Document of The World Bank F|LUE Copy FOR OFFIMIAL USE ONLY Reprt No. P-2407-IN REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT AND LOAN TO INDIA FOR THE REGUNDAM THERMAL POWER PROJECT December 11, 1978 I This dwmsat hm a ra&kt" dtubboimd my be mnd by rhelest may in te pwoma.ce of ther OUcid duti. lb cmsiI ama guewie be dsclsd wihu Wod Rik _wboht.I CURRENCY EQUIVALENTS Currency Unit = Rupee (Rs) Rs 1 Paise 100 US$1 = Rs 8.6 Rs 1 = US$0.1163 Rs 1 million = US$116,279.07 (Since September 25, 1975, the Rupee has been officially valued relative to a "basket" of currencies. As these currencies are floating, the US Dollar/Rupee exchange rate is subject to change. As of December 8, 1978, the exchange rate was Rs 8.32 to US$1.0.) FISCAL YEAR April 1 - March 31 ABBREVIATIONS AND ACRONYMS USED IN THIS REPORT G01 - Government of India NTPC - National Thermal Power Corporation, Ltd. CEA - Central Electricity Authority SEB - State Electricity Board kV - kilovolt = 1,000 volts kWh - kilowatt-hour = 1,000 watt-hours MW - megawatt = 1,000 kilowatts km - kilometer FOR OFFICIAL USE ONLY INDIA RAMAGUNDAM THERMAL POWER PROJECT CREDIT, LOAN AND PROJECT SUMMARY Borrower: India, acting by its President. Beneficiary: National Thermal Power Corporation, Ltd. Amount: US$250 million (US$200 million IDA, US$50 million IBRD). Interest Rate (IBRD portion): 7.35 percent. Commitment Fee (IBRD portion): Standard. Term (IBRD portion): Payment over 20 years, including five years' grace. Project Description: Construction of the first three 200 MW generating units, together with ancillary equipment and related facilities, at the Ramagundam thermal power station in the State of Andhra Pradesh, and about 1,200 km of associated transmission. The risks involved are no greater than can normally be expected with operations of this type. Estimated Cost: (US$ millions) Item Local Foreign Total Preliminary Works 2.8 - 2.8 Main Civil Works 59.6 1.0 60.6 Electrical and Mechanical Plant 147.8 32.3 180.1 Coal Handling and Transportation 28.5 3.1 31.6 Transmission 100.4 12.4 112.8 Sub-total 339.1 48.8 387.9 Contingency (Physical) 19.8 2.5 22.3 Contingency (Price) 62.5 9.4 71.9 Engineering and Administration 25.2 3.7 28.9 Total Project Cost 446.6 64.4 511.0 This document has a restricted distribution and may be used by recipients only in the performance of their ofRcial duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - Financing Plan: (US$ millions) Local Foreign Total IDA 185.6 64.4 250.0 GOI Loans and Equity 261.0 - 261.0 Total 446.6 64.4 511.0 Estimated (US$ millions) Disbursements: Bank FY FY80 FY81 FY82 FY83 FY84 FY85 Annual 48 67 85 35 7 8 Cumulative 48 115 200 235 242 250 Rate of Return: 10% (using bulk supply tariff as indicator of benefits). Appraisal Report: No. 2175-IN, dated December 11, 1978. INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT AND LOAN TO THE GOVERNMENT OF INDIA FOR THE RAMAGUNDAM THERMAL POWER PROJECT 1. I submit the following report and recommendation on a proposed development credit to India in an amount equivalent to US$200 million on standard IDA terms, and a proposed loan to India in an amount equivalent to US$50 million, to help finance a project for the construction of the first phase of a proposed 2,100 MW thermal power station. Amortization of the loan would be over 20 years, including five years' grace, at the standard Bank interest rate. The proceeds of the credit and loan would be re-lent by the Government to the National Thermal Power Corporation for 20 years, including five years' grace, at an interest rate of 10-1/4% per annum. This is the rate at which the Government normally lends to industrial enter- prises. The exchange risk would be borne by the Government. PART I - THE ECONOMY 1/ 2. An economic report, "Economic Situation and Prospects of India" (2008-IN dated April 17, 1978), was distributed to the Executive Directors on April 18, 1978. Country data sheets are attached as Annex I. Background 3. India is a vast, continental country with over twenty States divided on linguistic and ethnic grounds with a population of over 620 million people, almost as many as live in Africa and Latin America combined. It has a dual economy. While 79% of its population lives in rural areas, their productivity is low. Agriculture's share in value added declined only gradually from about 50% to 43% over the last twenty years. The share of manufacturing has in- creased slowly and, since the late 1960s, has remained approximately constant at about 16%. Industry has a highly diversified structure with import substi- tution and self-sufficiency pushed to the point where India has the capacity to produce virtually every type of consumer and capital good required for a modern economy. As in the case of many other large economies, the foreign sector plays a relatively minor role; both exports and imports represent about 7% of GDP; foreign saving has supplied only about 5% of gross investment in che recent past. 4. Even though growth has been slow in the past, the economy enjoys many of the prerequisites for sustaining faster growth and development. Although literacy is far from universal, India has large resources of well trained administrative, scientific and technical manpower and a dynamic entre- preneurial class. Per capita consumption of commercial energy is low by 1/ Parts I and II of this report are substantially the same as Parts I and II of the President's Report for the Composite Agricultural Extension Project (Report No. P-2381-IN), dated November 30, 1978. international comparison and power shortages are a way of life; but India is relatively well-placed with regard to primary fuel sources. There are very large reserves of coal and nuclear ores, and considerable hydro-electric potential. Recent petroleum and gas discoveries have begun to be exploited and prospects are bright for further discoveries. The basic elements of the infrastructure needed to serve the economy have been established; in absolute terms the irrigation, railway, telecommunication, road and power systems are each among the largest in the developing, and in some cases the developed, world. However, considerable gaps remain as the situation varies greatly from State to State. 5. Given the size of India's population, its annual increase of 13 mil- lion people is such as to absorb a large portion of any provision to increase standards of living. It is not possible to discern any significant increase in the incomes of the vast mass of the rural and urban poor, who number 250 million with a per capita income of US$70 per annum or less. Although food- grain production may be persistently underestimated, there has been no perma- nent increase in per capita foodgrain consumption recorded in aggregate statistics since 1960/61. Many years after the initial target, primary educa- tion is still not universal. The labor force has grown faster than employment and a considerable backlog of unemployed exists. Nevertheless, there has been progress, with per capita income increasing on trend 1%-1.5% per annum; birth rates falling to below 37 per thousand from levels of 45-50 per thousand at the start of the 1950s, life expectancy increasing from about 32 years in the 1940s to 45-50 years in the 1970s, school enrollment rising from 32% to 65% of children of primary school age and from 5% to 29% of children of secondary school age since 1950/51. 6. The rate of growth of GDP has been 3.5% per annum over the period since Independence and 2.8% per annum over the period 1969/70 to 1976/77. These low rates of growth are only partly due to low availability of inves- tible resources, although there have been times that foreign exchange was a severe bottleneck. The net transfer of resources from abroad has never been above 3% of GDP and fell to as little as 0.8% between 1969/70 and 1973/74. India's saving effort has grown steadily since the beginning of planning in 1951, when it was 9% of GDP, to its recent level of 20% of GDP, which compares well with other countries' saving performance at the same level of per capita incomes. Despite a doubling in the rate of investment, from about 10% of GDP in the early 1950s to about 20% at present, the trend rate of GDP growth has not increased. This marks a decline in the efficiency of capital use which transcends fluctuations due to weather, war or international terms of trade shifts. Recent Trends 7. In many respects economic conditions during the last three years have been significantly different from those prevailing in previous years. In the late 1960s and early 1970s, the economy faced several shortages-- foodgrains, agricultural and industrial inputs and foreign exchange--which retarded production and investment and often led to price increases. An ad- verse shift in terms of trade, starting with the oil price hike in 1973 and - 3 - continuing with the foodgrain and fertilizer price rises in the following year, greatly increased the cost of acquiring these essential commodities abroad. These external shocks combined with a spate of bad weather played havoc with the economy through 1974/75, causing slow growth in production and investment and a record level of inflation. 8. Since the excellent monsoon in the summer of 1975, a new situation has arisen. The period 1975 to 1978 has been characterized by much greater price stability, enhanced agricultural and industrial output and comfortable foodgrain and foreign exchange reserves. The new situation was a combined result of domestic policies and fortuitous circumstances. The increase in foodgrain stocks was only in part due to improved policies and programs. The more decisive factor has been the three good-to-excellent monsoons coming on top of substantial foodgrain imports in 1975 and 1976. Industrial output increased on average by 7% a year in 1975-1978 compared to 3% in 1970-75, due to greater power availability, better management in the public sector, improved labor relations, better transport and some increase in demand derived from increased incomes due to improved harvests, greater exports and h.gher levels of public investment. The most dramatic turnaround occurred in the balance of payments, with a sharp real reduction of the import bill helped by good harvests and increased domestic production of iron and steel, fertilizer and oil, which reduced demand for imports. The supply of foreign exchange was also greatly increased by a significant step-up in the volume of exports, an increase in foreign aid and a substantial juLmp in remittances from Indians working in the Middle East, Europe and America. 9. In 1977/78, the growth of GDP was about 5%, a recovery over the rate of 1.6% in 1976/77 but less than the 8.5% reached two years earlier. Prices, which had been rising during 1976/7,7 after a decline in 1975/76, were stabilized; wholesale prices at the endl of March 1978 stood at about the same level as in March 1977, and the yearly average was only 5.4% above that of the previous year. Exports in 1977/78 are estimated at US$6.4 billion and imports at US$6.6 billion. The inflow of invisibles from abroad at US$1.4 billion and net aid disbursements of US$1.2 billion more than offset the small trade deficit of US$200 million and IMF repurchases of US$330 million to in- crease reserves by US$2.1 billion to US$5.8 billion by end of March 1978. 10. The 1977/78 foodgrain crop may exceed the 1975/76 record level of 121 million tons due to very good weather and increased input use. Support purchases could result in peak foodgrain stocks as high or even higher than in 1977, when they were 21 million tons. In addition to ample and evenly distributed rainfall, more intensive and widespread use of three crucial inputs--irrigation water, fertilizer and extension advice--contributed to the bumper harvest. Fertilizer consumption surged 30% in 1977/78, continuing its recovery from the depressed level of 1974/75. Annual additions to irri- gated area have averaged 2 million hectares since 1975/76 compared with 1.3 million hectares per annum achieved from 1969 to 1975. An improved extension system, which has been getting heartening results, has been introduced in several States and is slated for further coverage. -4- Development Prospects 11. India faces the future with large stocks of foodgrains, high and rising external reserves, excellent crop expectations, price stability and good prospects for sustaining the improved supply of foreign exchange. The circumstances present a great opportunity for further promoting the develop- ment of the Indian economy. The Draft Five Year Plan for 1978-83, discussed though not yet approved by the National Development Council, responds to this challenge by projecting a rapid growth in real terms of both overall invest- ment and public Plan expenditures. Investment is to rise on average by 10.7% per annum and the economy is expected to grow on average by 4.7% per annum during the years 1978-83. 12. The new Draft Plan reveals an intention to reorient the country's development toward improving the living conditions of the poor. This is reflected in its principal objectives: (i) the removal of unemployment and significant underemployment; (ii) an appreciable rise in the standard of living of the poorest sections; and (iii) the provision of basic needs to low-income groups. To achieve these objectives, the Government proposes to emphasize agricultural development, cottage and small-scale industries, area planning for integrated rural development and the provision of minimum needs. As a first step toward complete removal of unemployment, the Plan envisages the creation of a large number of new jobs through a considerable expansion of construction activity as well as a boost in the consumption levels of the poor--which in turn would require the production of the necessary wage goods, largely in small-scale, labor-intensive units. Specific programs to achieve these objectives are still in the making. 13. In order to achieve a sizable rise in the income of the poorest classes of society, the Draft Plan--in conformity with the Janata Party policy-- places prime emphasis on the development of rural areas. A major impulse for agricultural development will be provided by the expansion of irrigation and related agricultural inputs, such as fertilizers and better farming techniques. The Draft Plan argues that efforts to increase productivity should be sup- plemented by measures with a redistributive impact such as supporting small farmers and small industry with institutional credit and material supplies and assistance for marketing. The Draft Plan also intends to complement the creation of employment and the increase in rural productivity by providing basic services to those groups which have so far been unaffected. For this purpose, the minimum needs program launched at the onset of the Fifth Plan is being revitalized and accelerated. 