii) an appreciable rise in the standard of living of the poorest sections of the popu'Lation, and (iii) provision by the Government of some of the basic needs of the people in these low-income groups. While the Plan recognizes the importance of achieving more rapid expansion of the economy than in the past to meet the employment and welfare objectives, the targeted rate of growth at 4.7% per annum is lower than projected in most earlier Plans. According tD the planners, this reflects in part the increased emphasis given to the distribution rather than the level of income generation, and in part the need for greater realism in the macro-economic assumptions underlying the Plan. While the trade-off between growth and distribution is not immediately obvious from the Plan model, the adoption of a more realistic growth target is in itself well justified -- even at 4.7% per annum, the targeted growth rate is higher than actually achieved during any of the previous Plan periods, and is substantially above the longer-term trend growth rate. 13. In agriculture, the economic policies, development programs and secular trends all seem favorable for a period of sustained high growth. Fertilizer prices have been reduced progressively from their very high level in early 1975 and despite some fall in market foodgrain prices, the fertilizer: foodgrain price ratio has fallen to a clearly profitable range. Good harvests and higher farm incomes provide the money to finance higher fertilizer pur- chases, creating something of a virtuous circle. Pricing policies for many crops--rice, wheat, sugarcane, pulses and others--have concentrated recently on supporting prices to maintain incentives to farmers rather than trying to administratively control prices to contain inflation. The ambitious irrigation and rural electrification investment program in the new Five-Year Plan, if fully fundetd, will help provide the water control needed to increase yields directly and to induce further productivity-increasing investments. The effective reorganization of the agricultural extension service will raise yields as it takes hold gradually across India. Finally, there are several heartening trends in foodgrasin production: one is the steady growth of area planted to high-yielding varieties of rice; another is the growing adoption of summer rice cultivation in the traditional wheat-producing areas (Punjab and Haryanal). These two trends along with the other favorable developments have caused rice production to rise impressively in the last two years. Another good omen for foodgrain production is the rapid growth of winter wheat cropping in traditionall rice areas (West Bengal, Assam and Orissa). 14. 'En industry, despite some uncertainty in industrial policy and the lack of strong policy stimulus to improve efficiency in the industrial structure, recently strengthened demand forces along with adroit input supply management should allow the industrial sector to continue to grow at the improved rate of the recent past, at least for the near- and medium-term future. Over the longer term, growth of industrial production at or above the rate experienced in the recent past--e.g., 7% per annum during the last four years--will require some changes in policy to induce a more efficient industrial structure. Recent industrial policies have sent mixed signals to private manufactures and investors. Some, such as reserving certain lines of production for small-scale enterprises or prohibiting the location of new firms in municipal areas, have been restrictive. Others have been stimula- tive, such as the raising of the exemption limit of industrial licensing for  capital investment or favorable adjustments in the pricing and production controls in several major industries, including cement, steel, and textiles. In addition the liberalization of import controls is of considerable benefit to increasing industrial production. However, there are some worrisome supply shortages that are currently threatening continued rapid industrial growth. Many can be handled through imports, if needed, as long as India maintains a healthy foreign exchange position. However, two supply constraints likely to persist in the future -- namely, rail transport and power -- cannot be eased through imports. The new Plan contains a major power investment program to increase capacity rapidly. The railway investment program is more modest. Another crucial input into both of these sectors, and into most other major sectors, is coal, whose supply needs careful management. 15. The main reason for expecting sustained growth in industrial pro- duction is improvement in demand prospects for each of the four major sources of industrial demand. The first is market demand for manufactured consumption goods, which is expected to pick up in response to the increase in disposable income due in particular to the good agricultural harvests. Although its effect has been delayed somewhat, this broad-based demand is finally making itself felt and is expected to continue into the future as long as the growth in agricultural output continues. Another source of demand is public expendi- ture on development projects, which has grown in a major way in the last few years and is scheduled to continue to grow under the new Five-Year Plan. A third source of growth is export demand for industrial goods. There has been a sustained growth in the export of manufactures such as engineering goods, garments, gems, finished leather and some chemical products. This export growth should continue in the future with proper policy support. A final source of growing demand is private investment by both the household and corporate sectors. There are as yet only a few signs of this growth, such as increased disbursement by term lending institutions and increased use of inputs; investments should become stronger as growth in the other sources of demand continues and as capacity limitations begin to constrain production in more industries. The net result of increasing demand should be continued high growth in industrial production in the near and medium term within existing policies. 16. Import policy is an area where there has been significant improve- ment in the recent past; but some improvement in export policy is required to raise incentives to export. India has liberalized import control policy significantly in the past two years and imports have responded. Future growth in imports, and in the benefits of price stability, enhanced production and increased efficiency which imports bring, will depend to a great extent on how the now liberalized policy is administered. A delicate touch is required to yield the benefits without bringing about undesirable damage to vulnerable industries. India has the foreign resources to allow imports to grow at the rapid rates of the past two years for a few more years and continue to relax the very severe restraints imposed on the economy during the early 1970s by suppression of imports. But, given the import liberalization undertaken so far and the expected growth of imports, by the end of the Plan period (1982/83), foreign exchange reserves will have fallen to six months of imports, or less, and some adjustment in the balance of payments will be required. Part of the  - 7 - adjustment will very likely be a reduction in the growth rate of imports; the import bill need not grow 15% in volume terms indefinitely to sustain the target growth in GDP. Part of the adjustment must come from the achievement of a growth rate of exports in the vicinity of 7-8% or higher in volume terms. Faster export growth is needed not only to provide the foreign exchange to sustain the rapid growth in imports but also to allow foreign demand and competitiorn to improve the efficiency of Indian industry. Finally, part of the adjustment should come from an increased net transfer of external assistance, 17. I]ndia's population policy continues to aim at reducing the birth rate to 33 births per thousand people by 1983 through completely voluntary acceptance of fertility control methods supplied by a family welfare system integrated with the supply cf basic health, maternal and child health and nutrition services. Since 1977, the family planning achievements in terms of number of acceptors have been below that needed to achieve the 1983 goal or even to keep the birth rate from rising above its current level. The low performance is primarily the result of the reaction to the harsh birth control poLicies introduced during 1976. Since then family planning perform- ance has been gradually returning to the rising trend which was discernible before it was disrupted by t:he intensive drive of 1976/77. Given continued support for the program of family welfare, India's rate of population in- crease should remain below 2% per annum and fall to 1.5% by 1990. 18. 'In addition to stimulating overall economic growth and constraining population growth, reduction of poverty in India requires special attention to ways of raising the income and productivity of low-income groups. More than one-t'hird of the world's poor live in India and more than 80% of the Indian poor belong to the rural households of landless laborers and small farmers. The prospects for alleviating their poverty by providing these families with more land are not good because of the virtual absence of un- cultivated arable land, the slow progress in implementing land reform and the limited amount of land ithat would be available if land reform were carried out. Estimates of the amount of land that would be available if land reform were carried out vary greatly. One estimate is that there would be about 9 million hectares available for distribution. This compares to roughly 45 million families in the two poorest groups in rural India: landless families and families owning less than one hectare of land, whose average holding is 0.31 hectares. An approach to the amelioration of poverty more promising than land reform is the creation of more employment opportunities for the landless and small farmers in rural areas. Although the basic thrust must come from the market by a more rapidly increasing agricultural output, there will be a role for employment-intensive rural works programs. The new Plan provides for increased rural employment both through direct employment schemes and through ambitious programs of investment in rural infrastructure * in additicn to the more general rural development programs.  - 8 - PART II - BANK GROUP OPERATIONS IN INDIA 19. Since 1949, the Bank Group has made 57 loans and 117 development credits to India totalling US$2,530 million and US$7,235 million (both net of cancellation), respectively. Of these amounts, US$1,002 million had been repaid, and US$3,168 million was still undisbursed as of July 31, 1979. Annex II contains a summary statement of disbursements as of July 31, 1979, and notes on the execution of ongoing projects. 20. Since 1957, IFC has made 17 commitments in India totalling US$64.0 million, of which US$15.9 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$33.6 million, US$25.6 mil- lion represents loans and US$8.0 million equity. A summary statement of IFC operations as of August 31, 1979, is also included in Annex II (page 2). 21. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor Irrigation and other on-farm investments through agricultural credit opera- tions. Major irrigation, marketing, seed development, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capacity utilization in industry. The Bank Group has also been active in supporting infrastructure development for power, telecommunications, and r-ailways. Family planning, water supply development, and urban investments have also received Bank Group support in recent years. 22. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis of the program on agriculture, industry, power, urban development and water supply remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs such as credit for on-farm investments, improved water management and intensification and stream- lining of extension systems, form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to proj- ects benefitting small farmers. Projects supporting water supply, sewerage, and urban development also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infra- structure and industrial investments will focus on agriculture-, export- and energy-related projects. 23. The need for a substantial net transfer of external resources in support of the development of India's economy has been a recurrent theme of Bank economic reports and of the discussions within the India Consortium. Thanks in large part to the response of the aid community, India has success- fully adjusted to the changed world price situation. However, the basic need fDr foreign assistance, to augment domestic resources, stimulate investment  - 9 - and accelerate economic growth, remains. As in the past, Bank Group assist- ance for projects in India should include, as appropriate, the financing of local expenditures, India iimports relatively few capital goods because of the capacity and competitiveness of the domestic capital goods industry. Con- sequently, the foreign exchange component tends to be small in most projects. This is particularly the case in such high-priority sectors as agriculture, irrigation, rural water supply and medium- and small-scale industry. 