India - Third Calcutta Urban Development Project

Document of 0 The World Bank FOR OFFICIAL USE ONLY Report No.P-3544-IN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN AN AMOUNT OF SDR 136.3 MILLION ,TO INDIA FPR THE THIRD CALCUTTA URBAN DEVELOPMENT PROJECT April 28, 1983 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. CURRENCY EQUIVALENTS (As of April 21, 1983) US$1.00 = RslO.075812 Rs 1 = US$0.09925 Rs 1 million = US$99,250 The US Dollar/Rupee exchange rate is subject to change. Conversions in the Staff Appraisal Report were made at US$1.00 = Rs 9.5, which represents the average exchange rate projected over the disbursement period. FISCAL YEAR April 1 - March 31 Abbreviations and Acronyms used in this Report CIT - Calcutta Improvement Trust CMA - Calcutta Metropolitan Area CMC - Calcutta Municipal Corporation CMDA - Calcutta Metropolitan Development Authority CMWSA - Calcutta Metropolitan Water and Sanitation Authority CVB - Central Valuation Board GOI - Government of India GOWB - Government of West Bengal HIT - Howrah Improvement Trust HMC - Howrah Municipal Corporation ILGUS - Institute of Local Government and Urban Studies FOR OFFICIAL USE ONLY INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: India, acting by its President. Beneficiary: The Calcutta Metropolitan Development Authority (ODA). Amount: SDR 136.6 million (US$147 million equivalent). Terms: Standard. Re-Lending Terms: (a) The Government of India (GOI) to the Government of West Bengal (GOWB): as part of Central assistance to State development projects on terms and conditions applicable at the time. GOI to bear the foreign exchange risks. (b) GOWB to OMDA: (i) for non-revenue producing investments, such as drainage and transportation infrastructure, funds would be provided on a grant basis; and (ii) for revenue-producing investments, GOWB would lend at 7% per annum for 15 years including a 5-year grace period. (c) CMDA to operating agencies and local bodies: (1) for urban renewal schemes (see para 56),,at commercial bank rate (presently, 12.5% per annum) for 15 years including a 5-year,grace period; (ii) for transmunicipal water supply projects, for 20 years including a 5-year grace period at interest not less than 8.25% per annum, (including 0.5% service charge); (iii) for other revenue-producing schemes, for 15 years including 5 years' grace at interest not less than 8.25% per annum (including 0.5% service charge); (iv) for non revenue-producing municipal projects like parks and playgrounds, one-third grant and two-third loan on terms as in (111); and (v) for transmunicipal drainage and transportation, 100% grant. Project Description: The purpose of the project is to improve urban management in the Calcutta Metropolitan Area 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- (CMA) through a comprehensive approach in which institutional and financial reforms go hand-in-hand with physical improvements. The project would build upon significant institutional, financial and legislative reforms already underway to strengthen metropolitan agencies and municipal governments and other institutions responsible for urban planning, management and operation. At the same time, the project would substantially increase the availability of " urban services, focusing on investments to provide minimum basic needs at affordable prices. Emphasis would be given to alleviate sectoral and spatial investment imbalances between the "metrocore" (Calcutta and Howrah) and the remainder of the CMA, to complete and complement earlier investments so that maximum benefits can be derived, and to improve cost recovery and financial management policies. The project investments would directly benefit over six million people, two-thirds of whom belong to the economically weaker section (with a monthly household income of up to US$37). The main project risk is that the program will prove too complex to administer and manage. However, the positive experience from the on-going implementation of the Second Calcutta Urban Development Project and the preparation of the proposed project as well as the establishment of special units under CMDA, for program management and for appraisal, monitoring and evaluation, indicate that risk is within acceptable limits (para 75). -iii- Estimated Cost: (US$ Millions) Item Local Foreign Total Water Supply 39.2 6.9 46.1 Drainage and Sanitation 60.1 8.8 68.9 Slum Improvement 13.2 1.8 15.0 Transportation Infrastructure 25.1 4.3 29.4 Shelter and Area Development 11.3 0.2 11.5 Panchayat 1/ Development 8.2 0.9 9.1 Health 7.1 0.3 7.4 Small-scale Enterprise Development 2.2 - 2.2 Technical Assistance and Training 2.9 0.6 3.5 Design, Supervision and Management 15.8 15.7 31.5 Other Urban Services 12.7 1.4 14.1 Base Cost 197.8 40.9 238.7 Physical Contingencies 15.7 2.3 18.0 Price Contingencies 40.4 6.0 46.4 Total Project Cost 253.9 49.2 303.1 Less: Taxes and Duties 7.7 - 7.7 Total Net Project Cost 246.2 49.2 295.4 (US$ Millions) Financing Plan: Local Foreign Total IDA 97.8 49.2 147.0 GOI & GOWB Loans and Grants 64.1 - 64.1 Open Market Borrowings 92.0 - 92.0 Total 253.9 49.2 303.1 Estimated Disbursements: (US$ Millions) FY84 FY85 FY86 FY87 FY88 FY89 Annual 12.8 26.3 33.7 33.5 28.7 12.0 Cumulative 12.8 39.1 72.8 106.3 135.0 147.0 Rate of Return: 15%, based on evaluation of components accounting for 54% of project costs. Appraisal Report: No. 4310-IN, dated May 2, 1983. 1/ Panchayats are the non-municipal urban areas within the Calcutta Metropolitan Area. l У ! ь INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO INDIA FOR THE THIRD CALCUTTA URBAN DEVELOPMENT PROJECT 1. 1 submit the following report and recommendation on a proposed develop- ment credit to India of SDR 136.3 million (US$147 million equivalent) on stand- ard IDA terms, to help finance a project designed to improve urban management in the Calcutta Metropolitan Area and expand and upgrade essential urban serv- ices in the metropolitan area. The proceeds of the credit would be channelled to the Government of West Bengal in accordance with the Government of India's standard terms and arrangements for the financing of State development projects. PART I - THE ECONOMY 2. An'economic report, "Economic Situation of India and Resource Mobi- lization Issues" (4395-IN, dated April 11, 1983), was distributed to the Execu- tive Directors on April 19, 1983. Country data sheets are attached as Annex I. Background 3. India is a large and diverse country with a population of about 700 mil- lion (in mid-1982) and an annual per capita income of US$250- The economy is dominated by agriculture which employs more than two-thirds of the labor force. However, the land base is not sufficient to provide an adequate livelihood to everyone engaged in agricultural activities, especially those with little or no land. Growth of value-added in agriculture -- 2.2% since 1950/51 -- has been slower than growth of industrial value-added (5.0% per annum). As a result, there has been a gradual decline in the share of agriculture in GDP (at factor cost) from 60% to just under 40%, while the share of industry rose from 15% to around 25%. But industrialization has not been rapid enough to absorb the growing labor force, or to bring about a rapid economic transformation, with significantly higher productivity and income levels. As a result economic growth has been slow over the past three decades, averaging about 3.6% per annum since 1950/51. 4. Nevertheless, there has been steady progress with per capita income rising by about 1.4% per year in the period 1950 to 1980. Despite the large population base and its relatively rapid growth, India has been able to eliminate persistent dependence on foodgrain imports through significant improvements in agricultural production. Savings and investment have increased markedly since 1950/51: gross national savings more than doubled from 10.8% of GDP (at factor cost) to 22.8% in 1982/83, while gross domestic investment rose from 12.5% of GDP to 24.9% in 1982/83. Foreign savings (balance of payments deficit on current account) have never financed a major portion of domestic investment: a peak of about 20% was reached during the early 1960s. Surpluses -2- arose for a few years in the late 1970s, and at the present time, foreign savings are about 8% of investment. External assistance has been low both as a percentage of GDP and in per capita terms. Net foreign savings has never risen above 3% of GDP, and presently stands at 2.1%. 5. Before the 1970s, India placed relatively less emphasis on export promotion and more on import substitution. The volume growth of exports between 1950/51 and 1969/70 averaged only 2.2% per annum, while the volume growth of imports over the same period was 4.3%. In the early to mid-1970s, however, India's terms of trade, which had remained roughly constant during the 1960s, deteriorated sharply. In response, the Government introduced various policy measures designed to stimulate exports. As a result, the volume of India's exports grew on average about 7.3% per annum for the 1970s as a whole, a performance which demonstrates that sustained rapid growth is possible. While expanding world markets, particularly in the nearby Middle East, con- tributed to this growth, liberalized access to imported inputs and more effec- tive export incentives played a major role. 6. Moving into the second half of the 1970s, the Indian economy was buoyed by higher levels of investment and an expanding level of foodgrain output. As a result, growth in real GDP and in agricultural and industrial value-added, substantially exceeded the historical 30-year trends (paragraph 3) averaging 4.9%, 3.9% and 5.6%, respectively. In 1979/80, however, this momentum was broken when the worst drought in recent years, combined with a doubling of international oil prices and domestic supply shortages, led to a sharp fall in foodgrain production, a decline in GDP, and the openIng up of a large trade deficit. Severe inflationary pressures also emerged after several years of virtual price stability. These setbacks in 1979/80 coincided with the prepara- tion of the Sixth Five-Year Plan which laid down a program of adjustment that aimed at improving the trade deficit, infrastructural bottlenecks and price stability with an overall growth of the economy at 1.6 percentage points above the trend growth of 3.6%. Recent Trends 7. In 1980/81 and 1981/82, the economy substantially recovered with real GDP growing by 7.9% and 5.2%, respectively. While industrial output expanded by 4% in 1980/81 and 8.6% in 1981/82, recovery was particularly robust in agriculture where normal weather helped output to rise by more than 15% and 5.5%, respectively. The availability of power, coal, and rail transport, already improved in 1980/81, was even better in 1981/82, recording growth rates of about 10%, 9.6% and 12.9%, respectively. The easing of constraints on the supply of infrastructure and basic commodities was a determining factor in the improved performance of the industrial sector. This overall improvement in the Indian economy, combined with a more restrictive monetary policy contributed to a sharp decline in the rate of inflation. Wholesale prices rose by about 9% on an average annual basis in 1981/82 and by only 2.5% in 1982/83, reflecting a strong deceleration from a peak increase of 18% in 1980/81. 8. After two years of fairly solid performance, the Indian economy faced a difficult year in 1982/83 due to the drought in mid-1982 which brought down the GDP growth rate to around 2% and put further strains on the already dif- ficult balance of payments and domestic resource situation. Besides a sig- nificant decline in the range of 4.5%-6.5% in agricultural production, GDP -3- growth was also constrained by a slowdown in industrial growth from 8.6% in 1981/82 to about 4% in 1982/83. This resulted from a combination of several factors, notably the decline in agriculture income, persistent (though les- sened) power shortages, a textile strike in Bombay, as well as depressed export markets and increased competition from imports. The Government was able, however, to protect the level of savings to a large extent and keep the momen- tum of the investment program through largely successful public sector resource mobilization efforts. Foreign savings played a crucial role in support of this effort. Similarly, the timely implementation of various economic policies mitigated the otherwise very distressing effects of a poor monsoon. Continued improvements of the infrastructure sectors, although at a slower pace than in the previous two years, also reduced the negative effects of the drought. 9. Agricultural production in 1982/83 received a serious setback from the drought. Foodgrain production, which had reached a record 133 million tons in 1981/82, declined to 124-127 million tons. Most other major crops also experienced negative growth in 1982/83. Corrected for weather variations, this still represents a creditable performance. In 1979/80, with a broadly com- parable monsoon, foodgrain production reached only 109 million tons. The Government was able to mitigate the effects of the 1982 drought through effi- cient management of foodgrain procurement and distribution, careful timing of foodgrain imports, and appropriate allocation of power to irrigation pumps. These policies helped to avoid disruptions in basic food supplies and con- tributed to price stability during the year. While the management of the foodgrain economy after the drought was a significant achievement, the effect of the drought on production re-emphasized the continued importance of the monsoon in India-s agriculture. The performance of the recent past and prob- able future trends suggest that on average foodgrain supplies will meet demand. The balance remains delicate, and the need for foodgrain imports to maintain consumer supplies or adequate buffer stocks could arise from time to time. Thus, programs to expand irrigation, strengthen extension and encourage the efficient use of other agricultural inputs continue to receive high priority. 10. Basic infrastructure services performed generally well in 1982/83, although growth of coal, power and rail transport failed to maintain the momen- tum of the marked recovery of 1981/82. Despite lower hydro generation due to the failure of the monsoon, overall power generation recorded an increase of about 7%. This was due largely to an increase in capacity utilization in thermal plants resulting from improved overall management, stabilization of most of the new large units and better availability of coal due to the combina- tion of increased coal production and improved railway performance. Neverthe- less, power shortages remain the major bottleneck in the economy. Railway * traffic grew by only 3.7% in 1982/83 reflecting a slowdown from 1981/82. The lower growth was due not to a decline in the operational efficiency of the railways but rather to slack demand from core sectors like steel, iron ore, coal washeries and fertilizers. Coal production growth (4% in 1982/83), after 10% growth in the two preceding years was creditable. There were no major shortages and there were improvements in the quality of coal. Recent easing of shortages and bottlenecks in infrastructure has come primarily from better utilization of existing capacity, but in the future most improvement must result from added capacity. It is therefore critically important that India maintain the pace of investment in these key sectors and mobilize sufficient resources to do so. -4- 11. The Indian economy has reverted from a situation of resource surplus, which had been a temporary phenomenon of the late 1970s, to one of resource scarcity. Investment has again grown quicker than national savings, and the scope for further increases in the latter appears limited. India's gross national savings rate, which averaged 22.4% of GDP in the last three years, is high by any standard, particularly considering India-s low income and the large proportion of its population living below the poverty line. Future increases in savings will depend heavily upon the enhanced profitability of public sector enterprises which would require better utilization of capacity, more efficient operations and adequate pricing policies. In 1981/82 there was a significant increase in public savings due to improved profitability of various public sector enterprises. This trend which was maintained in 1982/83 needs to be accelerated. The gap between gross investment and national savings which rose from 0.4% of GDP in 1979/80 to 1.8%, 2.3% and 2.1%, respectively in the first three years of the 1980s, has been financed by foreign savings. 12. India-s ability to generate resources to meet its development objec- tives has become increasingly linked to the balance of payments. The current account balance which recorded surpluses between 1976/77 and 1978/79, sharply deteri'orated to deficits of nearly US$2.9 billion in 1980/81 and US$3.8 billion in 1981/82 (1.8% and 2.3% of GDP, respectively). This was partly due to a sharp rise in the oil import bill as a result of both the disruption of oil production in northeast India in 1980 and significant oil price increases, and to a more liberal import policy aimed at providing producers with access to inputs for higher capacity utilization, greater efficiency, improved technology and capacity expansion. The current account deficit in 1982/83 declined to US$3.3 billion or 2.1% of GDP. The improvement would have been greater had not the drought resulted in the need to rebuild food stocks through imports and at the same time led to a lower level of GDP growth. This improvement in the balance of payments is to a significant degree the result of India's develop- ment and adjustment efforts over the past three years. It also reflects a reduction in the trade deficit as compared to the levels reached in 1980/81 and 1981/82. The trade deficit declined from US$7.6 billion in 1980/81 to US$6.0 billion in 1982/83 due to continued export volume growth (following the sub- stantial resumption in 1981/82) despite poor world market conditions, coupled with the containment in import growth due to import substitution of petroleum products, metals and fertilizers while allowing substantial growth in "other" imports through more liberal import policies. Nevertheless, it is expected that the balance of payments will be under strain for the next several years, for India's adjustment program will continue to require high levels of imports. 13. The high investment rate, about 25% of GDP, envisaged in the Sixth Plan coupled with the limited possibilities of raising domestic savings beyond the present high levels, necessarily implies a need for external resources. Faced with a reduction in the availability of bilateral and multilateral concessional assistance, India has begun to borrow significant amounts on commercial terms from the Euro-dollar market in addition to much greater utilization of sup- pliers- and export credits. India-s favorable debt service profile has enabled India to tap commercial capital markets at favorable spreads (over, relatively high underlying rates). In the period 1980-82 India contracted commercial loans totalling over US$2,000 million and suppliers credits of about US$520 million. The bulk of the loans are linked to specific development projects in the public sector while the credits are linked, by and large, to development projects in the private sector. India also reached an agreement -5- with the International Monetary Fund for the use of the Extended Fund Facility for SDR 5 billion over three years (1981/82 to 1983/84), SDR 2.5 bilJion of which have already been drawn. The transfer of funds under the EFF has stemmed the use of foreign exchange reserves which had fallen to less than four months of import coverage in 1981/82. In 1982/83, In addition to continued use of the EFF, financing requirements were met by increased non-concessional borrowing (about US$2,000 million) and a 10% increase in net aid disbursement. Development Prospects 14. The experience of recent years illustrates that India has 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 is large in absolute terms and has a highly diversified structure, capable of manufacturing a wide variety of consumer and capital goods. Basic infrastructure -- irrigation, railways, telecommunicat,ons, power, roads and ports -- is extensive compared to many countries, although there is considerable need for additional capacity 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 reasonable access to foreign savings, India has the capability for managing these considerable resources to accelerate its long-term growth. 