India - Second Bombay High Offshore Development Project

Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Rqpt No. P-2905-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR THE SECOND BOMBAY HIGH OFFSHORE DEVELOPMENT PROJECT November 18, 1980 This document is a restricted distribution and may be used by recipients only in the performdance of their official duties. Its contents may not otherwise be disclosed without Weld Dank authorlutlon.  CURRENCY EQUIVALENTS (as of November 13, 1980) US$1.00 = Rs 7.728968 Rs 1.00 = US$0.1294 Rs 1,000,000 US$129,383 (Conversions 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 BHS - Bombay High South BOP - Bombay Offshore Project DCF - Discounted Cash Flow EIL - Engineers India Limited GOI - Government of India IOC - Indian Oil Corporation LPG - Liquified Petroleum Gas Nm - Normal cubic meters OIDB - Oil Industry Development Board OIL - Oil India Limited ONGC - Oil and Natural Gas Commission  FOR OFFICIAL USE ONLY INDIA SECOND BOMBAY HIGH OFFSHORE DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY Borrower: India, acting by its President Beneficiary: Oil and Natural Gas Commission Amount: US$400 million Terms: Repayment over twenty years, including five years of grace, at 9.25% interest per annum. Relending Terms: Maturity not to exceed twenty years, including five years of grace, at an interest rate of 10.75% per annum. Project Description: The project would comprise Phase IV and advance action items of Phase V of ONGC's Bombay High offshore development program. Its main objectives would be to complete the development of the southern and central areas of the Bombay High field, and to achieve a production potential of 12 million tons of crude oil per year by mid-1982. The project involves the drilling of development wells, the construction and installation of well, processing and living quarters platforms, the installation of subsea flow lines, the expansion of the storage and crude stabilization facilities at the shore terminal, the extension of the telemetry and telecontrol faci- lities, and engineering and consulting services for monitoring reservoir performance and for designing and implementing a water injection program. Thi document has a mtrctd distribution and may be used by recipients only in the performance of ther official duties. Ia contents may not otherwise be disclosed without World Bank authorization.  -2- Estimated Costs: (US$ million) Local Foreign Total Fifteen Well Platforms 43.3 193.3 236.6 Subsea Pipelines - 27.5 27.5 Development Drilling 7.9 85.7 93.6 BHS Complex - 230.0 230.0 Terminal Facilities 16.7 7.5 24.2 Telemetry and Telecontrol 2.4 5.0 7.4 Engineering/Reservoir Studies 6.9 78.6 85.5 Customs Duties and Taxes 2.4 - 2.4 Subtotal 79.6 627.6 707.2 Contingencies: Physical 8.0 60.3 68.3 Price 13.5 34.2 47.7 Total 101.1 722.1 823.2 Financing Plan: (US$ million) Local Foreign Total IBRD Loan - 400.0 400.0 GOI Loan/Equity (including - 71.7 71.7 commercial borrowings and bilateral assistance) ONGC Internal Cash 101.1 250.4 351.5 Total 101.1 722.1 823.2 Estimated Disbursement: (US$ million) FY81 FY82 FY83 Annual 105.0 265.0 30.0 Cumulative 105.0 370.0 400.0 Rate of Return: Above 100% Appraisal Report: No. 3101-IN, dated November 5, 1980.  INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO INDIA FOR THE SECOND BOMBAY HIGH OFFSHORE DEVELOPMENT PROJECT 1. I submit the following report and recommendation for a proposed loan in an amount equivalent to US$400 million to India (GOI) to help finance the foreign exchange cost of Phase IV and advance action items of Phase V of development of the Bombay High oil and gas field. Amortization would be over 20 years, including five years of grace, at an interest rate of 9.25% per annum. The proceeds of the loan would be onlent to ONGC at 10.75% per annum with maturity not exceeding 20 years, including five years of grace. The exchange risk would be borne by GOI. 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 Mahanadi Barrages Project (No. P-2899-IN, dated November 11, 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 in India, which has primarily pursued a strategy of import substitution. As a result, 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  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.  - 5 - 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 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 period 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 integral part of the Bank's lending strategy to India for the next several years. 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 - THE ENERGY SECTOR IN INDIA General 26. Commercial primary energy (coal, oil, gas, hydro and nuclear) accounts for about 46% of total supply in India,with the balance (54%) coming  - 9 - from noncommercial energy (mainly firewood and agricultural and animal wastes). Over the past ten years, the growth of energy consumption in India has aver- aged 4% per annum,but this has not been sufficiently rapid to raise per capita consumption above the relatively low level of 410 kg of coal equivalent which characterizes the average for developing countries. Coal remains the main domestic source of commercial energy in India. Coal production rose from roughly 78 million tons in 1973/74 to just over 100 million tons in 1976/77, but by 1979/80 had increased only slightly to about 104 million tons. The stagnation of coal output, mainly due to poor capacity utilization, together with the growing demand for coal, led to shortages which became apparent as early as 1977/78. Improvements in the supply of electricity and explosives to the mines should considerably facilitate short-run improvements in capacity utilization and output. India also has substantial hydroelectric resources. The economically exploitable potential is estimated to be about 70,000 MW of which about 11,000 MW is already developed. 4,700 MW is scheduled for commis- sioning by 1984 and a further 23,000 MW is under study for development. India also has sufficient reserves of uranium and thorium to meet the projected requirements of its nuclear power program. 27. In late 1977, GOI appointed a high-level Working Group on Energy Policy to review the national energy situation and to recommend policy measures for optimal utilization of available energy resources; the Working Group reported its findings and recommendations in November 1979. Prominent among the measures it recommends to reduce energy demand are: improvement in the efficiency of energy use, introduction of fuel-efficient technologies, reduc- tion of transportation demand through improved planning of production and consumption locations, reduction of the energy intensity of industrial invest- ment and inter-fuel substitution from commercial to noncommercial and renewable energy. The Working Group's recommendations are worthy of support since they hold the promise of reducing commercial energy consumption without impeding economic growth. But even if these measures are successfully implemented, oil consumption is forecast to increase more than two-and-one-half times between 1980 and the turn of the century. Without implementation of the Working Group's recommendations, annual oil consumption for energy use is estimated to increase by an additional 35%. Oil products remain the main energy source in uses such as road transport where alternatives are not economically practi- cal. The continuing increase in oil prices, combined with the rapid growth in consumption of oil products, is having a serious adverse impact on the economy. An acceleration of oil exploration and development is therefore of crucial importance and has become a major objective of the Government. A major effort is thus underway to satisfy the rising demand without overly resorting to increased imports. The volume of petroleum imports declined from almost 18 million tons of crude equivalent in 1973/74 to about 16.2 million tons in 1975/76 but has grown since then and was at 16.2 million tons of crude oil and 4.5 million tons of products in 1979/80. A further increase in the volume of imports is expected for the period 1980/81 due to the unre- solved unrest that has caused a disruption for much of this year in the normal flow of oil from Assam, which normally provides nearly one-third of the total domestic oil production. The import bill rose from US$719 million in 1973/74 to US$4.16 billion in 1979/80 and is expected to exceed the US$10 billion mark in 1985/86. The share of domestic production in total avail- ability is at 40% at present and has been at that level for about a decade.  - 10 - The domestic share is projected to improve to about 46% over the next five years but would decline again in subsequent years unless new discoveries are made. Petroleum 28. India's petroleum deposits occur in sedimentary basins 2hat cover a total area of about 1.4 million km onshore and about 250,000 km offshore (to a water depth of 100 m). So far, commercial production has been esta- blished in only two basins: the Assam-Arakan basin in Assam, Nagaland, Meghalya, Tripura, Manipur and Misoram in the eastern part of the country; and the Cambay basin in Gujarat with its offshore extension, the Bombay High. India's total recoverable hydrocarbon reserves were recently estimated at 6.5 billion tons of which 5.0 billion tons were offshore. 29. Crude oil production from domestic reserves has increased steadily over the last 20 years, from as little as 0.45 million tons in 1960/61 to almost 7 million tons in 1970/71 and 11.8 million tons in 1979/80; it is projected to almost double, to more than 22 million tons, by 1984/85. The bulk of the increased production in the 1970s is attributable to Bombay High: from nil in 1970/71 to 36% of domestic production in 1979/80. The potential oil-bearing structures offshore of Bombay were first identified by a seismic survey in 1966, but no exploration took place for almost eight years, since offshore oil was not thought to be competitive with imported supplies at pre- 1973 prices. Commercial production from Bombay High, located about 160 km west of Bombay, began in May 1976, slightly over two years after the drilling of the first exploratory well, and reached a level of 2 million tons per year by March 1977. The installed refining capacity of India is approximately 30 million tons. An additional 7 million tons of capacity is expected to come on stream in 1981. Plans for new refineries and expansions of existing ones are now under consideration in the context of the preparation of the Sixth Five-Year Plan (1980/81-1984/85). 30. As a result of the slow growth of the economy and Government mea- sures to limit consumption of refined products, which was growing at a trend rate of 8 to 9% in the period before the oil crisis, consumption of petroleum products declined from 22.5 million tons in 1973 to 21.8 million tons in 1974, but has increased since then at an average annual rate approaching 7%,to 29.6 million tons in 1979/80. Even with a low rate of overall economic growth in India, consumption of petroleum products will exceed domestic production. In 1984/85, consumption of petroleum products is expected to reach 44.9 mil- lion tons. This would exceed expected domestic crude oil production by some 22 million tons,well over twice the gap that existed in 1979/80. 