India - Uttar Pradesh Social Forestry Project

Document of FILE The World Bank FOR OFFICIAL USE ONLY Report No. P-2562-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE UTTAR PRADESH SOCIAL FORESTRY PROJECT May 23, 1979 This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its eontents may not otherwise be disclosed without World Bank authoriztion.  CURRENCY EQUIVALENT (As of May 15, 1979) Rs 1.00 = Paise 100 US$1.00 = Rs 8.251147 Rs 1.00 = US$0.1212 Rs 1 million US$121,200 (Since September 24, 1975, the Rupee has been officially valued relative to a "basket" of currencies. As these currencies are now floating, the US Dollar/Rupee exchange rate is subject to change. Conversions in the Appraisal Report were made at US$1 to Rs 8.60, which represents the projected exchange rate over the disbursement period.) FISCAL YEAR April 1 - March 31 LIST OF ABBREVIATIONS USED IN THIS REPORT GOI - Government of India GOUP - Government of Uttar Pradesh SFD - Social Forestry Directorate U.P. - State of Uttar Pradesh  FOR OFFICIAL USE ONLY INDIA UTTAR PRADESH SOCIAL FORESTRY PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President (GOI). Beneficiaries: The State of Uttar Pradesh (U.P.) Amount: US$23 million. Terms: Standard. Relending Terms: As part of Central assistance to States for develop- ment projects, on terms and conditions applicable at the time. GOI would carry the exchange risk. Project Description: The proposed project would expand and intensify the social forestry program in Uttar Pradesh. The program aims at large-scale tree plantation along roads, rails and canals, on village common lands unsuitable for cropping, and on degraded forest reserves in need of rehabilitation. The trees would provide a much-needed source of energy to the villages, raw materials to cottage industries, and greater stability to the environment. The ultimate objective would be to have the villagers establish as soon as possible their own village forests, using voluntary labor, with the assist- ance of state-wide forest extension services, for dis- tribution of fuelwood and other products to village communities. About 48,600 ha of public and village lands would be planted under the project, 45,600 ha of which would be carried out by the Uttar Pradesh Social Forestry Directorate with varying degrees of community participation. The Directorate would be expanded and strengthened by providing additional staff, low-cost housing, equipment, vehicles and facilities for training, research and nurseries. Major project risks include the possibility of insufficient community participation in tree plantations, inadequate community contribution to protection of tree plantations, and inequitable share of project benefits to the poorer villagers. Safeguards built into the project are expected to minimize these risks. Other risks inherent in this project are no greater than can be expected of an innovative project of this type. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Cost: (US$ millions) Local Foreign /a Total Staffing, Vehicles, Equip- ment, Housing and Operating Expenses 16.3 0.1 16.4 Training and Fellowships 1.0 0.1 1.1 Research and Seed Testing 0.3 - 0.3 Nurseries 4.2 - 4.2 Plantings 7.8 - 7.8 Protection of Plantings 9.4 - 9.4 Sub-Total 39.0 0.2 39.2 Price Contingency 5.9 - 5.9 Physical Contingency 1.4 - 1.4 Total 46.3 0.2 46.5 Duties and Taxes 1.7 - 1.7 Project Cost Net of Duties and Taxes 44.6 0.2 44.8 Financing Plan: (US$ millions) Local Foreign Total IDA Credit 22.8 0.2 23.0 GOUP 21.8 - 21.8 Total 44.6 0.2 44.8 Estimated Disbursement: (US$ millions) FY80 FY81 FY82 FY83 FY84 FY85 Annual 0.5 2.2 3.7 4.8 5.3 6.5 Cumulative 0.5 2.7 6.4 11.2 16.5 23.0 Rate of Return: About 13%. Appraisal Report: No. 2386-IN, dated May 23,1979. /a Includes estimated cost of direct imports only.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE UTTAR PRADESH SOCIAL FORESTRY PROJECT 1. I submit the following report and recommendation on a proposed credit to India for the equivalent of US$23 million on standard terms, to help finance a social forestry program in the State of Uttar Pradesh. The project would initiate large-scale tree plantations close to the villages in order to provide a much-needed source of energy to the villagers, raw materials to cottage industries, and greater stability to the environment. PART I - THE ECONOMY I/ 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. Background 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 transformation 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 Rural Electrification Corporation Project (Report No. P-2533-IN) dated May 9, 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. 8. The 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 doubled from 1.3 million hectares a year during  - 3 - 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 nuLrient tons, an increase of 18% over 1977/78. This growth is impressive, particularly since it follows two successive years of very high growth--18% in 1976/77 and 26% in 1977/78--so that fertilizer consumption iF now 75% higher than it was in 1975/76. These rates of growth in agricultural inputs and output are heartening evidence that the good harvests of 1975/76 and 1977/78 were not isolated peaks resulting from good weather alone but represent an increased agricultural production capacity. 9. The 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 i higher but for recurring shortages of steel, coal, railway wagons and - ctric power and capacity constraints in fertilizer, cement, vegetable oils .,1 petroleum products. Labor unrest also constrained output in some indus- i:ries, 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% or more but continuing shortages in many States necessitated power cuts and curbs on new demand. 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 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 n i-977/78 and 1978/79 has slowed somewhat. After rising by 12% in 1975/76 d 3% 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 (witb 5-8% volume growth). Although part of the decline is attributable to ur.favorable conditions in foreign markets, export profitability has been allowed to deteriorate somaewhat. With net invisible receipts in 1978/79 estimated the sa-.e an 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. Development Prospects 11. The circumstances that have brought about the currently favorable economic situation hold the promise of continuing into the future given conti- n-ed policy improvements. The faster growth of the recent past has been made .r;-^ible by the much-increased inward flow of foreign exchange from increased *_ ,-.-t workers' remittances and external assistance; greatly improved agri- cL.cural performance; the impressive saving effort; the liberalization of import controls; and expanded public expenditure on development programs.  - 4 - 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 under- employment, (ii) an appreciable rise in the standard of living of the poorest sections of the population, 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 to 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 funded, will help provide the water control needed to increase yields directly and to induce further productivity-increasing investments. The highly effective reorganization of the agricultural extension service will raise yields as it takes hold progressively across India in the near future. Finally, there are several heartening trends in foodgrain 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 Haryana). 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  - 5 - rapid growth of winter wheat cropping in traditionally rice areas (West Bengal, Assam and Orissa). 14. In industry, despite some uncertainty in industrial policy and the lack of 6;rong 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 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 competition to improve the efficiency of Indian industry. Finally, part of the adjustment should come from an increased net transfer of external assistance. 17. India'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 of 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 low 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 the 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-third 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 that 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 these 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 owing 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 addition to the more general rural development programs. PART II - BANK GROUP OPERATIONS IN INDIA 19. Since 1949, the Bank Group has made 56 loans and 113 development credits to India totalling US$2,281 million and US$6,747 million (both net of cancellation), respectively. Of these amounts, US$975 million had been repaid, and US$2,806 million was still undisbursed as of March 31, 1979. Annex II contains a summary statement of disbursements as of March 31, 1979, and notes on the execution of ongoing projects. 20. Since 1957, IFC has made 15 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 April 30, 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 capac- ity utilization in industry. The Bank Group has also been active in support- ing infrastructure development for power, telecommunications, and railways. 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  - 8 - projects benefitting small farmers. Projects supporting water supply, sewer- age, 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 for foreign assistance, to augment domestic resources, stimulate investment 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 imports 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 econony 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. The 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 March 31, 1979, outstanding loans to India totaled US$1,331 million, of which US$657 million remained to be disbursed, leaving a net amount outstanding of US$674 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, 1977, India's outstanding and dis- bursed external public debt was US$13.3 billion, of which the Bank Group's share was 28%. 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 UTTAR PRADESH (U.P.) 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  - 9 - and logging sector contributes only about 1.5% to the net domestic product. Domestic rounlwood requirements by the ysar 2000 are projected to be nearly 3 290 million m : fuelwood 225 million m ; industrial hardwood, 52 million m and conifer, 13 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. 27. India's strategy for forestry development reflects the need, first, to develop production forestry programs to supply the growing need of the wood products industry and, second, to develop 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 Commis- sion on Agriculture (1976) recommended that each State should reorganize its Forest Department by converting the existing department into a Production Department and by creating a new Social Forestry Department. The State of U.P. 28. With a population of nearly 100 million, U.P. is the most populous State in India. It accounts for 17% of India's population, while its area (294,000 sq. km.) covers only 9% of the country. Nearly 86% of the popula- tion is rural (as against 78% for all-India). There are 112,000 villages with an average population of 700. By almost all economic indicators, Uttar Pradesh is one of the least developed states in India. A Bank study on "Rural Poverty and Agricultural Growth in India" estimates that Uttar Pradesh's population living below the poverty line (annual income of about US$65) has remained around 50% since the late 1950s. This, of course, means a growing absolute number. 