15. The medium-term framework for advancing India's development objectives is the Sixth Five-Year Plan (1980/81-1984/85), which is now in its fourth year. The Plan assigns priority to agriculture, energy development, the growth of exports and domestic import substitutes where appropriate, and the removal of infrastructural bottlenecks. Overall performance has so far been encouraging, although bottlenecks in key sectors such as power and transport are likely to persist. Moreover, fulfillment of the Plan targets will require additional resource mobilization. The efforts of the Central Government to raise resour- ces have so far been impressive and are likely to be broadly sufficient to meet the financing requirements of the Central Government-s share in plan invest- ment, even if some increase in inflation is experienced above current low levels. However, a shortfall in public savings is likely to occur in some States unless further measures are introduced. There will be a need also for continuous efforts to maintain the current level of private savings. Recent increases in interest rates and tax concessions on time deposits and the con- tinued dampening of inflationary expectations should stimulate such savings. 16. The higher capital formation rates of the past few years augur well for future income growth. However, returns to investment have so far been relatively low. Much of this phenomenon relates to India's stage of develop- ment, In which a large and growing proportion of investment has been needed to build up basic infrastructure. These services, such as power, transport and irrigation, have inherently high capital-output ratios. However, there is scope to improve the sectoral capital-output ratios through greater efficiency and better management. Bottlenecks in basic infrastructural sectors clearly can prejudice growth in other sectors where large investments have been made. As demonstrated in the last three years, performance in the basic service sectors can be improved through better planning and management, thus leading to higher productivity and capacity utilization throughout the economy. At the -6- same time, programs to expand domestic capacity arE vital. In the case of tradeable commodities like coal, steel and cement, this is justified on the grounds of comparative advantage. For sectors such as irrigation, power and transportation, expansion of planned capacity in accordance with the require- ments of the rest of the economy will be vital to overall medium- and long-term development prospects. In the short term, however, achieving an adequate balance between supply and demand in these sectors will remain a difficult objective. 17. Under the Sixth Plan, India has an ambitious oil production program backed by substantial financial commitment. While the gap between domestic consumption of petroleum and production remains large, the prospects for progressive substitution of domestic petroleum for imports are quite bright. In 1981, and again in early 1983, resources for exploration and development were raised by successive price increases for domestic crude and products. India's dependence on oil imports dropped from 63% in 1979/80 to about 45% now and a scheduled expansion in production is expected to decrease oil imports (in crude equivalent terms) to about 33% of consumption by 1984/85. The rapidly expanding level of exploration activity, combined with the possibilities for accelerated offtake from known fields, offers much encouragement for India-s longer-term energy prospects. 18. Despite an expected continued decline in its current account deficits from the current 2.1% to about 1.7% of GDP by the late 1980s, India will require growing access to world financial markets to complement concessional assistance. These commercial sources of funds will be important in the future since India's current account deficits, though not large relative to the size of the economy, will nevertheless be large in absolute terms and will neces- sitate external borrowing beyond levels expected to be available from normal concessional sources. Given the favorable structure of India's external debt, which reflects the past reliance on concessional sources, India should remain creditworthy for a substantial growth in external borrowing. 19. India's development prospects over the next few years will hinge on the extent to which the economy can be brought into both internal and external balance, while at the same time achieving more rapid growth than in the past. In the longer term, income growth represents the best strategy for achieving these needed adjustments, both by generating higher savings for further invest- ment, and by fostering the development of export and import-substituting industry to improve the balance of payments. In the short term, a relatively large external borrowing, including an increased emphasis on commercial borrow- ing, will be necessary to cope with the balance of payments consequences of such a growth strategy. However, an important element in providing India with the capacity to adjust flexibly will be adequate flows of concessional assis- tance. Although India is currently in a position to increase borrowing on commercial terms from the very low levels of the past, there are, of course, limits beyond which India will choose to sacrifice growth objectives rather than accept debt on unfavorable or unmanageable terms. The Government-s efforts to maintain an adequate rate of growth while adjusting the structure of the Indian economy to a more open and efficient environment requires foreign resources in addition to the level of commercial borrowing available to India. Indeed, along with increasing exports, higher efficiency of investment to support an adequate rate of growth is a key element in maintaining India's recently improved creditworthiness. India is still a very poor country with a -7- large rural sector and enormous investment requirements for human development and basic infrastructure. The fact that India has been able over the past seven years to maintain a rate of growth above the long term trend, despite the poor monsoons of 1979/80 and 1982/83, lends substance to the hope that a more open trade policy and concerted efforts to remove constraints on the growth of productive capacity, supported by adequate mobilization of savings both foreign and domestic, can sustain a rate of growth closer to 5.0% per annum than the long-run trend of 3.6% per annum. Combined with a reduction in the rate of population increase to below 2.0% per annum, a 5.0% growth rate would mean a doubling of the trend rate of growth of per capita income of less than 1.4% per annum. Success in these efforts would make a significant difference to the prospects of easing poverty in India. 20. A large and growing population and severe poverty underline the need to accelerate India-s development efforts. The 1981 Census placed India's popula- tion at 683.8 million, or about 12 million higher than official projections. The fact that there was no decline in inter-census rates of population growth, equivalent to about 2.2% per annum, is a cause for concern. While further analysis of the Census may suggest this rate of growth to be slightly overes- timated, the expectation of a measurable decline in the population growth rate has not materialized. Until the results of the Census are fully analyzed, firm judgements about the reasons for this outcome are not possible. However, the results re-emphasize the need for continuing efforts to strengthen the health and family planning program in a broad range of activities and services. These efforts are given high priority in the Sixth Plan, which aims at a rise in the proportion of protected couples in the reproductive age group from its estimated 1979/80 level of about 23% to over 35% by 1984/85. 21. Reduction of poverty remains the central goal of Indian economic growth. More than one-third of the world's poor live in India, and more than 80% of the Indian poor belong to the rural households of landless laborers and small farmers. About 51% of the rural population and 40% of the urban popula- tion subsist below the poverty line. Improvements in the living standards of the poor will depend to a large extent on the overall growth of the economy, particularly on increases in agricultural production and employment, and in non-farm rural employment. These developments will have to stem in large part from market forces which can be encouraged and reinforced by appropriate Government policies and the strengthening of basic services and infrastructure. The declining trend in real foodgrain prices between 1970 and 1981, resulting from India's sustained effort to raise agricultural production, reflects such developments. There is also a role for direct Government action in faster implementation of land reform (though the scope for significant reduction in poverty through land 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. Operations such as the community health volunteer program and the national adult literacy campaign provide 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 22. Since 1949, the Bank Group has made 71 loans and 156 development credits to India totalling US$4,783 million and US$11,447 million (both net of cancellation), respectively. Of these amounts, US81,332 million has been repaid, and US$5,907 million was still undisbursed as of March 31, 1983. Bank Group disbursements to India in the current fiscal year through March 31, 1983 totalled US$1,008 million, representing an increase of about 17 percent over the same period last year. Annex II contains a summary statement of disburse- ments as of March 31, 1983, and notes on the execution of ongoing projects. 23. Since 1959, IFC has made 28 commitments in India totalling US$220.4 million, of which US$28.3 million has been repaid, US$56.2 million sold and US$17.3 million cancelled. Of the balance of US$118.6 million, US$111.1 mil- lion represents loans and US$7.5 million equity. A summary statement of IFC operations as of March 31, 1983, is also included in Annex II (page 5). 24. The thrust of Bank Group assistance to India has been consistent with the country-s development objectives in its support of agriculture, energy and infrastructure. Of particular importance have been investments in irrigation, extension and on-farm development designed to increase agricultural produc- tivity, and efforts to improve the availability of basic agricultural inputs to farmers through credit, fertilizer, marketing, storage, and seed projects. Major elements of the lending program have also been directedat helping to meet the energy needs of the economy while curbing the growth of oil imports, and to ease the infrastructure bottlenecks which have hampered economic growth in India, particularly through power generation and distribution, and railways and telecommunications projects. The Bank Group has also provided financing for a broad range of medium- and small-scale industrial enterprises, primarily in the private sector, through its support of development finance institutions. Recognizing the importance of improving the ability to satisfy the essential needs of urban and rural populations, the Bank Group has supported nutrition and family planning programs, a rural roads project, as well as water supply and sewerage and other urban infrastructure projects. 25. This pattern of assistance remains highly relevant, and consonant with Government priorities, as reflected in the Sixth Plan. The continued active involvement of the Bank Group in agriculture, energy and infrastructure development will appropriately contribute to India's adjustment and growth prospects. Irrigation will need continuing support, with emphasis on improved efficiency in water conveyance systems to ensure reliable delivery to farmers fields. In addition, major investments to develop the large Narmada River basin will be vital to India's efforts to increase agricultural production. Important complements to these efforts, such as fertilizer production and distribution, agricultural credit and extension, will continue to receive support. A continued program of investments aimed at rapidly increasing the domestic supply of energy will clearly be necessary if India is to curb the cost of oil imports and alleviate the critical power shortages which constrain output in both the agricultural and industrial sectors. Exploitation of oil and gas resources is a central element of this program, which should be supple- mented by investments in hydro and thermal power generation, and in the expan- sion of the transmission and distribution networks. Industrial projects to increase the domestic production of basic commodities, which have been in short -9- supply and which India has a comparative advantage in producing, should also receive high priority. Finally, raising the efficiency and levels of transpor- tation infrastructure would mitigate a key constraint to achieving higher levels of economic growth so that further support of the railways and for ports development will be particularly appropriate. 26. The need for a substantial net transfer of external resources in support of the development of India-s economy has been a recurrent theme of Bank economic reports and of the discussions within the India Consortium. Thanks in part to the response of the aid community, India successfully adjusted to the changed world price situation of the mid-1970s. However, there is now a need for increased foreign assistance to India, not only to help the economy adjust to the more recent oil price increases and the overall 4 deterioration in the world trade environment but also to maintain the rela- tively higher growth rates achieved during the first two years of the Sixth Plan. As in the past, Bank Group assistance for projects in India should aim to include the financing of local expenditures. India imports relatively few capital goods because of the capacity and competitiveness of the domestic capital goods industry. Consequently, the foreign exchange component tends to be small in most projects. This is particularly the case in such high-priority sectors as agriculture, irrigation, and water supply. 27. India's poverty and needs are such that whenever possible, external capital requirements should be provided on concessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support. This requirement for additional assistance can be met, in part, through Bank lending. Given its development prospects and policies, India is judged credit-worthy for Bank lending to supplement IDA assistance. A con- tinuation of efforts already underway to achieve growth in productive capacity, trade expansion, higher levels of savings, foodgrains self-sufficiency and a reduction in the rate of population growth should result in continued economic growth and improvement in the balance of payments. Despite recent setbacks, India's external payments position is still manageable. The ratio of India's debt service to the level of exports was about 11% in 1982/83 and is projected to remain below 20% through 1995/96. As of March 31, 1983, outstanding loans to India held by the Bank totalled US$3,571 million, of which US$1,854 million remain to be disbursed, leaving a net amount outstanding of US$1,717 million. 28. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with 50%, 43% and 53%, respectively, in 1981/82. On March 31, 1982, India's outstanding and disbursed external public debt was about US$17.9 billion, of which the Bank Group's share was US$7.1 billion or 38% (IDA-s US$5.9 billion and IBRD-s US$1.2 billion). In 1981/82, about 16.0% of India-s total debt service payments were to the Bank Group. -10- PART III - THE CALCUTTA SETTING Physical Characteristics 29. The Calcutta Metropolitan Area (CMA) is the most populous urban agglomerate in India and the dominant urban and cultural center of eastern India--a nine-State region comprising nearly one-quarter of the country's populati9n. With a population of 10 million (1981) in an area of about 1,400 km , the CMA contains nearly half of the urban population of eastern India and about 70% of the urban population of the State of West Bengal, of which it is the capital. 30. The CMA stretches north and south for nearly 70 km along both sides of the Hooghly River. For most of this distance it forms a narrow corridor along the limited area of elevated land close to the river. Competition for the high land on the banks of the river is keen, as much of the remaining land in the Hooghly's basin is low-lying, waterlogged, and unsuitable for settlement. The central core of the metropolitan area is on the east bank of the river, within the jurisdiction of the Calcutta Municipal Corporation (CMC), which has a population of 3.3 million. Howrah, Calcutta's twin city, lies on the west bank of the river, opposite the CMC area. Both Calcutta and Howrah are encircled by numerous municipalities, small towns, and semi-urban areas which extend north and south along the river and combine with Calcutta and Howrah to make up the CMA. 31. Within the CMA, three bridges link the east and west banks of the Hooghly River. Only two of these bridges serve motorized vehicles, trams, and pedestrians; the third is a rail bridge. Crossing facilities for pedestrian traffic and public transport, the dominant modes of travel, are particularly poor. As a result, travel between the east and west banks of the river is severely constrained, although two new bridges are currently under construction and new river-crossing ferry services have recently been introduced. 32. The CMA is the slowest growing metropolis in India. Its annual population growth rate is 2.2%, compared to 3.3% for the nine largest Indian cities and 3.9% urban growth for the whole country. Yet, it adds about 220,000 people annually in absolute numbers. The annual growth combines with the limited availability of suitable land to produce extremely high population density in the CMA Population density in Calcutta city averages 32,000 persons per km . This is significantly higher than density statistics for metr?politan centers such ai Manhattan Island (26,000/ 19 ), Paris (25,000/ km ), Bangkok (21,000/ km ), and Tokyo (15,000/ km ), whose infrastructure and facilities greatly exceed -11- Calcutta's and whose high-rise pattern of development acts to ease crowding, in contrast with Calcutta's low-rise structures. 33. Calcutta-s high population density and inadequate past investments in infrastructure have resulted in serious deficiencies in the provision of all municipal services in the CMA despite significant advances made during the last decade (para 40). Some 60 percent of the area's population, or six million people, still live in conditions characterized by a lack of sewerage and drainage facilities and inadequate water supply and garbage collection. Of these, three million live in temporary or make-shift structures in refugee colonies or bustee areas.l/ Health and environmental conditions have historically been regarded as among the worst in the major cities of India. Existing health programs in the CMA are fragmented, with only weak links between preventive and curative services. Primary school facilities are equally inadequate, and reach less than 70% of eligible children in the area as a whole, less than 40% in the bustee areas. The Urban Economy 34. Calcutta-s economy suffered a major setback from the partition of India and Pakistan in 1947. It lost a major part of the hinterland that had provided raw materials and markets to its prominant manufacturing industries and, at the same, it began to receive an influx of refugees from East Pakistan (now Bangladesh) whose presence strained public service systems and increased unemployment. In addition, Calcutta has seen a significant decline in world demand for jute, one of its principal manufacturing outputs. Moreover, the progressive silting of the Hooghly River has undermined the capacity of Calcutta-s port and contributed to its decline relative to other Indian ports. Finally, deteriorating public services in Calcutta have combined with political instability during 1960s, civil unrest and labor disruptions to discourage private investment in the CMA. The result of these developments is that, while the OMA is still a very important element in the Indian economy, its per capita income is much lower than that of its industrial rival, Bombay; CMA's value-added per industrial worker is considerably lower than the all-India average; and its the average annual rate of growth in employment between 1971 and 1981 was a modest 0.7%. 35. Structural adjustments in the economy of the CMA are underway. The Government of West Bengal, which considers the rapid economic development of Calcutta-s rural hinterland a prerequisite for economic growth in the CMA, is implementing a variety of programs to bring modern 1/ "Bustee areas" are areas of land occupied by compact groups of small, single-story structures of temporary construction. Residents generally rent accommodation in these structures from a resident owner or "thika tenant". The thika tenant, in turn, rents the land from a non-resident landowner. -12- agricultural technology to West Bengal and to improve agricultural marketing and storage. Substantial investment has also been made in the coal and iron deposits of West Bengal, which provide raw materials for Calcutta's basic metals, metal products and machinery industries. The manufacturing sector of the CMA, which provides 40% of the area's employment, has undergone a major shift from dominance by the jute industry to dominance by the engineering industry, and a new port is being constructed at Haldia, 45 miles downstream from Calcutta city. The shortage of power (22% as against 11% for the whole of India), however, still remains acute. 