24. Although the growth prospects of the economy have improved, India's poverty and needs are such that as much as possible of India's external capi- tal requirements should be provided on concessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support, and India may be regarded as creditworthy for some supplemental Bank lending. Ihe ratio of India's debt service to the level of exports was 12% in 1978/79 and is projected to remain below 20% through 1995/96. As of September 30, 1979, outstanding loans to India held by the Bank totaled US$1,548 million, of which US$639 million remained to be disbursed, leaving a net amount outstanding of US$909 million. 25. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with an estimated 62%, 27% and 38%, respectiveLy, in 1978/79. On March 31, 1978, India's outstanding and dis- bursed external public debt was US$14.8 billion, of which the Bank Group's share was US$4.30 billion oi- 29% (IDA's US$3.66 billion and IBRD's US$0.64 billion). Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1977/78, about 16% of India's total debt service payments were to the Bank Group. PART III - FORESTRY IN INDIA AND GUJARAT Forestry in India 26. India's forest lands are substantial; about 23% of the total land area, or 75 million hectares, is classified as forest. Yet the forestry and logging sector contributes only about 1.5% to the net domestic product. Domestic rounSwood requirements by the y ar 2000 are projected to be nearly 3 290 million m : fuelwood, 225 million m ; industrial roundwood, 65 million m Continuation of existing plantation programs should ensure the supply of industrial hardwood, but fuelwood and coniferous roundwood would continue to be in short supply. Programs of plantations and investments need to be substantially stepped up if these shortages are to be met.  - 10 - 27. India's strategy for forestry development reflects the need, first, to develop production forestry programs to supply the growing need of the domestic wood products industry and, second, to develop community forestry (also referred to as social forestry) programs to supply fuelwood, fodder, small timber and minor forest produce to the rural population. In order to carry out the required programs, the National Commission on Agriculture (1976) recommended that each State reorganize its Forest Department into two separate wings, one to supervise traditional production forestry and wildlife activities and the other to develop community forests. The State of Gujarat 28. The State of Gujarat, with an area of about 196,000 sq. km., has a population of about 31.5 million (1978), of which 72% live in rural areas. Although Gujarat is highly industrialized by Indian standards, agricultural and allied activities still contribute 36% of the net domestic product of the State. Gujarat has more than 18,000 villages, with an average population of 1,050 people. A significant percentage of the population belongs to tradition- ally disadvantaged groups: scheduled tribes (14%) and scheduled castes (7%). 29. Forests cover about 10% of Gujarat's land arel. In 1974-77, State- owned forests annually produced an average of 150,000 m of timber, 300,000 tons of fuelwood, 73,000 tons of bamboo and 22,000 tons of fodder grass, in addition to a wide variety of other minor forest products. The forests also support a number of industries, including over 600 sawmills and a large pulp and paper mill, and provide raw materials for a wide variety of cottage industries. The forests' contribution to State revenue is about Rs 100 million per year (2.2% of the State's total revenue). Work in forest areas provides the main source of paid employment for marginal farmers, landless laborers and members of scheduled castes living in and around these areas. 30. Nevertheless, shortages of primary forest products, especially fuelwood, building poles and fodder are severe and are likely to become even worse in the future. Although rehabilitation and improved management of the existing forest areas would help alleviate the situation, the magnitude of the problem and the inequitable geographic distribution of existing forest resources are such that the long-term solution lies in the afforestation of new areas. Presently, many areas such as road, rail and canal reserves and, especially, village common lands and other wastelands that could grow trees, are unproductive. 31. In 1972, fuelwood and dung cake accounted for 84% of the energy requirements of rural households. Kerosene, coal, charcoal and soft coke rnade up the balance. It is rare to find electricity or gas being used for cooking and lighting in rural areas. Cooking is done on open fires or on small, open stoves made of clay and sand which burn at very low thermal efficiency. 32. In rural areas, about 80% of domestic fuel is collected free by women and children who spend up to three hours a day in search of firewood, cattle dung and crop wastes. Fuelwood remains the preferred source of rural  - 11 - energy, but its growing scarcity has obliged villagers to burn cattle dung which could otherwise be profitably utilized as farm manure. Community Forestry 33. In 1969, Gujarat launched a community forestry program and embarked on the establishment of fuelwood plantations along roadsides and canal banks. Encouraged by the success of this early program, the State expanded its efforts in 1974 and established the first plantations on village common lands follow- ing an intensive publicity campaign as to the benefits of village woodlots. In 1976 the! program was further expanded to include efforts at rehabilitating the State's degraded forests with fuelwood and pole plantations. By 1978 some 35,000 ha of plantations had been successfully established, including over 10,000 ha of village woodlots, 10,000 ha of plantations on degraded areas and 9,000 ha of- plantations alongside roads and canals. To date, an average of 8 ha of trees have been estasblished in over 1,500 villages. 34. The main objective of the present community forestry program is to provide fuelwood in rural ar-eas where it is needed most. It has been possible to design the plantations, hiowever, so that they also provide poles, bamboo, fodder, grass, fruits, oilseed and gum without seriously affecting fuelwood yields. Another facet of the program is the "farm forestry" scheme whereby free seedlings and advice are provided by the State to individuals and groups that will plant trees on their own lands. Forest Institutions 35. The head of the Gujarat Forest Department (GFD) is the Chief Con- servator of Forests (CCF) assisted by two Additional Chief Conservators, one responsible for forestry operations (which at present includes the community forestry program) and the other for wildlife management. Also directly responsible to the CCF are itwo Conservators of Forests (CF), one for project planning, mnonitoring and evaluation and one concerned with the control of illegal activity in the forest. At field level, there are presently nine operational circles, each under the direction of a CF. Four circles (each with 4-7 divisions) are responsible for production forestry and three circles (each with 5 divisions) for community forestry. The remaining two circles are responsible for wildlife management, research and working plans. In total, the Department's forestry staff is composed of 91 professionals, 1,740 tech- nical staff, and 3,215 vocational staff. 36. In 1949, the first Forest Labor Cooperative Societies (FLCS) were established in Gujarat, with the aim of increasing financial returns to forest laborers and encouraging responsibility among tribal people for the management and conservation of the forest. All exploitation is now done either by FLCS or GFD. There are presently 147 FLCS with a total membership of approximately 68,000 (94% of whom are tribal people) supervised by the Cooperatives Depart- ment and GFD. 37. In 1976, the Gujarat State Forest Development Corporation (GSFDC) was established to improve the efficiency of forest exploitation, to develop  - 12 - forest industries and to initiate grading and processing of forest products by tribal people. Unlike many other corporations of this type, FDC has concentrated on the production of minor forest products of high potential. Its efforts have met with considerable success. In 1978, it organized the collection, grading and marketing of 132,000 bags of bidi leaves (used for manufacture of local cigarettes), about 5,000 tons of mahuda flowers (an edible flower which can be used in the production of alcohol) and 1,155 tons of mahuda seeds (which are crushed for oil). Bank Group Assistance to Indian Forestry 38. The Madhya Pradesh Forestry Technical Assistance Project (Credit 609-IN) is the initial phase of a major project aimed at the establishment of a forest-based industry in Madhya Pradesh. The recently completed feasi- bility study, financed under the Credit, has recommended the establishment of an integrated industrial complex comprising a sawmill and a pulp mill. The Kandi Watershed and Area Development Project involves reforestation and pasture development over some 18,000 ha of Punjab's Siwalik Hills. It is expected to be presented to the Board later in FY80. 39. In early 1978, in recognition of the need to expand community forestry activities, GOI and the Bank agreed to examine the possibilities of developing projects in Gujarat and Uttar Pradesh. The Uttar Pradesh Project for US$23 million was approved in June 1979. PART IV - THE PROJECT 40. The project was prepared by the Government of Gujarat (GOG) with assistance from FAO/CP. It was appraised in March/April 1979, and negotia- tions were held in Washington, D.C. in October, 1979. The Indian negotiators included Mr. M.K. Dalvi, Additional Inspector General of Forests, GOI; Mr. J.K. Sibal, Director, Department of Economic Affairs, GOI; Mr. H.K. Khan, Secretary, Department of Agriculture, Forests and Cooperation, Gujarat; and Mr. K.P. Karamchandani, Chief Conservator of Forests, Gujarat. The Staff Appraisal Report (No. 2601a-IN, dated November 20, 1979) is being distributed separately. A Supplementary Project Data Sheet is attached as Annex III. P'roject Description 41. The project's primary objective would be to increase supplies of fuelwood in rural areas. Secondary objectives would be to provide poles, bamboo, small timber (for agricultural implements among other things), fodder, grass, fruits, oilseeds and other minor products from the same plantations. In addition, the project would introduce improved crematoria and stoves as fuelwood conservation measures, provide considerable paid employment to the poorest section of the population (tribal people, scheduled castes and the landless) in tree planting and maintenance, and help to stabilize the  - 13 - environment.. The project would be implemented in all of the State's nineteen districts located throughout mainland Gujarat and in the Saurashtra/Kutch region. 42. During the five-year implementation period the project would: (a) etxpand and strengthen the Community Forestry Wing (CFW) of t:he Gujarat Forest Department through the provision of t:echnical and support staff, construction of staff housing and other buildings, development of training programs and research activities and provision of vehicles and equipment. (b) establish about 105,000 ha of forest plantations, including about 37,000 ha of village woodlots, reforestation of about 30,000 ha of degrarded government forests, strip plantings on aibout 37,000 ha along roads, canals and railroads and afforestation of about 1,000 ha of privately owned land; (c) expand State nurse!ries to provide planting stock for project and farm forestry; and (d) promote fuelwood conservation measures, primarily through the construction of 10,000 smokeless stoves and 1,000 improved cremation facilities. 43. GOG recognizes that GFD cannot meet the State's needs for forest products by itself and that villages must be encouraged to operate their own community schemes. Therefore, the project's aim is to gradually shift respon- sibility for the establishment, maintenance, protection and harvesting of village woodlots from GFD to village panchayats. Although this shift cannot be entirely accomplished within the project period, villages participating in the project would take oni responsibility for these activities on about 9,200 ha of village woodlots (Section 2.07(a) of Project Agreement). 44. 'Village Woodlots. To expedite the transfer of responsibility for establishing and managing woodlots from GFD to village panchayats, two schemes involving different levels of community participation would be introduced. In both cases, plantations would be established either on land belonging to panchayats or on government land vested in panchayats. (a) The Village Self-lhelp Scheme would include those villages prepared to accepit full responsibility for the establishment, management and harvesting of woodlots. Villages in this scheme would be expected to pay from their own resources the labor costs of preparing, planting, maintaining, pro- tecting and harvesting their own woodlots. Technical assistance, seedlings and other inputs required would be provided by the CFW. The village panchayat would retain all the profits. A written agreement, defining the obliga- tions of both parties, would be concluded between GFD and the village panchayat.  - 14 - (b) The Supervised Village Scheme would include those villages without existing woodlots and unwilling at this stage to accept full responsibility for woodlot establishment and subsequent management and harvesting. For a management fee (25% of direct costs), CFW would advance funds for all plantation activities and would recover direct costs from the sale of forest produce. Harvesting of fuelwood, poles, bamboo and timber would be undertaken by villagers under the supervision of CFW staff. The area developed would be limited to 4 ha per village. The gross value of major forest produce would be split 50:50 between CFW and the village panchayats. fly June 30, 1980, GOG would prepare and furnish to the Association model contracts for the establishment of village woodlots and the afforestation of private lands (Section 2.10 of Project Agreement). 