India - Second Madras Urban Development Project

Dcumentof FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2911- IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE SECOND MADRAS URBAN DEVELOPMENT PROJECT November 25, 1980 This doument has a restrided distribudon and may be used by meipients only in the perfonmance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as of November 18, 1980) Rs 1.00 = Paise 100 US$1.00 = Rs 7.785431 Rs 1.00 = US$0.12845 Rs 1,000,000 = US$128,450 (Since September 24, 1975, the Rupee has been fixed against a "basket" of currencies. As these currencies are now floating, the U.S. Dollar/Rupee exchange rate is subject to change. Con- versions in the Staff Appraisal Report were made at US$1.00 to Rs 8.40, which represents the projected exchange rate over the disbursement period.) FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS USED IN THIS REPORT DHRW - Department of Highways and Rural Works GOI - Government of India GTN - Government of Tamil Nadu ha2 - hectare km - square kilometer MMC - Madras Municipal Corporation MMA - Madras Metropolitan Area MMDA - Madras Metropolitan Development Authority PTC - Pallavan Transport Corporation SIDCO - Small Industries Development Corporation TNHB - Tamil Nadu Housing Board TNSCB - Tamil Nadu Slum Clearance Board UNDP - United Nations Development Programme WHO - World Health Organization  FOR OFFICIAL USE ONLY INDIA SECOND MADRAS URBAN DEVELOPMENT PROJECT Credit and Project Summary Borrower: India, acting by its President. Beneficiaries: The Government of Tamil Nadu (GTN) Tamil Nadu Housing Board (TNHB) Tamil Nadu Slum Clearance Board (TNSCB) Pallavan Transport Corporation (PTC) Small Industries Development Corporation (SIDCO) Madras Municipal Corporation (MMc) Madras Metropolitan Development Authority (MMDA) Amount: SDRs 32.6 million (US$42 million on November 11, 1980). Terms: Standard. Relending Terms: From GOI to Tamil Nadu: As part of Central assistance to State development projects on terms and conditions applicable at the time. From GTN to TNSCB, TNHB, MMDA, MMC, DHRW and other Government Departments: Grants and direct expenditures. From GTN to PTC: For bus chassis, loans at 10.5% p.a. interest over 15 years. For other capital expenditures, loans at 12.5% p.a. interest over 15 years. From GTN to SIDCO: Loans at 8.5% p.a. inte- rest over 10 years. From GTN to MMC: Loans at 11% p.a. interest over 20 years with three years' grace. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contenst may not otherwise be disclosed without World Bank authorization.  Project Description: The project would support: (a) the development of about 15,000 residential and about 200 indus- trial plots on two sites totalling about 180 ha, together with construction and machinery loans and provision of community services; (b) provision of basic infrastructure and land tenure to about 50,000 slum households and provision of home improvement loans and grants to about 80,000 slum households; (c) purchase of about 550 buses and depot improvements for PTC and construction and improvement of two roads linking sites and services areas to employment centers; (d) civil works and equipment to improve solid waste collection and infrastructure maintenance in the MMC; and (e) technical assistance and training for implementing agencies to build their planning and implementation capacity. Estimated Cost: (US$ Millions) Local Foreign Total Sites and Services 17.0 1.1 18.1 Slum Improvement 21.8 0.9 22.7 Transport - Roads 3.3 0.9 4.2 Buses 4.3 6.5 10.8 Solid Waste Management and Infrastructure Maintenance 2.6 0.1 2.7 Technical Assistance and Training 0.9 0.2 1.1 Design and Supervision 3.2 0.3 3.5 Base Cost 53.1 10.0 63.1 Physical Contingencies 3.2 0.4 3.6 Price Contingencies 18.1 3.1 21.2 Total Project Cost 74.4 13.5 87.9 Taxes and Duties 3.9 - 3.9 Project Cost Net of Taxes and Duties 70.5 13.5 84.0 Financing Plan: 1/ (US$ Millions) Local Foreign Total IDA 28.5 13.5 42.0 GTN Loans and Grants 42.0 - 42.0 Total 70.5 13.5 84.0 1/ Net of taxes and duties.  - 11]l - Estimated Disbursements: 1/ (Us$ Millions) FY81 FY82 FY83 FY84 FY85 FY86 Annual 0.3 6.3 11.4 13.5 9.0 1.5 Cumulative 0.3 6.6 18.0 31.5 40.5 42.0 Rate of Return: 22% Appraisal Report: No. 2893-IN, dated November 26, 1980. 1/ According to IDA's fiscal year.   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE SECOND MADRAS URBAN DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed development credit to India in an amount equivalent to SDRs 32.6 million (US$42 million on November 11, 1980) on standard IDA terms, to help finance a project to provide improved shelter and urban services in the Madras Metropolitan Area, and to strengthen metropolitan planning and investment programming and budgeting. The proceeds of the credit would be channelled to the Government of Tamil Nadu in accordance with the Government of India's standard terms and arrangements for the financing of State develop- ment projects. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation and Prospects of India" (2933-IN, dated May 1, 1980), was distributed to the Executive Directors on May 14, 1980. Country data sheets are attached as Annex I. Background 3. India is a large and diverse country with a population of 663 million (in mid-1980) and an annual per capita income of US$180. Agriculture continues to dominate India's economy, employing over two-thirds of the labor force. However, the land base is not sufficient to provide an adequate livelihood to all those engaged in agricultural activities, especially the landless or nearly landless who have only an insecure grasp on the means of existence. The share of agriculture in GDP at factor cost (measured in 1970/71 prices) has declined from 59.6% in 1950/51 to 40.7% in 1978/79. The share of industry has increased over the same period from 14.5% to 22.7%. But industrialization has not been rapid enough to absorb the growing labor force, nor to bring about the substan- tial economic transformation that has led to higher productivity and rapid urbanization in some other developing countries. The urban population was 18% of the total in 1960, and is 21% now. 4. Economic growth has been slow in the past. The trend growth rate of GDP was 3.7% per annum from 1950/51 to 1978/79. Slow growth in agriculture-- 2.5% per annum over the same period--has constrained overall growth, not only because of the high share of agriculture in GDP but also because scarce for- eign exchange has often been required to import food. Industrial value-added has grown more rapidly, at 5.4% per annum between 1950/51 and 1978/79, but this growth has not been as high as in many other countries, nor as high as 1/ Parts I and II of the report are substantially the same as Parts I and II of the President's Report for the Second Bombay High Offshore Develop- ment Project (No. P-2905-IN, dated November 18, 1980).  -2- required. Gross domestic saving more than doubled from 10% of GDP in 1950/51 to 24% in 1978/79. Similarly, gross domestic investment as a fraction of GDP rose from 10% in 1950/51 to just over 24% in 1978/79. Foreign savings have never financed a large portion of domestic investment: a peak of about 20% was reached during the early 1960s; by the end of the 1970s, the proportion had returned to much lower levels. External assistance has been low both as a percentage of GDP and in per capita terms. Net external assistance has never risen above 3% of GDP. 5. Except during periods of balance of payments crisis, exports have received relatively little emphasis i. India, which has primarily pursued a strategy of import substitution. As a tesult, India's share of world trade has fallen consistently since 1950/51. The volume growth of exports between 1950/51 and 1978/79 averaged only 3.0% per annum. The volume of growth of imports over the same period has slightly exceeded that of exports. During the early 1970s India's terms of trade, which had remained roughly constant during the 1960s, deteriorated drastically, spurring a relatively rapid period of export growth through the mid-1970s. For the five years ending in 1976/77 the volume of India's exports grew on average over 10% per annum, demonstrating that sustained rapid growth was possible. While expanding world markets, par- ticularly in the nearby Middle East, contributed to this process, adjustments in trade policies designed to improve the profitability of exports played a major role. Recent Trends 6. Over the period 1975/76 to 1978/79, growth in real GDP (at factor cost), agricultural value-added and industrial value-added averaged 4.7%, 2.8% and 7.3% per annum, respectively. These trends represent a marginally better growth performance than the long-term trends from 1950/51 to 1975/76. However, GDP is expected to have declined by about 3% in 1979/80 as a result of the drought-induced decrease in agricultural production and input con- straints in other sectors, bringing recent trends back in line with the long- term picture. Industrial production stagnated in 1979/80, largely due to shortfalls in the production of major inputs such as coal, steel and cement, as well as constraints in the provision of infrastructure, notably power and transportation. As a consequence of these developments, the remarkable price stability that characterized the Indian economy after 1975 came to an abrupt end at the close of fiscal year 1978/79. During the spring and summer of 1979 the price index rose sharply, and under the drought conditions, which were then quite serious, prices failed to make the normal downward adjustment over the winter. The result was that the level of prices at the end of the year (1979/80) were almost 20% above the level at the beginning of the year. Foodgrain prices rose over the summer and autumn of 1979 but in most markets still prevailed close to the Government's ration prices. Low income groups in urban areas were assured adequate supplies of grain at stable prices through the public distribution system. The substantial stocks of foodgrains also provided resources for a large-scale drought relief employment program for low income groups in rural areas. 