India - Madhya Pradesh Medium Irrigation Project

Document of FIL COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2961-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MADHYA PRADESH MEDIUM IRRIGATION PROJECT February 18, 1981 This document haw 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.  CURRENCY EQUIVALENTS (As of February 12, 1981) US$1.00 = Rs 8.217528 Rs 1.00 = US$0.122 Rs 1 million - US$121,691 (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 AC - Appraisal Committee AD - Agricultural Department CWC - Central Water Commission GOI - Government of India GOMP - Government of Madhya Pradesh ID - Irrigation Department (GOMP) IFAD - International Fund for Agricultural Development MIP - Medium Irrigation Project MP - Madhya Pradesh O&M - Operation and Maintenance  FOR OFFICIAL USE ONLY INDIA MADHYA PRADESH MEDIUM IRRIGATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President Benefiziary: State of Madhya Pra:desh Amount: SDR 112.6 million (US$140.0 million) Terms: Standard Relending Terms: As part of Central Assistance to States for development projects on terms and conditions applicable at the time. Project The purpose of the project is to develop irrigation water Description: supplies on the numerous small rivers located throughout Madhya Pradesh to supplement limited and erratic rain- fall. The project would also provide the basis for better water management in the State. It would furth- ermore improve the data base for planning future irri- gation projects in Madhya Pradesh. The project would consist of: construction, over a five-year period, of medium irrigation projects throughout the State; flow monitoring and evaluation studies; water management areas; training of management staff; technical services for the planning and design of the distribution system; and demonstration farms for irrigated agriculture. The project would increase agricultural production and the standard of living of the farmers in Madhya Pra- desh. The risks under the proposed project are those normally associated with irrigation projects in India. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - (US$ million) Estimated Costs 1/: Local Foreign Total Construction of Medium Irrigation Projects 153.3 31.4 184.7 Flow Monitoring 0.5 0.2 0.7 Water Management 0.4 0.1 0.5 Demonstration Farms 0.1 0.1 0.2 Technical Services 0.6 0.4 1.0 Base Cost 154.9 32.2 187.1 Price Contingencies 37.4 7.6 45.0 Total Cost 192.3 39.8 232.1 (US$ million) Financial Plan: Local Foreign Total IDA Credit 100.2 39.8 140.0 Local Financing 92.1 - 92.1 192.3 39.8 232.1 =c=== ==== =-==== Estimated Disbursement: (US$ million) FY82 FY83 FY84 FY85 FY86 FY87 Annual: 8 26 29 35 29 13 Cumulative: 8 34 63 98 127 140 Rate of Return: 18% Appraisal Report: No. 3260-IN of February 18, 1981 I/ Including taxes and duties, which are negligible.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE MADHYA PRADESH MEDIUM IRRIGATION PROJECT 1. I submit the following report and recommendation on a proposed development credit to India in an amount of SDR 112.6 million (US$140 mil- licn) on standard IDA terms to help finance a five-year time slice of Madhya Pradesh StaEe's investmenL program for medium irrigation and asso- ciated items. The Government of India (GOI) would channel the proceeds of the credit to the Government of Madhya Pradesh (GOMP) in accordance with GOI's standard terms and arrangements for financing state development pro- jects. 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 mil- lion (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 ade- quate livelihood to all those engaged in agricultural activities, espe- cially the landless or nearly landless who have unly 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 59.6Z 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 1/ Parts I and II of the report are substantially the same as Parts I and II of the President's Report for the Second Madras Urban Development Project (Report No. P-2911-IN), dated November 25, 1980.  transformation that has led to higher productivity and rapid urbanization in some other developing countries. The urban population was 18% of the total in 1960, and is 21% now. 4. Economic growth has been slow in the past. The trend growth rate of GDP was 3.7% per annum from 1950/51 to 1978/79. Slow growth in agri- culture -- 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. 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, particularly in the nearby Mid- dle 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 fac- tor 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 constraints in other sectors, bringing recent trends  - 3 - 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, so that by September it stood at 18.4% above that of the previous September. 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 appropriate policies over the past few years are becoming increasingly evident and have withstood the test of a severe drought. Agricultural production, which had increased by 14.5% in 1977/78 and 3.4% in 1978/79 to record levels each year, fell about 8-9% in 1979/80. Foodgrain production is estimated to have declined from 131.4 million tons in 1978/79 to 118- 120 million tons in 1979/80. Considering that 1979/80 was a year of acute drought, coming after two successive years of record output, the foodgrain production achieved -- still the fourth highest in Indian history -- pro- vides a measure of the contribution that expanded irrigation, extension and other inputs have made to Indian agriculture. Furthermore, the capa- city of India's irrigation potential to counteract drought ccinditions was not adequately tested because of the diesel shortages which inhibited the utilization of groundwater resources. Rapid growth in the use of basic inputs for agricultural production has continued. Additions to the area under irrigation have almost doubled from 1.3 million hectares during the five-year period ending in 1973/74 to about 2.5 million additional hec- tares a year during the most recent three-year period. Fertilizer con- sumption in 1979/80 exceeded five million nutrient tons, a level almost 80% higher than in 1975/76. 8. As the new decade begins, the Indian economy is shiLfting from a situation of resource surplus, which had been a temporary phenomenon of the late 1970s, to one of resource scarcity. Investment has again over- taken domestic savings, and the scope for further increases iLn 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 remaiLned comfort- ably small in relation both to GDP and to a growing pipeline of aid com- mitments. This was primarily due to favorable terms of trade movements and rapidly growing net invisibles which masked adverse underlying trends  - 4 - in the volume of exports, which has barely grown since 1976/77. Particu- larly serious is the evident decline in the quantum of manufactured 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 pol- icy and increase in imports were limited to raw materials, basic commodi- ties and intermediate goods; consumer goods remained banned and capital goods imports were permitted only on a selective basis. Strong new pres- sures 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 exports now exceed 50%. 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 manufac- turing a wide variety of consumer and capital goods. Basic infrastructure -- irrigation, railways, telecommunications, roads and ports -- is exten- sive 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 suf- ficient 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 stra- tegy; however, it is unlikely that the priorities accorded to agriculture  and power will be lessened. Furthermore, developments in Inclia 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 iin infrastruc- ture and related constraints in production of several basic industrial inputs; (b) the new policy options emerging in agriculture; (c) the need to substitute less costly energy sources for imported petroleum; and, (d) the anticipated deterioration of the balance of payments in the near future. 12. The higher capital formation rates of the past few years augur well for future income growth. However, there are signs that, relative to existing demands, the pas_' investment program has led to disproportionally low growth in certain crucial sectors, namely power, coal, transport ser- vices, 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, and the aim of policy is self-sufficiency. All these are tradeable commodities. Although in 1979/80 they were not imported in sufficient amounts to eliminate the shortages, inacreased short-term reliance on imports may be necessary to alleviate slowdowns and dislocation in using industries. In the case of sectors in which there is no option to import the final product --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 infrastructural constraints and shortages of basic industrial inputs demonstrates that the expansion of industrial out- put leads to competing claims on scarce resources which must be effi- ciently allocated among different industries. 13. The substantial increase in the world price of petroleum in 1979, together with the expectation that this pattern will not be reversed in the near future, raises several issues concerning energy prospects for India. India imports the equivalent of about 50% of its petroleum con- sumption. 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 implementation of India's long-term conversion program. The interdependencies in the economy currently make petroleum demand a residual which is contingent on the operation of many other sec- tors and which has significant implications for the balance of payments.  - 6 - 14. In agriculture, despite the 1979 drought, economic policies, development programs and secular trends all seem favorable for sustaining a period of high growth during the 1980s. India should end 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 decade which point to a consistent improvement in foodgrain availability in the econ- omy. In view of the acceleration in the use of agricultural inputs and the projected fall in the population growth rate, the long-run prospects for foodgrain supply and demand balances look favorable. Persistent shor- tage seems unlikely, and it is probable that a wide range of policy options will become much more practical as the overriding emphasis on foodgrains can be somewhat relaxed. These options include a slowly fal- ling real price of foodgrains to increase the affordability of foodgrains to low-income families, further rationalization of domestic markets and prices, and diversification to the production of other higher value crops. This prospect will involve only a gradual shift in emphasis rather than a dramatic break with past policies. 15. Foreign exchange reserves still provide some cushion that can help the Government of India in short-term supply management, but this situa- tion 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 decline in the reserve level is expected 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. Investments required to relieve short-term supply constraints must compete with longer-term programs to accelerate growth and to develop India's con- siderable physical and human resources. The balancing of these objectives will place a difficult burden on the framers of India's next Five-Year Plan. The primary focus must be on the implementation of appropriate domestic adjustment policies, although the aid community can and should play an important role in ensuring that India's efforts do not fail due to inadequate foreign resources. 