45. Reforestation of Degraded Forests. Depending on prevailing labor conditions in the area, this component would use either of two approaches. The first approach would involve the use of casual laborers employed by CFW to establish and maintain plantations and Forest Labor Cooperative Societies (FLCS) to harvest and market the produce. The second approach would be to provide full-time employment to groups of 9 to 15 tribal families, housing them near the areas to be forested and providing them with adequate facilities (Section 2.09 of Project Agreement). Under both approaches, GFD would keep 80% of the proceeds from the sale of the produce; the remaining 20% would be provided to the Cooperative Societies under the first approach and to the resettled families under the second approach. 46. Afforestation of Private Lands. As a pilot effort, CFW would encour- age tribal families to return marginal agricultural land in forest areas to trees, under a variety of contract arrangements. For example, an estimate would be made of the annual cash return from growing food crops on an area of at least 2 ha. CFW would advance these monies to the farmer in semi-annual installments and repayment would be made from future forest product sales. CFW would establish and maintain the plantation for three years, after which the farmer would assume responsibility for maintenance. CFW would supervise harvest and sales and, after recovering its direct costs, including cash advances, would return all net profits to the owner. 47. Strip Plantations. Plantations along roads, irrigation canals, and railways would be CFW's responsibility. Villagers would be allowed to collect fodder grass and other minor produce, but fuelwood, poles, bamboo and small timber would be sold by GFD in urban areas. Net profits would be split on a 50:50 basis between CFW and the panchayats. 48. Nurseries and Farm Forestry. To meet the increased planting require- ments of the project, the number of nurseries for raising nursery stock for the State's community forestry programs would be expanded from the present 210 to 440 (mostly temporary) and some existing sites would be enlarged. From the nurseries and temporary distribution centers, CFW would continue to provide  - 15 - about 30 million seedlings (principally fuelwood and fruit) annually free of charge to people who request them and would also give instructions on planting, care and utilization of the plants. CFW would monitor the distribution of seedlings a,nd their survival rate. 49. Fuelwood Conservation Measures. CFW would promote the use of an improved stove which requires less fuel than present stoves and can be adapted by simple improvements to existing stoves at low cost (approximately Rs 50 per stove). Demonstration stoves would be constructed in each village establish- ing a self-help woodlot for a total of about 10,000 improved stoves (Section 2.07(b) of Project Agreement). The project would also provide for construction of improvecl cremation facilities which would reduce the amount of fuelwood needed per cremation from 400 to 240 kg. These units would be established in about 800 villages with self-help plantations and in about 200 cities (Section 2.07(c) of Project Agreement). 50. Research. The main objective of the research program would be to increase tree productivity and decrease establishment and maintenance costs. The project would also provide for increased seed testing and storage facili- ties. Four field stations and a small research institute would be established and equipped under the project. A research program acceptable to IDA would be prepared and furnished by September 30, 1980 (Section 2.07(d) of Project Agreement). 51. Training. The project would support a program of increased staff training, which would include regularly scheduled in-service and pre-service training, through the provision of additional staff, buildings, vehicles and equipment. The project wou:Ld also provide short-duration fellowships for domestic (12 man-months) and foreign (8 man-months) study. In addition, a total of 40 man-months of fellowships would be funded for project staff to attend training courses and workshops to develop extension techniques in community forestry. Two one-year domestic fellowships in extension tech- niques and two two-year overseas fellowships for project economists would be provided. Project Implementation 52. The Project would expand and strengthen CFW through the appointment of an Additional CCF, who would be directly responsible to the CCF for all community forestry affairs, and through the establishment of one new community forestry circle and two new divisions by June 30, 1980 (Section 2.13 of the Project Agreement). Special support units would be created, including a pub- lic relations unit at the headquarters level and two communication units responsible for publicity at the village level by September 30, 1980, and two additional. communication units by September 30, 1981 (Section 2.12 of Project Agreement). A monitoring unit would be established by June 30, 1981, and its work program submitted to IDA for review by December 31, 1981 (Section 2.15 of Project Agreement). An evaluation cell would be established by December 31, 1982, and its work program would be submitted to IDA for review by June 30, 1983 (Sect:ion 2.16 of Project Agreement).  - 16 - 53. The project would finance costs of CFW staff, vehicles, equipment and staff housing. Since much of the success of CFW's activities would depend on regular and frequent visits to village panchayats and individual farmers, and supervision of other plantations, it is essential that field level staff and their supervisors live near their work. For this purpose GOG would pro- vide housing or rent allowance as necessary (Section 2.08 of Project Agreement). GOG housing policy would continue to encourage the use of rented accommodation where possible. Since suitable rental lodging would not be available in many areas, the project would provide housing for about 50% of project staff. The project would also finance construction of a headquarters building for the GFD Community Forestry Wing. Other office accommodations would be rented. Because project plantings would be scattered over a large area and effective project management requires staff mobility, the project would provide for additional vehicles at headquarters, circles and divisions. Motorcycles for Extension Rangers and bicycles for Extension Foresters and Protection Assistants would be provided on credit. Credit terms and travel allowances 'would be set up so as to provide incentive for purchase and utilization of motorcycles and bicycles by field staff. 54. State- and District-level committees would coordinate community forestry activities with other Government programs. A State Policy Review Committee would be established under the chairmanship of the State's Minister for Forests to make overall policy decisions and to ensure coordination between various Government departments. District Forest Committees would be estab- lished in each district, under the chairmanship of the District Collector, to coordinate activities of various departments at the district level. The District Committees would prepare annual district plans for the establishment of village woodlots. The above committees would be established by June 30, 1980 (Section 2.14 of Project Agreement). Marketing Arrangements 55. Fuelwood, poles, bamboo, and timber from all areas but village woodlots and degraded forest reforested by CFW using casual laborers would be marketed by CFW either from roadsides (in the case of roadside plantations) or from sale depots through the current practice of auctions. FLCS would be responsible for marketing products from degraded forest areas reforested with casual labor. GOG would prepare and furnish to the Association, by September 30, 1980, its proposals for the sharing of major forest produce or its revenue (Section 2.11 of the Project Agreement). 56. The Khadi and Village Industries Commission (KVIC) would continue to handle the marketing of non-edible oilseed. KVIC representatives located in strategic villages collect and pay for the seed brought in by villagers, which is then transported for storage and processing into soap, etc. by small, *Locally owned enterprises that obtain credit for equipment and working capital from KVIC. 57. Minor forest produce such as gum, bidi leaves, doli and mahuda flowers would continue to be purchased from villagers and tribal people by GSFDC, which would also continue to help tribal people set up cooperatives  - 17 - to process these products further. In view of the acute shortage of forest products, nLo marketing difficulty is foreseen for any of the products gen- erated by t:he project. Cost Recovery 58. On the basis of thte proposed arrangements for sharing project out- put, the project's financial rate of return would be 5%; i.e., the returns would pay off government investments in the project, including staff and other recurrent costs, in 34 years and yield a 5% interest rate on such investment. The corresponding cost recovery index for the project over the entire period (34 years) would be 51%, if recovered at 10% interest. This index is consi- dered satisfactory, given that the project would provide employment to a disadvantaged section of the population, meet some of the basic needs of rural communities and yield substantial additional indirect benefits by improving the environment, and because advisory staff costs are generally not recovered. Project Cost and Financing 59. The total project cost, over five years, is estimated at US$76.0 million, of which US$3.6 miLlion represents foreign exchange expenditures. Duties and taxes included in total costs are estimated at US$2.3 million. The proposed credit of US$37 million would finance about 50% of total project cost excluding duties and taxes. The balance of the project cost would be borne by the Government of Gujarat and local panchayats. The credit would be made to GOI on standard terms and channelled to GOG on GOI's terms and arrange- ments for development assistance to the States. 60. In order to ensure an early project start, retroactive financing up to US$500,000 would be provided for expenditures incurred after June 1, 1979, in providing planting stock and in doing advance work for land prepara- tion and plantation protection for the 1980 planting season. ProcuremerLt and Disbursements 61. Direct plantation works (US$38.7 million), including nursery expen- ditures, planting, protection works, and farm forestry would be scattered over a wide area and would be carried out over different periods of time. There- fore, contracts following competitive bidding would not be practical. Nursery works, including the production of seedlings, would be carried out through force account by CFW. Land preparation, planting and maintenance for village plantations would also be carried out by CFW with varying degrees of partici- pation from village panchayats. However, some materials such as fencing wire, tools, and fertilizers would be procured under local competitive bidding procedures, which are satisfactory. Contracts for civil works (US$3.7 mil- lion) wouLd be small and widely dispersed in time and place and, therefore, would not be suitable for international competitive bidding; they would be let following local competitive bidding or by force account in accordance with established GOG proce(lures that are satisfactory to IDA. Design and supervision of housing and building construction would be carried out by GFD or the Public Works Departraent. Vehicles (US$2.7 million) would be purchased  - 18 - over three years; as adequate maintenance and availability of spare parts would be of paramount importance, this would necessitate purchase of locally made vehicles of types already used by government departments. Thus, procure- ment would be by local competitive bidding under existing government procedures which are acceptable to IDA. Research equipment would be required in small lots and would not, therefore, be suitable for procurement under ICB proce- dures. These items and other miscellaneous equipment (US$1.0 million) would be bulked whenever possible and procured through local competitive bidding exceDt where valued at less than US$20,000, when they would be purchased by prudent shopping through usual trade channels. Stoves and crematoria (US$0.5 million) would be built under force account. The balance of project costs (US$29.4 million) would be staff salaries and related expenditures (US$16.3 million), training (US$0.7 million), and contingencies (US$12.4 million). 62. Disbursements under the Credit would cover 100% of the cost of training; 100% of foreign expenditures for imported equipment, or 70% of ex- penditures for locally procured vehicles and equipment; and 55% of expendi- turEs for direct planting, civil works, CFW staff salaries, and stoves and crematoria. 