7. In agriculture the positive results of large investments and appro- priate policies over the past few years are becoming increasingly evident and  -3- have withstood the test of a severe drought. Agricultural production, which had increased by 14.5% in 1977/78 and 3.4% in 1978/79 to record levels each year, declined from 131.4 million tons in 1978/79 to 118-120 million tons in 1979/80. Considering that 1979/80 was a year of acute drought, coming after two successive years of record output, the foodgrain production achieved--still the fourth highest in Indian history--provides a measure of the contribution that expanded irrigation, extension and other inputs have made to Indian agriculture. Furthermore, the capacity of India's irrigation potential to counteract drought conditions was not adequately tested because of the diesel fuel shortages which inhibited the utilization of groundwater resources. Rapid growth in the use of basic inputs for agricultural production has continued. Additions to the area under irrigation have almost doubled from 1.3 million hectares a year during the five-year period ending in 1973/74 to about 2.5 million additional hectares a year during the most recent three-year period. Fertilizer consumption in 1979/80 exceeded five million nutrient tons, a level almost 80% higher than in 1975/76. 8. As the new decade begins, the Indian economy is shifting from a situation of resource surplus, which had been a temporary phenomenon of the late 1970s, to one of resource scarcity. Investment has again overtaken domestic savings, and the scope for further increases in the latter appears limited. Marginal savings rates have recently been well above 30% in the household sector. Future increases in savings will depend largely on enhanced profitability of public sector enterprises. Impending resource scarcity is even more apparent in the foreign sector. Between 1975/76 and 1978/79 India's current account deficit had remained comfortably small in relation both to GDP and to a growing pipeline of aid commitments. This was primarily due to favorable terms of trade movements and rapidly growing net invisibles which masked adverse underlying trends in the volume of exports, which has barely grown since 1976/77. Particularly serious is the evident decline in the quantum of manufactured nontraditional exports which had contributed much to the export growth of the first half of the decade. A combination of strong domestic and slack international demand, exacerbated until recently by apparent lessened interest in export promotion, have been the major causal factors. 9. In contrast, imports have grown rapidly in volume terms and there have been important changes in composition. As a result of the accumulation and maintenance of foodgrain stocks, foodgrain imports--which had been a traditional item in the balance of payments--have declined to insignificant levels since 1977/78. Reflecting the impact of the liberalized import policy adopted by the Government, non-foodgrain imports increased sharply, so that their level in 1978/79 was over 80% higher than in 1975/76. In large part, the liberalization in import policy and increase in imports were limited to raw materials, basic commodities and intermediate goods; consumer goods remained banned and capital goods imports were permitted only on a selective basis. Strong new pressures on the balance of payments have developed during 1979/80. The terms of trade again deteriorated markedly as a consequence of unexpectedly large increases in petroleum prices, which caused the oil import bill to double in 1979/80, accounting for more than 80% of the total estimated US$2.5 billion increase in imports, and bringing India's total import bill to about US$11 billion. Petroleum imports as a proportion of total exports now exceed 44%.  -4- Development Prospects 10. The experience of recent years illustrates that India does have the capacity to grow and develop at a more rapid pace. Although the industrial sector is small compared to the size of the economy, it nevertheless has a highly diversified structure 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 there is considerable scope for expansion as well as improvement in the utilization of existing capacity. India is also well-endowed with human resources and with institutional infrastructure for development. Finally, India has an extensive natural resource base in terms of land, water and minerals (primarily coal and ferrous ores, but also gas and oil). With good economic policies and sufficient access to foreign savings, India has the capability for managing these considerable resources to accelerate its long- term growth. 11. The new Indian Government installed in January 1980 is in the process of formulating its policies and programs. A new Plan for the period 1981-86 is being prepared to replace the Draft Five-Year Plan for 1978-83. At this stage it is not possible to comment on the new development strategy; however, it is unlikely that the priorities accorded to agriculture and power will be lessened. Furthermore, developments in India as well as in the world economy during 1979/80 have brought to the surface urgent issues which will need the attention of policy-makers, irrespective of the broader context of development strategy that the new Government may adopt. Among these issues are the following: (a) the bottlenecks in infrastructure and related constraints in production of several basic industrial inputs; (b) the new policy options emerging in agriculture; (c) the need to substitute less costly energy sources for imported petroleum; and (d) the anticipated deterioration of the balance of payments in the near future. 12. The higher capital formation rates of the past few years augur well for future income growth. However, there are signs that, relative to existing demands, the past investment program has led to disproportionally low growth in certain crucial sectors, namely power, coal, transport services, steel and cement. Potential output growth in sectors which have benefitted from large investments in the recent past may not materialize unless these input bottle- necks are alleviated. In the case of coal, steel and cement, domestic produc- tion appears to be clearly justified on grounds of comparative advantage, indi- cating an a priori case for policies to promote greater investment. All these are tradeable commodities. Although in 1979/80 they were not imported in sufficient amounts to eliminate the shortages, increased short-term reliance on imports may be necessary to alleviate slowdowns and dislocation in using industries. In the case of sectors in which there is no option to import-- power and transportation--the planning of capacity expansion becomes even more crucial. Although there is scope for improvement in the shortrun per- formance of these sectors, major investments in balancing and modernization programs as well as new capacity are needed in order to provide adequate and stable growth in the medium term. The presence of infrastructural constraints and shortages of basic industrial inputs demonstrates that the expansion of industrial output leads to competing claims on scarce resources which must be efficiently allocated among different industries.  13. The substantial increase in the world price of petroleum in 1979, together with the expectation that this pattern will not be reversed in the near future, raises several issues concerning energy prospects for India. India imports the equivalent of about 60% of its petroleum consumption. In order to implement its policy of minimizing dependence on foreign oil, the Government intends to rapidly expand its oil exploration program, to increase the utilization of its vast coal reserves and to increase the development of India's considerable hydroelectric potential. However, recent shortages of coal and power are symptomatic of operational problems reflecting, in part, past planning and investment decisions which are inhibiting the timely imple- mentation of India's long-term conversion program. The interdependencies in the economy currently make petroleum demand a residual which is contingent upon the operation of many other sectors and which has significant implications for the balance of payments. 14. In agriculture, despite the 1979 drought, economic policies, devel- opment programs and secular trends all seem favorable for sustaining a period of high growth during the 1980s. India ended the 1979/80 rabi (winter) season with grain stocks of about 15 million tons, without having imported foodgrains during the year. This is partly due to the bumper crop of 1978/79, but also reflects the trends of the last decade which point to a consistent improvement in foodgrain availability in the economy. In view of the acceleration in the use of agricultural inputs and the projected fall in the population growth rate, the long-run prospects for foodgrain supply and demand balances look favorable. Persistent shortage seems unlikely, and it is probable that a wide range of policy options will become much more practical as the overriding emphasis on foodgrains can be somewhat relaxed. These options include a slowly falling real price of foodgrains to increase the affordability of foodgrains to low- income families, further rationalization of domestic markets and prices, and diversification to the production of other higher value crops. This prospect will involve only a gradual shift in emphasis rather than a dramatic break with past policies. 15. Foreign exchange reserves still provide some cushion that can help the Government of India in short-term supply management, but this situation is likely to be short-lived. Rising import prices and uncertainties in the prospects for exports and invisible receipts have led to a serious and rapid deterioration in India's balance of payments prospects. Reserves were only marginally higher in March 1980 than the level of a year earlier and, in terms of import coverage, fell below the 8-month level for the first time since 1977. A sharp increase in the trade deficit is expected to put far greater pressure on the reserve level in 1980/81. At best, India's reserves may provide a cushion for two more years, and even that is conditional on the maintenance of aid flows and workers' remittances and on moderation in oil price increases. 16. India's medium-term development prospects are mixed. Progress has been made and continues to be made, particularly in agriculture, but the economy faces a period of difficult adjustments in the coming years. Invest- ments required to relieve short-term supply constraints must compete with longer-term programs to accelerate growth and to develop India's considerable  -6- physical and human resources. The balancing of these objectives will place a difficult burden on the framers of India's next Five-Year Plan. The primary focus must be on the implementation of appropriate domestic adjustment policies, although the aid community can and should play an important role in ensuring that India's efforts do not fail due to inadequate foreign resources. 