14. The allocation of the Draft Plan outlay for the next five years reflects these priorities. Out of a total expected spending of US$81 billion, US$35 billion--43%--has been earmarked for rural development programs includ- ing agriculture, irrigation, fertilizer and social infrastructure expenditures directly benefitting the rural areas. The share of these sectors amounted to 37% during the Fifth Plan period and to 40% in the Annual Plan for 1978/79. It can thus be expected to rise further during the next four years. Si4i1a_1y- spending on the minimum needs program in 1978-83 will absorb 6% of the Plan resources, as compared to less than 3% in the Fifth Plan. On the other hand, the shares of industry and of transport and communication have been reduced. 15. There is considerable scope for stepping up growth in agriculture. The most promising development is the sharp increase in government outlays and improved project implementation for irrigation. There are also indica- tions that private investment in tubewells is picking up again after a slump in the early 1970s. Other favorable indicators include the spread of an improved system of extension to more States and the recovery of fertilizer demand. With regard to more productive use of existing capacity, there is an increased awareness in the Government that the benefits of irrigation projects can be much increased, not only through command area development, but also through improved design standards in major surface irrigation infrastructure. Nevertheless, comprehensive improvement in water management remains a distant goal, particularly in existing systems and where farms are small and frag- mented. The bulk of the increase in private tubewell development in the last few years has come from the Eastern Region, where more and more farmers are sinking wells to enable them to grow a winter crop of wheat in addition to providing better water control for the summer rice crop. Improved water man- agement would make such investments even more productive. Increased farmer incomes from the recent good harvests, somewhat lower fertilizer prices, and grain prices supported at incentive levels have encouraged farmers to apply considerably more fertilizer. Finally, the reorganized and improved extension and research system which has been introduced recently in several States in northern and eastern India holds out the hope that sound advice will reach many more farmers in both irrigated and rainfed areas and will raise their productivity significantly. The improved extension system is an excellent example of how the growth effort can and must be structured so as to increase the incomes of small and marginal farmers, who work 25% of the cultivated land and account for somewhat more than 25%; of production; more importantly, these farmers make up about 70% of the rural population and constitute the majority of those living below the poverty level in India. 16. Industrial prospects are somewhat: more difficult to discern. Moderate growth in 1977/78 after an excellent year in 1976/77 suggests the persistence of problems plaguing the sector since the mid-1960s--large un- utilized capacity, stagnant capital formation in the private sector and low productivity growth. Lower investment than expected, of course, is one of the reasons for low capacity utilization in capital goods industries, which make up a significant portion of the sector. Sluggish demand for industrial products from all sources--not only from investments but also from agricul- ture, exports and import substitution--has been a basic constraint. Further import substitution cannot be a major source of growth for manufactured goods in the future because most opportunities for efficient import substitution have been exploited. Increased growth of real incomes from greater produc- tivity in both agriculture and manufacturing, sustained increases in exports and increased investment, particularly by the public sector, all can raise demand for industrial production. 17. The new industrial policy of the Janata government and the orienta- tion Of Lile DLaft Five YEar Plar. cmphasize small-scale industry over heavy industry and have accordingly promoted suclh measures as product reservation, credit rationing and, within the small-scaLe sector, plans to initiate special efforts for the growth of the "tiny" sector. While the priority accorded to the small-scale sector is laudable, there are doubts about the efficacy of the policy measures chosen. Past experience indicates that other factors are also crucial to its development, particularly effective demand, quality control, prices and marketing techniques. Some small-scale industry is cap- ital intensive and not well suited to as rapid employment generation as is hoped; nor can all goods be efficiently produced using small-scale technology. 18. India's population growth rate of about 2% is not high in comparison with that of most developing countries. Moreover, the rate is on the decline, after growing steadily census to census from 1920 through 1970, both because the birth rate continues to fall and because mortality is not falling as steeply as in the past. Family planning acceptor rates slowed down in the wake of the abandonment of the 1976 population policy after the 1977 general elections and the momentum of the program has yet to be recaptured, particu- larly in Northern India. However, the new Government has reaffirmed its com- mitment to a voluntary family planning program and has budgeted the resources to carry it out. Over the longer term, with a sustained family planning effort, it should be possible to bring the birth rate down from its 1970-75 level of about 37 per thousand to about 23 per thousand by the end of the century, implying a population growth rate somewhat under 1.1%. Our "best guess" projection of India's population in the year 2000 is 885 million. Many of the benefits of family planning policy will only be felt beyond the turn of the century; the decline in fertility will, however, bring about an earlier change in the age structure of the population. The school age group will grow more slowly or not at all after 1981, thereby reducing the pressures on the primary and secondary education systems. However, the labor force will con- tinue to grow at a faster rate -- 2.5% per annum -- until well into the 1990s, resulting in an increasing proportion of the population in the labor force from 40.8% to 45% in 1991. 19. The Government's goal of eliminating unemployment in 10 years implies an expansion of the number of jobs at the rate of 9 million per annum -- 7 million new entrants to the labor force and the absorption of 2 million or so formerly unemployed. The majority of these will have to continue to be absorbed -- judging from the prevailing composition of the labor force -- in agriculture and the unorganized small-scale sector. The absorptive capacity of the modern organized sector is unfortunately low; its employment elasticity is expected to be no more than 0.5. Given its low current share of output, even rapid growth of this sector would not make much of a dent in the backlog of the unemployed. Employment in the organized sector has been growing at about 2.2% per annum in the past ten years, less than the labor force growth rate, and all of this in the public sector. Private sector employment has not grown at all since 1966. While the labor absorption elasticities of the small- scale sector may be higher in some cases than that of the large-scale sector, a major effort to expand production must succeed before an appreciable employ- ment impact will materialize. 20. In the short run India's balance of payments should not be a con straint on growth and development. With good medium-term prospects for India's exports, the expected continuation of growth in invisible receipts and the potential for an increase in net aid disbursments, the net availability - 7 - of foreign exchange to finance merchandise imports is projected to rise over the next five years, in current prices, from US$8.7 billion in 1977/78 to US$16.7 billion in 1982/83, an average of 14% per annum. Given the unlikely need to increase rapidly imports of some traditionally important items -- e.g., petroleum, fertilizer, foodgrains, edible oil and cotton -- other imports can increase at the rate of 20% a year over the next five years. 21. Altogether, these currently favorable circumstances present the * opportunity to double India's trend rate of growth of per capita income from the average annual rate of 1.5% that prevailed for the last thirty years to 3% over the next five, and thereafter. This requires a continued fall in the rate of population growth to below 2% per annum and a rise in the growth of GDP from the historical rate of 3.5% to 5.0% per annum. Both of these targets are within reach. The first should be achieved barring a total abandonment of the family planning program. The second requires improved efficiency and increased investment by both the public and private sectors; it also means more fully harnessing the gains from trade through international specializa- tion, implying a strong export effort and continued easier access to imports. In addition to enabling a faster rate of per capita income growth, the pre- sent situation allows for increasing the coverage of the population's minimum needs. This requires formulating and administering effective, efficient programs of public investment and, of course, requires larger public outlays. 22. With the enhanced resources at India's disposal, the economy is poised for a higher rate of economic growth. The Government is moving to take advantage of this opportunity with increased public expenditure envi- sioned over the next five years, and the liberalized trade policies recently announced. It is yet too early to know whether the moves made so far will be sufficient to achieve the desired targets or whether additional steps will be necessary. Assured international support for India's development effort will be an important factor in moving the Government to take greater risks in pursuing a dynamic development program directed at meeting the huge needs of its large and impoverished population. PART II - BANK GROUP OPERATIONS IN INDIA 23. Since 1949, the Bank Group has made 55 loans and 108 development credits to India totalling US$2,236 million and US$6,077 million (both net of cancellation), respectively. Of these amounts, US$934 million had been repaid, and US$1,652 million was still undisbursed as of September 30, 1978. Annex II contains a summary statement of disbursements as of September 30, 1978, and notes on the execution of ongoing projects. 24. Since 1957, IFC has made 15 commitments in India totalling US$63.6 million, of which US$14.7 million has been repaid, US$7.6 million sold and US$6.9 million cancelled. Of the balance of US$34.4 million, US$26.7 mil- lion represents loans and US$7.7 million equity. A summary statement of IFC operations as of September 30, 1978, is also included in Annex II (page 2). -8- 25. In recent years, the emphasis of Bank Group lending has been on agriculture. The Bank Group has been particularly active in supporting minor irrigation and other on-farm investments through agricultural credit opera- tions. Major irrigation, marketing, seed development, and dairying are other agricultural activities supported by the Bank Group. Also, the Bank Group has been active in financing the expansion of output in the fertilizer sector and, through its sizeable assistance to development finance institutions, in a wide range of geographically scattered medium- and small-scale industrial enterprises. IDA financing of industrial raw materials and components for selected priority sectors has been instrumental in facilitating better capac- ity utilization in industry. The Bank Group has also been active in support- ing infrastructure development for power, telecommunications, and railways. Family planning, education, water supply development, and urban investments have also received Bank Group support in recent years. 26. The direction of assistance under the Bank/IDA program has been consistent with India's needs and the Government's priorities. The emphasis of the program on agriculture, industry, power, urban development and water supply remains highly relevant. Projects designed to foster agricultural production through the provision of essential inputs such as credit for on-farm investments, command area development of existing irrigation schemes, intensification and streamlining of extension systems, and seed production form an important aspect of the Bank Group's program for the next several years. Special emphasis will be given to projects benefitting small farmers. Projects supporting water supply, sewerage, and urban development also form an integral part of the Bank's lending strategy to India for the next several years. Lending in support of infrastructure and industrial investments will focus on agriculture-, export- and energy-related projects. 27. 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 large part to the response of the aid community, India has success- fully adjusted to the changed world price situation. However, the basic need for foreign assistance, to augment domestic resources, stimulate investment and accelerate economic growth, remains. As in the past, Bank Group assist- ance for projects in India should include, as appropriate, the financing of local expenditures. India imports relatively few capital goods because of the capacity and competitiveness of the domestic capital goods industry. Con- sequently, the foreign exchange component tends to be small in most projects. This is particularly the case in such high-priority sectors as agriculture, irrigation, rural water supply and medium- and small-scale industry. 28. Although the growth prospects of the economy have improved, India's poverty and needs are such that as much as possible of India's external capi- tal requirements should be provided on concessionary terms. Accordingly, the bulk of the Bank Group assistance to India has been, and should continue to be, provided from IDA. However, the amount of IDA funds that can reasonably be allocated to India remains small in relation to India's needs for external support, and India may be regarded as creditworthy for some supplemental Bank - 9 - lending. As of September 30, 1978, outstanding loans to India totaled US$1,343 million, of which US$539 million remained to be disbursed, leaving a net amount outstanding of US$804 million. 