63. Disbursements for all force account work, salaries, local training, petty contracts involving payments up to Rs 100,000, and other procurement involving expenditures up to Rs 50,000 for vehicles and equipment would be against statements of expenditures certified by the Additional CCF for Com- munity Forestry. Full documentation would be required for all other disburse- ments. For the purpose of disbursements against statements of expenditure, CFD's institutional and staffing capabilities, as well as budgeting, account- ing, internal control and auditing are adequate and satisfactory. Project Benefits and Risks 64. The increase in forest produce expected under the project would benefit a large proportion of the State's population, but enhanced employ- ment opportunities and the right to gather free fodder, fruit and other minor produce would favor the rural poor. From project year 10, the average annual production of fuelwood from the project village woodlots would be about 390,000 tons, of which 45% would be utilized by rural people. Annual project output of fuelwood would be sufficient to satisfy the need of about 2.5 million people at the current annual consumption level of 165 kg per capita. In addition, an average of 4.8 million poles and large bamboos would be produced annually. Fruit production would be sufficient to provide 10 kg annually for six million people. The greater abundance of fodder would also result in additional milk production of about two million liters annually. The introduction of some 10,000 improved stoves and 1,000 crematoria would result in savings of some 16,000 tons of fuelwood annually. Moreover, project production of fuelwood would divert to agricultural land considerable quantities of cow dung and vegetable waste, which would otherwise have been used for cooking. 65. Over the five-year project implementation period, 105,440 ha of idle or underutilized land would be brought into productive use, largely through use of labor. In total, 38.4 million man-days would be required for  . 19 - project activities, equivalent to 25,600 people fully employed for five years. Since most forestry operations would be concentrated over a two- or three- month period each year, at least 100,000 laborers would obtain temporary employment each year; most of these would be from among the disadvantaged sections of the population. 66. The major environmental impact of project plantations is expected to be on soil conservation and, in some cases, restoration of soils. In arid areas of western and northern Gujarat, plantations would assist in arresting wind erosion. In alkaline areas in the east of the State and wetter areas of the south and east, soil stabilization by tree roots, accumulation of leaf litter and reduction of the impact of rain on the soil will restrict run-off and, in hill areas, reduce siltation of rivers. 67. The return to the economy has been calculated for each planting component, excluding farm forestry for which data are uncertain, and for the project as a whole, including the cost of technical support but excluding research. Only directly quantifiable benefits have been included. On this basis, the overall rate of return of the project is estimated at 17%. 68. The principal project risks are: (i) that the free distribution of seedlings might lead to excessive waste, (ii) that fewer-than-expected villages would be willing to participate in the self-help scheme, and (iii) that the better-off people in the village, being the more powerful, would be the major beneficiaries of woodlot produce. The CFW monitoring unit would conduct spot checks on the survival rate of seedlings and would study the overall impact of the free clistribution; GOG and IDA would jointly review the merits of free seedling distribution in project year 4. Special care has been taken to provide aclequate incentive to villages to participate in the self-help scheme; these include receiving 100% of all woodlot benefits and priorit:y for the introduction of smokeless stoves and cremation facili- ties. Finally, steps would be taken to inform villagers of their rights and otherwise assist the village panchayats in arriving at an equitable distri- bution of forest produce among villagers. 69. Overall risks are, therefore, manageable and worth taking in view of the present need and the expected benefits to the large number of poor villagers involved. An interim evaluation would be carried out in year 4 of the project, so that any necessary adjustments can be made to facilitate attainment of project objectives. PART V - LEGAL INSTRUMENTS AND AUTHORITY 70. The draft Development Credit Agreement between India and the Asso- ciation, the Project Agreement between the Association and the State of Gujarat, and the recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement are being distributed to Executive Directors separately.  - 20 - 71. The features of the draft agreements of special interest are listed in Section III of Annex III. 72. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 73. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President November 20, 1979  INDIA - SOCIAL tNDICATORS DATA SHE Page 1 of i LAND AREA ( HOUSAND SQ. KM.) INDIA RanfliECR GROUPS (ADJUSTEr A`IAGE' - MOST RECENT ESTIMATE TOTAL 3287.6 SAME SAME NEYT HIGER. AGRICULTUL 1818.3 MOST RECENT GZOGRAPHIC INCOME INCOME 1960 / 1970 A ESTIMTE b RZGION kc GROUP /d GROUP > GNP PER cAprA (US$) 60.0 90.0 180.0 191.1 209.6 467.5 ENERGY CONSUMPTION PER CAPITA (KLOGRMS OF COAL hQUIVALENT) 142.0 181.0 218.0 69.1 83.9 262.1 POPULATION ANtD VITAL STATISTICS POPULATION, NT-YEU (MILLIONS) 434.9 547.6 631.7w. URRA POPULATION (PENCBT Or TOTAL) 17.9 19.7 20.7. 13.2 16.2 24.6 POPULATION PROJECTItONS POPULATION IN YEAR 2000 MLLIONS) 973.0 STATIONARY POPULATION (MILLIONS) 1643.0 TMAR STATIONARY POPULATION IS REAlCD 2150 POPULATION DENSITY PER SQ. DI. 132.0 167.0 192.0 86.6 49.4 45.3 PER SQ. 3M. AGRICULTURAL LAND 247.0 308.0 347.0 330.2 252.0 149.0 POPULATION AGE STRUCTURE (PEILCENT) 0-14 YRS. 40.8 42.5 42.0 44.3 43.1 45.2 15-64 YRS. 55.7 54.6 55.0 52.4 53.2 51.9 65 YSS. AND ABOVE 3.5 2.9 3.0 3.1 3.0 2.8 POPULATIObt GROWTH ATEA (PERCENT) TOTAL 1.9 2.3 2.1 2.4 2.4 2.7 UM1AM 2.551t 3.3 3.1 4.1 4.6 4.3 CRUDE BIRTH RATE (PER TOUSAND) 43.0 40.0 35.0 44.4 42.4 39.4 CRUDE DEATH RATE (PEU THOUSAND) 21.0 17.0 14.0 16.4 15.9 11.7 GROSS REPRODUCTION RATZ 3.2 2.9 2.4 3.2 2.9 2.7 FAMILY PLANNING ACCEPTMRS. ANNUAL (TSOtSANtS) 64.0 3782.0 4518.0 USERS (PERCENT OP MARRIED WOI) .. 12.0 16.9 7.9 12.2 13.2 FOOD AND NUTRITION INDEX OF OOD PRODUCTION PER CAPITA (1969-71-100) 100.0 102.0 101.0 99.4 98.2 99.6 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMNTS) 95.0 92.0 89.0 93.0 93.3 94.7 PROTEINS (GRAMS PEU DAY) 51.0 53.0 48.0 56.1 52.1 54.3 OF WHICH ANIMAL AND PULSE 19.0 16.0 12.6 10.4 13.6 17.4 CHILD (AGES 1-4) MORTALITY RATE 28.0 22.0 18.0 19.2 18.5 11.4 REALTH LIFE EXECTANCY AT BIRTH (YEARS) 43.0 48.0 51.0 49.1 49.3 54.7 INFANT KORTALITY RATE (PEU TEEOUSAND) *- 134.0 .. .. 105.4 68.1 ACCESS TO SAPE WATER (PERCENT OF POPULATION) TOTAL *- 17.0 33.0 31.5 26.3 34.4 URBAN .. 60.0 83.0 63.9 58.5 57.9 RURAL .. 6.0 20.0 20.1 15.8 21.2 ACCESS TC EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 18.0 20.0 15.7 16.0 40.8 URBAN *- 85.0 87.0 66.8 65.1 71.3 RURAL *- 1.0 2.0 2.5 3.5 27.7 POPtrLATICN PER PHYSICIAN 5800.0h 4890.0 3135.0 7107.9 11396.4 6799.4 POPULATICN PER NURSING PERSON 9630.^OLh 5220.0 6320.0 12064.0 5552.4 L522.1 POPULATION PER HOSPITAL BED TOTAL 25%0.OLi 2020.0 1231.0 2738.4 1417.1 726.5 URBAN .. .. .. .. 197.3 272.7 RURAL .. .. .. .. 2445.9 1404.4 AONISSLONS PER HOSPITAL BED .. .. .. .. 24.8 27.5 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL ;.2 .. 5.2 .. 5.3 5.4 URBAN 5.2 .. 4.8 .. 4.9 5.1 RURAL 5.2 .. 5.3 .. 5.4 5.5 AVERAGE NiUMBER OF PERSONS PER ROOM IMOTAL 2.6 2.8 UMAN .. .. ... RURAL .. .. .. .. . . ACCESS D) ELECTRICITY (PERCENT OF DWELL.NGS) IOTAL .. .. .. .. 22.5 28.1 URBAN .. .. .. .. 17.8 45.1 lURAL .. .. .. .. .. 9.9  ANNEX I Page 2 of 5 INDIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED A ERAGES INDIA - NDST RECENT ESTIMATE ) a SAME SAME NEXT HIGHER MOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 lb ESTIMATE /b REGION /c GROUP /d GROUP /e EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 72.0 79.0 59.5 63.3 82.7 KALE 80.0 87.0 94.0 74.9 79.1 87.3 FEMALE 40.0 55.0 63.0 43.7 48.4 75.8 SECONDARY: TOTAL 20.0 29.0 28.0 19.5 16.7 21.4 MALZ 30.0 39.0 38.0 27.8 22.1 33.0 FEMALE 10.0 17.0 18.0 10.0 10.2 15.5 VOCATIONAL ENROL. (Z OF SECONDARY) 8.0 6.OLI .. 1.3 5.6 9.8 PUPIL-TEACHER RATIO PRIMARY 29.0 40.0 42.0 42.2 41.0 34.1 SECONDARY 16.0 17.0 .. .. 21.7 23.4 AIRLT LITERACY RATE (PERCENT) 28.0 33.0 36.0 25.5 31.2 54.0 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.7 1.0 1.2 2.3 2.8 9.3 RADIO RECEIVERS PER THOUSAND POpULATION 5.0 21.0 24.0 15.5 27.2 76.9 TV RECEIVERS PER THOUSAND POPULATION .. 0.1 0.5 .. 2.4 13.5 NEWdSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 16.0 16.0 6.2 5.3 18.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 4.0 6.3 3.8 .. 1.1 2.5 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 188670.0 226870.0 261000.0/k FEKALE (PERCENT) 31.3 32.6 32.2 21.4 24.8 29.2 AGRICULTURE (PERCENT) 73.0 73.0 73.0 66.3 69.4 62.7 INDUSTRY (PERCENT) 11.0 11.0 11.0 9.6 10.0 11.9 PARTICIPATION RATE (PERCENT) TOTAL 43.0 40.2 39.2 35.8 36.9 37.1 MALE 57.1 52.3 51.3 52.3 52.4 48.8 FEMALE 27.9 27.1 26.2 15.7 18.0 20.4 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.1 1.3 1.2 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 26.7 26.3/1 .. .. .. 15.2 HIGHEST 20 PERCENT OF HOUSEhOLDS 51.7 48.971 .. .. .. 48.2 LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 6.771 .. .. .. 6.3 LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 17.271 .. .. .. 16.3 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) UqBAN .. .. 83.0 86.5 99.2 241.3 RURAL .. .. 73.0 74.2 78.9 136.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. .. 91.9 179.7 RURAL .. .. 50.0 50.4 54.8 103.7 ESTIMIATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 47.0 44.3 44.1 24.8 RURAL .. .. 52.0 52.4 53.9 37.5 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of che indicator and the most populaced country in each group. Coverage of countries among tne indicators depends on availability of data and is not uniform. *b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1974 and 1977. 'c Sooch Asia; 'd Low Income (S230 or less per capita 1976); /e Lower Middle Income (5281-550 per capita, 1976); _ 1978 mid-year population is estimated at 640.4 million; iR 1951-6~0; 'h 1962; i959; <i '967; /k 1978 mid-year labor force is estimated at 261 nillion; i1 1964-o5. Most Recenc Estimate of GNP per capita is for 1978. August, 1979  rrxIOO r SMIA rIAONage 3 o:z Notes: Althoigh the data ar darnw fro am ures generally ;Judged the -Set authoritative sod reliable, it &csi Uas be noted tint thee any not be itrts'-- tiuna.lly comparble because of the tuck of standarldi sd dsfl.ssties sad concept. used by diffarst oo..striea Ia eofl1etlmg the data Phe dat tar, nonetael-sa useful to describe order of agnitude, indicate trends, and sharacteriesew asrimoajar differenesa between countrie.. The adJusted group a gesse foe cock indic-tor u- piSltio-eight.d geometric Manss, emeAldig the estee vIalue of the indicator and the sost luopesatad coutry is eag group. Due to lack sf data, group averages of all. indicators for Capital. Surplus Oil sporten and of indicatores of Acces to Water sod floreta Diseps..a, Hdussing, I ...a IsDtoteibutics. sod Poverty for other country gnoups are peypsl.tion-weighted geometric wmen wIthout exclusion of the extreme vsl.ue and the most populated coutry. Si-ce rtca coege of cotrimea og the kodleatoes d...ads on awisiltyof aaan aat unf-. osatios mot be emerised he relating averages of one indicator to another. Theme averages are sally usefusl us avprouimatie of xpete:' alugwhen pSrIm the valuses of one indicator at a, time awing the ocioutry mnd reference groups. 1MW AiEA (thoused sq hk) Mccas to gereta Dlisposa percent ofpp u)- 2totl urban. - iral- Toa.-Total aurface area compriulig 1sod ure.ansd Inlansd raters.Useropole(ta,ubnadrrl)evd by= eret dSposld A.gri-,ltural - Iloat recent estimate of sgrieultua.1 area used temporarily Percentages of their respective popsl.atieme. Ime-ta. disposal ~I' S Include or Permsnrotly for oropo, pastures, maket and kitchen gardens or to the collection and disposal, with or sitbemt treatmest, of hissn -srtr lie fal.io. snd aste-water by water-boone systems or tEas use of pit prifles mmd e.allr hastallatiosis GNP PERl CAPITA (US$) - GiNP per capita estimates at current msarket prices, ajIAhemt ero 4yag - Pegailatio divided by nmber of practIcing piystiein calculated by saea occriamthod as World Bssk Atlas (:1976-768 basic) quIiufied i-7blil.scoo at university level. 1960, 1970, tad 1978 data. RRM on :ie a..i Pa_O - Pepsation divided by sister of practiciag malc y SLWTIN PERCAPITA - Annua co-optios of c trilenergy tend feal* gradiuate miSs, practical1 sisree, end assistant aurses. (col od igite ptroleum, natural gas sod hydro-, nuclear and geo- Rhplai D e osital I- ttl urban wad rural.