36. The success of the efforts to spur the economy of the CMA depends not only on the wisdom of the individual investment decisions made, but also on the ability of local authorities to build and sustain a physical environment in which individual and industrial efficiency are possible. With this in mind, the Government of West Bengal has embarked upon a substantial program for the rehabilitation and expansion of urban infrastructure in the CMA. It is the Government-s intention that these infrastructure investments combine with on-going development efforts to halt the economic decline of the Calcutta metropolitan area. Metropolitan Institutions 37. The Calcutta Municipal Area has been designated as a unified planning region by the Government of West Bengal. It is not, however, a single administrative unit. Local administration in the CMA is the responsibility of the Calcutta and Howrah Municipal Corporations, 37 municipalities and 165 panchayats (non-municipal urban areas). 38. In effect, the Government of India and the Government of West Bengal exert a dominant influence on the CMA. GOI sponsors major industrial projects and has responsibility for the national highways, the railway system, airports and seaports. GOWB agencies execute projects within the CMA in the areas of education, public health, road construction and maintenance, housing, small-scale industry promotion, power, and public transport. Deficiencies in the organization and management of the local authorities reduce their ability to deal with their own development problems. Moreover, as self-generated revenues are inadequate to their needs, most of the local bodies in the CMA rely heavily on financial support from GOWB. Borrowings and grants from GOWB are tightly regulated. To qualify for financial assistance, development projects must be sanctioned and integrated into GOWB's overall development plan. The activities of local authorities are largely confined to the provision of primary education and preventive health services, limited commercial activities (e.g., market administration), and the operation and maintenance of infrastructure put in place by State and national authorities. Even in this last function, local bodies are given financial and technical assistance by GOWB. 39. In 1970, GOWB established the Calcutta Metropolitan Development Authority (GMDA), which was reconstituted under the West Bengal Town and -13- Country (Planning and Development) Act of 1979. OMDA is responsible for economic and physical planning as well as for design and construction of public works within CMA. Its Board includes two elected Corporation Counselors and three elected Municipal Commissioners representing the municipalities and other local bodies in CMA. CMDA has now evolved into an organization with over 4,000 staff, capable of executing an investment program of over US$50 million annually. To finance its development schemes, CMDA obtains financial resources through State Plan allocations, 50% of the metropolitan entry tax (octroi), and its own market borrowing. Recent Improvements in Service Delivery 40. Since the early 1970s, during which it was supported by two IDA Credits (see paras 43 to 46), CMDA has provided an overall institutional and intersectoral approach to Calcutta-s problems, developed a strategy to address urgent high priority needs, and served as an executing agency to carry out investments to reduce the most serious service deficits. During this period, major efforts have been made to improve and strengthen the legal framework and managerial systems of the CMDA and the Calcutta Municipal Corporation (CMC), in whose jurisdiction the bulk of investments were located and which would be responsible for the operation and maintenance of completed works. With the completed investments, nearly two-thirds of the CMA's population living in registered slums (or about two million people) have benefitted from the "bustee" improvement program; CMA's water supply has tripled (from 100 million gallons a day in 1973 to 300 million in early 1983) with greater coverage under a much enhanced distribution network; and significant improvements have been made in other sectors, such as drainage, solid waste management and health. 41. There are a number of areas where improvements are lagging, however, For example, improvements in urban transport and delivery of serviced urban land have been less significant. Investments in the high-density areas are sometimes not well-coordinated and there are delays in complementary works (e.g. secondary and tertiary water distribution and sewerage collection systems). The disparity in service levels between the metrocore (Calcutta and Howrah) and the rest of the CMA has become more acute, as the former has received a concentration of investment while the latter is absorbing nearly all the recent population growth. Finally, there have been inadequate increases in self-generated local revenues and the financial gap in CMC and other local governments has become unacceptably large. This has resulted in delays in transferring new infrastructure facilities to local bodies, and poor maintenance of existing aged systems. 42. Building on the efforts of the 1970s, significant institutional intervention is continuing. CMDA is being further strengthened as a financial and policy intermediary with a strong Appraisal, Monitoring and Evaluation Unit, and a number of executing functions are being transferred to other agencies. The municipalities have been given an expanded role in capital budgeting and in setting the priority of local schemes within broad guidelines set by CMDA. CMC-s internal organization, management and -1 4- financial systems are being further strengthened through appointment of a task force to address principally its water supply sector and property tax assessments and collection. Several pieces of legislation have been introduced to increase the financial resources of municipalities, to improve planning and control of land use, and to strengthen local governments. Finally, a number of changes are underway to improve the resource base of local bodies, to introduce better financial management practices, and to emphasize the importance of cost recovery and operations and maintenance in the delivery of urban services. Bank Group Involvement 43. The first Calcutta Urban Development Project (Cr. 427-IN of September 1973) comprised a broad program of urban works, with emphasis on infrastructure to meet the urgent service needs of the population. The IDA credit of US$35 million equivalent was directed mainly to investments in water supply, sewerage, drainage and traffic engineering. The credit was fully disbursed in November 1979, some two years behind the appraisal target. The slow progress under the first project reflected the lack of experience on the part of CMDA, the principal implementing agency. 44. The Operations Evaluation Department has audited the first Calcutta Urban project. It has stated in its report (No. 4023) that the "CMDA expanded quickly .... It became the dominant public works agency in the CMA. Developing the expanded organization to effectively deal with its expanded responsibilities proved more difficult and took longer than expected. Execution of the projects also took longer than expected and was hindered by inadequate preparation and CMDA's reorganization problems. With the development of a second project, the institutional goals for CMDA were substantially achieved and specific measures to strengthen operation and maintenance were identified". Regarding the execution of the investment schemes, the report states that progress was made "in expanding the supply and distribution of potable water, improving drainage, sanitation and general environment especially in Bustee (slum) areas and in improving facilities for traffic at critical points. Benefits were delayed in some cases by the inefficient sequence of project construction and the loose coordination of complementary investments." The report sees the institution-building attempts as a process of change--moving through stages--and, it further states, "the nature of the needed changes has become more clear with time and so has the pressure to make them. Present focus is on the need to strengthen the finance, operation and maintenance of the system". The proposed Third Calcutta Urban Development Project addresses the problems highlighted by the Operations Evaluation Department's report. 45. The Second Calcutta Urban Development Project (Cr. 756-IN of January 1978) continued IDA assistance with a credit of US$87 million. In addition to the provision of shelter, municipal infrastructure improvements, solid waste management and technical assistance, the project includes other components such as school construction and health care, credit for small businesses, traffic engineering and management. The -15- major focus has, however, been on a series of organizational, administrative and fiscal reforms and on the operation and maintenance of the completed schemes. Although about a year behind appraisal target, progress under the second project has been considerably better than under the first, and it is now virtually complete. 46. IDA has also made a US$56 million credit for the Calcutta Urban Transport Project (Cr. 1033-IN of October 1980) to support financial and operational rehabilitation of the public bus and tram operations in Calcutta. Although physical performance (acquisition of buses and trams, progress of civil works) has been satisfactory, the operational and financial performance of project agencies has been poor. To help improve the situation, GOWB has (i) appointed a task force of senior COWB officials in the Calcutta State Transport Corporation, (ii) increased bus and tram fares effective March 1983, and (iii) concentrated the transportation planning responsibilities in CMDA. PART IV - THE PROJECT Background 47. The proposed project was prepared by the Calcutta Metropolitan Development Authority (CMDA). It was appraised in October 1982. Negotiations were held in Washington D.C. in April 1983, with an Indian delegation coordinated by Mr. S.P. Bajpai, Deputy Secretary of the Department of Economic Affairs, GO. The Staff Appraisal Report (No. 4310-IN), dated May 2, 1983, is being circulated to the Executive Directors separately. A Supplementary Project Data Sheet is attached as Annex III. Project Objectives 48. The project would continue IDA support to improve urban management in the Calcutta Metropolitan Area through a comprehensive approach in which institutional and financial reforms go hand-in-hand with physical improvements. The project would further strengthen metropolitan and municipal governments and other institutions responsible for urban planning, management and operation. At the same time, it would substantially increase the number of direct beneficiaries of urban services, focusing on investments to provide minimum basic needs at affordable costs. Emphasis would be given to rectifying sectoral and spatial investment imbalances between the "metrocore" (Calcutta and Howrah) and the remainder of CMA, completing and complementing earlier investments so that maximum benefits can be derived, and improving operation and maintenance of assets through improved cost recovery and financial management policies. The private sector would be encouraged to participate more actively in development (e.g., in financing and developing urban renewal schemes), and greater use would be made of institutional financing. The project investments would directly benefit -16- over six million people, 70% of whom belong to the economically weaker sector (EWS).l/ Project Description 49. The project would pursue these objectives in three ways. First, it would build upon the institutional reforms already achieved and would strengthen the institutions further. Second, it would continue technical assistance and training to the agencies concerned. Finally, the project would expand urban services and employment in the CMA. For example, it would double the availability of water supply in the CMA for about 3 million people to an average of ten gallons per person per day, over 2 million people would also benefit from an improved drainage systems; 25,000 serviced housing sites would be provided, over 3 million people would benefit from improved transportation; and nearly 60,000 households would benefit from the small-scale entrepreneur program. The following paragraphs describe these elements in further detail. 50,. Institutional Development. A number of institutional reforms have already been set in motion to improve the working of CMDA, the Calcutta and Howrah Municipal Corporations, the municipalities, and other agencies. Under the proposed project, emphasis has been directed to consolidate those steps and, at the same time, incorporating new ones to further strengthen the institutional development program. Among the reforms already implemented or planned are the following: (a) GOWB would complete its review of the current property tax assessment base of all CMA municipalities, by December 31, 1983; and if any tax base is found inadequate, the Central Valuation Board would carry out a general revaluation of that tax base (Section 3.04 of the West Bengal Agreement). (b) CMDA has been reorganized to reflect its future role. For example, an Appraisal, Monitoring and Evaluation Unit (AMEU) and a Shelter, Urban Renewal and Area Development Directorate (SURAD) have been added. All key management positions in these units have been filled. The AMEU was instrumental in the preparation of this project, and has developed a comprehensive monitoring framework for the project. AMEU and SURAD would remain part of CMDA beyond the project period. (c) CMDA is retaining the services of the Housing Development Finance Corporation (an IFC-assisted Corporation) for two years' advisory and training services to develop SURAD's 1/ About 45% of CMA population (about 4.5 million people) belong to households in EWS, with a monthly income of Rs 350 (about US$37) or less per household. -17- marketing, loan administration and financial management capabilities. (d) The Calcutta Metropolitan Water and Sanitation Authority (CMWSA) has been strengthened by provision of additional staff. A new accounting system has been implemented effective April 1983. (e) The Calcutta Municipal Corporation is strengthening its financial management, particularly in the areas of water metering, property assessment, customer billing, and inventory control. Effective April 1983, CMC has established a new department responsible for meter reading, billing and customer service, and appointing three staff members to improve property assessment, a Special Officer and supporting staff to manage water metering, and two staff members for stores inventory and control. (f) GOWB, CMDA, CMC, HMC and other local bodies are taking a number of measures to improve public finance in the CMA, including revision of GOWB's financial grant system to local bodies and increase in cost recovery (see paragraphs 67 to 73). 51. Technical Assistance and Training. The project would provide advisory and consultancy services amounting to about 330 man-months and involving a cost of about US$1.0 million, including US$763,000 in foreign exchange. The services would include about 35 man-months of internationally recruited consultants for the Institute of Local Government and Urban Studies and for overseas training and teaching materials (US$429,000). In addition, the following would be implemented by CMDA: (i) about 20 man-months of advisory services by international consultants to improve the water supply, drainage and sanitation facilities (US$217,000); (ii) a CMA-wide transport study involving about 110 man-months of local consultants (US$117,000) and 10 man-months of international consultants (US$117,000); (iii) annual inspections of major infrastructure projects using 14 man-months of local consultants (US$15,000); and (iv) technical assistance in accounting, organization, management and finance studies for smaller municipalities, and in finance studies for Howrah Municipal Corporation (HMC) and larger municipalities for a total of 142 man-months (US$149,000). 52. In the past, both CMDA and CMC have run training courses for their staffs in their respective training centers. GOWB has recognized the need for systematic training of local government personnel in the whole of West Bengal and in May 1982 set up an Institute of Local Government and Urban Studies which is designed to meet this need. An ambitious training program has been set up to train 10,000 persons at the Institute, while the CMC Training Center would cater for another 10,000 persons and the CMDA Training Center for about 2,000, making a total of 22,000 persons to be trained during the project period. -18- 53. Urban Services. On the basis of both technical characteristics and institutional responsibilities for planning and implementation, the five-year (April 1, 1983 to March 31, 1988) investment program to be financed under the project has been divided into four areas. They are the municipal development program, the transmunicipa infrastructure program, the metrocore (Calcutta/Howrah) investment program, and the CMA-wide complementary program. 54. The municipal development program, to be executed by the municipalities, seeks to deliver basic municipal services to the most deprived areas in each of 37 municipalities (4.2 million population), Calcutta Municipal Corporation (CMC) (3.3 million) and Howrah Municipal Corporation (HMC) (740,000) within a range of affordable service delivery norms recommended by CMDA. Services would include water supply, drainage, solid waste management, privy conversions, local road improvements, and improvement and expansion of markets. As part of area-based improvements, bustees (slums) in each municipality would be provided with basic utilities. 55. The transmunicipal infrastructure program, which would be planned and executed by CMDA and CMWSA, would improve and expand critical infrastructure, including construction and renovation of two water treatment plants and primary grids, renovation of four sewerage pumping stations, establishment of land-fill sites for solid waste disposal, implementation of area development and transportation schemes, the benefits of which are to be shared by two or more municipalities. 56. CMDA would also plan and execute programs of investment under the metrocore investment program in Calcutta and Howrah. Such programs would focus on the maximization of benefits from the existing infrastructure including that newly created under the first and second IDA credits. For example, it would include improvements to and expansion of the water supply and sewerage system, including bulk metering and leak detection, drainage, solid waste management, traffic management, and construction of key road links to enhance efficiency of existing inner-city road networks. Funds are included for seed capital for urban renewal schemes in both Calcutta and Howrah, to encourage the private sector to participate in redevelopment works in urban areas, thus attracting private commercial financing in such schemes which would also increase municipal revenues. 