29. Of the external assistance received by India, the proportion con- tributed by the Bank Group has grown significantly. In 1969/70, the Bank Group accounted for 34% of total commitments, 13% of gross disbursements, and 12% of net disbursements as compared with an estimated 62%, 27% and 38%, respectively, in 1977/78. On March 31, 1977, India's outstanding and dis- bursed external public debt was US$13.3 billion, of which the Bank Group's share was 28%. Because Bank Group assistance to India is predominantly in the form of IDA credits, debt service to the Bank Group will rise slowly. In 1977/78, about 16% of India's total debt service payments were to the Bank Group. PART III - THE POWER SECTOR 30. The Indian power sector is within the concurrent jurisdiction of the Central Government and the State Governments. The Electricity (Supply) Act, 1948, assigns extensive responsibilities to the State authorities, but it also provides for broad guidance and coordination by the Central Government. The principal agencies in the industry are the State Electricity Boards (SEBs), which are responsible for the generation, transmission and distribution of electricity within each State; the Central Electricity Authority (CEA); and the two Central Power Corporations, the National Thermal Power Corporation (NTPC) and the National Hydro Power Corporation. 31. In the 1950s and 1960s, power generation and the expansion of in- stalled capacity kept pace with consumption, growing on average by about 12% annually. Since 1970, the situation has deteriorated and power shortages have grown in frequency and duration as demand for power has outstripped supply. Between 1970/71 and 1974/75 growth in power generation averaged only 6% annually. The main reason for this poor performance was delays in complet- ing new power projects, which led to shortfalls in capacity below planned levels. Moreover, poor monsoons and an unreliable coal supply meant that even available hydro and thermal capacity was not fully utilized. Weakness in the management of thermal power stations also contributed to the problem. In the following years the situation improved, the result of two good mon- soons, of much improved coal supply, and also of a concerted effort in the power sector to improve project implementation, thermal capacity utilization and overall system management. Capacity grew by 10% in 1975/76 and 7% in 1976/77, while generation grew by 13% and 11.5%, respectively. In 1977/78 generation increased by less than 4% in spite of an 11% increase in capacity. This was due to a number of factors, including damaged turbine blades in one of the nuclear generating units, long outage periods in some other major units, and longer-than-anticipated periods of stabilization in new units, most of which did not come into service until late in the year. As a result, shortages of power persist in many parts of India. Generating capacity throughout India, excluding 2,200 MW of non-utility capacity, stood at about 24,000 MW as of March 31, 1978. - 10 - 32. While per capita demand for electricity has been rising in India, it remains among the lowest in the world at about 140 kWh per annum. Overall, demand is dominated by industry, which accounts for about 62% of all electri- city sold. Agriculture and irrigation account for another 14-15% of demand. Growth of consumption has been particularly rapid in the rural areas, where more than 80% of the total population live. The number of electrified vil- lages grew from just over 3,000 in 1950/51 to some 211,000, or over one-third of all villages in India, by 1976/77. During the next five years, the Govern- ment plans to electrify a further 110,000 villages and to increase the number of connections in villages already electrified. The number of irrigation pumpsets and tubewells which have been energized increased from 21,000 in 1950/51 to 3.3 million by the end of 1977/78. An additional 3 million are expected to be energized by the end of 1982/83. 33. To help cope with the power scarcity and to strengthen Central planning and coordination of the power system, the Government of India has undertaken to construct and operate large Centrally owned generating stations. For this purpose, the National Thermal Power Corporation and the National Hydro Power Corporation were established in November 1975, with authority to design, construct, own and operate generating and transmission facilities and supply power in bulk directly to State Electricity Boards. 34. The Centrally owned generating stations will ultimately form part of the national power system, but in the medium term they are intended to supply power to the SEBs in the Region in which they are located. The Ramagundam thermal power station is to be installed in the Southern Region, and its power will be available to the SEBs in that region -- Andhra Pradesh, Kerala, Karnataka and Tamil Nadu. These SEB systems are interconnected at 220 kV and the Southern Region already operates on an integrated basis. In 1983/84, the year during which the first two units under the project are expected to be commissioned, Andhra Pradesh and, to a lesser degree, Kerala are forecast to have surplus capacity and energy, while Karnataka and Tamil Nadu are forecast to have capacity and energy shortages. The transmission system included in the project provides for power to be "wheeled" through Andhra Pradesh to Karnataka and Tamil Nadu, and through Karnataka to Kerala. Planning and Coordination in the Power Sector 35. State Electricity Boards. Planning of power in India has, in the past, been on a State basis. Given the organization of the sector, SEBs have been concerned only with developments within their own State boundaries, and, until recently, little attempt has been made to evaluate the least-cost method of meeting demand on a broader regional or national basis. Histori- cally, the financial situation of the SEBs has been weak; in particular, financial returns have been adversely affected by inadequate tariff policies. However, there has been some progress in recent years. Under the power trans- mission credits, SEBs were expected to work toward a rate of return target of 9-1/2% on the capital base. By 1977/78 ten SEBs, out of a total of 18, had achieved this target, and a further five SEBs should do so in 1978/79. - 11 - As a first step toward more comprehensive tariff reforms, an analysis of the tariff structure of Andhra Pradesh State was carried out in 1975. Since then, tariffs in the State have been increased and their structure has been brought more closely in line with the study's recommendations. Nine other SEBs have recently completed pricing studies based on marginal cost pricing principles and one is on the process of carrying out such a study, as a result of under- takings given under previous Credits. 1/ The Karnataka, Kerala and Tamil Nadu SEBs will carry out similar studies in connection with the proposed Ramagundam project. Thus, most of the States of India will have at their disposal basic data and analyses needed for establishing improved tariffs. Furthermore, amendments to the financial provisions of the Electricity (Supply) Act, 1948, have recently been enacted. The Act, as amended, requires among other things, that tariffs be set to ensure that revenues will at least meet operating expenses, depreciation and interest, and provide from internal resources a reasonable contribution to capital investment. 36. Central Electricity Authority. Power planning nationwide is to be coordinated by the Central Electricity Authority (CEA). The CEA was set up in 1950 to be responsible for developing a national policy for power develop- ment and for coordinating the activities of the various planning agencies in- volved in electricity supply. However, without any staff of its own and with no clear and accepted functions to perform, it could not operate effectively. In October 1974, responsibility for the power sector was placed in a newly constituted Ministry of Energy, which was also placed in charge of the coal mining industry. Following the establishment of the Ministry of Energy, the functions of the former Central Water and Power Commission were divided, with its power functions and staff transferred to the CEA, reporting to the Ministry of Energy. The Electricity (Supply) Act, 1948, was amended, with effect from October 8, 1976, to assign to the CEA new functions, including, in particular, the formulation of short-term and perspective plans for power development, training of personnel, interconnected system operations, and research and development; these are in addition to its general responsibility for develop- ing a sound, adequate and uniform power policy and coordinating the activities of the planning agencies in relation to the control and utilization of national power resources. 37. With the rapid growth of the power sector and with the resultant increasing complexity of operation, the need for coordination at the national level has increased. In recognition of this, the Government has decided to pursue an integrated national approach to sector development. The unified operation of power systems on a regional basis has already commenced; the Southern Regional Grid has been operating on an inter-connected basis at 220 kV since August 1972; inter-connection of power systems in other regions is also progressing and will pave the way for an all-India grid. IDA Credit 604-IN (Fourth Power Transmission Project) includes provision to help finance the cost of consultants to study the technical, economic and financial aspects of the long-term national plan for power development in India. GOI has estab- lished a committee to agree on the standard design parameters to be adopted in L/ Maharashtra, West Bengal, Gujarat, Bihar, Uttar Pradesh, Rajasthan, Punjab, Haryana, Delhi Electricity Supply Undertaking (DESU) and Madhya Pradesh. - 12 - developing the national grid which will comprise initially a 400 kV network. Teshmont Consultants, Inc. of Canada has been engaged by CEA to assist in the detailed studies for developing the system.(This consultancy is being financed by IDA under credit 604-IN.) The work on ttie 400 kV systems studies, which are basic to the ultimate establishment of a national power system, is pro- gressing satisfactorily and the report on Stage I, which provides for inte- grated operation on a regional basis by the mid 1980s, has been published. CEA is also working on the development of a 15-20 year plan which would include, inter alia, detailed demand forecasts, investigations of power gen- eration schemes to meet load growth requirements, determination of resource requirements and definition of responsibilities and operational policies at the State, regional and national levels. 38. Thus, the Government is demonstrating its commitment to improved performance in the sector. As a first priority, the efficiency of operation of existing facilities is being promoted by close monitoring of factors such as capacity utilization, planned and unplanned outages, and fuel consumption. In addition, the implementation of new projects is closely monitored to mini- mize delays in the installation of new capacity. The progressive integration of the existing power systems will also contribute significantly to increased efficiency. The financial performance of the sector is being improved by the implementation of the recent amendments to the Act (para 35). These areas of concern and others -- organizational structure, management practices, planning systems, tariff structures and legislative framework -- are now being reviewed by a high-level committee under the chairmanship of V. G. Rajadhyaskha, Member, Planning Commission, which is examining all aspects of the working of the power supply industry in India under very broad terms of reference and which is expected to report to the Ministry of Energy within a year. Bank Group Operations in the Power Sector 39. The Bank has made eight loans to India for power projects amounting to US$284.5 million and IDA has made ten credits totalling US$796 million. Nine of the twelve loans and credits for generating plant, the Beas project (Credit 89-IN) and the first three transmission projects (Loan 416-IN and Credits No. 242-IN and 377-IN) have been completed. The Korba and Trombay thermal power projects (Credit 793-IN and Loan 1549-IN) are still at an early implementation stage; as of November 1978, commitments in respect of contracts awarded were US$1 million and US$40 million, respectively. In the cases of the Singrauli thermal power project (Credit 685-IN) and the Rural Electrifi- cation project (Credit 572-IN), commitments to November 1978 were US$104 million and US$55 million, respectively. Of the finance made available for the remaining transmission project (Credit 604-IN), approximately US$94 million had been committed by November 1978. The ongoing power transmission project and the rural electrification project are proceeding satisfactorily notwithstanding delays in initial implementation and, in the case of the power transmission project, in preparation of specifications for the more sophisti- cated load dispatch equipment. The three ongoing generation projects are also proceeding satisfactorily. - 13 - PART IV - THE PROJECT 40. The project was appraised by a mission which visited India in April/ May 1978. A report entitled "India - Staff Appraisal Report - Ramagundam Thermal Power Project" (No. 2175-IN, dated December 11, 1978) is being dis- tributed separately to the Executive Directors. Negotiations were held in Washington in November/December 1978. GOI, CEA and NTPC were represented by a delegation headed by Mr. J. K. Sibal of the Department of Economic Affairs, Ministry of Finance. A Supplementary Project Data Sheet is attached as Annex III. Project Description 41. The proposed project consists of construction of the first 600 MW of capacity in the Ramagundam thermal power station, together with ancillary equipment and related works and 400 kV transmission facilities to convey bulk power to recipient SEBs. The power station will be constructed in the vicinity of the South Godavari coal fields in the State of Andhra Pradesh. Its gen- eration capacity is expected to reach 2,100 MW -- comprising three 200 MW and three 500 MW