- Pspulatbon (total, urban, ibermaI ~ciy Le Ikiiograa- of coal rquivsleet per ca.Pia a9d era0diiedb ter respectv mitro optlbd vilable in electricity)6 dt.. public and private general end speei.11oed bostpit.1 sad reshbilhtatio.coenters. Hospitals are estshlishaets permanently Staffed by at least one physioiao. POPUIATION AN1 VITAL STATISTICS lstablishmeats providing primeipally cus todial care are not seclded. Ruoral Tota. Ppuiaion PEAfea milos-AsoJuy1191,97,adhospitals, bowever, inclad. health sad medical centere not persnetly Staf fed 1977 data, by a physician (but by a. medical sesietst, nurs, midwife, etc. ) which offer Urban upulation (Percent of total) -Rito of urban to total pinlatis; ho-patient a-datioa and proide a, limited range of medical fanilitia.. different definitioc o .f urhan arcas may affect comparability of data Admssonso r' I tal ed-Total sumober of dadissio.s to or discharges from amongcountr-e; 1960, 1970, acid 1975 data, hoptasdl2ded the,o.hr of bed.. PooltioProjoction, Puoslation in year 01) - Current popultloa projecti.on rer baurd on HOUSING 1975 total population by age and eo tad their mortal:Lty and fertility Average Soe ofHseod(esa e nscd) - oa. ra.an ua - ratc ~.crjoctio P pronotors for ourtallty ratoo comprise of three Aheneehld cossso vapafhdvd erosar iigqatr o ecoauouiog ifo -oetaooy at birth incre..asing eith country's their main meals. A hoarder or ledger may or sem otbancueyi h Per capita iocoo lcv-1, tad fema.leisfe -op-tancy utahiliciag at houseehold for Statistica.l purposes. T7.5 Yearo. ft- ;arster- for fcrtility -atc also h,-v three levels Avaag smbr of p-su e om-ttl rt o oal - Average onb-s asouniog dcolino in fertility acoordong to inomea level sod punt of personse Per romh l ra,adrrleeped conventional deelliogo, reall Planning perforuasco. Ea-h country is then ass [gnd one of these respectively, Chellings emclsde n00-permanent structues and unwcopied parto. cine oodiain f crtsilty rod fortility trends for projeotio A..ess to Eleetfkolty (peroent of dweliiogs) - total. urhan, tas rural - Con- purposes- venticeal dwellings witht electrlicty ho living quarters an percentage of St.tionacy populatico - Is.o a tatioaary population there le no groeth total, urban, sand rSafl doelluinge respeetively. ciose tthc birth -tlo is Iqual to thc doath cab, sod ~ale the age structur reaico constant. This i sachieved only after fertility rates EDUXiTIOI decline to the repinoemont level of unit net repr-ductiic rate, hben AStjidd rlintPio each coorats comen replaces otocf canotly. The staticoary pops- Prsr col-ttl aesdfas-tustotal, Sale tsd.fesleearll muon slo saestimated cc Iho basis of tke Projected oharauterietios setoal gsa h rmr ee ecntages of respective primary of the populaticoniothe year 2000, and the rate of de,cline of fertility schcol-agi popualations; oorslly includes children aged 6-fl1 years hut rate to repiacc"ot IeI, adjusted for different lengths of prinary education; for coutries ith Yea tatian.ry popsiatica is reached - The year hben Statiosary Ppopalatiun universal dsuation enro11senIt may smoed 100 percent Since Some Pupils ohor has beon reoohcd. are below or shove the official school age. population lcaoitr i~~~~~ ~~~~eooodary oh1il -tot,al alefand femal - Ccwabted aS a e; ae.ondary Pec so. ka. - Mlid-yps-a pops.iatl per squr . s. meer(100 hectares) of euainrsuoSat jeat fur yasof approved primary lestructico; total area provides general -octiona1, or teacher training instructions for psp,la per sa .. ho. ug Io.rnl land - Computed as abov for saricltural landusualy of 12 to 17 ye- of age; urrespood-nc courses are g-eral1y oaly. .. luded. PbD.Iat e e'--.t) - Children (0-1t years ), eorkiag-agr Vocaional earollatot (PeretofsVndr) -.Vctiomal tstitution. inclode (1-iynSitad setired (65 year and ove r) as proestoges of mid-year techoical, industrtial,n orohe =rors hish operate i.d.peOdeotly or aS popeslatico; 1960, 1970, tad 1977 data. departments of Secondary institutions . Poisulatlon irowib~ 1Pr t&to1ta - A-aa - arIoeth rates of total mdd- Pu,prlt,-tece ratio - rmry n secodary - Total etudents earo1l'od In yaar PpooIatios Ao-93I07 _70td 1970-f7. prmr o euda4ryevel diide by bre of teachers in the orro- Pouato Ioth ur~'"ban - Annual grooth rates of urban sponding levels. ppltosfor 195-0 1;66-0 no 1970-75. Adult literacy rate (percent) - Literate adults (able to reed and rite) a OrsdeOBirth ate _op.I thousad) An ..oal lic birtha per thousand of id- .aperorotage of total adult poplatice aged 15 years and Over. year Popult Io;1 , 1970, and 1977 data. Crude Death Rate 'Per thosoand) - A_nua deaths Per thousand If aid-year CCIPCPIPTICU ~i96IatloFI96lii7, cod 1977 data- PsegrCs(Per thousand Populiation) - Passeoger oars oumprise motorcr Gros PerdcioBt rg ubro agtr os ilha seaIng Clean than eight persons; .acludeo sebalances, hearses sod silitary ia her canarprocd-ti-e period of si cpriooapr.enet ag- vehicles. spciiccrtliy taes; usually flo-pyar scrgos ending ic 1960, hadic lociver (Per thosd popuaio)- All types of rasrsfor radi. 170, and 1975. brodcasts to geea ulcprthousand of popuition; eooludea tliceaned Faadl F I-ning - Acc-ptcr- A-..oa (thousads) - An-o1 unber of receivera in countries and is years she. regiatratiun of radionesn Is accptcro of birbh-cotr-l d-ci- order -upi- of oatio...l fealy effect; data for recent yeare Say sot be oomparable s1Ioc -otoo-rica plectiog progr-s abo1isbed licensiag. fonly.P1aooolcg - door (Prcent o4f ourrid oce)- P-rortage of maried TV Revrs(per thisuand poessltion) - TV receivers for broadcas t to geaeraI Ioc f ch Id -hauin sgr15 yar wbo uett-car doic psblio per tiousnd PoposIato; eccLudssc soft....sd Tv rccei-cer n loouatcir to tll carried --c cc coe age group. tad in years h.. registration of TV Sets ata in effect. Ff100 All) IIUPlITION leas~~~~~~~W7papec irculation (per thousand ooj -aloo)- Shoes Ithe sce-e circultIon ofD N NURITOd PrdcitprCpt ce fprcptf "diygeneral ~terst eespape.r , defior asapeiodical publication Indrot- erCeit(19t9-71-100) -Id.fpe.pi.dented peleorily ts reco.rding genral nvea It Ic conuidered to be "daily" anua produ'tic or all food comdities Froductis esolodes aced and if it a,ppeas at leas.t four times a rec. feed and itonclcodar yea bss. Coossoditiec cccer prlesr7 gocds CInem Annua Attendanc per Capita per Year - Cased on the -iui- of ti,ctarl (e.g. ..ara. -tasnled of sugar) ohlch are edible aod ocotalo astricot sldduring the year Iocluding adminions to drive-in cinemas and mobile (e.g. cfe nod, Ir ar-ccud) Aggregat, prcduotso of each country aita.. ishads atlsi average prodace price weights. rer caPIta supply of colo-s- Ipe-cct of. rcoireaeata) - Computed from LA1033 100RCEC -eargy eqivoIct of act food soppli-o a-ilable is ..untry per capita Total Labor Porce (thous ands) - Elcnoically motive Persoos, incaluig arced per dny. cA-ilabie uppli_s coprise do-etic prodctioa, imports lens forces and unemployed but -oclding housewicra otudests, etc. iDfis.itios- coot,ad clan cc in tock. Net -upplico coo1lde animal feed, seeds, in varioun countries are sot comparable. q-antitie suod is focd p-occ-iag, and loose In diotrihuiticn. Rlequir- FITZ!c jpprcent), -FPeale labor force as percentage of tctal labor force. ocota -Ie estimated by PAO based oa phyciologic-l n-eda for noAg 9l3ltu(~pgrc5pt( - Labor force in farming , foretry, hunting and sotiosty nod islb- osdoifcsorohca tepre-tur-, body eright., r-igas prcentage of total labor forc.. age nodscdIotribti_soof Ppopoits'-, and aso 10 pro-a-t for Industry (percent) - Labor force ie miaiug, oopatruti-n, soufacturiug and osate at hoocebol le_el electricity, eater td gan as percentage of total labor force. fcc npit suply Ljtcio [cro- Per JAy) - Fr-teso coolest iprPart icipation gate (p:eret) - total sl,adfmle - Participation or capits net supply of food per doy. Net supply of foso[ is defined as activity rates are computed as tstal, male, and feanlr labor force a- Per- above. Peqoicc-coto for all I_otrocs catabliohed by CiDA provide for a eetages of total, aale and female popslatios of all ages respectively; ei.inis alo1-o ci li gross oif toto1 prtisper dsp sod 20 graeou of i96i, 1970, scd 1975 data. Th-eseare lIds participation rates reflecting anit1 scd p.1cc protris, of ouclh 10 grom should hr animal protein. age-se tructuc of the ppulatica, and bog time trend. A Pro estimates Thes tstda-do are 10-cr than tboar of 75 graa of tstal proteis and ere fr.. natIonal souroes. 23 cres of -sIol protein so to averge for the world, proposed by FAO Econoic Deedency oatio - antis cf Population under 15 and 65 and over to in tIc Third Wcrid FPood du-ocy. h ao force is age group of 15-64 years, Per capita prttic supply froo siosI and puloc - Frotria supply of food de-ivd froc -timals an ussise sprds. INOM DISTPIUJTION Child Os" 1-si Ibrtalt RatZe or"thousnd) - isul staprhoan Percentage of Private Income (ht l. eth e hu- oth In cash and kind) - ReceIved by rioheet is age grop 1-1 years, to childrens ic this ago group; for mot devel- 5 Peroent, richest 20 peroent, poorest 20 Percent, nod Po..r..t hO p-eret oPisig -o-t-- Os ots deriv-d fro iife taies. of households. HEALTH POVERTY TAOIST GROUPS life lpectay at crs- Averag noser of ye-r of life Estimated Absolute Pbrrt Inelcom Leve (s perl c"api~ta)f -uban and rura - remalshg at birth; 1901970ad 1977. data. Absolute poverty incom lee is that mos ee e hch a micima infrm Maortslity hato (Pccth Alota) - Oscl deaths of :nfants under sac sutritio..ally adequte diet plu .e.....tial son-food r-qoirceweto i5 oct ye" f Me pe, th...-d Ii- bi,th.. ~~~~~affordable. Acoc-i to dare Water (orecIn of popo1atio) -ito~tal,urEban, and rural - Estimated Rclative Poverty Iscm ee 0$Per eanita(-ubn ua i-loebe of peopl (tota, -bhan, and rrl sihros bl.eacces to Rural relative poverty i.s levelin us-third of averagepr capIta ssfc atrc -opply ;iso1ndcs treated surfac atora or sosteated but Personal lao-- of the country. Urban 1-ce is deri-rd 'rom the rural line .,csin Iose -ter c-o as tOht f'rom protected boe priago, mith adjustarat for higher o-t of living is urban area.. an aiay se1o) as per-etsg9s of th-ur r-speoti- populations. Io Estimated Popla.tion Relor hbclte Poety Income level .. (erct' - rban and an, oanarea a public foostmls cc standpoot locatedisot acre than rurl - Peres o ppuatco(uba ndrua)sereabotepr" 200 meters frn a too- MoY cc conidered an being sithiR reasonble a__s of that hous- In rura arena reasonable access scad imply thst thIch--ufe Io or acher of tbe ho-shold do not hav to upend aEconomic and Coo ia1 Data . sa diosr-por ti-otr p-t of the dsp io fetching tbe ftodlyl. cater leeds onob Analysis and Projections Department August 1979  ANNEX I 3~cUUVa TM?A Page 4 of 5 W PS& Cm IN 1977: t 150 GNU X&flOWL PUCS IN 1977/17 haL 5X W PAM9 tU. content erico) ______. _t 1960/61-1964/65 1965/W-1"96/70 1970/71-1976/77 GNW at Market trice 101.47 100.0 3.9 3.8 3.2 Gross Domestic lnestmnt 21.65 21.3 Gross National Saving 22.77 22.4 Current Account Balace d/ 1.04 1.0 lesnurce 2-lanc d/ - 0.31 0.3 OUy,j. ULAOR FOR= AN~D ?RCfVI?YMT IN 1971 Value Added (at factor cost) Laor Fare V.A. Par Worker us$ BIn. S j. I 1S % of Nattonal Average Agriculture 24.5 46.6 130.0 72.1 IUt 64 Industry 11.8 22.3 20.2 11.2 5e2 I1 Seryice- 16.3 31.1 30.2 16.7 5U 1" Intel/avetrag 52.6 100.0 180.4 100.0 292 lo0 COmw Fixw" / qeeral GoVer mat Central C_r t 1977775197X/ 197/7519778 1S7 4 /75-1bn/9 Currant Receipts 164.42 18.9 18.2 95.62 11.0 10.5 Current 3zpnditures 157.29 15.1 16.5 l52 10.9 9.9 Current Suxplua/Deficit 7.13 0.8 1.6 0.J5 U.S. 0.6 Capital eadituroa f/ 62.58 7.2 7.0 43.31 5.0 5.0 Sxternal AsAistence (st) Al 9.82 1.1 1.6 9.82 1.1 1.6 MOMI. CRIT AIMD M3CR 1970/71 1973/1 1974/75 1975/76 197617 1977/78 Spteber 1977 S<et_er 197S (Is B11l1.a matctending at end of period) osey and Qusi Mony 121.4 198.4 220.3 254.7 308.9 365.1 334.8 395.8 bak Credit to Governmt (at) 52.6 57.3 95.3 101.1 110.2 129.7 119.3 139.5 3Bak Credit to Commrcial Sector 64.6 107.0 126.7 153.9 185.1 210.0 195.3 223.5 (Percentage or Index Number) Janury 1978 Januarr 1979 Money and Quasi Money as % of CF 30.1 33.5 31.5 34.5 38.8 41.9 Ubolasale Price Index (1970/71 * 100) 100.0 139.7 174.9 173.0 176.6 185.8 114.5 184.6 LAnul percentage chang in: Wholesale 1ticr index 7.7 20.2 25.2 - 1.1 2.1 5.2 3.2 0.1 Bank Credit to Govermnt (net) 10.8 12.3 9.2 6.1 9.0 17.7 13.4 16.9 Bank Credit to Commrcial Sector 19.4 22.6 18.4 21.5 20.3 13.5 16.6 14.4 /bs per capita 01W aetimate is At market prcaes, calculated by the convrsion technique used in the lWrld Atlas. All other convmrsiona to dollars in thia table are at the average exchange rate prevailing derl.s Sle period cowered. bl Quick 2 tieeteo. c_ Coputed frm trend line of GW at factor cost aorie. including one obe4rvation before first year and one observation after last year of listed period. d/ World Bank estimates; not aecosarily consistent with official Natinoal Accout Statistics. at Iransfera betwen Centre and States have been netted out. ff All loans and advances to third partis hae b-en netted out. g/ mxternal grants and lo"s, less principal repayments, as recorded in the Central budget.  ANNEX I Page 5 of 5 h/ h/ BALANCE OF PAYMENTS 1975/76 1976/77 1977/78 1978/79 MERCHANDISE EXPORTS (AVERAGE 1975/76 - 1977/78) (us$ million) US$ Mln. % Exports of Goods 4,672 5,753 6,276 6,800 Engineering Goods 610 11 Imports of Goods -6,449 -5,928 -7,237 -8,400 Tea 417 7 Trade Balance -1,777 - 175 - 961 -1,600 Gems 377 7 NFS (net) 310 360 650 700 Clothing 331 6 Leather and Leather Resource Balance -1.467 185 - 311 - 900 Products 278 5 i, Jute Manufactures 267 5 Interest Payments (net) - 216 - 180 - 50 - Iron Ore 265 5 Other Factor Payments (nel:) - - - - Cotton Textiles 248 4 Net Transfers J/ 470 730 1,400 1,300 Sugar 244 4 Others 2,530 45 Balance on Current Accoun: -1,213 735 1.039 4o0 Total 5.567 100 Official Aid Disbursements 2,341 1,953 1,628 1,805 EXTERNAL DEBT, MARCH 31. 