29. Forests cover 17% of the total area in Uttar Pradesh; the per capita forest area is only 0.05 ha, compared with 0.14 ha for the whole of India which itself is well below the world average of 1.04 ha. In 1977/78, the forestry sector contributed some 4% of State revenue and accounted for about 2% of the State's net product. These figures, however, take no account of the very considerable quantities of fuelwood, small timber, fodder, thatch- ing, grass, fruits and medicinal herbs that are taken by villagers. Most forests are located in the hills, whereas over 80% of the population is in tne Gangetic Plains. 30. In addition to sawn timber, the forests in Uttar Pradesh support large-scale industries like pulp and paper, veneer and plywood, and turpen- tine and resin industries. They also support a large number of small-scale and cottage industries such as matches, paper, carpentry, baskets and oil extraction. There is no doubt that the demand for forest products far ex- ceeds supply.3 For example, industrial wood supplies are presently about one million m per annum whereas demand is estimated to be nearly four times this amount. Many forest-based cottage industries have suffered due to raw material shortages. However, the critical gap remains in fuelwoods for3 domestic consumption. While present consumptisn is around 18 million m 3 the requirements are estimated at 42 million m per annum in 1978 and are projected to rise to 63 million m by the year 2000.  - 10 - 31. Rural households meet their energy requirements almost exclusively (95%) from non-commercial fuels. In the plains, they use firewood (36% of their energy needs), vegetable and crop wastes (32%) and dung cake (27%). Commercial fuels are used mostly for lighting (kerosene 3.5% and electricity 0.5%) and charcoal represents a negligible share (1%). Fuelwood remains the most preferred source of rural energy but its growing scarcity in a large area has obliged the villagers to burn cattle and buffalo dung which would otherwise be profitably utilized as farm manure. Social Forestry 32. The main objective of existing social forestry programs is to pro- vide forest products in rural areas where they are most needed. This objec- tive is achieved by establishing multi-purpose tree plantations to supply fuel and small timber and to provide food, fodder, shade and the environ- mental stability that is necessary for continued food production. These plantations also generate income and employment, both directly, by providing jobs in planting, harvesting, and marketing, and indirectly, by providing raw materials for cottage industries. The plantations are established on presently unproductive or unused land, for example, by strip planting along road, canal and rail sides and by block planting on village commonland, wastelands and degraded forests. Forest Institutions 33. The Forest Department is responsible for the management of State forests. Its administrative head is the Chief Conservator of Forests. He is assisted by four Additional Chief Conservators, each of whom is responsible for several forest circles. There are fifteen forest circles, each headed by a Conservator of Forests, some of which are functional circles (e.g. research and development, working plans, soil conservation) and some of which are geo- graphical. There are two additional officers of Conservator rank - the Director of National Parks and the Director of Social Forestry. All forest circles are divided into 3 to 7 divisions, under the control of a Deputy Conservator; sub- divisions are controlled by Assistant Conservators. The Department has a competent technical staff of 256 professional officers (Assistant Conservators and above), 2,031 technical staff (Forest Rangers and Foresters) and 4,309 junior staff (Forest Guards and equivalent personnel). Professional officers and rangers are recruited from among science graduates and receive a two-year forestry course at the national training centers in Dehra Dun, Uttar Pradesh, or Barnihat, Meghalaya State. Other staff are trained at seven other centers within the State. In 1974, the State established a Forest Corporation to improve logging practice and supply timber and fuelwood to consumers at reduced cost. It employs 700 persons. 34. The existing Social Forestry Directorate, established in 1976 under an officer of Conservator rank, comprises four divisions covering ten adminis- trative districts. Its present staffing includes a Director, 4 Divisional Directors, 21 Rangers, 83 Deputy Rangers, 104 Foresters and 129 forest exten- sion workers. Shortage of funds and technical staff have kept the program very small. So far, the four existing divisions have established about 300 ha of strip planting and 700 ha of block planting.  - 11 - Bank Group Assistance to the Indian Forestry 35. The Madhya Pradesh Forestry Technical Assistance Project (Credit 609-IN of February 1976) is the only project financed by the Bank Group in the Indian forestry sector. The main objectives of the project include fea- sibility studies for major forest-based industries in Bastar District of the State of Madhya Pradesh, and research on appropriate plantation species and methods and on logging operation. The feasibility studies are expected to be completed on schedule and the final reports are expected before the end of 1979. Other research activities are also progressing satisfactorily. Recently, a second Social Forestry Project (in Gujarat) has been appraised which is expected to be presented to the Executive Directors in Fiscal Year 1980. PART IV - THE PROJECT 36. The project was prepared by the Government of Uttar Pradesh (GOUP) with assistance from FAO/CP. It was appraised in October/November 1978, and negotiations were held in Washington, D.C. in April/May 1979. The Indian negotiators included Mr. B.P. Srivastava, Inspector General of Forests, GOI; Mr. J.K. Sibal, Director, Department of Economic Affairs, GOI; Mr. N.P. Tripathi, Secretary of Forests, Uttar Pradesh; and Mr. K.M. Tiwari, Director, Social Forestry Directorate, Uttar Pradesh. The Staff Appraisal Report (No. 2386a-IN, dated May 23, 1979) is being distributed separately. A Supplementary Project Data Sheet is attached as Annex III. Project Description 37. The proposed project would expand and intensify the social forestry program in the Gangetic Plains of Uttar Pradesh (70% of the State area) where the density of human population is very high at 350 person/sq.km. and forest cover is very low at 2% of the land. The program aims at establishing and maintaining tree plantations along roads, rails and canals, on village common lands unsuitable for cropping, on farmer-owned lands and on forest reserves in need of rehabilitation. The trees would provide a much-needed source of energy to the villagers, raw materials to cottage industries, and greater stability to the environment. The plantation program under the proposed project would be labor-intensive and would be carried out primarily by dr- viding paid employment to the poorest sections 1/ of the rural population. The five-year project would comprise the following: (a) Expansion and strengthening of the Social Forestry Directorate, through the provision of additional staff, low-cost housing, equipment, transportation, and training facilities; 1/ As far as possible, employment would be restricted to the poorest vil- lagers called Antyodaya as identified by Government of Uttar Pradesh for its rural development program.  - 12 - (b) Forest plantations on 48,600 ha - including about 45,600 ha along roads, rails and canals, on village common lands, and on degraded forests to be planted by the Social Forestry Directorate with varying degrees of community involvement, and a minimum of 3,000 ha of village forests to be planted in village common lands under community self- help programs. In addition, about 8 million seedlings and extension services would be provided for planting on privately-owned lands; (c) Construction of 90 new nurseries and rehabilitation of 50 existing ones; (d) Protection of social forest plantations; and (e) Research, seed testing and storage, and field demonstrations. 38. Plantations. The bulk of project plantings would be undertaken by the Social Forestry Directorate in close collaboration with the local com- munities. The aim would be to establish strip and block plantings on about 45,500 ha of land with the consent and for the benefit of neighboring vil- lagers; 15% along major roads of the State, 9% along railway lines, 35% along canals, 11% on village common lands and 30% in degraded forest reserves. Species to be planted would be selected in consultation with the local popu- lation. Although the main focus would be on the provision of fuelwood and fodder, other species would be included to meet a variety of other local requirements, including fruit trees, trees producing small timber and oilseed, trees for raising silkworms, and trees producing other raw materials for cottage industries. Palatable grasses (for stall-feeding) would be grown within young plantations to compensate villagers for the loss of grazing until abundant fodder became available from tree foliage. Finally, mulberry and arjun trees would be planted on about 1,500 ha to develop sericulture for the benefit of the poorest (Antyadoya) families. One hectare of mulberry trees or two hectares of arjun trees would provide full-time employment to a family of three working members. 39. The ultimate objective of the social forestry program is to have the villagers establish their own village forests using voluntary labor with technical assistance from the state-wide forest extension services. Therefore, the project would initiate pilot schemes of community self-help forests in at least 3,000 ha in about 1,500 villages. In such schemes the role of the Social Forestry Directorate would be limited to provision of extension ser- vices and fencing materials. Villagers would provide free labor. 40. In addition to the community self-help forest plantations on common- lands, encouragement would be provided to promote tree plantings in private lands. The Social Forestry Directorate would provide seedlings to individuals at nominal cost and would provide extension services including carrying out tree planting demonstrations close to their fields and homesteads. The  - 13 - project costs include provision to produce 8 million seedlings which would be sufficient to plant trees on at least 4,000 ha of private land. 41. Plantation Protection. The livestock population (mainly cattle and buffalo :L~d, to a lesser extent, goats) within the project area is very high at 150/sq km. Protection of plantations against browsing, trampling and breakage is essential for village forestry to be successful. Three types of protection would be used, depending on the area and the nature of the expected problem; live hedges would be used in areas of low stock pressure, and trenches or fences would be used in high-pressure areas. Most fenced areas would be patrolled by watchmen, each of whom would be responsible for about 10 km of strip-plantings. Overall protection costs are high, especially for long narrow strip-plantings. It is expected that the direct involvement of rural communities in social forestry would progressively diminish the costs. A similar strategy is being employed in Gujarat with considerable success. 