31. The major institutions in the sector are the Oil and Natural Gas Commission (ONGC) and the Indian Oil Corporation (IOC)--both public sector undertakings--and Oil India Limited (OIL)--presently a joint Government and privately owned company but in the process of being fully nationalized. IOC handles all of India's crude oil imports and distributes imported oil products in addition to those produced by its own refineries. Both ONGC and OIL are  - 11 - engaged in exploration and development of hydrocarbon resources, but OIL's activities are restricted to a small producing field in Assam and a small onshore/offshore concession, the Mahanadi basin. ONGC is the main entity through which GOI intends to explore for, and develop, hydrocarbon resources. A more detailed description of ONGC is in paragraphs 44 and 47-49 below. GOI's Ministry of Petroleum, Chemicals and Fertilizer is in charge of policy making in the petroleum sector; it vets all programs and budgets proposed by ONGC. The Oil Industry Development Board (OIDB) is primarily a financial institution in the petroleum sector. It obtains funds through a cess levied on domestic production and provides financing to oil organizations for deve- lopment projects. 32. It is against this background that India is now making a concerted effort to attract foreign oil exploration companies to help explore for oil both onshore and offshore, a recent initiative which has generated consider- able interest within the international petroleum industry. The success of these efforts over the next three to four years will be a key factor in determining whether indigenous crude oil supplies can be increased suffi- ciently to meet the anticipated growth in demand during the present decade. 33. India has consistently followed a policy of maintaining retail prices of oil products at international levels, with a cross-subsidy from gasoline towards kerosene (on social grounds) and naphtha (for fertilizers). Average prices in India for key products, last increased in June 1980, are US$2.30 per gallon for gasoline, US$1.03 per gallon for high speed diesel fuel, US$0.96 per gallon for furnace oil, and US$0.69 per gallon for kerosene. Domestic crude oil is sold by the producer at Government-regulated prices. These have not changed significantly in recent years and are about US$7.75 per barrel for offshore and US$4.69-5.48 per barrel for onshore crude. The offshore crude price includes US$1.60 per barrel of cess and royalties and US$0.70 per barrel of pipeline tolling fees. While crude prices are low when compared to international prices, they do not act as a disincentive to invest in oil exploration or development, as the major producers are in the public sector and operating decisions are based upon the international price of oil. Crude oil and its products constitute substantial sources of revenue to GOI and State Governments. In 1978/79, GOI alone received some US$2.1 billion through excise duties, customs duties, corporate income taxes, dividends, cess and royalties. Bank Group Involvement 34. The Bank Group has been involved in the Indian energy sector since 1950. It has made 20 loans and credits totalling US$1,504.5 million for power generation and transmission and two loans totalling US$47.4 million for coal production. The proposed project would be the Bank Group's second lending operation in the Indian petroleum sector. In 1977, the Bank made a loan of US$150 million (Bombay High Offshore Development Project, Loan 1473-IN) toward Phase III of the Bombay High Development. The project includes production wells, production and production/processing platforms with a combined capacity of 180,000 barrels per day, and ancillary facilities such as a 26-inch gas and a 30-inch oil pipeline, an oil and gas processing terminal, supply base, supply lines and telecontrol. ONGC completed the first part of Phase III in June  - 12 - 1978 and all facilities are operating satisfactorily. A delay of six months has affected implementation of the second or last part of Phase III, mostly due to the suppliers' and contractors' failure to fulfill their delivery commitments on time. The project is expected to be substantially completed by December 1980. ONGC's field for future expansion is wide open, particularly offshore, and the Bank expects to play a meaningful role in ONGC's program, including exploration activities. This would include a continuation of the Bank's institution-building role, started under Loan 1473-IN, by advising ONGC in technical and managerial matters. ONGC is about to embark on the develop- ment of the major South Bassein gas field capable of producing 18 million Nm of free gas over 20 years to supply new fertilizer and petrochemical plants. The Bank is cooperating with GOI and ONGC to ensure that the development of the South Bassein gas field is carried out in an optimal fashion, and that GOI and ONGC prepare the basis for a long term gas resource strategy in order to maximize the benefits of this new source of energy to the economy. PART IV - THE PROJECT 35. The proposed project was appraised by a mission which visited India in June 1980. The Staff Appraisal Report (Report No. 3101-IN, dated November 5, 1980) is being distributed to the Executive Directors separately. A Supplementary Project Data Sheet is attached as Annex III. Negotiations were held in Washington in October 1980. GOI and ONGC were represented by Mr. S.C. Jain, Director, Department of Economic Affairs and Mr. Venugopal, Chairman, ONGC. Project Description 36. The proposed project comprises Phase IV and advance action items of Phase V of ONGC's Bombay High development program. Its main objective is to achieve a plateau production potential of 240,000 barrels per day by mid-1982. The principal components of the project are: drilling of 64 development wells, construction and installation of 15 production platforms, construction and installation of a three-deck processing platform--Bombay High South (BHS)--and a separate living quarters platform. 37. The project would also include about 133 km of subsea flow lines. Shore facilities at Uran near Bombay for the stabilization and storage of crude oil would be expanded, as would the telemetry and telecontrol system that was introduced under Phase III of the Bombay High development. The project would also provide for consultancy services to ONGC for the prepara- tion of engineering designs and bid documents, construction supervision for the BHS complex and living quarters platform, assistance in overall project management and monitoring reservoir performance. 38. The project is expected to be completed by November 1982. This schedule is tight but achievable; it is based on ONGC's experience in imple- menting Phase III of the Bombay High development.  - 13 - Project Cost and Financing 39. The project cost, including US$68.3 million of physical contingencies and US$47.7 million for price escalation, is estimated at US$823.2 million, of which US$722.1 million, or 88%, represents foreign exchange costs. Taxes and duties included in the total are estimated at US$2.4 million. 1/ This cost estimate is based, in part, on bids already received by ONGC. 40. The proposed loan of US$400 million would provide 49% of the total project cost and 55% of the foreign exchange cost of the project net of duties and taxes. The balance would be financed by ONGC as part of its US$2.9 bil- lion overall financing plan for FY1981-83, which includes US$1,224 million of ONGC's internal resources, a small amount (US$19 million) of equity and grants from the Oil Industry Development Board, and the balance, including working capital, in long-term borrowings, which--as in the past--will be arranged or provided by the Government (Section 3.02 of the Loan Agreement). Bilateral financing is already being arranged with Japan (for three of the platforms). Discussions are also underway with the U.S. Exim Bank and other external financing sources. Procurement and Disbursement 41. All items to be financed under the proposed loan (paragraph 43 below) would be procured in accordance with the Bank's procurement guidelines. Contracts would be awarded on the basis of international competitive bidding, except that, subject to prior approval of the Bank, items with limited sources of availability, whose timely supply is critical to efficient project execu- tion and which are estimated to cost US$2 million or less, may be procured on the basis of quotations from short lists of suppliers, provided that the aggregate value of such contracts does not exceed US$7.5 million. A prefe- rence of 15% or the customs duty, whichever is less, will be applied to any local bid for the purpose of bid evaluation. The BHS processing platform complex and the wellhead platforms will be tendered in lumpsum contracts; this procedure is acceptable. ONGC's normal procurement procedure for for- eign suppliers requires worldwide bidding similar to the Bank's procedures. It is expected that this procedure will be applied for imported equipment and services not financed from the proceeds of the Bank loan. 42. Contracts with a total value of about US$40 million for items with a long lead-time for delivery for the BHS platform complex (e.g. oil pumps, compressors and generators) are expected to be awarded before the expected date on which the proposed loan would be signed. These contracts have been tendered and are being awarded in accordance with the Bank's procurement guidelines and would be eligible for financing from the proposed loan. Retroactive financing of expenditures of up to US$5 million is proposed on these contracts. 43. The proposed Bank loan would be made to India, which would onlend it to ONGC at 10.75% annual interest for 20 years including a five-year grace 1/ Offshore facilities are exempt from custom duties and taxes.  - 14 - period. Execution of a Subsidiary Loan Agreement on terms acceptable to the Bank would be a condition of effectiveness of the loan (Section 6.01 of the Loan Agreement). The proceeds of the loan would be disbursed against 100% of foreign expenditures or 100% of local expenditures (ex-factory) on items eli- gible for Bank financing (BHS platform complex and six production platforms including subsea pipeline connections). Project Implementation 44. ONGC is responsible for project implementation. The Commission, which was established by an Act of Parliament in 1959, consists of a Chairman, four full-time Members (Finance, Materials, Offshore, and Onshore) and three part-time Members representing GOI's Ministry of Finance, the Ministry of Petroleum, Chemicals and Fertilizers and the Planning Commission. As of January 1, 1980, ONGC's total staff numbered 26,000, including 3,600 engineers and senior technical personnel. ONGC's administrative and financial functions are centralized in the corporate headquarters at Dehra Dun; its operational staff is divided among three regional offices and the Bombay Offshore Project (BOP), whose headquarters are in Bombay. BOP, which was created in 1973/74 and is headed by ONGC's Member (Offshore), is in charge of offshore explora- tion and of the development of the offshore fields, particularly Bombay High. Within ONGC, BOP would be in charge of implementing the proposed project. BOP has been the focus of intense activity over the past five years. The increase in its staff reflects its growing importance: from 20 in 1974 to 600 in 1977 and 900 at present. The staff is highly motivated, experienced and techni- cally competent in its fields of activity. However, aware of the rapid tech- nological progress in oil exploration and the development of oil and gas reservoirs, ONGC continues to use foreign consultants when the in-house capability is insufficient or to verify critical results obtained in-house. ONGC has followed a consistent policy ensuring that techniques developed in India reflect the latest technology available worldwide and are properly applied. 45. Compagnie Francaise des Petroles (CFP, France) has been engaged by ONGC since 1977 to carry out computer modelling studies of the Bombay High reservoir, with a view to optimize future production. Phases IV and V of Bombay High are a result of these studies, which were independently confirmed by ONGC's own reservoir specialists. Detailed engineering, design and tender- ing for the production platforms as well as construction supervision for the BHS complex and the living quarters platform are being carried out by Engineers India Ltd. (EIL), which has sufficient experience in this type of work. Fluor (US) would serve as back-up consultant for the BHS platform. EIL is also the main consultant for the onshore terminal, with Kellogg (US) as back-up for the processing plants. Peter Frankel & Partners (UK) are the consulting engineers for the onshore supply base at Nhava Sheva. The extension of telemetry and telecontrol are being carried out with the advice of the Electronics Commission, Radar and Communications Project, which has performed well for ONGC in the past. During the implementation of the project, ONGC would continue to use consultants for these activities, whose qualifications, experience, and terms and conditions of employment would be satisfactory to the Bank (Section 2.02 of the Project Agreement).  - 15 - 46. All necessary precautions will be taken during design and construc- tion of the project to minimize the ecological hazards associated with the production facilities, pipelines and the offshore and terminal facilities. ONGC has chartered a multi-purpose supply vessel outfitted for offshore fire- fighting and oil-spill cleanup, and has started action to acquire two addi- tional vessels of this kind. OMISCO (UK) are serving as ONGC's advisors on the maintenance of offshore oil installations. Four ONGC engineers received special training in the UK in offshore pollution preventiorn and control, and ONGC is in the process of setting up a pollution control group. The National Coast Guard Service of India would assist in any offshore oil emergency. All manned platforms will be equipped for fire-fighting and with emergency escape and survival systems. ONGC Finances 47. ONGC is in a sound financial position, with a debt/equity ratio of 40:60 and a current ratio of 1.6. While key financial parameters (selling prices, investment programs) are decided by the Government, the present frame- work enables ONGC to operate in a financially responsible and reasonably auto- nomous fashion. Past policies have enabled ONGC to perform satisfactorily thus far, and this is expected to continue in the future. ONGC's income statements for the last four years demonstrate the rapid growth that ONGC has experienced in its activities, primarily because of the expanding offshore production. Sales of offshore crude increased more than tenfold, from 0.4 million tons in 1977 to 4.2 million tons in 1980, while sales of onshore crude declined from 5.3 million tons in 1977 to 5.0 million tons in 1980 (after reaching a peak of 5.6 million tons in 1979). Revenues also grew steadily, from Rs 2.1 billion in 1977 to Rs 4.1 billion in 1980. Net profits, which had been Rs 0.4 billion in 1977, were Rs 0.7 billion in 1980. In the 1977-80 period, ONGC's overall investment amounted to Rs 10.0 billion (US$1.2 billion), one-half of which was financed from internal cash generation. 48. The total of ONGC's balance sheet as of March 31, 1980 was Rs 9.4 billion (US$1.1 billion), including Rs 6.6 billion (US$780 million) in net fixed assets, Rs 5.7 billion in equity, and Rs 3.7 billion in long-term debt. Over the past three years, ONGC has obtained Rs 961 million in equity contri- butions from GOI toward the financing of exploration expenditures. Most of the balance of its financing requirements was obtained from GOI in the form of long-term loans (including the proceeds of Loan 1473-IN) and from the Oil Industry Development Board. Its debt coverage ratio, 6.8 in 1980, is satis- factory. 49. Financial projections for 1981-85 indicate that ONGC's performance should continue to be satisfactory. This forecast conservatively assumes that prices of crude oil and natural gas remain constant, that GOI would no longer provide equity financing, and that no discovery of additional oil or gas would be made during the period. While the volume of crude oil sales would continue to grow, ONGC's net profit would peak in 1983 at Rs 1.4 billion, up from Rs 0.8 billion in 1981, and would drop sharply to Rs 0.6 billion in 1984 and Rs 0.5 billion in 1985, essentially because of losses on its onshore operations, unless its substantial exploration program onshore leads to sufficient increases  - 16 - in production from new discoveries. This continues a persistent trend since 1977 and is attributable to high depreciation charges on a substantial explora- tion program onshore. In order to keep the adequacy of ONGC's revenues under surveillance, GOI would periodically carry out a review of the prices of crude oil and natural gas, which will determine the level of prices required to enable ONGC to meet its operating expenses and earn a return on its invested capital sufficient to meet its debt service requirements, maintain adequate working capital and finance a substantial portion of its proposed capital expansion (Section 4.02 of the Loan Agreement). The first of these reviews is expected to be carried out in 1981. In addition, ONGC would submit annually to GOI and the Bank an economic and financial evaluation of the Bombay High Project and of any subsequent major developments, which will indicate the level of prices required to allow ONGC to earn a discounted cash flow (DCF) return of at least 15% for the project and any such subsequent major developments (Section 4.03 of the Project Agreement). ONGC's current DCF return on Bombay High is 20%. It is expected that in the future ONGC will continue to be able to finance 30-50% of its investment program from internal resources. Benefits and Risks 50. The benefits of the project are taken to be the savings in crude oil and fuel oil imports resulting from the incremental production of crVde oil and natural gas (totalling 450 million barrels of oil, 7.2 billion m of gas and 1.4 billion tons of liquified petroleum gas (LPG) over the 21-year expected lifespan of the project). Since the full benefits will only materialize after the introduction of water injection (around 1983-84), ONGC would implement a water injection program in accordance with the results of the ongoing detailed reservoir studies carried out by ONGC (Section 3.04 of the Project Agreement). Using total project cost (net of price contingencies,but with additional pro- visions for water injection and well conversion in the future) as investment cost, and assuming--conservatively--that international petroleum prices remain constant in real terms at the current level of US$32 per barrel of oil, US$180 per thousand Nm of gas and US$300 per ton of LPG, and that operating cost excluding depreciation will be US$1 per barrel of oil, the economic rate of return (ERR) of the project is far above 100%. This result is less sensitive to variations in costs or benefits than to delays in project implementation; however, a one-year delay in production would still leave the ERR above 100%. 51. The risks normally associated with hydrocarbon development projects are compounded for offshore ventures by weather and sea conditions. However, over the years the industry has developed techniques and technologies which, if they do not eliminate risks, reduce them to an acceptable level. The technical solutions selected by ONGC have proven reliable. ONGC's consultants have sufficient experience in the design and construction of offshore and onshore facilities, and experienced contractors will be selected for project implementation. ONGC's staff is qualified and experienced in all the facets of oil and gas production, processing and utilization; therefore, the risk of errors in design and/or operation is minimal. Weather conditions, however, are not predictable and may cause delays despite the precautions taken to  - 17 - avoid major construction work offshore during the monsoon. The present tightness of the market for processing equipment and jack-up drilling rigs may also delay the completion of the project. 52. There is also a risk that the central and southern areas of the Bombay High field may not live up to ONGC's expectations, especially concern- ing the reservoir performance under water injection. ONGC and its reservoir consultant, CFP, have been careful and conservative in their approach to the evaluation of the reservoir, and both have extensive experience in assessing reservoirs and their production mechanisms. Their estimates are consistent with the industry experience in similar oil and gas fields. During the devel- opment of the central and southern areas, ONGC staff and its reservoir consul- tants will monitor the behavior of the reservoir and will provide sufficiently advanced warning of any problem for ONGC to take remedial actions. PART V - LEGAL INSTRUMENTS AND AUTHORITY 53. The draft Loan Agreement between India and the Bank, the draft Project Agreement between the Bank and ONGC, and the Report of the Committee provided for in Article III, Section 4(iii) of the Articles of Agreement are being distributed to the Executive Directors separately. 54. Execution of the Subsidiary Loan Agreement for relending proceeds of the loan to ONGC would be an additional condition of effectiveness of the loan (Section 6.01 of the draft Loan Agreement). 55. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATION 56. I recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President November 18, 1980   ANNEX I Page 1 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTgD AV RAGES LANID AREA (THOUSAND SQ. KM.) MOST RECENT ESTIHATEMP TOTAL 3287.6 AGRICULTURAL 1824.0 MOST RECENT L0W INCOME MIDDLE INCOME 1960 lb 1970 /b ESTIMATE /b ASIA & PACIFIC ASIA & PACIFIC GNP PER CAPITA (US$) 60.0 90.0 180.0 197.9 894.8 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 108.0/c 141.0/c 176. 0Lc 166.0 842.4 POPULATION AND VITAL STATISTICS POFULATION, MID-YEAR (MILLIONS) 434.9 547.6 643.9 URBAN POPULATION (PERCENT OF TOTAL) 17.9 19.7 21.7 20.8 39.1 POPU LATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 974. . STATIONARY POPULATION (MILLIONS) 1645.0 YEAR STATIONARY POPULATION IS REACHED 2150 POPULATION DENSITY PER SQ. 04. 132.0 167.0 196.0 193.2 376.1 PER SQ. KM. AGRICULTURAL LAND 247.0 308.0 353.0 409.6 2350.4 POPUI.ATION AGE STRUCTURE (PERCENT) 0-14 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 YRS. AND ABOVE 3.5 2.9 3.0 3.0 3.4 POPULATION GROWTH RATE (PERCENT) TOTAL 1.9 2.5 2.0 2.2 2.4 IRBAN 2.5 d 3.3 3.3 3.9 4.1 CRUDE BIRTH RATE (PER THOUSAND) 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 GROSS 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 (AGES 1-4) MORTALITY RATE 28.0 22.0 18.0 17.9 5.3 HEALTH LIFE EXPECTANCY AT BIRTH (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 POPL'LATION PER HOSPITAL BED TOTAL 2149.OLf 1629.0 1289.0 1758.4 819.4 URBAN .. .. .. 502.9 RIIRAL .. .. .. 10524.1 ADMISSIONS PER HOSPITAL BED .. .. .. .. 28.8 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 URBAN 5.2 .. 4.8 RURAI 5.2 .. 5.3 AVERACF NUMBER OF PERSONS PER ROOM TDTAL 2.6 2.8 URBAN .. RLIRAI. ... ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. URBAN .. RERAI ..  ANNEX I Page 2 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVEIAGES - MOST RECENT ESTIMATE y MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 lb ESTIMATE fb ASIA & PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRTMARY: 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. (D OF SECONDARY) 8.0 6.0OA .. 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 CINEMA 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 26.3/h HIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 48.9/h LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 6.77h LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 17.2/h POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ 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 am.ong the indicators depends on availability of data and is not uniform. Lb llniess 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. / Solid fuel conversion factors revised, /d 1951-60; /e 1962; /f 1958; /g 1967; /h 1964-65. April, 1980  ANNEX I DEFINITION OP SOCIAL INDIECATORS Page 3 of 5 Notes: Although the data are Crust frosuce geealy Ide the mot aroh taiv an eiable,it theuld sine be unsed that they may sot ha inter- nototolycsyu .h..ecus ofth lac of stadard.e deftefIo n otpeue ydiereet toit-n in cel1ertiag the dnta. The data are,soe theless, utefu t derrbe orders of -oiuntude, indicate teds, and ha.c.ertee- ertais major diff-esentes t-. 'on -eoontfl. The rote -sc Arcua ac (1)h u-m coutry group oi the subject rouctry mmd (2) a reuntry gras.p aith somewhat higher averge Ioose thea the country gra-p of the objec cot (matr for "Capital SurplusilE 01ePer ter" gruspehers 'iddle I.ron North AftI ins ad Middle test is ches..n bemuse ~ of srne coco-alcra afictlel. ta shereersu greup does the..rae. ar. ppletn weIghted aithmei. masf hcmt odico- sod chew only abtsa isoot hl fth osrisi. grap hs dta for that iedirtr ic th oes of ..a.etriem -mog the indieters... depends on the evallbillt, of deco sod Is not osifor-, o-tie mus be rie te reloting -verag of ..e tadi-ostr is setber Theeargsseony aeo i opaigsh su of ass indiotac at s sima smag she . torey end esfereere grasps. LAND1 AREA (thr..a.ud aq.ks.) Po2s1etion err f'hys.-nan-cpoaIl- dnotdeob -sse spaticing p0y- Ttl-Total turface sees ooprtsisg land eree aed island waters . cis quoij-d <en se_oa aco_ at utinest ee. Agrtc-lnar.l - otE ea giuesademue eprrily erpe-raetly P. -eaOion Ne-trc Persa -. oplaio dtotded by number of preoIttotg ftr ros pstrs.majt .db .cesgads. ort li falle; 1977 dan.t ml n eal rdur _urn, yrsct_i nuss, d ..aslutatnre- GNSP Pit CAPIfa (US05) - fliP Pc -.yi,. esimate at .......t maten prices. ca- oro ie perdiSeseledi Sea by tonal, ar-ti, a ru.ra di P .pitics (trs. -ulated by tare -sn into method as World Bsh. Aslut (1976-7 Tbasis.) 1960, arbas IeC earl) .diddb p hity gorootc nubre sIta beds d 1978 d.t ~~~~~~~~~~~battete rnes.hsitlcre ssrahlts:hmmnns!i pe -aietlcrfe ENERGYl CfNSUMPTION Pit CAPITA - A ..a c1onsumptien of c--eriul ene rgy I(ea b a les n hysiis. ,faratblishm.t. prolig priaripaily n..atadia ___________________________ care are sot Iolded. stI hospitals, howver, tclode hewltb med m-di.el an igte,ptrlum atrl a sdhdro,oooradgohemlee- cnesst permnetly staffed by , hsts (bas by meire1.. sai-tt, tricity Is. hu'ogrem atca qtasnprcaia N 90 n 197h asrmr, midwife, ste.) ahirb offer is-ptriom rnedno rcd Asia. ~~~~~~~~~~~~~~~~limited range of medice1 facilities. oe statistical Parpne aebs hePi- calm telade WlHSs prineipal generalco peeiali ted opltsln, sd rarsl POPULATION ASS VITAL STATISTICiIo- Total Pepulatio.. Bid-Year imll Il .. As of Jaly 1;IhO190md 19h AmamosprBootltd - Tat-l obe_ of odnisat... so or shre data, i. p. ..t ffrom hospitlsl di,nded by the o-b-r of heAr. thu PoulaIon(pecen oftonl) Rti.of aarbor te total populsetonr; differeos daftaitiona of orb. anaesmy affect r-p-rbilift of data HOU1SIN anog outries~; 1960, 1970, sod 1978 data.. rba.De.tgnahl.pasn e hseod)-ttl shn n rues1- ,Populaionr1 i. 111 p1111 Projections -dA house.hold omnim t. a gre-p ni isdivid I ho abate lining qaset..s PPopluioni er20 urn papuhaionpososs era! bae n Ni d their mete meals. A hoarder or lodgeemyormynt eiclddt ttlpopulation by ag sdsesd rarmroiysafotility rts she he....hold far tnerl.tir1 purposes. PI...t.. prmters foe mortality sates tompriss of three 1-el ases AVeras. abeo emn e om ete1 u.rban ndrra A-erageum ing lfe. eaata.cyet birth Increas.ing with cn...tryt per nepite inooe hr a p-r...s par roe.- l utes, sdrra sruld --vetis...l lan..l, sod femals lfe _opecranoy bteiltinig en77.1 year. The para- damlliina resperniney. D.sllingsescladsssp erarc nad mtrforfrility ruts alas have thre lvelasuin dsrlie I is....c.apied prts. fertilt accrd ing to tnom -lve -d p,,t f eily planning peeformso.. Atcm.n. letict (prtls f w_big)-otb sea.Aii4Clur - tEch cocetry Is th-t asigned one of these olds -sbinotions of moctaliny Cestos Awlg iheeteirity"i lnig urter as pertentege an-d fertility teseda ice peojection purposes..o otl srban, adg. rsI dwelling it..rily Sttisne.cy eseslation In s stetisnry papslatian thes Is no gewe sines she biosh rate is equal no the damsh erst, and also the age atracture rs- EDUCATION muien esn.tent. This Is achieved siy after fertility ratas deolise to Ad sated fErLlent Ratio the replacemet level of unirt-st repro doeion,rats, shen sash game.estiar Prmrysoo-tsa.1 male and feae- Gross total, male and fosalt .iawnrPlacs. tueimcl.The.taIonr oplto si- wa aolme of all ogem at the primarylelasetaefef reasto ostimetd as the besiatof the rjoe tharatetistios of the P p 1psieta primaryshe-asppolatinos; noeal1y includes thilde agd 6-11 In thet year ZOS, and she runs of decline of fertility rare so raplan- years but mdjssted Pfordifferent losgths of primay eiato;for non lcal utnissnt nvra edanetionenslmssmy -nosd lID Peeceot Yea aarsosy aplati-n Is -ha.bd - The Year ah.. tatia...ry populatios sine sm pupilssebtwahbv heofcs oo ee sire bus been casobd. Secoedees school- toa,maead _femal - C t.and am shon; secodary Population -t .p1-- .rq kiatnsityh a .. )ofdoration esquires tn least fear year ar aPproved primaryimtuson Peesa.be.- Md-yar oplaton er quae lloste (10 hctaes)'~provides ges.r.. .n..ona, or teacher tratitg Inetpu-till,frpu Pe n. b.eeianre .ad - Compard as above for egeiu dturl le d aslydo 2r 7paao ae orsodnerore r eee O51T. Tonetiesal em1ole- (enet at ; esdary) V*- Ycaisoo i-st~ti-on.. PPopulaion Age Stnr-ose (prest - Childreo (0-14 yprer), waking-age (15-teld nehea idscl,0 other programshish operte Indepa- hA y_sa) * ad retIre1d (01 yours sod ooer) am peroestagen of mid-year peps- detyoasd eatnsof sr ayisatittes yastpopletossfor195-60,l9h-7i ae 190-7. prtespee,din level. ar -.d-. y bh Pesato Oos gae(ecnt. ra _-8Annul growth retes of urban pops- AMult litss rte(.r..t - Ieat dlt al ta read sad -rit.) Clotios far190-65 tI%0-70, end 197i-78. seee aeo ntleatpclat.ionee 1yar nt Trde Birthan (ear sho...nd) - Annua Ine births per thossead of aid-year P . ..o .. .tP, t . 5y...d..r popolatior;' 1960, 1970. and 19 78 data. CNOMT Crue eat Ese pe thousand - An.o. Ideotis pee the.....d of mid-year Pessenas Cas(a1 huedrrlts)- smoe aecmen er p 1960oa lh, 1970,. ad 1970 danaP... cr asn este ih esn;eoae gmbo sne, beras a Irons RSerrduotion nets-Averageiosebecof daughtars a oa ill beer In iIay eils hritnlcpoans sidi h sptsospeetaeaeti t Radio Re..eIVers (as thesase eslio)-All types of reneio.r. f. oredc ity rates; ....sily f iVs-yssr avragas sediag is 1960, lOll., sad 19771. hendsms o enra p tle e hesasd a a eis salae al dJ famiy Peouog-A tseors Anna (th Eusem.) - A-sul nuber of enreptare tesd receivers. in sumnim sad Is years when esgistretiss ofcdi - of birth-c..stro davire ..... aueiemof nsriooo faily plenniag pragra.. wei.f o aefrtne ecemymnb oprbesnems Famil Pla...Ins - liners (eRodant of married wms ferestags marid t ties ahdtishd.t flina y-ssietbg..p.b.i.. soe f child-booting age (15-44 years) wh.o us bicth-taetrs1 devices tO TV .. genivs % (perh- h iee .... ts)- 5sesocefrigeusit almrid women is sam age g-eap. gnrlpbi e bssdpplta;sene siesd esvr is se1unbissad is year raises esgPitetiom atTVet e s f t PiOO AD NUTRTITIONIldIS.r.h g.rt- f t i d I.d. of Food Pr.d..ii- P. ~~Sweser iealnis pe esssg seseide) - tSb- nth avragef etrolm Oneuo PadPodcio prCaia (1969- 71 10) - I.do ofpcsi msltof f "ditygenralt.sres newpaert inttn sapsmdclP yesdsotion nf sll god csodne. ProdutIon attiude see d and feed and lsna ese rmrl urrriggneinw.T sociee isoncaeda ya hst.Comoite crt pimygnd eg t agroa t r he "daily" if it appears at ..eat fate time. ni instead of -uga) ahib are edibl sodcoti aurint (e.g. e fead TEn AeslA tenan a eaerTa ae sEs ubro te r nlde) A;Uggrgt prddatlan of eac h coo-toy Is boodo rces eddoiu qteyar,icaigammlssi en-niea nan,Iomalu _9sgeproducerI prieaght; 1961-h5, 197D, sad 197: data. sdmbie t. Percuit.suel fcerie(Psrost of reustemente - Compated from enrgy squlo-lst of se t feed supplies _nsilebl is Iesatry Per caPita LABOE PIECE pe;r Amy. dosileble supplies usePeita dometic Prodoet id, imperte last ~ Ten. aot eo.shsd)-tsomeiyatv eros nldn aeuns td chages Ia crook pe splie solude anima feed, m-de, are hacssdoselydbt esoa.ding bs ie,suet.ec qucrtieis used in food procsing, sd lasses in distribution. esquir- Deiton inviuscnresteonnmabe;1960, 91 n masts asre estimated by FAt bh...d so physiological snsfor -.-me sent- 1978i dens. I t . ..r. ..t.. . 