17. The annual population growth rate declined from 2.2% in the late 1960s to below 2% at present and is expected to continue falling to around 1.6% by the latter half of the 1980s. Despite the declining trend in the rate of population increase, a net reproduction rate of one (replacement level) will only be achieved around the year 2020. At that time, the population of India is estimated to reach 1.2 billion persons, an increase of about 81% over the mid-1980 level of 663 million. Family planning has played an important role in achieving the fertility decline in the past decade, and the extent of a further decline will be greatly influenced by the continuation of a success- ful official family planning program. The family planning performance data for 1978/79 and the first ten months of 1979/80 clearly indicate a recovery from the sharp decline observed in virtually all major contraceptive methods during 1977/78. Except for male sterilizations, the number of acceptors for all contraceptive methods surpassed the 1974/75 levels in 1978/79. While the increase in the total acceptors of IUD and conventional contraceptives was modest, female sterilizations increased by about 40% between 1977/78 and 1978/79. Data for the first ten months of 1979/80 confirm a secular upward trend in overall performance. So far, policy makers have not made major attempts to accelerate the male sterilization program. Instead, they have opted for policies that would yield relatively modest but sustainable results with increased emphasis on reversible methods. 18. Beyond the effects of overall economic growth and constrained popula- tion growth, the 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. In addition to marginal holdings of physical assets, the poor are ill-endowed with human resources, being disproportionately represented among the illiterate, the malnourished and those having otherwise poor health status. Improvements in the living standards of the poor will depend to a large extent on the over- all growth of the economy, mainly on productivity increases in agriculture and nonfarm rural employment, but also on the expansion of employment oppor- tunities in urban areas. These developments will have to stem largely from market forces which, however, can be greatly facilitated by appropriate gov- ernment policies and investment priorities. There is also a role for direct government actions in faster implementation of land reform (though the scope for significant reduction in poverty through redistribution is quite limited in India), in increasing the supply of credit available to small farmers and rural artisans and finally in broadening the provision of those services which enhance the human capital of the poor and improve living standards. Many of the latter are elements of the Minimum Needs Program which has been an integral part of Indian planning for the past decade. Progress has been slow but steady in the expansion of primary education, the extension of rural health facilities and the provision of secure village water supplies. Recent innovations, including the community health volunteer program and the national  -7- adult literacy campaign, are encouraging evidence that well-targeted, rela- tively low-cost programs can lead to enhanced prospects for India's poor. PART II - BANK GROUP OPERATIONS IN INDIA 19. Since 1949, the Bank Group has made 59 loans and 129 development credits to India totalling US$2,654 million and US$8,402 million (both net of cancellation), respectively. Of these amounts, US$1,092 million had been repaid, and US$3,925 million was still undisbursed as of August 31, 1980. Bank Group disbursements to India in the Bank's current fiscal year through August 31, 1980,, totalled US$131 million, representing an increase of about 51% over the same periDd last year. Annex II contains a summary statement of disbursements as of August 31, 1980, and notes on the execution of ongoing projects. 20. Since 1959, IFC has made 18 commitments in India totalling US$72.6 million, of which US$19.1 million has been repaid, US$7.6 million sold and US$7.5 million cancelled. Of the balance of US$39.4 million, US$29.9 million represents loans and US$8.5 million equity. A summary statement of IFC operations as of September 30, 1980, is also included in Annex II (page 5). 21. In recent years, Bank Group lending has emphasized agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit operations and in providing direct support to major and medium irrigation. Marketing, seed development, agricultural extension, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capacity utilization in industry. The Bank Group has also been active in supporting infrastructure development for power, telecommunications, and railways. Family planning, water supply development, urban investments and the development of oil and natural gas 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, power, water supply and other infrastructure sectors remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs, particularly water and credit for on-farm investments, will continue to receive emphasis. Improved water management and intensification and streamlining of extension systems form an important institution-building aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefit- ting small farmers. The Bank Group's continuing role in the fertilizer sector also assists India in the more efficient provision of another key input in the agricultural growth process. Projects supporting water supply, sewerage, urban development and investments in the petroleum sector also form an inte- gral part of the Bank's lending strategy to India for the next several years.  - 8 - Lending in support of infrastructure and industrial investments will focus on those subsectors which have recently emerged as key constraints on India's overall growth, primarily power and transportation. 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 part to the response of the aid community, India successfully adjusted to the changed world price situation of the mid-1970s. However, there is now a need for increased foreign assistance to adjust to an even greater deterioration in the balance of payments anticipated during the 1980s by augmenting domestic resources and stimulating investment. As in the past, Bank Group assistance for projects in India should aim to include the financ- ing of local expenditures. India imports relatively few capital goods because of the capacity and competitiveness of the domestic capital goods industry. Consequently, the foreign exchange component tends to be small in most proj- ects. This is particularly the case in such high-priority sectors as agricul- ture, irrigation, and water supply. 24. India's poverty and needs are such that, whenever possible, external capital 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 reason- ably be allocated to India remains small in relation to India's needs for external support. India should therefore be eligible for supplemental Bank lending, for which it would be creditworthy. The ratio of India's debt serv- ice to the level of exports was 12% in 1978/79 and is projected to remain below 20% through 1995/96. As of August 31, 1980, outstanding loans to India held by the Bank totaled US$1,338 million, of which US$576 million remained to be disbursed, leaving a net amount outstanding of US$775 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, 1979, India's outstanding and dis- bursed external public debt was US$15.3 billion, of which the Bank Group's share was US$4.6 billion or 30% (IDA's US$4.0 billion and IBRD's US$0.6 bil- lion). Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1978/79, about 17.5% of India's total debt service payments were to the Bank Group. PART III - TAMIL NADU AND MADRAS Tamil Nadu 26. The State of Tamil Nadu is located in southeast 2rn India, facing the Bay of Bengal. Covering an area of nearly 130,000 km , Tamil Nadu had a population estimated at 48 million by late 1979, approximately 7.4% of the total population of India, making it the third most densely populated State in the country. Estimated average annual per capita income in Tamil  - 9 - Nadu in 1977/78 was approximately US$120 equivalent (compared to an all-India mean per capita income of US$135), which placed Tamil Nadu ninth in rank by per capita income among India's States. 27. The economy of Tamil Nadu is characterized by a relatively small agricultural sector, accounting in 1975/76 for about 35% of net State domestic product, and a relatively large manufacturing sector, accounting for about 22% of net State domestic product (relative to this sector's 16% contribution to India's overall GDP). Commerce and services (i.e., trade, storage, banking and insurance) make up the third largest sector, contributing approximately 19% of the State's income. While Tamil Nadu enjoys the highest rice yield per hectare in India, is second only to Punjab in fertilizer consumption, and has exploited three-quarters of its irrigation potential, in recent years there has been little or no growth in real income from agriculture, which has led to stagnating rural incomes. The effects of this stagnation are compounded by significant rural income inequalities. Approximately 50% of the agricultural labor force in Tamil Nadu is landless and 60% of existing landholdings are less than one hectare in size. As a result of these and other factors, 59% of the rural population was estimated to be below the absolute poverty level in 1970/71, compared to an all-India average of 49%. 28. In contrast to agriculture, manufacturing--principally textiles, electrical machinery, and transport equipment--grew at a rate of about 5% per annum in real terms in the 1960s and early 1970s. Similarly, commerce and services grew at an annual real rate of about 2% in the 1960s, although this sector has shown little additional growth in the 1970s. The combined effect of significant rural income inequalities, stagnating rural incomes, and growth in the largely urban-based manufacturing and service sectors has been an increase in Tamil Nadu's urban population, due in large part to migration from rural areas. Tamil Nadu is currently India's most urbanized State, with 32% of its population in urban areas relative to an all-India figure of 21%. Of the State's total urban population, nearly one-third resides in the Madras Metro- politan Area. The Madras Metropolitan Area (MMA) 29. The Economy. The population of the Madras Metropolitan Area, esti- mated at 4.8 million in 1979, grew at an annual rate of 5% between 1961 and 1971 (the date of the last census), making the MMA the most rapidly growing large metropolitan center in India. Forty-two percent of this growth was accounted for by migration from rural areas. Madras, the capital of Tamil Nadu, is the trade and commerce center of southern India and contains the fourth largest port in the country. The MMA is also home to a large number of public and private sector manufacturing enterprises, whose principal products are machinery, transport equipment, rubber and chemical products. The manufac- turing sector accounts for approximately 20% of total employment in the MMA and has generated a substantial increase in employment over the past two decades. It is estimated that in the early 1960s employment in the organized manufac- turing sector 1/ (which accounts for approximately 57% of total manufacturing 1/ Enterprises employing 50 workers or more with power or 100 workers or more without power, or having a capital base of Rs 10 million or more.  - 10 - employment) grew at a rate of 20% per annum, declining to a rate of approxi- mately 4.5% per annum between 1965 and 1975. Employment in the non- manufacturing sector grew at a more modest rate of 2.9% per annum during the 1960s, although the absolute contribution of this sector (which accounts for about 80% of the work force) to incremental employment was 2.5-3 times greater than that of the manufacturing sector. 30. Annual per capita income in the MMA was Rs 855 (approximately US$114 equivalent) in 1970/71--higher than the then Statewide average of Rs 624 (US$83), but considerably less than the per capita income of many other metropolitan areas in India (e.g., Bombay, which had a per capita income of Rs 1,940 in 1970/71). Approximately 56% of the area's total income is derived from the tertiary sector and 39% from the secondary sector. In both tertiary and secondary sectors, small enterprises (less than 10 employees) play an important role. Indeed, small businesses account for about 43% of the jobs in Madras. These jobs are typically filled by relatively unskilled or semi-skilled workers who receive low wages in return for their labor. 1/ Small businesses are, as yet, not well tied into the organized economic sectors, selling approximately 95% of their goods and services to businesses like themselves or to individual consumers. 31. Urban Services. Madras suffers from serious deficiencies in key service sectors, particularly water supply and shelter. Investment in public services has failed to keep pace with the growth in population, estimated at 200,000 persons per annum, and service levels have deteriorated, as demon- strated by the growing proportion of the population living in poorly serviced slum settlements. This problem is compounded by the fact that the city's location and physical characteristics (e.g., flat terrain, distance from major water sources, soil conditions) lead to high service costs for water supply, sewerage, and drainage. 32. The main features of key service sectors in the MMA are as follows. (a) Shelter. The number of households in unplanned hutment areas in Madras was estimated at 200,000 in 1976 (about 25% of the total MMA popula- tion), and was increasing at a rate of about 4.5% per year, 2/ as investment in shelter fell behind the rate of population growth in the metropolitan area. In addition to the households living in these unserviced or poorly serviced hutment areas, about 180,000 low income households live in very poor environ- mental conditions in a number of older sections of the city, where population density rises as high as 1,500/ha. Priority needs in the slum areas are secure tenure, primary infrastructure (water supply, sewerage, drainage, and access), garbage clearance, and health and social welfare services. 1/ The average monthly wage in small-scale enterprises was Rs 177 (US$22) in 1979. 2/ Implying an increase of over 10,000 households (including more than 55,000 people) per year by 1980.  - 11 - (b) Water Supply and Sewerage. The Madras Metropolitan Area has one of the poorest water supply and sewerage systems of any major urban area in India. The incidence of intestinal parasitic diseases and of cholera and typhoid is high, largely due to unsanitary conditions caused by the lack of an adequate, cafe water supply and waste water disposal system. The average reliable yield of water for domestic consumption in Madras is a meager 19 litres per capita per day. Of the 4.8 million people in the MMA, only 2 million (42%) are directly connected to the piped water distribution system, while the remaining 2.8 million depend on public standpipes (serving 1.7 million people at 240 persons/standpipe) and a falling supply of privately- tapped groundwater (serving the remaining 1.1 million residents of the MMA). Sewerage services are equally inadequate in Madras. The existing sewerage system covers about 60% of the area of the MMA, cannot cope with the increas- ing population density even in some areas that are sewered, and suffers from poor maintenance. In response to the critical situation in this sector, the State Government has prepared a water supply and sewerage project which is now being reviewed for inclusion in our program of upcoming lending opera- tions in India. (c) Solid Waste Collection and Disposal. While an estimated 1,000 tons of refuse are collected per day in central Madras (within the jurisdiction of the Madras Corporation), it is estimated that an additional 200-300 tons remain uncollected. Moreover, the existing collection system is operated inefficiently (e.g., underutilization of refuse vehicles, excessive idle time involved in collection and loading of refuse, etc.) and refuse is disposed of without benefit of sanitary landfill methods, thereby foregoing valuable opportunities for land reclamation. (d) Transport. The people of Madras rely heavily on walking, bicycling and buses for transport. Pedestrian and bicycle trips each account for approx- imately 21% of passenger trips and buses for 42% of passenger trips, with the remaining trips provided by trains (11%) and cars and motorcycles (5%). While motor vehicle congestion is not serious in the MMA, inadequate road space for pedestrians and bicycles in some areas has given rise to traffic hazards for non-motorized travellers. Moreover, buses, the main mode of vehicular travel for low income groups, are severely overcrowded on some routes, with up to 140 passengers travelling in buses designed to carry 65 passengers. Finally, while the road system in Madras is relatively well articulated, the expansion of the urbanized area has given rise to a need for construction of several new link roads and has rendered even more important completion of the still incomplete city bypass, or ring road. 33. The Government of Tamil Nadu is well aware of these service deficien- cies and has embarked on an investment program designed to redress existing inadequacies and respond, to the extent possible, to increasing service needs. They have been assisted in this effort by UNDP and WHO, who jointly conducted a study, completed in 1978, which mapped out an immediate action program to initiate improvements in the water supply and sewerage systems, and by IDA, 1/ The average monthly wage in small-scale enterprises was Rs 177 (US$22) in 1979.  - 12 - which is supporting a multi-sectoral urban development program in Madras, initiated in 1977 under the first Madras Urban Development Project (see paras 35-36 below). 34. Urban Administration. The Madras Metropolitan Area is formally governed by the Madras Municipal Corporation, four small municipalities, four townships, and twenty panchayats (local authorities serving predominantly rural areas). However, the Government of Tamil Nadu (GTN) exerts a dominating ing influence on the metropolitan area through its power to enact legislation governing local bodies, through its own sectoral departments and statutory authorities (e.g., the Tamil Nadu Housing Board, the Tamil Nadu Slum Clearance Board, etc.), which share responsibility for service provision in the MMA, and through the Madras Metropolitan Development Authority (MMDA), created in 1972 by GTN to plan future development in the MMA, control land use in the region, and coordinate the work of local and State-level agencies within the metropoli- tan area. MMDA has had a particularly strong and growing influence in the recent development of Madras. Initially oriented largely toward physical plan- ning and land use control, it has moved toward a more comprehensive approach to urban planning, increasing its emphasis on social and economic development and its capacity to perform an investment programming and budgeting function for the MMA. An important element of the first Madras Urban Development Proj- ect, MMDA would continue to fill a key planning, coordination, and monitoring role under the proposed project. Bank Group Activities in the MMA 35. The Bank Group has supported two projects for the direct benefit of the city of Madras--Loan 199-IN (US$14 million; approved April 15, 1958) for development of the Port of Madras and Credit 687-IN (US$24 million; approved March 8, 1977) for the first Madras Urban Development Project. The objectives of and experience with the first Madras Urban Development Project are partic- ularly important as background for discussion of the proposed project. Sched- uled for completion in 1982/83, the first Madras project sought primarily to initiate the implementation of replicable low-cost solutions to Madras' shelter and infrastructure problems and to strengthen investment planning and financial management in the MMA, with particular focus on MMDA and the Madras Corporation. The project supports an investment program which includes the development of three sites and services areas to house 13,500 households, as well as commercial and industrial enterprises; infrastructure and service improvements for 30,000 slum households; priority rehabilitation works for city-wide water supply and sewerage systems; transport improvements, focusing on expanded pedestrian and bicycle facilities,.elimination of bottlenecks in the road network, strengthened traffic engineering, and expansion of the city's bus fleet; and technical assistance to strengthen metropolitan planning and capital budgeting. 