generating units -- by July 1987. The first 200 MW unit is expected to be commissioned by July 1, 1983, and the commissioning of the remaining two 200 MW units will follow at six-month intervals. The principal components of the project include civil works; three 200 MW turbo-generating units and three 680 tonnes-per-hour boilers, complete with all auxiliaries, and ancillary electrical and mechanical equipment; coal transportation and handling equipment; and about 1,200 km of 400 kV transmission line, together with associated equipment. Project Cost and Financing 42. The total Ramagundam 2,100 MW power development, including asso- ciated transmission, is estimated to cost about US$1.3 billion. The project cost, including contingencies, is estimated at US$511 million equivalent, of which about US$64 million represents the estimated foreign exchange costs. Interest during construction adds about US$65 million to the financing required. The proposed Bank Group financing of US$250 million would provide 49% of the project cost, and 43% of the total financing requirement. The balance of the financing would be made available by the Government in the form of loans and equity contribution. Procurement and Disbursement 43. All equipment financed under the proposed credit would be procured through international competitive bidding in accordance with Bank Group guidelines. The proceeds of the credit would be disbursed against the cost of turbo-generators, boilers, electrical equipment and other power station equipment; coal handling and transportation equipment; transmission equipment; and consultants' services. Indian manufacturers competing under international competitive bidding would be granted a preference margin of 15% or the current rate of import duty, whichever is less, and are expected to win most of the contract awards. - 14 - Project Implementation 44. The National Thermal Power Corporation Limited (NTPC), which would own and operate the Ramagundam station, was established in 1975 under the Companies Act, 1956, with an initial authorized share capital of Rs 1,250 million (US$145 million). It is managed by a Board, which presently consists of seven Directors, of whom two are full-time. Steady progress has been made in building up this institution since early 1976, when a competent and ex- perienced Chairman and Managing Director was appointed. The Mechanical, Electrical Design, Civil Design, Systems Engineering and Operation Services Departments have been established and NTPC is making good progress in the appointment of key staff. As a relatively new organization entrusted with an important task, NTPC places special importance on the need for training of engineers and operating staff and plans to establish a training school equipped with a simulator (financed under Credit 793-IN) and other modern training facilities. 45. A detailed master plan for project implementation has been pre- pared by NTPC. Soil conditions at the power plant site have been investiga- ted and the availability of adequate coal reserves has been confirmed. The Covernment has agreed to take all necessary steps to ensure adequate coal supplies for the power station by the time the first generating unit is commissioned (Section 3.04 of Development Credit Agreement). For transpor- tation of coal from the mine to the power station, a "merry-go-round" railway system would be used. Cooling water arrangements are adequate. 46. Designs and specifications for the turbo-generators, boilers and auxiliary plant and for the transmission towers are being prepared. NTPC will carry out basic engineering and preliminary design. As in the case of Korba, consultants would be retained to review designs and specifications; since these would be closely similar to those for the Singrauli and Korba projects, the consultants' services will be required mainly for items involv- ing deviations from earlier designs. Consultants would also be appointed to assist as necessary in the design and supervision of construction of the 400 kV transmission. NTPC has developed a comprehensive integrated project management system. In view of the importance of NTPC's overall program to the development of the power sector in India and the high cost of delay, consultants with experience in major construction programs of this nature would be appointed to review NTPC's project management and information systems and their initial implementation (Section 2.02 of Project Agreement). 47. Adequate measures would be taken to minimize the adverse ecological effects of the project, including stack emissions, heat dissipation and ash disposal. The approval of the National Committee on Environmental Planning and Coordination has been obtained, and appropriate occupational safety stand- ards would be observed (Section 2.10 of Project Agreement). NTPC Finances 48. NTPC is expected to construct and put on stream four large-scale thermal power stations with an aggregate generating capacity of 7,300 MW -- one 2,000 MW station at Singrauli in Uttar Pradesh; two 2,100 MW stations, - 15 - one at Korba in Madhya Pradesh and the other at Ramagundam in Andhra Pradesh; and one 1,100 MW station at Farakka in West Bengal (to be extended to 1,600 MW) -- together with some 6,000 circuit km cf associated 400 kV transmission. 49. NTPC would not begin to earn revenues until the first 200 MW gene- rating unit is commissioned at Singrauli, scheduled for January 1, 1982. As the generating capacity increases, NTPC's arnual revenue is expected to in- crease at a faster rate than its operating expenses and produce a rate of return on the capital base rising gradually from 1.8% in 1982/83 to 9.5% by 1988/89. By the end of 1985/86, NTPC is scheduled to have commissioned four- teen 200 MW generating units, including those of the Ramagundam project, and six 500 MW units, as well as almost 5,000 kli of associated 400 kV transmission. The overall investment cost for the years 1976/77 through 1985/86 is estimated to amount to almost US$5,600 million equivaLent. The Government would provide funds so that NTPC's debt/equity ratio would not exceed a ratio of 1:1, in accordance with the provisions of the Companies Act, and NTPC would inform the Association of any proposal to modify existing limitations on the borrowing powers (Section 3.03 of Project Agreement). Loans would be repayable by NTPC in 20 years, including periods of grace of up to five years, with interest at a rate of 10-1/4% per annum. This compares with about 11% charged by domestic lending institutions for similar types of lending. Inflation over the past three years has averaged about 2% per annum, and the expected rate of infla- tion for the next three years is about 5%. 50. NTPC has agreed to achieve in 1988/89 and maintain thereafter a rate of return of not less than 9-1/2% on the cost of the average net assets in service, and to set tariffs from the time of commissioning of its first 200 MW generating unit at Singrauli at levels not lower than those estimated to be required to meet this target in 1988/89. (Section 4.03 of Project Agreement). In view of the high capital investment in the early stages and the time in- volved in commissioning generating units, this approach to setting the tariff and reaching the target rate of return in 1'388/89 would be appropriate. The forecast average bulk supply price per kWh for the sale of energy is about 26 paise (US$0.030), excluding fuel surcharge. This rate has been adopted for the purposes of forecasting revenues from 1981/82. NTPC's cash generation would not begin to cover annual debt service and working capital increases fully until 1986/87. The shortfalls of funds during the initial five years (1981/82-1985/86) would be financed from capital provided by GOI. 51. NTPC's capitalization as of March 31, 1982 when NTPC begins to earn revenues would be US$2,468 million equivalent, consisting of GOI loans (including the relending of the Association's Credits) and equity in a ratio of 48/52. By March 31, 1985, following completion of the project, NTPC's capitalization would have doubled to about US$5,206 million equivalent, financed by GOI capital in a debt/equity ratio of 49/51. 52. As in the case of the Singrauli and Korba thermal projects, NTPC is required to agree to sell the project's output of power undezL bulk supply contracts satisfactory to the Association (Section 2.09 of Project Agreement). Since determination of the appropriate level of tariffs has to be consistent - 16 - with the financial viability of NTPC, the tariff would be adjusted, as neces- sary, to meet the financial requirements. The States of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu and the Union Territory of Goa have agreed to purchase not less than 85% of the output from the Project. Project Justification and Risks 53. The proposed Ramagundam development offers economies of scale and relatively low fuel costs due to its location at the coal pithead. Of the other alternatives considered, the only practicable one was the development of smaller thermal units at the load centers. Ramagundam was found to be preferable when compared with this alternative, the equalizing discount rate being 27%. Assuming a bulk supply tariff of about 26 paise per kWh, the internal rate of return, which equalizes the present worth of revenues and the economic costs of the project, is satisfactory at about 10%. 54. The principal risk involved in project implementation is the possi- bility of delay, with consequent increased costs and loss of revenues. How- ever, delays will be kept to a minimum through careful coordination and super- vision. Problems at the engineering and design stage will be minimized by the use of experienced consultants, and the fact that a number of 200 MW units will have been in operation in India for some years before the project is commissioned will reduce the possibility of "teething troubles" during the early stages of operation. The prospects for attainment of the project's institutional objectives -- namely, the strengthening of power planning by the Central Government and the development of a national power system -- must be viewed with some caution, because the power sector is a "concurrent subject" under the Indian Constitution and is, therefore, influenced to a significant extent by sensitive Center/State relations. PART V - LEGAL INSTRUMENTS AND AUTHORITY 55. The draft Development Credit and Loan Agreements between India, and the Association and the Bank, respectively, the draft Project Agreement between the Association and NTPC, the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement of the Association and the Report of the Committee provided for in Article III, Section 4(iii) of the Bank Articles of Agreement of the Bank are being distributed to the Executive Directors separately. 56. Special conditions of the project are listed in Section III of Annex III. 57. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and the Bank. - 17 - PART VI - RECOMMENDATION 58. I recommend that the Executive Directors approve the proposed credit and loan. Robert S. McNamara President December 11, 1978 ANNES I Page 1 INDIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES INDIA LAND AREA (THOUSAND SQ. KM.) - HOST RECENT ESTIMATE) TOTAL 3280.5 SAME SAME NEXT HIGHER AGRICULTURAL 1797.5 MOST RECENT GEOGRAPHIC INCOME INCOME 1960 Lb 1970 Lb ESTIMATE Lb REGION L. GROUP /d GROUP /e GNP PER CAPITA (US$) 60.0 90.0 150.0 167.4 182.9 432.3 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 142.0 181.0 221.0 65.7 88.9 251.7 POPULATION AND VITAL STATISTICS TOTAL POPULATION, MID-YEAR (MILLIONS) 434.9 547.6 631.7 /f URBAN POPULATION (PERCENT OF TOTAL) 17.9 19.8 20.6 12.8 15.0 24.2 POPULATION DENSITY PER SQ. KM. 133.0 167.0 193.0 85.2 46.8 42.7 PER SQ. KM. AGRICULTURAL LAND 247.0 308.o 351.0 322.6 254.1 95.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 41.0 41.6 40.1 44.0 43.6 44.9 15-64 YRS. 55.9 55.3 56.7 52.9 53.3 52.8 65 YRS. AND ABOVE 3.1 3.1 3.2 2.9 2.9 3.0 POPULATION GROWTH RATE (PERCENT) TOTAL 2.0 2.3 2.1 2.2 2.4 2.7 URBAN 2.5 L/ 3.2 3.1 4.2 4.0 8.8 CRUDE BIRTH RATE (PER THOUSAND) 43.2 41.0 37.0 45.1 44.3 42.2 CRUDE DEATH RATE (PER THOUSAND) 23.9 19.0 17.0 17.3 19.7 12.4 GROSS REPRODUCTION RATE 3.2 2.9 2.8 3.2 2.9 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. 3782.0 6821.0 USERS (PERCENT OP MARRIED WOMEN) .. 12.0 16.9 13.7 14.6 14.2 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1970-100) 98.1 100.0 96.2 /h 95.6 96.4 104.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 95.0 92.0 89.0 91.1 92.3 99.5 PROTEINS (GRAMS PER DAY) 51.0 53.0 48.0 49.6 50.0 56.8 OF WHICH ANIMAL AND PULSE 19.0 16.o 12.6 12.6 13.9 17.5 CHILD (AGES 1-4) MORTALITY RATE 44.0 .. .. .. .. 7.5 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 41.7 47.z 49.5 43.1 45.8 53.3 INFANT MORTALITY RATE (PER THOUSAND) 139.0 /L 122.0 130.0 99.5 102.7 82.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL ., 17.0 31.0 30.0 26.4 31.1 URBAN .. 60.0 80.0 66.3 63.5 68.5 RURAL .. 6.0 18.0 17.2 14.1 18.2 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 18.0 20.0 15.7 16.1 37.5 URBAN ,, B5.o 87.0 66.9 65.9 69.5 RURAL *- 1.0 2.0 2.5 3.4 25.4 POPULATION PER PHYSICIAN 5840.0 /i 4890.0 4220.0 8830.8 13432.7 9359.2 POPULATION PER NURSING PERSON 5310.0 /i 5220.0 3680.0 8479.3 6983.3 2762.5 POPULATION PER HOSPITAL BED TOTAL 2590.0 /j 2020.0 *- 1624.5 1157.6 786.5 URBAN .. .. .. .. 183.3 278.4 RURAL .. .. .. .. 1348.8 1358.4 ADMISSIONS PER HOSPITAL BED .. .. .. .. 19.5 19.2 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 .. 5.2 URBAN 5.2 .. 4.8 .. 4.8 RURAL 5.2 .. 5.3 .. 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 2.6 2.8 .. URBAN .. .. .. .. 1.8 2.3 RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELL INGS) TOTAL .. .. .. .. 25.9 28.3 URBAN .. .. .. RURAL .. .. .. .. 8.7 10.3 ANNEX I Page 2 INDIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES INDIA /a - MOST RECENT ESTIMATE) SAME SAME NEXT HIGHER MOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 /b ESTIMATE /b REGION /c GROUP Ld GROUP /e EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 41.0 63.0 65.0 59.1 62.9 75.8 FEMALE 27.0 48.0 52.0 38.4 45.9 67.9 SECONDARY: TOTAL 23.0 30.0 29.0 19.9 14.4 17.7 FEHALE 11.0 18.0 18.0 9.9 8.8 12.9 VOCATIONAL (PERCENT OF SECONDARY) 8.0 6.0 /k 1.5 6.6 7.4 PUPIL-TEACHER RATIO PRIMARY 29.0 38.0 40.0 38.2 38.5 34.3 SECONDARY 16.0 17.0 .. 23.5 19.8 23.5 ADULT LITERACY RATE (PERCENT) 28.0 33.0 36.0 35.6 36.7 63.7 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.7 1.0 1.0 2.2 3.1 7.2 RADIO RECEIVERS PER THOUSAND POPULATION 5.0 21L0 25.0 14.9 31.1 71.1 TV RECEIVERS PER THOUSAND POPULATION .. 