57. The CMA-wide complementary program would include the following: (a) Shelter and Area Development. Sites and services programs initiated under previous projects have faced serious delays due to management and land acquisition problems. Under the proposed project, CMDA's role as the primary planning and implementing agency would be strengthened, and it would make 25,000 serviced plots available to a range of income groups. The project would include "seed capital" to be placed in an Area Development Fund by GOWB by March 31, 1984. The purpose -19- of the Fund is to initiate and sustain a construction program, through bridging finance, while long-term funds from Indian financial institutions (estimated at US$33.6 million) are being secured. The seed capital would amount to about US$9.5 million, ard IDA would reimburse 50% of the amount (US$4.75 million) after GOWB makes the deposits in the Fund. IDA wcul& subsequently receive full documentation of expenditures as the funds are actually used. (b) Health. A pilot health care program started under the second project would be expanded by provision of additional 60 ward health centers (one for every 30,000 population), and 8 polyclinics, expanding 15 maternity facilities, and by establishing a drug distribution system and one Urban Health Training Center. (c) Small-scale Enterprise. Building on the experience gained under the second project, about 43,000 families, resident in slums, would be provided with access to commercial credit to undertake small-scale enterprises. ODA has identified a target group of about 170,000 families of self-employed and self-employable persons in the CMA, and they have been divided into three income levels (monthly family income of up to Rs 350, Rs 350-600 and above Rs 600). The project would cover about 25% in each income level. At present, the lowest-income families in the group are benefiting from low-interest (4% per annum) loans provided by commercial banks under a Reserve Bank of India directive which requires each bank to lend up to 1% of its deposits to such beneficiaries at an interest rate of 4%. Under the proposed project, the next income group (monthly family income of between Rs 350 to 600) would also benefit from a lower rate in the form of a rebate of 4.25% annual interest, for prompt re-payment of a first loan of up to Rs 10,000, which would reduce the effective rate from the prevailing market rate of 12.5% to 8.25% per annum. The rebate, amounting to a total of about US$632,000 during the project period, would be provided by GOWB and forms part of the project cost. CMDA would review annually the interest rebate feature to determine its effectiveness (Paragraph 2 of Schedule 2 to the Project Agreement). (d) Panchayat DeelopentProgram. This program was also started under the second project to provide a minimum standard of all-weather roads, water supply and sanitation for the 165 panchayats (non-municipal urban areas) within the CMA. Under the proposed project, about 650 km of roads would be paved, about 2,000 hand-operated tubewells would be sunk and about 15,000 of the existing 65,000 privies would be replaced with sanitary latrines. -20- Project Implementation 58. The project would be implemented by existing institutions and agencies of GOWB and the local bodies, with assistance from the national institutions like the Housing and Urban Development Corporation, the Housing Development Finance Corporation and commercial banks. While CMDA would be responsible for overall coordination of project implementation, the principal implementing agencies include CMDA, CMC, HMC, 37 municipal authorities, the Calcutta Metropolitan Water and Sanitation Authority (CMWSA), the Calcutta Improvement Trust (CIT), the Howrah Improvement Trust (HIT) and GOWB departments responsible for Local Government and Urban Development, Metropolitan Development, Irrigation and Waterways, and Health. Implementation responsibility for major components would be as follows: Components Agencies Responsible Municipal development program CMC, HMC, municipalities Transmunicipal Infrastructure -Water supply, sanitation drainage, solid waste CMDA, CMWSA -Transportation, area development CMDA Calcutta/Howrah Investment -Water supply, sewerage, drainage, solid waste CMDA, CMC, HMC, CMSWA -Transport infrastructure CMDA, CIT, HIT -Traffic management CMDA -Urban renewal CMDA, CIT, HIT CMA-wide program -Shelter CMDA, CIT, HIT -Small-scale entrepreneur program CMDA -Training CMDA, CMC, ILGUS -Health Department of Health, GOWB -Panchayat Development CMDA, Panchayats 59. CMDA has been restructured to meet its future role. An Appraisal, Monitoring and Evaluation Unit and a Shelter, Urban Renewal and Area Development Directorate have been added. A Program Management Unit has also been established specifically to coordinate and monitor physical and financial progress of this project. The CMDA Board has approved the staffing structure for these units and all key management positions have been filled. Recruitment is currently underway to fill positions of economists, physical planners, financial analysts, data processing operators and programmers. Similarly, CMC has completed staffing for management of its water metering, financial management, and stores and inventory control programs. Finally, additional staffing is underway to -21- strengthen CMWSA in the areas of revenue administration, accounting, finance and maintenance. Project Costs and Financing 60. The total estimated cost of the project is US$303.1 million, including US$49.2 million (16%) in foreign exchange costs and US$7.7 million in taxes and duties. The project cost components are water supply (US$46.1 million), drainage and sanitation (US$68.9 million), slum improvement (US$15.0 million), transportation infrastructure (US$29.4 million), shelter and area development (US$11.5 million), design, supervision and management (US$31.5 million) and others (US$36.3 million). In addition, physical contingencies (US$18.0 million), at 10% for civil works with detailed engineering and 15% for works with preliminary engineering, and price contingencies (US$46.4 million), at 8.0%, 7.5%, 7%, 6% and 6% for fiscal years 1984 through 1988, respectively, have been added for local as well as foreign exchange costs. 61. The proposed IDA credit of US$147 million equivalent would finance about 50% of total costs, net of taxes and duties. The balance would come from GOI grants (under its Minimum Needs Program), GOWB grants and loans, octroi receipts to CMDA, and CMDA-s market borrowings. Retroactive financing of up to US$500,000 is provided in the proposed credit, to cover expenditures incurred after March 1, 1983, for civil works, equipment purchases and consultants' services for engineering design. 62. GOI would pass the proceeds of the credit to GOWB on its standard terms and arrangements for financing of State development projects. In turn, GOWB would channel the funds to CMDA as grants and loans. For revenue-producing schemes, such as urban renewal, water supply, shelter and area development, GOWB would lend to CMDA at 7% per annum for 15 years including 5 years' grace, and for non-revenue-producing schemes, such as roads and drainage, funds would be provided on grant basis. The projected weighted average cost of CMDA borrowings is 7.75% per annum. CMDA would on-lend for urban renewal schemes at the prevailing commercial bank rate (presently 12.5%), and for other investments at not less than 8.25% per annum (Paragraph 1 of Schedule 2 to the Project Agreement). Procurement and Disbursement 63. The total cost of civil works, including contingencies, is estimated at US$215 million. Within this amount, about US$36 million of works would be procured through international competitive bidding (ICB), in accordance with IDA Guidelines. ICB procurement would be required for (i) construction of the Baranager-Kamarhati Water Treatment Plan, (ii) renovation of the Serampore Water Treatment Plant (iii) construction of the new water main from Tallah to central Calcutta, and (iv) reconstruction of the Durgapur Bridge. Bidders for the above works would be prequalified in accordance with criteria agreed with IDA. Eligible domestic bidders would be accorded a preference of 7 1/2% under ICB procurement. The balance of civil works, totalling US$179 million, -22- are not likely to interest foreign bidders as they are widely dispersed over area and time requiring several thousand small contracts. CMDA would, however, where practicable, group these works into contract packages of not less than US$2.6 million, to be let on a "slice and package" basis under competitive bidding advertised on an all-India basis in accordance with procedures acceptable to IDA. Civil works which cannot be grouped as indicated above, would be awarded under contracts following competitive bidding advertised locally, which are satisfactory to IDA. 64. Procurement of plant, equipment, and vehicles under the project totals about US$25 million equivalent, including contingencies. Contracts for about US$9.5 million, for bulk meters, leak detection equipment, gully-pit emptiers, jetting machines, tipping trucks, tanker lorries, tractors, payloaders and bulldozers, would be awarded by CMDA (and other executing agencies) on the basis of ICB in accordance with IDA's Guidelines. Qualifying domestic manufacturers would receive a preference in bid evaluation of 15% or the import duty, whichever is the lower. Pipes (US$8 million) and pumps (US$2 million) would be awarded by CMDA and other executing agencies under local competitive bidding procedures which are satisfactory to IDA. These involve a variety of sizes procured by several agencies over the whole project period. Cars and jeeps (US$0.2 million) and miscellaneous solid waste equipment including handcarts, tricycle trailers, containers and small tools (US$3.8 million), which are readily available locally and have well-established repair and spare-part outlets, would also be procured similarly. Small items of plant, equipment, and materials in packages of less than about Rs 100,000 and totalling approximately Rs 15 million, would be let after obtaining quotations from at least three suppliers. 65. All bidding packages for civil works estimated to cost US$500,000 equivalent or more, and all bidding packages for plant, equipment, and vehicles estimated to cost US$200,000 equivalent or more, would be subject to IDA-s prior review of procurement documentation, resulting in a coverage of about 20% of the total estimated value of works contracts, and about 66% of goods contracts. This would involve a review of about 59 contracts (21 equipment, 38 civil works). 66. The proceeds of the proposed credit would be disbursed as follows: (a) 70% of total expenditures for civil works procured through ICB and 50% of total expenditures for other civil works; (b) 100% of foreign expenditures for directly imported plant, equipment, and vehicles, or 100% of local expenditures (ex factory) for locally manufactured goods procured through ICB, and 50% for other locally manufactured goods; (c) 100% of total expenditures on consulting services, technical assistance and training. -23- Disbursements would be fully documented except for: (a) payments made under civil works cintracts for one or more progress payments not exceeding R, 300,000; and (b) payments for locally procured items of equipment costing Rs 150,000 or less. Such disbursements would be made against statement of expenditures (SOEs), the documentation for which would not be submitted to IDA but retained and made available for inspection during the course of project review missions. Independent auditors acceptable to IDA would be retained to carry out an annual audit of all SOEs submitted in a fiscal year, and CMDA would be required to furnish the audit reports to IDA within nine months of the end of each fiscal year. Cost Recovery 67. Performance on cost recovery under the first and second projects (Cr. 427-IN and Cr. 756-IN) has been poor. CMC has not been able to recover the costs of providing water as expected, on account of its poor financial management. In view of the large investments already made and those included under the proposed project, it is vital that the local bodies be able to generate adequate funds for proper operations and maintenance. The local bodies will continue to sell their services at below cost and the deficits, albeit smaller than before, will continue to be met by transfer of resources from GOWB. Nevertheless, GOWB is undertaking a number of measures to enhance cost recovery, through enhanced property tax revenues and increased user charges. 68. Property Taxes. Property taxes continue to be the largest source of revenue of the local bodies. In recent years, property taxes have accounted for about 70% of internal revenue (about 45% of total revenues including State Government transfers). This significant source of revenue suffers from a low assessment base, an inefficient rate structure and poor collection performance. Under the proposed project, CMC would: (I) reduce its reliance on GOWB revenue subventions from 24% of its revenue expenditures in fiscal year 1982/83 to 10% by 1987/88; (if) take steps to achieve cash collection of not less than 85% of the current demand of its consolidated property taxes by fiscal years 1987/88; and (iii) take steps to achieve cash collections of its arrears demand of property taxes of at least 50% annually. (Paragraphs 1, 2 and 3 of Schedule to the West Bengal Agreement). In addition, the Central Valuation Board of GOWB would assist all CMA municipalities in updating their property tax roll to improve their collection performance. 69. In the proposed project, direct cost recovery measures through user charges are included for water supply, area development and urban renewal. In the water supply program, CMC would aim at recovering, by 1987/1988, all expenditures for operations, maintenance, purchase of bulk water, and a charge in lieu of depreciation. To achieve this, CMC would, as a condition of Credit effectiveness, revise the rates for metered non-domestic users as agreed with the Association (Section 5.01 of the Development Credit Agreement). It would also introduce graduated water rates in consultation with the Association for all unmetered domestic -24- consumers, by November 1, 1983 (paragraph 6 of the Schedule to the West Bengal Agreement). In addition, CMC intends to introduce annual licencing for all new private tubewells by about October 1983. Finally, CMC would carry out installation of water meters in accordance with a schedule acceptable to IDA (Paragraphs 8 and 9 of the Schedule to the West Bengal Agreement). 70. The Calcutta Metropolitan Water and Sanitation Authority (CMWSA) operates primarily as a bulk supplier of water to municipalities and to CMC. However, a number of industrial, commercial and institutional users remain CMWSA's retail customers for reasons of locational convenience. CMWSA is expected to achieve full cost recovery by 1985/86. To realize this, CMSWA would introduce, as a condition of Credit effectiveness, such charges for water supply which would be .agreed with the Association (Section 5.01 of the Development Credit Agreement). These charges would be revised periodically to enable CMWSA to cover all expenditures for operation, maintenance and debt service requirements by its financial year 1985/86 (Section 3.05 of the West Bengal Agreement). 71. The area development program would achieve full cost recovery and would actually generate a net surplus of 6-8% of capital investments. Under this program, the economically weaker section and the low-income group would get affordable plots at actual or slightly below costs, whereas premiums of 10% to 75% would be added to the costs for middle-income, higher income and commercial plots. By September 30, 1983, CMDA would submit for the Association-s review and aproval its administrative, operational and financial guidelines for implementing the shelter and area development program under the project, including costing and pricing formula, maintenance charges, the criteria for beneficiary selection, conditions of lease and terms and conditions of loans for the sites and services beneficiaries (Paragraph 3 of Schedule 2 to the Project Agreement). 72. Under the urban renewal schemes, the concerned agencies (for example, Calcutta Improvement Trust and Howrah Improvement Trust) would auction the rights for further development to private developers based on a minimum price set to cover all costs. Of the net surplus, 50% would be retained by the agencies themselves for further urban renewal schemes and the other 50% would go to CMDA toward investments in its shelter and area development program. 73. As stated earlier, the improvements in cost recovery measures alone are unlikely to meet the needs of the local bodies in the near future and GOWB would have to continue to transfer resources in the form of grants and shared taxes. At present, GOWB's annual grants to local bodies are based on the organizational structure and staffing of the respective bodies. This project would initiate a fundamental change in the municipal finance system. To ensure the most effective utilization of limited State Government resources, and to introduce a structural shift in municipal finance toward greater reliance on self-generated resources, GOWB has announced implementation of a revised grant structure, beginning -25- April 1, 1983. Under this system, the level of GOWB grants to be paid out of a "Fund Assigned to Municipalities" would be based on absolute levels of performance of the local bodies, linked with both a penalty and an incentive mechanism. Initially, the revised grant structure would be implemented in CMC, HMC and the CMA municipalities. It would be spread to other parts of the State in the future based on the lessons and experience of this initial application. A set of minimum performance targets have been worked out for individual municipalities, which includes performance on revenue collection (primarily property tax) as well as on expenditures needs (for investments, operations and maintenance, debt service, etc). Benefits and Risks. 74. The most direct benefit from the project is the improvement in service delivery, which is estimated to benefit over six million people (or 60% of CMD-s population). The execution of the project activities would directly result in generation of 30,000 construction jobs over the 5-year implementation period, and 20,000 full-time jobs for operation and maintenance over the schemes' operational life. In addition, the small-scale enterprise program would directly benefit about 43,000 persons and would generate 16,000 net additional jobs. Perhaps the most important project benefits would accrue from the institutional and fiscal. reforms which are crucial for sustaining an expanded program of public investments and for developing the organizational and management capabilities necessary to plan, execute and operate such an investment program. Economic rates of return from the investments range from 13% for area development to about 24% for some local road improvements. Based on the 54% of the project costs for which benefits have been quantified, the weighted average economic rate of return is estimated at 15%. 75. The major project risk is that the program will prove too complex to administer and manage, particularly in the light of recent adjustments in OMDA's responsibilities, under which its role for planning and coordination has been increased while its implementation responsibilities have been somewhat decentralized to other local bodies (para 42). This risk would grow if the caliber of key personnel of CMDA is reduced from the present high quality. However, experience during project preparation indicates that CMDA is fully capable of handling the complexities involved. Furthermore, the establishment of the Program Management Unit and the recent strengthening of appraisal, monitoring and evaluation capabilities of CMDA (para 59) should reduce the implementation risks by means of improved and structured monitoring of project progress which should allow timely actions to correct any problems as they emerge. Another risk could be the lack of political will to implement the cost recovery measures built into the project. Although this risk can not be completely eliminated, the commitments shown by GOWB and the local bodies and the implementation of the revised financial grant system, based on, inter alia, cost recovery performance, should minimize this risk. -26- PART V - LEGAL INSTRUMENTS AND AUTHORITY 76. The draft Development Credit Agreement between India and the Association, the draft West Bengal Agreement between the Association and the State of West Bengal, the draft Project Agreement between the Association and CMDA and the Recommendation of the Committee provided for in Article V, Section 1(d) of the Articles of Agreement are being distributed to the Executive Directors separately. 77. Special conditions of the Project are listed in Section III of Annex III. The following are additional conditions of effectiveness: (a) CMC has revised the agreed rates for metered non-domestic users (Section 5.01(b) of the Development Credit Agreement); and (b) CMWSA has introduced the agreed bulk water supply rates (Section 3.05 of the West Bengal Agreement (Section 5.01(a) of the Development Credit Agreement). 78. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 79. I recommend that the Executive Directors approve the proposed credit. A.W. Clausen President April 28, 1983 ANNEX I INDIA - SOCIAL INDICATORS DATA SHEET Page 1 of 5 INDIA REFERENCE GROUPS (WEIGHTED AV9MGES AREA (THOUSAND SQ. KM.) MOST RECENT ESTIMATE- TOTAL 3287.6 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 1818.2 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC ASIA & PACIFIC GNP PER CAPITA (US$) 70.0 110.0 240.0 261.4 890.1 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 111.2 152.5 194.4 448.7 701.7 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUS.) 434850.0 547569.0 673207.0 URBAN POPULATION (PERCENT OF TOTAL) 17.9 19.7 22.3 17.3 32.4 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 994.1 STATIONARY POPULATION (MILLIONS) 1694.4 YEAR STATIONARY POPULATION IS REACHED 2115 POPULATION DENSITY PER SQ. KM. 132.3 166.6 200.6 158.1 255.9 PER SQ. KM. AGRICULTURAL LAND 247.0 307.8 362.8 355.9 1748.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 40.9 42.7 40.2 36.8 39.9 15-64 YRS. 54.5 54.2 56.8 59.7 56.8 65 YRS. AND ABOVE 4.6 3.1 3.0 3.5 3.3 POPULATION GROWTH RATE (PERCENT) TOTAL 1.8 2.3 2.1 2.0 2.3 URBAN 2.5 3.3 3.3 3.3 3.9 CRUDE BIRTH RATE (PER THOUSAND) 43.7 40.0 35.6 29.3 31.8 CRUDE DEATH RATE (PER THOUSAND) 21.8 16.7 13.6 11.0 9.8 GROSS REPRODUCTION RATE 2.9 2.7 2.4 2.0 2.0 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) 64.0 3782.0 5619.0 USERS (PERCENT OF MARRIED WOMEN) .. 12.0 22.6 19.3 36.3 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71=100) 98.0 102.0 99.0 108.1 115.6 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 95.6 90.4 88.8/c 97.3 106.4 PROTEINS (GRAMS PER DAY) 53.6 49.7 48.4/c 56.9 54.4 OF WHICH ANIMAL AND PULSE 17.2 14.8 13.1/i 20.0 13.9 CHILD (AGES 1-4) MORTALITY RATE 26.2 20.7 17.4 10.9 6.7 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 43.2 48.1 51.8 57.8 59.8 INFANT MORTALITY RATE (PER THOUSAND) 165.0 139.0 123.4 89.1 63.7 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 17.0 33.0 32.9 32.0 URBAN .. 