1978 - Amortization - 531 - 560 - 645 - 725 USS billion Transactions with IMF 242 - 337 - 330 - 158 Outstanding and Disbursed 14.8 All Other Items - 45 - 216 384 205 Undisbursed 4.3 Outstanding, including Increase in Reserves (-) - 794 -1,575 -2,076 -1,527 Undisbursed 19.1 Gross Reserves (end year) 2,172 3,747 5,823 7,350 h/l/ Net Reserves (end year) !t/ 1,365 3,276 5,668 7,350 DEBT SERVICE RATIO FOR 1977/78 15.0 percent Fuel and Related Material% IBRD/IDA LENDING. DECEMBER 31, 1978 Imports 1,417 1,581 1,817 1,980 US$ million of which: Petroleum 1,417 1,581 1,817 1,980 IBRD IDA Exports 43 37 33 n.a. Outstandi-. -.d Disbursed 613 3,864 of which: Petroleum 22 21 18 n.a. Undisbursed 615 1,992 Outstanding, including _/ Undisbursed 1,228 5,856 RATE OF EXCHANGE June 1966 to mid-December 1971 US$1.00 - Rs 7.5 Rs 1.00 = US,5O.133333 Mid-December 1971 to end-June 1972 : US$1.00 = Rs 7.27927 Rs 1.00 - USjO.137376 After end-June 1972 : Floating Rate Spot Rate end-December 1978 : US$1.00 = Rs 8.188 US$1.00 = Rs 0.122 h/ Estimated. i/ Figures given cover all investment income (net). Major payments are interest on foreign loans and charges paid to IMF, and major receipt is ioterest earned on foreign assets. j/ Figures given include workers' remittances but exclude official grant assistance, which is - included within official aid disbursements. k/ Excludes net use of IMF credit. 1/ Amortization and interest payments on foreign loans as a percentage of merchandise exports. m/ Excludes exchange adjustment, but includes us$ 22 million due to third parties.  ANNEX II Page 1 of lo THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of September 30, 1979) US$ million 1/ Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 41 Loans/ 1,163.2 55 Credits fully disbursed 3,338.6 267-IN 1971 India Wheat Storage -- 5.0 .22 294-IN 1972 India Bihar Agricultural Markets -- 14.0 .29 312-IN 1972 India Population -- 21.0 1.41 342-IN 1972 India Education -- 12.0 6.38 356-IN 1973 India IDBI I -- 25.0 8.65 378-IN 1973 India Karnataka Agricultural Markets -- 8.0 5.73 390-IN 1973 India Bombay Water Supply I -- 55.0 9.62 427-IN 1973 India Calcutta Urban Development I -- 35.0 1.24 440-IN 1973 India Bihar Agricultural Credit -- 32.0 3.64 456-IN 1974 India HP Apple Processing & Marketing -- 13.0 8.44 481-IN 1974 India Trombay IV Fertilizer -- 50.0 .98 1011-IN 1974 India Chambal (Rajasthan) CAD 52.0 -- 24.20 482-IN 1974 India Karnataka Dairy -- 30.0 21.55 502-IN 1974 India Rajasthan Canal CAD -- 83.0 38.54 520-IN 1974 India Sindri Fertilizer -- 91.0 4.74 521-IN 1974 India Rajasthan Dairy -- 27.7 17.97 522-IN 1974 India Madhya Pradesh Dairy -- 16.4 7.36 526-IN 1975 India Drought Prone Areas -- 35.0 13.59 1079-IN 1975 IFFCO IFFCO Fertilizer 109.0 -- 17.73 1097-IN 1975 ICICI Industry DFC XI 96.3 -- 6.36 532-IN 1975 India Godavari Barrage Irrigation -- 45.0 13.58 541-IN 1975 India West Bengal Agric. Development -- 34.0 15.68 '562-IN 1975 India Chambal (Madhya Pradesh) CAD -- 24.0 9.14 572-IN 1975 India Rural Electrification I -- 57.0 24.58 585-IN 1975 India Uttar Pradesh Water Supply -- 40.0 26.68 598-IN 1975 India Fertilizer Industry -- 105.0 67.94 604-IN 1976 India Power Transmission IV -- 150.0 92.40  ANNEX II Page 2 of 18 US$ million 1/ Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 609-IN 1976 India Madhya Pradesh Forestry T.A. -- 4.0 2.57 610-IN 1976 India Integrated Cotton Development -- 18.0 16.06 1251-IN 1976 'India Andhra Pradesh Irrigation 145.0 -- 119.40 1260-IN 1976 India IDBI II 40.0 -- 27.25 1273-IN 1976 India National Seeds I 25.0 -- 24.22 1313-IN 1976 India Telecommunications VI 80.0 -- 24.14 1335-IN 1976 India Bombay Urban Transport 25.0 -- 12.99 680-IN 1977 India Kerala Agric. Development -- 30.0 29.82 682-IN 1977 India Orissa Agric. Development -- 20.0 17.42 685-IN 1977 India Singrauli Thermal Power -- 150.0 123.90 687-IN 1977 India Madras Urban Development -- 24.0 17.06 690-IN 1977 India WB Agric. Exten- sion & Research -- 12.0 12.00 695-IN 1977 India Gujarat Fisheries -- 4.0 2.48 1394-IN 1977 India Gujarat Fisheries 14.0 -- 14.00 712-IN 1977 India Madhya Pradesh Agric. Dev. -- 10.0 9.73 715-IN 1977 India ARDC II -- 200.0 48.32 720-IN 1977 India Periyar Vaiyar Irrigation -- 23.0 18.19 728-IN 1977 India Assam Agricultural Development -- 8.0 7.34 1473-IN 1977 India Bombay High Offshore Development 150.0 -- 81.35 736-IN 1977 India Maharashtra Irrigation -- 70.0 55.89 737-IN 1977 India Rajasthan Agricul- tural Extension -- 13.0 12.09 740-IN 1977 India Orissa Irrigation -- 58.0 52.72 1475-IN 1977 ICICI Industry DFC XII 80.0 -- 45.10 747-IN 1978 India Second Foodgrain Storage -- 107.0 97.88 756-IN 1978 India Calcutta Urban Development II -- 87.0 67.92 761-IN 1978 India Bihar Agric. Extension & Research -- 8.0 7.75  ANNEX II Page 3 of 18 US$ million 1/ Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 1511-IN 1978 India IDBI Joint/Public Sector 25.0 -- 25.00 1549-IN 1978 TEC Third Trombay Thermal Power 105.0 -- 94.38 788-IN 1978 India Karnataka Irrigation -- 117.6 108.23 793-IN 1978 India Korba Thermal Power -- 200.0 179.43 806-IN 1978 India Jammu-Kashmir Horticulture -- 14.0 14.00 808-IN 1978 India Guajarat Irrigation -- 85.0 81.15 815-IN 1978 India Andhra Pradesh Fisheries -- 17.5 17.50 816-IN 1978 India National Seeds II -- 16.0 15.99 1592-IN 1978 India Telecommunications VII 120.0 -- 73.00 824-IN 1978 India National Dairy -- 150.0 147.28 842-IN 1979 India Bombay Water Supply II -- 196.0 196.00 843-IN 1979 India Jaryana Irrigation -- 111.0 97.64 844-IN 1979 India Railway Modernization & Maintenance -- 190.0 177.06 848-IN 1979 India Punjab Water Supply & Sewerage -- 38.0 36.87 855-IN 1979 India National Agricultural Research -- 27.0 27.00 862-IN* 1979 India Composite Agricultural Extension -- 25.0 25.00 871-IN 1979 India NCDC -- 30.0 27.48 1648-IN 1979 India Ramagundam Thermal Power 50.0 -- 50.00 874-IN 1979 India Ramagundam Thermal Power -- 200.0 200.00 889-IN 1979 India Punjab Irrigation -- 129.0 129.00 899-IN* 1979 India Maharashtra Water Supply -- 48.0 48.00 911-IN* 1979 India Rural Electrification Corp. II -- 175.0 175.00 925-IN* 1979 India Uttar Pradesh Social Forestry -- 23.0 23.00  ANNEX II Page 4 of 18 US$ million 1/ Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 947-IN* 1979 India ARDC III -- 250.0 250.00 1743-IN* 1979 India Thal Fertilizer 250.0 -- 250.00 Total 2,529.5 7,234.8 of which has been repaid 960.7 53.0 Total now outstanding 1,568.8 7,181.8 Amount Sold 133.3 of which has been repaid 112.2 21.1 Total now held by Bank and IDA 1,547.7 7,181.8 Total undisbursed (excluding *) 639.1 2,454.1 * Not yet. effective. 1/ Prior t.o exchange adjustment.  ANNEX II Page 5 of 18 B. STATEMENT OF IFC INVESTMENTS (As of September 30, 1979) Fiscal Amount (US$ million) Year Company Loan Equity Total 1959 Republic Forge Company Ltd. 1.5 - 1.5 1959 Kirloskar Oil Engines Ltd. 0.9 - 0.9 1960 Assam Sillimanite Ltd. 1.4 - 1.4 1961 K.S.B. Pumps Ltd. 0.2 - 0.2 1963-66 Precision Bearings India Ltd. 0.7 0.3 1.0 1964 Fort Gloser Industries Ltd. 0.8 0.4 1.2 1964-75-79 Mahindra Ugine Steel Co. Ltd. 11.8 1.4 13.2 1964 Lakshmi Machine Works Ltd. 1.0 0.3 1.3 1967 Jayshree Chemicals Ltd. 1.0 0.1 1.1 1967 Indian Explosives Ltd. 8.6 2.9 11.5 1969-70 Zuari Agro-Chemicals Ltd. 15.1 3.8 18.9 1976 Escorts Limited 6.6 - 6.6 1978 Housing Development Finance Corporation 4.0 1.4 5.2 TOTAL 53.6 10.4 64.0 Less: Sold 5.9 1.7 7.6 Repaid 17.0 - 17.0 Cancelled 6.2 0.7 6.9 Now Held 24.5 8.0 32.5 Undisbursed 4.5 0.6 5.1  ANNEX II Page 6 of 18 C. PROJECTS IN EXECUTION 1/ Generally, the implementation of projects has been proceeding rea- sonably weLl. Details on the execution of individual projects are below. The level of disbursements was UJS$538.3 million in FY79 or 39% of Bank Group com- mitments to India in that year. The undisbursed pipeline of US$3,093 million as of September 30, 1979, reflects the lead time which would be expected given the mix of fast- and slow-disbursing projects in the India program. Ln. No. 1097 Eleventh Industrial Credit and Investment Corporation of India Project; US$100.0 million loan of April 2, 1975; Effective Date: July 1, 1975; Closing Date: December 31, 1980 Ln. No. 1475 Twelfth Industrial Credit and Investment Corporation of India Project; US$80.0 million loan of July 22, 1977 Effective Date: October 4, 1977; Closing Date: March 31, 1983 These loans are supporting industrial development in India through a well-established development finance company and are designed to finance the foreign exchange cost of industrial projects. ICICI continues to be a well-managed and efficient development bank financing medium- and large-scale industries, which often employ high technology and are export-oriented. Loan 1097 is fully committed and disbursements are slightly ahead of schedule. Disbursements under Loan 1475 are also ahead of schedule. Loan No. 1260 Second Industrial Development Bank of India Project; US$40.0 million loan of June 10, 1976; Effective Date: August 10, 1976; Closing Date: June 30, 1981 Loan No. 1511 IDBI Joint/FPublic Sector Project; US$25.0 million loan of March 1, 1978; Effective Date: May 31, 1978; Closing Date: March 31, 1I83 Loan 1260 is designed to assist the Industrial Development Bank of India in promoting small- and medium-scale industries and in strengthening the State Financial Corporations involved. Loan 1511 is designed to encourage the pooling of private and pubLic capital in medium-scale joint ventures. The project a'Lso assists IDBI in carrying out industrial sector investment studies and in strengthening the financial institutions dealing with the state joint/ public sector. 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered and the action being taken to remedy them. They should be read in this sense and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 7 of 18 Cr. No. 440 Bihar Agricultural Credit Project; US$32.0 million credit of November 29, 1973; Effective Date: March 29, 1974; Closing Date: March 31, 1980 The project provides US$32.0 million in support of a lending program for 50,000 tubewells and pumpsets investment in the Tirhut Division of Bihar. Because of slow disbursements caused by a lower than estimated Dollar/Rupee exchange rate and by low unit investment costs compared with appraisal esti- mates, IDA agreed to extend the closing date to March 1980 and expand the project area to cover the whole State. Physical targets have now been achieved and the credit should be fully disbursed by the revised closing date. Cr. No. 715 Second Agricultural Refinance and Development Corporation (ARDC) Project; US$200.0 million credit of June 1, 1977; Effective Date: August 24, 1977; Closing Date: December 31, 1979 Cr. No. 947 Third Agricultural Refinance and Development Corporation (ARDC) Project; US$250.0 million credit of August 20, 1979; Effective Date: December 7, 1979 (expected); Closing Date: June 30, 1982 Lending to farmers under the Second ARDC Project (Cr. 715) is pro- ceeding well and the credit is expected to be fully disbursed by the closing date. The Third ARDC Project (Cr. 947) would continue lending to farmers upon completion of the second project. Cr. No. 747 Second Foodgrain Storage Project; US$107.0 million credit of January 6, 1978; Effective Date: May 17, 1978; Closing Date: June 30, 1982 As of September, 1979, satisfactory progress was being made in the construction of bag storage warehouses, despite problems of land acqui- sition at some sites. However, construction of flat bulk warehouses and port silos is not expected to be completed until 1985, as a result of delays in the employment of consultants and the longer time required for the prepa- ration of technical specifications and tenders and the construction itself. Cr. No. 456 Himachal Pradesh Apple Processing and Marketing Project; US$13.0 million credit of January 22, 1974; Effective Date: September 26, 1974; Closing Date: December 31, 1980 The project encountered prolonged initial delays due to managerial arLd technical problems. These problems have been largely resolved, but con- struction progress remains slow due to material shortages and severe winter conditions. Initial packing house operations were undertaken in the last two seasons with favorable response from farmers. The project is scheduled for completion by December 1980.  