India - Social Safety Net Sector Adjustment Program Project

 Social safety net sector adjustment program Report No: ; Type: Report/Evaluation Memorandum ; Country: India; Region: South Asia; Sector: Social Protection Adjustment; Major Sector: Social Protection; ProjectID: P009987 India: Social Safety Net Sector Adjustment Program (Cr. 2448- IN) The India Social Safety Net Sector Adjustment program (SSN), supported by Credit 2448-IN for US$500 million equivalent, was approved in FY92. The original closing date, December 1993, was extended twice, first to June 1994 and then to August 1994. The credit was fully disbursed on October 20, 1994. Additional financial and technical assistance was provided by the Governments of Japan, the Netherlands, Switzerland, the European Community and USAID. The Implementation Completion Report (ICR) was prepared by South Asia Regional Office. The ICR incorporates comments written informally by the Borrower and the Dutch co-financier, but these are not presented separately in the final document. The central objective of the SSN program was to facilitate the process of structural adjustment in India, by helping to mitigate the potentially negative transitional consequences of adjustment and promote the development of key social programs in primary education, primary health care, disease control and nutrition. The operation complemented the Bank's first Structural Adjustment Loan/Credit to India (Ln. 3421-IN and Cr. 2316-IN), approved in December 1991. The main components of the program were (a) the restoration and increase of central government funding for key social programs and a delineation of medium-term financing needs for the social sectors; (b) the expansion of key social and safety net programs into administrative districts that were poorer than the average or especially vulnerable to the changes induced by stabilization and adjustment; (c) improvements to the quality, effectiveness and efficiency of selected social and safety net programs; and (d) funding of the National Renewal Fund (NRF) to cover the costs of compensation and retraining of workers laid off as a result of industrial restructuring. The SSN program was implemented satisfactorily, based on Government of India's (GOI) progress towards meeting agreed benchmarks for improving the quality and effectiveness of several key centrally funded social programs. The operation also provided the basis for the restoration and future increases in the central budget for key social programs. The NRF was established and initiated its work in providing compensation to displaced workers. However, the program did have an ambitious time frame, and implementation was slower than planned. Delays occurred in carrying out activities related to the NRF. This was due in part to administrative delays, but also to a much slower pace of industrial restructuring than originally anticipated. Progress in reviewing and adjusting the financing of social sector programs was also uneven. In education, there was some improvement in financing and a shift in focus towards basic education, but, in health and nutrition, progress was disappointing. Not much progress was made in developing a coherent approach to the medium-term financing of the social sectors. The ICR and the Operations Evaluation Department (OED) rate the SSN program's outcome as satisfactory, sustainability as likely, institutional development as modest and Bank performance as satisfactory. An important lesson of the program, which is identified in the ICR, is that the impact of cross-sectoral adjustment operations is likely to be greatly enhanced if components are embedded in the ongoing sectoral dialogue of the Bank and the client. The ICR is satisfactory, but gives only an adequate description of the project's objectives and outcomes. The ICR does not, however, address in sufficient detail reasons for GOI's limited progress in developing a coherent medium- term financing strategy in the social sectors, nor the fiscal impact and sustainability of the SSN in the context of the overall stabilization and adjustment effort. An audit is planned which will pay particular attention to these matters.