India - Mahanadi Barrages Project

Document of The World Bank FILE Cxpy FOR OFFICIAL USE ONLY Report No. P-2899-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THX INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MAHANADI BARRAGES PROJECT November 11, 1980 This document bhs a restricted distrbution and may be used by recipients only in the performnce of their -ofecid duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (as of October 24, 1980) US$1.00 = Rs 7.676644 Rs 1.00 . US$0.1302 Rs 1,000,000 = US$130,265 (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 CWC - Central Water Commission (GOI) GOI - Government of India GOO - Government of Orissa IPD - Irrigation and Power Department (GOO)  FOR OFFICIAL USE ONLY INDIA MAHANADI BARRAGES PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President Beneficiary: State of Orissa Amount: US$83.0 million Terms: Standard Relending Terms: As part of Central Assistance to States for develop- ment projects on terms and conditions applicable at the time. Project Description: The purpose of the project is to ensure continued availability of irrigation water in a 167,000 ha command area currently serviced by two 110-year-old weirs. The two weirs are in danger of collapsing and continued supply of irrigation water would avert the danger of a sharp decline in agricultural production in the area. It would safeguard farm incomes and employment for the area's agricultural labor force. The project consists of the construction of two new barrages, which would replace the old weirs across the Mahanadi River and its branch, the Birupa River. The head regulators for the three irrigation canals taking off from the barrages would be replaced by new structures. The project would also include the development of a Drainage Master Plan for the entire Mahanadi delta, including the implementation of selected works identified under the Master Plan, a program of water management pilot operations and the construction of staff accommodation and other build- ings required for the supervision and management of the project. The risk associated with the project, apart from those normally inherent in irrigation projects in India, is that one or both of the old weirs might collapse while the new barrages are being constructed; the project would contain specific measures to minimize this risk. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Costs: (US$ million) Local Foreign Total Civil Works 38.1 9.5 47.6 Mechanical Engineering Works 4.8 7.1 11.9 Engineering, Supervision and Administration 9.0 0.5 9.5 Drainage Master Plan 1.2 0.2 1.4 Water Management Program 0.3 0.1 0.4 Base Cost: 1/ 53.4 17.4 70.8 Physical Contingencies 9.9 3.2 13.1 Price Contingencies 19.9 6.5 26.4 Total 83.2 27.1 110.3 Financing Plan: (US$ million) Local Foreign Total IDA Credit 55.9 27.1 83.0 Local Financing (GOO) 27.3 - 27.3 Total 83.2 27.1 110.3 Estimated Disbursement: (US$ million) FY82 FY83 FY84 FY85 FY86 FY87 Annual: 2.2 8.8 19.0 25.0 19.0 9.0 Cumulative: 2.2 11.0 30.0 55.0 74.0 83.0 Rate of Return: 21%. Appraisal Report: No. 3111-IN, dated October 31, 1980. 1/ Including negligible amount of duties and taxes.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MAHANADI BARRAGES PROJECT 1. I submit the following report and recommendation on a proposed development credit to India for SDR 63.3 million (US$83.0 million equivalent) on standard IDA terms to help finance the construction of two barrages across the Mahanadi and Birupa Rivers for the diversion of irrigation water, and associated facilities and pilot operations. The Government of India (GOI) would channel the proceeds of the credit to the Government of Orissa (GOO) in accordance with GOI's standard terms and arrangements for financing State development projects. 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 substantial 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 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 foreign 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 required if the overall growth of the economy is to be accelerated. Slow growth has persisted despite a quite creditable domestic saving and investment performance. 1/ Parts I and II of this report are substantially the same as Parts I and II of the President's Report for the Bihar Rural Roads Project (No. P-2885-IN, dated October 22, 1980).  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 near-by 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, GNP 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 Fall 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  - 3 - year, fell about 8-9% in 1979/80. Foodgrain production is estimated to have declined from 131.4 million tons in 1978/79 to 116 million tons in 1979/80. Considering that 1979/80 was a year of acute drought, coming after two succes- sive 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 might have been even more clearly demonstrated had not the diesel shortages 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 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 consump- tion in 1979/80 exceeded five million nutrient tons, twice the level consumed in 1974/75. 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 grown little since 1976/77. Particularly serious is the evident decline in manufac- tured non-traditional 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 pro- cess 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 maintained. 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 con- straints 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 rates of capital formation over 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 bottlenecks are alleviated. In the case of coal, steel and cement, domestic production appears to be clearly justified on grounds of comparative advantage, indicating an a priori case for policies to promote further invest- ment. 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 disloca- tion 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 performance 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 infrastruc- tural 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 64% 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. 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 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 five years during which substantial foodgrain stocks were built up while imports were reduced to negligible levels. In view of the anticipated growth in foodgrain output and the pro- jected 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 certain policy options will become much more prac- tical 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. These possibilities are likely to emerge slowly and 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 on 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 rises. 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 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.  - 6 - 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 reversal of 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 reversable methods. 