60.0 83.0 70.7 51.9 RURAL .. 6.0 20.0 22.2 20.5 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 18.0 20.0 18.1 37.7 URBAN .. 85.0 87.0 72.7 65.7 RURAL .. 1.0 2.0 4.7 24.0 POPULATION PER PHYSICIAN 4850.4 4889.0 3630.6 3297.8 8540.4 POPULATION PER NURSING PERSON 10975.3/d 8296.5 5696.1 4929.3 4829.4 POPULATION PER HOSPITAL BED TOTAL 2178.7 1612.9 1311.0/e 1100.4 1047.5 URBAN .. .. 362.3/i 301.3 651.6 RURAL .. .. 10432.8/e 5815.7 2597.6 ADMISSIONS PER HOSPITAL BED .. .. .. .. 27.0 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 5.6 5.2 URBAN 5.2 5.6 4.8 RURAL 5.2 5.6 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 2.6 2.8 URBAN 2.6 2.8 .. RURAL 2.6 2.8 .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. URBAN .. .. .. RURAL .. .. .. ANNEX I Page 2 of 5 INDIA -SOCAL INDICATORS DATA SHEET INDIA REFERENCE GROUPS (WEIGHTED AVE9GES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b ASIA & PACIFIC ASIA & PACIFIC EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 73.0 78.0/c 97.4 96.2 MALE 80.0 90.0 92.0/C 101.0 99.8 FEMALE 40.0 56.0 63.0/; 87.8 92.1 SECONDARY: TOTAL 20.0 26.0 27.0/c 53.0 37.6 MALE 30.0 36.0 36.0/? 63.8 41.1 FEMALE 10.0 15.0 17.0/? 41.3 34.1 VOCATIONAL ENROL. (% OF SECONDARY) 8.0 1.0 0.7/f 1.7 20.8 PUPIL-TEACHER RATIO PRIMARY 46.1 41.5 51.8/c 37.7 35.5 SECONDARY 16.0 20.9 .. 20.2 25.0 ADULT LITERACY RATE (PERCENT) 28.0 33.4 36.0 52.1 73.1 CONSUMPTION PASNGER CARS PER THOUSAND POPULATION 0.6 1.1 1.3/c 1.5 9.8 RADIO RECEIVERS PER THOUSAND POPULATION 4.9 21.5 33.6 35.4 116.5 TV RECEIVERS PER THOUSAND POPULATION 0.0 0.0 1.0 3.2 37.6 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 10.6 16.0 19.8 16.4 53.7 CINEMA ANNUAL ATTENDANCE PER CAPITA 4.1 4.1 3.7 3.6 2.8 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 185951.1 219194.2 264204.4 FEMALE (PERCENT) 30.7 32.5 31.8 29.5 33.6 AGRICULTURE (PERCENT) 74.0 74.0 69.3 70.0 52.2 INDUSTRY (PERCENT) 11.0 11.0 13.2 15.0 17.9 PARTICIPATION RATE (PERCENT) TOTAL 42.8 40.0 39.2 40.0 38.5 MALE 57.0 52.4 51.8 51.8 50.5 FEMALE 27.3 26.9 25.9 23.8 26.6 ECONOMIC DEPENDENCY RATIO 1.1 1.1 1.1 1.0 1.1 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 26.7 26.3/ 22.2/f HIGHEST 20 PERCENT OF ROUSEHOLDS 51.7 48.97i 49.4/** LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 6.77j 7.0/. L3WEST 40 PERCENT OF HOUSEHOLDS 13.6 17.2 16.2/.. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 132.0 133.8 194.7 RURAL .. .. 114.0 111.1 155.1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) UaAN .. ., .. .. 178.2 RURAL ** .. .. .. 164.9 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 40.3 43.8 24.4 RURAL .. .. 50.7 51.7 41.1 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise notede, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1978 and 1980. /c 1977; /d 1962; /e 1976; /f 1975; /1 1964-65. May, 1982 ANNEX Z Page 3 of 5 nвРlнlтгоИS о£ sосvu. гlттслтояs Nо[ев: .ц[fiougЪ [Ие да[а а е д[ам fгот в в еепегаllу judged [Ье mne[ aucherltatlve хпд те11вИ1е, 1t вhоиlд яLво Ье по[ед [M1ас ehey теу n с Ье 1nCer- г мtlапаllу сотрв[вЫе бecause о£ the lack оfгвгвпдагдl[ед деЕ1п1t1опь впд roncepCe веед Ьу д1£Еегеп2 с ипСгlев 1п соllес[1пq [Ье date, ТИе даСа аге, попе- theleaa, ueeful to descrlbe огаегв of таgпlСиде, lndica2e [тепдв, впд сhвгассегlхе сеггеlа таJот dlff¢гепсеь ъе[иеег. соипсгlев. rne тееагеПсе етоира а¢(г1 [1к в пгту qrnnp оЕ cn¢ аиыег[ с ипсту ам (2) а пггу Агоир ы1сИ в твиnас Ынп¢г а ха8¢ lпсоте снап сИв г. ипгту qzoup о£ Che аиЬдес [гуг(ехсеУ[ Еогв�"К3gИ Iпсим о11 Ехрот " gxoup vhere "!11дд1еогпсоте North AFг1cfl аПд И1дд1е FA5[е' iв сhовеп Ьесаив¢ of g onge[ aclo-culturfll efflпl[1е5). In Che геЕ¢Lence Аго�р дас8 [1к в Yag¢ь е е роуиlа[1оП йelgh.ee arlthmeClc те в Еот eazh 1пдlсагпт and shovn ппlу нЬеп таjогl[у о£ the с untrles 1п а group hав дега Еаг [hat 1пдlсаtог. 51псе [he с гвде оЕ < иnсгlев anong [hепlпдlса[огв depends оп the аvа11аЫ13еу оЕ да[в апд 1а п unlform, свиСlоп т г Ье е тсlаед ± кеlасlпg а гвgев of one 1пдlса[ог со впосhег. Тtеве аvегаgев аге опlу ивеЕиl 1п cemparing ibe value о£ опе 1пдlсвспт at а[1те amoпgu[he соил[ту апд ге£етепсе gгоирв. ААЕА (thou end вq.km.) Рориlа[1оп рег юочрlгыl Вед - г игЬап antl г та1 - Уоупlа[1оп ([о[а1, то[а1 - тогаl виг£вге а со�,гlвйg lала а апа 1пlалд иасегь; 1979 да[в. игЪап, апд гикаl} дlчlаед Ъу[[hеlт respecclve питьег оЕ Ъоьрi[а1 ьвав Aqclculcural - EsCieaterof aRrlc�ilcutal а ивед гетрвгагllу ог реттапеп[1у va11a6e 1п риЪ11с апд Рг:часе general апд spec1a11ved hoeplcal апд т- £ок <гора, рав2игев, ыгkес апд 'кlссhепгgагдепв ог [о 11е fаllон, 19]9 даса. hab171rai1пn Ноырltаlь а [аЬllьhтепга регталепгlу staffeL Ьу вС leaat о enphyslc:an. EsCa615hmencs pкavlding ргlпе1ра11у cu5to- GNP РЕА CAPI2A (ll55) - GNp рет сзрltа eallmaces а mazket ртlсеь. са1- д1а1 с [ 3псlидед. Аигаi hoвplcals, ho+ever, 1псlиде Ееа1[h ' culated Ъу s rslon meched аь Чок1д 6ank[AtuaCe(19]8-80 Ьав1а); 1960, апд тедlсаlтег с permacen[1у ыгаfЕед Ъу а phyHlclan (Ьиг Ьу а 1970, апд 1980еда[ауе тедlсаl авslвtап[сьп v1dv1£е, е[с.) иhlch п£Еег 1п-ра[lепс а - дасlоп апд pcovlde а 11т1[¢д гапgе оЕ тедlеаl faci11t1¢s. £пт в[a[1s�- ЕЧ@RGY CCNStiNPTIOЛ рЕА Сц'I^А - иа1 с итрсlоп о£ с 1а1 е ergy (соаl [1еа1 ригровев и п hospl[а1г v lцде ЧКОв ргlпсlриl/general hosplcale, ' апд 11gn1Ce, реггоlеит, п cal�3as andnhyder, п ®апд gecThermal еlес- апд т га1 h�spicals. 1оса1 о га1 hosplcels and тедlсаl and тасегпl[у trlclcy) 1п kllograms е: соа, qulvalenc рег сарlса;¢1960, 1970, апд 1979 сепсегs. Spec:alLzed hoьpltalsua inc;uded опlу ипдег е са1. еагл- Rдткььlопь г Hosplcal Вед - тосаlгпитъет оЕ адыанlопs со ст diachaгgeв Егот hospitals dlvidea Ьу che питЪег nf бeds. РОРIЛ,АII0И ANll VLLAL 5fA1i5:1cS 7ог'а1 РориlаТlоп_ю1а-х¢ai (гИоиьапдь) - As о£ tuly 1; 196п. 1Ч7о, апа 19во нгиsгЧG даса. P.verage 51ze £ Nonsehold (рекаопs рег hcusehold) - са1, urban, апд х га1- е UкЬап Рориlасlоп (регсепС of согаl) - Аа21о о£ ик со [о[а1 рориlас:оп; А Иоиsеьпlд conslsis оЕ а Бгоир ot 1nd1v1duals vhotshace 1lvirtg quar[e-s д1Е£егепr де£1птСlопs оЕ иеЪвп'а тау аЕЕес[ со�гатаЫllТу оЕ да[а апд tbelr таlп meals А boarder пг lпдgег тау or тау пос Ъе 1лсlидед 1п топg со сгlег; 1960, 19]0, апдт1980 даса. Сье household Еот s scical ригронеs. Paqula[1cnu2гo7ecclorts Pveгage'питЬег of Овкsопь-рег гсов - и[ьаП, а га1 - [age п т- Р�1ас'. п 1�гаг 2000 - Сиггепt populaClon projec[Ieгs аге based оп 1980 bег оЕ регьопs рег г от 1n а11 и [апд r га1 с�uvlad г пгlопаl и total рориlагЕол Ъу абе апд se апд [hеlг ю tаlг[у аъд fer[111cY га[е5. дн¢1lings, геьрес[1vе1у. ?нellingsnexcludeunon-permanenc striccures апд Ргоjсссlоп рагате[егв Еок то telicy га[ comprlse of thгee 1егеls assum- ип.,ссиVlед peres. 1ag life ezpectancy at бlrehкlnczeaьlagevltЪ с [гУ's рег caplta lпсоте Pccess Со Eleccrfcl[у �percent of днеllгпцs7 - соСа1 игЬап. and г га1 - 1eve1, апд £етаlе 11£е ехрес[апсу' scaЫlizl¢g а п77.: уеагв. The рага- Сопvепсiппаl dvellings ьУСh е [гlсгtу :п 11v1ng quar[екs as peecentage а£ог Еетс.llгу к also 6ave с г 1evcls а uming десllпе 1n о. сс_а1, urбan, апд гикаl дне111гgs zespecclvely. ferc113ty а огдlпб ссаlпсоае 1eve1 апдлравс £ат11у F1апп1п3 регfогталсе. ггh с ипСтугlS ther. zsslgned о �f с.lеве n пе сотЪlпасlоп5 пЕ тог[а11[у E00CATION апд ferel!icy с ends fnr ргоlессlоп ри[роьеs1 ^djusced Епкоllте с Raclos S[atlcnary ро4Ыа[ior. - IП а саtlо:гагу populaclon theгe 15 по groыth slпге Ртlтагу schoo_1 - са1, гаlе апд £ет=1е - CroSS [о[а1, таlе апд female [he бlгth cate iь equffi to che death г апд also che зgе в[гис[vге г- гоllдепе of а11 ages а[ [he ртlтату .eve1 as ретСелсаgеь оЕ геsреС[1ve mafns г л ТM1Эь 15 acbieved опlсааЕгет fe[[L'ity s decliue г ргvаагу school-age рори7а:lогн; n та1-у 1ncludes childzen agea б-i1 [he ге�lасетепс 1eve1 оЕ ип1С п тереодис[1вл raie. ЧЬеПоеасh gепетагlоп years Guc adlusted f т diEferen[ leng[ьs of ртlтагу едисаггоп; fot of w enlaces 3[ве1£ е ас[1у� The s atlonary рориlа[1оп ьlге ы tr1e5 vi[h unlveraal едисасlоп е пllтес[ пгу е еед 100 ➢егсеп[ estlmac¢дго сhг Ьд41е оЕ '�he pcoJected charгecer15t1rc оЕ [he рприlасгпп slnce s те puprls а е Ье1оы о аЬо+а сЬе оЕЕlггаl оо1 в8е. in the уеатп2000, апд the таге of десliпе of ferClliCy гасе io гер!асе- 5есопдату school - госаl, таlе апЭ £=_таlе - Сотрц[едьаs abov¢, s опдагу _ 1eve1. едисагlоп reqvlres аС t Еоиг уеагs о apprcved ргlтагу г ис[1оп; Уеа aclon rv рориlаеlоп 1s г ached - Т'пе уеат vheп statгonarY рориlасlоп provldes general, асlопаl, пт асЪег•егаlпlпS lnacructv пв�fпе рпрlls s1xe2 ; Ъе т гсhед. иа11у of :. со 17пуеагs ок age;ccorrespondence соитsеь агг genexally риlагtпп�и пеlсуе хсlидед. РоУег ьу. 7[т� - юid-yezc рориlа[1оп рес square kllomecer У1оо heccaces) п£ vогасlопаl в тпllтепг (ретгепс ot s опгагуi - согапоплl ,п�иг.�гlопь са1 а i960. I970 апд 1979 дага. 1псlиде cechnical, 1г.див2т1а1, о ocher ртпgтать ыhlch орегасе lпдерепд- perosq. kaeda8ricclcueal land - Compviced аь сЬоче £ог agrrcul[итаl .and ncly о s дераг[теп[s uI s агу 1nsc1[и[1orts. оцу; 1960, 1970 апд 7979 да[а. �1: сеа_Ъег га21о_-�ттагу еапд se опдаку - Тоса1 scuden2s е гоllед 1п Ропиlзгlоп Аде 8Сгиссиге (регсепе) - Children (0-14 уеата), иorkiпg-age (15- ргlпаry апд s сагу 1evels дЕчгдед Ьу numбers о£ с¢achers 1п [he 64 v г), алд ке[lгед (65 Эеа- лпд >vcr) а,е -еп[ ges of v1d-yaar рори- ondingel¢v 1агlопг 1960. 19]0, а¢д 19В0 даса. Адиlсгlгс асу гагев(ре п[) - Llсагаее гдиlгs (аьlе С еад апд ыгlсеl Рориlагlоп сгои[И Аа[е (percenU - сосаl - Аппиаl gтоисЬ гагеs оЕ [осаl тд- as а регсепгаке о- сосаl аацц рориlагlог aged ц уеаг5гапа o+en аг рориlа[1оп for 1950-6(1. 1960-]0, лпд 1970-80. Рориlагtоп Grov[ь Race (рет<еп[) - urбan - Аппсаl gгоигп га[es of игЬап рори- CON51Pf?TION lactons £ т 19i0-ЬО, 1960-70, and 19к0-80. Pas r Cars (рег thousaпd popuia:lon) - Passenger с сотркlsе т Сгvде Нiтсъ Аа[е (рет cbouszna) - рплиаl цче Ьцгhь гег chosaпa of тш-уеаг елг3пу lеьь гиаг еlвнг рекьпп5; а.гlпдав апьиlапсаа, Ъеагве9оат рориlасlап, 1960, 1970, а а' 19Э0 data. т1'.lгагу veFlcles. Стиде �еасп £иСе (Рег с апд) - Аппиаl �eachs рег сЪоиSапд о( т1д-уеаг Rзд1о Recelvees (рек thousand ро�и а[1оп) - А11 суре5 оЕ г сеlvег5 £ог гддlо populatlon, 196С, 1970,�иапд 1980 да[е. Ьгоадса s to Непегаl риьliг per1thпusand пЕ пориlаскпп;генсlидеь и- Cгoss Аергодиссlсл Race - Average nитЬег оЕ daugbcers а ыг11 Ьеаг 1п 1lcensedtr celrers 1п councrles апд in years ыhen геglsггагlоп of rzdio hci п гтаl геркоацссlvе р 1од 1£ г е experlences ргеаеп[aege-epeclflc Сег- effecc; дага Еот епС )'еак5 тау пог Ье СоафагаЬlе 51Псе t1L1[у rates а:1у Е есуеаг а rage5 епдlпg 1п 1360, 19]0, апд 1980. 2г1е5 aбolzshed 1 n51ng. Рат11у Р_anning JвАгсерсогs, Мпиаlч(Сьоиьапдв) - Мпиа1 питЪег ОЕ а cepcors ГlпАесеlчегs (pez сИоиsапд рориlа[1оп) - TV т celVers Еок Ьгоадса5[ с of bizth-cortгo: де�lсеь ипдег ацврlсеь о£ пагlопаl Еат11у planniлg prcgraa. gелегьl риЫ1� Рег chuuaartd popula[1on; ехсlцде5 ипllсеп5ед ТУ г сЕ1Ует5 еатг:ч гlапп3Пд - оьвка (регсепг оЕ тагтlеа н'от¢п) - Рексап[аgе оЕ тагнеа ипепв5 апг 1п у¢агв нnеп текlвгкаЫоП оЕ тv в г 1п вЕЕесг. of сh11д-ъеагlпg rge (15-44 years) vho use пуг-h-соц[го1 devlce-s [о N�ыspaper С1гсvlа[го� (рег thousand рориlа[1оп) - Shovssthe а гаgе с3т- а11 таггlед wотеп 1п ьатс лgе 3гоиР� асlоп оЕ "де11у gепетаl lnгекеы wspapei', де`. �ед а аерет3од1саl риЫlгаtlоп devoCed pclmarlLy t ording gепегаl п нIе 1s со¢5iдекед FOOD ANp A1ГfATTION о Ье "дЫ1у" 1Е 1г арреагs at 1easC £оск clmes а негk5 Izdex о£ £оод Prcduccio apL[а (1969-7'_а100) - Iпдех о£ рег сарlса а,л1 Сlпеги Аппг.аl Агсепдапсе рег Caplta рек Ус У- Based о гъе итЬет of ргодис[1оп о£ а11 food с ттодlггеs. Ргодиссiол ezcludes аеед and £еед апд [lcke[a 5о1д during the уеаг, 1nc1uding адт1ь51опs to дгlvе-1а clnemas 1ь п calendac уеег Ьавц. Соттодl[1es с г рггтату gоод5 (e.g. scgaк апд то611е ипгкs. lnstead оЕ augar) ыhlch а edible апд сопtаlп nucгlents (e.g coffee апд в хсlидед). Aggeega[е ргодис[1ог. оЕ each с vrt[гу 1а Ьаьед о LABOA FORCE паlваv rage ргодисег ргlсе vreigbcs, 1961-65, 1470, апд 3980 дага. То[а1 ЬаЬог Рогсе (ehousands) - Есо га11у c[1ve рег , 1ne1uding Регагар!га supply оЕ свlоггга (per оЕ гв9иlгетепгв) - сотриг¢а Егого тег Еогге апа и етр7оуаа Ьи[ ехгlид=пу ио,�.еы1�=ч,аь и е . ergy equlvalenC зf п[ food supplles ачаllаЫе in г [гу рег caplta егlпg populacion оЕ at1 zges. 9eE1п1t1ons й varгous coancrlesca,e г дау pva11a6_е supolies сотргlве domestic ркодис�iоп, lmpores lевн сотрагаЫе; 1950, 19]0 гпд 1980 даса, exports, аМ chan¢es 1п s[ock. Иес sиррllеь ехсlцде antmal feed, seeds, F=ma1e (perceat) -£етаlе 1гЪог Еогсг а Cage nf г са1 1аЪог £птге. quan6tles гsед 1n Ео>д pкocessrпg, апд losses 1п d1s2rLbv[1on. Aequlre- Аgтlсиlсиге (регс¢пТ) - LаЬог £огсе 1п fагтгпg,г fores[ту� bunting апд агlтасед ау FAO бased ог. physlologlcal пеедь Еот п та1 асгl- Eishing as ре_сепсаgе сЕ г ги1 1аЪиг Еогсе; .960, 191С апд 1980 даСа. vlty5artdzhealch с п51дег1пg епvlгоптел[а1 [етрега[иге, Ьоду aelgЫs, age Industry �гсеп[) - 1аЪет Еогге г тпg, с t uction, manvEaccuring ` - апа s х дlвtгкъисlоп оЕ �ориlа[1оп, апд а11ои1пg 10 регсепг for ьвsсе at апд eleccricicy, v апд gas as реr-епtаgепоЕкго[а'_ 1аЬог force, household 1eve1; 1ЭЫ-65, 19]П anL 15]) гаса. 1960, 19]0 and 1980[даса. Рет сарl[а supply о£ рто[еiп (дтатs рег дау) - Рго[e1n с еЕ рег сарlса Рат ci➢acion Rate (ргтсеп2j -_[а1, тз1е, апд female - Partici�atLOn о . ч[.рр1у of food рег дау. 5иррlу of Еосд 15 деflпедпа a6cve. Аа- cC1v1:y 2 сотри[ед а [а1, т с femdle 1аЬог '. qulre s£ог а11 г unt:res escablr5hee Ъу lli�A ргоvlде £огвтv pexcencagesc >Е с са1, таlс and £етаlе рприlагiсп of а11 ages кеsресгlvе:у; аl-оыапсьs оЕ 60 grams оЕ с ta1 рго[е1п рет дау апд :0 gгams о£пап3таl апд 1960, iЭ70, апд 1990 даеа. These а е based оп Il.O�s раг[Тс1➢а[гоп гаСеs о£ whгch Lp gгатч вЬоиlд Ье ап1'иа1 ргосеlп. Tnee - eEleccing age- of Сьегрориlаtlоп, ая2 lortg clme сгепд. А # aedse [hап ;ho5 о£ 7i gга са1 рго[е:п апд 23 дramsrofa fev sclmaros агтеfтпгоцл са] г апlтаl proteln а zage Еот [hегыогlд, реороеед Ъу £АО 1п che Тh1тд Есопоаlг Dependency Ra[1о дсRвСlе о£иаооиlа[:оп vnder 15 апд 65 апд оvет Wcr1d Food 5urvey;a196e65. 1970 апд 19]] даса. [о Che со[а1 1аЬог foTCe. Рек гарт[г рго[е1п s.гррlу = та1 апд pulse - Рго[ein supply оЕ Еоод де- rlved Ет anlmals апд pulsesarn giama рег 3ау, 1961-65, 15]0 and 19]7 да[а. 1NCOi1E DISSRtEpTION сЫ1а (авеьтl-n) деасЬ даке (рег [ьоцнапд> - аппиаl ааасьн рег :Ьоигапа 1п еег саке Е Рцvаге lпсоте (ъпсn т asn апа ктпа; - яесеlсеа ьу ricnesc age gкouD 1-4 уеагг, со chlldren in [his age group, £ог то с developiпg соип- 5ср¢ксепi, rlchest 20 рексеп[, роегеsс 20 реrсепг, агд рппгеsг 40 регсегг стlеs аага дегкчед from 11fe [абlеа; 1960, 1910 anL 1980 даса. оЕ houнeh�lds. иРдLТН POVF1tTY TARGE2 G:t0UP5 ш£е Ехрысса [ в3гсь р�еак5) - pverage питьег оЕ угаг5 ot 1:Ее remalning тhе 4o11nving еsгlтг[es а егу арртгигтага те £ ро�еггу 1evels, 2 blrth; 1%Ов 1970 апд 1Э60 даса. апд sM1OU1d Ье i ег➢гегед н пsideraxle са Iп£апг Mercalicy Fate (рег сhоиsапг) - Аппиаl deachs кnfants ипдег оп , т Еs2lдгееЭ Aбso ecYov кtу гпсотег� ve1 (V55 регп�3га) - игЬап and г та1 - of age рек с апд 11ve ЬгксЬв; tg60, 1970 апа 1980гдага. Ab5oluce�poveтtv те 1eve1 v сИас н 1eve1 Ъе1оы чhlгh а _та1 Асге s со 5afeaVaBer (percent оЕ� риlаСlоп) -[осаl огЬал апд г га1 - Nuo- trlTtonallу вднЭиагь diec р1..г егsепгiаl non-foud г q rcmencs lsпппс ьег оЕ реорlе (госа�, итьап. апа г а;) н1[И г паЫе а в с0 в. аЕtогдаые. н е вцрргу (1"с!идаь [ гва ьигеасе на[етв , [еа ь�с и � аттасеа евсlгоагеа ее7аича Уочегсу йготе ьечеl cus5 ➢ет гарlга) апа т uch а- cha[ £тот рго [ед 6oгeholes, springs,eand sanlcaeyovells) as Ruia1 _e1aClve poverty i, е 1ew1 г -гhlгд cf а гage�per сарlсаа� peкcencages оЕ che_г respectкve рориlа[1ons. In а игЬап а а риЫ1с personal i оЕ the с ипсгу, tirban 1eve1 1s derSved £гпа t.�e гигаl fow са2п п лпдрпsг lоаа[ед по than 200 т г frostaahouse тау Ье 1ече1 итсИПад]иа т foo hlgher с оЕ 11v1nq г игЬап а nsldeгedzascbeing vlchlп к wбe а оЕ [ьастhоиае. Iп т raL а Е_s_[lъзсед Рориlа[1oneHelow .4Ъво1и[е Poverгv Iпсоте L=ve1 (рьгегепг) - игЬал паЫе а оиlд imDlyatбa[ che houseиlfe с aemбers о£ rhe household апд г га1 - Регсепг оЕ oopuiacl�n (игЬап гпд гсгаl) vho ате "absol.гte доапоС have [ ехрепЛ а dis{+глрпгсlьпаtе рате of tfe дау 1п Ее[chtng che апое . family's v eeLS. Accese г' aпDlsposal (регсепТ of �ориlаtlоп) - ta1 игЬа� апд г _ Numbe- оЕкргорlе (Сога1. игЬап апа г а:1 г vнд и е а dlsposal а percentages оЕ [hгlг [ ecClve povulacгons.e Excrecaed:sposal та пгlиде � Che colleccion аМ uiepoanl, vlгh о еа[тепt. of Rитал е кега апд v - г Ъу vac_г-Ьогпе syscemsгorocheruse оЕ р1с pгivies anrt ьгп.- 1аг lnscalla[1or.s. риlагlоп р t Уhчакгlлп - Populatlon dlvlded ьу пцтЬее of ртас[15ing phy51- Есоготlс впЭ $ос1а1 Оа[а D1v1a1on осlап5 qualltiea Егот а теаlсаl 5chool а ипlчеквlку lвчаl. ��пппт.с нпаlупlь а д ггпlегсlопв дератгивпс Populaclon рег \vcsing Person - Рори!асгоп dlvlded Ьу питЪег �£ pгaccising Мау 1982 таlе лпд female Еглдиасе nurses. aeslstaпc пигsеа, practlcel п.вгsеа апд nursing aux111ar1es. ANNEX I Page 4 of 5 ECONOMIC DEVELOPMENT DATA GNP PER CAPITA IN 1981 US$250 GROSS NATIONAL PRODUCT IN 1981/82 b/ ANNUAL RATE CF GROWTH (%, constant prices US$Bln 1955/56-1959/60 1960/61-1964/65 1965/66-1969/70 1970/71-1974/75 GNP at Market Prices 165.38 100.0 3.7 3.6 3.6 2.9 Gross Domestic Investment 41.74 25.2 Gross National Saving 37.66 22.8 Current Account Balance -4.08 -2.4 OUTPUT, LABOR FORCE AND PRODUCTVITY IN 1979 Value Added (at factor cost) Labor Force i/ V.A. Per Worker US$ BIn. % % US$ % of National Average Agriculture 39,8 39.6 180.6 70.7 220 56 Industry 25,2 25.1 32.2 12.6 783 199 Services 35,5 35.3 42.6 16.7 833 211 10075 lb0. 0 55 -.4 1 TO 7 _ 'T94 Total/Average 100 GOVERNMENT FINANCE General Government e/ Central Government Rs.Bln. % of GDP _Rs. BI-. % of GDP 1981/82 1981/82 1977/78-1981/82 _981/82 1981/82 1977178-1981/82 Current Receipts 285.77 19.4 19.1 149.2E 10.1 10.4 Current Expenditures 280.34 19.0 18.2 155.03 10.5 10.6 Current Surplus/Deficit 5.43 0.4 0.9 -5.75 -0.4 -0.2 Capital Expenditures f/ 116.91 7.9 7.8 83.66 5.7 5.5 External Assistance (net) dj 16.45 1.1 1.0 MONEY, CREDIT AND PRICES 1970171 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 February 1982 February 1983 (Re Billion outstanding at end of period) Money and Quasi Money 110.2 224.8 277.8 329.1 401.1 472.3 554.5 625.5 615.5 711.7 Bank Credit to Government(net) 54.6 69.2 77.6 76.4 94.2 124.1 164.4 204.4 292.2 353.5 Bank Credit to Commercial Sector 65.2 156.2 188.5 212.2 255.3 310.1 362.8 430.4 422,2 487.7 (percentage or Index Numbers) April-Feb 1981/82 April-Feb 1982/83 Money and Qasi Money as % of GDP 27.4 30.3 34.6 36.5 41.2 44.1 4:3.3 42.5 Wholesale Price Index (1970171 = 100) 100.0 173.0 176.6 195.8 185.8 217.6 257.3 281.3 281.7 287.3 Annual percentage changes in: Wholesale Price Index 7.7 -1.1 2.1 5.2 - 17.1 18.2 9.3 10.0 2.0 Bank Credit to Government (net) 15.0 6.3 11.1 16.3 16.0 25.6 29.6 19.1 22.7 yl 21.0 Bank Credit to Commercial Sector 20.5 22.7 20.7 12.6 20.3 21.5 17.0 18.7 20.9 F/ 15.5 h/ j/ The per rapita GNP estimate is at market nrices, using World Bank Atlas methodology, base period 1979-1981. All other conversions to dollars in this table are at the average exchange rate prevailing during the period covered. b/ Quick Estimates, Central Statistical Organization. R/ Computed from trend line of GNP at factor cost series, including one observation before first year and one observation after last year of listed period. d/ World Bank estimates of net disbursement; not necessarily consistent with official figures. a/ Transfers between Centre and States have been netted out. All loans and advances to third parties have been netted out. Percentage change from end-Narch 1981 to end-February 1982. Percentage change from end-March 1982 to end-February 1983. i/ Total Labor Force and percentage breakdown from Sixth Five Year Plan, Table 2.6 and Annexure Table 13.8. ANNEX I Page 5 of 5 i/ 5/ / BALANCE OF PAYMENTS 1979/80 1980/81 1981/82 1982/83 MERCHANDISE EXPORTS (AVERAGE 1978/79-1981/82) (U,S$ M1.) USS MEn. % Exports of Goods q/ 7,948 8,504 8,511 8,800 Engineering Goods 901 11 Imports of Goods q/ -11,383 -16,119 -15,253 -14,801 Tea 457 6 Trade Balance -3,435 -7,615 -6,742 -6,001 Gems 759 10 NFS (net) 1,042 1,365 1,120 1,088 Clothing 556 7 Leather & Leather Products 470 6 Resource Balance -2,393 -6,250 -5,622 -4,913 Jure Manufactures 279 4 Iron Ore 352 4 Interest Income (net) k/ 287 600 212 -128 Cotton Textiles 319 4 Net Transfers 1! 1,852 2,771 1,577 1,668 Sugar 104 1 Others 3,789 47 Balance on Current Account -254 -2,879 -3,833 -3,373 Official Aid Total 7,986 100 Cross Disbursements 1,218 1,629 1,821 1,933 EXTERNAL DEBT, MARCi 31, 1982 Amortization 1,894 2,338 2,475 2,569 USS billion Transactions with IMF - 1,035 690 1,980 Outstanding and Disbursed 18.3 All Other Items u/ -740 -130 -1,075 -358 Undisbursed 8.5 Outstanding, including 26.8 Increase in Reserves (-) -224 345 2,397 -182 Undisbursed Gross Reserves (end year) p/ 7,204 6,859 4,462 4,644 Net Reserves (end year) m/ 7,204 6,532 3,498 1,703 DEBT SERVICE RATIO FOR 1981/82 j/ n/ 8.9 per cent Fuel and Related Materials IBRD/IDA LENDING, us of February 28, 1983 Imports (Petroleum) i/ 4,046 6,657 5,570 4,686 USS million IBRD IDA Outstanding and Dis'ursed 1,357 6,688 Undisbursed 1,896 4,270 Outstanding including Undisbursed 3,253 10,958 RATE OF EXCHANGE June 1966 to mid-December 1971 USSI.00 = Rs 7.50 Spot Rate end-March 1983: US$1.00 = Rs 10.03 Rs 1.00 = US$0.13333 Rs 1.00 = US$0.0997 Mid-December 1971 to end-June 1972: USS1.00 = Rs 7.27927 Rs 1.00 = US$0.137376 After end-June 1972 : Floating Rate Spot Rate end-December 1981 : US$1.00 = Rs 9.099 Rs 1.00 = US$0.110 Spot Rate end-December 1982 : US1.00 = Rs 9.634 Rs 1.00 = USSO.104 Estimated. k/ Figures given cover all investment income (net). Major payments are interest on foreign loans and charges paid to IMF, and major receipts is interest earned on foreign assets. 