36. Implementation experience under the first project has been generally good. The physical and institutional feasibility and social acceptability have been demonstrated for the sites and services and slum improvement programs,  - 13 - which represented new approaches to urban service provision in the MMA. 1/ While delays have taken place in the physical implementation of the sites and services schemes, largely due to land acquisition problems and contract provisions, these problems have now been resolved and project execution has resumed an adequate pace. Similarly, initial institutional hindrances to the granting of title to slum dwellers and sites and services residents have been addressed, clearing the way for settlement of the sites and services areas and provision of secure tenure to thousands of slum dwellers. By March 1980, all legal and administrative procedures had been completed for the settlement of 2,200 households on the first of the developed sites and services areas, and by November 1980, over 800 households had already settled in the areas. The order sanctioning passage of land tenure to residents of improved slums, which was issued by the former State Government, was given final reconfirmation by the newly-elected Government in August 1980. By November 1980, over 2,000 households had concluded lease-cum-sale agreements which will eventually pro- vide them with the legal tenure. Finally, while progress in improving Madras Corporation's accounting and financial management capabilities has been some- what slower than anticipated, the Corporation has appointed a new Chief Accountant and consultants to assist in designing and installing a new accoun- ting system. 37. The experience of the first project has been generally positive and has reinforced the Madras authorities' recognition of the need for rapid expansion of service programs which focus on the needs of the lower income groups and continued reorientation of these programs toward low-cost, replic- able service systems. It is in response to this need that the Government of Tamil Nadu has sought IDA's support for a Second Madras Urban Development Project, to complement and expand on the investment program underway under the first project. PART IV - THE PROJECT 38. The proposed project was appraised by a mission which visited India in October 1979. A subsequent mission in March 1980 updated project cost estimates as well as the project implementation schedule. A report entitled "Staff Appraisal Report for the Second Madras Urban Development Project" (No. 2893-IN, dated November 26, 1980) is being distributed separately to the Executive Directors. Negotiations were held in Washington in November 1980. The Governments of India and Tamil Nadu were represented by a delegation coordinated by Mr. B.S. Lamba, Deputy Secretary, Department of Economic Affairs, Government of India (GOI). Project Description 39. The proposed project would support the continued re-orientation of shelter and infrastructure investments in Madras to make them more responsive 1/ In the past, clearance of slums and relocation of slum dwellers in relatively high-cost tenements together with construction of finished houses affordable only to higher income groups had constituted local -agencies' approach to provision of shelter.  - 14 - to the pressing needs of the city's lower income groups. In support of this objective, the project would not only finance physical investments in shelter and infrastructure, but would supplement these investments with technical assistance to build the capacity of local agencies to plan and execute appro- priate service programs. The project would be carried out over approximately four and a half years (December 1980-July 1985) and would consist of the following five components. (a) Sites and Services (US$18.1 million) 1/ - Two sites covering 180 hectares have been selected for development under the project on the basis of their suitability for residential use, proximity to employment opportunities and off-site infrastructure links, and availability for acquisition at a reasonable price. Approximately 15,000 residential and 200 small industrial plots (100 with on-site sheds) would be developed on these sites, which would be provided with access roads and footpaths, water supply (through individual groundwater systems), sewerage, drainage, street lighting and facilities for individual power connections. A variety of plot sizes and options in terms of on-plot super-structure (from an unenclosed sanitary core only to provision of a two-room house) would be provided to suit the varying needs and repayment capacities of a range of income groups. Basic housing construction loans for lower income beneficiaries, and shed construction and machinery loans for purchasers of industrial plots would be provided under the project. Also schools, community halls, and fully-equipped medical centers would be provided. (b) Slum Improvement (US$22.7 million) - Under the project slum hutment areas inhabited by about 50,000 households would be provided with improved water supply, drainage, sanitation, security/street lighting, roads and foot- paths, refuse collection services, and pre-schools and medical centers. 2/ Off-site arterial and feeder drains would be constructed or repaired to pro- tect low-lying areas against flooding. In order to assist slum residents in making improvements to their own homes, home improvement loans of approximately US$180-420 equivalent would be made available to households with incomes over Rs 250 (US$29) but under Rs 600 (US$71) per month. For households with incomes below this level, which GTN feels could not afford to service such loans, grants of Rs 600 (US$71) would be provided for home improvement. (c) Transport (US$15.0 million) - The project would provide for the procurement of about 550 single-deck buses and spare parts for the Metropolitan Wing of the Pallavan Transport Corporation (PTC) 3/ in order to reduce over- 1/ Figures in parentheses are estimates of the total cost of each component, exclusive of contingencies and design and supervision costs. 2/ Medical centers, as well as home improvement loans and grants, would be provided to the 30,000 slum households in areas improved under the first Madras project as well as areas improved under the proposed project. 3/ The State-owned bus company serving Madras.  - 15 - crowding in city buses and replace over-age buses. As required by the result- ing expansion of PTC's fleet, the project would also finance the construction of one additional bus depot and the procurement of communications and workshop equipment for PTC. Technical assistance would be provided for depot and work- shop cost studies and surveys to continue improvements to operating procedures (see section (e) below). In addition to investments in support of PTC, the project would address transport needs in the MMA through: (i) the construction of an addi- tional 6 km of the Inner Ring Road, which would link the sites and services areas developed under the project with those included in the first Madras project and with important employment centers; and (ii) improvements (e.g., road widening, provision of cycle tracks) to 14 km of the Madras-Tiruvellore Road, another major access way from the sites and services areas to employment centers. (d) Solid Waste Management and Infrastructure Maintenance (US$2.7 mil- lion) - Vehicles and equipment (e.g., handcarts, collection bins, etc.) for waste collection and disposal, a vehicle depot, and a refuse transfer station would be provided to enable the Madras Municipal Corporation to extend its refuse collection and disposal services, particularly to areas occupied by low-income households, now typically under-served. With the assistance of consultancy services provided under the project (see section (e) below), the Madras Municipal Corporation would gather better information on refuse gene- ration and collection and test a number of collection and disposal systems during the project period, to establish a basis for making long-run plans for solid waste management. The Corporation, again with the assistance of consul- tants, would also identify deficiencies in its systems for maintenance of basic infrastructure (especially secondary roads, footpaths, street lighting, and public conveniences) and take initial remedial steps during the project period. These remedial actions (for which US$1.2 million equivalent has been budgeted) are expected to include equipment procurement and minor civil works (e.g., depot construction), and will be carried out only after agreement has been reached between IDA, GTN, and the Corporation (Section 2.07, Project Agreement). (e) Technical Assistance and Training (US$1.1 million) - In order to facilitate improved development planning and investment programming in the MMA, the project would provide technical assistance to MMDA to: (i) continue the work program begun under the first project for the preparation of economic, social and spatial development plans; (ii) assist MMDA in a study of present and future employment and manpower training needs for the MMA; (iii) assist MMDA in analyzing the economic, financial, and technical feasibility of pro- posed major investment projects; (iv) design and install a planning and deve- lopment information system; and (v) train MMDA's staff in the organization and management of urban systems. In addition, in order to insure that MMDA has adequate resources to continue and expand the community development work it has undertaken in slum and sites and services areas, the project would support the establishment within MMDA of a unit to operate a Small Entrepreneurs Identifi- cation Program, which would assist small entrepreneurs in obtaining loans from State and commercial banks. As mentioned above, the Madras Municipal Corpor- ation would be provided with technical assistance to: (i) facilitate the  - 16 - gathering of data on solid waste generation, collection and disposal and the evaluation of alternative solid waste management systems; and (ii) identify potential organizational and operational improvements to the Corporation's infrastructure maintenance systems. Finally, the project would provide tech- nical assistance to PTC for cost studies and surveys of operational procedures (see (c) above) and to the Small Industries Development Corporation (SIDCO), to enhance its capacity to promote small business development on the commer- cial/industrial plots in the sites and services areas. Project Implementation 40. Project implementation would be coordinated and monitored by MMDA, which has demonstrated its capacity for management, monitoring and evaluation and progress reporting under the first Madras project. Primary responsibility for the individual project components would be assumed by the following agencies: (a) Sites and Services Tamil Nadu Housing Board (TNHB) Small Industries Development Corporation (SIDCO); 1/ (b) Slum Improvement Tamil Nadu Slum Clearance Board (TNSCB); (c) Transport Buses -- Pallavan Transport Corporation (PTC) Road Improvements -- Department of Highways and Rural Works (DHRW); (d) Solid Waste Management Madras Municipal Corporation (MMC); and and Infrastructure Maintenance (e) Technical Assistance MMDA, MMC, PTC, SIDCO. and Training In addition, in sites and services and slum improvement areas, the Departments of Education, Health and Social Welfare and, in some cases, voluntary agencies would operate completed schools and health centers, and existing service agencies, such as the Tamil Nadu Electricity Board and the Madras Metropolitan Water Supply and Sewerage Board, would be drawn in to operate newly installed infrastructure. These agencies have the necessary capability to carry out their obligations under the proposed project. Project Costs and Financing 41. The total cost of the project is estimated at US$87.9 million, of which US$13.5 million, or about 15% of total project cost, represents foreign exchange costs. Physical contingencies of 10% have been applied to civil works 1/ Management of sale of industrial sites and sheds and associated machinery and shed loans only.  - 17 - for road construction and improvement and for the sites and services areas, and of 15% to slum improvement civil works. Price contingencies have been applied for the period 1980/81-84/85 to all items except land already publicly owned or subject to imminent acquisition at rates of 11%, 7.7%, 7.7%, 7.7% and 5.5% per year, respectively, for items of local procurement and 10.5%, 9%, 8%, 7% and 7% per year, respectively, for items subject to foreign procurement. Technical assistance costs (including consultants' salaries, overhead, profit, travel, and subsistence) have been estimated at US$7,000 per man-month for foreign consultants and approximately US$1,000 equivalent per man-month for locally procured services. 42. The proposed credit of US$42 million would finance 50% of project cost net of taxes and duties, which are estimated at US$3.9 million equivalent, and would cover all foreign exchange costs. The Government of India would make the proceeds of the credit available to GTN on the standard terms and conditions for State development projects. GTN would ir turn provide funds equivalent to the proceeds of the credit, together with the balance of project costs, to the implementing agencies on the terms and conditions indicated below. Financing Plan (US$ million) Primary Implementing Grants and Direct Total Component Agency(ies) Expenditures Loans Cost Sites and Services TNHB 22.6 - 22.6 SIDCO - 5.7 /a 5.7 Slum Improvement TNSCB 33.1 - 33.1 Transport: Buses PTC - 15.0 /b 15.0 Roads DHRW 6.3 - 6.3 Solid Waste Management & Infrastructure Maintenance MMC 1.8 1.9 /c 3.7 Technical Assistance MMDA, MMC, 1.5 - 1.5 SIDCO, PTC Total 65.3 22.6 87.9 /a At 8.5% per year over 10 years. /b At 10.5% per year over 15 years for bus chassis and 12.5% per year over 15 years for other capital investments. Ic At 11% per year over 20 years with 3 years' grace. These terms and conditions are consistent with prevailing practice. As under the first project, GTN would provide funds for sites and services and slum improvement schemes on a grant basis to TNHB and TNSCB, who would deposit all revenues collected under these schemes in revolving funds to finance future sites and services and slum improvement efforts. Charges would be made of beneficiaries under the various components on the terms and conditions out- lined in paras 44-50 below.  - 18 Cost Recovery 43. Strong emphasis has been placed on cost recovery under the proposed project, in order to ensure the long-term replicability of the service programs supported so that these programs can be expanded to respond to the growing service needs of the population of Madras. Cost recovery measures to be taken under the four direct service components are outlined below. The terms and conditions for onlending to beneficiaries for shelter, shed construction and machinery loans are consistent with market rates and are expected to be positive in real terms. They should be evaluated against a background of almost total price stability in India over the period 1974/75-1978/79. Although 1979/80 saw an upsurge in inflation to an annual rate of approxi- mately 16.7%, the rate of inflation over the project period is expected to fall to an average of 7%. 44. Sites and Services. The full costs of land, on-site infrastruc- ture, plot development, and construction and machinery loans under the sites and services component (66% of total component cost) would be recovered through plot sales and loan repayments. While residential plots for the lowest income groups would be priced below the equivalent of total chargeable costs, the sale at market prices of plots designated for middle and higher income groups and for commercial and industrial uses would offset the subsidy to the poorest beneficiaries. Plot sales and improvement loans would be made on terms and conditions acceptable to IDA (Section 3.04, Project Agreement), which would include: (i) for residential and commercial plots, payment by beneficiaries of a minimum 10% downpayment on the price of the plot, with the balance of the plot charge plus the improvement loan (for eligible bene- ficiaries) paid at 12% per annum interest over 15 years; (ii) for industrial plots and sheds to be managed by SIDCO and shed construction loans, payment by beneficiaries of a minimum 20% downpayment on developed sites with the balance paid over eight years at 11% per annum interest with two years' grace; and (iii) for machinery loans, payment by beneficiaries of a minimum 20% downpayment, with the balance repaid over seven years at 11% per annum in- terest with one year's grace. In addition, all beneficiaries would be charged Rs 3 (US$0.36 equivalent) per month for maintenance. Settler selection criteria to be agreed with IDA (Section 3.04, Project Agreement) would ensure that various plot size and design alternatives would be reserved for desig- nated income groups. All revenues from plot sales (minus a 2.5% deduc- tion on industrial sites to cover SIDCO's administrative cost) would be deposited in the Sites and Services Revolving Fund established under the first project to support future low-cost shelter investments (Section 3.06(i), Project Agreement). 45. The remainder of component cost is accounted for by off-site infrastructure (28%) and community facilities (6%). The cost of off-site infrastructure would be partially recovered through electricity, water, and sewerage taxes and charges, while the cost of community facilities would be largely unrecovered, with the exception of some school sites which would be sold to private agencies for construction and operation of schools. In recognition of the high overall level of cost recovery in this component, and thus the replicability of the program, and the responsiveness of these invest- ments to the needs of low income groups typically not served through public shelter investments in the past, GTN would, commencing April 1, 1982, limit  - 19 _ its annual investment in housing other than for economically weaker sections to 55% of its total investment, and, would agree with IDA on the physical standards of its housing for economically weaker sections (Section 3.02, Project Agreement). These agreements would represent a significant shift in TNHB's investment profile since the start of the first IDA-supported urban project in Madras, wien virtually none of TNHB's investments in the Madras area went into shelter affordable by the lowest income groups. 46. Slum Improvement. Approximately 72% of the total cost of the component represents directly chargeable costs (i.e., land, on-site infra- structure, and funds for home improvement). Seventy-six percent of these directly chargeable costs would be recovered through improvement charges and loan repayments under the project (which would be made on terms and conditions satisfactory to IDA; Section 3.05(ii), Project Agreement), and channelled back into the Slum Improvement Revolving Fund set up under the first project (Section 3.06(ii), Project Agreement). Beneficiaries of the slum improvement program would be assessed a monthly charge for land and improvements of Rs 13.6 (US$1.62 equivalent) for a period of 15 years with no downpayment required. This charge is calculated by amortizing 75% of average per household land and improvement cost at 12% interest over 15 years and adding a monthly maintenance charge of Rs 2. These payments would be made under lease-cum-sale agreements which would entitle the beneficiary to full tenure to the improved plot on conclusion of the 15-year period or on pre- payment of the full land and improvement charge (Section 3.05(i), Project Agreement). Home improvement loans to eligible beneficiaries would be fully recovered at 12% interest over 15 years. Home improvement grants to families with incomes below Rs 200/month would, of course, not be recovered. 47. The remainder of component cost is accounted for by off-site infrastructure (21%) and community facilities (7%). As in the sites and services program, off-site infrastructure costs would be partially recovered from electricity, water, and sewerage taxes and charges. The costs of com- munity facilities in slum areas, however, would not be recovered. 48. In addition to improving direct cost recovery for the IDA-supported slum improvement program, GTN intends to improve TNSCB's overall cost recovery by reducing the proportion of this agency's investments in its highly subsi- dized slum clearance/tenement program. TNSCB's tenement program was phased down to an annual level of Rs 37.5 million (US$4.5 million) under the first IDA-supported urban development project in Madras, and this limit on expendi- tures would be continued under the proposed project (Section 3.03, Project Agreement). The amount of Rs 37.5 million would comprise a decreasing propor- tion of the State's investment and, as a result of price increases, produce a decreasing number of tenemants. 49. Transport. On November 1, 1980, the Government of Tamil Nadu implemented, an increase of 30% in the average fare per passenger kilometer charged by PTC in the MMA. With this increase, bus fares would fully recover all costs of bus services, including depreciation and debt service. In addition, in order to ensure that PTC continues to maintain a sound financial  - 20 - and operational profile, PTC would maintain a minimum current ratio 1/ of 1.5, a maximum operating ratio 2/ of 0.95, and a minimum debt service coverage 3/ of 1.5 (Section 3.09, Project Agreement). No special cost recovery provisions would be introduced for the road construction and improvement program, as expenditures on road construction and maintenance in the MMA are already exceeded by revenues derived from fuel taxes, excise duties and taxes on tires and other charges imposed on road users. 