6 seAsed dsnibrte f poyalation, sod allowing 10 perosot fur wsea siolue(ecet t e orc nf ns, fnres..r.-. 1t-y bunting sod . household level; 1961-hI, 1970,. sd 1977 data, fishing as p-rnng oftellbsr ferca,; I960, 1970 and 1978 data. Pe sisa _sply of Prntein (scams er dey - Pro tai nontmsi of pee caia ootc prrm)- fao fame In iig esrein auatrn net ssyp1y of food pee day. Bet suppl o food Is dsfiteedasboe Re .ad se-teieity, aste rad gasspecntg of toa mbrfrm 90 quirensts fo sll oeIrin established by TITA provide for minium190tta1d 1978- data. alloso cfhigrm of cral. p-otis pee dayen 0 gram of osimo sed Paricpio Ras(res)-tal sl,anfmle-Ptcitisc ardo . ace lwrthou those of 70 gram of torel protein and 2grm prcenage 0g tona, male an femal poeaid of all sges rsaente aie..e . ytsie as na Idgsfa the world,. proposed by PAO in the Third P tb,190 n" 10'at.Tee t l'sptipti easetcin WorldPead urve; 196-P1,1tThind 190pdas, ag-seastrucure f.the papulatio.ad lag time toed. A fee esti- dyeld ream aMratan puse .i.gam pe dy; 1961-65, 1970 and 1977 dateU.fomi Deden..o Ratio -Stie of pupalation under I end 65 sod ovac Chid (as 1-_) Mortlity Rste (rer thousd) - Annual deaths per tho..a.d ti.n the ntal. labor f-ras. assgrup1- jyse,. sohidlde in this ag grou..P; foe mas devaleping coun- tries dais d-i-odfueilfo Ialt;16, 1970 sod 1977 data.. ISCOMF DTITRIBUTION Perrentese of Private lnos.. (both In cash and hiod) -Ri..eii-d byariches Lrif1mbpeveara) - Anecage .-uber at ysacs of life esaalinig I yarreet, richest 20 pret pooresi 20 perceat, -rd poorest 40 y orct lieiretanoy' blhli of ha....bhlds. asbirh; 1960, 1970ad 178 deta. Tofan- Ourtoliry Sat (peP thousand) - Aenul1 deaths of i.fust. under sos year POVERTY TARGET GROUPS ofag per the....ed floe births..Estimated AbsunePvet nom ee (15 -m cepittel - r -nd r-1e - Somber of people (toco1, orha., cud rurel) wth reasnbl, a...e.. ra safe AbcriteiPooerym iqa... diVet plus esetta ass- sob rmnsi e vter npply (inolodes crested turf.. ac .eters urnreae hotsnotaitad at iseals._Il ..t itpd r lI o do out bee to pedodsprpcrsssp acti.. . r. oftedysReeioteadrurl1 P-1 es of p ...in ubnad ua)wo s a lsspo" rucso-t umbr .ofp psp1 roel,- urba, aIdlorl stIIced hyancr-ofter..aty rb.1- .d-- f-t. o of hnorauces an oss t-ase by 'ser-bror ysses fthe use :h.d .1el~t . . of . hyn of il, 1-b.8 ... o h docicces..d.utucduy iseaetaii.,  Pog,o 4 of 5 ECONOMIC DEvELOPhENT DATA GNP PER CAPITA IN 1978: USS 180 b/ C/ GROSS NATIONAL PRODUCT IN 1978/79 ANNUAL RATE OF GROWTH (7. constant pricesl US$ Bln. %7 1955/56-1959/60 1960/61-1964/65 1965/66-1969/70 1970/71-1974/75 197S/76-1977/78 GNP at Mer-et Prices 117.08 100.0 3.7 3.6 3.7 2.8 5.6 Gross Domestic Investment 28.28 24.2 Gross National S-isg 28.11 24.0 Correst Accot.nt Ba..nce d/ 0.50 0.4 OUTUT.bOR L FRCE AND PRODUCTIVITY IN 1971 V.lue Added (at factsr cost) Labor Force V.A. Per Worker US$ Bln. 7 Mil. 7. US$ of National Average Agric-ltsre 24.5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Services b163 31.1 30.2 16.7 542 186 Totol/-verage 52.6 100.0 180.4 100.0 292 100 GOVERNMENT FINANCE !/ General Government Centrsl Goverssent R. Bln. _ f P Rs,81n. : f GDP 1~97B/79 19/79 1974/75-1978/79 17i77 1978/79 1974/75-1978/79 Current Receipts 183.65 19.1 18.3 107.71 11.2 10.6 Current Expenditures 177.26 18.4 16.7 108.99 11,3 10.1 Current Sorplus/Deficit 6.41 0.7 1.6 - 1.28 -0.1 0.5 Capital Espenditursa f/ 78.41 8.1 7.2 57.34 6.0 5.1 Internal Assistance (net) _/ 8.15 0.8 1.4 8.15 0.8 1.4 MONEY. CREDIT AND PRICES 1970/71 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Sapte-ber 1978 Septe-ber 1979 (R. Billion outstanding at and of period) Mosey ecd Quasi Mosey 121.4 198.4 220.3 254.7 308.9 370.4 445.6 398.5 473.7 Bank Cr-dit to Gover-eset (net) 52.6 87.3 95.3 101.1 110.2 134.7 153.9 139.5 161.7 Bank Credit to Co-ner.ia1 Sector 64.6 107.0 126.7 153.9 185.1 212.2 253.3 225.8 273.8 (Percentage or Index Numbers) Jansary 1979 J.an..ry 1980 M.oney and Quasi Mosey as 2 of GDP 30.1 33.5 31.5 34.5 38.8 41.5 46.3 Wholesale Price Index (1970/71 - 100) 100.0 139.7 174.9 173.0 176.6 185.8 185.8 185.3 224.0 Annuai p-rcentage changes in: Wholesale Price Index 7.7 20.2 25.2 - 1.1 2.1 5.2 - 0.4 20.9 Bank Credit to Go-er nset (net) 10.8 12.3 9.2 6.1 9.0 22.2 14.3 16.9 15.9 Bank Credit tO Com-rci.l Sc-rt 19.4 22.6 18.4 21.5 20.3 14.6 19.4 15.6 21.3 */ The per capita GNP estite is at market prices. calculated by the conversion te.hniiqe used in the World Bank Atla., 1979. All other conversio-s to dollars in this table are et the -verage eachange rate prevailing during the period covered. b/ Qoick Ectimatec. c/ Computed from trend line of GNP at factor cost series, including one observation before first year and one observation after last year of listed period. d/ World Bank estinatee; not hecessarily consistent with official figures. e/ Tranofera between Centre and States have been netted out. f/ All loots and advancee to third parties have bees netted oct.  ANNEX I Page 5 of S BALANCE OF PAYTBNTS 1976/77 1977/78 1978/79 h 1979/0 h I8ZRCH&NDISE UPORTS (AVERAGE 1975/76 - 1978/79) US6 ln. % Exports of Goods 5,753 6,315 6,976 7,800 Engineering Goods 671 11 imports of Goods -5,928 -7,188 .8,488 -11,000 Te 420 7 Trade Balance - 175 - 873 -1,512 -3,200 Gems 499 8 NFS (not) 379 692 882 1,050 Clothing 378 6 Leather and Leather Resource Balance 204 - 181 -630 -2,150 Products 319 5 Jute Manufactures 251 4 Interest Paymnts (net) i -182 - 89 130 400 Iron Ore 270 5 Other Factor Payments (net) - - - Cotton Textiles 248 4 Net Transfers J/ 695 1,077 1,000 1,000 Sugar 224 4 - O~~~~~thers 2.649 45 Balance on Current Account 717 87 500 -750 , Total 5.929 10 Official Aid Diaburasments 1,955 1,628 1,695 1,870 ZETERNNL DEBT. MARCH 31. 1979 Amortization -560 -645 -702 - 687 US9 billion Transactions with If0 -337 -330 -158 - Outatanding *nd Diabursed 15,5 All Other Itea -200 616 199 - -183 Undisburaed 5.2 Outstanding, including 20.7 Increase in Reserves C-) -1,575 -2,076 -1,534 - 250 Undisbursed Gross Reserves (end year) 3,747 5,823 7,357 7,607 h/l/ Not Reserves (end year) k/ 3,276 5,668 7,357 7,607 DEBT SIRVICE PATIO FOR 1978/79 15.0 percent Fuel and Related Mteril IBRD/ID& LENDING. DECB(8ER 31. 1979 Imports 1,581 1,811 2,043 4,050 USS million of which: Petroleum 1,581 1,811 2,043 4,050 IBID IDA Exports 37 32 24 - Outstanding and Disbursed 689 4,286 of which: Petrole,as 21 18 n.a. - Undisbursed 614 2,621 Outstanding, including 1,303 6,907 Undiabursed RATE OF EXCHANGE June 1966 to mid-December 1971 US$1.00 - Rs 7.5 Rs 1.00 - US$0.133333 Kid-December 1971 to end-June 1972 3 US$1.00 - Re 7.27927 Re 1.00 - US$0.137376 After end-June 1972 Floating Rate Spot Rate end-Detember 1978 USS1.00 - Rs 8.188 Rs 1,00 - US$0.122 End-Decasber 1979 : US$1.OO - Re 7.907 Re 1.00 - U050.126 h/ Estimated. 1/ Figures given cover all investment income (net). Major payments are interest on foreign loans and charges paid to IMF, and major receipt is interest earned on foreign assets. J/ Figures given include workers' remittances but exclude official grant assistance, which is included within official aid disbursements. k/ Excludes net use of 7MW credit. / Amortization and interest payments on foreign loans as a percentage of merchandise exports.  ANNEX II Page 1 of 18 THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of August 31, 1980) US$ million Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 41 Loans/ 1,163.2 64 Credits fully disbursed 3,803.4 342-IN 1972 India Education -- 12.0 4.82 378-IN 1973 India Karnataka Agricultural Markets -- 8.0 1.59 390-IN 1973 India Bombay Water Supply I -- 55.0 3.75 456-IN 1974 India HP Apple Processing & Marketing 13.0 6.80 1011-IN 1974 India Chambal (Rajasthan) CAD 52.0 - 16.85 482-IN 1974 India Karnataka Dairy -- 30.0 19.56 502-IN 1974 India Rajasthan Canal CAD -- 83.0 32.62 521-IN 1974 India Rajasthan Dairy -- 27.7 14.36 522-IN 1974 India Madhya Pradesh Dairy -- 16.4 6.17 526-IN 1975 India Drought Prone Areas -- 35.0 4.93 1079-IN 1975 IFFCO IFFCO Fertilizer 109.0 -- 4.08 1097-IN 1975 ICICI Industry DFC XI 95.6 -- 2.95 532-IN 1975 India Godavari Barrage Irrigation -- 45.0 5.97 541-IN 1975 India West Bengal Agric. Development -- 34.0 10.86 562-IN 1975 India Chambal (Madhya Pradesh) CAD -- 24.0 3.79 572-IN 1975 India Rural Electrification I -- 57.0 5.82 585-IN 1975 India Uttar Pradesh Water Supply -- 40.0 19.62 598-IN 1975 India Fertilizer Industry -- 105.0 42.58 604-IN 1976 India Power Transmission IV -- 150.0 68.39  ANNEX II Page 2 of 18 US$ million Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 609-IN 1976 India Madhya Pradesh Forestry T.A. -- 4.0 1.97 610-IN 1976 India Integrated Cotton Development -- 18.0 11.82 1251-IN 1976 India Andhra Pradesh Irrigation 145.0 -- 96.17 1260-IN 1976 India IDBI II 40.0 -- 19.74 1273-IN 1976 India National Seeds I 25.0 -- 23.55 1313-IN 1976 India Telecommunications VI 80.0 - 23.24 1335-IN 1976 India Bombay Urban Transport 25.0 - 8.85 680-IN 1977 India Kerala Agric. Development -- 30.0 26.06 682-IN 1977 India Orissa Agric. Development - 20.0 12.71 685-IN 1977 India Singrauli Thermal Power -- 150.0 79.85 687-IN 1977 India Madras Urban Development -- 24.0 11.30 690-IN 1977 India WB Agric. Exten- sion & Research -- 12.0 12.00 695-IN 1977 India Gujarat Fisheries -- 4.0 0.00 1394-IN 1977 India Gujarat Fisheries 14.0 -- 14.00 712-IN 1977 India Madhya Pradesh Agric. Dev. -- 10.0 7.36 720-IN 1977 India Periyar Vaigai Irrigation -- 23.0 15.63 728-IN 1977 India Assam Agricultural Development -- 8.0 7.04 1473-IN 1977 India Bombay High Offshore Development 150.0 -- 22.74 736-IN 1977 India Maharashtra Irrigation -- 70.0 42.14 737-IN 1977 India Rajasthan Agricul- tural Extension -- 13.0 9.96 740-IN 1977 India Orissa Irrigation -- 58.0 41.35 1475-IN 1977 ICICI Industry DFC XII 80.0 -- 21.93 747-IN 1978 India Second Foodgrain Storage -- 107.0 87.54 756-IN 1978 India Calcutta Urban Development II - 87.0 43.75 761-IN 1978 India Bihar Agric. Extension & Research -- 8.0 7.39  ANNEX II Page 3 of 18 US$ million Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 1511-IN 1978 India IDBI Joint/Public Sector 25.0 -- 24.65 1549-IN 1978 TEC Third Trombay Thermal Power 105.0 -- 88.13 788-IN 1978 India Karnataka Irrigation -- 117.6 94.22 793-IN 1978 India Korba Thermal Power -- 200.0 167.16 806-IN 1978 India Jammu-Kashmir Horticulture -- 14.0 13.88 808-IN 1978 India Gujarat Irrigation -- 85.0 74.22 815-IN 1978 India Andhra Pradesh Fisheries -- 17.5 16.47 816-IN 1978 India National Seeds II - 16.0 15.77 1592-IN 1978 India Telecommunications VII 120.0 -- 59.39 824-IN 1978 India National Dairy -- 150.0 138.16 842-IN 1979 India Bombay Water Supply II -- 196.0 192.10 843-IN 1979 India Haryana Irrigation -- 111.0 69.23 844-IN 1979 India Railway Modernization & Maintenance -- 190.0 166.07 848-IN 1979 India Punjab Water Supply & Sewerage -- 38.0 31.58 855-IN 1979 India National Agricultural Research -- 27.0 26.31 862-IN 1979 India Composite Agricultural Extension -- 25.0 20.96 871-IN 1979 India NCDC -- 30.0 20.79 1648-IN 1979 India Ramagundam Thermal Power 50.0 -- 50.00 874-IN 1979 India Ramagundam Thermal Power -- 200.0 177.14 889-IN 1979 India Punjab Irrigation -- 129.0 115.98 899-IN 1979 India Maharashtra Water Supply -- 48.0 47.59 911-IN 1979 India Rural Electrification Corp. II -- 175.0 172.86 925-IN 1979 India Uttar Pradesh Social Forestry -- 23.0 21.39  ANNEX II Page 4 of 18 US$ million Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 947-IN 1979 India ARDC III -- 250.0 161.06 1743-IN* 1979 India Thal Fertilizer 250.0 - 250.00 963-IN 1979 India Inland Fisheries 20.0 20.00 954-IN 1979 India Maharashtra Irrigation II 210.0 198.69 961-IN 1979 India Gujarat Community Forestry 37.0 34.93 981-IN 1980 India Population II 46.0 46.00 1003-IN 1980 India Tamil Nadu Nutrition 32.0 32.00 1004-IN 1980 India U.P. Tubewells 18.0 17.82 1011-IN 1980 India Gujarat Irrigation II 175.0 175.00 1027-IN 1980 India Singrauli Thermal II 300.0 300.00 1012-IN 1980 India Cashewnut 22.0 22.00 1028-IN 1980 India Kerala Agricultural Extension 10.0 10.00 1033-IN* 1980 India Calcutta Urban Transport 56.0 56.00 1034-IN* 1980 India Karnataka Sericulture 54.0 54.00 1046-IN 1980 India Rajasthan Water Supply and Sewer 80.0 80.00 1843-IN 1980 ICICI Industry DFC XIII 100.0 100.00 1887-IN* 1980 India Farakka Thermal Power 25.0 25.00 1053-IN* 1980 India Farakka Thermal Power 225.0 225.00 Total 2,653.8 8,511.6 of which has been repaid 64.4 Total now outstanding 1,626.3 8,447.2 Amount Sold 133.8 of which has been repaid 120.3 13.5 Total now held by Bank and IDA 1/ 1,612.8 8,447.2 Total undisbursed (excluding*) 576.3 3,348.9 * Not yet effective 1/ Prior to exchange adjustment.  