0.1 0.5 .. 2.8 14.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 16.0 16.0 6.4 6.0 16.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 4.0 6.3 4.1 .. 1.4 1.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 175000.0 218000.0 261000.0 /1 FEMALE (PERCENT) 31.3 32.6 32.2 21.3 24.2 28.0 AI,RICULTURE (PERCENT) 71.0 69.0 69.0 62.8 60.7 54.1 SIDUSTRY (PERCENT) 11.3 13.5 PARTICIPATION RATE (PERCENT) TOTAL 43.0 40.2 39.2 35.8 39.8 37.8 MALE 57.1 52.3 51.3 52.4 53.3 50.3 FEMALE 27.9 27.1 26.2 15.6 19.6 20.9 ECONOMIC DEPENDENCY RATIO 1.1 1.1 1.1 1.3 1.3 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 26.7 25.0 /m .. 18.6 20.3 19.5 HIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 53.1 Im .. 42.8 45.1 48.9 LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 4.7 Ia .. 7.3 5.7 5.9 LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 13.1 I. .. 19.3 16.8 15.7 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. 80.0 80.2 88.5 155.9 RURAL .. .. 65.0 67.2 71.9 97.9 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. .. 100.8 143.7 RURAL .. .. 41.0 39.8 42.0 87.3 ESTIMATED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 53.0 50.3 46.0 22.9 RURAL .. .. 46.0 44.6 48.0 36.7 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-weighted geometric mans, excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1973 and 1977. /c South Asia; /d Low Income ($280 or less per capita 1976); /e Lower Middle Income (S281-550 per capita, 1976); /f 1978 mid-year population is estimated at 640.4 million; /i 1951-60; /h 1977; /i 1962; /I 1958; /k 1967; /1 1978 mid-year labor force is estimated at 261 million; /m 1967-68. September, 1978 ANNEX I Page 3 DEFINITIONS OF SOCIAL INDICATORS loin. I'het u.iostd grouy averages for each indicator are population-seighted geometric means. eoluding the extreme values of the indiator and the meat i,olaced; cl try in each group. Coverage of -ouetrief among the indicators depends oe availability sf data and is not omifsm. Due to lack of data, grco. a overages f- Capital Surplu. Oil Eiporters and indicaorsr of access to water and excrete disposa1, husi.ng, income distribution sad poverty *re lirplic poptilaticv-t_eighted geometric means withoot the exclusion of extreme values. uANh AREA cLhcvs.,-d sq. k) Ppoultisn per hospita1 bed - total. urban. and rcroc - Population (tota1, local - lota1 surface area comprising land area and inland waters. urban, and rcral) divided by their respective number of hospital beds Al,ir-clt-rai -oot recent estimate of agricultura-l rea axed temporarily available In poblic and private generl and speelalined hospital and re- ,'4 yvermaoectif for c-ops, pastures, market and kitchen gardens or to habilitation centers. Hospitals are establishments permanently staffed by I.e (.1 lou. ~~~~~~~~~~~~~at least one physician. Establishments providing principally coxtodia1 care are not included. Rural hospitals, bhever. include health and medi- INP' LER CAPITA (UnS) - GiP per capita estimates at torrent sarket prices, c.l centers not peran ently staffed by a physician (but by a medical as- alculated hy same convernion method as World Bsnk Atlas (1975-77 basis); istant, muase, midwife, etc.) which offer in-patient -ccomn-dation sod 1900, 1970, and 1977 data provide a limited range of medic-1 facilities. Admissions Per hospital bed - Total uober of adnissiena to Pt discharges ECIfSY C'NSUiPION PER CAPITA - Annual consunptios of commercial energy from hospitals divided by the nmmber of beds. (cool end iigsice, petroleu=, matcral gas snd hydro-, nmcleer and geo- thermal eIeCtrioity) in kilograms of coal equivalent per capita. HOUSING Average sine of household (persons opr household) - total, urban, and rural- f:l.oTION AND VITAI SIATISTICS A household consists of a group oP individuals who share living quarters TLnloi popltII, d...-vear (millions) - As of July 1; if nst available,. and their main meals. A boarder or lodger may or may not be included in average of tru sod-year estimates; 1960, 1970, and 1977 data, the hossehold for statistical puoposes. Statistical definitions of house- Urban population (orrcoct of tote1) - Ratio of urban tn tota1 popula- hold vary. tion; different defisitions of orban areas may eff-ct compar-bility Average numbmr of persons pear room - tota1, orban, and rural - Average non- cr data among contrie.s ber of parsons per room is all, urban, and coral occupied conventiomal P pulation density dwellings, respectively. Dwellings esclude nan-penrmnent structures and Per sqg kr. - Mid-yaar populatitn per square kiloeeter (10 hectores) unocurpied parts, of total area Acces t electricity (percent of dwellings) - total., urban, and rural - Per A hs=_agricultare land - Coeputed as above for ogricolcorol land Conventional dwellings with electricity in living quarters as percentage onto. of total. urban, and rural dwellings respectively. Popultaion age structure (pero-nt) - Children (0-14 years), working-age (15-64 years), and retired (65 years and over) as percentages of mid- EDUCATION year population, Adjusted anrollment ratios Population growth rate (percent) - total, and urban - Cnmpound annoal Priry school - total, and female - Total and female enrollment of all ages growth rates of tota1 and urban mid-year pcpulstin.s for 1950-6h, at the primary level as percentages of respectively primary school-sge 1960-I0, and 197i-751 populati.ns; normally includes children aged 6-11 yaeas but adjusted for Crude birth rate (per thosnd) - Annual live births per tbsand of different lengths of primary education; for countries with univermal edo- aid-year pnpulation; ten-year arithxetic averages ending in 1960 and cation enrollmend may exceed 100 percent since some pupils are belpv or 1970 and five-year ovsrsge ending is 1975 for most recent estimate above the official school age. Crude death rate (per thoosand) - Annual deaths per thousand of mid- Sec2ndary school - total, and female - Computed as above; secondary educa- year population; ten-year arithmetic averages ending in 1960 and 1970 tion requires at least fsur years of approved primary instrrctien; pro- and five-year overage ending in 1975 for mast recent estiate. vides general vocational, or teacher training insttrctioss for pupils Iroas r-productian rate - Average number of daughters a nman will bear usually of 12 to 17 years of age; correspondence courses are generally in her -orma1 reproductive period if she experiences present age- excluded. Specific fertility rates; usoally five-year averages ending in 1960, Vocational enr-llment (Percent of secondary) - V.cactioual institotions in- 1970, and 1975 cluds tmchnical, industrial, or other programs which operate independently FamilP planin -acceptors, annual (thousands) - Annual nu bee of or as departments of secondary institutions. acceptors of birth-control devices under auspices of osuiena1 f(oily PuPil-teaxher ratio - primary, and secondary - Total stadents en.olled in cplcning pn ogran primary and secondary levels divided by numbers of teachers in the corre- family lannin - uxers (percent of m-rried wemn) - Percantage of sponding levels. married women of child-bearing age (15-44 years) who use birth-control Adlt literacv rate (percent) - Literate adults (able to read and write) as devices to all married vocex in name age group. a percentage of toatl adult population aged 15 years and over. FOOD A.9D NTRITION CONSUHPETION Index of food production per capita (1970-100) - Index nmuber of per Passenger cars (per thoucead Psoulation) - Passenger cars comprise mator cars capita ennol production of all focd commodities, seating 1ess then eight personsi excludes obolances, hearses and military Por copis supply of calories (paercent of resoireents) - Compoted from vehicles. -emrgy equivalent of net food supplias available in coontry per capita Radio recevers (Per thousand nopulation) - All types sf receIvers for radis Per day Available supplies comprise domestic production, imports less broadcasts to general public per thousand of pepolatien; excludes unlicend exports, and changes in tock. Net supplies exclude animal feed, seeds, receivers in countries and in years when registration of radio sets was in quantitcis used in food processing, and losses in distribution. Ra- effect; data for recent years may net be comperable since most to.ntries qaitomente were estimated by FAO based on physiological needs for nor- abolished licensing. m _l activity and health considering environmentaL temperature, body TV receivers (per thousand opopltion) - TV r.civers for broadcast to gansse ceightp, age snd ss distributions of population, and allowing 10 per- Pabiic per thousand poeplation; exuiodes anlicr ne d TV receivers in coon- cent for waste at house.hold level, tries and in years when registration of TV sets was in effect. Por capita supply of protein (rtoms per day) - Protein cont-et of per Nemepaper circulation (per thousand population) - Shows the average cincull- copice sac supply of food per day. Net supply of food is defined as tion of "daily generel interest neVspaper * defined as a periodical publi- hov.e Requiremento for 11 coun,tries established by CSDA provide for cation devoted primarily to recording general news. It is considered to sinimum allowance of 60 grams of tot-1 protein per day and 20 grams be "daily" if it appears at least four ti.es a wahk. of animal and pulse protein, of which 10 groom should be anisal protein. Cinema annual attendance eer caPita Per year - Based on the number of tickets These otandards are lower than those of 75 grams of total protein and snld daring the year, including adoissione te drive-in cinemas snd mobile 73 grams of animal protein as am average for the sorld, proposed by exits. LAP -c c Third Wernd Fod Survey. er -lt Pprotein supply fIom animal and pulse - Protein supply of food EHPLOYDENT de-iv-d from animals and poles in grama per day. Tecal labor force (thousands) - Eo-noraically active persons, including armed Child (eage 1-4) mortality rote (per theusand) - Annual deaths per thous- (frces and unemployed but excluding houemwives, atudnts, etc. Defnti- and iA age group 1-4 years, to children in this age group. ticne is various co-ntries are not compsrable. Female (percent) - Female labor force as percentage of total labor fact. HEALTH Agriculture (percent) - Labor force in farming, forestry, hunting and fishing Life opectooccat birth (years) - Average somber of years of life as percentage of total labor force. remaining at birth; usually five-year averages ending.in 1960, 1970, Industry (percent) - Labor force in mining, sOnsmtuction. a nufacturing and and 1975. electricity, water and gas as percentage ef total labor force. infant mortality rate (per thousand) - Annual deaths of infants under Particination rate (percent) - total. male, and female - Total, male, and one year of age per thousand live birhts 'ea -e labor force as pereetegex of their respective populations Access to oafs water (Iercent of population) - total. urban, and rural - These are ILO's adjusted participstion rates reflecting ge--55 Nomber of people (total, ecbh, end rural) with reamonabl access to struct-re of the popuiation. end iee time trend. eafe cater supply (inclades treated surface waters or untreated bht Economic dependency ratio - Ratio of population coder i5 end 65 and over to -ncoctaminated water such as that from protected bereholes, springs, the laboo force in age group of 15-64 years and .n.itary wells) as percestages of their respective popolatione. Iman crban area a pblic fountain cc scandpest located not more INCOME DISTRIBUTION then 200 metors from a houee ny be considered as being within rt5 Percentage of private income (both in cash and kind) received by richest 5 consble access of than houe. In rerD1 areas reasonable access would paro..t. richest 20 percent, poorest 20 percent, and ponrest 40 pereent imply that the hoosevife or members of the household do not have to . f hou.shld. spend a disproportiomate part of the day in fetching the family's vatcr needs POVERTY TARGET GROOPS Access to eon.et. disposal (perccnt of poePlation) - toctl. rbhe, and Estimated ebeolute pavertv income level (ISu per capita) - urbha and rural - rural - Nuober of people (total, urban, and rural) served by excrete Absolute poverty income levl is that I.oose level below which a minimal disposal a. percentages of their respective pepulationse Excrete nutritionally adequate diet plus essential non-food requirements is not di'ponal cay include the collection and disposal, with or without affordsble. treatment, of hsn exerets end waste-water by water-borne systems Estimated relative poverty incom level (US pear capita) - urban and rural - cc na., usa of pit privies and similar installations. Rative poverty incone level is that income level less than one-third Poeplat-on Per physician - Papoletios divided by number of practicing per capita personal income of the country. phypiciia- qualified from a madical school at univsrsity level. Estited pnpalsisn hslow poverty inco level (Percent) - urbcn and rcoe - Pot_letion pcr nursing psrssn - Population divided by nuh sr of Percent of population (urban and rsral) who are ither "abshlute poor" or practicing male and female graduate nurses, practical nurses, and "relative poor" whichever is greeter. asoictani nuroes. Econonic and Social Data Division Economic Analysis and Projections Department ANNEX I Page 4 ECONOMIC DEVELOPAENT DATA GNP PER CAPITA IN 1976 isS 1uS GROSS NATIONAL PRODUCT IN 1976/77 b/ NJAL RATE OF GROWTH (%. constant prices) US$ Eln. B 1960/6i-1964/65 1965/66-1969/70 1970/71-1975/76 GNP at Market Prices 86.04 100.0 3-9 3.8 2.9 Cross Domeatic Investment 16.62 19.3 Gross National Saving 18.18 21.1 Current Acoount Balance 1.56 1.8 Resource Gap 0.95 1.1 OUTPRT, LABOR FORCE AND PRODUCTITY IN 1975/76 Val,u, Added (at faotor cost) Labor Force VkA. Per Worker 0St Bin. il.Ave% _ oC Agriculture 30.2 43 179.0 69 169 63 Industry 16.7 24 33.9 13 494 193 Services 23.4 33 48.0 18 488 133 Total/average 70.3 10 21100 277 100 GOVERNMENT FINANCE General Government Central Government (Re. Bin) % of GCP In I of GDP 1976 /77 1976/77 1974/75-1976/77 1976/77 1976 77 1974/75-1976/77 Current Receipts 147.46 19.1 17.9 83.78 10.9 10.4 Current Expenditures 140.18 18.2 16.2 84.25 10.9 9.6 Current Surplus/Deficit 7.28 0.9 1.7 - 0.47 - 0.8 CaPital Expenditures e/ 59.05 7.6 7.1 40.39 5.2 5.0 External Assistance (net) 11.21 1.5 1-7 11.21 1.5 1.7 MONEY. CREDIT AND PRICES 1970/71 1.2L 1973/74 1974/7S 1976/77 _LSetember 1976 September 1977 EBillion Re outotanding at end of perio Money and Quasi Money 105-7 142.2 169.0 186.9 215.0 262.6 258.2 284.8 Bank Credit to Public Seotor(net) 56.9 82.5 92.9 102.6 109.1 117.3 112.7 130.7 Bank Credit to Private Sector 56.7 76.o 90.1 109.5 127.5 161.0 144.0 170.0 (Percentage or Index Numbers) JEana 1977 January 1978 Money and quasi Money as % of GDP 24.3 27.3 26.4 25.5 27.6 31.3 Wholesale Price Index (1970/71 = 100) 100.0 116.2 139.7 174.9 173.0 176.6 178.8 183.3 Annual percentage changes ins Wholesale Price Index 7-7 10.0 20.2 25.2 -1.1 2.1 7.5 2.5 Bank Credit to Public Sector (net) 8.6 19.6 12.6 10.4 6.3 7.5 4 7 Xf 15 8 1 Bank Credit to Private Sector 17.3 18.0 18.5 21.5 16.4 26.3 24.9 Jl 1.9 s/ g/ The per capita GNP estimate is at market prices, calculated by the conversion technique used in the World Atlas. All other conversions to dollars in this table are at the average exchange rate prevailing during the period covered. / Quick Estimates. Sj 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/ Transfers between Center and States have been netted out. e/ All loans and advances to third parties have been netted out. 1/ Net bank credit to Government Sector. / Bank credit to Commercial Sector. ANNEX I Page BALANCE OP PAYIENTS 1974/75 12157 1 1977/7 I MISE E[PORTS (AVERAGE 1974/75 - t96/7) Exporte of Goode 4,174 4,665 5,760 6,400 Engineering Goods 515 1 Imports of Good -5,665 -6,o84 -5,950 -6,600 Sugar 379 8 Trade Banoa -1,491 -1,419 - 190 - 200 Tea 296 6 NFS (net) 215 310 465 500 Jute Kanufaotures 294 6 Leather and Leather Resource GaP -1278 -1,109 215 300 Products 268 5 Clothing 257 5 Interest Payments (net) = - 198 - 216 - 135 - 130 Iron Ore 236 5 Other Faotor Peyments (net) - - - Cotton Textilee 223 5 Net Traunfere i/ 257 470 730 1,000 Other 2396 A2 Total 4866 100 Balance on Current Aoeount -1,217 - 855 610 1,170 Official Aid DDE3EROI , ET. MARCH 31. 