18. Beyond the effects of overall economic growth and reduced 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. The poor are ill-endowed with human resources, being disproportionately represented among the illiterate, the malnourished and the sick. Improvements in the living standards of the poor will depend to a large extent on the overall growth of the economy, mainly on increases in agricultural produc- tivity and rural employment opportunities both on and off the farm, but also on the expansion of employment opportunities in urban areas. These develop- ments will have to stem largely from market forces which, however, can be greatly facilitated by appropriate government policies and investment prior- ities. There is also a role for direct government action in faster implemen- tation of land reform (though the scope for significant reduction in poverty through redistribution of land 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-targetted, relatively low-cost programs can lead to enhanced prospects for India's poor.  -7 - 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 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.  - 8 - 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. Therefore, India should be eligible and regarded as credit- worthy, for some supplemental Bank lending. The ratio of India's debt service to the level of exports was 12% in 1978/79 and is projected to remain below 20% through 1995/96. As of 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 - AGRICULTURE AND IRRIGATION IN ORISSA 26. Agriculture is dominant in Orissa's economy, contributing 69% of the State's total domestic product. More than 80% of the population of about 26 million depends directly or indirectly on agriculture, which employs 79% of the work force. The domestic product is highly vulnerable to the vagaries of the monsoon, which often results in severe flooding and droughts. Economic growth in Orissa has been lagging behind the rest of India. Between 1960/61 and 1977/78, the domestic product grew at an annual average rate of 2.3%, compared with 3% for India as a whole.  27. Orissa covers some 15.5 million ha, which represents 5% of India's total land area. The net cropped area is 6.0 million ha, or about 39% of the total area of the state; 1.1 million ha are irrigated. The bulk of the balance is forest, which accounts for about 40% of the State's area. Paddy is the most important crop, accounting for 70% of the cropped area and con- tributing abeMt one-tenth of the rice produced in India. Yields are low, ranging from 1.0 ton/ha for rainfed kharif to 2.1 tons/ha for irrigated rabi paddy. High yielding paddy varieties account for most of the rabi crop but only for about 10% of the kharif crop. Other cereals, like wheat, maize, millets, and barley, take up another 7%, and pulses 14% of the cropped area. Oilseeds (6%), fibers, vegetables and spices account for the remaining 9%. The yields of most crops virtually stagnated during the 1970s. 28. The pressures of population and poverty in rural Orissa are consider- able. Among Indian States, Orissa has the highest percentage of people living in rural areas (over 90%) and is also one of the poorest States in terms of per capita income (about Rs 785 or US$93.50). About 39% of the population belong to scheduled castes and tribes; this proportion of disadvantaged people is the largest among all States of India. Small and marginal farmers, owning less than 2 ha, operate over 75% of the holdings but control less than 40% of the cultivable land, while farmers with 5 ha or more account for only 7% of the holdings but control 35% of the land. Individual holdings are highly fragmented. Adding to the problem of the skewed distribution of income in the rural areas are the landless and agricultural laborers, who constitute an 1.8 million households. The incomes of about 90% of the rural population are estimated to be below the poverty line, compared with about 40% for India as a whole. Consequently, Orissa has the lowest per capita taxable capacity of all states in India (Punjab has the highest at Rs 71.9, the average is Rs 49.4 and Orissa's is Rs 27.6). Of the 15 major states, Orissa also has the lowest tax base. Overall state tax revenues account for only 4% of the State Domestic Product. Orissa, therefore, collects only Rs 20 per head in tax revenues (this compares with an average of Rs 48 for the 15 major states). Neverthe- less, Orissa's tax revenues have been increasing in real terms, at an annual rate of 7-8%. 29. The average rainfall in Orissa is high, about 1,500 mm, but there are considerable variations in both total amount and distribution, and even in the rainy season supplementary irrigation is necessary for high and stable yields. In the dry season (November to April) intensive cropping is not feasible without irrigation. Orissa has vast water resources, which would be sufficient for irrigating about 4 million ha in the rainy season and 2.4 million ha in the dry season. 30. Irrigation development in Orissa started in the second half of the nineteenth century in the Mahanadi delta areas, where about 150,000 ha were brought under irrigation during the rainy season. During the first half of this century, the canal-irrigated area remained virtually unchanged. Since 1950, the Government has completed two major irrigation projects, Salandi and Hirakud, as well as a number of medium schemes, and substantially extended the Mahanadi delta system. Simultaneously with plans for irrigation development in new areas, GOO is now facing the need to renovate the old Mahanadi delta system, which is 110 years old, to ensure the continuity of irrigation.  - 10 - Minor surface irrigation is of little importance in Orissa; but groundwater development, nearly stagnant at a low level until recently, is now receiving increased attention. 31. The Bank Group has contributed to the development of Orissa's agricultural sector through both financial and technical assistance. One of the first irrigation projects supported by the Bank Group in India was the Salandi Irrigation Project (Credit 14-IN of November 1961, US$8 million). Like other irrigation projects in India at that time, the Salandi project did not fully achieve its agricultural potential due to inadequate supporting services and lagging construction of field channels and drains by the farmers. The problems encountered with projects such as Salandi have since led GOI and the Bank Group to reorient their concept of sound irrigation development. In 1975, the Bank, GOI and GOO, with assistance by the IBRD/FAO Cooperative Program, undertook a general review of Orissa's foodgrain potential and agri- cultural development constraints. This led to the formulation of the Orissa Agricultural Development Project (Credit 682-IN of April 1, 1977, US$20 mil- lion) as well as the Orissa Irrigation Project (Credit 740-IN of October 11, 1977, US$58 million). The former project is designed to strengthen agricultural supporting services, particularly agricultural extension and research. Credit 740-IN supports the development of medium irrigation schemes throughout the State, land consolidation, and construction of water courses. Both these projects are currently under implementation. Under the Agricultural Development Project, the reform of the extension system has made good progress; the technical knowledge of both extension workers and farmers has manifestly improved since the project started and the extension service is well on the way to becoming the professional technical service farmers require. Progress of the irrigation project is slightly behind schedule, mainly due to initial constraints in budget