ANNEX II Page 5 of 18 B. STATEMENT OF IFC INVESTMENTS (As of September 30, 1980) 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. 0.6 0.4 1.0 1964 Fort Gloster Industries Ltd. 0.8 0.4 1.2 1964-75-79 Mahindra Ugine Steel Co. Ltd. 11.8 1.3 13.1 1964 Lakshmi Machine Works Ltd. 1.0 0.3 1.3 1967 Jayshree Chemicals Ltd. 1.1 0.1 1.2 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 1.2 5.2 1980 Deepak Fertilizer and Petrochemicals Corporation Ltd. 7.5 1.1 8.6 TOTAL GROSS COMMITMENTS 61.1 11.5 72.6 Less: Sold 5.9 1.7 7.6 Repaid 19.1 - 19.1 Cancelled 6.2 1.3 7.5 Now Held 29.9 8.5 38.4 Undisbursed 10.5 1.1 11.6  ANNEX II Page 6 of 18 C. PROJECTS IN EXECUTION 1/ Generally, the implementation of projects has been proceeding reason- ably well. Details on the execution of individual projects are below. The level of disbursements was US$729 million in FY80, compared to US$538 million in the previous year. Disbursements in the current fiscal year through August 31, 1980 totalled US$131 million, representing an increase of about 51% over the same period last year. The undisbursed pipeline of US$3,925 million as of August 31, 1980, 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 Ln. No. 1843 Thirteenth Industrial Credit and Investment Corporation of India Project; US$100.0 million loan of May 16, 1980; Effective Date: June 27, 1980; Closing Date: December 31, 1985 These loans are supporting industrial development in India through a well-established development finance company and are designed to finance the foreign exchange cost of industrial projects. ICICI continues to be a well-managed and efficient development bank financing medium- and large-scale industries, which often employ high technology and are export-oriented. Loan 1097 is fully committed and disbursements are slightly ahead of schedule. Disbursements under Loan 1475 are also ahead of schedule. Loan No. 1260 Second Industrial Development Bank of India Project; US$40.0 million loan of June 10, 1976; Effective Date: August 10, 1976; Closing Date: June 30, 1981 Loan No. 1511 IDBI Joint/Public Sector Project; US$25.0 million loan of March 1, 1978; Effective Date: May 31, 1978; Closing Date: March 31, 1983 Loan 1260 is designed to assist the Industrial Development Bank of India in promoting small- and medium-scale industries and in strengthening the 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.  Page 7 of 1 State Financial Corporations involved. Loan 1511 is designed to encourag, tL pooling of private and public capital in medium-scale joint ventures. The project also assists IDBI in carrying out industrial sector investment studies and in strengthening the financial institutions dealing with the state joint/ public sector. Cr. No. 947 Third Agricultural Refinance and Develonment Corporation (ARDC) Project; US$250.0 million credit of August 20, 1979; Effective Date: January 2, 1980; Closing Date: June 30, 1982 Refinancing of lending to farmers has been started under this project after the completion of the Second ARDC Project towards the end of 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 As of September 1979, satisfactory progress was being made in the construction of bag storage warehouses, despite problems of land acqui- sition at some sites. However, construction of flat bulk warehouses and port silos is not expected to be completed until 1985, as a result of delays in the employment of consultants and the longer time required for the prepa- ration of technical specifications and tenders and the construction itself. Cr. No. 456 Himachal Pradesh Apple Processing and Marketing Project; US$13.0 million credit of January 22, 1974; Effective Date: September 26, 1974; Closing Date: December 31, 1980 The project encountered prolonged initial delays due to managerial and technical problems. These problems have been largely resolved, but con- struction progress remains slow due to material shortages and severe winter conditions. Initial packing house operations were undertaken in the last two seasons with favorable response from farmers. The project is scheduled for completion by December 1980. Cr. No. 806 Janmu-Kashmir Horticulture Project; US$14.0 million credit of July 17, 1978; Effective Date: January 16, 1979; Closing Date: June 30, 1984 The principal executing agency, J&K Horticulture Produce Marketing and Processing Corporation, is under strong management and rapid progress has been made in start-up operations with only minor slippage. The project's research activities, however, are behind the original schedule due to poor organization. Ln. No. 1313 Telecommunications VI Project; US$80.0 million loan of July 22, 1976; Effective Date: September 14, 1976 Closing Date: March 31, 1982  ANNEX II Page 8 of 18 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 Both projects are progressing satisfactorily, although as of November 1979, when they were last reviewed, imports of electronic switching equipment and local production of electro-mechanical switching equipment were behind schedule, resulting in a reduced growth rate for the installa- tion of direct exchange lines. Institutional improvements envisaged under the projects have been achieved, and the financial situation of the Posts and Telegraphs Department remains sound. Ln. No. 1079 IFFCO Fertilizer Project; US$109.0 million loan of January 24, 1975; Effective Date: April 28, 1975; Closing Date: December 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, 1981 Ln. No. 1743 Thal Fertilizer Project; US$250.0 million loan of August 20, 1979; Effective Date: December 31, 1980 (expected); Closing Date: November 30, 1984 The IFFCO project was delayed by about a year as a result of a change in feedstock from fuel oil to naphta and delays in completion of engineering contracts. However, project construction is now proceeding satisfactorily and commissioning is expected within the next six months. Credit 598 is designed to increase the utilization of existing 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 about 18 months. 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: June 30, 1981 Delays in project implementation were encountered as a result of frequent changes in management in the early stages, and these have necessi- tated an extension of the closing date by 18 months to June 30, 1981, to allow for completion of works and withdrawal of the credit. Progress is improving, however. As of May, 1979, construction on 36 of the 39 markets envisaged under the project was underway or completed, and trade had shifted to about half of these. An additional five markets may be included in the project at the request of the State government. Cr. No. 342 Agricultural Universities Project; US$12.0 million credit of November 10, 1972; Effective Date: June 8, 1973; Closing Date: December 31, 1981  ANNEX II Page 9 of 18 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. 390 Bombay Water Supply and Sewerage Project; US$55.0 million credit of January 22, 1974; Effective Date: March 13, 1974; Closing Date: June 30, 1981 Cr. No. 842 Second Bombay Water Supply and Sewerage Project; US$196.0 million credit of November 13, 1978; Effective Date: June 12, 1979; Closing Date: March 31, 1985 Cr. No. 848 Punjab Water Supply and Sewerage Project; US$38.0 million credit of October 27, 1978; Effective Date: January 25, 1979, Closing Date: March 31, 1983 Cr. No. 899 Maharashtra Water Supply and Sewerage Project; US$48.0 mil- lion credit of June 21, 1979; Effective Date: November 9, 1979; Closing Date: June 30, 1984 Having overcome earlier difficulties, including cost overruns caused by inflation (requiring project redefinition in February 1975), redesign of major project components and the addition of a supplementary study on sewage disposal, Credit 390 is now progressing satisfactorily. The water treatment works were successfully completed on schedule at the end of 1979. Completion of construction of the project sewerage works is scheduled for mid-1980. Financial performance of the project entity is satisfactory. Implementation of Credit 842, a second stage of the ongoing Credit 390, is proceeding to schedule. Preliminary work in connection with implementation of Credit 848 is progressing 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, 1981 The Project has had a slow start due to delays in the preparation of technical reports for regional and local water authorities and in the engagement of consultants. While improvements have been made in the physical execution, other aspects of project implementation continue to lag so that disbursements under the Credit have fallen short of estimates at the time of appraisal. In order to improve the situation, arrangements have been made to closely supervise and coordinate implementation.  