1/ Figures given include workers' remittances but exclude official grant assistance which is included within official aid disbursements. m/ Excludes net use of TMF credit. n/ Amortization and interest payments on foreign loans as a percentage of exports of goods and services.and current transfers. 0/ Includes commercial borrowing. p/ Excluding gold. q/ Net of crude petroleum exports. ANNEX II Page 1 of 26 THE STATUS OF BANK GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of March 31, 1983) US$ million Loan or Fiscal (Net of Cancellations) Credit Year of No. Approval Purpose Bank IDA 1/ Undisbursed 2/ 46 Loans/ 1,568.0 - 76 Credits fully disbursed - 4,364.4 - 482-IN 1974 Karnataka Dairy - 30.0 11.87 502-IN 1975 Rajasthan Canal CAD - 83.0 13.99 521-IN 1975 Rajasthan Dairy - 27.7 6.84 522-IN 1975 Madhya Pradesh Dairy - 16.4 0.31 585-IN 1976 Uttar Pradesh Water Supply - 40.0 8.55 598-IN 1976 Fertilizer Industry - 105.0 3.59 604-IN 1976 Power Transmission IV - 150.0 10.17 609-IN 1976 Madhya Pradesh Forestry T.A. - 4.0 0.98 610-IN 1976 Integrated Cotton Development - 18.0 5.02 1251-IN 1976 Andhra Pradesh Irrigation 145.0 - 52.44 1260-IN 1976 IDBI II 40.0 - 1.31 1273-IN 1976 National Seeds I 25.0 - 17.08 1313-IN 1977 Telecommunications VI 80.0 - 3.68 1335-IN 1977 Bombay Urban Transport 25.0 - 5.69 680-IN 1977 Kerala Agric. Development - 30.0 14.82 682-IN 1977 Orissa Agric. Development - 20.0 4.01 685-IN 1977 Singrauli Thermal Power - 150.0 9.62 690-IN 1977 West Bengal Agricultural Extension & Research - 12.0 11.60 1394-IN 1977 Gujarat Fisheries 14.0 - 4.68 712-IN 1977 M.P. Agric. Development - 10.0 1.57 720-IN 1977 Periyar Vaigai Irrigation - 23.0 10.40 728-IN 1977 Assam Agricultural Development - 8.0 4.81 736-IN 1978 Maharashtra Irrigation - 70.0 6.34 737-IN 1978 Rajasthan Agric. Extension - 13.0 1.37 740-IN 1978 Orissa Irrigation - 58.0 0.24 1475-IN 1978 Industry DFC XII 78.5 - 3.86 747-IN 1978 Second Foodgrain Storage - 107.0 64.61 756-IN 1978 Calcutta Urban Development II - 87.0 8.30 761-IN 1978 Bihar Agric. Extension & Research 8.0 6.19 ANNEX II Page 2 of 26 US$ million Loan or Fiscal (Net of Cancellations) Credit Year of No. Approval Purpose Bank IDA 1/ Undisbursed 2/ 1511-IN 1978 IDBI Joint/Public Sector 25.0 - 4.66 1549-IN 1978 Third Trombay Thermal Power 105.0 - 16.68 788-IN 1978 Karnataka Irrigation - 117.6 57.00 793-IN 1978 Korba Thermal Power - 200.0 49.63 806-IN 1978 Jammu-Kashmir Horticulture - 14.0 11.56 808-IN 1978 Gujarat Irrigation - 85.0 29.91 815-IN 1978 Andhra Pradesh Fisheries - 17.5 10.53 816-IN 1978 National Seeds II - 16.0 10.55 1592-IN 1978 Telecommunications VII 120.0 - 28.48 824-IN 1978 National Dairy - 150.0 87.61 842-IN 1979 Bombay Water Supply II - 196.0 170.17 843-IN 1979 Haryana Irrigation - 111.0 0.10 844-IN 1979 Railway Modernization & Maintenance - 190.0 63.60 848-IN 1979 Punjab Water Supply & Sewerage - 38.0 9.88 855-IN 1979 National Agricultural Research - 27.0 20.30 862-IN 1979 Composite Agricultural Extension - 25.0 9.45 871-IN 1979 National Cooperative Development Corporation - 30.0 6.07 1648-IN 1979 Ramagundam Thermal Power 50.0 - 50.00 874-IN 1979 Ramagundam Thermal Power - 200.0 52.90 889-IN 1979 Punjab Irrigation - 129.0 68.92 899-IN 1979 Maharashtra Water Supply - 48.0 17.49 911-IN 1979 Rural Electrification Corp. II - 175.0 26.76 925-IN 1979 Uttar Pradesh Social Forestry - 23.0 9.77 954-IN 1980 Maharashtra Irrigation II - 210.0 99.51 961-IN 1980 Gujarat Community Forestry - 37.0 18.45 963-IN 1980 Inland Fisheries - 20.0 18.29 981-IN 1980 Population II - 46.0 39.48 1003-IN 1980 Tamil Nadu Nutrition - 32.0 25.95 1004-IN 1980 U.P. Tubewells - 18.0 3.75 1011-IN 1980 Gujarat Irrigation II - 175.0 132.77 1012-IN 1980 Cashewnut - 22.0 18.95 1027-IN 1980 Singrauli Thermal II - 300.0 221.29 1028-IN 1980 Kerala Agricultural Extension - 10.0 8.99 1033-IN 1980 Calcutta Urban Transport - 56.0 30.35 1034-IN 1980 Karnataka Sericulture - 54.0 44.68 1046-IN 1980 Rajasthan Water Supply and Sewerage - 80.0 64.42 1843-IN 1980 Industry DFC XIII 100.0 - 15.29 ANNEX II Page 3 of 26 US$ million Loan or Fiscal (Net of Cancellations) Credit Year of No. Approval Purpose Bank IDA 1/ Undisbursed 2/ 1887-IN 1980 Farakka Thermal Power 25.0 - 25.00 1053-IN 1980 Farakka Thermal Power - 225.0 179.32 1897-IN 1981 Kandi Watershed and Area Development 30.0 - 25.30 1925-IN 1981 Bombay High Offshore Development 400. C - 42.02 1072-IN 1981 Bihar Rural Roads - 35.0 28.17 1078-IN 1981 Mahanadi Barrages - 83.0 77.59 1082-IN 1981 Madras Urban Development II - 42.0 29.88 1108-IN 1981 M.P. Medium Irrigation - 140.0 132.36 1112-IN 1981 Telecommunications VIII - 314.0 210.79 1116-IN 1981 Karnataka Tank Irrigation - 54.0 53.85 1125-IN 1981 Hazira Fertilizer Project - 400.0 344.72 1135-IN 1981 Maharashtra Agricultural Ext. - 23.0 21.75 1137-IN 1981 Tamil Nadu Agricultural Ext. - 28.0 25.25 1138-IN 1981 M.P. Agricultural Ext. II - 37.0 36.27 1146-IN 1981 National Cooperative Development Corp. II - 125.0 109.46 1172-IN 1982 Korba Thermal Power Project II - 400.0 366.87 1177-IN 1982 Madhya Pradesh Major Irrigation - 220.0 206.58 2050-IN 1982 Tamil Nadu Newsprint 100.0 - 81.29 1178-IN 1982 West Bengal Social Forestry - 29.0 26.86 1185-IN 1982 Kanpur Urban Development - 25.0 23.37 2051-IN 1982 ICICI XIV 150.0 - 124.82 2076-IN 1982 Ramagundam Thermal Power II 300.0 - 300.00 2095-IN 1982 ARDC IV 190.0 - 190.00 1209-IN 1982 ARDC IV - 160.0 23.34 1219-IN 1982 Andhra Pradesh Agricultural Extension - 6.0 5.80 2123-IN 1982 Refineries Rationalization 200.0 - 181.91 2165-IN 1982 Rural Electrification III 304.5 - 300.00 2186-IN 1982 Kallada Irrigation 20.3 - 20.00 1269-IN 1982 Kallada Irrigation - 60.0 48.41 1280-IN 1983 Gujarat Water Supply - 72.0 71.45 1286-IN 1983 Jammu/Kashmir and - Haryana Social Forestry - 33.0 31.70 1288-IN 1983 Chambal Madhya Pradesh - - Irrigation II - 31.0 31.00 1289-IN 1983 Subernarekha Irrigation - 127.0 123.26 2205-IN 1983 Krisbna-Godavari Exploration 165.5 - 163.05 2210-IN 1983 Railways Modernization & Maintenance II 200.0 - 197.04 1299-IN 1983 Railways Modernization & Maintenance II - 200.0 200.00 ANNEX II Page 4 of 26 US$ million Loan or Fiscal (Net of Cancellations) Credit Year of No. Approval Purpose Bank IDA 1/ Undisbursed 2/ 2241-IN 1983 South Bassein Gas Development* 222.3 - 222.30 1319-IN 1983 Haryana Irrigation IT* - 150.0 150.00 1332-IN 1983 U.P. Public Tubewells II* - 101.0 101.00 Total 4,783.1 11,446.6 of which has been repaid 1,211.8 120.4 Total now outstanding 3,571.3 11,326.2 Amount Sold 133.8 of which has been repaid 133.8 - - Total now held by Bank and IDA 3/ 3,571.3 11,326.2 Total undisbursed (excluding *) 1,854.3 4,052.3 1/ IDA Credit amounts for SDR-denominated Credits are expressed in terms of their US dollar equivalents, as established at the time of Credit negotiations and as subsequently presented to the Board. 2/ Undisbursed amounts for SDR-denominated IDA Credits are derived from cumulative dis- bursements converted to their US dollar equivalents on the basis of the SDR/US dollar exchange rate (1 SDR = US$1.07867) in effect on March 31, 1983. 3/ Prior to exchange adjustment. * Not yet effective. ANNEX II Page 5 of 26 B. STATEMENT_OF_IFC INVESTMENTS (As of March 31, 1983) Amount (US$ million) Year Company Loan Equity Total 1959 Republic Forge Company Ltd. 1.5 - 1.5 1959 Kirloskar Oil Engines Ltd. 0.9 - 0.9 1960 Assam Sillimanite Ltd. 1.4 - 1.4 1961 K.S.B. Pumps Ltd. 0.2 - 0.2 1963-66 Precision Bearings India Ltd. 0.6 0.4 1.0 1964 Fort Gloster Industries Ltd. 0.8 0.4 1.2 1964-75-79 Mahindra Ugine Steel Co. Ltd. 11.8 1.3 13.1 1964 Lakshmi Machine Works Ltd. 1.0 0.3 1.3 1967 Jayshree Chemicals Ltd. 1.1 0.1 1.2 1967 Indian Explosives Ltd. 8.6 2.9 11.5 1969-70 Zuari Agro-Chemicals Ltd. 15.1 3.8 18.9 1976 Escorts Limited 6.6 - 6.6 1978 Housing Development Finance Corporation 4.0 1.2 5.2 1980 Deepak Fertilizer and Petrochemicals Corporation Ltd. 7.5 1.2 8.7 1981 Coromandel Fertilizers Limited 15.9 15.9 1981 Tata Iron and Steel Company Ltd. 38.0 - 38.0 1981 Mahindra, Mahindra Limited 15.0 - 15.0 1981 Nagarjuna Coated Tubes Ltd. 2.9 0.3 3.2 1981 Nagarjuna Signode Limited 2.3 - 2.3 1981 Nagarjuna Steels Limited 1.5 0.2 1.7 1982 Ashok Leyland Limited 28.0 - 28.0 1982 The Bombay Dyeing and Manufacturing Co. Ltd. 18.8 - 18.8 1982 Bharat Forge Company Ltd. 16.3 - 16.3 1982 The Indian Rayon Corp. Ltd. 8.5 - 8.5 TOTAL GROSS COMMITMENTS 208.3 12.1 220.4 Less: Sold 53.0 3.2 56.2 Repaid 28.3 - 28.3 Cancelled 15.9 1.4 17.3 Now Held 111.1 7.5 118.6 Undisbursed 93.1 0.2 93.3 ANNEX II Page 6 of 26 C. PROJECTS IN EXECUTION 1/ (As of March 31, 1983) Generally, the implementation of projects has been proceeding reasonably well. Brief notes on the execution of individual projects are below. The level of disbursements was US$1,245 million in FY82, compared to US$962 million in the previous year. Disbursements in the current fiscal year through March 31, 1983 total US$1,008 million, representing an increase of about 17% over the same period last year. The undisbursed pipeline as of March 31, 1983, is US$5,907 million. Ln. No. 1475 Twelfth Industrial Credit and Investment Corporation of India Project; US$80 million loan of July 22, 1977; Effective Date: October 4, 1977; Closing Date: September 30, 1983 Ln. No. 1843 Thirteenth Industrial Credit and Investment Corporation of India Project; US$100 million loan of May 16, 1980; Effective Date: June 27, 1980; Closing Date: December 31, 1985 Ln. No. 2051 Fourteenth Industrial Credit and Investment Corporation of India Project; US$150 million loan of October 8, 1981; Effective Date: December 3, 1981; Closing Date: March 31, 1988 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, often in the high technology fields and are also mostly export-oriented. Disbursements are on schedule for the twelfth loan and ahead of schedule for the thirteenth and fourteenth loans. Ln. No. 1260 Second Industrial Development Bank of India Project; US$40 million loan of June 10, 1976; Effective Date: August 10, 1976; Closing Date: March 31, 1983 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered and the action being taken to remedy them. They should be read in this sense and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution. ANNEX II Page 7 of 26 Ln. No. 1511 IDBI Joint/Public Sector Project; US$25 million loan of March 1, 1978; Effective Date: May 31, 1978; Closing Date: March 31, 1983 Loan 1260 has been completed and was closed on March 31, 1983. Dis- bursements are expected to be completed by the end of April 1983. Loan 1511 is nearly complete and was also scheduled to close on March 31, 1983. Although project implementation has been satisfactory, a small number of sub-projects remain unfinished. Following a detailed review of the project by a Bank mission in April, a short extension of the closing date will be made to allow completion of these sub-projects and full disbur- sement of the loan proceeds. Ln. No. 2050 Tamil Nadu Newsprint Project; US$100 million loan of September 23, 1981; Effective Date: March 22, 1982; Closing Date: August 31, 1985 Project progress is good. Land acquisition has been completed and construction began in July 1982. Basic engineering work was completed on schedule at the end of August. Procurement is proceeding as planned. Cr. No. 598 Fertilizer Industry Project; US$105 million credit of December 31, 1975; Effective Date: March 1, 1976; Closing Date: December 31, 1982 Cr. No. 1125 Hazira Fertilizer Project; US$400 million credit of October 28, 1981; Effective Date: January 21, 1982; Closing Date: June 30, 1986 Following completion of 37 fertilizer sub-projects, Credit 598 was closed on December 31, 1982. Disbursements are expected to be completed by the end of April 1983. About US$3 million in the credit account are expected to be cancelled. Credit 1125 Is proceeding generally satisfactorily. Procurement of all critical items is on schedule. The need to undertake unexpected piling and foundation work identified by detailed soil surveys delayed somewhat the start of major civil works. This has now been completed, and erection of the ammonia and urea plants is scheduled to begin in April-May 1983. Ln. No. 2123 Refineries Rationalization Project; US$200 million loan of May 5, 1982; Effective Date: June 29, 1982; Closing Date: September 30, 1986 Project implementation is satisfactory. The conversion component is making very good progress, with construction about to commence. Prepara- tion work and investment approvals for the energy efficiency and pollution control components are underway. Ln. No. 1925 Second Bombay High Offshore Development Project; US$400 million loan of December 11, 1980; Effective Date: February 24, 1981; Closing Date: March 31, 1984 ANNEX II Page 8 of 26 Ln. No. 2205 Krishna-Godavari Exploration Project; US$165.5 million loan of November 9, 1982; Effective Date: February 28, 1983; Closing Date: March 31, 1986 Ln. No. 2241 South Bassein Offshore Gas Development Project; US$222.3 million loan of March 31, 1983; Effective Date: Expected June 1983; Closing Date: December 31, 1985. The Bombay High Project is progressing well. All platforms and subsea pipelines have been installed essentially on schedule. ONGC reached its targetted production level of 240,000 Bbl/day in May 1982, and is presently producing 250,000 Bbl/day, 44% of which comes from project wells. Initial activities under the Krishna-Godavari Project are about four months behind schedule due to longer than anticipated testing and completion time for on-shore wells, lack of adequate number of geophysicists for processing the seismic data, and delay in initiating procurement actions. These problems have been discussed in depth with ONGC, and they are in the process of undertaking steps to correct the situation. The South Bassein Gas Project is designed to assist India to increase her gas production capability through the installation of offshore platforms for drilling, processing, and gas flaring, and the laying of a subsea pipeline to Gujarat State and the fertilizer plant at Hazira. Initial procurement activities are underway. Cr. No. 604 Power Transmission IV Project; US$150 million credit of January 22, 1976; Effective Date: October 22, 1976; Closing Date: June 30, 1983 Cr. No. 685 Singrauli Thermal Power Project; US$150 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 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 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 million loan and Cr. No. 874 US$200 million credit of February 2, 1979; Effective Date: May 22, 1979; Closing Date: December 31, 1985 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 ANNEX II Page 9 of 26 Ln. No. 1887 Farakka Thermal Power Project; US$25 million loan and Cr. No. 1053 US$225 million credit of July 11, 1980; Effective Date: December 10, 1980; Closing Date: March 31, 1987 Ln. No. 2076 Second Ramagundam Thermal Power Project; US$300 million loan of January 6, 1982; Effective Date: March 16, 1982; Closing Date: June 30, 1988 Cr. No. 1172 Second Korba Thermal Power Project; US$400 million credit of February 4, 1982; Effective Date: March 16, 1982; Closing Date: December 31, 1989 Credits 685 and 1027 assist in financing the 2,000 MW Singrauli development, which is the first of four power stations In the Government's program for the development of large central thermal power stations feeding power into an interconnected grid. Credit 793, together with Credit 1172, which became effective March 16, 1982, support the construction of the 2100 MW development, consisting of three 200 MW and three 500 MW generating units, at the second such station, at Korba, together with related facilities and associated transmission. Loan 1648/Credit 874, together with Loan 2076, which also became effective March 16, 1982, support similar investments at Ramagundam. Loan 1887/Credit 1053 assists in financing the first three 200 Mw generating units at the Farakka station. The National Thermal Power Corporation (NTPC) has been carrying out construction and operation of these power stations. Loan 1549 supports the construction of a 500 MW extension of the Tata Electric Company-a station at Trombay, designed to help meet the forecast load growth in the Bombay area. All these large-scale thermal power projects are progressing satis- factorily. Construction works for the Singrauli, Korba, and Farakka stations are on or ahead of schedule, although some slippage has occurred in the implementation schedule for the Ramagundam project. The first unit at the Singraull station was commissioned on schedule in February 1982, the second unit in October 1982, and the third in March 1983. The first unit at the Korba station was also commissioned in March 1983. In the Third Trombay project, procurement is complete and the generator is expected to be commis- sioned in April/May 1983. Tata Electric Company's financial performance in 1982, and projections through 1985, are satisfactory. Cost overruns, caused by design modifications, price increases in materials, and increases in customs duties, will be met by the Government of India. Cr. No. 911 Second Rural Electrification Corporation Project; US$175 million credit of June 21, 1979; Effective Date: October 17, 1979; Closing Date: March 31, 1984 Ln. No. 2165 Third Rural Electrification Corporation Project; US$304.5 million loan of June 22, 1982; Effective Date: October 21, 1982; Closing Date: June 30, 1986 These projects are progressing satisfactorily with no major problems. Procurement of materials and equipment is on schedule, and disbursements are keeping pace with appraisal estimates. Detailed plans for the new Rural Electrification Corporation (REC) training institute to be established in ANNEX II Page 10 of 26 Hyderabad are well advanced. REC's financial performance continues to be satisfactory. In the near future, REC's major thrust under both projects will be on improving consumer connection performance, which is lagging con- siderably behind projections. REC is in the process of reassessing the annual work programs of the State Electricity Boards, including an analysis of the reasons for the poor connection performance, the setting of realistic new goals, and the introduction of measures to improve the situation. Ln. No. 1313 Telecommunications VI Project; US$80 million loan of July 22, 1976; Effective Date: September 14, 1976 Closing Date: March 31, 1983 Ln. No. 1592 Telecommunications VII Project; US$120 million loan of June 19, 1978; Effective Date: October 30, 1978; Closing Date: December 31, 1983 Cr. No. 1112 Telecommunications VIII Project; US$314 million credit of March 26, 1981; Effective Date: June 24, 1981; Closing Date: December 31, 1984 Loan 1313 has been successfully concluded and was closed on March 31, 1983. Disbursements are expected to be completed by May 31, 1983. Loan 1592 and Credit 1112 are both progressing satisfactorily and there are no major problems. Initial delays in Loan 1592 as a result of late procurement caused by a strike have been offset by accelerated implementation during 1982. All bidding under Credit 1112 is now complete and civil works are underway. Institutional improvements under all projects have been achieved and the financial position of the Posts & Telegraph Department remains sound. Cr. No. 844 Railway Modernization and Maintenance Project; US$190 million credit of November 13, 1978; Effective Date: January 10, 1979; Closing Date: December 31, 1984 Ln. No. 2210 Second Railway Modernization and Maintenance Project; Cr. No. 1299 US$200 million loan and US$200 million credit of December 23, 1982; Effective Date: February 23, 1983; Closing Date: September 30, 1987 These projects are designed to help the Indian Railways reduce re-manufacturing and maintenance costs of locomotives and rolling stock and to improve their performance and availability. The physical execution of Credit 844 continues to make good progress. Procurement of all critical equipment is complete and civil works are well advanced. Commitments under the project total nearly 97% of the Credit amount. Initial activities for the second project are underway. The Indian Railways' financial and traffic performance continued its significant improvement in FY1982/83, and this is expected to be sustained in FY1983/84. ANNEX II Page 11 of 26 Cr. No. 1072 Bihar Rural Roads Project; US$35 million credit of December 5, 1980; Effective Date: January 15, 1981; Closing Date: June 30, 1986 The project aims to construct or rehabilitate 700 km of rural roads and to improve maintenance of the rural road network in Bihar. It is proceeding on schedule. The majority of the equipment required for the project has been delivered. Contracts have been awarded for