42. Nurseries. The project would establish about 90 new nurseries and rehabil-itate about 50 existing ones. This would provide for one nursery in each territorial range under the Social Forestry Directorate (see paragraph 46). Temporary nurseries would also be established in several locations close to the plantation sites or for distribution of seedlings to the villagers. 43. Research. The project would strengthen social forestry research, mainly by improving seed testing and field research facilities. The program would be directed by an Assistant Director of Research under the supervision of the Conservator of Research. The existing seed testing unit in Kanpur would be expanded and equipped, and two new but less sophisticated seed testing facilities would be established. Three research stations would be expanded and a new one would be established. Uttar Pradesh would prepare and furnish to IDA a satisfactory research program by December 31, 1979 (Section 2.10 of the Project Agreement). 44. Communications and Publicity at Village Level. Project success, and the longer-term goal of inducing villagers to establish their own forests, would mainly depend upon the understanding and participation of the rural population. Therefore, five Communications Units would be created, one in each forestry region. In addition to educating villagers on the benefits of afforestation and dangers of deforestation, the Units would also propagate methods of conservation such as improved wood-burning stoves that can double the efficiency of traditional methods. The project would provide funds for vehicles, audio visual equipment, construction of stoves and operating costs. At least three such Units would be established by April 1, 1980 (Sections 2.12(c) of the Project Agreement). 45. Training. A large number of staff would need to be recruited and trained to staff the strengthened Social Forestry Directorate (see paragraph 46). Most of the training needs would be met by the existing national- and State-level institutions, but two new schools would be established to meet the training needs of Forest Extension Workers. Since a number of new foresters' posts would be filled by agricultural graduates, a six-month pre-service course on forestry would be provided to them. A number of foresters in the  - 14 - Department would require additional training in extension and community rela- tions. Conventional curricula would, therefore, be revised to meet these needs. The project would also provide twelve short-term and two two-year fellowships, to middle and senior staff of the Social Forestry Department, for training in other States or overseas. Project Implementation 46. Responsibility for project implementation would be with the Uttar Pradesh Social Forestry Directorate, which would work with increasing parti- cipation of the village communities. The existing Social Forestry Directorate (SFD) is under an officer of Conservator rank, who is responsible to an Additional Chief Conservator of the Forest Department. Under the project, SFD would be reorganized and strengthened and would become a separate wing of the Forest Department directly under the Chief Conservator of Forests (CCF). The SFD Director would be upgraded to Additional CCF rank. At full development, SFD would comprise five regions under Regional Directors (Conservators) and twenty-eight field divisions under Divisional Directors (Deputy Conservators). Each division would comprise five territorial ranges headed by a Ranger who would supervise an average of four units: one, with a deputy ranger in charge, would be responsible for the nurseries; three, under Community Devel- opment Foresters, each assisted by two Forest Extension Workers, would be responsible for maintaining permanent liaison with the participating villages and individuals, and for physically implementing the program. 47. Provision would be made in the project for incremental staff cost, vehicles, equipment, and housing. Uttar Pradesh would ensure that field staff, including forest extension workers and community development foresters, would live in or near areas assigned for their operation, and for this purpose, it would provide low-cost housing or rent allowances as necessary (Section 2.13 of the Project Agreement). The use of rented accommodations would be encouraged wherever possible. However, in U.P. housing is limited. Therefore, the project would provide construction of new low-cost housing for 40% of the project staff. This would provide housing for about three-quarters of the lower paid staff. Funds have also been included for office rents, office furniture and equipment. Because project plantings would be scattered over a very large area, adequate transport for field, monitoring and communication staff would be essential. Staff cars and jeeps would thus be provided for staff whose responsibility encompasses at least a whole division--i.e., an area of at least 50 km radius. Motorcycles would be provided for staff (Rangers) whose area of responsibility covers an area of between 25 km and 50 km radius; bicycles would be provided to the Foresters and Forest Extension Workers. Efforts would be made to encourage the staff to purchase their own motorcycles and bicycles on credit. Credit terms and travel allowances would be set up so as to provide incentive for purchase and utilization of motor- cycles and bicycles by field staff (Section 2.14 of the Project Agreement). 48. Decisions regarding selection of lands and species to be planted, organization of planting works and distribution of the project benefits would be jointly made by the Social Forestry Directorate (SFD) and the villagers concerned. The Community Development Foresters of SFD, who would receive special training in community development skills and community relations,  - 15 - would be the main liaison between SFD and the villagers. Each Community Development Forester would be assisted by Forest Extension Workers. A Village Forest Committee would be set up by each participating village, most likely under the chairmanship of the village leader (Pradhan), through a resolution of the Village Panchayat, which is a locally elected body in most Indian villages. The Forest Extension Worker would normally attend the committee meetings. Each village would sign a contract with SFD. The formulation of a pro forma contract, satisfactory to the Association, would be a condition of Credit effectiveness (Section 5.01(b) of the Development Credit Agreement). The contract would provide for various degrees of involvement by the partici- pating villages, in planning and management of the plantation, and in meeting the direct planting costs by free supply of labor. The costs of inputs and paid labor would be contributed by SFD and would be recovered in kind from the village plantings at the time of harvest (para 52). Thus, the greater the villagers' contribution, the greater would be the returns to the villagers. For example, in the case of self-help schemes the return to the Government would be nominal (only the cost of seedlings) and almost the entire produce would accrue to the village. Initially, the SFD would be solely responsible for managing the plantation. However, the contract would provide for transfer of management to the panchayats as and when villagers have demonstrated their ability and willingness to manage the forests by themselves. 49. Coordination of social forestry activities with other programs of the Government would be achieved through State- and District-level committees. A State Policy Review Committee would be established, under the chairmanship of the Minister for Forests, to make overall policy decisions and to ensure coordination between various Government Departments. A Project Implementa- tion Committee would be set up, under the chairmanship of the Uttar Pradesh Secretary of Forests, to coordinate the activities of various agencies con- cerned with the project. Finally, a District Level Committee would be set up, under the District Collector (who is the Chief Administrative Officer at the District level), to coordinate interdepartmental activities at each District level. Uttar Pradesh would establish these Committees no later than December 31, 1979 (Section 2.02 of the Project Agreement). 50. A project Monitoring and Evaluation Unit would be established in the Social Forestry Directorate. Its staff would include a sociologist expe- rienced in extension work, an economist, a team of surveyors, statisticians, and data processors. The project would be kept constantly monitored by means of field visits, sample surveys and ad hoc studies, so that any adjustment in this innovative project could be made promptly. At the end of three years, an evaluation team would be added to carry out the interim evaluation of the project. The Monitoring Unit would be established by April 1, 1980, and its work program would be submitted to IDA for review by June 30, 1980 (Section 2.12(a) and (b) of the Project Agreement). Marketing Arrangements 51. The forest produce would be shared between the villagers and SFD under arrangements specified in the contracts between the Directorate and the  - 16 - Village Forest Committee (see paragraph 48). The arrangements would vary from place to place to accommodate preferences of the villagers and to try out different arrangements during initial phase. As an illustration, a pro- posed sharing arrangement would be as following: (i) Fodder, edible flowers and some fruits (from village common lands) would be collected by the villagers free of charge, and supervised by the Village Forest Committees under the guidance of SFD. (ii) Harvesting of fuelwood would be undertaken by the villagers, organized and supervised by the Village Forest Committees under SFD guidance. All villagers would be entitled to a supply of fuelwood, free of charge or at a nominal cost, which would be based on a fixed number of headloads per household. (iii) Timber would be sold through the U.P. Forest Development Corporation, and other forest produce would be auctioned by SFD as is currently done. The net income, after deduct- ing the costs incurred by SFD, would be credited to a forest fund, to be used for projects of local public utility or for the development of the Panchayat forests. Cost Recovery 52. GOUP intends to recover the entire costs of its social forestry program, including SFD's investment and operating costs, over 30 years without interest. However, in view of the fact that the proposed project would aim primarily at meeting basic needs (fuelwood and cattle feed), that the majority of the beneficiaries could not afford to pay for these goods, and that the project is designed to motivate the rural people to participate in tree- planting schemes, this intention may be too ambitious. Therefore, the Association would only require that GOUP recover the labor and materials costs (Section 2.11(b) of the Project Agreement). In order to ensure this cost recovery, the SFD Planning Branch would prepare an operational and financial plan for each village plantation which would be embodied in the contract between SFD and the villages (see paragraph 48). GOUP would submit to the Association, by March 31, 1980, operational and financial plans for ten rep- resentative village plantations (Section 2.11(a) of the Project Agreement). Project Cost and Financing 53. The total project cost, over five years, is estimated at US$46.5 million, including duties and taxes of about US$1.7 million. Foreign exchange cost for direct imports is only US$0.2 million. The proposed credit of US$23 million would finance about 51% of the total cost excluding duties and taxes. The balance of the project cost would be borne by the Government of Uttar Pradesh (GOUP). IDA funds would be channelled through GOI to GOUP on standard terms and arrangements for financing of State development projects. GOI would carry the exchange risk.  - 17 - 54. In order to ensure an early start of the project, retroactive financ- ing up to US$500,000 would be provided to cover expenditures from January 1, 1979 to the date of credit signing for: (i) nurseries to provide planting stock, soil work and protection investments; (ii) training costs for additional project staff; and (iii) tractors and vehicles to carry out field operations. Procurement and Disbursements 55. Direct plantation works (US$21.4 million), including nursery expen- ditures, planting and protection works, would be done manually, would be scattered over a wide area (in total, 140 nurseries and 10,000 planting sites), and would be carried out over five years. Furthermore, planting works would be done as much as possible with community participation. Therefore, competi- tive bidding for contracts would not be practical. Nursery works would be carried out by the Forest Department. Land preparation, planting, maintenance and housing construction would also be carried out by the Forest Department with varying degrees of participation from the local communities. However, required material such as barbed wire, tools and fertilizers would be procured under local competitive bidding. Civil works (US$2.4 million) for construc- tion of about 1,400 houses, 140 nursery sheds, two training schools, and one research building would be small and also dispersed in time and place. Contracts for most of the works would be let following competitive bidding advertised locally, in accordance with local procedures which are satisfactory to IDA. However, experience has shown that remote area works may not always attract suitable bid. Therefore, some works, not in excess of 30% of the total, may be carried out by force account. Field vehicles (US$1.95 million) would be purchased in small quantities over three years and would be widely dispersed in rural areas. 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. Procurement would be by local competitive bidding under existing government procedures. Miscellaneous equipment (US$0.35 million) would be bulked when- ever possible and procured through local competitive bidding. The balance of project costs (US$20.4 million) would be mostly staff salaries and related expenditures (US$11.1 million), training (US$1.1 million), land cost (US$0.9 million) and contingencies (US$7.3 million). 56. Disbursements under the Credit would cover: (a) 100% of the cost of training; (b) 100% of the foreign expenditures for imported equipment; (c) 70% of locally procured vehicles and equipment; (d) 50% of expenditures for civil works; (e) 50% of expenditures for staff salaries; and (f) 50% of direct planting expenditures.  - 18 - 57. Disbursements for force account works, salaries, local training, contracts costing Rs 50,000 or less for equipment and vehicles, and other contracts costing less than Rs 100,000 would be made against certificates of expenditure submitted by the Director of the Social Forestry Directorate. Documents for these items would be retained by the Social Forestry Directorate and reviewed by IDA during supervision missions. Full documentation would be required for all other disbursements. Certificates of expenditures would be audited at least once every six months and reports submitted to IDA promptly thereafter. For administrative simplicity, staff salaries would be disbursed at 50% of total staff salaries which is equivalent to 55% of the incremental salaries. Project Benefits and Risks 58. The proposed project would help to lay a sound basis for development of social forestry in the State. This would bring forests close to where they are most needed, thereby providing an important source of rural energy to the villagers, fodder for livestock, and raw materials to cottage industries. Forest institutions would be strengthened and the village communities would be involved. 59. The direct benefits of the project would include: provision of at least 20% increase in the fuelwood supplies to six million people, at full project development, close to their villages; greater abundance of fodder resulting in additional 4 million liters of milk production annually; gen- eration of a total of 19.3 million man-days of employment (mainly to the poorest villagers); provision of raw materials for cottage industries and creation of additional employment opportunities; release of organic wastes (presently used as fuel) for agriculture; and soil erosion control and other environmental benefits. Economic rates of return range from about 10% for roadside plantings to 27% for farm forestry. The overall economic rate of return is about 13%. 60. Most project beneficiaries are poor, with incomes below the critical consumption level of about 76% of the national average. In order to measure the impact of the project on income distribution and saving, a social cost- benefit analysis was carried out to reflect the Government's objectives of growth and income distribution. The results of the analysis give a social rate of return of 36%, indicating that the project would have a positive distributional impact as well as satisfy the traditional economic efficiency criterion. Sensitivity analysis showed that the project's social rate of return would exceed the economic rate of return under any reasonable assump- tions about the Government's economic and social objectives. 61. The most obvious risk is that the project may not lead to self- sustained community involvement as expected, and thus may not achieve the long-range goal of self-help social forestry. This risk would exist parti- cularly in early years; however, the provision of active supervision and guidance of the strengthened Social Forestry Directorate, community partici- pation, and the extension and communication activities are expected to  - 19 - minimize this risk. Another major risk is that the villagers may not provide their modest contribution of helping protect project plantings. Again, the "tree consciousness" generated by the field extension staff and the project's education and communication activities are expected to minimize this risk. Finally, there is a risk that richer and more influential people of the vil- lages would siphon away the bulk of project benefits. Special care has been taken to avoid this risk; in particular, contractual arrangements would specify sharing of the forest produce, village committees would organize and supervise distribution of the produce, and SFD staff would inform villagers of their rights and be alert to possible abuses. 62. Overall risks inherent in this innovative project are, therefore, reasonable and worth taking considering the present need and the expected benefits to the large number of poor villagers involved. An interim evalua- tion would be carried out after three years of project implementation, so that necessary adjustments can be made to facilitate attainment of project objectives. PART V - LEGAL INSTRUMENTS AND AUTHORITY 63. The draft Development Credit Agreement between India and the Asso- ciation, the Project Agreement between the Association and the State of Uttar Pradesh and the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement are being distributed to Executive Directors separately. 64. The features of the draft agreements of special interest are listed in Section III of Annex III. 65. An additional condition of effectiveness, specified in Section 5.01 of the Development Credit Agreement, would be the preparation of a model con- tract, satisfactory to the Association, on the establishment of village plantations (paragraph 48). 66. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 67. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President May 23, 1979   ANNEX I Page 1 of S INDIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES INDIA I LAND AREA (THOUSAND SQ. KK.) - MOST RECENT ESTIMATE) L TOTAL 3287.6 SAME SAME NEXT HIGHER AGRICULTURAL 1818.3 MOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 /b ESTIMATE /b REGION /c GROUP /d GROUP /e GNP PER CAPITA(US$) 60.0 90.0 150.0 167.4 182.9 432.3 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 142.0 181.0 218.0(76) 65.7 88.9 251.7 POPULATION AND VITAL STATISTICS TOTAL POPULATION, MID-YEAR (MILLIONS) 434.9 547.6 631.7 /f URBAN POPULATION (PERCENT OF TOTAL) 17.6 19.5 20.6 12.8 15.0 24.2 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 973.0 STATIONARY POPULATION (MILLIONS) 1643.0 YEAR STATIONARY POPULATION IS REACHED 2150 POPULATION DENSITY PER SQ. KM. 132.0 167.0 192.0 85.2 46.8 42.7 PER SQ. KM. AGRICULTURAL LAND 247.0 308.0 347.0 322.6 254.1 95.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 41.0 41.6 42.0(77) 44.0 43.6 44.9 15-64 YRS. 55.9 55.3 55.0(77) 52.9 53.3 52.8 65 YRS. AND ABOVE 3.1 3.1 3.0(77) 2.9 2.9 3.0 POPULATION GROWTH RATE (PERCENT) TOTAL 1.9 2.3 2.0 2.2 2.4 2.7 URBAN 2.5/I 3.4 3.5 4.2 4.0 8.8 CRUDE BIRTH RATE (PER THOUSAND) 44.0 40.0 35.0(77) 45.1 44.3 42.2 CRUDE DEATH RATE (PER THOUSAND) 21.0 17.0 14.0(77) 17.3 19.7 12.4 GROSS REPRODUCTION RATE 3.2 2.9 2.4(77) 3.2 2.9 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. 3768.0 4518.0 USER (PERCENT OF MARRIED WOMEN) .. 12.0 11.2 13.7 14.6 14.2 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION 100.0 102.0 101.0 95.6 96.4 104.3 PER CAPITA (1969-71 = 100) PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 95.0 92.0 89.0 91.1 92.3 99.5 PROTEINS (GRAMS PER DAY) 51.0 53.0 48.0 49.6 50.0 56.8 OF WHICH ANIMAL AND PULSE 19.0 16.0 12.6 12.6 13.9 17.5 CHILD (AGES 1-4) MORTALITY RATE 28.0 22.0 10.0 ., .. 7.5 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 41.7 48.0 51.0(77) 43.1 45.8 53.3 INFANT MORTALITY RATE (PER THOUSAND) .. 134.0 134.0 99.5 102.7 82.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION TOTAL .. 17.0 33.0 30.0 26.4 31.1 URBAN .. 60.0 83.0 66.3 63.5 68.5 RURAL .. 6.0 20.0 17.2 14.1 18.2 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 18.0 20.0 15.7 16.1 37.5 URBAN .. 85.0 87.0 66.9 65.9 69.5 RURAL .. 1.0 2.0 2.5 3.4 25.4 POPULATION PER PHYSICIAN 5840.0/h 4890.0 3135.0(77) 8830.8 13432.7 9359.2 POPULATION PER NURSING PERSON 11590.0/h 5220.0 6320.0(76) 8479.3 6983.3 2762.5 POPULATION PER HOSPITAL BED TOTAL 2590.0/i 2020.0 1231.0(77) 1624.5 1157.6 786.5 URBAN .. .. ., .. 183.3 278.4 RURAL .. .. .. .. 1348.8 1358.4 ADMISSIONS PER HOSPITAL BED .. .. .. .. 19.5 19.2 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 .. 5,2 URBAN 5.2 .. 4.8 .. 4.8 RURAL 5.2 .. 5.3 .. 5.3 AVERACE NUMBER OF PERSONS PER ROOM TOTAL 2.6 2.8 URBAN ' i 8 2.3 RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS TOTAL .. .. .. .. 25.9 28.3 URBAN RURAL 8 . . . 8.7 10.3  ANNEX I INDIA - SOCIAL INDICATORS DATA SHEET Page 2 of 5 REFERENCE GROUPS (ADJUSTED AVERAGES INDIA /a - MOST RECENT ESTIMATE) SAME SAME NEXT HIGHER MOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 /b ESTIMATE /b REGION /c GROUP /d GROUP Le EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 72.0 79.0(76) 59.1 62.9 75.8 FEMALE 40.0 55.0 63.0(76) 38.4 45.9 67.9 MALE 80.0 87.0 94.0(76) SECONDARY: TOTAL 20.0 29.0 28.0(76) 19.9 14.4 17.7 FEMALE 10.0 17.0 18.0(76) 9.9 8.8 12.9 MALE 30.0 39.0 38.0(76) VOCATIONAL (PERCENT OF SECONDARY) 8.0 6.0/ . . 