50. Solid Waste Management and Infrastructure Maintenance. The Madras Municipal Corporation currently funds these activities out of general revenues. While no specific charges for these services would be introduced under the project, particular attention would be paid to improving the financial condi- tion of the Corporation. To this end, GTN has already taken the following steps: (i) appointment of a qualified individual to the post of Municipal Chief Accountant; (ii) appointment of consultants to design, install, and train staff for a double entry cash or accrual accounting system; and (iii) preparation of proposals for increasing the Corporation's revenues, including improvement in collection of property taxes, the major source of self-generated revenue for the Corporation. GTN would cause the Corporation to increase its revenues by at least 8% per year (Section 3.10(i), Project Agreement). In addition, the Corporation would ensure that its debt service payments do not exceed 20% of its self-generated revenues for any year up through and including 1985/86 (Section 3.10(ii), Project Agreement). Procurement and Disbursement 51. Contracts for civil works, with a total value of US$42.7 million equivalent, 4/ would be individually small and scattered. About 200 indivi- dual contracts, the bulk of which would be approximately US$200,000 in value, would be let over the four-and-a-half year project period. Although civil works contracts in the same area would be combined as far as possible, these contracts would be unlikely to attract foreign bidders and would thus be awarded on the basis of local competitive bidding under procedures acceptable to IDA. 52. Bus chassis and spare parts (estimated total value US$8.5 million) and equipment for solid waste management--with the exception of hand carts and refuse bins--(US$1.1 million) would be procured on the basis of interna- tional competitive bidding in accordance with IDA's procurement guidelines. Domestic bidders competing under international bidding would be allowed a preference margin equal to 15% of the c.i.f. bid price or the current applic- able customs duty, whichever is lower. Handcarts and refuse bins (US$0.5 million) would be procured on the basis of local competitive bidding in 1/ Current assets/current liabilities. 2/ Operating costs/operating revenues. 3/ Net revenue/total debt service. 4/ All costs in this section are cited net of taxes but inclusive of contingencies.  - 21 - accordance with procedures satisfactory to,IDA. Additional equipment to be purchased under the project (US$1.4 million) would largely involve small contracts under US$50,000 in value for equipment normally procured without competitive bidding, by reason of its specialized nature or required standard- ization. Such equipment would be purchased through normal commercial channels after obtaining, wherever possible, quotations from at least three suppliers. However, infrastructure maintenance equipment to be purchased by the Corpora- tion (to be selected on the basis of consultants' advice and in consultation with IDA; see para 39(d) above) would be purchased on the basis of local competitive bidding where contracts would exceed US$50,000 in size and the supply network permits competitive bidding. Finally, bus bodies (US$4.2 million) would be built in PTC's own workshop, which has demonstrated its competitiveness with private manufacturers in both price and quality. Mate- rials to be used in bus body construction (US$2.2 million) would be procured by PTC on the basis of local competitive bidding following procedures satis- factory to IDA. 53. The proceeds of the credit would be disbursed against: (i) 55% of expenditures for civil works and for equipment and materials procured through local competitive bidding or prudent shopping; (ii) 100% of foreign expendi- tures or 100% of local ex-factory costs for equipment procured on the basis of international competitive bidding; (iii) 100% of expenditures on technical assistance and training; and (iv) 40% of expenditures for shelter, home improvement, and small business loans. Disbursements against civil works payments not exceeding Rs 300,000, equipment and materials payments not exceeding Rs 150,000, and expenditures on loans to eligible beneficiaries would be made on the basis of statements of expenditure. Disbursements against all other expenditures would be fully documented. Benefits and Risks 54. The principal benefits of the proposed project would be to redirect a growing proportion of public investment in shelter and infrastructure in the MMA toward low-cost, replicable programs which would benefit low-income groups, to expand the capacity of local institutions to plan and execute appropriate public service programs, and to extend the concept of full cost recovery, introduced under the first project, by supporting even more afford- able design solutions for low-income households. The average rate of return on investments, the benefits of which are quantifiable (representing 74% of total project cost) is estimated at 22%. The sites and services component would provide shelter, infrastructure, and community services for about 15,000 families (approximately 83,000 people), of which 11,100 (61,000 people) fall between the 10th and the 47th percentiles on the MMA's income distribution curve. The average cost per household served of the plots and services pro- vided is estimated at US$1,900. In addition, the industrial sites developed are expected to serve about 200 new or expanding businesses supporting at least 4,000 jobs. The slum improvement component would provide land tenure and basic infrastructure and services to approximately 50,000 slum households, most of which have incomes below the urban poverty threshold, at an average cost per household of US$570. Health facilities would also be provided to 30,000 households included in the slum improvement program supported by the first project. Taken together, 63% of the cost of these two components would directly benefit households below the absolute poverty level. These households  - 22 - are 77% of the combined beneficiaries of the two shelter components. The economic rate of return of the sites and services component is estimated at 28%, while that of the slum improvement component is estimated at 13%. 55. The PTC investment program would reduce the extreme overcrowding on city buses and provide buses to extend services into the new sites and services areas developed under both the first and proposed second Madras urban projects. The economic rate of return of this program, taking the incremental revenue accruing to PTC as a proxy for the minimum level of benefits, is estimated to be about 33%. It should be noted that this estimate does not take into account the benefits which would accrue due to reduced passenger waiting time or reduced wear and tear from overcrowding on PTC buses. The road construction and improvement program would stress the provision of adequate and safe facilities for pedestrians, cyclists and bus passengers and would ensure that newly developed sites and services areas are well- connected to employment centers. The economic rate of return for the extension of the Inner Ring Road is estimated at 13%. 56. Finally, the solid waste management and infrastructure maintenance program would extend refuse collection coverage and raise the efficiency of other municipal services in low income areas which currently do not benefit adequately from these services, thereby considerably reducing public health hazards. It is expected that the investments supported by this program will permit the collection of an additional 200 tons/day of solid waste and signi- ficantly improve services to, among others, the 80,000 households in slum areas improved or to be improved under the two Bank Group-supported urban projects in Madras. Furthermore, the program would support the testing of alternative methods of solid waste collection and disposal to assist the Madras Municipal Corporation in identifying long-term cost-effective strate- gies for dealing with the growing solid waste management task. 57. The experience already gained by IDA and the implementing agencies under the first project should act to minimize the risks under the proposed project. There are, nevertheless, two potential risks. First, there is the possibility that the increase in the construction programs for which TNHB and TNSCB are responsible, might stretch the capacity of these agencies. In the case of TNHB, however, the proposed sites and services component represents an increase of only about 15% over the level reached in the first project. Moreover, steps have already been taken to streamline TNHB's procedures in light of the experience of the first project and annual staffing requirements for the proposed project have been carefully reviewed with TNHB, which has assured, to IDA's satisfaction, that adequate staff will be available. In the case of TNSCB, an increase of 70% in the total slum improvement program is anticipated over the course of the proposed project. However, the reduc- tion in TNSCB's slum clearance/tenement construction program (see para 48 above) would free a sizeable contingent of staff for the slum improvement program, and if need be the Madras Municipal Corporation is willing and able to supplement TNSCB's capacity. A careful review of TNSCB's overall staff resources and past performance has been conducted and used as a basis for a realistic project implementation schedule.  - 23 - 58. The second potential risk involves the conclusion of lease-cum-sale agreements and collection of payments from beneficiaries in the sites and services and slum improvement schemes. With still limited experience under the first project, all procedural problems involving the granting of title and collection of payments may not have been identified. However, by November 1980 lease-cum-sale agreements had been concluded with over 2,000 slum resi- dents and 2,200 sites and services beneficiaries. The experience so far is encouraging. Moreover, the proposed charges to various income groups fall well within the applicable limits of affordability and the assurance of title to sites and services and slum plots is expected to provide ample incentive for payment to beneficiaries, who typically have been living with the extreme insecurity that comes of unauthorized settlement on public and private lands. PART V - LEGAL INSTRUMENTS AND AUTHORITY 59. The draft Development Credit Agreement between India and the Asso- ciation, the draft Project Agreement between the Association and the State of Tamil Nadu, and the Recommendations of the Committee provided for in Article V, Section 1(d) of the Articles of Association are being distributed to the Executive Directors separately. 