ANNEX II Page 10 of 18 Cr. No. 1046 Rajasthan Water Supply and Sewerage Project; US$80 million credit of June 25, 1980; Effective Date: August 5, 1980; Closing Date: September 31, 1985 Implementation of this project is proceeding satisfactorily. Detailed construction programs have been prepared for rural schemes, and pre- paration of tender documents for urban schemes have been completed. Cr. No. 756 Second Calcutta Urban Development Project; US$87.0 million credit of January 6, 1978; Effective Date: April 7, 1978; Closing Date: March 31, 1983 The project is proceeding quite well in most sectors, in spite of the severe floods of September 1978 and serious Statewide electric power shortages. Procurement is generally on schedule for equipment and consultants' services, though somewhat behind for larger civil works contracts. Staff shortages in some of the implementing agencies continue, although more exten- sive use of consultants has to a great degree alleviated this problem. Cr. No. 687 Madras Urban Development Project; US$24.0 million credit of April 1, 1977; Effective Date: June 30, 1977; Closing Date: September 30, 1981 Physical progress is generally satisfactory and costs are within appraisal estimates on most components. However, land acquisition problems and consequent delays in construction on one of the three sites and service areas will result in about 15 months delay in the completion of the final sections of these areas. Inadequate attention and staff has been given to the financial analysis and marketing strategies required to ensure that anti- cipated cost recovery in the sites and services and slum upgrading components and thus replicability is actually achieved. However, there is still ample time to deal effectively with these problems; technical assistance is being sought to strengthen financial management and analysis. 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  ANNEX II Page 11 of 18 These four credits, totalling US$224.1 million, support dairy devel- opment projects organized along the lines of the successful AMUL dairy coopera- tive scheme in Gujarat State. More than 2,100 dairy cooperative societies (DCS) have been established under the three state projects (Karnataka 923, Rajasthan-926, Madhya Pradesh-272). Farmer response had been excellent and project authorities are under considerable producer pressure to speed up the establishment of DCS. Profitability in almost all of the DCS is good and con- struction of dairy and feed plants is now proceeding at a satisfactory pace. Limited milk processing capacity has been the major constraint to DCS formation in all three projects. Under the National Dairy Project, three subprojects with an estimated total cost of approximately Rs 1,000 million have been appraised by the Indian Dairy Corporation and a further eight subprojects are in various stages of preparation and appraisal. Advance procurement of dairy equipment is well underway though disbursements have been slow, mainly as a result in the start of project operations. Cr. No. 532 Godavari Barrage Project; US$45.0 million credit of March 7, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1981 Both the civil works and equipment tenders have been awarded after international competitive bidding. Work is proceeding satisfactorily. Ln. No. 1011 Chambal (Rajasthan) Command Area Development Project; US$52.0 million loan of June 19, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 502 Rajasthan Canal Command Area Development Project; US$83.0 million credit of July 31, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 562 Chambal (Madhya Pradesh) Command Area Development Project; US$24.0 million credit of June 20, 1975; Effective Date: September 18, 1975; Closing Date: June 30, 1981 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  ANNEX II Page 12 of 18 Cr. No. 788 Karnataka Irrigation Project; US$126.0 million credit of May 12, 1978; Effective Date: August 10, 1978; Closing Date: March 31, 1984 Cr. No. 808 Gujarat Irrigation Project; US$85.0 million credit of July 17, 1978; Effective Date: October 31, 1978; Closing Date: June 30, 1984 Cr. No. 843 Haryana Irrigation Project; US$111.0 million credit of August 16, 1978; Effective Date: December 14, 1978; Closing Date: August 31, 1983 Cr. No. 889 Punjab Irrigation Project; US$120.0 million credit of March 30, 1979; Effective Date: June 20, 1979; Closing Date: June 30, 1985 Cr. No. 954 Second Maharashtra Irrigation Project; US$210 million credit of April 14, 1980; Effective Date: June 6, 1980; Closing Date: December 31, 1985 Cr. No. 1011 Second Gujarat Irrigation Project; US$175 million credit of May 12, 1980; Effective Date: June 27, 1980; Closing Date: April 30, 1986 These projects, based on existing large irrigation systems, are designed to improve the efficiency of water utilization and, where possible, to use water savings for bringing additional areas under irrigation. Canal lining and other irrigation infrastructure, drainage, and land shaping are prominent components of these projects. In addition, provisions have been made to increase agricultural production and marketing by reforming and upgrading agricultural extension services and by providing processing and storage facilities and village access roads. Progress of these projects is generally satisfactory with the exception of the Nagarjunasagar compo- nent of Loan 1251 where water losses have proven higher than anticipated. Specific efforts are underway to redesign this project so that it can achieve its original objectives. 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, 1981 The progress of shallow tubewells is well ahead of the appraisal schedule, but progress in all other areas is slow. The project will not fully disburse by the closing date, and GOI's request for an extension is expected. Cr. No. 682 Orissa Agricultural Development Project; US$20.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 690 West Bengal Agricultural Extension and Research Project; US$12.0 million credit of June 1, 1977; Effective Date: August 30, 1977; Closing Date: September 30, 1982  ANNEX II Page 13 of 18 Cr. No. 712 Madhva Pradesh Agricultural Extension and Research Project; US$10.0 million credit of June 1, 1977; Effective Date: September 2, 1977; Closing Date: September 30, 1983 Cr. No. 728 Assam Agricultural Development Project; US$8.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 Cr. No. 737 Rajasthan Agricultural Extension and Research Project; US$13.0 million credit of November 14, 1977; Effective Date: February 6, 1978; Closing Date: June 30, 1983 Cr. No. 761 Bihar Agricultural Extension and Research Project; US$8.0 million credit of January 6, 1978; Effective Date: May 2, 1978; Closing Date: October 31, 1983 Cr. No. 862 Composite Agricultural Extension Project, US$25.0 million credit of February 16, 1979; Effective Date: December 14, 1979; Closing Date: December 31, 1984 Cr. No. 1028 Kerala Agricultural Extension Project; US$10 million credit of June 25, 1980; Effective Date: August 18, 1980; Closing Date: June 30, 1986 These eight credits finance the reorganization and strengthening of agricultural extension services and the development of adaptive research capabilities in nine States in India. In areas where the reformed extension system is in full operation, field results have been very good, both in terms of adoption of new agricultural techniques and of increased crop yields. In Rajasthan, Assam, and Orissa, in particular, significant gains have been made under the projects. In West Bengal, where a change in government brought a review of the organizational principles underlying the new extension system and an accompanying hiatus in project implementation, a recent Cabinet deci- sion has reaffirmed the State Government's commitment to the project and revised implementation plans are under preparation. In Bihar and Madhya Pradesh, staff shortages, particularly in supervisory and managerial posts, have hampered project implementation, although progress in areas where regu- lar extension visits are being made attests to the efficacy of the system itself. In Gujarat, Haryana and Karnataka, all covered under the Composite Agricultural Extension Project, important early administrative and financial steps have been taken to pave the way for effective operation of the reor- ganized extension system. In Kerala, project implementation has just begun. Cr. No. 855 National Agriculture Research Project; US$27.0 million credit of December 7, 1978; Effective Date: January 22, 1979; Closing Date: September 30, 1983 While the initial sanctioning of research subprojects under this project was somewhat slower than expected, due to staff shortages in the Project Unit, the pace has picked up considerably in recent months. Commit- ment of funds to research subprojects in FY80 is expected to meet or even exceed appraisal estimates, although corresponding disbursements may lag  ANNEX II Page 14 of 18 somewhat behind the original estimates. Additions to the staff of the Project Unit are being recommended to expedite further progress under the project. Cr. No. 526 Drought Prone Areas Project; US$35.0 million credit of January 24, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1981 Overall progress of this project continues to be satisfactory. Implementation of most components is proceeding well. Dairying and dryland farming components show particular promise for the drought-prone areas. Cr. No. 680 Kerala Agricultural Development Project; US$30.0 million credit of April 1, 1977; Effective Date: June 29, 1977; Closing Date: March 31, 1985 Project implementation started slowly due to initial staffing and funding delays. The project has now gained momentum and the planting opera- tions, which were one season behind original schedule, have been rephased to make up for lost time. Cr. No. 871 National Cooperative Development Corporation (NCDC) Project; US$30.0 million credit of February 2, 1979; Effective Date: May 3, 1979; Closing Date: December 31, 1984 As of October, 1979, when the project was last reviewed, construc- tion of godowns had begun in the three participating States of Haryana, Orissa, and Uttar Pradesh. Consultants were being recruited to assist NCDC and State Cooperative Banks in strengthening their institutions. Initial project preparations have been completed on schedule; disbursements are therefore expected to follow the appraisal targets. Cr. No. 844 Railway Modernization and Maintenance Project; US$190.0 million credit of November 13, 1978; Effective Date: January 10, 1979; Closing Date: December 31, 1984 Credit 844 was designed to help the Indian Railways reduce manu- facturing and maintenance costs of locomotives and rolling stock and to improve their performance and availability. The project is still at an early stage of implementation but is progressing satisfactorily. Cr. No. 609 Madhya Pradesh Forestry Technical Assistance Project; US$4.0 million credit of February 26, 1976; Effective Date: May 17, 1976; Closing Date: December 31, 1981 A feasibility study financed under this Credit and completed in November 1979 has recommended the establishment of two mills, one for sawn- wood and one for pulp, as the basis of the development of a forest-based industry in Bastar district.  ANNEX II Page 5 -of 18 Cr. No. 925 Uttar Pradesh Social Forestry Project; US$23.0 million credit of June 21, 1979; Effective Date: January 3, 1980; Closing Date: December 31, 1984 Cr. No. 961 Gujarat Community Forestry Project; US$37 million credit of April 14, 1980; Effective Date: June 24, 1980; Closing Date: December 31, 1985 These projects were designed to expand the social forestry program in Uttar Pradesh and Gujarat, to provide a source of energy to the villages, and supply raw materials to cottage industries. The projects provide for large-scale tree plantations on public and village lands, primarily along roads, rails and canals, and on village common lands and degraded forest reserves. 