allocations and inadequate staffing. The Bank Group has also contributed to groundwater development in Orissa through a series of credits to the Agricultural Refinance and Development Corporation (ARDC). PART IV - THE PROJECT Project Formulation 32. The main objective of the project is to ensure continuity of irriga- tion in the 167,000 ha combined command area serviced by two 110-year-old weirs, which are in danger of collapse. The project would safeguard farm incomes and employment for the area's agricultural labor force. In addition, the project would provide the basis for drainage development over the entire Mahanadi delta and for the introduction of improved water management practices in a pilot area. 33. The project was prepared by the Governments of India and of Orissa, with assistance by staff of the Bank. It was appraised in July 1980. A supplementary Project Data Sheet is attached as Annex III. A report entitled "India - Staff Appraisal Report - Mahanadi Barrages Project," Report No. 3111-IN, dated October 31, 1980, is being circulated separately to the Executive Directors. Negotiations were held in Washington in October 1980.  - 11 - The Borrower and GOO were represented by a delegation coordinated by Mr. S.C. Jain, Director, Department of Economic Affairs, GOI. The Project 34. The proposed project would support the construction of two barrages across the Mahanadi and Birupa rivers near Cuttack, Orissa's largest city. The existing weirs which have reached the end of their technical and economic life developed most of the defects which appeared in the same type of weirs prior to their collapse, and their condition is considered to be as serious as that of the Godavari weir which is currently being replaced with Bank Group financial assistance (Credit 532-IN of March 7, 1975). 35. The new Mahanadi barrage would be located 60 m downstream of the old weir and would be 1,936 m long. Its spillway would have 76 bays, separated by concrete piers and equipped with steel leaf gates, which would maintain the pond level at the present 21.20 m elevation. At this elevation the height of the barrage would be about 7 m above the river bed. At each end of the barrage there would be 10 bays for undersluices and one fish ladder bay. A concrete two-way road bridge as well as the gate operating platform and walkway would rest on the piers. The Birupa barrage would be located 300 m downstream of the existing structure to secure adequate foundations and to reduce its length to 180 m, compared to the 635 m long old weir. It would have 13 bays for the spillway and two bays for the undersluices on the left side of the river. The project would also finance engineering, administration and supervision costs, including the building of staff accomodation. The head regulators for the three main canals taking off from the two existing weirs would be replaced by new structures adapted to the new diversion conditions. 36. Drainage is poor in many parts of the project area. Many of the drains constructed over 100 years ago have silted and require rehabilitation, or have been obstructed by new roads or railways. River embankments often breach during the rainy season, flooding adjacent areas and further aggravat- ing the drainage problem. Since 1978, GOO has been implementing a small rehabilitation program for the drains, with extensions of the program being planned. However, due to the lack of a comprehensive Drainage Master Plan for the entire Mahanadi delta area, drainage works have been done on a piecemeal basis and with less than optimal efficiency. In order to prepare comprehen- sive solutions to the drainage situation, the project would include the preparation of a Drainage Master Plan for the whole Mahanadi delta area of about 300,000 ha, covering the main and intermediate level drainage systems. Preparation of the plan would involve detailed investigations and pilot studies which would allow: determination of the extent of the area requiring drainage improvement, by type of improvement and by priority; development of design criteria and solutions for drainage of low lying areas; identification of flood protection improvements required to prevent breaches of river embank- ments; and preparation of a detailed and comprehensive Master Plan including estimates of costs and benefits. Selected works identified under the Master Plan would be implemented under the project after prior approval by the Association.  - 12 - 37. Under Credit 740-IN, some funds were allocated for refinancing agricultural loans to farmers for the construction of watercourses in areas including the Mahanadi delta. However, progress of this component has been slow, mainly due to the reluctance of farmers to apply for credit and diffi- culties in establishing their creditworthiness. GOO intends to provide initial financing for these works from its budget. Construction of the watercourse would be followed by the introduction of a system of rotational water supply in its command, to improve equity and reliability of water supply to each farmer. The difficulties expected in implementing this plan--especially from farmers at the head reaches of the distribution system, who have been using more than their equitable share of water--could be avoided by coordinating the sequence of land consolidation and construction of watercourses to be followed immediately by the introduction of rotational water supply. To speed up this process, the project would finance a program of water manage- ment pilot operations, which would experiment with the measures described above in an area of a typical distributary of about 1,000 ha. Project Implementation 38. Foundation exploration, hydraulic model studies and detailed designs for civil engineering works have been completed and would serve as a basis for tendering. Implementation of all civil engineering works is estimated to take five years for the Mahanadi and four years for the Birupa barrage. All ancillary works, such as land acquisition, site preparation, construction of approach roads, and drawing of power lines, are expected to be completed in the first year, as would be the contracting procedures for the main civil works and the gates. Equipment and vehicles to be used departmentally for site preparation and for the construction of access roads as well as super- vision maintenance and emergency arrangements would be provided under the project. 39. Overall responsibility for project implementation would rest with GOO's Irrigation and Power Department (IPD), under the Chief Engineer, Irri- gation. IPD has established a special unit, headed by an Additional Chief Engineer, for project execution. This unit would prepare detailed construc- tion drawings, specifications and tender documents, and would have a separate cell for accounts and audits. Qualified staff for all project tasks are avail- able within IPD. IPD would also be responsible for adequate construction standards. It would assign qualified staff for construction supervision, with particular emphasis on quality control. Any changes or additions to the ori- ginal design, which was carried out by GOI's Central Water Commission (CWC), would require CWC's approval. CWC would conduct periodical inspections to ensure that the work has been carried out in accordance with its design and specifications. 