17. The annual population growth rate declined from 2.2% in the late 1960s to below 2% at present and is expected to continue falling to around 1.6% by the latter half of the 1980s. Despite the declining trend in the rate of population increase, a net reproduction rate of one (replacement level) will only be achieved around the year 2020. At that time, the  population of India is estimated to reach 1.2 billion persons, an increase of about 81% over the mid-1980 level of 663 million. Family planning has played an important role in achieving the fertility decline in the past decade, and the extent of a further decline will be greatly influenced by the continuation of a successful official family planning program. The family planning performance data for 1978/79 and the first ten months of 1979/80 clearly indicate a comeback from the sharp decline observed in virtually all major contraceptive methods during 1977/78. Except for male sterilizations, the number of acceptors for all contraceptive methods sur- passed 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 non-terminal methods. 18. Beyond the effects of overall economic growth and constrained population 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 Ind-La, and more than 80% of the Indian poor belong to the rural households of landless laborers and small farmers. In addition to marginal holdings of physical assets, the poor are ill-endowed with human resources, being dispropor- tionately represented among the illiterate, the malnourished and those having otherwise poor health status. Improvements in the living standards of the poor will depend to a large extent on the overall growth of the economy, mainly on productivity increases in agriculture and non-farm rural employment, but also on the expansion of employment opportunities in urban areas. These developments will have to stem largely from market forces which, however, can be greatly facilitated by appropriate govern- ment policies and investment priorities. There is also a role for direct government actions in faster implementation of land reform (though the scope for significant reduction in poverty through redistribution is quite limited in India), in increasing the supply of credit available to small farmers and rural artisans and finally in broadening the provision of those services which enhance the human capital of the poor and improve living standards. Many of the latter are elements of the Minimum Needs Program which has been an integral part of Indian planning for the past decade. Progress has been slow but steady in the expansion of primary education, the extension of rural health facilities and the provision of secure village water supplies. Recent innovations, including the commun- ity 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.  - 8 - PART II - BANK GROUP OPERATIONS IN INDIA 19. Since 1949, the Bank Group has made 61 loans and 131 development credits to India totalling US$2,833 million and US$8,512 million (both net of cancellation), respectively. Of these amounts, US$1,133 million had been repaid, and US$4,072 million was still undisbursed as of January 31, 1981. Bank Group disbursements to India in the current fiscal year through January 31, 1981, totalled US$373 million, representing an increase of about 20% over the same period last year. Annex II contains a summary statement of disbursements as of January 31, 1981, and notes on the execution of ongoing projects. 20. Since 1959, IFC has made 19 commitments in India totalling US$110.6 million, of whicii US$19.8 million has been repaid, US$27.6 mil- lion sold and US$7.5 million cancelled. Of the balance of US$55.7 mil- lion, US$47.2 million represents loans and US$8.5 million equity. A sum- mary statement of IFC operations as of October 31, 1980, is also included in Annex II (page 5). 21. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit 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 expansior. of output in the fertil- izer 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 instrumen- tal 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, and urban investments have also received Bank Group support in recent years, 22. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Goverment'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 benefitting 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, and urban develop- ment also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infrastructure and industrial investments will focus on those subsectors which have recently emerged as key constraints on India's overall growth, primarily power and transportation. 23. The need for a substantial net transfer of external resources in support of the development of India's economy has been a recurrent theme of Bank economic reports and of the discussions within the India Consor- tium. Thanks in part to the response of the aid community, India success- fully adjusted to the changed world price situation of the mid-1970s. However, the need for increased foreign assistance to adjust to an even greater deterioration in balance of payments prospects during the 1980s by augmenting domestic resources and stimulating investment, remains. As in the past, Bank Group assistance for projects in India should include, as appropriate, the financing of local expenditures. India impDrts rela- tively 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 projects. This is particularly the case in such high-priority sectors as agriculture, irrigation, and water supply. 24. India's poverty and needs are such that as much as possible of India's 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 reasonably be allocated to India remains small in relation to India's needs for external support, and India should be regarded as creditworthy for some supplemental Bank lending. The ratio of India's debt service to the level of exports was 12% in 1978/79 and is projected to remain below 20% through 1995/96. As of January 31, 1981, outstanding loans to India held by the Bank totalled US$1,766 million, of which US$561 million remain to be disbursed, leaving a net amount out- standing of US$1,206 million. 25. Of the external assistance received by India, the proportion contributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disburse- ments, and 12% of net disbursements as compared with an estimated 64%, 60% and over 100%, respectively, in 1979/80. On March 31, 1980, India's out- standing and disbursed external public debt was US$15.6 billion, of which the Bank Group's share was US$5.2 billion or 34% (IDA's US$4.5 billion and IBRD's US$0.7 billion). Because Bank Group assistance to India is predom- inantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1979/80, about 18% of India's total debt service payments were to the Bank Group.  - 10 - PART III - AGRICULTURE AND IRRIGATION IN MADHYA PRADESH 26. Madhya Pradesh (MP) is India's largest state. It covers an area of 442,800 km and has a population of about 5? million. Although MP is rich in natural resources -- minerals, fuel, timber, iron ore, etc. -- they are as yet relatively unexploited. The State's economy depends largely on a low-productivity agricultural sector, which contributes about 55% of the State Domestic Product. The encouragement of agricultural growth, particularly through the expansion of irrigation and improved water management, is thus a precondition for economic progress. By most indicators, MP is one of the poorest states of India. 27. The per capita income of MP was Rs 896 in 1977/78, compared to Rs. 1,163 for the country as a whole. Between 1970/71 and 1977/78, the State's income grew at an annual rate of 1.8%. Because of the population increase, the per capita income actually declined in the same period by 0.9% per annum. The zero growth rate of primary net domestic product is mainly due to the stagnation of foodgrain production, which increased at only 0.2% per annum over the period; this contrasts with the 3.4% p.a. growth rate of the primary sector in the Indian economy. Production in the industrial sector, which started at a low base, grew rapidly, at 6.2% per annum (11% per annum nationwide), but contributed only about 20% of the State Domestic Product. MP is estimated to possess 44% of the country's bauxite reserves, 50% of its manganese, 30% of its high grade iron ore, 25% of its coal, and 27% of India's total forest resources. Recently, rich deposits of copper have been discovered. The State is estimated to be endowed with 11% of the country's total hydro-electric power potential, second only to Assam. However, the per capita industrial power consumption in MP is only 80% of the Indian consumption. 28. MP's estimated population of 52 million (1980) is growing at about 2.6% per annum, which is one of the highest growth rates among Indian states. The population density of 94 persons per km2 is low, compared with the national average of 167. The population is predominantly (84%) rural, and is scattered in small villages with an average population of 430 persons per village. Just over 20% of the population is tribal. One third of the State's inhabitants belong to the so-called backward classes, which include scheduled castes and tribes. About 37% of the total popula- tion constitute the State's labor force; about 80% of the labor force is employed in the agricultural sector. Cultivators and agricultural labor- ers account for 53% and 27% of the labor force, respectively. The average farm size in MP has decreased from 4.0 ha in 1970/71 to 3.6 ha in 1976/77, with wide variations among districts. About two-thirds of all holdings are owner-operated. In a normal year, about two-thirds of the population has incomes below the poverty line (estimated at US$80 for 1979/80). How- ever, there are large regional variations in the incidence of poverty. In the eastern and southern parts of the State, about 90% of the population  - 11 - live below the poverty line, while the proportion in the western part of the State is about one half. 29. Wide differences in climate, soil and topography create varying conditions for agriculture in different parts of the State. Seven major agro-ecological zones are distinguished on the basis of climate, topogra- phy and prevailing soil type. Rainfall varies from less than 800 mm in the West and Northwest to over 1,600 mm in the Northeast and Southeast. Winter temperatures also vary throughout the State according to latitude and altitude. The different zones can be classified as having warm, mild or cool winters. Frosts are recorded in some northern areas. The agro- climatic conditions in the various zones determine predominant crops (rice, wheat, jowar, cotton and bajra, or a combination of those). 30. Because of the limited rainfall throughout the State, which comes almost entirely from the Southwest monsoon, irrigation development is a prerequisite for a significant increase in agricultural production. In some parts of Madhya Pradesh the time interval between sowing rains and the next realization of a significant rain is as long as 32 - 34 days, on average, and it is always erratic. With irrigation, the planting can be done on schedule, without guess work, and in amounts sufficient to estab- lish a good seed bed and to ensure good seed germination and initial growth. The short duration of the monsoon season or an earlier than nor- mal receding of the monsoon rains further aggravates the problems of equating moisture with plant needs. 31. A major part of MP's irrigation potential is yet to be exploited. Despite the fact that within MP are the catchments of all eleven of the major rivers of Central India, only 11% of the net cropped area (about 2.2 million ha) in the State is irrigated, compared to the national aver- age of about 26%. At present, only about 15% of the groundwater and sur- face water potential is utilized. Of the 2.2 million ha net irrigated area, about half is served from canals and half from (largely privately owned) wells. About one-third of the canal-irrigated area is under major schemes (defined as over 10,000 ha), about one-third under medium schemes (2,000 - 10,000 ha), and about one-third under minor schemes (below 2,000 ha). Irrigation is almost exclusively limited to one season; less than 5% of the irrigated area receives irrigation in both seasons. The potential for groundwater development is fairly limited. The unexploited groundwa- ter potential has been estimated at 1.7 million ha, compared with a sur- face water potential of 9.0 million ha. Thus, most of the increase in irrigation in MP will have to come from surface water resources. 