ANNEX II Page 8 of 18 Cr. No. 806 Jammu-Kashmir ]Horticulture Project; US$US$14.0 million credit of July 17, 1978; Effective Date: January 16, 1979; Closing Date: June 30, 1984 The principal executing agency, J&K Horticulture Produce Marketing and Processing Corporation, is under strong management and rapid progress has been made in start-up operations with only minor slippage. The project's research activities, however, are behind the original schedule due to poor organization,. Ln. No. 1313 Telecommunications VI Project; US$80.0 million loan of July 22, 1976; Effective Date: September 14, 1976 Closing Date: March 31, 1980 Ln. No. 1592 Telecommunications VII Project; US$US$120.0 million loan of June 19, 1978; Effective Date: October 30, 1978; Closing Date: March 31, 1982 Both projects are progressing satisfactorily, although as of May, 1979, when they were last reviewed, imports of electronic switching equipment and local production of electro-mechanical switching equipment were behind schedule, resulting in a reduced growth rate for the installa- tion of direct exchange lines. Institutional improvements envisaged under the projects have been achieved, and the financial situation of the Posts and Telegraphs Department remains sound. Cr. No. 481 Trombay IV Fertilizer Expansion Project; US$US$50.0 million credit of June 19, 1974; Effective Date: August 21, 1974; Closing Date: December 31, 1979 Cr. No. 520 Sindri Fertilizer Project; US$91.0 million credit of December 18, 1L974; Effective Date: February 27, 1975; Closing Date: March 31, 1980 Ln. No. 1079 IFFCO Fertilizer Project; US$US$109.0 million loan of January 24, 1975; Effective Date: April 28, 1975; Closing Date: March 31, 1980 Cr. No. 598 Fertilizer Industry Project; US$105.0 million credit of December 31, 1975; Effective Date: March 1, 1976; Closing Date: June 30, 1980 Ln. No. 1743 Thal Fertilizer Project; US$250.0 million loan of August 20, 1979; Effective Date: December 31, 1979 (expected); Closing Date: November 30, 1984 The Trombay IV project has been commissioned, about 18 months behind schedule due to longer-than-expected delivery times for critical equipment, although the nitrophosphate plant is still having some operational  ANNEX II Page 9 of 18 problems. The Sindri project has also been commissioned and commercial pro- duction is expected shortly. The IFFCO project was delayed by about a year as a result of a change in feedstock from fuel oil to naphta and delays in completion of engineering contracts. However, project construction is now proceeding satisfactorily and commissioning is expected within the next six months. Credit 598 is designed to increase the utilization of existing fer- tilizer production capacity. The project has encountered delays in sub-project preparation and investment approvals by the Government. Further, some of the sub-projects identified earlier may not materialize because of reconsideration by the Central and State governments. IDA has agreed to a list of sub-projects to replace the ones that are likely to be dropped. Because of the above, the project is likely to be delayed by about 18 months. Cr. No. 294 Bihar Agricultural Markets Project; US$14.0 million credit of March 29, 1972; Effective Date: July 31, 1972; Closing Date: December 31, 1979 Cr. No. 378 Karnataka Wholesale Agricultural Markets Project; US$8.0 mil- lion credit of May 9, 1973; Effective Date: September 7, 1973; Closing Date: December 31, 1979 Substantial progress has been achieved in the implementation of the Bihar project (Credit 294). As of May, 1979, when the project was last reviewed, construction works had been completed for 29 of the 50 markets proposed, and were in various stages of cornpletion for the remainder. Addi- tional investments to provide for more shop-cum-godowns have also been made, and the construction associated with these is also almost completed. Land acquisition problems connected with four markets remain to be settled, but these are not expected to affect the implementation or disbursement schedule. In the Karnataka project (Credit 378), some delays in project implementation were encountered as a result of frequent changes in management in the early stages, and these have necessitated an extension of the closing date by 18 months to June 30, 1981, to allow for completion of works and withdrawal of the credit. Progress is improving, however. As of May, 1979, construction on 36 of the 39 markets envisaged under the project was underway or completed, and trade had shifted to about half of these. An additional five markets rmay be included in the project at the request of the State government. Cr. No. 312 Population Project; US$21.2 million credit of June 14, 1972; Effective Date: May 9, 1973; Closing Date: June 30, 1980 This credit is designed to finance an experimental and research oriented population project in Karnataka and Uttar Pradesh. The project' s infrastructure, which would provide the optimum facilities (buildings, equip- ment, staff and transport) according to GOI standards in selected districts in each state, is virtually complete. The two Population Centers, established to design and monitor research aimed at improving the family planning program, are now functioning. The Population Centers are expected to complete their  ANNEX II Page 10 of 18 evaluation of family planning strategies and the introduction of management information and evaluation systems by the present closing date. Cr. No. 342 Agricultural liniversities Project; US$12.0 million credit of November 10, 1972; Effective Date: June 8, 1973; Closing Date: December 31, 1979 Tlne project involves the development of the agricultural univer- sities in Assam and Bihar. The primary aim of the AUs project is to improve the quality and practical triaining of undergraduates and so the spectrum of their employment opportunities; and to strengthen university structure to enable it to give an impetus to agricultural and rural development. Consider- able progress has been made in achieving the latter objective; but achieving educational objectives is more slowly attainable, constrained by traditional attitudes and structures where consistent effective leadership falters. Changes to a more functional orientation are now planned. The Project Director and others responsible are aware of the constraints and are support- ing efforts to remove them. Cr. No. 390 Bombay Water Supply and Sewerage Project; US$55.0 million credit of January 22, 1974; Effective Date: March 13, 1974; Closing Date: June 30, 1981 Cr. No. 842 Second Bombay Water Supply and Sewerage Project; US$196.0 million credit of November 13, 1978; Effective Date: June 12, 1979; Closing Date: March 31, 1985 Cr. No. 848 Punjab Water Supply and Sewerage Project; US$38.0 million credit of October 27, 1978; Effective Date: January 25, 1979, Closing Date: March 31, 1983 Cr. No. 899 Maharashtra Water Supply and Sewerage Project; US$48.0 mil- lion credit of June 21, 1979; Effective Date: November 9, 1979; Closing Date: June 30, 1984 Having overcome earlier difficulties, including cost overruns caused by inflation (requiring project redefinition in February 1975), redesign of major project components and the addition of a supplementary study on sewage disposal, Credit 390 is now progressing satisfactorily. Completion of proposed water treatment works by the end of 1979 is realistic- ally forecast. Completion of construction of the project sewerage works is scheduled for mid-1980. Financial performance of the project entity is satis- factory. Implementation of Credit 842, a second stage of the ongoing Credit 390, is proceeding to schedule. Preliminary work in connection with imple- mentation of Credit 848 is progressing satisfactorily.  ANNEX II Page 11 of 18 Cr. No. 585 Uttar Pradesh Water Supply and Sewerage Project; US$40.0 million credit of September 25, 1975; Effective Date: February 6, 1976; Closing Date: June 30, 1980 The Project has had a slow start due to delays in the preparation of technical reports for regional and local water authorities and in the engagement of consultants. While improvements have been made in the physical execution, other aspects of project implementation continue to lag so that disbursements under the Credit have fallen short of estimates at the time of appraisal. In order to improve the situation, arrangements have been made to closely supervise and coordinate implementation. Cr. No. 427 Calcutta Urban Development Project; US$35.0 million credit of September 12, 1973; Effective Date: January 10, 1974; Closing Date: December 31, 1979 Cr. No. 756 Second Calcutta Urban Development Project; US$87.0 million credit of January 6, 1978; Effective Date: April 7, 1978; Closing Date: March 31, 1983 The first of these credits is expected to be fully disbursed by December 31, 1979. By that date the project will be substantially complete, with the exception of one water supply subproject (of a total of seven) and the area development component, both of which will be completed with State Government funds and supervised by IDA in conjunction with the supervision of the Second Calcutta Urban Development Project. The second project is proceeding quite well in most sectors, in spite of the severe floods of September 1978 and serious Statewide electric power shortages. Procurement is generally on schedule for equipment and consultants' services, though some- what behind for larger civil works contracts. Staff shortages in some of the implementing agencies continue, although more extensive use of consultants has to a great degree alleviated this problem. 'Cr. No. 687 Madras Urban Development Project; US$24.0 million credit of April 1, 1977; Effective Date: June 30, 1977; Closing Date: September 30, 1981 Physical progress is generally satisfactory and costs are within appraisal estimates on most components. However, land acquisition problems and consequent delays in construction on one of the three sites and service areas will result in about 15 months delay in the completion of the final sections of these areas. Inadequate attention and staff has been given to the financial analysis and marketing strategies required to ensure that anti- cipated cost recovery in the sites and services and slum upgrading components and thus replicability is actually achieved. However, there is still ample time to deal effectively with these problems; technical assistance is being sought to strengthen financial management and analysis.  ANNEX II Page 12 of 18 Cr. No. 482 Karnataka Dairy Development Project; US$30.0 million credit of June 19, 1974; Effective Date: December 23, 1974; Closing Date: September 30, 1982 Cr. No. 521 Rajasthan Dairy Development Project; US$27.7 million credit of December 18, 1974; Effective Date: August 8, 1975; Closing Date: December 31, 1982 Cr. No. 522 Madhya Pradesh Dairy Development Project; US$16.4 million credit of December 18, 1974; Effective Date: July 23, 1975; Closing Date: June 30, 1982 Cr. No. 824 National Dairy Project; US$150.0 million credit of June 19, 1978; Effective Date: December 20, 1978; Closing Date: December 31, 1985 These four credits, totalling US$224.1 million, support dairy development projects organized along the lines of the successful AMUL dairy co-operative scheme in Gujarat State. The Karnataka Project, which got off to a slow start:, has shown considerable improvement. Farmer response has been good and more than 700 dairy cooperatives are functioning effectively. All four dairy inions envisaged under the project have been established and are functioning satisfactorily. In Madhya Pradesh, the response of small farmers to the project has been excellent. More than 260 dairy cooperatives societies have been formed and their financial situation remains most satisfactory, plant construction is well underway and the Madhya Pradesh Dairy Development Corporation is now responsibLe for the management of all dairy plants in the project area. The Rajasthan project is also doing well. Five milk unions have been formed and excellent progress has been made in servicing the 800 village-level dairy cooperatives. Cr. No. 532 Godavari Barriage Project; US$45.0 million credit of March 7, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1980 Both the civil works and equipment tenders have been awarded after international competitive bidding. Work is proceeding satisfactorily. Ln. No. 1011 Chambal (Rajasthan) Command Area Development Project; US$52.0 million loan of June 19, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 502 Rajasthan Canal Command Area Development Project; US$83.0 million credit of July 31, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 562 Chambal (Madbhya Pradesh) Command Area Development Project; US$24.0 million credit of June 20, 1975; Effective Date: September 18, 1975; Closing Date: December 31, 1979  ANNEX II Page 13 of18 Ln. No. 1251 Andhra Pradesh Irrigation and Command Area Development (TW) Composite Project; US$145.0 million loan (Third Window) of June 10, 1976; Effective Date: September 7, 1976; Closing Date: December 31, 1982 Cr. No. 720 Periyar Vaigai Irrigation Project; US$23.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 Cr. No. 736 Maharashtra Irrigation Project; US$70.0 million credit of October 11, 1977; Effective Date: January 13, 1978; Closing Date: March 31, 1983 Cr. No. 740 Orissa Irrigation Project; US$58.0 million of October 11, 1977; Effective Date: January 16, 1978; Closing Date: October 31, 1983 Cr. No. 788 Karnataka Irrigation Project; US$126.0 million credit of May 12, 1978; Effective Date: August 10, 1978; Closing Date: March 31, 1984 Cr. No. 808 Gujarat Irrigation Project; US$85.0 million credit of July 17, 1978; Effective Date: October 31, 1978; Closing Date: June 30, 1984 Cr. No. 843 Haryana Irrigation Project; US$111.0 million credit of August 16, 1978; Effective Date: December 14, 1978; Closing Date: August 31, 1983 Cr. No. 889 Punjab Irrigation Project; US$120.0 million credit of March 30, 1979; Effective Date: June 20, 1979; Closing Date: June 30, 1985 These projects, based on existing large irrigation systems, are designed to improve the efficiency of water utilization and, where possible, to use water savings for bringing additional areas under irrigation. Canal lining and other irrigation infrastructure, drainage, and land shaping are prominent components of these projects. In addition, provisions have been made to increase agricultural production and marketing by reforming and upgrading agricultural extension services and by providing processing and storage facilities and village access roads. Progress of these projects is generally satisfactory with the exception of the Nagarjunasagar compo- nent of Loan 1251 where water losses have proven higher than anticipated. Specific efforts are underway to redesign this project so that it can achieve its original objectives.  ANNEX II Page 14 of 18 Cr. No. 541 West Bengal Agricultural Development Project; US$34.0 million credit of April 28, 1975; Effective Date: August 28, 1975; Closing Date: March 31, 1980 The progress of sha'Llow tubewells is well ahead of the appraisal schedule, but progress in all other areas is slow. The project will not fully disburse by the closing date, and GOI's request for an extension is expected. Cr. No. 682 Orissa Agricultural Development Project; US$20.