40. IPD has also prepared a contingency plan and would be responsible for its implementation, to minimize potential damage and loss of agricultural production, in case one or both of the existing weirs fail during the construc- tion of the new barrages. Materials essential for emergency repairs would be stockpiled near the weir sites (Section 2.06 of the Project Agreement).  - 13 - 41. The main responsibility for the water management program would be with GOO's Command Area Development Department. IPD would be responsible for improving the main conveyance and drainage systems serving the pilot area and for timely water supply. The Drainage Master Plan would be prepared either by IPD or be contracted to an agency with appropriate specialized expertise and experience. Agreement has been reached with GOO that it would submit to IDA for comment, terms of reference for the preparation of the DMP by September 30, 1981; and select by December 31, the agency which would pre- pare the Drainage Master Plan. Agricultural Supporting Services 42. The Training and Visit system has been introduced as a part of the reorganization of the agricultural extension services under the Orissa Agri- cultural Development Project (see paragraph 31 above), and the extension services were brought under a single line of command; since then the quality of extension has improved. The Orissa University of Agriculture and Tech- nology has the principal responsibility for agricultural research in the state. The Central Rice Research Institute of the Indian Council of Agricul- tural Research, at Cuttack, carries out specialized research on rice. 43. Availability of agricultural inputs is adequate. The State Seed Corporation is responsible for production, processing and marketing of quality seed. Fertilizer and insecticides are sold through over 700 private and cooperative outlets. Marketing arrangements for aricultural produce are satisfactory. Four regional cooperative marketing societies are engaged in marketing in the project area. The Jute Cooperative Marketing Society and private mills purchase jute. Cold storage is available in two plants in Cuttack. Seasonal agricultural credit is provided by the Primary Cooperative Credit Societies and by commercial banks. Credit services in the project area are satisfactory. Project Cost and Financing 44. The estimated total cost of the project is US$110.3 million equiva- lent. Taxes and duties included in the cost estimate are negligible. The foreign exchange component of project cost is estimated at US$27.1 million (25%). The principal cost components, net of physical and price contingencies (US$13.1 million and US$26.4 million, respectively), are civil works (US$47.6 million) and mechanical engineering works (US$11.9 million). The balance is made up by the Drainage Master Plan (US$1.4 million), the Water Management Program (US$0.4 million), and engineering, supervision and administration (US$9.5 million). 45. The proposed credit of US$83.0 million would cover 75% of total project cost, including all foreign exchange cost and 67% of local cost. This share of project cost financing is justified in this case because of serious constraints on Orissa's budget (which cannot be remedied in the short run due to the State's low tax base), the extraordinary poverty of the population in the area (see paragraph 28 above) and the need to implement the project in the shortest possible time (to minimize the risk of weir failure). GOO would finance the remaining project cost. GOO would provide sufficient funds and materials to execute the project in accordance with the five-year project  - 14 - implementation program (Section 2.01 of the Project Agreement). The proceeds of the credit would be used to finance: civil and engineering works (US$69.0 million), equipment, materials and vehicles (US$2.0 million), and drainage plan and water management studies (US$2.0 million). The remaining US$10.0 million would be unallocated. To ensure timely undertaking of preparatory activities, such as the construction of approach roads, site buildings and procurement of mild steel for reinforcement, retroactive financing of up to US$1 million would be provided for eligible expenditures incurred after August 1980. Procurement and Disbursement 46. Contracts for civil and mechanical engineering works amounting to about US$58 million would be awarded on the basis of international competi- tive bidding in accordance with the Bank Group procurement guidelines. Local contractors participating in the bidding for civil works would be entitled, for bid evaluation, to a 7.5% preference. For gate manufacture and erection, a preference limited to 15% or the prevailing customs duty if lower would be extended to local manufacturers in the evaluation of bids. Tender documents would clearly specify the preferences and the manner of their application. GOO would use tendering and contracting procedures that are in line with the standard procedures developed by CWC and approved by the Association. An additional US$2 million worth of civil and engineering works which are not suited for international tendering due to their individually small size and would be contracted through local competitive bidding or in piecework con- tracts, or would be carried out departmentally (riverbed preparation, access roads, site preparation and staff housing). 47. The estimated cost of equipment, materials and vehicles for prepara- tory works, supervision and maintenance is US$1.7 million. These items would be procured after local competitive bidding, in order that they could benefit from existing servicing and spare parts supply facilities. 48. The proceeds of the credit would be disbursed against the ex-factory price of locally manufactured equipment, materials and vehicles, or against 70% of expenditure for these items, where the ex-factory price is not readily available. Disbursement for civil and mechanical engineering works would be 85% of expenditures. Expenditures for the Drainage Master Plan and for the water management program would be fully reimbursed. Full documentation would be required for all disbursements, except for payments of up to Rs 300,000 for civil and mechanical engineering works and Rs 150,000 for equipment and vehicles and for works carried out departmentally, for which disbursements would be made against certificates of expenditure. The supporting documents for these payments would not be submitted to the Association but would be retained by GOO for inspection by IDA review missions. It is expected that disbursements would be completed by March 1987. Benefits and Economic Justification 49. The project's primary objective is to ensure the continuity of irrigation in the area under the commands of the Mahanadi and Birupa weirs. Its net economic benefits are equal to the difference between present bene- fits under irrigation and benefits under rainfed conditions that would exist  - 15 - temporarily in the case of failure, or permanently if weirs are not ultimately replaced. A return to rainfed conditions would reduce annual production by 259,000 tons of paddy, 10,000 tons of jute and 20,000 tons of groundnuts. The annual net value of production would decrease by US$30 million in financial 1980 prices or by US$36 million in economic prices. Moreover, employment opportunities in the area would decrease by the equivalent of about 62,000 full-time jobs. The income of an average farm family would decrease from about Rs 2,280 to Rs 790, which would trigger a negative multiplier effect in other sections of the local economy. A failure of the weirs would also result in grain shortages, social unrest and other undesirable socio-economic effects which cannot be quantified. 