1.5 6.6 7.4 PUPIL-TEACHER RATIO PRIMARY 29.0 38.0 40.0 38.2 38.5 34.3 SECONDARY 16.0 17.0 .. 23.5 19.8 23.5 ADULT LITERACY RATE (PERCENT) 28.0 33.0 36.0 35.6 36.7 63.7 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.7 1.0 1.2(76) 2.2 3.1 7.2 RADIO RECEIVERS PER THOUSAND POPULATION 5.0 21.0 24.0(76) 14.9 31.1 71.1 TV RECEIVERS PER THOUSAND POPULATION .. 0.1 0.5 .. 2.8 14.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 16.0 16.0(75) 6.4 6.0 16.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 4.0 6.3 3.8 .. 1.4 1.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 175000.0 218000.0 261000.0/k FEMALE (PERCENT) 31.3 32.6 32.2 21.3 24.2 28.0 AGRICULTURE (PERCENT) 73.0 73.8 72.5 62.8 60.7 54.1 INDUSTRY (PERCENT) 10.4 9.8 PARTICIPATION RATE (PERCENT) TOTAL 43.0 40.2 39.2 35.8 39.8 37.8 MALE 57.1 52.3 51.3 52.4 53.3 50.3 FEMALE 27.9 27.1 26.2 15.6 19.6 20.9 ECONOMIC DEPENDENCY RATIO 1.1 1.1 1.1 1.3 1.3 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 26.7 25.0/1 .. 18.6 20.3 19.5 HIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 53.1/1 .. 42.8 45.1 48.9 LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 4.7/1 .. 7.3 5.7 5.9 LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 13.1/1 .. 19.3 U6.B 15.7 POVERTY TARGET GRObPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 83.0(77) 80.2 88.5 155.9 RURAL .. .. 73.0(77) 67.2 71.9 97.9 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 80.0(75) .. 100.8 143.7 RIURAL .. .. 50.0(77) 39.8 42.0 87.3 ESTIMATED POPULATION BELOA ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 47.0(77) 50.3 46.0 22.9 RURAL .. .. 52.0(77) 44.6 48.0 36.7 Not available Not applicable NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the 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 South Asia; /d Low Income ($280 or less per capita 1976); /e Tower Middle Income ($281-550 per capita, 1976); /f 1978 mid-year population is estimated at 640.4 million; /g 1951-60; /h 1962; /i 1958; /j 1967; /k 1978 mid-year labor force is estimated at 261 million; /1 1964-65. March, 1979  ANNEX I Page 3 of 5 DEFfINITIDONS 0? SOCIAL ThPiCAID SeNe; Although the lava are draw Era snr..geeraly judged the cot eutherittic and reliable, it ah-ld also be noted coat they may net h. inerna- Tinna.Ilyc.onperaie ras of the loch of -caderdinad definitinn and con.Pts aad by differ-t uneetries in oul-uttg the 'lac. The data r,nntees useful to describe ord- of iaeie.ldico- trends, sad uhroeratnetrai ao differ-mn between -- co-tia.. The dIone ooc vrae for eah todictr r ppultlor-aihd g tmi.i nan, excluing the acresc -n of the Indicaor and th mast pepalated cootre in eah group. Dun tocI fdt,grotp averages of all ladLoatror for Capital Sorplas Oil fnrrsaed ofldi-star ofocssto .ersdsevr disoa, f.-ionia, Lue ltionbotlo a-d P-vart for other on ry group arepo,pw,latn-oibadg trig insan aIthour -ucloal of the sotre-e oc1use ard ao ltpopulated countr. Sinc thecvrg of uutisan the idictor dpde an-telAhilitv of aioe so is no ufr'. cauio neteexrised in relatino evresof one indicator to oauthsr. These averoe are moe-tly efla npaiala of "xavd'=le oe prte t2he veuas. of one iedioatorrattleoon the contyu rfrsnt ron LoND ARtCA (thousad s.hPoulation Per nfrrici.n - PopuietLue divided by c-nhe ofp preticiag physi- Total - To te1 sufceae -orprisinn led on d - inau eaten cowqsii fr-n a ndiosi euccu.Latuieic lre. Agrico1tuv-I - Or rcn n seo gicultural are usd temporarily Pocolatian ec awning cer- - Popultian divided by mce fpetoe or pso_acetly lot crepe, pasturen, marhet and kcitohen icodas or to 1 m alesd femle gredots noe,pratical nurs, an. .d aseNtoa ces lie fallow.Ponoltian ear bhnta ad-rts rbs d rualI Papuletioa (enrol, oras adcral) divdd by, the.irren tv mahrof hospital bade TNP P11 CAPITA (UnOl - GOP Par capIta sutnotes steetmrbet prcs riaeain pubict and p,irate geo.ro ~an'd sp-tcisand hos pital adye calclatd b aeocrinmthod as World Oamb Atlas (1975-7T baeis; hbhilitatian center. Iopitaa ore secbllsfeseecs pracneuly staffed by 19hD, 1970,end' 1971 data, at leas.t em phy"lie.. Estahlisfhastc prewidieg principally coatodla1 oas reat incledad. Runi hnpi-els, however, lclds health en.d -di- EuNRCY CONPIPTION POD CAPITA :.- uuI -oe.-ptinm of geanrcie1 enrgy un oat ote atpraen tffed by a portu.ise (bus by, amd .Ica s an lete., pe-olro,_ naua - ee sod hydro-, . eI..ee sod gewibmeni elacan, gaee, . eidsE. etc.> hiob offer inpalec ccmedatigs end electricity) in bilogrem of coal aqoivalo_t par caPita. preelda a inited reega of medical facilitie.. A""'enm anh-peitaL bad - Tota ouxhar of aenncsto or oi-h-rges PPtD.ATtOn hOD VTALTATII~TICO rnhept divIded by t'. u,,br of beds. Toa conlaton old-ve (illiueei - Os of July 1; 1960, 1979, end 1977 data. MUSINTG Uran...ot (ateo of toa)-ctir of urba to total popel.taaim; Asessoeo ooeodferoapr noseoI ),tta. chr and rurl1 doffvent dainttu othnrasey affect casp-rbillty of date A h:tflbeid. cnitc agopttullduaaoo nr loe qatr axocg ucoatries. an~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~d their main -.Le. A boarder or lodgar may or can nor he included In she rocoLatio In Doe 2000 - Corn- population Pr-j-Lnn ore bed em Aros..ro ann ncr to-cra, bro.adrua- vrsecee 195ttlppltion by ags and see and chair moftlity and fertility opesnparanIal,uban, aad ron ocoie eorai-I dwellings. rats.Preeolo p-Aratara for mortelity rates capris o.f 3 level repotirely. Doellinge enclda o-sana strouturee cad on-cupted parta. aesoneg lfe eoactony tfbirth icr...sicg eith coutry's. per capita Aceot lcrcty (ame ofiesll )- tta urban and rural - toon lee,ed female IfeI pe tne .cbileingo as 77.5 ysn Cnotinl sli hecth oleoniity i Ilig _urters as parcotog of Th.armt-r for fa-tiliny rate loby. lviaeoagdcnetotal, arbs5 and ruraldslea1epoiey in fertility according to Jnca lana sa.d past femily planLag per- foenoace. l,faub ootry ia then assigned on of these 9 Conbiatlo0a EDUCATlION of motalty aed fertility trends fcr projcteiuaprpss hdfwstd ronatats l'.i_tonr Penulatio - In a Icatlas_ Pnpclattmo, then I is n ro g th Primacy school;-totalmle and femal - tin total, maleand fesal enrol- eioca tinbirth rat is oqaL to nba death race, end olofhs egoex of oil ags- at the primary levl-a pa-.r.esges of repocole pria-ry o rutotva remins -ont-. Thin is echi..ad onl afta frniliy ratas enhoni-ega pep.aitines; -nenaly iclodee childre aged 6-li years but decline to the fepiacanee lave of -nit net ripr-doatie rate, hem .eoh edjstad for different lengths of primary edeutian; for coontrion nith genertIonof on vepacesitself sooly he Stteianse Pop.letiQn anvrsa' dnto enolet l oaD 1 pr-e since sane Pupils af. eiacns timtd em b heal of ths prolsetod charateriatic of the helms me ba- the offinia1 aehal age. onual i he y-s 2000, aed th care of den1ies of fertility rets naadr coi .oa,ml and fensi - Conputed as oboes; -asodasy adun- tovpl -net lel. tinrqin n-et rrpr of approvdpriaynsrte;providee hcc itimrnP ro -nloih- . Ic .t.ahed - The yea ohs a Stationry Popsie- geseLnainl rtahcmtn n ro n tnpaie saly of floe else has bane resobed. ~~~~~~~~~~~~~~~~~~~~12 ta 17 year of age; o-rreapd-ac -or-e er geealy excluded. Por os. Ia.-Mid-year population Par sq--r killnter (130 hegneres) ctheicl, edonia, or ohar prgon hih or-re adepsed.atly or- oftotal era. dspermmsst of semondar leetitutiana.. Pe o.o. soiciorl ad - Cnputod sa above for 1-rotre ad Nl-ecrras-eim r.nd oodary - Tota1 asdante sereiled in only. prmr a aodry len La dmided by e.s of teachera In the ora Ponolation ace ntr,'tore aronet), - Cldrs 1-14 sr) wokn-age apwdisg level.. (15-4 yern),and etird (I yers and, 'ovr as P.reta f mid- Adult literac rate frcef-Ltaeadl (ble to read sad writs)a ynar poplaion.- 5preaaottal Aadir popultion ogsd 15yer and over. growth -stee of tota and urbanai-ya ponito for 195 0-60, UIPIMmE 1960-PD and 1979-17. I'esmee oars leer nhoedosito -P....ege oar capieatorca Crude irthrte(a tcoe....d) ""'ssa lire birnhe per thoasnd ofosia lesteeghpron;ecusoblne,bensndmiay mi-erpoplacieM; 16,1970 and 1977 da.reuim Crude de_e rts loer th....andl - nenua deahs par chot.an of eid- bai aaialertnamdneltiem) - All types of rec..lonre for radio yea popelicl"; 1960, 1970 and 1977 data. bre it.arts togneral publicpetr thousand of pepolatlan; secludes: onliceesad Grs ecdocicrt-ueesoar of IOaht-ssaeea ill bea rs..aire in cosrisad in year ohenrgeca f rdbos wsi i.0 her coerli' opreduttive pried if she oneies reeat se- efc;dt o eotyr ayueh oprhssneme ouatnie specifIc fetility raise; osclly flo-y-s veae ending i 1960, abolishe itoenia.S 1l70, and II:5. :t rnelere (p-c thousad poeletala) -.TV regeloen for,broadcast to gemral tally olaeaao-aucentor. ausi. ce edl-mel bo.r of pblin Par nhoussad population: encldee - asicaa IV4 rmivere in on acpreof birth-cotrol device. draspcsof maniemL femily trmTV nyas hnngmreo o newsL efet. planing progrsm. tiewenener circulation fear thousand egoulotlon) - Shone the average rirteal-a-hoW th FemIr nlsoefthe uesIacmeo are ae - Pr tnege nf tine of 'daIly gearel interest neespapar, defined aapridelpbLi macnod wee of child-beaing ega (1-4 henl o s blrth-c Iolt-cation denotd primarily to recrding gnre1 new. It Is considered to devices to all nerrld 0mm in san g group. he "daily" if it sppaa t least four clans a weak. FOOD AND NIIIRITITI solId dain the' sr:, llding ad ison to die-la cinana an bila lodee oi fon _rdnlnor cache f1o9l leii - nde ahr of par ..Lta. Pe Ponia orl of caloisaP: reret of rnic Cet) -Capwtad fran DMLMEL enry -qlvla of . t food opplise available in coutr pa aia Toa ao ore(hmsdal-teosiel sispeen, lenldaig armd pe dy 01aisl oupplias eweprism don-etle pr-dociem,imprte I... forons an -epica"d bat e-clodig hasaswie, stdents, etc. Dafioi- euora,an .cmua e -cok. nan eupplis nlueaina feed, eee isi varow cwacie re ercaperble. qoitrusd ia food proossaing, and LeasI diatribtcion. Pa- tamle (anrunt) - rem1l labor force as p-rcennge of tona labar ferns, qairnonta ante atixaced by FAOd bsed on phv'io1gieal nee ds for nor- Aoncutore feenent) - Labor forca in feeming, foretry, huetiag and fishing el "v a tivt a-d health ceaidecing anvir-.asto1 temperature, body aspanntg of totaL labor force. caights,N ag d too nietn,bihel of population, and all1wing 10 par- Industr (maccent) - Labor forc in eiirg. o -erutia, s-f-otering sad ceot for waste at broadold leel elcticty water and gases. petntagef-tota labor forte. "cPooc sovelc oorecen fro ner dsy -T prottein -onta of par Pertinicatlo rate "rar...ot - total mam M IArd female - Tota, mea, aed capitaret spply f land par day. Net e.Pply of food is defined as lm L. lbor force as perc-tagee of theircseev population; 1960O, 1970 shave.Reqeir-.ste for all counries oscablisbhd by UnDo preside for and 1975 data. Tbhsee era ILs. djoeted p-rticipacla cres, rfisocig age- minio allowancef 601h grac of total protein per dey aed 20 gins se terature of the population, and long tIns tred. ofaimal ad pulse proate of ohieh 10 gram shoe1d he aelaI p-eteix. Beeowicdaonde reelo - lotte of populo-tioa ondor 10 and 65 and ever bees.. eadrds are Please the h.ea of 71 Prone of tota protin and telbrfoe ta age go..p of ID-64 y-er, 23 gr of eia prtis .navrg Per the osrid, peeponad by FAO le hbs Thln Wrd roo Durve. INCUHE l10TtDlRa-T"lh-N ,d)r idbFfh. Per -tya roel nrfan aimal sod noise - Pr-tie copply of food Perote.a. ofaiaalnn ht na n id eevdh iha der,ived fran4animls and pulse in gram pat da. p-rut, rih-e 20 pecant pu t2pecn.od poorest 40 percet Chid ben1)notltry rte ler thoueand) - Aeu-I dea ths per theme- of hnssholda. and to oNe group 1-4 ...ra, to children ia thia 5 ageroup. 