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 690 West Bengal Agricultural Extension and Research Project; US$12.0 million credit of June 1, 1977; Effective Date: August 30, 1977; Closing Date: September 30, 1982 Cr. No. 712 Madhya Pradesh Agricultural Extension and Research Project; US$10.0 million credit of June 1, 1977; Effective Date: September 2, 1977; Closing Date: September 30, 1983 Cr. No. 728 Assam Agricultural Development Project; US$8.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 Cr. No. 737 Rajasthan Agricultural Extension and Research Project; US$13.0 million credit of November 14, 1977; Effective Date: February 6, 1978; Closing Date: June 30, 1983 Cr. No. 761 Bihar Agricultural Extension and Research Project; US$8.0 million credit of January 6, 1978; Effective Date: May 2, 1978; Closing Date: October 31, 1983 Cr. No. 862 Composite Agricultural Extension Project, US$25.0 million credit of February 16, 1979; Effective Date (expected): December 14, 1979; Closing Date: December 31, 1984 T'hese seven credits finance the reorganization and strengthening of agricultural extension services and the development of adaptive research capabilities in nine States in India. In areas where the reformed extension system is in full operation, field results have been very good, both in terms of adoption of new agricultural techniques and of increased crop yields. In Rajasthan, Assam, and Orissa, in particular, significant gains have been made under the projects. In West. Bengal, where a change in government brought a review of the organizational. principles underlying the new extension system and an accompanying hiatus in project implementation, a recent Cabinet deci- sion has reaffirmed the Stat:e Government's commitment to the project and revised implementation plans are under preparation. In Bihar and Madhya Pradesh, staff shortages, particularly in supervisory and managerial posts, have hampered project implementation, although progress in areas where  ANNEX II Page 15 of 18 regular extension visits are being made attests to the efficacy of the system itself. Finally, in Gujarat, Haryana and Karnataka, all covered under the Composite Agricultural Extension Project (which is not yet effec- tive), project implementation is still in the very early stages, although important early administrative and financial steps have been taken which should pave the way for effective operation of the reorganized extension system. Cr. No. 855 National Agriculture Research Project; US$27.0 million credit of December 7, 1978; Effective Date: January 22, 1979; Closing Date: September 30, 1983 While the initial sanctioning of research subprojects under this project was somewhat slower than expected, due to staff shortages in the Project Unit, the pace has picked up considerably in recent months. Commit- ment of funds to research subprojects in FY80 is expected to meet or even exceed appraisal estimates, although corresponding disbursements may lag somewhat behind the original estimates. Additions to the staff of the Project Unit are being recommended to expedite further progress under the project. Cr. No. 526 Drought Prone Areas Project; US$35.0 million credit of January 24, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1980 Overall progress of this project continues to be satisfactory. Implementation of most components is proceeding well. Dairying and dryland farming components show particular promise for the drought-prone areas. Cr. No. 680 Kerala Agricultural Development Project; US$30.0 million credit of April 1, 1977; Effective Date: June 29, 1977; Closing Date: March 31, 1985 Project implementation started slowly due to initial staffing and funding delays. The project has now gained momentum and the planting opera- tions, which were one season behind original schedule, have been rephased to make up for lost time. Cr. No. 871 National Cooperative Development Corporation (NCDC) Project; US$30.0 million credit of February 2, 1979; Effective Date: May 3, 1979; Closing Date: December 31, 1984 As of October, 1979, when the project was last reviewed, construc- tion of godowns had begun in the three participating States of Haryana, Orissa, and Uttar Pradesh. Consultants were being recruited to assist NCDC and State Cooperative Banks in strengthening their institutions. Initial project preparations have been completed on schedule; disbursements are therefore expected to follow the appraisal targets.  ANNEX II Page 16 of 18 Cr. No. 844 Railway Modernization and Maintenance Project; US$190.0 mil- lion credit of November 13, 1978; Effective Date: January 10, 1979; Closing Date: December 31, 1984 Credit 844 was designed to help the Indian Railways reduce manu- facturing and maintenance costs of locomotives and rolling stock and to improve their performance and availability. The project is still at an early stage of implementation but is progressing satisfactorily. Cr. No. 609 Madhya Pradesh Forestry Technical Assistance Project; EUS$4.0 million credit of February 26, 1976; Effective Date: May 17, 1976; Closing Date: December 31, 1981 A feasibility study financed under this Credit and completed in November 1979 has recommended the establishment of two mills, one for sawn- wood and ene for pulp, as the basis of the development of a forest-based industry in Bastar district. Cr. No. 925 Uttar Pradesh Social Forestry Project; US$23.0 million credit of June 21, 1979; (expected) Effective Date: January 20, 1980; Closing Date: December 31, 1984 This project was designed to expand the social forestry program in Uttar E'radesh, to providle a source of energy to the villages, and supply raw materials to cottage industries. The project provides for large-scale tree plant:ation on 48,600 ha of public and village lands, primarily along roads, rails and canals, and on village common lands and degraded forest reserves. Cr. No. 6L0 Integrated Cotton Development Project; US$18.0 million credit of February 26, 1976; Effective Date: November 30, 1976; Closing Date: December 31, 1981 The project's progress remained very disappointing in all areas until the 1978 season, resulting in negligible disbursements. Due to renewed interests from GOI and the States, the project has now started to progress well. Short-term credits are increasing significantly, new processing units are being established in Haryana and Maharashtra, and plant protection activities have started progressing well. Ln. No. 1273 National Seed Project; US$25.0 million loan of June 10, 1976; Effective Date: October 8, 1976; Closing Date: June 30, 1981 Cr. No. 816 Second National Seed Project; US$16.0 million credit of July 17, 1978; Effective Date: December 20, 1978; Closing Date: December 31, 1984 These projects were designed to increase the availability of high quality agricultural seed, and cover nine States (four by Ln. 1273-IN and five by CR. 816-IN). The first project started slowly due to organizational  ANNEX II Page 17 of 18 difficulties and is almost two years behind schedule. Progress in the second project States is satisfactory. The role of various organizations (National and State) in the production and processing of seed is being reviewed. Ln. No. 1335 Bombay Urban Transport Project; US$25.0 million loan of December 20, 1976; Effective Date: March 10, 1977; Closing Date: June 30, 1980 The bus procurement program supported by the project has proceeded on schedule, with all 700 bus chassis and bodies having been ordered and 589 already in service. Total fleet strength has increased from 1,530 buses at the inception of the project to 1,900 buses in September 1979, in accordance with appraisal estimates. Depot capacity expansion is lagging somewhat behind fleet expansion, but should match fleet size by early 1980. However, delays in construction of new workshop facilities have been more substantial and will not be fully recoverable. Traffic management civil works are also somewhat behind schedule, although efforts are being made to speed up the works program. Ln. No. 1394 Gujarat Fisheries Project; US$14.0 million loan and US$4.0 (TW) and million credit of April 22, 1977; Effective Date: Cr. No. 695 July 19, 1977; Closing Date: June 30, 1983 Cr. No. 815 Andhra Pradesh Fisheries Project; US$17.5 million credit ofJune 19, 1978; Effective Date: October 31, 1978; Closing Date: September 30, 1984 In Gujarat, harbor construction at Mangrol and Veraval are under way, and although some delays have been encountered, the project is progress- ing satisfactorily and no major problems are evident. In Andhra Pradesh, preliminary work on implementation is progressing satisfactorily, and harbor works at Visakhapatnam and Kakinada are scheduled to commence shortly. Cr. No. 685 Singrauli Thermal Power Project; US$150.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 793 Korba Thermal Power Project; US$200.0 million credit of May 12, 1978; Effective Date: August 14, 1978; Closing Date: March 31, 1985 Ln. No. 1549 Third Trombay Thermal Power Project; US$105.0 million loan of June 19, 1978; Effective Date: February 8, 1979; Closing Date: March 31, 1984 Ln. No. 1648 Ramagundam Thermal Power Project; US$50.0 million loan and and Cr. US$200 million credit of February 2, 1979; Effective Date: No. 874 May 22, 1979; Closing Date: December 31, 1985  ANNEX II Page 18 of 18 Cr. No. 604 Power Transmission IV Project; US$150 million credit of January 22, 1976; Effective Date: October 22, 1976; Closing Date: June 30, 1981 Credit 685 assists in financing the first stage of the 2,000 MW Singrauli development which is the first of four power stations in the Government's program for the development of large central thermal power stations feeding power into an interconnected grid. The second such station, at Korba, is being financed under Credit 793. The National Thermal Power Corporation (NTPC) has been carrying out construction and operation of these power stations. Organization and staffing of NTPC is proceeding satisfactorily. Loan 1549 is supporting the construction of a 500 MW extension of the Tata Electric Companies' station, in order to help meet the forecast load growth in the Bombay area. Loan 1648 and Credit 874 sup- port the construction of the first three 200 MW generating units in Andhra Pradesh together with related facilities and associated transmission. All these large-scale thermal power projects are progressing satisfactorily. Under Credit 604, contracts aggregating about US$114 million have been ap- proved to date. Although this project suffered delays in preparation of technical specifications and evaluation of bids for highly sophisticated equipment, the project is now progressing satisfactorily. Cr. No. 57'2 Rural Electrification Project; US$57.0 million credit of July 23, 1975; Effective Date: October 23, 1975; Closing Date: December 31, 1979 Cr. No. 911 Rural Electrification Corporation II Project; US$175.0 million credit of June 21, 1979; Effective Date: October 17, 1979; Closing Date: March 31, 1984 Credit 572 consists of a tranche of rural electrification schemes which would cover about 140 rural electrification schemes. There are now thirteen State Electricity Boards (SEBs) eligible for onlending, compared with six at the time of appraisal. The project got off to a slow start, due principally to the need to adapt the specifications and tendering procedures to international competitive bidding, but the position has improved and the full amount of the Credit has been committed. Credit 911 would provide con- tinued support to the Rural Electrification Corporation's lending program, and help finance about 1,700 rural electrification schemes in fourteen SEBs, including the newly participating Uttar Pradesh SEB. The project is at an early stage of implementation, and preparation of bid specifications is progressing satisfactorily. Ln. No. 1473 Bombay High Offshore Development Project; US$150.0 million loan of June 30, 1977; Effective Date: October 20, 1977; Closing Date: December 31, 1980 The project is progressing satisfactorily. Gas and oil pipelines from Bombay High to shore were commissioned in June 1978. Most contracts for Phase II-[ of Bombay High dlevelopment have been laid, construction should be completed by mid-1980 and the loan should be fully disbursed by its original closing date.  ANNEX III Page 1 of 2 INDIA GUJARAT COMMUNITY FORESTRY PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken by the country to prepare the project 10 months. (b) The agency which has prepared the project Government of Gujarat, with assistance from FAO/CP. (c) Date of first presentation to the Bank and date of first mission to consider the project February 1978 and May 1978. (d) Date of departure of appraisal mission March 5, 1979. (e) Date of completion of negotiations October 19, 1979. (f) Planned date of effectiveness March 1980. Section II: Special IDA Implementation Action None Section III: Special Conditions (a) GOG to ensure that participating villages assume responsibility for establishment, maintenance and harvesting of 9,200 ha of village woodlots (para 43). (b) GOG to prepare and furnish model contracts by June 30, 1980 (para 44); (c) GOG to provide adequate facilities to full-time laborers (para 45);  ANNEX III Page 2 of 2 (d) GOG to take fuelwood conservation measures (para 49); (e) GOG to submit a research program by September 30, 1980 (para 50); (f) GOG to make certain organizational arrangements by specified dates (paras 52 and 54); (g) GOG to prepare proposals for sharing forest produce and revenue by June 30, 1980 (para 55).   IBRD 14323 7O