97 Disbureents 1,761 2,341 1,953 1,840 vst Bilion Amortization -515 -531 -568 0 630 Outatending and Diebureed 13.6 Traenactions with IIF 522 242 -336 - 330 Undisbursed 3.2 All Other Iteme -589 -403 _292 23 Outetanding,inoluding Undiebursed 16.8 Increase in Reserves (-) 38 -794 -1,575 -2,073 DEBT SERVICE RATIo FOR 1976/77 14.4 peroent Groas Reserves (end year) 1,378 2,172 3.747 5,820 Net Reserves (end year) j&/ 758 1,365 3,276 5,670 IBRB/IDA LENDIIG, Deseaber 1. 1977 (US5 In.) Fuel and Related lateriale IBRD IDA Imports 1,451 1,417 1,550 1,800 Outstanding and Disbureed 469.0 3,560.5 af whih: Petrolem 1,451 1,417 1,560 1,800 VUditbe ed 674i9 1,ic57di Exports 26 43 37 n.a. Undiebursed 1,163.9 4,817.5 of which: Petroleum 17 22 21 n.a. RATE OP EXCRANGE Prior to mid-Deso.ber t97 I US$1.00 = Rs 7.5 After end June 1972 Floating Rate Re 1.00 =1SS8O.133333 Spot Rate January 31, 197S Mid-Deeomber 197t to US$1.00 = Re 7.27927 approx. US$.OO = Re 8.063 end June 1972 Re 1.00 = vs50.137376 epprox. Rs 1.00 = USS0.124 Es/ etimated. j Figures given cover all investment income (net). Major payments are interest on foreign loans and charge. paid to IMF, and major receipt is interest earned on foreign assets. 4/ Figures given inolude workers' remittances but exclude offioial grant assietance, which is ineluded within offioial aid disbursements. / Exoludes net use of IMP oredit. j/ Amortization and intereet paymnts on foreign loans as a peroentage 4f .6rch&andie eirports. ANNEX II Page 1 of 15 THE STATUS OF BANX GROUP OPERATIONS IN INDIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (As of Sept. 30,1978) US$ Million-/ Loan or (Net of Cancellations) Credit No. Year Borrower Purpose Bank IDA Undisbursed 40 Loans/ 1,100.63 53 Credits fully disbursed 2,884.6 267-IN 1971 India Wheat Storage -- 5.0 2.99 294-IN 1972 India Bihar Agricultural Markets -- 14.0 6.02 312-IN 1972 India Population -- 21.2 4.52 342-IN 1972 India Education -- 12.0 8.39 356-IN 1972 India IDBI -- 25.0 9.78 377-IN 1973 India Power Transmission III -- 85.0 0.46 378-IN 1973 India Mysore Agricultural Markets -- 8.0 6.73 902-IN 1973 ICICI Industry DFC X 64.80 -- 2.84 390-IN 1973 India Bombay Water Supply -- 55.0 18.09 427-IN 1973 India Calcutta Urban Development -- 35.0 6.71 440-TN 1973 India Bihar Agricultural Credit -- 32.0 13.31 456-IN 1974 India HP Apple Processing & Marketing -- 13.0 8.80 481-IN 1974 India Trombay IV -- 50.0 9.58 1011-IN 1974 India Chambal (Rajasthan) CAD 52.0 -- 31.93 482-IN 1974 India Karnataka Dairy -- 30.0 23.64 502-IN 1974 India Rajasthan Canal CAD -- 83.0 46.35 520-IN 1974 India Sindri Fertilizer -- 91.0 9.82 521-IN 1974 India Rajasthan Dairy -- 27.7 24.84 522-IN 1974 India Madhya Pradesh Dairy -- 16.4 13.14 526-IN 1975 India Drought Prone Areas -- 35.0 20.32 1079-IN 1975 IFFCO IFFCO Fertilizer 109.0 __ 46.56 1097-IN 1975 ICICI Industry DFC XI 100.0 -- 17.92 532-IN 1975 India Godavari Barrage Irrigation -- 45.0 19.04 541-IN 1975 India West Bengal Agricultural Development -- 34.0 22.68 562-IN 1975 India Chambal (Madhya Pradesh) CAD -- 24.0 14.19 572-IN 1975 India Rural Electrification -- 57.0 42.15 582-IN 1975 India Railways XIII -- 110.0 0.36 585-IN 1975 India Uttar Pradesh Water Supply -- 40.0 33.67 598-IN 1975 India Fertilizer Industry -- 105.0 81.99 604-IN 1976 India Power Transmission IV -- 150.0 123.81 609-IN 1976 India Madhya Pradesh Forestry T.A. -- 4.0 3.55 610-IN 1976 India Integrated Cotton Development -- 18.0 17.63 1251-IN(TW) 1976 India Andhra Pradesh Irrigation 145.0 -- 135.77 1260-IN 1976 India IDBI II 40.0 -- 34.42 1273-IN 1976 India National Seed 25.0 -- 24.92 1313-IN 1976 India Telecommunications VI 80.0 -- 28.09 1335-IN 1976 BMRDA Bombay Urban Transport 25.0 -- 17.70 680-IN 1977 India Kerala Agricultural Development -- 30.0 29.95 682-IN 1977 India Orissa Agricultural Development -- 20.0 19.51 685-IN 1977 India Singrauli Thermal Power -- 150.0 136.62 687-IN 1977 India Madras Urban Development -- 24.0 21.56 695-IN 1977 India Gujarat Fisheries -- 4.0 4.00 1394-IN(TW) 1977 India Gujarat Fisheries 14.0 -- 14.00 690-IN 1977 India West Bengal Agricultural Development -- 12.0 12.00 712-IN 1977 India Madhya Pradesh Agricultural Development -- 10.0 10.00 715-IN 1977 India Second ARDC Credit -- 200.0 136.09 720-IN 1977 India Periyar Vaigai Irrigation -- 23.0 22.28 728-IN 1977 India Assam Agricultural Development -- 8.0 7.79 1473-IN 1977 India Bombay High Offshore Development 150.0 -- 87.13 736-IN 1977 India Maharashtra Irrigation -- 70.0 70.00 737-IN 1977 India Rajasthan Agricultural Extension -- 13.0 13.00 740-IN 1977 India Orissa Irrigation -- 58.0 57.50 1475-IN 1977 ICICI Industry DFC XII 80.0 -- 72.27 747-IN 1978 India Second Foodgrain Storage -- 107.0 105.62 756-IN 1978 India Second Calcutta Urban Development -- 87.0 79.53 761-IN 1978 India Bihar Agricultural Extension & Research -- 8.0 8.00 1511-IN 1978 India IDBI Joint/Public Sector 25.0 -- 25.00 1549-IN* 1978 TEC Third Trombay Thermal Power 105.0 -- 105.0 788-IN* 1978 India Karnataka Irrigation -- 126.0 126.0 793-IN* 1978 India Korba Thermal Power -- 200.0 200.0 806-IN* 1978 India Jammu-Kashmir Horticulture -- 14.0 14.0 808-IN* 1978 India Gujarat Irrigation -- 85.0 85.0 815-IN* 1978 India Andhra Pradesh Fisheries -- 17.5 17.5 816-IN* 1978 India Second National Seed -- 16.0 16.0 1592-IN 1978 India Telecommunications VII 120.0 -- 120.0 824-IN* 1978 India National Dairy -- 150.0 150.0 842-IN* 1978 India Second Bombay Water Supply & Sewerage -- 196.0 196.0 843-IN* 1978 India Haryana Irrigation 111.00 111.00 844-IN* 1978 india Railway Modernization and Maintenance 190.00 190.00 848-IN* 1978 India Punjab Water Supply and Sewerage 38.00 38.00 Total 2,235.43 6.077.40 of which has been repaid 1,343.25 6 035 96 Total now outstanding Amount Sold 133.31 of which has been repaid 111.47 21.84 Total now held by Bank and IDA 1,321.41 6,035.96 Total undisbursed (excluding a) 538.55 1,652.01 * Not yet effective. I/ Prior to exchange adjustments. November 1978 ANNEX II Page 2 of 15 B. STATEMENT OF IFC INVESTMENTS (As of September 30, 1978) Fiscal Amount (US$ million) Year Company Loan Equity Total 1959 Republic Forge Company Ltd. 1.5 - 1.5 1959 Kirloskar Oil Engines Ltd. 0.9 - 0.9 1960 Assam Sillimanite Ltd. 1.4 - 1.4 1961 K.S.B. Pumps Ltd. 0.2 - 0.2 1963-66 Precision Bearings India Ltd. 0.7 0.3 1.0 1964 Fort Gloser Industries Ltd. 0.8 0.4 1.2 1964-75 Mahindra Ugine Steel Co. Ltd. 11.8 1.0 12.8 1964 Lakshmi Machine Works Ltd. 1.0 0.3 1.3 1967 Jayshree Chemicals Ltd. 1.0 0.1 1.1 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 TOTAL 53.6 10.0 63.6 Less: Sold 6.0 1.6 7.6 Repaid 14.7 - 14.7 Cancelled 6.2 0.7 6.9 Now Held 26.7 7.7 34.4 Undisbursed 6.5 0.9 7.4 ANNEX II Page 3 of 15 C. PROJECTS IN EXECUTION 1/ Generally, the implementation of projects has been proceeding rea- sonably well. Details on the execution of individual projects are below. The level of disbursements was US$496.4 million in FY78 or 39% of Bank Group com- mitments to India in that year. The undisbursed pipeline of US$2,191 million as of September 30, 1978, corresponds roughly to commitments over the preceding two-year period and reflects the lead time which would be expected given the mix of fast- and slow-disbursing projects in the India program. Ln. No. 902 Tenth Industrial Credit and Investment Corporation of India Project; US$70.0 million loan of June 8, 1973; Effective Date: August 16, 1973; Closing Date: December 31, 1978 Ln. No. 1097 Eleventh Industrial Credit and Investment Corporation of India Project; US$100.0 million loan of April 2, 1975; Effective Date: July 1, 1975; Closing Date: December 31, 1980 Ln. No. 1475 Twelfth Industrial Credit and Investment Corporation of India Project; US$80.0 million loan of July 22, 1977 Effective Date: October 4, 1977; Closing Date: March 31, 1983 These loans are supporting industrial development in India through a well-established development finance company and are designed to finance the foreign exchange cost of industrial projects. ICICI continues to be a well-managed and efficient development bank financing medium- and large-scale industries, which often employ high technology and are export-oriented. Loans 902-IN and 1097-IN are fully committed and disbursements are slightly ahead of schedule. Disbursements under Loan 1475-IN (US$5.1 million) are also ahead of schedule. Cr. No. 440 Bihar Agricultural Credit Project; US$32.0 million credit of November 29, 1973; Effective Date: March 29, 1974; Closing Date: March 31, 1980 The project provides US$32.0 million over three years in support of a lending program for 50,000 tubewells and pumpset investments in the Tirhut Division of Bihar. Because of slow disbursements caused by a lower than estimated Dollar/Rupee exchange rate and by low unit investment costs 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered and the action being taken to remedy them. They should be read in this sense and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution. ANNEX II Page 4 of 15 compared with appraisal estimates, IDA agreed to extend the closing date to March 1980 and the project area to cover the whole State. Physical targets have now been achieved and the credit should be fully disbursed well in advance of the closing date. Cr. No. 715 Second Agricultural Refinance and Development Corporation (ARDC) Project; US$200.0 million credit of June 1, 1977; Effective Date: August 24, 1977; Closing Date: December 31, 1979 This project is designed to provide long- and medium-term credit to farmers through credit institutions, for on-farm investments, primarily in minor irrigation. As of September 30, 1978, disbursements amounted to about US$63.9 million, which is 32% of total disbursements, slightly below appraisal targets. The proportion of disbursements to small farmers is estimated at about 60% compared with the appraisal target of 50%. Training programs for staff of the financing institutions are progressing satisfactor- ily. Appraisal for a third line of credit is presently in the field. Cr. No. 267 Wheat Storage Project; US$5.0 million credit of August 23, 1971; Effective Date: November 14, 1972; Closing Date: September 30, 1979 Cr. No. 747 Second Foodgrain Storage Project; US$107.0 million credit of January 6, 1978; Effective Date: May 17, 1978; Closing Date: June 30, 1982 Credit 267-IN, which is being co-financed with Sweden, finances (i) the construction of bag and bulk grain storage and handling facilities, (ii) staff training, and (iii) an All-India Grain Storage Study. The government-owned Food Corporation of India is responsible for the storage construction. All the nine 10,000-ton-capacity bag warehouses envisaged under the project as revised became operational in 1975. The construction of five grain silos is progressing satisfactorily after delays due to cement shortages. The training component is being implemented. The All-India Grain Storage Study was completed in October 1976 and proved useful in formulating the proposal for Credit 747-IN, which has now begun disbursing. Cr. No. 456 Himachal Pradesh Apple Processing and Marketing Project; US$13.0 million credit of January 22, 1974; Effective Date: September 26, 1974; Closing Date: December 31, 1978 Cr. No. 806 Jammur-Kashmir Horticulture Project; US$14.0 million credit of July 17, 1978; Effective Date (expected): December 20, 1978; Closing Date: June 30, 1984 Credit 456 includes grading and packing centers, cold storage facilities, a juice processing plant, road improvements and cableways. It also includes cold storage facilities and a pilot project to promote oak mushroom production. The project encountered initial delays due to managerial ANNEX II Page 5 of 15 and technical problems; however remedial measures have been taken to overcome these difficulties. Land has been acquired for 8 of the 10 packing and grad- ing sites, and procurement and construction activities are well underway. The Project Preparation Report for the juice processing plant has been completed, and the equipment is being ordered. The road improvement program is progres- sing satisfactorily, and the feasibility reports on aerial cableways at the packing/grading sites have been completed. Ln. No. 1313 Telecommunications VI Project; US$80.0 million loan of July 22, 1976; Effective Date: September 14, 1976; Closing Date: March 31, 1980 Ln. No. 1592 Telecommunications VII Project; US$120.0 million loan of June 19, 1978; Effective Date: October 30, 1978; Closing Date: March 31, 1982 Loan 1313-IN is progressing satisfactorily; disbursements reached US$51.9 million as of September 30, 1978. Cr. No. 377 Power Transmission III Project; US$85.0 million credit of May 9, 1973; Effective Date: September 28, 