014170 tatosa oett ovrtr eum level 11511 onr canit -ob-t and rurl1 ils seo oe t hirro (years -Aorege eager of years of life remain- obs.tin poverty lomlrhsta non ee eo te a mIimal leg at brth 161, 1970, and1977d dav..nutritionaly adequate diet plu essen..tial1oem-food rql e is no inetnneierte (ear chog-sd) uncool 1eethe of Infants cedar frdb vuc... to eafe. wae vecr f P2nnolacion - ravel urban suIdrr I -1 icte`rs Povrybmln-0oetir ra eprcpt personaL Nanher of people (t.tal, omn,sd rura) alth r-oenble _c.n toilor of the onty oaf a atr -uppy (incLude.... tretd surface -ae o o trerd hut Estimated coualrcam boue oey cen ee acno-uban cd ard ooocar u-ia) oprcraeof thei r.vepa tto populatinca. Icuurouoae putl. foain or ntendpwt 1atediact mor thee 200 ntere fran hos -a ecniderd as being aitb ra.arooble accstf tat ocu. I rura areas reasonable. ...... wold PImpl riot tue ho.--if. cv vonhre of inir hi....hold do cot faeto aped diepoporbemoe pat ofthe duov 1f1totubiep 'the1 raiy 5wtr af To ic -rd looia1 Dat loe pural on -: pececpesc th i repetie .oploIuc.., Eacec diarhe19 cayleloe ne oleolo sd diapesl, ith or aith-u rane,o r.tc utet and -soo-utcr by usteboc up.acn or the u of lit privira andciiorlcaetr.  AbNEX I bcoacinEinTm Page 4 of 5 US rig fTa IN 1977: tS 150 GROS NATIONaL n XUCT 1N 1977/78 Ail 31 o (IM.. cM tent uries.) ONBg, Aln \ 1960/61-196416 inl9w5 im9*/7 1970171-1976/77 GNP at Market Price 101.47 100.0 3.9 3.8 3.2 Gross Domstic 1nvest_t 21.65 21.3 Gross Hatioal Saving 22.77 22.4 Current Account Balance d/ 1.04 1.0 Resource Balance d/ - 0.31 - 0.3 OUTPUT LABOR roNCz AND Pr IT! DI 1971 Valua Added (at cat) .IUor FOrCe . APrWerr-- UI,Nil, 1rSIS. x S e S Uaiioal Aweraf Agriculture 24.5 46.6 130.0 72.1 IS 4 Industry 11.8 22.3 20.2 11.2 562 199 Srvices 16.3 3 .1 16.7 52 1 Total/average 52.6 100.0 180.4 100.0 292 GOVERAMlT F1MxRc3 Oenral Gover_ent Central G ot b sln 19~~~7477-5-1927756 l271 97-7/17 97 51974 78 Current Receipts 164.42 18.9 16.2 95.62 11.0 10.5 Current Rzpenditures 157.29 18.1 16.5 Aa7 10.9 9 Currant Ruzlua/Deficit 7.13 0.8 1.6 0.35 a... 0.6 Capital Rependituras f/ 62.58 7.2 7.0 43.31 5.0 5.0 gxternal Assistance (net) A/ 9.82 1.1 1.6 9.82 1.1 1.6 AIMIU CUDIT AND MIC8 1970/71 1973/74 1974/75 1975/76 1976/77 19778 8t_ber 1977 Setber 1978 (Re Billion outstanding at ad of period) money and Quasi May 121.4 198.4 220.3 254.7 308.9 365.1 334.8 395.8 Bank Credit to Gove nnt (not) 52.6 87.3 95.3 101.1 110.2 129.7 119.3 139.5 4ank Credit to Carcial Sector 64.6 107.0 126.7 153.9 185.1 210.0 195.3 223.5 (Percenr-ta or lndx IhNubers) J ar 1978 J-z-r 1979 honey and Quasi lAmey as ? of GDM 30.1 33.5 31.5 34.5 38.8 41.9 Wholesale Price lodex (1970/71 - 100) 100.0 139.7 174.9 173.0 176.6 185.8 184.5 184.6 Annm l percentege chnges in: Vholesale Price Index 7.7 20.2 25.2 - 1.1 2.1 5.2 3.2 0.1 bank Credit to Coverment (net) 10.8 12.3 9.2 6.1 9.0 17.7 13.4 16.9 Bank Credit to Coercial Sector 19.4 22.6 18.4 21.5 20.3 13.5 16.6 14.4 I/ The per capita GNP *etista is at _ rket prices, calculated by the conersion technique need in the World Atlas. All other conversions to dollars in this table are at the averae enchange rate preailing daring te period eowerd. b/ Quick Ratiatos. cI Cmputed from trend line of GIP at factor cost seri*s, including one observation before first year And one observation after last year of listed period. d/ World bank astimates; not oeceasarlly consistent with official National Account Statistics. */ Transfers between Centre eod States have been netted out. f/ All loans and advances to third parties have been netted out. A/ Reternal grants and loans, 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 MERCRHUfISE EXPORTS (AVERAGE 1975/76 - 1977/78) (US$ million) U0S Ml. x 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 Jute Manufactures 267 5 Interest Payments (net) - 216 - 180 - 50 - Iron Ore 265 5 Other Factor Payments (net) - - - - Cotton Textiles 248 4 Net Transfers jI 470 730 1,400 1,300 Sugar 244 4 _ Others 2,530 45 Balance on Current Account -1,213 735 1.039 400 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 US$ 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 hll/ Net Reserves (end year) k/ 1,365 3,276 5,668 7,350 DEBT SERVICE RATIO FM 1977/78 15.0 percent Fuel and Related Materials 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 a.a. Outstanding and Disbursed 613 3,864 of which; Petroleum 22 21 18 n.a. Undisbursed 615 1,992 Outstanding, including i Undisbursed 1,228 5,856 RATE OF EXCHANGE June 1966 to mid-December 1971 Us$1.00 - Rs 7.5 Rs 1.00 - US$0.133333 Mid-December 1971 to end-June 1972 US$1.00 = Rs 7.27927 Rs 1.00 - US$0.137376 After end-June 1972 Floating Rate Spot Rate end-December 1978 US$1.00 - Rs 8.188 US$1.00 - Rs 0.122 h/ Estimated. i/ Figures given cover all investment income (net). Major payments are interest on foreign loans and charges paid to IMF, and major receipt is interest earned on foreign assets. J/ Figures given include workers' remittances but exclude official grant assistance, which is included within official sid disbursements. k/ Excludes net use of IMF credit. 1/ Amortization and interest payments on foreign loans as a percentage of merchandise exports. m/ Excludes exchange adjustment, but includes US$ 22 million due to third parties.  ANNEX II Page 1 of 15 THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATBMRNT OF BANK LOANS AND IDA CREDITS (as of March 31, 1979) US$ Million-' Loan or (Net of CaU cellatious) Credit No. Year Borrower Purpose Bank IDA Undisbursed 40 Loansl 1,100.6 55 Credits fully disbursed 3,338.6 267-IN 1971 India Wheat Storage -- 5.0 1.4 294-IN 1972 India Bihar Agricultural Markets -- 14.0 2.7 312-IN 1972 India Population -- 21.2 3.1 342-IN 1972 India Education -- 12.0 7.0 356-IN 1972 India IDBI -- 25.0 9.1 378-IN 1973 India Mysore Agricultural Markets -- 8.0 6.7 902-IN 1973 ICICI Industry DFC X 62.8 -- 0.3 390-IN 1973 India Bombay Water Supply -- 55.0 13.4 427-IN 1973 India Calcutta Urban Development -- 35,0 3.7 440-IN 1973 India Bihar Agricultural Credit - 32.0 7.8 456-IN 1974 India NP Apple Processing S Marketing -- 13.0 8.8 481-IN 1974 India Trombay IV -- 50.0 3.2 1011-IN 1974 India Chambal (Rajasthan) CAD 52.0 -- 28_7 482-IN 1974 India itarnataka Dairy -- 30.0 22.7 502-IN 1974 India Rajasthan Canal CAD - 83.0 43.7 520-IN 1974 India Sindri Fertilizer -- 91.0 7.1 521-IN 1974 India Rajasthan Dairy -- 27.7 21.6 522-IN 1974 India Madhya Pradesh Dairy -- 16.4 10.7 526-IN 1975 India Drought Prone Areas -- 35.0 17.4 1079-IN 1975 IFFCO IFFCO Fertilizer 109.0 -- 28.4 1097-IN 1975 ICICI Industry DFC XI 97.5 - 8.5 532-IN 1975 India Godavari Barrage Irrigation -- 45.0 18.1 541-IN 1975 India West Bengal Agricultural Development -- 34.0 20.4 562-IN 1975 India Chambal (Madhya Pradesh) CAD -- 24.0 11.3 572-IN 1975 India Rural Electrification -- 57.0 34.8 585-IN 1975 India Uttar Pradesh Water Supply -- 40.0 30. 7 598-IN 1975 India Fertilizer Industry -- 105.0 76.9 604-IN 1976 India Power Transmission IV -- 150.0 107.4 609-IN 1976 India Madhya Pradesh Forestry T.A. -- 4.0 2.9 610-IN 1976 India Integrated Cotton Development -- 18.0 16.1 1251-IN(TW) 1976 India Andhra Pradesh Irrigation 145.0 -- 126.8 1260-IN 1976 India IDBI II 40.0 -- 30.4 1273-IN 1976 India National Seeds 25.0 -- 24.7 1313-IN 1976 India Telecommunications VI 80.0 - 25.1 1335-IN 1976 BMRDA Bombay Urban Transport 25.0 -- 15.0 680-IN 1977 India Kerala Agricultural Development -- 30.0 29.9 682-IN 1977 India Orissa Agricultural Development -- 20.0 17.9 685-IN 1977 India Singrauli Thermal Power -- 150.0 131.3 687-IN 1977 India Madras Urban Development -- 24.0 19.2 695-IN 1977 India Gujarat Fisheries -- 4.0 3.5 1394-IN(TW) 1977 India Gujarat Fisheries 14.0 -- 14.0 690-IN 1977 India West Bengal Agricultural Development -- 12.0 12.0 712-IN 1977 India Madhya Pradesh Agricultural Development -- 10.0 10.0 715-IN 1977 India Second ARDC Credit -- 200.0 108.9 720-IN 1977 India Periyar Vaigai Irrigation -- 23.0 20.4 728-IN 1977 India Assam Agricultural Development -- 8.0 7.7 1473-IN 1977 India Bombay Nigh Offshore Development 150.0 -- 81.4 736-IN 1977 India Maharashtra Irrigation -- 70.0 62.7 737-IN 1977 India Rajasthan Agricultural Extension -- 13.0 12.2 740-IN 1977 India Orissa Irrigation -- 58.0 56.0 1475-IN 1977 ICICI Industry DFC XII 80.0 -- 57.9 747-IN 1978 India Second Foodgrain Storage -- 107.0 102.7 756-IN 1978 India Second Calcutta Urban Development -- 87.0 73.0 761-IN 1978 India Bihar Agricultural Extension & Research -- 8.0 8.0 1511-IN 1978 India IDBI Joint/Public Sector 25.0 -- 25.0 1549-IN 1978 TEC Third Trombay Thermal Power 105.0 -- 97.3 788-IN 1978 India [arnataka Irrigation -- 126.0 126.0 793-IN 1978 India Korba Thermal Power -- 200.0 200.0 806-IN 1978 India Janmm-Ktashoir Horticulture -- 14.0 14.0 808-IN 1978 India Gujarat Irrigation -- 85.0 85.0 815-IN 1978 India Andhra Pradesh Fisheries -- 17.5 17.5 816-IN 1978 India Second National Seeds -- 16.0 16.0 1592-IN 1978 India Telecommnunications VII 120.0 -- 93.4 824-IN 1978 India National Dairy -- 150.0 148.0 842-IN* 1978 India Second Bombay Water Supply & Sewerage -- 196.0 196.0 843-IN 1978 India Naryana Irrigation -- 111.0 106.1 844-IN 1978 India Railway Modernioation 5 Maintenance -- 190.0 187.5 848-IN 1978 India Punjab Water Supply and Sewerage -- 38.0 37.7 855-IN 1979 India National Agricultural Research -- 27.0 27.0 862-IN* 1979 India Composite Agricultural Extension -- 25.0 25.0 871-IN* 1979 India NCDC 30.0 30.0 1648-IN* 1979 India Ranagundam Thermal Power 50.0 -- 50.0 874-IN* 1979 India Ra-agundam Thermal Power -- 200.0 200.0 889-IN 1979 India Punjab Irrigation - 129.0 129.0 Total 2,280.9 6,747.4 of which has been tepaid 927.7 46.8 Total now outstanding 1,353.2 6,700.6 Amount Sold 133.3 of which has been repaid 111.5 21.8 Total now held by Bank and IDA 1,331.4 6,700.6 Total undisbursed (excluding*) 656.7 2,148.7 Not yet effective 1/ Prior to exchange adjustment  ANNEX II Page 2 of 15 B. STATEMENT OF IFC INVESTMENTS (As of April 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 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 15.9 - 15.9 Cancelled 6.2 0.7 6.9 Now Held 25.6 8.0 33.6 Undisbursed 4.5 0.6 5.1  ANNEX II Page 3 of 15 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 US$496.4 million in FY78 or 39% of Bank Group com- mitments to India in that year. The undisbursed pipeline of US$2,806 million as of March 31, 1979, corresponds roughly to commitments over the preceding two-year period and 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 (US$22.2 million) are also ahead of schedule. 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. 