32. Madhya Pradesh accords a high priority to irrigation and has been allocating a large share of Plan budgets to this sector, currently about 30%. Given the priority in Plan allocations and the apparent rate of utilization, the growth in the benefits from irrigation in My' has been somewhat disappointing. The two principal constraints to the development  - 12 - of irrigation have been long construction periods for major and medium projects, and the slow and uneven uptake of irrigation once the facilities have been created. In many cases, dams have been built and water stored, but distribution systems not completed, with outlet command areas ranging from 40 ha to over 100 ha. Because of this lag in the construction of the distribution systems, the water has been preempted at the head of the sys- tem. This fact combined with the ability of influential groups to mono- polize water, has resulted in large areas, especially at the tail end of the commands, being left unirrigated. Other factors in the slow and uneven uptake of irrigation have been the low level of technology adopted in irrigation planning, design, construction, operation, and maintenance, and over-optimistic design assumptions about crop water requirements and irrigation losses in the system. 33. The Bank Group has contributed directly to the development of MP's agricultural sector through previous IDA credits, but its involvement in irrigation has been small compared with the Bank Group's contribution to irrigation in some other states of India. The Madhya Pradesh Agricultural Credit Project (US$33 million credit of June 8, 1973; Cr. 391-IN) provided long and medium term agricultural credit to farmers through credit insti- tutions for such on-farm investments as tractors, minor irrigation and land shaping. The credit was fully disbursed by 1977. The MP Dairy Pro- ject (US$16.4 million credit of December 18, 1974; Cr. 522-IN) is support- ing dairy development organized along the lines of the successful AMUL dairy cooperative scheme in neighboring Gujarat. Farmer response has been excellent and the Government is under considerable producer pressure to speed up the establishment of dairy cooperatives throughout the State. The Chambal (MP) Command Area Development Project (US$24 million credit of June 20, 1975; Cr. 562-IN) is designed to improve the efficiency of water utilisation in the command area of the Chambal River in MP and bring addi- tional areas under irrigation. This project started slowly, but is now about to be completed. The major constraint was the slow acceptance by the farmers of on-farm development, which was meant to be carried out, and paid for, by the farmers themselves with agricultural credit available to them from the proceeds of the credit. (The reduction of the outlet com- mand size from some 40 ha to about 8 ha in MP as elsewhere in India, as a matter of policy, has meanwhile virtually eliminated this problem.) The MP Forestry Technical Assistance Project (US$4 million credit of February 26, 1976; Cr. 609-IN) provided the funds for a feasibility study, com- pleted in November 1979, for the establishment of a saw-mill and a pulp factory based on the forest resources of southeastern MP. The MP Agricul- tural Extension and Research Project (US$10 million credit of June 1, 1977; Cr. 712-IN) is designed to strengthen agricultural supporting ser- vices, particularly extension and research in MP. Staff shortages, espe- cially in supervisory and managerial posts, have delayed implementation of the extension component, but results in areas where regular extension visits are being made attest to the effectiveness of the extension system introduced under the project.  - 13 - PART IV - THE PROJECT Project Oblectives and Formulation 34. The objectives of the project are to improve the performance of investments in MIPs in the State, through the introduction of new plan- ning, design, construction and operational criteria. These criteria are aimed at increasing the reliability and timeliness of water deliveries to the farm-gate, a prerequisite for successful irrigated agricu:Lture. Experience in MP and other states has shown that without the confidence that they will receive irrigation ia accordance with plant requirements, farmers are unlikely to make the necessary complementary investments in on-farm development, improved inputs, and better management to justify the planned investments in irrigation infrastructure. The proposed project would represent a large part of HP's medium irrigation prograim for the five-year period April 1981 to March 1986. Almost the entire medium irri- gation sub-sector will therefore benefit from the improvements in plan- ning, design, construction and operation introduced under the IDA project. As some MIPs will be only partially financed under the project, and will be completed after the five-year period, the impact of these improvements will extend well beyond the project period. 35. The project was prepared by GOMP with assistance from GOl's Cen- tral Water Commission (CWC) and from Bank Staff. It would closely follow the pattern introduced by the Orissa Irrigation Project (US$58 million credit of October 11, 1977; Cr. 740-IN) and the (First) Gujarat Irrigation Project (US$85 million credit of July 17, 1978; Cr. 808-IN). The project was appraised in September 1980. A supplementary Project Data Sheet is attached as Annex III. A report enLitled "INDIA - Staff Appraisal Report - Madhya Pradesh Medium Irrigation Project", Report No. 3260-IN, dated February 18, 1981, is being circulated separately to the Executive Direc- tors. Negotiations were held in Washington in February 1981. The Bor- rower and GOMP were represented by a delegation coordinated by Mr. S. C. Jain, Director, Department of Economic Affairs, GOI. The Proiect 36. In support of GOMP's medium irrigation program (paragraph 34 above), the proposed project would comprise construction, over the next five years, of medium irrigation projects covering a combined service area of about 107,000 ha throughout MP. Eligibility of MIPs for inclusion in the project would be determined through special procedures (paragraph 40 below) and on the basis of criteria (paragraph 37 below) agreed upon among the Association, GOI, and GOMP. On-going MIPs, if eligible, and MIPs started in 1981/82 would be completed under the project, while MIPs started in 1982/83 or later would be financed only up to March 1986. About 25 to 30 MIPs (including some MIPs under construction which can be  - 14 - modified to meet the criteria) are likely to be included in the project. 37. Specific criteria for planning, design and construction, and stan- dards of economic viability have been established for MIPs to be included in the project. They incorporate a broad range of requirements primarily directed at improving the efficiency of irrigation investments in the State. The planning criteria include the preparation, for each MIP, of a soil survey and land irrigability classification, of a comprehensive socio-economic survey, and of an agricultural development plan. They also specify in detail the methods for obtaining the required hydrological data and for determining crop water requirements and drainage needs. The design criteria incorporate the minimum requirements for the physical lay-out of MIPs. They include specifications of materials and shape for the dam including the spillway, the entire distribution system, drainage, and supplementary devices such as a telephone and radio communication sys- tem for system operation. An important design criterion is that the entire system from the dam to the 5-8 ha blocks will be lined unless it can be demonstrated that such lining is not economically justified. The implementation and operational criteria specify construction practices and scheduling and set standards for management, operation, and maintenance of completed MIPs. The economic criteria would ensure that individual MIPs would yield an economic return of at least 12%. Only projects that meet the established criteria would be eligible for financing from the proposed credit. MIPs that cannot be completed by 1985/86 would still be con- structed to their completion, and operated, according to the agreed cri- teria (Section 2.02 (a) (ii) of the Project Agreement). 38. MIPs, for the purposes of the proposed project, would be irriga- tion systems encompassing cultivable command areas between 2,000 ha and 15,000 ha. Each MIP would consist of a storage dam with spillway, a fully lined canal network delivering water through outlets serving 5-8 ha blocks, unlined field channels to the 2 ha operating unit, and a drainage network connected to natural drains. The average cost would be about Rs 14,000 (US$1,670) per ha of net cultivable command area. Typically, the dam accounts for about 60% of the cost of an MIP, and the conveyance and drainage networks together for about 40%. To ensure the safety of the dams of MIPs, GOMP would constitute a panel of exports, with acceptable qualifications, experience, and terms of reference, which would review the plans and designs of the dams and their associated structures, and would conduct periodic reviews, during design and construction, to examine whether any new grounds for making changes in the design of the dam have become apparent (Section 3.02(a) of the Project Agreement). After con- struction, GOMP would have the dams and related structures of MIPs period- ically inspected to determine any deficiencies that might endanger their safety. GOMP would propose appropriate inspection arrangements for the Association's review not less than one year before the expected completion of each dam (Section 3.02(b) of the Project Agreement). For each MIP, prior to its appraisal and approval, a comprehensive resettlement plan  - 15 - (including an implementation schedule) would be developed for the reloca- tion of residents in the reservoir areas. People ousted from the submer- gence area would be offered compensation in the form of cultivable land (Section 3.04 of the Project Agreement); as far as possible, irrigated land would be used for this purpose. 39. In order to improve the hydrological data base for the planning of medium irrigation projects dispersed throughout the agro-climatic areas of the State, stream flow gauging stations will be established for new and on-going MIPs. In four MIPs representing different agro-climatic zones, two "water management areas" of about 200 ha each would be set up to allow experimentation with rotational water supply and other water allocation procedures. Four demonstration farms of about 10 ha each, one in each major river basin, would be established; their main objective would be to test improved agricultural practices under irrigated conditions. A first stage of training of staff for the management and operation of irrigation projects in MP, which might form the basis for the establishment of a larger-scale training institute at a later date, would be provided under the project. Classroom courses and field visits to operating irrigation projects, both in India and abroad, workshops and seminars, and audiovisual instruction equipment would be provided for training. The project also includes technical services by consultants with qualifica- tions, experience and terms of reference satisfactory to the Association (Section 2.03 of the Project Agreement); they would assist GCIMP primarily in planning and designing the MIP distribution systems. Project Implementation 40. Appraisal and progress review by IDA of individual MI:Ps would not be practical. Instead, these would be carried out by the Appraisal Com- mittee (AC) of GOI's Central Water Commission (CWC), which was established for this purpose in the framework of the Orissa and Gujarat Medium Irriga- tion Projects (paragraph 35 above). The procedures for MIP preparation, appraisal and progress review would conform to those established for the Orissa and Gujarat projects. The AC is headed by the Member, Planning and Progress, of CWC. Its staff at present consists of a Director, six engineers, two agriculturalists, and one economist. The AC's appraisal and review work under the Orissa and Gujarat projects has been satisfac- tory. During the implementation of the proposed project, CWC would gradu- ally increase the AC's staff in accordance with specified manpower coeffi- cients, which would be adjusted in the light of experience gained during project implementation. The AC would also supervise, and monitor the pro- gress of, individual MIPs in accordance with the technical and economic criteria and procedures agreed with IDA. 41. The overall strategy for irrigation development in NP is based on a master plan already framed for the Godavari and Narmada river basins and under various stages of formulation in respect of other water-sheds.  - 16 - Within this strategy, the investigation and preparation priorities of MIPs are established by the Chief Engineer for the respective basins. The ini- tial investigations for each MIP are carried out by an Executive Engineer stationed near the proposed MIP. Detailed project preparation for MIPs would be the responsibility of GOMP's Irrigation Department (ID), coordi- nated by its Project Preparation and Monitoring Cell. The progress of MIP preparation would be reviewed periodically by the AC to ensure the adher- ence to the established criteria for planning and preparation. Subsequent to the approval by GOMP technical and administrative departments as required, and after inclusion of approved MIP proposals in GOMP's annual development plan, which would in turn require the approval by GOI's Plan- ning Commission, the selected MIPs would be submitted to the AC for appraisal. The AC would visit the project area and for each MIP prepare a project summary to be submitted to the Association. If the MIP meets all established criteria, costs less than Rs 100 million (US$11.9 million) excluding price contingencies, and has a benefit/cost ratio of not less than 1.0, the CWC/AC would be authorized to approve the project. In all other cases, the sub-project would be reviewed in detail by IDA which would base its decision on an analysis of Project Reports and Summaries supplemented by field visits, if necessary. It is expected that about 40% of the eligible MIPs, representing about 60% of the IDA-financed invest- ment program, would be subject to prior IDA review and approval. The main activities of IDA (apart from sub-project review in cases where the AC is not authorized to approve) would concentrate on assessing the continued quality of AC appraisal and review work, spot checking whether the agreed criteria have been followed, reviewing procurement procedures, checking the financial records kept by GOMP, assessing the continuing appropriate- ness of the established criteria, and examining content, timing and ade- quacy of the reports submitted by the AC to the Association. 42. The ID would be responsible for the implementation of all irriga- tion works. Each MIP would be implemented by four or five sub-divisions. GOMP's Agriculture Department (AD) would establish irrigation demonstra- tion plots in each MIP area, and, through its extension staff, provide the necessary guidance to the farmers on the lay-out of farm channels and related on-farm works (Section 2.02 (b) of the Project Agreement). Staff- ing of the agricultural extension services in each MIP area would conform with State-wide standards which have been agreed between IDA and GOMP under the MP Agricultural Extension and Research Project (Cr. 712-IN, paragraph 33 above); in order to meet the needs of irrigated agriculture, GOMP would also, as necessary, strengthen the input supply, credit, storage and marketing facilities available to farmers in MIP areas (Sec- tion 3.03 of the Project Agreement).  - 17 - 43. The ID would retain responsibility for the physical maintenance of the irrigation system from the dam down to the outlets, which would each serve a command area of about 5-8 ha. Each MIP would be managed by a full-time project manager with at least three months of special training in water management. Project Cost and Financing 44. The estimated total cost of the project is US$232.1 million equivalent (including taxes and duties, which are negligible), including US$39.8 million (17%) in foreign exchange. The principal cost components, including physical contingencies, are: construction of MIPs (US$184.7 million) and technical services (US$1.0 million). The balance is made up by flow monitoring (US$0.7 million), water management areas (US$0.5 mil- lion), demonstration farms (US$0.2 million), and price contingencies (US$45.0 million). 45. The proposed credit of US$140 million would cover 60% of project cost, including all foreign exchange cost and US$100.2 million of local costs. Local cost financing is justified in India for projects such as this for the reasons discussed in paragraph 23 above. GOMP would finance the remaining 40% of project cost. GOI would channel the proceeds of the credit to GOMP on the standard terms and arrangements on which development funds are being provided to state governments by the Center. GOI and the International Fund for Agricultural Development (IFAD) are at present con- sidering the possibility of channeling an as yet unspecified amount (pos- sibly some US$25 million) of IFAD funds to GOMP in support of GOMP's development plan for MIPs in addition to the proposed IDA credit. If this proposal should materialize, IFAD would finance a portion of GOMP's 40% contribution to the project cost. 46. The proceeds of the proposed credit would be used to finance: civil works (SDR 100.97 million, or US$125.6 million), equipment and vehi- cles (SDR 5.81 million or US$7.2 million), and technical assistance (SDR 0.98 million, or US$1.2 million). The remaining SDR 4.84 million (US$6.0 million) would be left unallocated. Procurement and Disbursement 47. The proposed project includes about US$128 million worth of civil works (net of contingencies and engineering and administration). These works would be labor intensive, relatively small, and scattered over the State in 25 to 30 schemes. In these circumstances, it would not be feasi- ble or economic to combine them into contracts large enough to attract international contractors. It is therefore proposed that thLey be carried out by Indian contractors. The dams and main canals would be packaged into contract parcels so as to attract competition from the larger domes- tic contractors, but at the same time small contractors would be allowed  - 18 - to bid for individual contracts. Tendering and bid evaluation would be based on standardized competitive bidding procedures and guidelines recently developed by CWC and approved by the Association. Smaller works, such as minor irrigation and drainage networks, buildings, and road improvements, representing less than 40% of the civil works of the pro- ject, would be executed under small unit price or percentage rate con- tracts. Departmental works would be used only when required for safety or quality considerations or where the use of department-owned equipment is required, and would be limited to 10% of all works. About US$3 million worth of remaining work on contracts let after September 1980, when the project was appraised, and conforming to the Bank Group's procurement guidelines, would be eligible for financing under the proposed project. 48. The estimated cost of vehicles and equipment to be procured under the project is approximately US$8.6 million (net of price contingencies). All equipment and vehicles would be procured on the basis of local com- petitive bidding from indigenous sources in order to benefit from existing servicing and spare part supply facilities. The equipment and vehicles will be grouped to promote efficiency and attract competition; however, bids will also be accepted on individual schedules to attract small manufacturers. 49. The proceeds of the credit would be disbursed against the ex- factory price of equipment and vehicles. Where the ex-factory price is not readily available, 70% of expenditures would be reimbursed. Disburse- ments for civil works would be 70%. For technical services, all expendi- tures would be reimbursed. Full documentation would be required for all disbursements, except for payments of up to Rs 300,000 for civil works and Rs 150,000 for equipment and vehicles, and for departmental work, for which disbursements would be made against certificates of expenditure. The supporting documents for these payments would not be submitted to IDA but would be retained by GOMP for inspection by IDA review missions. It is expected that disbursements would be completed by March 31, 1987. Benefits and Economic Justification 50. The proposed project would assist in expanding the area under irrigation in MP by about 107,000 ha. At full development, the project would increase foodgrain production by an estimated 238,800 tons each year. Cash crop production would increase in value by about Rs 120 mil- lion each year. The project would generate about 22,800 and 8,900 addi- tional full-time jobs in the farm and non-farm sectors, respectively. The value added to the local economy would be about Rs 290 million. 51. Net farm incomes would rise substantially under the project. For the average 3.6 ha farm, they are expected to increase to Rs 11,550, or 420% of what they would be without the project (Rs 2,750).  - 19 - 52. The average economic rate of return on three sample MIPs, which have already been prepared, is 18%. Since these have been selected as typical of the three major agro-climatic divisions of the State, it is likely that the average economic rate of return for the whole project will also be 18%. According to the economic criteria for the selection of MIPs, CWC/AC would be authorized to approve any project with an economic rate of return of at least 12%. But projects that "only just clear" this minimum rate of return would be rare, as economic inefficiency in project design is constrained by the agreed criteria not only for the 'benefits but also for project efficiency and water requirements, for irrigation inten- sity, and for the indicative zonal cropping patterns. Cost Recovery 53. The "project rent" (net incremental income less the necessary rewards to the farm family for its labor, entrepreneurship and cultivation risk) is estimated to average about Rs 910/ha at full development. The annual financial requirement to recover total capital cost of the project, including on-farm development, at 10% interest over 50 years for infras- tructure and over 10 years for other investments, and O&M expenditures would be Rs 1,575/ha, or Rs 1,510/ha for infrastructure without on-farm development. At current rates, direct and indirect revenue from irrigated lands would total Rs 166/ha, equivalent to a total cost recovery index of 11% and a project rent recovery index of 18%. GOMP has a policy of reviewing and revising the water charge every two or three years. The rates have been reviewed recently, and an increase of about 250% (on aver- age for the proposed cropping patterns) has been recommended to the leg- islature. If the proposed revised rates become effective, the cost recovery index would increase from 11% to 18%, and the rent recovery index from 18% to 30%. As the average farm income would more than quadru- ple under the project (paragraph 51 above), there appears to be scope for a further significant increase in the water charges. 