1973; Closing Date: November 30, 1978 Cr. No. 604 Power Transmission IV Project; US$150.0 million credit of January 22, 1976; Effective Date: October 22, 1976; Closing Date: June 30, 1981 The drawdown of Credit 377-IN was slow initially and as a conse- quence it has been necessary to postpone the Closing Date by one year. However, an amount of US$84.5 million had been disbursed by the end of September 1978 and the balance should be disbursed before the revised Closing Date. Under Credit 604-IN, contracts aggregating about US$50 million had been awarded by March 1978 and disbursements as of September 30, 1978 were US$26.2 million. This Credit included a supplementary Credit of US$30 million to meet increased costs of equipment scheduled under Credit 377-IN; all but US$4 million of this amount has also been committed. Cr. No. 481 Trombay IV Fertilizer Expansion Project; US$50.0 million credit of June 19, 1974; Effective Date: August 21, 1974; Closing Date: June 30, 1979 Cr. No. 520 Sindri Fertilizer Project; US$91.0 million credit of December 18, 1974; Effective Date: February 27, 1975; Closing Date: March 31, 1979 Ln. No. 1079 IFFCO Fertilizer Project; US$109.0 million loan of January 24, 1975; Effective Date: April 28, 1975; Closing Date: March 31, 1980 ANNEX II Page 6 of 15 Cr. No. 598 Fertilizer Industry Project; US$105.0 million credit of December 31, 1975; Effective Date: March 1, 1976; Closing Date: June 30, 1980 The Trombay IV project is now being commissioned, about 18 months behind schedule due to longer-than-expected delivery times for critical equip- ment. The Sindri project is also being commissioned. The IFFCO project was delayed by about a year as a result of a change in feedstock from fuel oil to naphtha and delays in completion of engineering contracts. However, project construction is now proceeding satisfactorily. Mechanical completion of the entire plant should result in August 1979. Credit 598-IN is designed to increase the utilization of existing fertilizer production capacity. The project has encountered delays in sub-project preparation and investment approvals by the Government. Further, some of the sub-projects identified earlier may not materialize because of reconsideration by the Central and State governments. IDA has agreed to a list of sub-projects to replace the ones that are likely to be dropped. Because of the above, the project is likely to be delayed by 6-12 months. Cr. No. 294 Bihar Agricultural Markets Project; US$14.0 million credit of March 29, 1972; Effective Date: July 31, 1972; Closing Date: December 31, 1978 Cr. No. 378 Karnataka Wholesale Agricultural Markets Project; US$8.0 mil- lion credit of May 9, 1973; Effective Date: September 7, 1973; Closing Date: December 31, 1979 These projects were designed to help with establishment of whole- sale markets in a number of towns in Bihar and Karnataka. Progress under the Bihar project has generally been satisfactory. The project includes training of the Agricultural Produce Marketing Committee (APMC) staff and evaluation of the project's economic impact. Development plans have been completed for 53 market yards to ensure the project target of 50 markets is met. As of March 1978, the date of the last review, appraisals had been completed for 50, and loans approved for 47 markets. Construction had been completed for 16 and was in progress for 23 markets. Farmers and traders served by the 8 market yards now in operation report more efficient marketing activities and improved farmers' terms of trade. Progress under the Karnataka project is improving. As of September 1978, when the project was last reviewed, construction was underway for 36 of the 39 project markets. Plans and land acquisition are nearing completion at the remaining sites. Both projects are expected to be completed by their respective closing dates. Cr. No. 312 Population Project; US$21.2 million credit of June 14, 1972; Effective Date: May 9, 1973; Closing Date: June 30, 1979 This credit is designed to finance an experimental and research oriented population project in Karnataka and Uttar Pradesh. The project's infrastructure, which would provide the optimum facilities (buildings, equip- ment, staff and transport) according to GOI standards in selected districts ANNEX II Page 7 of 15 in each state, is almost complete. The two Population Centers, which will design and monitor research aimed at improving the family planning program, are now functioning. To allow adequate time for the Population Centers to complete their evaluation of family planning strategies and the introduction of management information and evaluation systems, the closing date has been extended by one year. Disbursements as of September 30, 1978 were 79% of the full credit amount. Cr. No. 342 Agricultural Universities Project; US$12.0 million credit of November 10, 1972; Effective Date: June 8, 1973; Closing Date: December 31, 1979 The project involves the development of the agricultural univer- sities in Assam and Bihar. The primary aim of the AUs project is to improve the quality and practical training of undergraduates and so the spectrum of their employment opportunities; and to strengthen university structure to enable it to give impetus to agricultural and rural development. Considerable progress has been made in achieving the latter objective; but achieving edu- cational objectives is more slowly attainable, constrained by traditional attitudes and structures where consistent effective leadership falters. Changes to a more functional orientation are now planned. The Project Director and others responsible are aware of the constraints and are sup- porting efforts to remove them. Cr. No. 356 Industrial Development Bank of India Project; US$25.0 million credit of February 9, 1973; Effective Date: June 22, 1973; Closing Date: September 30, 1979 Loan No. 1260 Second Industrial Development Bank of India Project; US$40.0 million loan of June 10, 1976; Effective Date: August 10, 1976; Closing Date: June 30, 1981 Loan No. 1511 IDBI Joint/Public Sector Project; US$25.0 million loan of March 1, 1978; Effective Date: May 31, 1978; Closing Date: March 31, 1983 The first IDBI Project had a slow start mainly due to institutional problems in the participating State Financial Corporations. However, the credit is now fully committed, and disbursements had reached US$15.2 million by the end of September 1978. In order to continue the Bank Group's involve- ment in assisting small- and medium-scale industries and in strengthening the State Financial Corporations involved, a second operation (Loan 1260-IN) was approved in 1976, and disbursements have reached US$5.6 million by the end of September. Loan 1511-IN is designed to encourage the pooling of private and public capital in medium-scale joint ventures. The project will also assist IDBI in carrying out industrial sector investment studies and in strengthening the financial institutions dealing with the state joint/public sector. ANNEX II Page 8 of 15 Cr. No. 390 Bombay Water Supply and Sewerage Project; US$55.0 million credit of January 22, 1974; Effective Date: March 13, 1974; Closing Date: December 31, 1978 Cr. No. 842 2nd Bombay Water Supply and Sewerage Project; US$196.0 mil- lion credit of November 13, 1978; Effective Date (expected): February 13, 1978; Closing Date: March 31, 1985 Cr. No. 848 Punjab Water Supply and Sewerage Project; US$38.0 million credit of October 27, 1978; Effective Date (expected): January 25, 1979; Closing Date: March 31, 1983 Having overcome earlier difficulties, including cost overruns caused by inflation (requiring project redefinition in February 1975), redesign of major project components and the addition of a supplementary study on sewage disposal, the project is now progressing relatively well. All of the major contracts for the water supply components have been awarded and it is forecast that works will be sufficiently advanced to permit the supply of additional water (455 mld) in the last quarter of 1978; completion of water treatment works for the whole supply by the end of 1979 is realistically forecast. Completion of additional sewage disposal studies (August 1977) has allowed engineering design of the project sewerage components to proceed, so that completion of construction of these works is now scheduled for 1980, two years later than originally forecast. Financial performance of the project entity is satisfactory. The second Bombay Water Supply and Sewerage Project has just been signed. Cr. No. 585 Uttar Pradesh Water Supply and Sewerage Project; US$40.0 million credit of September 25, 1975; Effective Date: February 6, 1976; Closing Date: June 30, 1980 The Project has had a slow start due to delays in the preparation of technical reports for regional and local water authorities and in the engagement of consultants. While improvements have been made in the physical execution, other aspects of project implementation continue to lag so that disbursements under the Credit have fallen short of estimates at the time of appraisal. In order to improve the situation, arrangements are being made to appoint a full-time management adviser to closely supervise and coordinate implementation. Disbursements as of the end of September 1978 stood at US$6.3 million or 16% of the credit amount. Cr. No. 427 Calcutta Urban Development Project; US$35.0 million credit of September 12, 1973; Effective Date: January 10, 1974; Closing Date: December 31, 1979 Cr. No. 756 Second Calcutta Urban Development Project; US$87.0 million credit of January 6, 1978; Effective Date: April 7, 1978; Closing Date: March 31, 1983 ANNEX II Page 9 of 15 For the first of these projects, following considerable increases in project costs, GOI and IDA finalized a project redefinition in April 1976. It is now expected to be substantially completed by March 1979. Credit 756-IN is designed to expand and upgrade the capabilities of Calcutta's administra- tive authorities, to strengthen the city's fiscal base, and to rehabilitate and extend its urban service system. Cr. No. 687 Madras Urban Development Project; US$24.0 million credit of April 1, 1977; Effective Date: June 30, 1977; Closing Date: September 30, 1981 The project is designed to develop and promote low-cost solutions to the problems of providing improved services to the urban poor in the Madras Metropolitan Area (MMA) and to strengthen metropolitan planning. Project components consisting of sites and services, slum improvement, small- scale and cottage industry, and maternal and child health are designed to benefit directly some 250,000 persons in low-income areas of the city. The water supply and sewerage, road and traffic, bus transport and technical assistance components are designed to eliminate bottlenecks in water supply and transport. Project implementation is proceeding satisfactorily, and disbursements are slightly ahead of appraisal estimates. Cr. No. 482 Karnataka Dairy Development Project; US$30.0 million credit of June 19, 1974; Effective Date: December 23, 1974; Closing Date: September 30, 1982 Cr. No. 521 Rajasthan Dairy Development Project; US$27.7 million credit of December 18, 1974; Effective Date: August 8, 1975; Closing Date: December 31, 1982 Cr. No. 522 Madhya Pradesh Dairy Development Project; US$16.4 million credit of December 18, 1974; Effective Date: July 23, 1975; Closing Date: June 30, 1982 Cr. No. 824 National Dairy Project; US$150.0 million credit of June 19, 1978; Effective Date (expected): December 27, 1978; Closing Date: December 31, 1985 These four credits, totalling US$224.1 million, support dairy devel- opment projects organized along the lines of the successful AMUL dairy coop- erative scheme in Gujarat State. The Karnataka Project, which got off to a slow start, has begun to show considerable improvement under new management appointed recently. Farmer response has been good and over 600 dairy coop- eratives with small farmer participation are functioning effectively. All four dairy unions envisaged under the project have been established and are functioning satisfactorily. In Madhya Pradesh good progress has been made. About 310 new dairy cooperatives societies have been established. Detailed design studies for plant construction are complete. The response of small farmers to the project is excellent. GOMP has plans to cover all districts in the State. Technical services investments are being made. ANNEX II Page 10 of 15 Contracts have been placed for livestock imports. The Rajasthan project is also doing well. Four milk unions have been formed and excellent progress has been made in organizing the servicing of nearly 450 dairy cooperatives at the village level. Plant designs are ready, and procurement is making adequate progress. Based upon the good results experienced, GOR is planning to expand the form of dairy development to all other districts of the State. Karnataka's decision to procure plant equipment jointly with Rajasthan and Madhya Pradesh on the same tender should lead to a recovery of considerable time lost earlier in the Karnataka project. Cr. No. 532 Godavari Barrage Project; US$45.0 million credit of March 7, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1980 Both the civil works and equipment tenders have been awarded after international competitive bidding. Work is in progress and is proceeding satisfactorily. Disbursements stood at US$26.0 million on September 30, 1978. Ln. No. 1011 Chambal (Rajasthan) Command Area Development Project; US$52.0 million loan of June 19, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 502 Rajasthan Canal Command Area Development Project; US$83.0 mil- lion credit of July 31, 1974; Effective Date: December 12, 1974; Closing Date: June 30, 1981 Cr. No. 562 Chambal (Madhya Pradesh) Command Area Development Project; US$24.0 million credit of June 20, 1975; Effective Date: September 18, 1975; Closing Date: December 31, 1979 Ln. No. 1251 Andhra Pradesh Irrigation and Command Area Development (TW) Composite Project; US$145.0 million loan (Third Window) of June 10, 1976; Effective Date: September 7, 1976; Closing Date: December 31, 1982 Cr. No. 720 Periyar Vaigai Irrigation Project; US$23.