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered and the action being taken to remedy them. They should be read in this sense and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 4 of 15 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 Credit 715 is designed to provide long- and medium-term credit to farmers through credit institutions, for on-farm investments, primarily in minor irrigation. The proportion of disbursements to small farmers is currently estimated at about 60% compared with the appraisal target of 50%. Training programs for staff of the financing institutions are progressing satisfactorily. Cr. No. 267 Wheat Storage Project; US$5.0 million credit of August 23, 1971; Effective Date: November 14, 1972; Closing Date: September 30, 1979 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 Credit 267, which is being co-financed with Sweden, finances (i) the construction of bag and bulk grain storage and handling facilities, (ii) staff training, and (iii) an All-India Grain Storage Study. The government-owned Food Corporation of India is responsible for the storage construction. All the nine 10,000-ton-capacity bag warehouses envisaged under the project as revised became operational in 1975. The construction of five grain silos is progressing satisfactorily after delays due to cement shortages. The training component is being implemented. The All-India Grain Storage Study was completed in October 1976 and proved useful in formulating the proposal for the Second Foodgrain Storage Project (Credit 747). The Second Project is proceeding satisfactorily. Cr. No. 456 Himachal Pradesh Apple Processing and Marketing Project; US$13.0 million credit of January 22, 1974; Effective Date: September 26, 1974; Closing Date: December 31, 1980 Cr. No. 806 Jammu-Kashmir Horticulture Project; US$US$14.0 million credit of July 17, 1978; Effective Date: January 16, 1979; Closing Date: June 30, 1984 Credit 456 includes grading and packing centers, cold storage facilities, a juice processing plant, road improvements and cableways. It also includes cold storage facilities and a pilot project to promote mush- room production. The project encountered initial delays due to managerial and technical problems; however remedial measures have been taken to overcome these difficulties. land has been acquired for 8 to 10 packing and grading sites, and procurement and construction activities are well underway. The Project Preparation Report for the juice processing plant has been completed,  ANNEX II Page 5 of 15 and the equipment has been ordered. The road improvement program is progres- sing satisfactorily, and the feasibility reports on aerial cableways at the packing/grading sites have been completed. The Jammu Kashmir Horticulture Project was declared effective on January 16, 1979. 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$120.0 million loan of June 19, 1978; Effective Date: October 30, 1978; Closing Date: March 31, 1982 Loan 1313 supports the expansion of the Indian telecommunications system through the provision of funds for the installation of 220,000 direct exchange lines and expansion of the trunk network. A second loan (Loan 1592) continues support of the development of India's telecommunication system through FY 1981 and as well contributes to the improvement of the Indian telecommunication industry. Both projects are progressing satisfactorily. Cr. No. 604 Power Transmission IV Project; US$150.0 million credit of January 22, 1976; Effective Date: October 22, 1976; Closing Date: June 30, 1981 Under Credit 604, contracts aggregating about US$65 million had been awarded by December 1978. This Credit included a supplementary Credit of US$30 million to meet increased costs of equipment scheduled under the Third Power Transmission Project; almost all of this amount has also been committed. Cr. No. 481 Trombay IV Fertilizer Expansion Project; US$50.0 million credit of June 19, 1974; Effective Date: August 21, 1974; Closing Date: June 30, 1979 Cr. No. 520 Sindri Fertilizer Project; US$91.0 million credit of December 18, 1974; Effective Date: February 27, 1975; Closing Date: September 30, 1979 Ln. No. 1079 IFFCO Fertilizer Project; 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 The Trombay IV project is now being commissioned, about 18 months behind schedule due to longer-than-expected delivery times for critical equip- ment. The Sindri project is also being commissioned. The IFFCO project was  ANNEX II Page 6 of 15 delayed by about a year as a result of a change in feedstock from fuel oil to naphtha and delays in completion of engineering contracts. However, project construction is now proceeding satisfactorily. Credit 598 is designed to increase the utilization of existing fertilizer production capacity. The project has encountered delays in sub-project preparation and investment approvals by the Government. Further, some of the sub-projects identified earlier may not materialize because of reconsideration by the Central and State governments. 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 6-12 months. Cr. No. 294 Bihar Agricultural Markets Project; US$14.0 million credit of March 29, 1972; Effective Date: July 31, 1972; Closing Date: December 31, 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 These projects were designed to help with establishment of whole- sale markets in a number of towns in Bihar and Karnataka. Progress under the Bihar project has generally been satisfactory. The project includes training of the Agricultural Produce Marketing Committee (APMC) staff and evaluation of the project's economic impact. Development plans have been completed for 53 market yards to ensure the project target of 50 markets is met. As of November 1978, the date of the last review, appraisals had been completed for 50, and loans approved for 49 markets. Construction had been completed for 19 and was in progress for 31 markets. Farmers and traders served by the 11 market yards now in operation report more efficient marketing activities and improved farmers' terms of trade. Progress under the Karnataka project is improving. As of October 1978, when the project was last reviewed, construc- tion was underway for 36 of the 39 project markets. Plans and land acquisi- tion are nearing completion at the remaining sites. Both projects are expected to be completed by their closing dates. 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 almost complete. The two Population Centers, which will design and monitor research aimed at improving the family planning program, are now functioning. To allow adequate time for the Population Centers to complete their evaluation of family planning strategies and the introduction of management information and evaluation systems, the closing date has been extended to June 1980.  ANNEX II Page 7 of 15 Cr. No. 342 Agricultural Universities Project; US$12.0 million credit of November 10, 1972; Effective Date: June 8, 1973; Closin Date: December 31, 1979 The 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 training 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. 356 Industrial Development Bank of India Project; US$25.0 million credit of February 9, 1973; Effective Date: June 22, 1973; Closing Date: September 30, 1979 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/Public Sector Project; US$25.0 million loan of March 1, 1978; Effective Date: May 31, 1978; Closing Date: March 31, 1983 The first IDBI Project had a slow start mainly due to institutional problems in the participating State Financial Corporations. However, the credit is now fully committed. In order to continue the Bank Group's involve- ment in assisting small- and medium-scale industries and in strengthening the State Financial Corporations involved, a second operation (Loan 1260) was approved in 1976, and disbursements have reached US$9.6 million by the end of March. Loan 1511 is designed to encourage the pooling of private and public capital in medium-scale joint ventures. The project will also assist IDBI in carrying out industrial sector investment studies and in strengthening the financial institutions dealing with the state joint/public sector. 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  ANNEX II Page 8 of 15 Cr. No. 842 Second Bombay Water Supply and Sewerage Project; US$196.0 million credit of November 13, 1978; (expected) 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 Having overcome earlier difficulties, including cost overruns caused by inflation (requiring project redefinition in February 1975), re- design of major project components and the addition of a supplementary study on sewage disposal, Credit 390 is now progressing relatively well. All of the major contracts will be sufficiently advanced to permit the supply of additional water (455 mld) in the second quarter of 1979; completion of water treatment works for the whole supply by the end of 1979 is realistically fore- cast. Completion of additional sewage disposal studies (August 1977) has allowed engineering design of-the project sewerage components to proceed, so that completion of construction of these works is now scheduled for mid-1980, two years later than originally forecast. Financial performance of the project entity is satisfactorily. Credit 848 was declared effective on schedule and preliminary work in connection with its implementation is pro- gressing satisfactorily. 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 are being made to appoint a full-time management adviser 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 For the first of these projects, following considerable increases in project costs, GOI and IDA finalized a project redefinition in April 1976. It is now expected to be substantially completed by December 1979. Credit 756 is designed to expand and upgrade the capabilities of Calcutta's admin- istrative authorities, to strengthen the city's fiscal base, and to reha- bilitate and extend its urban service system.  ANNEX II Page 9 of 15 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 The project is designed to develop and promote low-cost solutions to the problems of providing improved services to the urban poor in the Madras Metropolitan Area (MMA) and to strengthen metropolitan planning. Project components consisting of sites and services, slum improvement, small- scale and cottage industry, and maternal and child health are designed to benefit directly some 250,000 persons in low-income areas of the city. The water supply and sewerage, road and traffic, bus transport and technical assistance components are designed to eliminate bottlenecks in water supply and transport. Project implementation is proceeding satisfactorily, and disbursements are slightly ahead of appraisal estimates. 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 devel- opment projects organized along the lines of the successful AMUL dairy coop- erative scheme in Gujarat State. The Karnataka Project, which got off to a slow start, has begun to show considerable improvement under new management appointed recently. Farmer response has been good and over 700 dairy coop- eratives with small farmer participation are functioning effectively. All four dairy unions envisaged under the project have been established and are functioning satisfactorily. Karnataka's decision to procure plant equipment jointly with Rajasthan and Madhya Pradesh on the same tender should lead to a recovery of considerable time lost earlier in the Karnataka project. In Madhya Pradesh good progress has been made. About 252 new dairy cooperatives societies have been established. Detailed design studies for plant construc- tion are complete. The response of small farmers to the project is excellent. GOMP has plans to cover all districts in the State. Technical services in- vestments are being made. Contracts have been placed for livestock imports. The Rajasthan project is also doing well. Four milk unions have been formed and excellent progress has been made in organizing the servicing of nearly  ANNEX II Page 10 of 15 800 dairy cooperatives at the village level. Plant designs are ready, and procurement is making adequate progress. Based upon the good results expe- rienced, GOR is planning to expand the form of dairy development to all other districts of the State. Cr. No. 532 Godavari Barrage 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 in progress and is proceeding satisfactorily. Disbursements reached 60% of total credit amount as of March 31, 1979. 