civil works totallIng to about US$13 million and work began last March. Ln. No. 1335 Bombay Urban Transport Project; US$25 million loan of December 20, 1976; Effective Date: March 10, 1977; Closing Date: June 30, 1983 Cr. No. 1033 Calcutta Urban Transport Project; US$56 million credit of October 27, 1980; Effective Date: December 18, 1980; Closing Date: December 31, 1984 Implementation of the Bombay project is satisfactory, with about 75% of the loan disbursed. Construction of new workshop facilities began in January 1982, but to allow for completion the loan closing date may have to be extended one year. A bus fare revision on April 1, 1982 increased revenues by 20% and will enable the project authority to achieve its targeted operating ratio. There has been considerable recent improvement in the Calcutta project, including definite progress at the policy level in response to IDA's 15-point action program to improve project implementation, which was presented to the project authorities in October 1982. All 75 new tramcars financed under the project have been delivered, an additional 60 should be renovated and in service by December 1983, and the operating performance of the tram company has improved substantially over the last six months. Although the operating performance of the bus corporation remains unsatisfac- tory, the recent appointment of three new senior staff members to the cor- poration-s management and a new Chairman of the Board is expected to improve operations, and there are now over 500 new buses in service. Cr. No. 756 Second Calcutta Urban Development Project; US$87 million credit of January 6, 1978; Effective Date: April 7, 1978; Closing Date: December 31, 1983 Cr. No. 1082 Second Madras Urban Development Project; US$42 credit of January 14, 1981; Effective Date: March 2, 1981; Closing Date: March 31, 1986 Cr. No. 1185 Kanpur Urban Development Project; US$25 million credit of February 4, 1982; Effective Date: April 22, 1982; Closing Date: June 30, 1986 Physical performance in the Calcutta project is generally good. All sub-projects presently under implementation are scheduled to be completed by March 31, 1983. Following a review of the overall program for Calcutta-s further development, the Government of West Bengal shifted its investment ANNEX II Page 12 of 26 priorities somewhat and consequently requested a revision of some components of this project. IDA agreed to the suggested changes, and the closing date has been extended by nine months to allow for completion of the redefined project. Credit 1082, is proceeding satisfactorily, with the exception of the sites and services component, where legal challenges are causing delays in land acquisition. The Government of Tamil Nadu (GOTN) is actively pursuing the resolution of these court cases and has identified alternative sites to be used so that the sites and services works can be finished by the project closing date. The financial performance of the Pallavan Transport Corpora- tion (PTC), the project implementing agency, is unsatisfactory. It is not generating funds sufficient to meet its financial targets. An action plan to cut operating costs, reduce new investment, and raise revenues has recently been formulated and, subject to the agreement of GOTN, will enable PTC to achieve the required targets by 1983/84 and maintain them thereafter. Progress under Credit 1185 is mixed. Procedures to improve cost recovery have not been introduced as agreed, studies on institutional strengthening of the project agencies have not begun, and the project authority suffers from a serious lack of staff with proper management exper- tise. However, there has been considerable improvement recently in land acquisition for slum upgrading, where completed works have benefitted nearly 6,700 households. Procurement is proceeding well and all physical works are expected to be completed on schedule. Cr. No. 585 Uttar Pradesh Water Supply and Sewerage Project; US$40 million credit of September 25, 1975; Effective Date: February 6, 1976; Closing Date: December 31, 1982 Following the completion of physical works, the project was closed on December 31, 1982. Institutional and financial performance under the project were unsatisfactory, and several of the implementing agencies were unable to achieve the financial performance targets which had been agreed with IDA. Cr. No. 842 Second Bombay Water Supply and Sewerage Project; US$196 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 million credit of October 27, 1978; Effective Date: January 25, 1979; Closing Date: March 31, 1984 Cr. No. 899 Maharashtra Water Supply and Sewerage Project; US$48 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: December 31, 1985 ANNEX II Page 13 of 26 Cr. No. 1280 Gujarat Water Supply and Sewerage Project; US$72 million credit of November 9, 1982; Effective Date: February 8, 1983; Closing Date: September 30, 1987 Recent progress under Credit 842 has been encouraging. Preparation of contract documents and drawings for the water supply component is well advanced. For the 137 sewerage sub-projects, all tender documents have been completed and construction is well underway, although there have been serious delays on the two major sewerage treatment plants due to land acquisition difficulties. Cost overruns are expected and IDA has requested the project authorities to prepare detailed estimates and proposals for dealing with these. The financial performance of the Bombay Water Supply and Sewerage Department continues to be satisfactory, and all financial conditions under the project are being met. The closing date of Credit 848 has been extended one year as a result of initial procurement delays. Physical implementation of the project is now proceeding satisfactorily, and all works are expected to be finished by the extended completion date of December 1983. The quality of construction work is excellent, and the Punjab Water Supply and Sewerage Board is proving to be an effective implementing agency. However, there continue to be significant problems with financial and operational performance, which must be improved considerably if agreed targets under the project are to be met. IDA has brought this to the attention of the project authorities repeatedly, and plans to concentrate its supervision efforts for the duration of the project on improving the financial and operational aspects of implementation. Credit 899 is proceeding reasonably well. It has now entered the full construction stage, and work is satisfactory. Disbursements are in line with the appraisal estimates. The level of tariffs is adequate to achieve the financial performance targets under the project. The Government of Maharashtra is preparing detailed estimates and proposals for dealing with the anticipated cost increases which have occurred as a result of delayed start of construction and retendering on one major water supply facility. Attention now needs to be devoted to the resolution of the staffing difficul- ties in the Maharashtra Water Supply and Sewerage Board, particularly the lack of financial staff to properly administer their financial operations. Under the Rajasthan project, Credit 1046, the rural water supply schemes are well advanced and engineering designs for the urban schemes have been nearly finalized. Progress in the project has been hampered by the Government of Rajasthan (GOR) fund allocations running at between 50%-60% of annual requirements. A recent Cabinet decision has deferred the construc- tion of the planned Hemawas/Kuri Pipeline to provide water to the city of Jodhpur, in order to consider the possibility of accessing water from the Rajasthan Canal instead. A feasibility report has been completed. GOR has decided on the alternative Rajasthan Canal source, which will be funded without Bank assistance. Initial work under Credit 1280 is proceeding well. The design team has been established and detailed design of all sub-projects is on schedule. The bid documents for civil works in Ahmedabad, one of the project cities, have been approved and will be issued shortly. Work is now concentrating on preparation of bids for materials procurement. ANNEX II Page 14 of 26 Cr. No. 502 Rajasthan Canal Command Area Development Project; US$83 million credit of July 31, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1983 Ln. No. 1251 Andhra Pradesh Irrigation and Command Area Development (TW) Composite Project; US$145 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 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1984 Cr. No. 736 Maharashtra Irrigation Project; US$70 million credit of October 11, 1977; Effective Date: January 13, 1978; Closing Date: March 31, 1983 Cr. No. 740 Orissa Irrigation Project; US$58 million of October 11, 1977; Effective Date: January 16, 1978; Closing Date: October 31, 1983 Cr. No. 788 Karnataka Irrigation Project; US$126 million credit of May 12, 1978; Effective Date: August 10, 1978; Closing Date: March 31, 1984 Cr. No. 808 Gujarat Medium Irrigation Project; US$85 million credit of July 17, 1978; Effective Date: October 31, 1978; Closing Date: June 30, 1984 Cr. No. 843 Haryana Irrigation Project; US$111 million credit of August 16, 1978; Effective Date: December 14, 1978; Closing Date: August 31, 1983 Cr. No. 889 Punjab Irrigation Project; US$129 million credit of March 30, 1979; Effective Date: June 20, 1979; Closing Date: June 30, 1985 Cr. No. 954 Second Maharashtra Irrigation Project; US$210 million credit of April 14, 1980; Effective Date: June 6, 1980; Closing Date: December 31, 1985 Cr. No. 1011 Second Gujarat Irrigation Project; US$175 million -redit of May 12, 1980; Effective Date: June 27, 1980; Closi.,g Date: April 30, 1986 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. 1108 Madhya Pradesh Medium Irrigation Project; US$140 million credit of March T6, 1981; Effective Date: May 13, 1981; Closing Date: March 31, 1987 ANNEX II Page 15 of 26 Cr. No. 1177 Madhya Pradesh Major Irrigation Project; US$220 million credit of February 24, 1982; Effective Date: April 16, 1982; Closing Date: June 30, 1987 Ln. No. 2186 Kallada Irrigation Project; US$20.3 million loan and US$60 million Cr. No. 1269 credit of July 6, 1982; Effective Date: September 21, 1982; Closing Date: March 31, 1987 Cr. No. 1288 Second Chambal Madhya Pradesh Irrigation Project; US$31 million credit of September 7, 1982; Effective Date: December 1, 1982 Closing Date: March 31, 1987 Cr. No. 1289 Subernarekha Irrigation Project; US$127 million credit of November 9, 1982; Effective Date: January 10, 1983; Closing Date: April 30, 1987. Cr. No. 1319 Haryana II Irrigation Project; US$150 million credit of February 23, 1983; Effective Date: Expected May 1983; Closing Date: March 31, 1988. These projects, based on existing large irrigation systems, are designed to improve the efficiency of water utilization and, where possible, to use water savings for bringing additional areas under Irrigation. Canal lining and other Irrigation infrastructure, drainage, and land shaping are prominent components of these projects. In addition, provisions have been made to increase agricultural production and marketing by reforming and upgrading agricultural extension services and by providing processing and storage facilities and village access roads. Following unsatisfactory early project progress, Loan 1251 was refor- mulated in May 1980, at which time project completion was planned for Decem- ber 1984. On the basis of improved implementation performance under the reformulated program, a one-year extension of the closing date is now under consideration. Implementation of Maharashtra I has been unbalanced, with emphasis on major works. As of March 31, 1983, the original closing date, the large construction components were about 80% complete, but there were major short- falls in the minor Irrigation and CAD works. Over recent months there has been some improvement in implementation, with the provision of adequate budget resources and staff, and the preparation of detailed work programs for completion of the works. Therefore, a one-year extension of the closing date is being considered to allow completion of all project components and hence full development of the irrigation potential of the area. As a result of cost overruns, the Periyar Vaigal Project was reformu- lated in 1981, at which time completion was planned for March 1984. Accord- ingly, the closing date has been extended by one year to March 31, 1984. Recent implementation progress has been encouraging, particularly in the construction of field channels. The project could profit still further, however, from improved coordination among the various Government of Tamil Nadu agencies responsible for project execution. ANNEX II Page 16 of 26 The Karnataka Project is experiencing serious delays in command area development and completion of construction of the distribution system, due mainly to lack of proper support from the State Government and inadequate staffing of the project entity. The urgent attention of the State Government must be devoted to the early resolution of these implementation problems. Although the Gujarat Medium Project is 30% behind schedule on average, there has been considerable recent improvement. There is no longer a shortage of field staff, construction standards have improved, and there has been substantial progress in finalizing the designs of the distribution systems. Disbursements, at 50% of the SAR target, are expected to improve following the Introduction of steps designed to reduce ineligible expendi- tures. The COG is currently preparing detailed implementation schedules to ensure completion of the 23 sub-projects by June 1984. The Gujarat II Project has also demonstrated recent signs of improve- ment. Staffing problems, which had been a cause of serious delays, have now been resolved. The quality of construction work has improved, design problems have been corrected, and the Water and Land Management Institute is contributing significantly to the training of Irrigation Department staff. Although the project remains considerably behind schedule and will face cost overruns, all components continue to be economically and financially viable. The GOG is now preparing detailed implementation schedules for the completion of project works which will form the basis for future monitoring. Shortages of cement and inadequate provision of budgetary resources continue to delay implementation of the Punjab Project. In addition, there are cost overruns in the canal and watercourse lining components of about 15% and 40%, respectively; and the study of water charges, due in August 1981, remains incomplete. The Government of Punjab has repeatedly been requested by Bank supervision missions to address these issues urgently. The Madhya Pradesh Medium Irrigation Project is considerably behind schedule. The sub-project appraisal process has been overly slow. While there are 12 sub-projects now under implementation, approximately 20-25 are needed to assure expected project benefits and full disbursement of the credit proceeds. Moreover, the works are unbalanced in favor of construction of dams rather than conveyance systems. Several significant procurement contracts are scheduled to be awarded in April 1983, which is expected to bring about accelerated project implementation. There has been significant recent progrss in the MP Major Project. Procurement procedures have been streamlined, several major ICB and LCB contracts are expected to be awarded in March-April 1983, and design work for the canal structures is progressing well. The GOMP's planned intensification of project activities during the current December 1982-June 1983, and the 1983/84 construction seasons, should be adequate to offset initial start-up delays. Attention can now be devoted to completion of the resettlement plan for persons to be displaced by project reservoirs, and to initiation of the minor project components, such as roads, research stations, and the estab- lishment of drainage and hydrometeorological networks. ANNEX II Page 17 of 26 Credit 1289 supports an irrigation and industrial/water supply program on 255,000 ha in the States of Bihar, Orissa and West Bengal. Credit 1319 continues the Government of Haryana's modernization program through the lining of irrigation channels and the provision of supplementary water from augmentation tubewells. Early project activities are proceeding as scheduled. Progress of the remaining projects is generally satisfactory. Cr. No. 1116 Karnataka Tank Irrigation Project; US$54 million credit of March 26, 1981; Effective Date: May 5, 1981; Closing Date: March 31, 1986 Th project is designed to finance the construction of 120-160 tank irrigation schemes throughout the State of Karnataka. The Government of Karnataka has proposed a reduction to 87 in the number of schemes to be completd. Project preparation has been slow due to serious staffing vacan- cies and the overloading of senior project staff with non-project respon- sibilities. Design work is seriously behind schedule and construction has not yet begun at the dam sites. The Government of Karnataka has been asked to prepare a program to complete the scheduled works within the agreed project period, together with a staffing and budget plan, by the end of October 1982. Credit 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. Credit No. 1332 Uttar Pradesh Public Tubewells II Project; US$101 credit of March 31, 1983; Effective Date: Expected June 1983; Closing Date: March 31, 1988. The first project has been successfully completed within the original closing date. In fact an additional 70 tubewells above the 500 originally plannned at appraisal were constructed. Disbursements are expected to be completed by June 30, 1983. Initial activities are underway for Credit 1332, which provides for the installation of 2200 new tubewell systems, and the upgrading of 750 existing tubewell systems, based on the modernized design which was success- fully proven in the first project. Cr. No. 682 Orissa Agricultural Development Project; US$20 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 million credit of June 1, 1977; Effective Date: August 30, 1977; Closing Date: September 30, 1983 Cr. No. 712 Madhya Pradesh Agricultural Extension and ResearchLProject; US$10 million credit of June 1, 1977; Effective Date: September 2, 1977; Closing Date: September 30, 1983 ANNEX II Page 18 of 26 Cr. No. 728 Assam Agricultural Development Project; US$8 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1984 Cr. No. 737 Rajasthan Agricultural Extension and Research Project; US$13 million credit of November 14, 1977; Effective Date: February 6, 1978; Closing Date: June 30, 1983 Cr. No. 761 Bihar Agricultural Extension and Research Project; US$8 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 million credit of June 25, 1980; Effective Date: _August 18, 1980; Closing Date: June 30, 1986 Cr. No. 1137 Tamil Nadu Agricultural Extension Project; US$28 million credit of May 7, 1981; Effective Date: July_22,-1981; Closing_Date: June 30, 1987 Cr. No. 1135 Maharashtra Agricultural Extension Project; US$23 million credit of May 7, 1981; Effective Date: July 22, 1981; Closing Date: June 30, 1987 Cr. No. 1138 Second Madhya Pradesh Agricultural Extension Project; US$37 million credit of May 7, 1981; Effective Date: July 22, 1981; Closing Date: June 30, 1987 Cr. No. 1219 Andhra Pradesh Agricultural Extension and Research Project; US$6 million credit of_May 5, 1982; Effective_Date: July 27, 1982; Closing Date: March 31,_1988 These twelve credits finance the reorganization and strengthening of agricultural extension services and the development of adaptive research capabilities in thirteen States in India. In areas where the reformed exten- sion system is in operation, field results have been most encouraging, both in terms of adoption of new agricultural techniques and of increased crop yields. In Madhya Pradesh I and Orissa, significant gains have been made under the projects. There has been considerable improvement in the West Bengal Project over the past year. Staffing problems have been resolved, and civil works have started. Attention now needs to be devoted to improvement in fieldwork, which is weak due to insufficient supervision of extension workers and poor generation of agricultural recommendations. ANNEX II Page 19 of 26 In Rajasthan, too, significant early gains were achieved following the establishment of a well organized and stable extension service. Although the quality of field work is somewhat uneven, the basic extension system is well established. Implementation of the Assam Project is slow due in part to unsettled conditions in the State. Insufficient supervision contributes, inter alia, to lack of coordination among various implementing agencies, staff vacancies, and poor understanding of the AEOs appropriate role in the extension sys- tem--all of which result in ineffective field work. Implementation of the Bihar Project is unsatisfactory. Despite the decision of the Government of Bihar (GOB) one year ago to commit adequate budget funds and appoint key staff, there has been no progress to date. Staff vacancies remain, field extension continues to be weak, and civil works have not yet started. In Gujarat, Haryana and