50. Calculation of the project's economic rate of return requires assump- tions regarding the probability of failure of the old weirs. Both weirs are liable to breach in the near future and the probability that either of the weirs would fail is presently (1980) estimated to be within the range of 10% to 20% (15% for calculation purposes), and rising by about 2% per annum. Based on this estimate and on the estimated losses described in paragraph 49 above, and discounting costs and benefits of the project over a 50-year period, the economic rate of return of the project is calculated at 21%. This rate of return is based on the present water distribution system, farming practices and yields. If the present field to field irrigation were to be replaced by irrigation directly from watercourses the annual net benefits from irrigation would more than double, and the economic rate of return would increase to 41%. Sensitivity tests indicate that even considerable deviations from the basic assumptions still leave the project economically viable. If the present probability of weir failure is reduced by 5%, the economic rate of return would decrease to 19%. The economic rate of return would remain above the opportunity cost of capital if the gross value of production decreases by less than 32% of the estimate or if construction costs increase by less than 148%. Cost Recovery 51. The capital costs of the new barrages would amount to Rs 4,220 per ha of cultivable command area. Assuming an economic life of the project of 50 years and 10% annual interest, recovery of these costs would require annual payments of Rs 508 per ha. The incremental O&M cost of the new bar- rages is estimated at Rs 20 per ha. Total annual payments required to recover investment cost and full O&M cost would therefore be Rs 528 per ha. The project rent (net incremental income less the necessary rewards to the farm family for its labor, entrepreneurship and cultivation risk) is estimated at Rs 1,020 per ha. 52. Water charges in Orissa are among the lowest in India. However, GOO is in the process of raising water rates considerably. The increase proposed by GOO, which has been gazetted and presented to the State Legisla- ture is expected to become effective in the near future, would amount to 100% for kharif paddy and about 50% for other crops. The increased charges would range from Rs 10 to Rs 230 per ha and would average Rs 112 per ha for the projected cropping pattern in the project area. These water charges, together with Rs 132 per ha in incremental sales taxes and Rs 12 per ha in incremental  - 16 - land revenue and cess, would bring total incremental revenues from the irri- gated lands to an average of Rs 256 per ha, equivalent to a cost recovery index of about 50% and a project rent recovery index of 25%. 53. To a large extent, the low level of irrigation charges in Orissa reflects the unsatisfactory irrigation services, especially the unreliable water supply during the dry season, the constraints of diversification of crops inherent in the field-to-field water distribution system, and the poor drainage. 54. With the forthcoming increase in water charges, farmers in the project area would face a steep increase in the cost of irrigation services. It would be difficult to impose on them an additional levy for financing the new barrages, especially since these would not result in benefits incremental to those accruing to them now or to farmers in other irrigation projects. In the short run, the best way to increase the rate of cost recovery would be by accelerating the rate of transition to irrigation directly from watercourses on a fixed rotational schedule in order to improve the reliability of water supply. The resulting intensified use of inputs and increased production would increase the revenue from sales taxes by some Rs 70 per ha. Eventually, the increased reliability and equity of the water supply and the resulting increased return per unit of water would permit a gradual increase in the water rates to bring them to more realistic levels. Project Risks 55. The main risks attached to a project of this type are weir failure during construction. Under the project, all possible precautions would be taken to minimize damage due to weir failure (paragraph 40 above). PART V - LEGAL INSTRUMENTS AND AUTHORITY 56. The draft Development Credit Agreement between India and the Association, the draft Project Agreement between the Association and the State of Orissa, and the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement are being distributed to the Executive Directors separately. 57. Special conditions of the project are listed in Section III of Annex III. 58. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association.  - 17 - PART VI - RECOMMENDATION 59. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President November 11, 1980   ANNEX I Page 1 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVIRAGES LAIJD AREA (THOUSAND SQ. KM.) HOST RECENT ESTIMATE- TOTAL 3287.6 AGRICULTURAL 1824.0 MOST RECENT LOW INCOME MIDDLE INCOME 1960 b 1970 /b ESTIMATE tb ASIA & PACIFIC ASIA & PACIFIC GNP PER CAPITA (US$) 60.0 90.0 180.0 197.9 894.8 ENERGY CONSUMPTION PER CAPITA (KILOGRMS OF COAL EOUIVALENT) 108.0.Ls 141.0]S 176.015 166.0 842.4 POPULATION AND VITAL STATISTICS POPULATION. MID-YEAR (MILLIONS) 434.9 547.6 643.9 URBAN POPULATION (PERCENT OF TOTAL) 17.9 19.7 21.7 20.8 39.1 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 974. I STATIONARY POPULATION (MILLIONS) 1645.0 YEAR STATIONARY POPULATION IS REACHED 2150 POPULATION DENSITY PER SQ. KM. 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 POPULATION 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 URBAN 2.51d 3.3 3.3 3..9 4.1 CRUDE BIRTH RATE (PER THOUSAND) 43.0 40.0 35.0 37.4 28.7 CRUDE 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) TOTAL .. 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 5800.01 4890.0 3617.0 6322.7 4120.1 POPULATION PER NURSING PERSON 9630.0/e 5220.0 5675.0 9459.0 2213.6 POPULATION PER HOSPITAL BED TOTAL 2149.O0f 1629.0 1289.0 1758.4 819.4 URBAN .. .. .. 502.9 RURAL .. .. .. 10524.1 ADMISSIONS PER HOSPITAL BED .. .. .. .. 28.8 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 URBAN 5.2 .. 4.8 RURAL 5.2 .. 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 2.6 2.8 URBAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAN .. .. RURAL .. .. ..  ANNEX I Page 2 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVEAGES - HOST RECENT ESTIMATE) HOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b ASIA 6 PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 72.0 80.0 80.9 98.6 MALE 80.0 87.0 95.0 94.3 99.2 FEHALE 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. (2 OF SECONDARY) 8.0 6.0-/A 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 FEHALE 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 6.7/h 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 (1S$ 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 Ia The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1974 and 1978. /c Solid fuel conversion factors revised, /d 1951-60; Ie 1962; /f 1958; /, 1967; /h 1964-65. April, 1980  ANNE I DEFIITTOS OFSOCAL IDtCAURSPage 3 of 5 aRon:- Although the data are dras tram sources.. geerll jdge t,he mos unt-h-rtclssd eibl itsoldas bs noted that they may net be intte- na.