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 30, 1974; Closing Date: June 30, 1981 Cr. No. 562 Chambal (Madhya Pradesh) Command Area Development Project; US$24.0 million credit of June 20, 1975; Effective Date: September 18, 1975; Closing Date: December 31, 1979 Ln. No. 1251 Andhra Pradesh Irrigation and Command Area Development (TW) Composite Project; US$145.0 million loan (Third Window) of June 10, 1976; Effective Date: September 7, 1976; Closing Date: December 31, 1982 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  ANNEX II Page 11 of 15 Cr. No. 808 Gujarat Irrigation Project; US$85.0 million credit of July 17, 1978; Effective Date: October 17, 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$129.0 million credit of March 30, 1979. Effective Date: July 3, 1979 (expected); 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. 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 project provides financing over four years mainly for minor irrigation investments but also for development of markets, agro service centers, and support of related government extension services. Although dis- bursements have been slower than anticipated, there has been a considerable improvement in project organization and administration and disbursements are expected to improve considerably. The physical progress of shallow tubewells, and of deep tubewells for the Minor Irrigation Corporation, is satisfactory. IDA, GOWB and ARDC are combining efforts in order to solve difficulties such as organizational problems at the farm level; lack of demand for agro service centers; and completion of designs for water distribution systems and irriga- tion schemes. Positive results, particularly for the redesigned water distri- bution systems have been achieved. 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. 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. 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  ANNEX II Page 12 of 15 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. 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. 855 National Agriculture Research Project; US$27.0 million credit of December 7, 1978; Effective Date: January 7, 1979; Closing Date: September 30, 1983 Cr. No. 862 Composite Agricultural Extension Project, US$25.0 million credit of February 16, 1979; Effective Date (expected): May 16, 1979; Closing Date: December 31, 1984 These projects, totalling US$123 million, finance the reorgani- zation and strengthening of agricultural extension and the development of adaptive agricultural research services with the objective of achieving early and sustained improvements in agricultural production, particularly foodgrains. Arrangement for monitoring and evaluation of project progress and impact is an essential feature of these projects. The Orissa and Assam projects also provide funds for laying the basis for longer term improvements in ground- water development in the States. The projects' components include provision of additional staff, training facilities, housing, offices, laboratory facilities, equipment and transportation. 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 physical progress of the Drought Prone Areas project (DPAP) continues to be satisfactory. The rate of disbursement is improving and implementation of most components is proceeding, by and large, according to schedule. 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 This project would improve tree crop production in Kerala and has particular emphasis on increasing benefits to small farmers. It comprises rehabilitation of 30,000 ha coconut and 10,000 ha pepper and 2,240 ha cashew, and new plantings of 5,000 ha coconut and 1,500 ha cashew. About 25% of the coconut area would be irrigated for intensive intercropping. Funds have been provided for development of a seed garden for tree crops and for strengthening tree crops research. Ten crumb rubber factories would also be established to  ANNEX II Page 13 of 15 process smallholder rubber. Project implementation started slowly due to initial staffing and funding delays but has recently gained momentum. Proj- ect actions for 1978/79 have been rephased and advance action planned so as 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 This project is intended to strengthen the institutional framework responsible for promoting and financing development of cooperatives, partic- ularly village level multipurpose cooperative societies. Cr. No. 572 Rural Electrification Project; US$57.0 million credit of July 23, 1975; Effective Date: October 23, 1975; Closing Date: December 31, 1979 Credit 572 consists of a tranche of rural electrification schemes which, at about Rs 5 million each, would cover about 140 schemes. There are now thirteen States 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 now improved and the full amount of the Credit has been committed. 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. Cr. No. 609 Madhya Pradesh Forestry Technical Assistance Project; US$4.0 million credit of February 26, 1976; Effective Date: May 26, 1976; Closing Date: December 31, 1981 This project will identify a sound resource base for pulp and paper manufacture and related industries, develop suitable logging systems, and undertake a feasibility study to determine optimal use of the existing wood resources in the Bastar District of southern Madhya Pradesh. It also includes a study of ways to integrate the area's tribal population with future develop- ment. Cr. No. 610 Integrated Cotton Development Project; US$18.0 million credit of February 26, 1976; Effective Date: November 30, 1976; Closing Date: December 31, 1981 The project finances equipment, civil works and crop production credit to support programs for cotton research and cotton production increase  ANNEX II Page 14 of 15 in three states. The project also provides credit for improving cotton gin- neries, new ginneries, cotton seed oil extraction plants and vegetable oil processing factories. Effectiveness was delayed by slow appointment of consultants, but the cotton extension services program was started without delay and has now been in operation for two years. Disbursements have been small mainly due to poor demand to date for project credit. A recent super- vision mission, working with technical consultants, has made detailed recom- mendations for more appropriate pest control practices and more adaptive research to identify and introduce better varieties. These measures are under discussion with GOI, and when agreed to and implemented, should speed up project disbursements. 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 Loan 1273 supports the first phase of India's national seed program, consisting of: seed industry expansion in the public and private sectors, improvements in seed quality control, strengthening of breeding and seed technology research, and development of a reserve stock scheme. Insti- tutional development and managerial arrangements, particularly at the state level, have proceeded fairly satisfactorily. Project implementation, however, slowed down after loan effectiveness mainly due to organizational problems. Project progress is now gaining momentum after GOI filled the two top posts of the National Seeds Corporation which were vacant for several months. A project supporting the second phase of India's national seed program (Credit 816) is now effective. 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 Contracts for all 700 bus chassis and nearly all 700 bus bodies to be procured under the project have been awarded and some 500 buses have been delivered. Civil works contracts have been awarded for 8 bus facilities, and 24 traffic engineering schemes. Delays are expected in implementing some BMC traffic engineering schemes and the BEST workshop schemes although steps are being taken to minimize such delays. Consultants in organization, admin- istration, financial management systems, accounting and development planning are at work assisting the Borrower, the Bombay Metropolitan Regional Develop- ment Authority. Other beneficiaries of the loan, the Bombay Municipal Corporation and the Bombay Electric Supply and Transport Undertaking, have selected consultants in traffic engineering and operations and management assistance, respectively. 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  ANNEX II Page 15 of 15 Cr. No. 815 Andhra Pradesh Fisheries Project; US$17.5 million credit ofJune 19, 1978; Effective Date: September 19, 1978; Closing Date: September 30, 1984 These projects finance the construction of fishing harbors, seafood processing plants and other facilities required to assist the development of fisheries in the States of Gujarat and Andhra Pradesh. The projects also provide funds through ARDC to assist fisherman to purchase 9-15 meter vessels and 9 meter canoes. Preliminary work in connection with implementation of these projects is progressing satisfactorily. 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 Credit 685 assists in financing the first stage of the 2,000 MW Singrauli development which is, in turn, 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 through Credit 793. It is proposed that the Bank Group will have a continuing involvement in this development program. The National Thermal Power Corporation (NTPC) has been formed to construct and operate these power stations, and the development program has gotten off to a good start. Organization and staffing of NTPC is proceeding satisfac- torily, and the Singrauli project is proceeding on schedule. Civil works are in progress and contracts have been awarded for major plant (turbo-generators, boilers, transformers). 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. 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 have been laid and were commissioned in June 1978. Disbursements reached 46% of the loan amount on March 31, 1979.  ANNEX III Page 1 INDIA UTTAR PRADESH SOCIAL FORESTRY PROJECT Supplementary Project Data Sheet Section I: Timetable of Key Events (a) Time taken by the country to prepare the project Six months during 1978. (b) The agency which has prepared the project U.P. Forest Department. (c) Date of first presentation to the Bank and date of the first mission to consider the project April 1978 and September 1978. (d) Date of departure of appraisal mission October 20, 1978. (e) Date of completion of negotiations May 4, 1979 (f) Planned date of effectiveness September 1979 Section II: Special IDA Implementation Action None Section III: Special Conditions (a) GOUP to formulate a research program, by December 31, 1979 (paragraph 43); (b) GOUP to establish at least three communications units by April 1, 1980 (paragraph 44);  ANNEX III Page 2 (c) GOUP to make available low-cost housing or rental allowances and credit and travelling allowance to field staff to ensure sufficient incentive for the purchase and utilization of motorcycles and bicycles (paragraph 47); (d) GOUP to formulate a model contract, between SFD and villages, as a condition of credit effectiveness (paragraph 48); (e) GOUP to establish the State Policy Review Commit- tee, the Project Implementation Committee and the District Level Committees no later than December 31, 1979 (paragraph 49); (f) GOUP to ensure recovery of at least the direct plantation costs (paragraph 52); and (g) GOUP to submit for IDA's comments a sample of ten plantation plans no later than March 31, 1980 (paragraph 52).  IBRD 14120 78\ 80' 82' DEM- L s CHINA HIMACHAL / *AKBHUTA P. 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