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's progress remained very disappointing in all areas until the 1978 season, resulting in negligible disbursements. Due to renewed interests from GOI and the States, the project has now started to progress well. Short-term credits are increasing significantly, new processing units are being established in Haryana and Maharashtra, and plant protection activities have started progressing well. Ln. No. 1273 National Seed Project; US$25.0 million loan of June 10, 1976; Effective Date: October 8, 1976; Closing Date: June 30, 1981 Cr. No. 816 Second National Seed Project; US$16.0 million credit of July 17, 1978; Effective Date: December 20, 1978; Closing Date: December 31, 1984 These projects were designed to increase the availability of high quality agricultural seed, and cover nine States (four by Ln. 1273-IN and five by CR. 816-IN). The first project started slowly due to organizational difficulties and is almost two years behind schedule. Progress in the second project States is more satisfactory. The role of various organizations (National and State) in the production and processing of seed is being reviewed. Ln. No. 1335 Bombay Urban Transport Project; US$25.0 million loan of December 20, 1976; Effective Date: March 10, 1977; Closing Date: June 30, 1983 Cr. No. 1033 Calcutta Urban Transport Project; US$56 million credit of October 27, 1980; Effective Date: January 31, 1981 (expected); Closing Date: December 31, 1984 The bus procurement program supported by the project has proceeded on schedule, with all 700 bus chassis and bodies having been ordered and 589 already in service. Total fleet strength has increased from 1,530 buses at the inception of the project to 1,900 buses in September 1979, in accordance  ANNEX II Page 16 of 18 with appraisal estimates. Depot capacity expansion is lagging somewhat behind fleet expansion, but should match fleet size by early 1980. However, delays in construction of new workshop facilities have been more substantial and will not be fully recoverable. Traffic management civil works are also somewhat behind schedule, although efforts are being made to speed up the works program. Project implementation under Cr. 1033 is proceeding satisfactorily. Ln. No. 1394 Gujarat Fisheries Project; US$14.0 million loan and US$4.0 (TW) and million credit of April 22, 1977; Effective Date: Cr. No. 695 July 19, 1977; Closing Date: June 30, 1983 Cr. No. 815 Andhra Pradesh Fisheries Project; US$17.5 million credit ofJune 19, 1978; Effective Date: October 31, 1978; Closing Date: September 30, 1984 In Gujarat, harbor construction at Mangrol and Veraval are under way, and although some delays have been encountered, the project is progress- ing satisfactorily and no major problems are evident. In Andhra Pradesh, preliminary work on implementation is progressing satisfactorily, and harbor works at Visakhapatnam and Kakinada are scheduled to commence shortly. Cr. No. 963 Inland Fisheries Project; US$20 million credit of January 18, 1980; Effective Date: May 5, 1980; Closing Date: September 30, 1985 This project, which is the first of its kind in India, is designed to increase carp production in five states--West Bengal, Bihar, Orissa, Madhya Pradesh, and Uttar Pradesh--through the construction of hatcheries, improve- ments to fish ponds, strengthening of extension services, and the establish- ment of training centers. The project became effective in May 1980, and the initial implementation tasks, primarily involving the establishment of State Fish Seed Development Corporations and Central and State project monitoring units, are 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 Ln. No. 1648 Ramagundam Thermal Power Project; US$50.0 million loan and and Cr. US$200 million credit of February 2, 1979; Effective Date: No. 874 May 22, 1979; Closing Date: December 31, 1985  ANNEX II Page 17 of 18 Cr. No. 604 Power Transmission IV Project; US$150 million credit of January 22, 1976; Effective Date: October 22, 1976; Closing Date: June 30, 1981 Cr. No. 1027 Second Singrauli Thermal Power Project; US$300 million credit of June 5, 1980; Effective Date: July 30, 1980; Closing Date: March 31, 1981 Ln. No. 1887 Farakka Thermal Power Project; US$25 million loan and and US$225 million credit of June 26, 1980; Effective Date: Cr. No. 1053 December 10, 1980 (expected); Closing Date: March 31, 1987 Credits 685 and 1027 assist in financing the 2,000 MW Singrauli development, which is the first of four power stations in the Government's program for the development of large central thermal power stations feeding power into an interconnected grid. Credit 793 supports the construction of the first three 200 MW generating units at the second such station, at Korba, together with related facilities and associated transmission. Loan 1648/ Credit 874 support similar investments at Ramagundam, and Loan 1887/Credit 1053, at Farakka. The National Thermal Power Corporation (NTPC) has been carrying out construction and operation of these power stations. Loan 1549 is supporting the construction of a 500 MW extension of the Tata Electric Companies' station at Trombay, in order to help meet the forecast load growth in the Bombay area. All these large-scale thermal power projects are pro- gressing satisfactorily. Although the transmission project financed by Credit 604 suffered delays in preparation of technical specifications and evaluation of bids for higher sophisticated equipment, the project is now progressing satisfactorily. Cr. No. 572 Rural Electrification Project; US$57.0 million credit of July 23, 1975; Effective Date: October 23, 1975; Closing Date: December 31, 1980 Cr. No. 911 Rural Electrification Corporation II Project; US$175.0 million credit of June 21, 1979; Effective Date: October 17, 1979; Closing Date: March 31, 1984 Credit 572 consists of a tranche of rural electrification schemes financed by the Rural Electrification Corporation. There are now thirteen State Electricity Boards (SEBs) eligible for onlending, compared with six at the time of appraisal. The project got off to a slow start, due principally to the need to adapt the specifications and tendering procedures to interna- tional competitive bidding, but the position has improved and the full amount of the Credit has been committed. Credit 911 provides continued support to the Rural Electrification Corporation's lending program, and is helping to finance about 1,700 rural electrification schemes in fourteen SEBs, including the newly participating Uttar Pradesh SEB. The project is at an early stage of implementation, and procurement is progressing satisfactorily.  ANNEX II Page 18 of 18 Ln. No. 1473 Bombay High Offshore Development Project; US$150.0 million loan of June 30, 1977; Effective Date: October 20, 1977; Closing Date: December 31, 1980 The project is progressing satisfactorily. Gas and oil pipelines from Bombay High to shore were commissioned in June 1978. Most contracts for Phase III of Bombay High development have been laid, construction should be completed by mid-1980 and the loan should be fully disbursed by its original closing date. Cr. No. 981 Second Population Project; US$46 million credit of April 14, 1980; Effective Date: June 26, 1980; Closing Date: December 31, 1985 The project has as its major objectives the lowering of infant and child mortality and morbidity, the improvement in the health status of mothers and children and the lowering of fertility. Early implementation works have started in both project States--Andhra Pradesh and Uttar Pradesh. Cr. No. 1012 Cashewnut Project; US$22 million credit of June 10, 1980; Effective Date: September 3, 1980; Closing Date: September 30, 1985 Implementation has started on this project which is designed to expand cashewnut production in the States of Kerala, Karnataka, Andhra Pradesh and Orissa. Cr. No. 1003 Tamil Nadu Nutrition Project; US$32 million-credit of May 12, 1980; Effective Date: August 5, 1980; Closing Date: March 31, 1987 First year's implementation in one test block is proceeding according to schedule. Cr. No. 1004 Uttar Pradesh Public Tubewells Project; US$18 million credit of May 12, 1980; Effective Date: June 27, 1980; Closing Date: March 31, 1983 Implementation is underway on this project. Cr. No. 1034 Karnataka Sericulture Project; US$54 million credit of October 27, 1980; Effective Date: January 31, 1981 (expected); Closing Date: December 31, 1985 Project implementation is proceeding well with encouraging progress in all components.  ANNEX K Page 1 INDIA SECOND BOMBAY HIGH OFFSHORE DEVELOPMENT PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken by the country to prepare the project One year (b) The agency that has prepared the project Oil and Natural Gas Commission (ONGC) (c) Date of first presentation to the Bank and date of the first mission to consider the project June 1980/June 1980 (d) Date of departure of appraisal mission June 1980 (e) Date of completion of negotiations October 1980 (f) Planned date of effectiveness December 1980 Section II: Special Bank Implementation Action None Section III: Special Conditions (a) GOI to make satisfactory arrangements for the provision of funds to ONGC should ONGC's funds be inadequate to carry out its investment program (paragraph 40); (b) ONGC to continue, during implementation of the project, to use consultants for certain activities, with qualifi- cations, experience, and terms and conditions of employment satisfactory to the Bank (paragraph 45);  ANNEX III Page 2 (c) GOI to carry out periodically review of the prices of crude oil and natural gas, which would determine the level of prices required to enable ONGC to meet its operating expenses and earn a return on its invested capital suffi- cient to meet its debt service requirements, maintain adequate working capital and finance a substantial por- tion of its proposed capital expansion (paragraph 49); (d) ONGC to submit annually to GOI and the Bank an economic and financial evaluation of the Bombay High Project and of any subsequent major developments, which would indicate the level of prices required to allow ONGC to earn a DCF return of at least 15% for the project and any such subse- quent developments (paragraph 49); and (e) ONGC to introduce an adequate and timely water injection program for the Bombay High reservoir, as determined by the findings of the on-going detailed reservoir studies being carried out by ONGC (paragraph 50).   X o t ' - l ;;~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~k,o \ ' ~~~~~~~~~~~~~~~~~~~~~2s _ f I,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~k j ! , .2 . *z .o ,,,;>5s, '\\ Z 4 0> : \ O * zg * m \ 3 S |* // _ /~~~~~~~~~~~ - ' )