~ta1..1yc-putahis he..u. o f the Iuh f oteudnd- deflitle. denet e sdbydifeetcotiss in, -lletiag she dens. Ths duna are none- theless, atefol todsscoi orders at sagittud, Indica.te esed, and ba-ete-ios ceeti major differeenee betee-... ets Theerfreea goep ar U th out cunao gna of tie sub)sot ous.t ty u- III a -tuir gro-p with somehat htgl- --rrge heroes then the country geauP at te nbj-a cutry (_ua,y tue "l Mtlisrlti foneet gop uber "Middle Incm loath Africa an. idsts scae eas fsrne oul-utrab tfnshs nrh tesogopdt tha avrage ar PaPulati-n weighted artmtcmenfato idi-at-e and sho eely beh- lout bot atthecoatnirni g.au. Ia. dlut oc that ladicatar. Sie the coergeatca..i s-eggb idiftrsdee-t m heavi thilt of. data uod is cot aiftfoa, c-tlo mut batratesd in relatig averges of one t.. tedican hr n asee.Treaese t any.d usfu In. apeieg belt vau of oa tdicut-r at a toes among the -auty aed rtrnegasp..P.T- g.... y..f11 .pt. L UANDRiA (tho..su.d qnhe.) ronaio a hsucn-Ppsantion usnadra y -umr- so praticing psy- Total - Tatulsrfc urea coprising aed urea and inlan eaters. tici_ qualifid conamdil schoo atuivrIty lens.. Agrtaulura - Estimata of ariaeueae used teporaily or p-eeeenly Paauiat-s -e eNsina Person _ .Papulatln dtvidsd by somber at proticleg f-a -tps, pustuass, sarhro aud kit~hesgadseo ta lie fallow; 1977 data, male ued female gradsate nurses patitl nuss,_d ..ssistasnrss dNy PtP, CAPITA_(tIJI$) - GNP per capita e tiae a---rre tknabt paices, o-1- ura,adrural) iie yterraetssu of'V leepitu beds. auas y tame .--vnua method as lurid lush Atlas (1976-7g betas); 1960, avilahle in public ted Priests ge-er1 aed apatai.id hespita1 andre i9li, ad 1978 data. hahilitstiseae-tere. Hfepitalsuree.ttabliheet. persstly staffed EsERGY CONIIs I PEa CAPITA - Or-ol --soptioao omrileeg aa byatln emphsis.ttbihsspaidgprcpaynatd and itgnits, petanloum, saturolgae and hydra-, oealgsr aud geaByna le- cn a s t iscded. ana hospitals,.heeer, isetlde health ae -adi"a ..d 1i d I..'N2. ~~~~~~~~~~enes a prasatysttfe y hyitn(bat by a a-di.s sisat ttriity) to kiloges- af coaI equinales Peace.pits; 1960, 1970, end 1978 tremidwife, er.) ehiah often in-parit --ssdetia med p-eide data, laise.d -sge of mdical facilitisa. PFr tattatical p.rps. . orhenb hampi- sale isciade WHO. yrinatpul gessal uod np-ialie-d hospital, an drua POPULTIONii AND VITAL. STATISTICIS h,spitls loa or rural- hoeplnao. and sdir-I amd matsesityetse. Total P.aultin., Mid-er(ilos - so ul ; 6, 1970, aed 1978 ad iesie art fsainal led - Tntel enbe of sdmlasuea to o diecheages data. gram~~~~~~~~~~~~~~f hespitele divided by the tmber ef beds. anlng -tuniris; 1960, 1171,ad17 as Aveage lies nftosehld erasno esld)-nal ura. ad eseel- Population Paa(ecti.ns A eobl ueit f a -etPo inivdual h. share living quattea Pa L.noni ysan 2000 - C-rret popola~tisa, Projcti-d- ar ae e 90 td their male meals. A bcsder at lodger say or may ace ha included in toa ppylalas, by age and sa dtermrai tyanfetility t55. the has...heldfa saiataca parpees. Pa aiar Parmtr -o e--nlity cares comprise of three 1oc1- aac Aveasnmerom-essarra - tona, urban, and roaI - Annauga te log lif enetu tf birch iconeusieg aith c-utty's Per c pita bcme he ft pe-..na P. roel Ia all urbas, ad tonal eccopled aaett leve, and femal life enpecta..cy etbiliing at 77.5 Years. The pare- dwlig.e sti-sly. 1 Iwelige seclde tn-pere-et stauctune sa.d senate for fertility rat ulc hav three Ion-s -ssaiag decline In utnaphe Paris. fertility accortding tu in-um leve aed past family planatg prtfo. anc... ic.e.s te tisottriity fop-st.nef dwaliia .. total, nbn and runel - tuch cou.nery is ites assigned or sf tb... nine c-bieanlas of mota.lity C.veisldwlig ihelcrct s iigqatIaa ecm an.d f-ctilityt-rads for p-j)ti-j-pupoe. oftat]. eaba,imed tota dwmiity rspcIvely.mg ittiseury osealatien -In a taioay Population, iha- Is no greth sis- the hieth atet is equal nothe death rt, sad als the g a9.tr-ctoesre.- EDUCDATION males ustent. Trhis is achievd usly fte- fe-tilityp rtesdt lm te Adloste Isesilmem ttiss the _saeea leel -faim met -sprnd-tias rtet, whtsabgemsta Primar sehea - tetal mal sa. d female - G.... total, male ed female ofesnaP"'sitef snatly. The stationar popo1atiam els maweaieta l gsa hepiayi la etnae of teap-totlt estimated the baeio of sha. psajeuted naannita f the papaletien prmary enits-e-ga peplati-sa; mesmly imalade ehtids aged 6-11 is the yeer 2000, aed the rtst of denline of fertility rtet te replete- years hoe djuatd Esr difft cet 1egtha ef pelmar ed...nios; ton set level -mtries withbaier d .d..atise arelise -y seemd ill pera..et Tea atatis...ny papraLithe ie seaubed - The Year whe. atti-ta y PePolatios isee eo papil are he en shav the sf8i`ial saes see ties bee beet reahed. Sene.d.. ao4.heli- total, male sad fausle - C.mpoted aabove; secoada Populainlass edsatie rqieat lens fea years efapproved primary imatrtina; Per am. kas. - Kid-peso pepalatio Per squaa hil-t-ne lilT hectares) f prvdsgars, aimi an .te the ta-ifsi iseatnoti... f- atpopi tonal ae.usly o8 12 te 17 year g age] es_repeadesasen ..sensg .eeaIy Pe u I t si-ultu-l land - Csapoted as above tnt- gicltna d mlW.ded nely. Tons~~~~~~V ..tioslseeima arom of aattedmr .-'fttiesa iaetitutiis Poaainionian Iruotr5 scet)- Cidrn(-byas,eaigam 11 tanldp tobe til hdati, oetherprgm hith operate indepe- 64 year), and retlee'd (IT er a vr slrntgso id%-y POPe- detlyerm depatuta= ef..ee.adary tastitntits lantois; 196~t1,1971, and 1978 data. Ppal-*.soh- taie - ram ....sa seeday - Total etodest enanld is Psuainlatb tan (rerc..st) - total - iAne.l growth fas ateal mid- pemr Ed sadr evl iie y ubr fte eei h yerpepolaions fan11-I 19601-71, and 1970-78. carreypeeding leel.4 ...diddb.- f h-ith P Gruatie i tum l te (rec..i - neha A-Iin growth atea. of unha p.p.-O Adult literay rt (eet)-Litentst adn1te (able te aad nod w-its) mimest tar 19f11-6l0,t1961-7G, .ed 19701-78..asapercntge ef ntal. adat popolatie aged 11 years sadovr Cead BMath lat leer _honsd) - aaoal live births per thousaad at mid-yea papolation; 1960, 19701..nd 1979 dana. CONISUMPTION Trade teeth laET (evethona-d) - Aua- deaths Per th....nd of eid-yer Pana..gEr Cars (per tho..e.ed eelto)-Peesege .t cr eetee. meter populatn. 91 17,ad178dt.cr seatieg lee than eiht prae mniadas a-bal.a.e.. hearses and lines Repreduntine late - Average saero d. gees ill bes is military vehicle.. her ,-rIa aepeduntiv peaedt she: paaleas paset ge-epecif... f.r- ladis taivr (ear theusad selnir - All types .o...niver f nrdb tiiyrtes; .u.aly fiv- a averges endin,g in, 1960, 197,te197htdaastgarlpbiaeatnadatpaaia;noueol- Poiy l gen - Acceturp dsoa (ehos..ed.) - danoa nuber f sane pt.e. testd e...mi-er in -eties atd is, years whet registria of radio e of binth-eo_toldevce sdenasie tntioa aiypae egea. meis effeet; data f- retest Yeses sty sa be comparable since meat PaiyPFU ta-en (naa of mantld wmn ennrg fmrid -eumrbe ah1iehed lieseieg. wees olf cild-heating ag (li-44 Ysua) who.s birth-not-l d .vi.e to TV Re.,veestee thaesaed onaltine) - TV --i-tnr fE- broadcast to all marrie women ins sage.. goP. geseralKpeblie e hasasad pplatioe; e..nldes onlic....ed TV rcivers PFOtD dND NUTRITION hti itameisedu years whnmrgitatn f TV sate was in effant. K-.