54. The current low level of water charges reflects the unsatisfactory level of water supply in the mostly unlined distribution systems existing at present which do not permit a reliable irrigation water supply to farm- ers especially those whose fields are located at tail ends. T'he technical standards introduced under the credit are specifically designed to ensure that each farmer in the command area receives a reliable water supply, so that the benefits to the individual farmers, including those at the tail end, would be higher and more secure. There is therefore likely to be a justification for collecting higher charges from the farmers benefitting from the construction of MIPs. GOMP would monitor the success of MIPs in providing timely and reliable supplies of water to all farmers in the com- mand and their reactions to the new standards. On the basis of these stu- dies, GOMP would, by December 31, 1983, review the water and water-related charges in the State and would, as soon thereafter as possible and after paying due regard to IDA's comments, implement a system of charges that  - 20 - would ensure recovery of annual O&M costs and, to the extent possible, cost of infrastructure investments (Section 3.05 of the Project Agree- ment). In establishing the level of charges, due consideration would be given to the incentives to, and payment capacity of, the farmers. Project Risk 55. The risks associated with the project are those that are normally inherent in irrigation projects in India. These include the possibility that the costs of each MIP would be underestimated and the project bene- fits would be overestimated. There is specifically the danger that unrealistic cropping patterns would be projected in order to spread water to the maximum number of farmers. Furthermore, the use of zonal cropping patterns in calculating the value of water may result in overestimates of project benefits (if the actual cropping pattern differs significantly from the projected zonal average). However, the following factors and procedures incorporated in the project would reduce these risks. Firstly, IDA will monitor differences between actual costs and appraisal estimates for each MIP and intervene in the appraisal of further MIPs if the diver- gence is too high. A mechanism for appropriate corrections has been incorporated in the criteria. Secondly, benefits have been estimated on the basis of conservative assumptions. These assumptions will be moni- tored and further adjusted downward for subsequent MIP appraisals, if required. Thirdly, differences between zonal and project-specific crop- ping patterns will be closely monitored and would be rectified for future MIPs by appropriate changes in the assumptions on projected cropping pat- terns. Lastly, differences between project- specific and zonal values of water can be expected to average out over the State. Thus, the risks associated with the project are acceptable. PART V - LEGAL INSTRUMENTS AND AUTHORITY 56. The draft Development Credit Agreement between India and the Asso- ciation, the draft Project Agreement between the Association and the State of Madhya Pradesh, and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement are being distri- buted 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.  - 21 - PART VI - RECOMMENDATION 59. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President February 18, 1981   ANNEX I Page 1 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AV A0ES LAND AREA (THOUSAND SQ. Ki.) HOST RECENT ESTIMATEM _ TOTAL 3287.6 A(GRICULTURAL 1824.0 MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE tb ASIA 6 PACIFIC ASIA & PACIFIC GNP PER CAPITA 1US$) 60.0 90.0 180.0 197.9 894.8 ENERGY CONSUMPTION PER CAPITA (KIlOCRAMS OF COAL EQUIVALENT) 108.0/c 141.0/c 176.O0c 166.0 842.4 POPULATION AND VITAL STATISTICS POPlLATTON, MOID-YEAR (MILLIONS) 434.9 547.6 643.9 URBAN POPULATION (PERCENT OF TOTAL) 17.9 19.7 21.7 20.8 39.1 POPILATION PROJECTIONS POPLLATION IN YEAR 2000 (MILLIONS) 974. 1 STATIONARY POPULATION (MILLIONS) 1645.0 YEAR STATIONARY POPULATION IS REACHED 2150 POPLILATION 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-r4 YRS. 56.5 54.6 55.6 55.0 56.2 h5 YRS. AND ABOVE 3.5 2.9 3.0 3.0 3.4 PnOlLATION GROWTH RATE (PERCENT) TOrAL 1.9 2.5 2.0 2.2 2.4 ITRBAN 2.5/d 3.3 3.3 3..9 4.1 CRIDE BIRTH RATE (PER THOUSAND) 43.0 40.0 35.0 37.4 28.7 (RUDE 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 FAHILY 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 (1969-714100) 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 PO PULAT ION) TOTAI. .. 18.0 20.0 17.7 52.8 URBAN .. 85.0 87.0 71.3 71.1 RURAL .. 1.0 2.0 .. 42.4 POPULATION PER PHYSICIAN 5800.0/e 4890.0 3617.0 6322.7 4120.1 POPULATION PER NURSING PERSON 9630.0/e 5220.0 5675.0 9459.0 2213.6 POPLLATION PER HOSPITAL BED TOTAI. 2149.0/f 1629.0 1289.0 1758.4 819.4 URSAt .. .. .. 502.9 RIIRAL .. .. .. 10524.1 ADmIssinNs PER HOSPITAL BED .. .. .. .. 28.8 HOGSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 URBAN 5.2 .. 4.8 RURAL 5.2 .. 5.3 AVERAGE NUIMBER OF PERSONS PER ROOM ITTAI. 2.6 2.8 IIRBAN .. .. RURAI .. .. ACCESS TO ELECTRICTTY (PERCENT PF DWELLINGS) TOTAl .. .. URBAN .. . RIRAI. .. ..  ANNEX I Page 2 of 5 INDIA - SOCIAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVE7AtES - MOST RECENT ESTIMATE)- HOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 72.0 80.0 80.9 98.6 MALE 80.0 87.0 95.0 94.3 99.2 FEMALE 40.0 55.0 64.0 66.7 97.7 SECONDARY: TOTAL 20.0 29.0 28.0 26.6 55.5 MALE 30.0 39.0 38.0 34.8 60.7 FEMALE 10.0 17.0 18.0 18.2 49.9 VOCATIONAL ENROL. (1 OF SECONDARY) 8.0 6.0/ .. 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 HALE 57.1 52.3 51.3 51.3 48.5 FEMALE 27.9 27.1 26.2 23.7 29.6 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.1 1.2 1.1 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 26.7 26.3/h HIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 48.9/h LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 6.77 .. LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 17.2/h POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INC'OME LEVEL (US$ PER CAPITA) URBAN .. .. 88.0 107.8 RURAL .. .. 76.0 86.5 192.1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. RURAL .. .. .. .. 182.5 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 40.7 46.2 RURAL .. .. 47.9 51.7 33.2 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends oa 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; /e 1962; /f 1958; /& 1967; /h 1964-65. April, 1980  ANlNEX I DEFINITIONS OF SOCIAL INDICATORS Page 3 of 5 Notma: Although the data are drau from acu-e generally judged the mast auCt-ietalv and enlieble, in shald also be eased that ibay may not be loos- natio..allytoepa-ale because of the lath ofAta_da-di-d deftition end connetr used by different ..oustelem in -olieting the data. The data are, mor- nhelee.n, . caful to deerribs oders fmantd.dicdtcac trosda. and tharatteriem catels major differse.. be . res -tunie.. The referen- groops ur (1) tha sa- country group of the tub)-teo .. c try and (2) a -nutry grop with sas-hbt higher a-erge itetm tha, the coentey grop of tbh ma_er country (-acet foe "Capital S-rplum Oil Oop-teee' geop abat "Middle InoefoN-h Africa and Middle tEat' is choose b-tas Of stronger not.oc..t. a ftit"i'is. In rho refl eraa ru data the a....... are pepuie,tien sigbted arithmetic men foe each tedicar and shoe only abet at lean ha'lf of thefcountries toagopbndata - that indiato.t Stnos the V n -srge of co..ntins among the iditstors depends an the a-ilbility tof deta and ha eo-uifem, caution ustbI....cind it relating a--rag of one indis-tr to another Tb..tee seer ages are amI,' oe1 te tspa-img thI value of one tdicator at a timesme ibm coun_try and oaf-seanc stoops. LAND AJOEA (thou....d alke.) ?opujatto- oar thy-uise rapotai-n tivind by eune o pat-tcctn phy- Total - Total -uf-c area coprising ladtraed-ld waessiodn... q-If-rd r-na mdical school at _ureIty Ie-el. E.iutnl-tlmi fanclualae sdtnaelyo emnnl Posalatuon Ne oeintd Person -P Ppulation fic.ided by.numberi of pentiltieg fee oropa, pastuosm maket aod tkitohen gardens or to lie faIo; 197) 'denyt, ae n fml gradt eaemrns..ota uso.adeesnt ua GSP Pit CAPT I S e ataeumtaa ere aket pte.c- urban aedrurl) dioidad by their -epectic number of hos:pital beds. culted by suer . corice mthod atWold San Atla (7-78 basis) 1980. avial npbli sod ptiVst general ad seoained hospitaladr- 19)1, od 1978 data. hebilitatien tetes'Opitals are estebliebhents p-nmasntly staffed byan least oat phYsinia..,EstbIiehb..ats peoiding principally.. tostdiel ENiRlY CONSUMPITION Fit CAPITA - An-ol coupinof c-I-oia1 e-eogY (nal care era ear inoedsd. hRal haspinals, h-.,.n., i-tlde health and medical and ligni-o, petrolon, natural ,gee toddthydra-, nuolet end goothera es- ceter son pe. ae.l sinE_. tadby a phys ician(bt by a meical.. asiatast. triclty) it kiI _rs o ol eqacaIn Par cacita; 1960. 1970. tad 1970 nramidwife, ann.) whic ffe in-pan eneto eta and proide data limited reaga of medi.loe aiiis o tnsi peep .... .ob- hoapi- tals tnolude littnP pnintpal genera an.d specielise~,d h,slas an ros POPULATION ADIl VITAL STATISTICSI. I. rr p d d 1 ~ i- .. Tottl Popalatic.. Olid-Your (millions A.i of July 1; 1960, 1970,..ad 1978 Adssosar terna Bed -Totalumbr-o adniesie- to or disothogee data, from hospitalsdividet b henmrofbade. lrbao Poplto. rec ftoa)-Atic of urban to tonl oultin dIffeec dIIite fua ra a ffeo tamPe ability of dart HOOLINiG amoguo..t tee;,1~990, 1970, and 1978 date. ic-r... Si.. of Hnesaheid has.a..e hoshold) - total, urba. end rued- Pocalueion Projections ,:t . .. . 18 A h..temhold nsiss- e of ,abgr-p of iadividaals -h. share living quaters Peclaio inyer 111- oroe poultin oolctan to bss OnISO ndtheir mi el. A order or ldger may or say not be ieclodsd in total1 population by ag. odse s . thermailty and fertility rtes.. the houshold far tsetistine prose Projsution par --at f- or torlity raise nonprise of three level .a.... - verne nuber of o...... Bee room - natal,ae. -b e d raral - Average o ing life onpacia...y at birth ucra.. tins with -outry'a Pert pita inc.m. her of persos e soo, in al ace, adcrlaapidcoet lecal. amA Omeat life nanar tbiltieg~ at 77 .1 ea The pars- delnstsPs..icel. aslssaldaeresettotre sot.r f or fo..nilitp rte ltt hv three1- ..... ssuing decline in us.ocoapied par ts. fetlity_ acodint -icacDea cod petfamily planning petfar.a..e. Ac.... so El-ctric it (arn- of deellias.). tota.1 b urs. ad trara - fItch.. coutry ie. uhee aind sto hes ice cableatien of vetuIttp Coeennio..al d-e11tog aith elotnicity im living uariste atpercetage an e tilt rnsfr Prjie Puo"ss of tia, urhee, and ros- delinsr-sp-nicely. Snationary peoltnian- I 0satan poplation th.r. it no groth isie the hirth rats is aqual to the death rats, and also the age staturs - tEDUCATION main ,rotant Thle Ca ochisc,d oclyaI..t f-1rtity estee denies t no jAd)si-td ta_ao patIos thI Ilanvn ee of unit oat raptodetia rata, when e-h genr tine Pr=Imay sba os.mi a eae-Amttl aeadfml ul o.men -spl.e. itsl toaiy. The t isianay ppln ine eseelenofalgsantoprimary level saPet-sanges of satc antimted a the baste of the pnojncted cha-atirietits of the populatiet pieyebe-g oaain;nomlyicuetcide gd6l toteya100, and tie rate of dool ine of fertility ra tsocrpae years bat adjusted fan differsnt lengths of prisn-y edun..nior; for menu loca. coutries ithene Ida .d.nation enoles a earned to .peroe..t Lon- nionr pulto is reached - The you when it.tana-y papolati-r sic-oeppl r eo or abos the offinia ~ school age. sloe ha bean rached. enoofar sod oo - otl 1ml end femal - Campu.