60. Special conditions of the Project are listed in Section III of Annex III. 61. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 62. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President November 25, 1980   ANNEX I Page 1 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AV7AGES LANE) AREA (THOUSAND SQ. KM.) MOST RECENT ESTIMATE TOTAL 3287.6 AGRICULTURAL 1824.0 MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b ASIA 4 PACIFIC ASIA 6 PACIFIC tNP PER CAPITA (I_) 60.0 90.0 180.0 197.9 894.8 ENERGY CONSUMPTION PER CAPITA 'KIIOGRAMS OF COAL EQUIVALENT) 108.0/c 141.0/c 176.O/c 166.0 842.4 POPULATION AND VirAL STATISTICS POPULATION, MlID-YEAR (MILLIONS) 434.9 547.6 643.9 lRBAN POPULATION (PERCENT OF TOTAL) 17.9 19.7 21.7 20.8 39.1 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 974. l STATUONARY POPULATION (MILLIONS) 1645.0 YFAR STATIONARY POPLLATION IS REACHED 2150 POPULATION DENSITY PER SQ. RM4. 132.0 167.0 196.0 193.2 376.1 PER SQ. KM. ACRICULTURAL LAND 247.0 308.0 353.0 409.6 2350.4 POPTLUATION AGE STRUCTURE (PERCENT) 0-!4 YRS. 40.0 42.5 41.4 42.0 40.4 15-64 YRS. 56.5 54.6 55.6 55.0 56.2 65 YR5. ASD ABOVE 3.5 2.9 3.0 3.0 3.4 POPULATION CROWTH RATE (PERCENT) TOTAL 1.9 2.5 2.0 2.2 2.4 [TRBAN 2.5/d 3.3 3.3 3,9 4.1 CRIJDE BINTH RATE (PER TROUSAND) 43.0 40.0 35.0 37.4 28.7 CRUDF DEATH RATE (PER THOUSAND) 21.0 17.0 14.0 14.6 7.9 CR0ss REPRODUCTION RATE 3.2 2.9 2.4 2.6 1.9 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) 64.0 3782.0 4714.0 USERS (PERCENT OF MARRIED WOMEN) .. 12.0 16.9 15.6 39.0 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71=100) 98.0 102.0 103.0 101.4 116.9 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 93.0 92.0 91.0 92.4 108.9 PROTEINS (GRAMS PER DAY) 52.0 51.0 50.0 49.8 60.3 OF WHICH ANIMAL AND PULSE 17.0 15.0 13.0 12.0 18.8 CHILD (AC-ES 1-4) MORTALITY RATE 28.0 22.0 18.0 17.9 5.3 HEALTH LIPFE EXPECTANCY Ar BNITH (YEARS) 43.0 48.0 51.0 50.8 63.0 INFANT MORTALITY RATE (PER THOUSAND) .. 134.0 .. .. 52.8 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 17.0 33.0 30.2 42.4 URBAN .. 60.0 83.0 66.0 62.1 RURAL .. 6.0 20.0 20.0 29.7 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAI .. 18.0 20.0 17.7 52.8 URBAN .. 85.0 87.0 71.3 71.1 RURAL .. 1.0 2.0 *- 42.4 POPULATION PER PHYSICIAN 5800.0/e 4890.0 3617.0 6322.7 4120.1 POPULATION PER NURSING PERSON 9630.0/e 5220.0 5675.0 9459.0 2213.6 POPE'LATION PER HOSPITAL BED TOTAL 2149.0/f 1629.0 1289.0 1758.4 819.4 URBAN .. .. .. 502.9 RURAL .. .. .. 10524.1 ADMISSIONS PER HnSPITAL BED .. .. .. .. 28.8 HOUSINC AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 URBAN 5.2 .. 4.8 RURAL. 5.2 .. 5.3 AV'ERAGF SUM8ER OF PERSONS PER ROOM TOTASI 2.6 2.8 lIRBAN .. .. RIR41. .. .. ArCCSS TO ELECTRICITY (PERCENT OF DWEILNCS) TOTAL .. .. URBAN .. .. RITRAI .. ..  ANNEX I Page 2 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVE CES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 72.0 80.0 80.9 98.6 MALE 80.0 87.0 95.0 94.3 99.2 FEMALE 40.0 55.0 64.0 66.7 97.7 SECONDARY; TOTAL 20.0 29.0 28.0 26.6 55.5 MALE 30.0 39.0 38.0 34.8 60.7 FEMALE 10.0 17.0 18.0 18.2 49.9 VOCATIONAL ENROL. (I OF SECONDARY) 8.0 6.0/R . 9.9 13.7 PUPIL-TEACHER RATIO PRIMARY 29.0 40.0 42.0 41.1 34.6 SECONDARY 16.0 17.0 .. 20.5 28.5 ADULT LITERACY RATE (PERCENT) 28.0 33.0 36.0 40.9 85.8 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.7 1.0 1.3 1.8 9.0 RADIO RECEIVERS PER THOUSAND POPULATION 5.0 21.0 24.0 25.8 118.9 TV RECEIVERS PER THOUSAND POPULATION *- 0.1 0.5 2.4 39.4 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 16.0 16.0 13.4 CINEM4A ANNUAL ATTENDANCE PER CAPITA 4.0 6.3 3.8 .. 4.9 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 189761.4 220670.5 252235.8 FEMALE (PERCENT) 31.3 32.6 32.0 29.4 36.8 AGRICULTURE (PERCENT) 74.0 74.0 74.0 70.5 51.9 INDUSTRY (PERCENT) 11.0 11.0 11.0 11.6 21.9 PARTICIPATION RATE (PERCENT) TOTAL 43.0 40.2 39.2 37.9 39.1 MALE 57.1 52.3 51.3 51.3 48.5 FEMALE 27.9 27.1 26.2 23.7 29.6 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.1 1.2 1.1 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 26.7 26.3h . HIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 48.9/h LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 6.7i h LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 17.2/h POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. 88.0 107.8 RURAL .. .. 76.0 86.5 192.1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. RURAL .. .. .. .. 182.5 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 40.7 46.2 RURAL .. .. 47.9 51.7 33.2 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. lb 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 1978. LA Solid fuel conversion factors revised, /d 1951-60; /e 1962; /f 1958; /g 1967; /h 1964-65. April, 1980  ANNEX I DFNTOSOF SOCIAL INDICATORS Page 3 of 5 5~os" Aths-ogcr-at err dc-a free souce generall :dgrd the noeatot-vndrlale tsold also he -totd that they say et be inter.- -olol oparo- -rcosef ottI loo of su-da-di-ed definlit-e aod c..erepte usd by difeseo fsIn teifecting the data. The data r. tree cceli-.-cdd oooeecdeso eqlot,ldletet tred,, aod ehar-ter-a- -tsat, maJor differt-oss bet-eutou..trie.. orc. rtrrcoor ecp r 'Cap1-ItalloeI_y Oi toyortca oo he Middle Iucern North Afri-a aed Middl E., east" I .cheost .a.aa. of etresgee u --cc -cuyua atiditles). To the ref--eo getup daoa thea agsaePeplaIttot neighted arsmee eesfo ah tidiratte aed shoe sly abet at onato old oitAr cotetes o a ~sup hoedata frthat CeleToL.bimo th ..evg oetttsoeg the diotto- dpseds at the avalahilisy of of t- tudoe-r o ai slo a..eeg the . u.... tey d efenegreaps. LAND tREd (cheuad qolOeouatctm RerlHh2scla- rcoottyeI etytud Otose ofpotloleg pep- -.loolsrfar re oeirttf ostonoan bltdtuor.tiiu. oad dc cy- edse chd laso-orn o sel Ai,tcLfuAi - REsiae. teeoLsoralt area used respoolfiy or 1 pemeeety, fueolatoov ye! N-vi o d oualei, tc.. byem rofpatig d of,posturesZsarhe -ud kiltehet garden or. ty lie yalee; 1907 data, sale -O ftalt geodoorohss pe-ctitol torte, andasitne sa H..ltooer .eyie led - ,-a yr- ara l F-1 yPTILai0 (Ltota, drNP PER dcIiA (LM0$ - GNfPye racis euiae t curren e-kee peters, eat- eel rtall dteided by ehete enspeeti nashbr f hosp ital beds relatd by - Acn -ohecenetd u lurId lath AsIan (th9r-i haste); 1960, aesihlebl it phlit cod polv-se geosoi o-d nysialtee hespitatad s,- lid sod '773 dote. ~hohilinatioore-t-o. Hospitl- r 1sibiha..o pema tlystffe th'Ftd .fodojyAiPERf CA01T - bic-ee ...moe f omrylsery(ol byo oe r physicIan_E tatobishm..nts yovidis1 pnlmeipally costdia1 _TA --p,J.. f-Lgy I I~~roe ae co hrlded. uEl hopitals, h-se,,, ebe eathsd sedlia1 -eduoc'r or Ien cra a a-d h,ydro-, -ucs- o-d ge-rhero els- cenor ens persanresly staffed by a physIian (bu by a medis1.. eaiestt rilc-cc In kl1ogeass of to- e.qo_l-eo Penc else; t96I, 1900,..ad 1909 -n-s, nidafo, er.) hbteh offe te-rutee.- rontaeead peostle loe liaised rsnge ofnedloa1 fertisies.. For ntssisieal psepesse neba hospi- rif:Lifdht AbC 111,01 ATAOTSTICI tab~~W i-clode Wills Pe_irhegesal eel. I.. np-ielold hospitats, eel tars POP,L&T,ON A]ND VITAL STATISTICS '~~tsysols oo or r-ra I-bootols ud erdiroI end aterotty tnet A1dlIily2idsyAid.Y-Atr(t_itiona) - Au of July 1; 1960, 119?b, end 1978 Adlaes e e ,tlld- Ter tote o:. fadeisaites to or disehargss deco,tru h-tyLtIs dflided by itho ethe 07 bela. AsffoecdelA ico futeoeotoaflert -epu-chlly of date HOUSINGo --yyui- s; 29th. 197, end 19)8 lecsA-. Ovre Sitee f t ...t.shod 2-n-n per houshold) - ot.t1, urba.. sd total- y~~yAoolvrlr3jtcc1euu ~~~~~~A tesa..bold e...ilat of a ge-up u individuals she share living q"aIte"n Ocaa nin yea 2011 -C ret population pr.e)oslnnae.baero I IMO anCd their esin seal. A b-d- -e lodge ma_y orma so he included is b,o o fush age ted oo nod their motlthadf.ittrtn the .o.shold fee stutistic-1 oc-eunes o ..le .e.et-tcy at bIrch ~ Ih loss... i cutry's yFe tayite Iet.se heA, prse pe_os l o,ad rure _cepie tvesta boi, ocd foesl d.Ie .epo..oocy aailAnieg us 77.5 years . The pore- -sliu, eycsel.fel a elde c-emnomercun n ocr irriclis taee alto tout t~~hreeI . 1eel -eesing de-lie to s..ctupied p-v.. "c-it10 u-odoe occo Inr u ps ly PIle..nleg P-eforsayrt -.. cesto EI-titftlt P ...ce of dulos ua, tuba..ted renal - tor -h -~r~ Is hyssgo n ot r.heu -vboeisatic- of nertolity Cnuve-ti-al deeIlioga_ cfth e v.;lecriity Is living qaLtnera percetage be boct.o cots is quod so i d-cth otto, end als thtRagssEDUer- CATIOyNs easoeors- ec thI In tei Ld_lpatrfrility Lese deeline 00 AdjsEd eolnesIt cRtios ito -oplocoe-t le-e of onIC 5ct r-prdotoin rate, thesctgnrlin O oesbol-oa, sate yued inoe-lostnl -aead female sOot5 tepar herb os-tly. The. taoso ouatinl Ie e .trlee c-- C11- eli ugen t ospiay ee speesa f reesv he tho rear lolA, and rho rato of dribe of f-rilloty este to replace- yearn bot od-dated for diftferntlngb o_~ f pioydeai e F_ et Th.rc-. h-uttio..lypu...eibb.l -eiv-e-1 edacotoeei- olln - nyesesd l.Id prcet hiro b -chr settld. ISeodtdy -ehycti- totolb tredfml Compared as shoe; stendesy TrAkn.- lid-yea rorolas-e yet aquat hilo--e 11D0 h-osars of proide geera, ctatlal. orte.. e teanie pnasestyin.ts ot e urlolsradice - erptedus byn fe orteuiutl undunsiloef12 te 17 years of age; o--ponde..te osra e ge..erally eely. ut-tico . or.. e I(rennet oi neceedary) - V.o.teiona.l isetirutsion fesute OeOtutoe(prE,r - Chiltlee (0-l4 years. soltogeg i incod tehnical tedata, oroher pregnams hieb opore.imtdepen- blnoo,uoI eIted (61 -rtr ad o-e) te p-ente.gee~ iiod-year pops- denl sa oprmna fsnneytsioise dative; 1760, 1370, and 1979 davo. forsi-res.h. cate ...rsa .. an secon,daty- Tra ntsdsIta esr-1id is OAO_A-.i.o. . thyAOLOr R rnerot>- - ... - Oo-,e aro-el -so- ef in-l id- yeimay eel scondaylvs dividedlyebesoftetbr in he soar -epclor'ous foe 1951-61, 161-70, end 1970-7f, ecerenpoedioglcno Piooo1--y io--t Ous ileeco-t - urben- Avota.t g-eth eaten of chen fop- Adolt lIteacyL ste (p--ees) - Literate sd1ts (able en teed ted arise> lances 1 te I yA-RI, 1060-70, end 1971_. usp-roetag of ctetl ado1t poyslatto_agd 10 years and ove. t.. IisO ..(lfA.t lone ifet ) - A--1u live bIrths per Lbh...a.d et id-yeur iy.drtic; 1960, 1970, and 1978 data. CONSUMTIONtl (osd