-. i-U-ti-(per tbnoaaad soaltion) I,bow the -veesg tieW lae fPn rdnto f aia(96-W1.-ldnofprnpt an tiam at "daily geserel inteemat nwpaper * d tend as a periJd,In peb- prodacin aalfodsu ditiss ndci.o.. setldos eed adPfend end 1 liratiom deiled prImaily to reoneding gseersl sae 't is eassidered in -s ca1nd-c Yee basis.. C ...ditisnovrprimar gond (.g. sges to he 'daily it it ppar atles fo tims ksh instead ofsga bih ar edible ted notain tstrise (e.. eae ae. d Cbems_ a -tedm e Capita aPt Tea - B..sed os the nuber ef teat ar elded) . AgXgregte paduction of saah -stry is hb-d amik'- t~ h .,jldi .t-.t- natel avras ado..er pries nights; 1961-65, 1971.sd 98 aa tieee meild dsit gteya, ldn dmsin odev-nn Percaie cmi ofainin(amenet of rnteame-ta) - Competed ftea n oisaie enentgy equivalent ft set fond sapplise avilable In a_stry per rApita LABOR FORCE per day. Available sapie rs dometin pendeoia,imetTles Itel LabePot(tn d) - Icasonitally active esm. inaluding eaot,1sad hbnesi stank, etepplits eslde salam teed, sfl, sad tone sa smplnyed ha t eacdiag those=ine,,etudette, rtc qs"ntie use infdpeiesn . sd lessee is dienribstise. teqains- 1s ctoei aiu estrts or sa aprbe I16,17 a estswe esiaedb Ch based na physielogieal seeds far mesl atii- 17 aa city sad health ..c.eideregeai tese talt -nture, body weights, age P 78l deret Pnslba oitopsnnaeoft51lbs rs aed ss dstniutia ofpopulatias, and a11ming 1i peneest far meets n Ornlur a en - Labor fera is taing, f_netry, beaning and 2hosehold level; 1961-li, 191., sa 19177aa fishing asp-eeng at total leb- fnrte; 1960, 1970 aed 1979 date. Per istt enaniy of prtein (erase pea daY) - Prosols oetnet of per saPin. Indasey p....ne ~I- Lhe- forte in m.inig nnttuntin,a, eaf-t-arieg net supply of food per day. let supply offod is defined as above.tE.- aedeanriity wt erdgsa ptetags of total labor force; 1960. qolemets o al n-ntris established by USDA proide tot m.isenm171sd17 dat. g 6lewme o I gam f total1 prote IPer day and 20 grams at animal sa 190d Petceto late d pert st - ,ml,ad female - Participatin poles pestin, of whiob II gee hbsld he animal protein. Th... ensad- aaimiey rtes. st. naputda toa, ae,ad female labor ft s urds are Inoe than those of 75 gra- of total poteis ted 23 taem of p-eetagse of total, niean ftamale ppatoof all geecaetiey anma protein as n oerge far the wand, prepo..ed by PAO is thn Third 1960, 1970, aed 1971 deas. Thass are P110 pricipetiat totes -efir-tlng Onn,id rood lovey; 1961-li, 1970 sad 1977 dots. aE-ama t-etore of the popoatie.. and me.g time treed A f. en nti- Pe .Peto antei. _oenlY faum atin adpus -d . Petein supply of fond de- matesse8a uioleoea rinad fromusimala ad pu1ses i grama pe dey; 196-6,1971 sad 1977 data. taneomin temdny tatin - tonn ofppltiasdan 1) sad 65 andoe Chld(ara1-) eeaity late,aanbuad - A-..aI deaths Pet thansd is otesellhttre uge group 1-i ss iohilde inhibi age letp; for meet devsing none tinto danaderive trmlife nables; I1911, 1970 end 1977 data. INClf DISTRIIBUTION 77101211 Pernentuas o~~~~~~~f Private I-em (both in cash sad hind) - te-ivd byorinbet Lifo tesciocc ut inib (earn) Averge toaer at esas f life sanug Ipret rihs 21 percet, po-vot 21percet, and PooetA- paea anbirth; 1960, 1970 and 1971 data. of hneod. Inat -otalitYlam pee thouns...d) - Aennal dothm at infaste ade- one Year POET TARGE GROUPS afeoprtheosd lint hitha. Eteimatd Absolu-te Pev-ty TI-a Leve (11$ar sita) - orb. asadaul- Numbr a prpla totl, rban so rual) iobaesnnabe ooes te ats . stritise.elly adeqoate diet plu ..n....tia1 ann-fond raqineta. is set sae upy (Includes tananed suf aewaesorotrae bat i-otmnae fPsdb ou.te eah an than ftra prte-td bnrh- es spig,sd ...sitary wells) istimed Relative Povety, en- Level (US$pe os it) ehm sd ea pracennag.. of their epet popbunan. I a uramaepublin .- tot l.rltive povety iseses lee is. ste.-third efaveesgapecit fa..nnin or statdpot locate dnomaethail eseer from a hoses maY be persml tean nf the noontry. Irban leve is dsived from b.the mel uaid,n,d an,~ bing withi Ia reasonble access off. thatbu narlass lee lbajemn o h,,Ig"her, coat.f living be tbha-osa resaneblo aceswId inply that the.ooecif orebea t. Ithe h..:eheid Taimae eaaieglwaslt oet ae ee aeet e do nt hae t sped adisproporint-at P ni tfhe day is f-trhieg the an--r---Pre--f--p--i--uba-adtoa)-hsae--- oat ee" to_ily' .. sane osdada. dIspoa us. pecaae1f their -enpa ine populotions. tEo-rn di.- Innicsd Soola1 Dtat Divisies pu -lna iald the oian -esd diupo...i,iole _ an ish-n trreeteor t Anonoeeysis and P-je-ti-a Depee-et ofhuan'crtaadwtts-wate by wator-brue systems orthe s f .Apr,il, 1991 pin privian and sisil_r inetallantioo.  ANNEX I Page 4 of 5 ECONOHIC DEVELOPMENT DMTA GNP PER CAPITA IN 1978: US$ 180 b/ c GROSS NATIONAL PRODUCT IN 1978/79 ANNUAL ARTE OF GROWTl (%. constant pricos) US$ B3n. % 1955/56-1959/60 1960/61-1964/65 1965/66-1969/70 1970/71-1974/75 1975/76-1977/78 GNP at market Prices 117.08 100.0 3.7 3.6 3.7 2.8 5.6 Cr.as Donestic Inveatnent 28.28 24.2 Grosa National Saving 28.11 24.0 Current Account Balance d/ 0.50 0.4 OUTPUT. LAbOR FORCE AND PRODUCTIVITY IN 1971 Value Added (at factor cost) Labor Force V.A. Per Worker USS Bln. % Mil. 7. US$ 7 of National Aver ae Agriculture 24.5 46.6 130.0 72.1 188 64 Industry 11.8 22.3 20.2 11.2 582 199 Services 16.3 31.1 30.2 16.7 542 186 Total/average 52.6 100.0 180.4 100.0 292 100 GOVERNBENT FINANC */ Ceneral Govern-ent Centril Government Rs ln. % of GR 1 onf GDP it;8/79 1978/79 1974/75-1978/79 1978/79 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 Surplus/Deficit 6.41 0.7 1.6 - 1.28 -0.1 0.5 Capital Expenditures f/ 78.41 8.1 7.2 57.34 6.0 5.1 External Assistance (net) A/ 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 78/79 Sexteber 1978 Sentember 1979 (Rs Billion outstanding at end of pertod) Honey and Qu.si Money 121.4 198.4 220.3 254.7 308.9 370.4 445.6 398.5 473.7 Bank Credit to Gover-.ent (net) 52.6 87.3 95.3 101.1 110.2 134.7 153.9 139.5 161.7 Bank Credit to Consaercial Sector 64.6 107.0 126.7 153.9 185.1 212.2 253.3 225.8 273.8 (Percentage or Index Numbers) January 1979 January 1980 Money and Quasi Honey as 7 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 Annual percentage chungea in: Wholesale Price Index 7.7 20.2 25.2 - 1.1 2.1 5.2 - 0.4 20.9 Bank Credit tc Cov-rnnent (net) 10.8 12.3 9.2 6.1 9.0 22.2 14.3 16.9 15.9 Bank Credit to Corenercisl Sector 19.4 22.6 18.4 21.5 20.3 14.6 19.4 15.6 21.3 a/ The per capita GOP estimate is at market pricen. calculated by the converaion technique used in the World Bank Atlas, 1979. All other conversiona to dollars in this table are at the average exchange rate prevailing during the period overed. b/ Quick Estimates. S/ Computed from trend line of GNP at factor cost series, including one oboervation before first year and one ob,ervati.n after last year of listed period. d/ World Bank estiftes; not necessarily consistent with official figures. e/ Transfers between Centre and States have been netted oat. f/ All loans and advances to third parties have bee- netted out.  ASNEX I Page 5 of 5 BAISUtC Or PA $NTS 1976177 1977/78 1971/79 1979/- 0 h R N DISR XRIPTS (AVEiAGi 1975176 - 1978/79) Exports of Goods 5,753 6,315 6,976 7,800 Engineering Goods 671 11 Imports of Good. -5,928 -7,188 .8,488 -I,00 Tea 420 7 Trade lance - 175 - 873 -1,512 -3,200 GM_ 499 8 XFS (not) 379 692 882 1,050 Clothing 37B 6 Leather and Leather Resource Balaftcg 204 _ 630 -2,150 Products 319 4 Jute Manufactures 251 4 Interest Payments (not) i -182 - 89 130 400 Iron Ore 270 5 Other Factor Payments (net) - - - Cotton Textiles 248 4 Net Transfer. j/ 695 1,077 1,000 1,000 Sugar 224 4 Others 2,649 45 Balance on Current Account 717 807 S -750 Total 5.929 10 Official Aid Disburmeenta 1,955 1,628 1,695 1,370 UTEUIh DIBT, &a3 31. 