-d as bhc; sandt Fcpuletioo Itosity e~dct itm reuie. a lat ou easoftapprovd primay ieanim Pee en. km. - Mid- yea papulatino pot sqa.te kilmot-e (lD heuneres) ofp-dI tt'.h -_L .. -f~~~~~~~~~~~~~~~~salya 12 to 17 Years of gfe; -r-repond-ete ore.r eae Per e.hn, agiculturl laud - Computed as bhac foe egicoltu-l land ennu1.1ded.V.tt. onlyV . Oootia . e.. iea 1(cement of scnay - tsiaa inatiteis Poculation ARs Structure (pal tten - Childre (I-li yrr), working-age (15- inalude teahainal, indeeril o ther prtgum whih operat iedapna- 64 er) an retired (65 years aed coed as pe--enree tf end-yea .pap- dantlyora depsoteents of sada_y inituitrus lto;1960, 1970, and 1978 data .Pal-te...he. rai rimeny. n oadr oa idets enrolld in P.rulationLewb sn(crnn-toa A Annual growh rate of t-ne mid- prmryndenodry Ilevel dicidedb ubr fteaher. nh yse popuations fo ..95.-hI. 19h_ 0-71 -ad 197070 norreepoedisg e-sl.. PocuIation Grnoth Rtne (pation. urban - Annual gro-th re.e. of urban popa- Adalt litear teas -...et)- L,itr-ts adults (able tr ead amd seine) lati..e for 19510-h, 1960-70, end 1970)-78. asape_cenngstf( nta1 adult pepolatias aged 15 yeats and aver Crud BIth ans Its ihu...nd) - Annua live hirihe Pn thoasand of aid-year yappulentc-;1960, 1070..rd 1979 dare. CONSUMPTDION Crude Ieti Eas (peethousad) - Annual deoths per thousan.d of mid-ys- Passenger Care (per thousan d p,oaulatia) - Passen ger care remprise eat pplto;1960, 1970, a-d 1979 daa,caseting lens thenegt .pon; eltedes b as .a.a.e. he-..e and Itn eRopdatti-n Rtne-A__rug oumbor of d-egheta- unanall hate ismIey sile bet corl -sprdu-nios period if she ap-ie..... presen tag-.peilit fee- Radin ienican los thoe-ad pecelatior) - All types of receivr Oar f adh tilityrm--;at-lly 0 ic-year averages ending is1967, 1970, and 1977. beoudrests n general public Pee thousan.d of Pop tias; sailed. me ei- FamlyPlania -icecars htanl thosads - nnal umer r nuptat es Idtnoivnes ft coutries end ia er when tsgstioa of radio e ofil birh-trne dcicen une..p.sc mtoe aiyOartapnre e in sffeot; data far -ee eas a e on be coparble scas os Family Fleontoe-lerc (ecnof matriedana. eteaso ard -etries abolished licensing. ros f child-benrig ago (15-44 yese) who canhith-tontoldcires to TX tcivere (pe h ...aas ond lnin - TV aein-- foe breadu...t to al -nro ae in name age grou. gT ser-lpablia pea thotasad papelatiom; emoldes unli-mmsd TV n.enivers FOOD AND NUTRITION ~~~~~ ~~~~~~~~in --nties tad in years ehenagstaisof TNst maeinefot. Ender of Food Poduttion Par iC.ite (1969-71-lII) - Iedaa of penc N.i t. aul te f"al general- th.-st swpapar"ti * d-ie asSb- aialpb m-dortim of all food rommdirIe.- P-od-rin encludes seed tad fas. n iano eoeddpiaiy otnodm esrlmw. Id P-is daideredb is o calnda yoa heit. onuoditas overpriary ood (e.g. .. ga..and no be "daily" if in aPpper en ..e Pou-rteawek iooirad of sugar) ehich are diie an ntia ntriante(.g.cfa n CieemA kn..a Ittssdaus ear Capita ow Year - Beset onhe meber of tea ar anoloded). Aggregate production of eath ...totey is bss..d Ontinkers sold darn bayr.iadig admissions no drive-is niamea nainlaaaeprnd... price weighs 1961-65, 197, ard 1979 dor.. t. h .t .Ii Per tayita sunolt oftlrr creto sarmna optdfo nd mobile sis stary equi-alent ofst food auPPIes avala,ble intus-y Pee t.pit. L7.0R0 pORCE ynda. AvailablesPPlies comprisedmsi pdu-tio. impo-te lean Tona Labor Pac- (thau...ede) - coEemIraly a-inepros iauleding aupura, an oheoineItoci Nat eupplien e-clde anima feed, sede amd farce n aepee u anuighosevs erdmt.ttc. qunite codInodpoesn, and loert dinneibutior. Neqaira- Defisiti... in cartoes aeatias eemoorcparabhe 160, 0970 and set eota ~tiatd hr 7AO bessd on physinogicai aed for, a,-a ettt- 1979 Aste. tri _ad health ...sidor ing ..vi-_tmanra tamp Aru e bIody eribte,.9 sf0 amel (apcsat) - Female lboc force at pr-retege of ntaI labor forte. and sa dietribato. tcplt ion.ofand allowief 10 patter Ear meets at Agriculture (pretreat) - Labor forte in fermiegjqo,-tray, hootin g and honhl m;16-8,07, n 97det. fishitag as peecemtage of totalI laor fern; 6198,190 ed 1979 date fancuitaauolooforoal tete on dy) PotIn cnstooacpia industy (r-ar..nt) -Labor forc in siisg.. ...ne.'.in aentn co spply n food Parday. e upl f.id in dnfinsd as uboc. Re- ta lcrct,etredsaspentg f tota lsjbao farce; 1160, qairen..nta fE- all cocrranrelit.had by 0010 provide ic mniu 1970 and 19"78 dta. utloet.ca of hO frame o total.1, p.ccin pe day aed 20 green of animal and Pa-icopotite ic crE nt oa,mLe., and tamale - P-rticiPti-o or polio potata, ufwitch 10gyano shuld bn uimal protein.Th3 nofd artnitiyraeatnmandasntl,ml, aed fsmas laborfocea ordn ar lowe rha those of 75 gRams of -coa1 protein en 23 Iras opeeng of tota, mae n fmaepopltian of all a ge _nspetit_sY; an imalpr t t anacra - o th. -cld, p-upo...d by PAO in the Third 1960. 1970, ood 1975 dana. These are: I1'L participation rates tafle-ning Ourid yod Oucry; 161-AS, 1970 and 1977 dac.t. -' Io h ...i. d at. , .A Par cacu1te yrcntin sanY from animal endpcao- Protmm supply of food d. a a'S'o ottur fteppino,nd oghm rn,0Swtn rhive rmoieead pl ngascoday; 91-6,070ed17dae Ecnmcnedsy ERle. - Eatia of populti-c under 15 and 65 end aoen Child (ues 1-07fOcrtalty tRn' (yet thuad) - Aortal deaths Pertosadi to the total leb- fette. age group I- peace, to ohdrne iibis ags gru;frms dclytgca tries dafa deriVad fete lifo tablet; 1960, 1970 and 1977 data. INCOME DISTRIBUTION OEAITh Percentage ~~~~~~~~~~of Privte toan (bath in cash end kind) R- Nciced by riches liOta incettunir at Birth(ve)- Averag rusher of y-r of life -snining 5 -csn, rihe 0rcat ooet2 eno adpoer1 eun I tE 1, 7 _ 78) ~~~~~~~~~~~~~of ho...eheldi. Omfa_ OcrtaJitr Itar (par thousan.d) - Annul doatbo of iofunisond- ... year POVERTY TARGET GROOPSF of go par tlhcocatd IlIc births. Estimated Abeoluts Poceaty Im-on LEos (It teen$ P oa pit:)-urhs and rura - Acconno- f atna (Percent of cclnc)-ital, urban, end rura I Abslt1oetyIcm oa it thatitoelsIThT TH5h . ieial Number ct pecp.. (tta, rbn, d rural) .ih rnnboatist ae nnitniydnaediet plu.a.. sennie1 non-tcd raqoir-mtte inma oterspply )i-cludea utratd Ioelace caters- orutreate.d ho noncom ruminated aftrdabla. cate suc ae hat rom rotetodbarehulo, springa, a nd eeiayel)a eias saiePvryIcm ee IOcrc:le tbha tad rurl perc..ntaget of thei,r-cp-tnio- populnin.- In an Ir..raa.ulc..e.eaie oer ncm ee i n-hrdo g pet u-pita -ootuinor -tn part Ilocata "I nor than 270 reot fn ahouse may be pesnlics ftetaty. Uirbue I...l isoderi_ed frmthe tonal cor-idarad as bsg within rea..ebpa at....ofthat....e..nfruraIso-t rescaloatetbIldiml Ita ....b..s.fa aht neh-c fth oeeod * ee ith adjsetsertfohifh-t cat of licing J. nrb.. ...... Aunt hove to a.od. d .nPrc triarIt part of th day is fatching the en idPPula-tio paioAp leePeet teom hove t.po bani) t- unbar di"Pua an p.. rcer togaeoftheit -ap-t ive popolatic-e. -It,cl duo Eosemio and Social Da.ta Division pcto ma iccudatie-cul-ettoo aud dunpo...l, cu th or tint ot __m...r. tt_ait Analysis end Peojettiens aepart-e cf hnac ncraa ad u bacaa y --b-r-hc ytc orthees c. f Apti1, 1980 pi rctnad olnilc J. tnaliaticec.  ANNEXI page 4 oE 5 ECONOMIC DEVELOPMENT DATA a/ GNP PER CAPITA IN 1978: US$ 180 b/ C/ GROSS NATIONAL PRODUCT IN 1978/79 ANNUAL RATE OF GROWTH M. constant prices) US5 Bil, 7. 1955/56-1959/60 1960/61-1964/65 1965/66-1969/70 1970/71-1974/7T 1975/76-1977/78 GNP at Market Prices 117.08 100.0 3.7 3.6 3.7 2.8 5.6 Gross Docestic Investment 28.28 24.2 GroCs National Saviog 28.11 24.0 Currect Accosnt Balance d/ 0.50 0.4 UUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1971 Value Added (at factor cost) Labor Force V.A. Per Worker USS Ml. 7. Mil. 7 US$ % of National AveraRe Agricu-ltre 24.5 46.6 130.0 72.1 188 64 1ndustry 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 GOVERNMENT FINANCE 1/ General Goverment Central overmnent RD. Bn. of GDP Ra.Bln Z of GDP 19 _ 1974/75-1978/79 1978179 1974/75-1978/79 Carrent Receipcs 183.65 19.1 18.3 107.71 11.2 10.6 Corrent Expenditures 177.26 18.4 16.7 108.99 11.3 10.1 Corrent 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 Extermal Assistance (net) d/ 8.15 0.8 1.4 8.15 0.8 1.4 MONEY. CREDIT AND PRICES 1970/71 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Sept-ber 1978 September 1979 (Rs Billion outstanding at end of period) Money and Qoasi Money 121.4 198.4 220.3 254.7 308.9 370.4 445.6 398.5 473.7 Bank Credit to Govern-ent (net) 52.6 87.3 95.3 101.1 110.2 134.7 153.9 139.5 161.7 Back Crodit to Comnercial 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 Money as 2. of GDP 30.1 33.5 31.5 34.5 38.8 41.5 46.3 Wholesale Price Index (1970/71 - 100) 100.0 139.7 174.9 173.0 176.6 185.8 185.8 185.3 224.0 Annual percentage changes in: Wholesale Price Index 7.7 20.2 25.2 - 1.1 2.1 5.2 - 0.4 20.9 Bank Credit to Government (net) 10.8 12.3 9.2 6.1 9.0 22.2 14.3 16.9 15.9 Bank Credit to Conseercial Sector 19.4 22.6 18.4 21.5 20.3 14.6 19.4 15.6 21.3 t/ The per capita GNP estimate in at market prices, calculated by thl eonveraion -echnique used in the World Bank Atlas, 1979. All other conversions to dollars in thin table are at the average enchange rate prevailing during the period covered. b/ Quick Estimates. c/ Compated from trend line of GNP at factor coat series. inoluding one observation before first year and one observation after last year of listed period. d/ World Bank estimates; cot necessarily consistent with official figures. e/ Transfers between Centre and States have been netted out. f/ All loans and advances to third parties have been netted out.  ANNEX I Page 5 of 5 bALANCE OF PAYMENTS 1976/77 1977/78 1978/79 h/ 1979 -o Mhl7EDSC MIORTS (AVE8AC 1975176 - 19781791 ULSS Mlla1 Exports of Goods 5,753 6.315 6,976 7,800 Engineering Goods 671 11 Imports of Goods -5,928 -7,188 -8,488 -11,000 Te 420 7 Trade Balance - 175 - 873 -1.512 -3,200 GM_ 499 8 NFS (net) 379 692 882 1,050 Clothing 378 6 Leather and Leather Resource Balance 204 -181 -630 -2,150 Products 319 5 Jute KManfactures 251 4 Interest Payments (net) i/ -182 - 89 130 400 Iron Ore 270 5 Other Factor Payments (net) - - - - Cotton Textiles 248 4 Net Transfers j/ 695 1,077 1,000 1,000 Sugsr 224 4 Balance on Current Account 717 87 -750 Others 2,649 45 m ~Total 5.929 lo Official Aid Disbursements 1,955 1,628 1,695 1,870 EXTERNAL DEBT. HNACI 31. 1979 Amortization -560 -645 -702 - 687 US$ billion Transactions with 1HF -337 -330 -158 - Outstanding and Disbursed 15.5 All Other Items -200 616 199 - -183 Undiebursed 5.2 Outstanding, including 20.7 Increase in Reserves (-) -1,575 -2.076 -1,534 - 250 Undisbursed Gross Reserves (end year) 3,747 5,823 7,357 7,607 Net Reserves (end year) ki/ 3,276 5,668 7,357 7,607 DEBT SERVICE PATIO FOR 1978/79 15.0 percent Fuel and Related Materials IBRD/IID L1EIDING, DUC 31. 1979 Imports 1,581 1,811 2,043 4,050 US$ million of which: Petroleum 1,581 1,811 2,043 4,050 IBII U Exports 37 32 24 _ Outstanding and Disbursed 689 4,286 of which: Petroleum 21 18 n.a. _ Undisbursed 614 2,621 Outstanding, including 1,303 6,907 Undisbursad RATE OF EXCHANGE June 1966 to mid-Decmber 1971 US$1.00 - Rs 7.5 Ras 1.00 .USSO 133333 Kid-Decmber 1971 to end-June 1972 s USS1.00 m Rs 7.27927 Rs 1.00 US$0.137376 After end-June 1972 Floating Rate Spot Rate end-Dec_sber 1978 USS1.00 - Rs 8.188 Rs 1.00 - US$0.122 End-December 1979 US$1.00 * Rs 7.907 Rs 1.00 m US10.126 h/ Estimated. Fi Figures given cover all investmant income (net). Major payments are interest on foreign loans and charges paid to IMF, and major receipt is interest earned on foreign asasts. j/ Figures given include workers' remittances but exclude official grant assistance, which is included within official aid disbursements. kV Excludes net use of IMP credit. r1/ Aortization and interest payments on foreign loans as a percentage of mrchandise exports.  