Karnataka, all covered under the Composite Agricultural Extension Project, the basic extension system has been estab- lished and attention now needs to focus on the quality of extension recommen- dations and the filling of remaining staff vacancies. The Directorate of Extension in the Central Government's Department of Agriculture needs strengthening. In Kerala, following the successful introduction of the T&V system in three Districts, the project was extended to the entire State in December 1982. The recruitment of the additional staff should be completed by April 1983, after which project implementation is expected to accelerate con- siderably. In Maharashtra, project implementation is ahead of schedule. The basic infrastructure of the revised extension service is well established. Field workers are visiting farmers regularly and their recommendations are being widely accepted. The Madhya Pradesh II Project remains behind schedule due to delayed sanctioning of budget resources during the first two project years. There has recently been considerable improvement in implementation which is expected to continue. Implementation of the Andhra Pradesh Project has been hampered during its first year by vacancies in senior staff positions caused by the decision of the newly elected State Government to retire all staff over 55 years of age. Promotion boards are now meeting to choose staff for the vacant posi- tions. Field activities have been ongoing for about slx months and are generally satisfactory, although an improved orientation program would be of benefit to staff at all levels. Civil works and procurement activities are on schedule. ANNEX II Page 20 of 26 Cr. No. 680 Kerala Agricultural Development Project; US$30 million credit of April 1, 1977; Effective Date: June 29, 1977; Closing Date: March 31, 1985 Project progress continues satisfactorily. Implementation of the smallholder component, the project-s largest, continues to gain momentum with a 36% increase in plantings in 1982/83. One crumb rubber factory of the nine included in the project is in operation and a further two should be commis- sioned in late 1983. The cashewnut component is completed. Ln. No. 2095 Agricultural Refinance and Development Corporation IV Project; Cr. No. 1209 US$190 million loan and US$160 million credit of February 24, 1982; Effective Date: May 25, 1982; Closing Date: June 30, 1984 The project, which is a continuation of ARDC III, consists of a two-year time slice of ARDC's lending program to farmers. The project is proceeding well, with disbursements ahead of schedule. In July 1982, ARDC and ACD/RBI were successfully merged into the National Bank for Agriculture and Rural Development (NABARD). The merger was carried out efficiently, permitting operations to continue uninterrupted. The loan recovery perfor- mance of the State Land Development Banks during 1981/82 was weak. NABARD has introduced rehabilitation programs and management studies designed to improve loan recovery and the overall performance of the participating banks. Cr. No. 855 National Agriculture Research Project; US$27 million credit of December 7, 1978; Effective Date: January 22, 1979; Closing Date: September 30, 1983 The project has made significant progress over the last six months. Contact has improved with the State agricultural universities, where there is considerable enthusiasm for NARP objectives. Implementation of sub-projects in Haryana, Kerala and Tamil Nadu is proceeding on schedule. The basic research projects, although satisfactory thus far, need to focus their atten- tion on local needs and problem-oriented multi-disciplinary research. Cr. No. 747 Second Foodgrain Storage Project; US$107 million credit of January 6, 1978; Effective Date: May 17, 1978; Closing Date: June 30, 1983 The project was revised in May 1982 to provide additional bag storage capacity in lieu of the bulk storage component. A one-year extension of the closing date was granted, with the possibility of further extension if project implementation improved. The project continues to be considerably behind schedule. However, implementation has gained some momentum since September 1982, when specific targets were established for accomplishment of certain project works by June 1983. Land acquisition, construction, and procurement are, overall, in line with these targets, but there remain deficiencies in staffing, and in the monitoring, training and research programs which have to be overcome to ensure satisfactory project progress. ANNEX II Page 21 of 26 Cr. No. 871 National Cooperative Development Corporation (NCDC) Project; US$30 million credit of February 2, 1979; Effective Date: May 3, 1979; Closing date: December 31, 1984 Cr. No. 1146 Second National Cooperative Development Corporation (NCDC) Project; US$125 million credit of July 21, 1981; Effective Date: November 11, 1981; Closing Date: June 30, 1987 These credits provide funds to rural cooperatives in various States for the construction and operation of godowns (warehouses) and cold storage and marketing facilities. Major emphasis is placed on institution building in order to make NCDC grow into a more effective development institution to serve India's rural cooperative sector. Disbursements under Credit 871 are on schedule. However, the construction of godowns has been slower than anticipated because cement supplies have been erratic and the response by contractors to tender offers has been poor in remote areas. Although the project is expected to be completed on time, increases in construction costs are likely to require a revision of the project scope to keep expenditures within the project financing provisions. Project implementation in most of the nine participating States under Credit 1146 is also behind schedule, principally because of organizational delays. The participating agencies have taken steps to speed up implemena- tion, but progress continues to be hampered by lack of adequate number of properly trained staff, supply shortages and cost escalations. NCDC and the State agencies concerned have resolved to do what is required to speed up implementation of these projects. Cr. No. 482 Karnataka Dairy Development Project; US$30 million credit of June 19, 1974; Effective Date: December 23, 1974; Closing Date: September 30, 1983 Cr. Nc. 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: March 31, 1983 Cr. No. 824 National Dairy Project; US$150 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. Farmer response has been excellent. About 18,000 dairy cooperative societies (DCS) have been established, with over two million members. Profitability of most DCSs is good and construction of dairy and feed plants is proceeding well. ANNEX II Page 22 of 26 In Credit 482, construction of the mother dairy at Bangalore, the key processing facility, was delayed by litigation. Construction by an experienced civil works contractor has now begun. To allow for near comple- tion of this dairy, and for the Government of Karnataka to implement improve- ments in their management support of the dairy producers' unions as required under the project, the closing date has been extended by one year. Under Credit 521, nearly 1,500 dairy cooperative societies (DCSs) have been formed, benefitting over 78,000 families. During 1981/82, these DCSs collected over 30 million liters of milk, for which the producers were paid Rs 67 million. The project was scheduled to close on December 31, 1982. However, as several project-financed facilities are not yet complete, includ- ing two processing plants, one powder plant, four training centers, and living quarters for staff, the 001 has requested an extension of the closing date, which is now under consideration. Credit 522 has been successfully completed and was closed on March 31, 1983. Over 800 dairy cooperative societies were formed, serving a membership of approximately 35,000 families. Disbursements are expected to be completed by May 31, 1983. Physical execution under Credit 824 is excellent, with the estab- lishment of new rural and urban dairies, cattle feed plants, and the acquisi- tion of rail and road milk tankers. The cooperative processing industry is served by 18,000 cooperatives with membership of over two million households. In addition, substantial institution building is taking place through the formation of federations, unions and cooperatives in 59 milksheds covered under the Operation Flood II Agreements designed to ensure autonomy in pric- ing and a three-tiered cooperative structure. Ln. No. 1273 National Seed Project; US$25 million loan of June 10, 1976; Effective Date: October 8, 1976; Closing Date: June 30, 1984 Cr. No. 816 Second National Seed Project; US$16 million credit of July 17, 1978; Effective Date: December 20, 1978; Closing Date: December 31, 1984 These projects are designed to increase the availability of high quality agricultural seed, and cover nine States. Although they are two to three years behind schedule because of initial problems in coordination and monitoring, mainly at the national level, there has been significant progress over the last year. The construction of transit and bulk storehouses has been delayed by land acquisition problems. However, there has been good progress in civil works and equipment procurement for the seed processing plants. It is expected that all works except seed farm development under both projects will be completed by December 1984. Cr. No. 1012 Cashewnut Project; US$22 million credit of June 10, 1980; Effective Date: September 3, 1980; Closing Date: September 30, 1985 This project helps to finance cashew planting and plantation improve- ment programs in the States of Andhra Pradesh, Karnataka, Kerala and Orissa. ANNEX II Page 23 of 26 The planting and improvement programs initially made very good progress although this has been dampened in 1982/83 by decreased cashewnut prices and Corporation land acquisition problems resulting from the Forest Conservation Act (1980). There is still every expectation that the project will fulfill its objective of significantly increasing cashew production and improving the incomes of the farmers. Cr. No. 610 Integrated Cotton Development Project; US$18 million credit of February 26, 1976; Effective Date: November 30, 1976; Closing Date: December 31, 1983 Project implementation continues to improve. The area to be covered by the project (183,000 ha) has been attained, and yields are increasing. Major processing facilities in Maharashtra and Haryana are under contract and work is progressing satisfactorily. The link between university research and project activity is excellent. However, because of poor performance in the early stages, the project closing date has been extended by two years to December 31, 1983, to allow for completion of the project works and full utilization of the credit proceeds. Cr. No. 1034 Karnataka Sericulture Project; US$54 million credit of October 27, 1980; Effective Date: December 18, 1980 Closing Date: December 31, 1985 The recent significant improvement in the staffing situation of the Department of Sericulture should bolster the previously curtailed extension program and should lead to increased bivoltine silk production which is a major project objective hitherto not being achieved. All other project components are progressing satisfactorily, especially the industrial cor- ponent where spun silk mill and silk filature are expected to be operational within 9-12 months. Cr. No. 806 Jammu-Kashmir Horticulture Project; US$14 million credit of July 17, 1978; Effective Date: January 16, 1979; Closing Date: June 30, 1984 The recent change in management of Jammu and Kashmir Horticultural Produce Marketing and Processing Corporation is expected to recoup implemen- tation progress lost in the last 12 months, and about 60% of project facilities could be operational for the 1983 harvest. Training programs and research activities are now well behind schedule. Cr. No. 925 Uttar Pradesh Social Forestry Project; US$23 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 Cr. No. 1178 West Bengal Social Forestry Project; US$29 million credit of February 24, 1982; Effective Date: April 9, 1982; Closing Date: December 31, 1987 ANNEX II Page 24 of 26 Cr. No. 1286 Jammu-Kashmir and Haryana Social Forestry Project; US$33 million credit of September 7, 1982; Effective Date: December 7, 1982; Closing Date: March 31, 1988 Physical progress under Credit 925 is satisfactory, except in the Eastern Region of the State, where greater population density, lower per capita income and fragmented farm size have been disincentives to the plant- ing programs. Remedial measures designed to address these problems, includ- ing free distribution of seedlings and a planned land consolidation program, are under consideration by the project authorities. Credit 961 is proceeding well. In response to rising prices for poles and pulpwood, the project has been adopted enthusiastically by the local residents. The current rate of planting is more than five times that which existed before the project. Project management is good, with cost control, audit, disbursement and procurement activities in line with appraisal report schedules. If the present momentum is maintained, it may be possible to resolve the rural fuelwood crisis in Gujarat within a decade. Implementation of the West Bengal Project is satisfactory. The overall physical targets of the project have been exceeded. The building program is progressing well and ahead of schedule. Attention now needs to focus on the recruitment and training of forestry extension workers, who are becoming urgently needed as tree plantings increase and project activities accelerate. Credit 1286, which became effective in December 1982, is designed to increase suppies of fuelwood and secondary products through the establishment of 94,000 ha of a new tree plantations, the rehabilitation of 17,000 ha of degraded forests, and the strengthening of research, training and forestry extension services in Haryana and Jammu and Kashmir. Both States have made a good start in implementing the first season s plantation program, and procurement of vehicles and equipment is underway. Ln. No. 1897 Kandi Watershed and Area Development Project; US$30 million loan of September 12, 1980; Effective Date: November 18, 1980; Closing Date: March 31, 1986 The recent improvement in project execution continues, and project activities are well coordinated. Progress on the main Dholbaha Dam is satis- factory, and the afforestation and soil conservation components are on schedule. Feasibility reports for ten watersheds have been competed, five of which have been reviewed and approved by the Bank. There are expected to be cost savings from the irrigation and flood control components of the project, as a result of which the Bank is now reviewing the overall project design and concept and the possibility of expanding the project scope. Ln. No. 1394 Gujarat Fisheries Project; US$14 million loan and US$4 (TW) million credit of April 22, 1977; Effective date: July 19, 1977; Cr. No. 695 Closing Date: June 30, 1984 ANNEX II Page 25 of 26 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 In Gujarat, the harbor works are now proceeding well following the finalization of a contractual dispute in September 1982. These harbor works and shore facilities are expected to be completed within the next year. The village roads and water supply components have been largely completed. However, the credit component is considerably behind schedule as a result of the weak financial position of the Gujarat Fisheries Central Cooperative Association (GFCCA) and loan recovery problems of the participating banks. Recommendations for improvement of GFCCA are currently under review by the Government of Gujarat. In Andhra Pradesh, one of three fishing harbors being constructed under the project has been operation for nearly one year, and the remaining two are scheduled to be completed by mid-1983 and early 1984. The financing of mechanized fishing vessels remains at a standstill due to loan recovery problems of the participating banks. NABARD is in the process of discussing with the banks ways to rectify this situation. Due to an expansion of private sector investment in seafood processing plants, the Government has decided to delete one of the two processing plants from the project and reduce the scope of the second one. Cr. No. 963 Inland Fisheries Project; US$20 million credit of January 18, 1980; Effective Date: May 5, 1980; Closing Date: September 30, 1985 Project implementation is generally satisfactory. Construction of the fish hatcheries in all five project States has commenced, and the first hatcheries are expected to begin limited operations by June 1983. All 58 Fish Farmer Development Agencies are fully functional and, as project activities accelerate, are placing necessary extension agents in the field. Progress of the pond improvement schemes has slowed considerably due to difficulties with loan sanctioning by the participating banks. Through a more active involvement in the loan approval process, NABARD is taking steps to correct this situation. Cr. No. 981 Second Population Project; US$46 million credit of April 14, 1980; Effective Date: June 26, 1980; Closing Date: December 31, 1985 Implementation of the project is proceeding well. Marked improvement has occurred in several components especially construction, now that cement is being allocated to the project on a priority basis. As a consequence, disbursements are accelerating. The Director of the Population Centre in Uttar Pradesh has been appointed and the training program is well underway. ANNEX II Page 26 of 26 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 The project is fully operational in Madural District, with all nutri- tion and health workers in place. Evaluation data show a significant decline in malnourishment in the project area and the participation rate for those people eligible for project benefits is over 90%. Civil works are a few months behind schedule, but the Government of Tamil Nadu has intensified its supervision work which is expected to speed up completion of the health subcenters and training facilities. Preparations are well advanced for the planned expansion of the project into two more Districts in the State in 1983. ANNEX III Page 1 of 2 INDIA THIRD CALCUTTA URBAN DEVELOPMENT PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken by the country to prepare the project One year and 8 months. (b) The agency which has prepared the project Calcutta Metropolitan Development Authority (CMDA) assisted by State and local government agencies. (c) Date of first presentation to the Bank and date of first mission to consider the project May 1979, February 1981. (d) Date of departure of appraisal mission October 1982. (e) Date of completion of negotiations April 13, 1983. (f) Planned date of effectiveness July 1983. Section II: Special IDA Implementation Actions None. Section III: Special Conditions (a) GOWB to complete its review of the adequacy of the property tax assessment base of all local bodies by December 31, 1983 and cause CVB to undertake a ANNEX III Page 2 of 2 general revaluation wherever inadequacies are found (para 50(a)). (b) CMDA to review annually the interest rebate provided to small-scale entrepreneurs (para 56(c)); (c) CMDA to on-lend for urban renewal schemes at prevail- ing commercial bank rate and for other investments at not less than 8.25% per annum (para 62); (d) CMC to (1) reduce its reliance on GOWB revenue sub- ventions; (il) achieve collection of current demand of 85% by 1987/88; and (iii) collect at least 50% of arrears of property tax demand each year (para 68); (e) CMC to revise the water rates as a condition of Credit effectiveness (para 69); (f) CMWSA to introduce agreed water supply rates as a condition of Credit effectiveness (para 70); (g) CMDA to submit for IDA's review and approval a pric- ing and cost recovery analysis for each area develop- ment project site (para 71). 馮 j N D I A THIRD CALCUTTA URB AN DEVELOPMENT PROJECT MAJOR WATER SUPPLY, DRAINAGE, AND SANITATION INVESTMENTS Prolecf Boundary SIEWERAGE WORKS Drainage PU.Ping stati.ns WATER SUPPLY Waler Treatment Plant Existing Water Treatment Plants LXWING Built-up Areas I Open Sp=s National ffighways Major Roads M,n.,,Rood, Rod,. ds -zý Bridges .......... Ferry Services Conals Lokes Marshes Corporation and Municipals1jy J 8.n., ies Kalycini - Bonsberia Boundary L i Calcutta Metropolitan Boundary Intefnotýonal Boundories '0ý 35 is KLOMIETýRS 2 4 6 1 MILES V7 N ýj C H l N A D l Ih,,ý, 1ý .&，伟 I N D I A THIRD CALCUTTA URBAN DEVELOPMENT PROJECT MAJOR TRANSPORTATION, SHELTER, AND URBAN RENEWAL INVESTMENTS PROJECT COMPONENTS Proposed Major Roads Proposed Connector Roads Proposed Bridges Kona Truck Terminal Shelter and Area Development Urban Renewal Project Boundary UNDER CONSTRUCTION (non-prolecA- Roads Bridges Subway and Stations J Cocii / Gas Plant EXISTING Built-up Areas Open Spaces National Highways Major Roads Minor Roads Railroads Bridges Ferry Services Canals .:t Lakes MaI Corporation and Municipality Boundaries Kolyani-Bonsberia Boundary Calcutta Metropolitan Boundary International Boundaries 0 5 0 KILCMET cRS 2 4 6 8 AFILES r N 1A C -4 f N A /N- CHI C? > a