1979 Aortization -560 -645 -702 - 687 USS bilion Transactions vith DD7 -337 -330 -158 - Outstanding and Disbursed 15.5 All Other Items -200 616 199 _ -183 Undieburaed 5.2 outstanding, including 20.7 Increase in Reserves (-) -1,575 -2,076 -1534 - 250 Undisbursed Gross Reserves (end year) 3,747 5,823 7.357 7,607 b/LI Net Reserves (end year) I./ 3,276 5,668 7,357 7,607 DEFBT SERVIC8 RATIO FOR 1978/79 15.0 percent Fuel and Related MAterials IRRD/IDA LENDING. DECUER 31. 1979 Imports 1,581 1,811 2,043 4,050 US$ million of which: Petroleu 1,581 1,811 2,043 4,050 IBRD IDA Irports 37 32 24 - Outstanding and Disbursed 689 4,286 of which: Petroleum 21 18 n.&, U lndisbursed 614 2,621 Outtetanding. including 1,303 6,907 Undisbursed June 1966 to aid-December 1971 U081.00 - Re 7.5 Rs 1.00 - USS0.133333 Kid-December 1971 to end-June 1972 : US$1.00 - Rs 7.27927 Rs 1.00 - USS0.137376 After nd-June 1972 Floating Rate Spot Rate nd-Doecber 1978 US*.OO -Re 8.188 Rs 1.00 - US0.122 Znd-Dc_er 1979 : US$1.00 - Rs 7.907 R.s 1.00 - USS0.126 b/ Ratimeted. / Figr givn cover *11 investment income (nt)* Major payments are interest on foreign loans and charge. paid to DO, end major receipt is intereat earned on foreign assets. ligures given include morkers' remittances but exclude official grant assistatnet, which is includ within official aid disbursements. / ltcud a net use of IDe credit. Amortisation and interest payments on foreign loans as a percentage of merchandise exports.  ANNEX II Page 1 of 18 THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of August 31, 1980) US$ 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 1053-IN* 1980 India Farakka Thermal Power 225.0 225.00 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 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 Total 2,653.8 8,401.6 of which has been repaid 1,027.5 64.4 Total now outstanding 1,626.3 8,337.2 Amount Sold 133.8 of which has been repaid 120.3 13.5 Total now held by Bank and IDA 1/ 1,612.8 8,337.2 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.  ANNEX II Page 7 of 18 State Financial Corporations involved. Loan 1511 is designed-to encourage the 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 Development 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$13.0 million credit of January 22, 1974; Effective Date: Septemher 26, 1974; Closing Date: December 31, 1980 The project encountered prolonged initial delays due to managerial and technical problems. These problems have been largely resolved, but con- struction progress remains slow due to material shortages and severe winter conditions. Initial packing house operations were undertaken in the last two seasons with favorable response from farmers. The project is scheduled for completion by December 1980. Cr. No. 806 Jammu-Kashmir Horticulture Project; US$US$14.0 million credit of July 17, 1978; Effective Date: January 16, 1979; Closing Date: June 30, 1984 The principal executing agency, J&K Horticulture Produce Marketing and Processing Corporation, is under strong management and rapid progress has been made in start-up operations with only minor slippage. The project's research activities, however, are behind the original schedule due to poor organization. Ln. No. 1313 Telecommunications VI Project; US$80.0 million loan of July 22, 1976; Effective Date: September 14, 1976 Closing Date: March 31, 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, altho'igh 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 creALt 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 Madhya Pradesh Agricultural Extension and Research Project; US$10.0 million credit of June 1, 1977; Effective Date: September 2, 1977; Closing Date: September 30, 1983 Cr. No. 728 Assam Agricultural Development Project; US$8.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 Cr. No. 737 Rajasthan Agricultural Extension and Research Project; US$13.0 million credit of November 14, 1977; Effective Date: February 6, 1978; Closing Date: June 30, 1983 Cr. No. 761 Bihar Agricultural Extension and Research Project; US$8.0 million credit of January 6, 1978; Effective Date: May 2, 1978; Closing Date: October 31, 1983 Cr. No. 862 Composite Agricultural Extension Project, US$25.0 million credit of February 16, 1979; Effective Date: 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 15 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 The bus procurement program supported by the project has proceeded on schedule, with all 700 bus chassis and bodies having been ordered and 589 already in service. Total fleet strength has increased from 1,530 buses at the inception of the project to 1,900 buses in September 1979, in accordance with appraisal estimates. Depot capacity expansion is lagging somewhat behind fleet expansion, but should match fleet size by early 1980. However, delays in construction of new workshop facilities have been more substantial and will not be fully recoverable. Traffic management civil works are also somewhat behind schedule, although efforts are being made to speed up the works program.  ANNEX II Page 16 of 18 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 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  ANNEX II Page 17 of 18 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. 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.  ANNEX II Page 18 of 18 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.  ANNEX III INDIA MAHANADI BARRAGES PROJECT Supplementary Project Data Sheet Section I Timetable of Key Events (a) Time taken by the country to prepare the project About one year (b) The agency that has prepared the project Government of Orissa; Project Preparation and Monitoring Cell (GOI) (c) Date of first presentation to the Bank and date of the first mission to consider the project November 1979/March 1980 (d) Date of departure of appraisal mission July 1980 (e) Date of completion of negotiations October 1980 (f) Planned date of effectiveness February 1980 Section II * Special Bank Implementation Action None Section III : Special Conditions (i) GOO to stockpile materials essential for emergency repairs near the weir sites (paragraph 40). (ii) GOO to provide sufficient funds and materials to execute the project in accordance with the five year project implementation program (paragraph 45).  ________________d'O _______________ IBRD 15010 tC RH. AUISLJST t s . _A:199 ~~~Sj ~~~~~ ~CHINA 9WD PAKISTAN BHUTAN X / u t v i )f : RNA R>, . H D EHIHA gNH -,I S, pH,HOH-d , PATIRSL. 77~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ A I~~~~~~~~~~~~~~ MAHANADI BARRAGES PROJECT L? ~~~~~~~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~PROPOSED RARRAGDS EXISTING WEIRS -H ~~~~~~~~~~~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~PROPOSED CANALS -EXISTING CANAlS WITH SYPHONS -Vi x~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~NEW SECTA EXISTING DRAINAGE CANALS HLD DELTAIPROJCCTAHEAI ROADS 5 5 HG IS CCCS.15:55; 5 REHS DEIFENED RAILROIADS MILES. - 5AREAS FLOODED . -RSS /~~~~~~~~~~~SGDROS 5 10 15 ) < 0 4A TOWNS AND CITIES