ANNEX II Page 1 of 20 THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of January 31, 1981) US$ million Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 42 Loans/ 1,163.2 65 Credits fully disbursed 3,807.4 342-IN 1972 India Education -- 12.0 4.47 378-IN 1973 India Karnataka Agricultural Markets -- 8.0 1.12 390-IN 1973 India Bombay Water Supply I -- 55.0 1.87 456-IN 1974 India HP Apple Processing & Marketing -- 13.0 6.43 lOll-IN 1974 India Chambal (Rajasthan) CAD 52.0 -- 14.83 482-IN 1974 India Karnataka Dairy -- 30.0 19.56 502-IN 1974 India Rajasthan Canal CAD -- 83.0 31.32 521-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 2.29 1079-IN 1975 IFFCO IFFCO Fertilizer 109.0 -- 1.24 1097-IN 1975 ICICI Industry DFC XI 100.0 -- 1.32 532-IN 1975 India Godavari Barrage Irrigation -- 45.0 4.81 541-IN 1975 India West Bengal Agric. Development -- 34.0 9.22 562-IN 1975 India Chambal (Madhya Pradesh) CAD -- 24.0 2.05 572-IN 1975 India Rural Electrification I -- 57.0 .04 585-IN 1975 India Uttar Pradesh Water Supply -- 40.0 17.37 598-IN 1975 India Fertilizer Industry -- 105.0 35.16 604-IN 1976 India Power Transmission IV -- 150.0 60.16  ANNEX II Page 2 of 20 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 1.71 610-IN 1976 India Integrated Cotton Development -- 18.0 11.61 1251-IN 1976 India Andhra Pradesh Irrigation 145.0 90.34 1260-IN 1976 India IDBI II 40.0 -- 16.13 1273-IN 1976 India National Seeds I 25.0 23.14 1313-IN 1976 India Telecommunications VI 80.0 -- 21.98 1335-IN 19?b India Bombay Urban Transport 25.0 8.25 680-IN 1977 India Kerala Agric. Development -- :30.0 25.15 682-IN 1977 India Orissa Agric. Development -- 20.0 12.00 685-IN 1977 India Singrauli Thermal Power -- 150.0 67.31 687-IN 1977 India Madras Urban Development -- 24.0 9.47 690-IN 1977 India WB Agric. Exten- sion & Research -- 12.0 12.00 1394-IN 1977 India Gujarat Fisheries 14.0 -- 11.18 712-IN 1977 India Madhya Pradesh Agric. Dev. -- 10.0 6.94 720-IN 1977 India Periyar Vaigai Irrigation -- 23.0 14.68 728-IN 1977 India Assam Agricultural Development -- 8.0 6.87 736-IN 1977 India Maharashtra Irrigation -- 70.0 39.26 737-IN 1977 India Rajasthan Agricul- tural Extension -- 13.0 9.49 740-IN 1977 India Orissa Irrigation -- 58.0 39.11 1475-IN 1977 ICICI Industry DFC XII 80.0 -- 15.27 747-IN 1978 India Second Foodgrain Storage -- 107.0 85.53 756-IN 1978 India Calcutta Urban Development II -- 87.0 37.29 761-IN 1978 India Bihar Agric. Extension & Research -- 8.0 7.33  ANNEX II Page 3 of 20 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 -- 21.17 1549-IN 1978 TEC Third Trombay Thermal Power 105.0 -- 79.66 788-IN 1978 India Karnataka Irrigation -- 126.0 88.01 793-IN 1978 India Korba Thermal Power -- 200.0 161.27 806-IN 1978 India Jammu-Kashmir Horticulture -- 14.0 13.79 808-IN 1978 India Gujarat Irrigation -- 85.0 73.23 815-IN 1978 India Andhra Pradesh Fisheries -- 17.5 16.08 816-IN 1978 India National Seeds II -- 16.0 15.58 1592-IN 1978 India Telecommunications VII 120.0 -- 56.35 824-IN 1978 India National Dairy -- 150.0 135.44 842-IN 1979 India Bombay Water Supply II -- 196.0 189.33 843-IN 1979 India Haryana Irrigation -- 111.0 59.81 844-IN 1979 India Railway Modernization & Maintenance -- 190.0 154.33 848-IN 1979 India Punjab Water Supply & Sewerage -- 38.0 27.12 855-IN 1979 India National Agricultural Research -- 27.0 26.21 862-IN 1979 India Composite Agricultural Extension -- 25.0 20.47 871-IN 1979 India NCDC -- 30.0 19.90 1648-IN 1979 India Ramagundam Thermal Power 50.0 -- 50.00 874-IN 1979 India Ramagundam Thermal Power -- 200.0 176.70 889-IN 1979 India Punjab Irrigation -- 129.0 112.29 899-IN 1979 India Maharashtra Water Supply -- 48.0 47.21 911-IN 1979 India Rural Electrification Corp. II -- 175.0 151.91 925-IN 1979 India Uttar Pradesh Social Forestry -- 23.0 21.32  ANNEX II Page 4 of 20 US$ mnillion Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 947-IN 1979 India ARDC III -- 250.0 145.98 963-IN 1979 India Inland Fisheries -- 20.0 20.00 954-IN 1979 India Maharashtra Irrigation II -- 210.0 192.52 961-IN 1979 India Gujarat Community Forestry -- 37.0 34.03 981-IN 1980 India Population II -- 46.0 45.97 1003-IN 1980 India Tamil Nadu Nutrition -- 32.0 32.00 1004-IN 1980 India U.P. Tubewells -- 18.0 17.52 1011-IN 1980 India Gujarat Irrigation II -- 175.0 175.00 1027-IN 1980 India Singrauli Thermal II -- 300.0 289.17 1012-IN 1980 India Cashewnut -- 22.0 21.95 1028-IN 1980 India Kerala Agricultural Extension -- 10.0 10.00 1033-IN* 1980 India Calcutta Urban Transport -- 56.0 56.00 1034-IN* 1980 India Karnataka Sericulture -- 54.0 54.00 1046-IN 1980 India Rajasthan Water Supply and Sewerage -- 80.0 79.88 1843-IN 1980 ICICI Industry DFC XIII 100.0 -- 94.87 1887-IN* 1980 India Farakka Thermal Power 25.0 *-- 25.00 1053-IN* 1980 India Farakka Thermal Power -- 225.0 225.00 1897-IN* 1980 India Kandi Watershed and Area Development 30.0 -- 30.00 1925-IN* 1980 India Bombay High Offshore Development 400.0 400.00 Total 2,833.0 8,511.6 of which has been repaid 1,060.9 72.0 Total now outstanding 1,772.0 8,439.9 Amount Sold 133.8 of which has been repaid 120.3 5.7 Total now held by Bank and IDA 1/ 1,766.3 8,439.9 Total undisbursed (excluding*) 560.7 3,511.2 * Not yet effective 1/ Prior to exchange adjustment.  ANNEX II Page 5 of 20 B. STATEMENT OF IFC INVESTMENTS (As of October 31, 1980) Amount (US$ million) Fiscal 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 1981 Tata Iron and Steel Company Ltd. 38.0 - 38.0 TOTAL GROSS COMMITMENTS 99.1 11.5 110.6 Less: Sold 25.9 1.7 27.6 Repaid 19.8 - 19.8 Cancelled 6.2 1.3 7.5 Now Held 47.2 8.5 55.7 Undisbursed 48.5 1.1 49.6  ANNEX II Page 6 of 20 C. PROJECTS IN EXECUTION 1/ Generally, the implementation of projects has been proceeding rea- sonably well. Details on the execution of individual projects are below. The level of disbursements was US$729 million in FY80, compared to US$538 million in the previous year. Disbursements in the current fiscal year through January 31, 1981 totalled US$373 million, representing an increase of about 20% over the same period last year. The undisbursed pipeline of US$3,834 million as of January 31, 1981, 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 Prolect; US$100.0 million loan of April 2, 1975; Effective Date: July 1, 1975; Closing Date: June 30, 198L Ln. No. 1475 Twelfth Industrial Credit and Investment Corporation of India Prolect; 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 Loans 1475 and 1843 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 1/ These notes are designed to inform the Executive Directolrs 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 understanding that. they do not purport to present a bal- anced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 7 of 20 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 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 progressing very well. 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 Satisfactory progress is being made in the construction of bag storage warehouses, despite problems of land acquisition 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 employ- ment of consultants and the longer time required for the preparation of technical specifications and tenders and the construction itself. The project is currently under review by the Government of India and some changes to its scope may be made in April 1981. Cr. No. 456 Himachal Pradesh Apple Processing and Marketing Project; US$13.0 million credit of January 22, 1974; Effective Date: September 26, 1974; Closing Date: December 31, 1981 The project encountered prolonged initial delays due to managerial and technical problems. These problems have been largely resolved, but construction 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 1981. Cr. No. 806 Jammu-Kashmir Horticulture Project; US$14.0 million credit of July 17, 1978; Effective Date: January 16, 1979; Closing Date: June 30, 1984  ANNEX II Page 8 of 20 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 Ln. No. 1592 Telecommunications VII Project; US$120.0 million loan of June 19, 1978; Effective Date: October 30, 1978; Closing Date: March 31, 1982 Both projects are progressing satisfactorily, although as of July 1980, when they were last reviewed, imports of electronic switching equipment for the sixth project were behind schedule, resulting in a reduced growth rate for the installation of direct exchange lines. Insti- tutional improvements envisaged under the projects have been achieved, and the financial situation of the Posts and Telegraphs Department remains sound. 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 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 million credit of May 9, 1973; Effective Date: September 7, 1973; Closing Date: June 30, 1981 Progress is satisfactory. As of December 1980, construction of the 39 markets originally envisaged under the project was almost completed, and trade had shifted to more than half of these. An additional eight markets have been included in the project at the request of the State government, and these are expected to be completed by June 1981. The credit is expected to be fully disbursed by the closing date of June 30, 1981.  ANNEX II Page 9 of 20 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 The project involves the development of the agricultural universi- ties 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. Considerable 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 supporting 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 million credit of June 21, 1979; Effective Date: November 9, 1979; Closing Date: June 30, 1984 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 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. Imple- mentation of Credit 1046 is proceeding satisfactorily. Detailed  ANNEX II Page 10 of 20 construction programs have been prepared for rural schemes, and prepara- tion of tender documents for urban schemes have been completed. 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 phy- sical execution, other aspects of project implementation continue to lag so that disbursements under the Credit have fallen short of estimates at the time of appraisal. In order to improve the situation, arrangements have been made to closely supervise and coordinate implementation. Cr. No. 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 country-wide materials shortages and serious Statewide electric power shortages. Procurement is generally on schedule for equipment and consul- tants' services, though somewhat behind for larger civil works contracts. Staff shortages in some of the implementing agencies continue, although more extensive use of consultants has to a great degree alleviated this problem. Cr. No. 687 Madras Urban Development Project; US$24.0 million credit of April 1, 1977; Effective Date: June 30, 1977; Closing Date: September 30, 1981 Physical progress is generally satisfactory and costs are within appraisal estimates on most components. However, land acquisition prob- lems 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. Increased attention shouLd be turned to the financial analysis and marketing strategies required Ito ensure that anticipated cost recovery in the sites and services and slum upgrading components and thus replicability is actually achieved. Teclanical assis- tance 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  ANNEX II Page 11 of 20 Cr. No. 521 Rajasthan Dairy Development Project; US$27.7 million credit of December 18, 1974; Effective Date: August 8, 1975; Closing Date: December 31, 1982 Cr. No. 522 Madhya Pradesh Dairy Development Project; US$16.4 million credit of December 18, 1974; Effective Date: July 23, 1975; Closing Date: June 30, 1982 Cr. No. 824 National Dairy Project; US$150.0 million credit of June 19, 1978; Effective Date: December 20, 1978; Closing Date: December 31, 1985 These four credits, totalling US$224.1 million, support dairy development projects organized along the lines of the successful AMUL dairy cooperative scheme in Gujarat State. More than 2,100 dairy coopera- tive societies (DCS) have been established under the three state projects (Karnataka-923, Rajasthan-926, Madhya Pradesh-272). Farmer response has 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 construction 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. 1078 Mahanadi Barrages Project; US$83 million credit of December 5, 1980; Effective Date: February 11, 1981; Closing Date: March 31, 1987 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  ANNEX II Page 12 of 20 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 Proiect; US$58.0 million of October 11, 1977; Effective Date: January 16, 1978; Closing date: October 31, 1983 Cr. No. 788 Karnataka Irrigation Project; US$126.0 million credit of May 12, 1978; Effective Date: August 10, 1978; C:Losing Date: March 31, 1984 Cr. No. 808 Gujarat Irrigation Project; US$85.0 million cred-it of July 17, 1978; Effective Date: October 31, 1978; Closing D)ate: 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 millicn 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 possi- ble, to use water savings for bringing additional areas under irrigation.  ANNEX II Page 13 of 20 Canal lining and other irrigation infrastructure, drainage, and land shap- ing 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 Periyar Vaigai Project (Cr. 720-IN) where cost overruns have occurred due to sub- stantial increases of both quantities and unit cost over the original engineers' estimates. Specific efforts are now underway to redesign this project so that it can still achieve its original objectives. Difficul- ties had also arisen earlier in connection with the Nagarjunasagar com- ponent of Loan 1251, where water losses proved to be higher than antici- pated. Additional assurances have been obtained from the State Government concerned, regarding the enforcement of cropping patterns and the sequence and timing of main canal construction and lining, which should ensure that this project will also achieve its 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 is not expected to be fully disbursed by the closing date, and GOI's request for an extension is expected. Cr. No. 682 Orissa Agricultural Development Project; US$20.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 690 West Bengal Agricultural Extension and Research Project; US$12.0 million credit of June 1, 1977; Effective Date: August 30, 1977; Closing Date: September 30, 1982 Cr. No. 712 Madhya Pradesh Agricultural Extension and Research Project; US$10.0 million credit of June 1, 1977; Effective Date: September 2, 1977; Closing Date: September 30, 1983 Cr. No. 728 Assam Agricultural Development Project; US$8.0 million credit of June 30, 1977; Effective Date: September 30. 1977; Closing Date: March 31, 1983 Cr. No. 737 Rajasthan Agricultural Extension and Research Project; US$13.0 million credit of November 14, 1977; Effective Date: February 6, 1978; Closing Date: June 30, 1983  ANNEX II Page 14 of 20 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.() 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 mil:Lion credit of June 25, 1980; Effective Date: August 18, 1980; Closing Date: June 30, 1986 These eight creditl- fi-ance the reorganization and strengthening of agricultural extension services and the development of adapitive 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, Madhya Pradesh 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 organiza- tional principles underlying the new extension system and an accompanying hiatus in project implementation, a Cabinet decision has reaffirmed the State Government's commitment to the project, revised implementation plans have been prepared, and project activities are resuming. In Bihar, staff shortages, particularly in supervisory and managerial posts, have hampered project implementation, although progress in areas where regular extension visits are being made attests to the efficacy of the system itself. In Gujarat, Haryana and Karnataka, all covered under the Composite Agricul- tural Extension Project, important early administrative and financial steps have been taken to pave the way for effective operation of the reor- ganized extension system and field work is off to a good start. 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. Com- mitment of funds to research subprojects is proceeding satisfactorily, although corresponding disbursements may lag somewhat behind the original estimates. Additions to the staff of the Project Unit have been made to expedite further progress under the project.  ANNEX II Page 15 of 20 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 dry- land 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 operations, 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 1980, when the project was last reviewed, construc- tion of godowns was progressing well in the States of Haryana and Uttar Pradesh, although some delays had occurred in the State of Orissa. Con- sultants had been recruited to assist NCDC and State Cooperative Banks in strengthening their institutions, although some consultants were yet to be recruited in Haryana. Disbursements have been progressing well and are now ahead of 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 manufacturing 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 sawnwood and one for pulp, as the basis of the development of a forest- based industry in Bastar district.  ANNEX II Page 16 of 20 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, designed to expand the social forestry program in Uttar Pradesh and Gujarat, to provide a source of energy to the villages, and to supply raw materials to cottage industries, are proceeding well. The projects provide for large-scale tree plantations on public lands, primarily along roads, rails and canals, on village common lands and on 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 pro- cessing 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 Prolect; US$16.0 million credit of July 17, 1978; Effective Date: December 20, 1978; Closing Date: 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 organiza- tional 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  ANNEX II Page 17 of 20 Cr. No. 1033 Calcutta Urban Transport Project; US$56 million credit of October 27, 1980; Effective Date: January 31, 1981 (expected); Closing Date: December 31, 1984 The bus procurement program supported by the Bombay project (Ln. 1335) has proceeded on schedule, with all 700 bus chassis and bodies having been ordered and 672 already in service. Total fleet strength has increased from 1,530 buses at the inception of the project to 1,935 buses in September 1980, in accordance with appraisal estimates. Depot capacity expansion has lagged somewhat behind fleet expansion, but caught up in November 1980. However, delays in construction of new workshop facilities have been more substantial and will not be fully recoverable. As a result, the loan closing date has been extended by three years. Traffic management civil works are also somewhat behind schedule, although now proceeding satisfactorily. Project implementation under Cr. 1033 is proceeding satisfactorily, a good start having been made on the important early procurement steps. Ln. No. 1394 Gujarat Fisheries Proiect; US$14.0 million loan and US$4.0 (TW) and million credit of April 22, 1977; Effective date: July 19, 1977; Cr. No. 695 Closing Date: June 30, 1983 Cr. No. 815 Andhra Pradesh Fisheries Project; US$17.5 million credit of June 19, 1978; Effective Date: October 31, 1978; Closing Date: September 30, 1984 As of October 1980 when these projects were last reviewed, the harbor construction works at Mangrol and Veraval in Gujarat had encoun- tered delays, although the problem with shortages of cement supplies had been overcome. In Andhra Pradesh, the harbor works at Visakhapatnam, Kak- inada and Nizampatnam were under way and the pace of implementation had increased at all three sites. 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, improvements to fish ponds, strengthening of extension services, and the establishment of training centers. The project became effective in May 1980. The initial implementation tasks, primarily involving the establishment of State Fish Seed Development Corporations and Central and State project monitoring units, are progressing satisfactorily. Site selection and hatchery design work is under way.  ANNEX II Page 18 of 20 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. 874 US$200 million credit of February 2, 1979; Effective Date: 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, L976; 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, 1988 Ln. No. 1887 Farakka Thermal Power Project; US$25 million loan and and US$225 million credit of July 11, 1980; Effective Date: Cr. No. 1053 December 10, 1980; 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 feed- ing power into an interconnected grid. Credit 793 supports the construc- tion of the first three 200 MW generating units at the second such sta- tion, at Korba, together with related facilities and associated transmis- sion. 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 ther- mal power projects are progressing satisfactorily. For Singrauli and Korba, construction works are on or ahead of schedule, although some slip- page has occurred in the implementation schedule for the Ramagundam pro- ject.  ANNEX II Page 19 of 20 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 This project provides continued support to the Rural Electrifica- tion Corporation's lending program, and is helping to finance about 1,700 rural electrification schemes in fourteen State Electricity Boards (SEB), including the newly participating Uttar Pradesh SEB. The project is pro- gressing satisfactorily. Ln. No. 1925 Second Bombay High Offshore Development Project; US$400.0 million loan of December 11, 1980; Expected Effectiveness Date: March 13, 1981; Closing Date: March 31, 1984 The project is progressing satisfactorily. 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. 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 proceeding satisfactorily on this project.  ANNEX II Page 20 of 20 Cr. No. 1034 Karnataka Sericulture Project; US$54 million credit of October 27, 1980; Effective Date: December 18, 1980 Closing Date: December 31, 1985 Project implementation is proceeding well with encouraging pro- gress in all components.  ANNEX III Page 1 MADHYA PRADESH MEDIUM IRRIGATION PROJECT Supplementary Project Data Sheet Section I: Timetable of Key Events (a) Time taken by the country to prepare the project About two years (b) The agency that has prepared the project Government of Madhya Pradesh (c) Date of first presentation to the Bank and date of the first mission to consider the project September 1978; September 1978 (d) Date of departure of appraisal mission September 1980 (e) Date of completion of negotiations February 1981 (f) Planned date of effectiveness May 1981 Section II: Special Bank Implementation Action None Section III: Special Conditions (a) GOMP to complete the MIPs started under the project, in accordance with agreed technical and economic criteria (paragraph 37). (b) GOMP to constitute a panel of experts for reviewing plans and designs of MIP dams and associated structures and for conducting periodic reviews during design and construction (paragraph 38).  ANNEX III Page 2 (c) GOMP to cause completed MIP dams and related structures to be periodically inspected to deter- mine any deficiencies that might endanger their safety, and to propose appropriate arrangements to this end not later than one year before the expected completion of the respective dam (para- graph 38). (d) GOMP, prior to the appraisal and approval of each MIP, to develop a comprehensive resettlement plan for the relocation of residents in the reservoir areas, and to provide compensation in the form of cultivable land (paragraph 38). (e) GOMP to employ consultants, with qualifications, experience and terms and conditions of employment satisfactory to the Association, to assist in the planning and design of the distribution system of MIPs (paragraph 39).   IBRD 1514t R A A AS THA N T/ \H, A ,A RA RE E H 40*' ,, C-1 9 ' , d /e j\ ,~7