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 Cr. No. 736 Maharashtra Irrigation Project; US$70.0 million credit of October 11, 1977; Effective Date: January 13, 1978; Closing Date: March 31, 1983 Cr. No. 740 Orissa Irrigation Project; US$58.0 million of October 11, 1977; Effective Date: January 16, 1978; Closing Date: October 31, 1983 Cr. No. 788 Karnataka Irrigation Project; US$126.0 million credit of May 12, 1978; Effective Date: August 10, 1978; Closing Date: March 31, 1984 ANNEX II Page 11 of 15 Cr. No. 808 Gujarat Irrigation Project; US$85.0 million credit of July 17, 1978; Effective Date: October 31, 1978; Closing Date: June 30, 1984 Cr. No. 843 Haryana Irrigation Project; US$111.0 million credit of August 16, 1978; Effective Date (expected): December 14, 1978; Closing Date: August 31, 1983 These projects, based on existing large irrigation systems, are designed to improve the efficiency of water utilization and, where possible, to use water savings for bringing additional areas under irrigation. Canal lining and other irrigation infrastructure, drainage, and land shaping are prominent components of these projects. In addition, provisions have been made to increase agricultural production and marketing by reforming and upgrading agricultural extension services and by providing processing and storage facilities and village access roads. Progress of these projects is generally satisfactory. Cr. No. 541 West Bengal Agricultural Development Project; US$34.0 million credit of April 28, 1975; Effective Date: August 28, 1975; Closing Date: March 31, 1980 The project provides financing over four years mainly for minor irrigation investments but also for development of markets, agro service centers, and support of related government extension services. Although dis- bursements have been slower than anticipated, there has been a considerable improvement in project organization and administration and disbursements are expected to improve considerably. The physical progress of shallow tubewells, and of deep tubewells for the Minor Irrigation Corporation, is satisfactory. IDA, GOWB and ARDC are combining efforts in order to solve difficulties such as organizational problems at the farm level; lack of demand for agro service centers; and completion of designs for water distribution systems and irriga- tion schemes. Positive results, particularly for the redesigned water distri- bution systems have been achieved. Cr. No. 682 Orissa Agricultural Development Project; US$20.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 728 Assam Agricultural Development Project; US$8.0 million credit of June 30, 1977; Effective Date: September 30, 1977; Closing Date: March 31, 1983 Cr. No. 690 West Bengal Agricultural Extension and Research Project; US$12.0 million credit of June 1, 1977; Effective Date: August 30, 1977; Closing Date: September 30, 1982 Cr. No. 712 Madhya Pradesh Agricultural Extension and Research Project; US$10.0 million credit of June 1, 1977; Effective Date: September 2, 1977; Closing Date: September 30, 1983 ANNEX II Page 12 of 15 Cr. No. 737 Rajasthan Agricultural Extension and Research Project; US$13.0 million credit of November 14, 1977; Effective Date: February 6, 1978; Closing Date: June 30, 1983 Cr. No. 761 Bihar Agricultural Extension and Research Project; US$8.0 million credit of January 6, 1978; Effective Date: May 2, 1978; Closing Date: October 3L, 1983 These projects, totalling US$71 million, finance the re-organization and strengthening of agricultural extension and the development of adaptive agricultural research services with the objective of achieving early and sustained improvements in agricultural production, particularly foodgrains. Arrangement for monitoring and evaluation of project progress and impact is an essential feature of these projects. The Orissa and Assam projects also provide funds for laying the basis for longer term improvements in ground- water development in the States. In particular, the Assam project is pro- gressing very well with coverage of farmers expanding ahead of schedule and noticeable improvements in the quality of training of village extension workers. The projects' components include provision of additional staff, training facilities, housing, offices, laboratory facilities, equipment and transportation. Cr. No. 526 Drought Prone Areas Project; US$35.0 million credit of January 24, 1975; Effective Date: June 9, 1975; Closing Date: June 30, 1980 Overall physical progress of the Drought Prone Areas project (DPAP) continues to be satisfactory. The rate of disbursement is improving and implementation of most components is proceeding, by and large, according to schedule. However, progress may be affected by possible changes in thinking at the national level. GOI is presently reviewing all national rural develop- ment programs, including the DPAP, in order to determine ways to improve over- all performance in the rural sector. The Government's review is being fol- lowed closely to determine whether any recommendations would have an impact on the ongoing project and require changes. Cr. No. 680 Kerala Agricultural Development Project; US$30.0 million credit of April 1, 1977; Effective Date: June 29, 1977; Closing Date: March 31, 1985 This project would improve tree crop production in Kerala and has particular emphasis on increasing benefits to small farmers. It comprises rehabilitation of 30,000 ha coconut and 10,000 ha pepper and 2,240 ha cashew, and new plantings of 5,000 ha coconut and 1,500 ha cashew. About 25% of the coconut area would be irrigated for intensive intercropping. Funds have been provided for development of a seed garden for tree crops and for strengthening tree crops research. Ten crumb rubber factories would also be established to process smallholder rubber. Project implementation started slowly due to initial staffing and funding delays but has recently gained momentum. Proj- ect actions for 1978/79 have been rephased and advance action planned so as to make up for lost time. ANNEX II Page 13 of 15 Cr. No. 572 Rural Electrification Project; US$57.0 million credit of July 23, 1975; Effective Date: October 23, 1975; Closing Date: December 31, 1979 Credit 572 consists of a tranche of rural electrification schemes which, at about Rs 5 million each, would cover about 140 schemes. There are now thirteen States eligible for onlending (compared with six at the time of appraisal). The project got off to a slow start, due principally to the need to adapt the specifications and tendering procedures to international competitive bidding, but the position has now improved and the full amount of the Credit has been committed. Cr. No. 582 Railways XIII Project; US$110.0 million credit of August 26, 1975; Effective Date: October 10, 1975; Closing Date: October 31, 1978 Cr. No. 844 Railway Modernization and Maintenance Project; US$190.0 mil- lion credit of November 13, 1978; Effective Date (expected): February 13, 1978; Closing Date: December 31, 1984 Credit 582 was designed to cover most of the foreign exchange requirements of Indian Railway's (IR) investment program for two years, from April 1, 1975, through March 31, 1977. However, since the approval of the project, increased production of steel products in India and further develop- ments in IR's indigenization program slowed down the rate at which IR requires foreign exchange. Therefore, the Closing Date was extended for one year in order to complete implementation of the project. The project was fully dis- bursed on October 24, 1978. Cr. No. 609 Madhya Pradesh Forestry Technical Assistance Project; US$4.0 million credit of February 26, 1976; Effective Date: May 17, 1976; Closing Date: December 31, 1981 This project will identify a sound resource base for pulp and paper manufacture and related industries, develop suitable logging systems, and undertake a feasibility study to determine optimal use of the existing wood resources in the Bastar District of southern Madhya Pradesh. It also includes a study of ways to integrate the area's tribal population with future develop- ment. Cr. No. 610 Integrated Cotton Development Project; US$18.0 million credit of February 26, 1976; Effective Date: November 30, 1976; Closing Date: December 31, 1981 The project finances equipment, civil works and crop production credit to support programs for cotton research and cotton production increase in three states. The project also provides credit for improving cotton gin- neries, new ginneries, cotton seed oil extraction plants and vegetable oil processing factories. Effectiveness was delayed by slow appointment of ANNEX II Page 14 of 15 consultants, but the cotton extension services program was started without delay and has now been in operation for two years. Disbursements have been small mainly due to poor demand to date for project credit. A recent super- vision mission, working with technical consultants, has made detailed recom- mendations for more appropriate pest control practices and more adaptive research to identify and introduce better varieties. These measures are under discussion with GOI, and when agreed to and implemented, should speed up project disbursements. Ln. No. 1273 National Seed Project; US$25.0 million loan of June 10, 1976; Effective Date: October 8, 1976; Closing Date: June 30, 1981 Cr. No. 816 Second National Seed Project; US$16.0 million credit of July 17, 1978; Effective Date (expected): December 17, 1978; Closing Date: December 31, 1984 Loan 1273-IN supports the first phase of India's national seed program, consisting of: seed industry expansion in the public and private sectors, improvements in seed quality control, strengthening of breeding and seed technology research, and development of a reserve stock scheme. Insti- tutional development and managerial arrangements, particularly at the state level, have proceeded fairly satisfactorily. Project implementation, however, slowed down after loan effectiveness mainly due to organizational problems. Project progress is now being made since endorsement of the project by the new Government in September 1977 and is expected to gain further momentum as GOI has filled the two top posts of the National Seeds Corporation, which were vacant for several months and adversely affected the project. A project supporting the second phase of India's national seed program (Credit 816-IN) was signed July 17, 1978. Ln. No. 1335 Bombay Urban Transport Project; US$25.0 million loan of December 20, 1976; Effective Date: March 10, 1977; Closing Date: June 30, 1980 Contracts for bodies and chassis for 325 single deck and 175 double deck buses have been awarded and some 144 buses have been delivered. Bids for an additional 200 buses are being evaluated. Civil works contracts have been awarded for 8 bus facilities, and 13 traffic engineering schemes. Delays are expected in implementing some BMC traffic engineering schemes and the BEST workshop schemes although steps are being taken to minimize such delays. Consultants in organization, administration, financial management systems, accounting and development planning are at work assisting the Borrower, the Bombay Metropolitan Regional Development Authority. Other beneficiaries of the loan, the Bombay Municipal Corporation and the Bombay Electric Supply and Transport Undertaking, have selected consultants in traffic engineering and operations and management assistance, respectively. Ln. No. 1394 Gujarat Fisheries Project; US$14.0 million loan and US$4.0 (TW) and million credit of April 22, 1977; Effective Date: Cr. No. 695 July 19, 1977; Closing Date: June 30, 1983 ANNEX II Page 15 of 15 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 Progress on Gujarat Fisheries project is good. All project imple- mentation units appear to be competent and enthusiastic and the project is progressing as anticipated at appraisal. Cr. No. 685 Singrauli Thermal Power Project; US$150.0 million credit of April 1, 1977; Effective Date: June 28, 1977; Closing Date: December 31, 1983 Cr. No. 793 Korba Thermal Power Project; US$200.0 million credit of May 12, 1978; Effective Date: August 14, 1978; Closing Date: March 31, 1985. Ln. No. 1549 Trombay Thermal Power Project; US$105.0 million loan of June 19, 1978; Effective Date (expected): December 19, 1978; Closing Date: March 31, 1984. Credit 685-IN assists in financing the first stage of the 2,000 MW Singrauli development which is, in turn, 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. The second such station, at Korba, is being financed through Credit 793-IN. It is proposed that the Bank Group will have a continuing involvement in this development program. The National Thermal Power Corporation (NTPC) has been formed to construct and operate these power stations, and the development program has gotten off to a good start. Organization and staffing of NTPC is proceeding satisfac- torily, and the Singrauli project is proceeding on schedule. Civil works are in progress and contracts have been awarded for major plant (turbogenerators, boilers, transformers). Loan 1549-IN is supporting the construction of a 500 MW extension of the Tata Electric Companies' station, in order to help meet the forecast load growth in the Bombay area. Ln. No. 1473 Bombay High Offshore Development Project; US$150.0 million loan of June 30, 1977; Effective Date: October 20, 1977; Closing Date: December 31, 1980 The project is progressing satisfactorily. Gas and oil pipelines from Bombay High to shore have been laid and were commissioned in June 1978. Disbursements stood at US$62.9 million on September 30, 1978. ANNEX III Page INDIA RAMAGUNDAM THERMAL POWER PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I: (a) Time taken by the country to prepare the project This project is the third in the planned development of large-scale thermal power stations; consequently, preparation of the present project was part of a continuing process. (b) The agency which has prepared the project Ministry of Energy/Central Electricity Authority/ National Thermal Power Corporation. (c) Date of first presentation to the Bank and date of the first mission to consider the project Preliminary feasibility report became available in February 1975. Preappraisal was carried out in January 1978. (d) Date of departure of appraisal mission April 14, 1978. (e) Date of completion of negotiations December 5, 1978. (f) Planned date of effectiveness March 31, 1979. Section II: Special IDA Implementation Actions None Section III: Special Conditions (a) GOI to ensure adequate coal supplies (para 45); (b) NTPC to appoint consultants (para 46); ANNEX III Page 2 (c) NTPC to have due regard for ecological and environmental factors (para 47); (d) NTPC to inform Association of any proposal to modify existing limitations on its borrowing powers (para 49); (e) NTPC to achieve 9-1/2% rate of return (para 50); and (f) NTPC to sell power under satisfactory bulk supply contracts (para 52). r Jc 91 U s.s rS. < _ 7 - ttt ksD Qc- ~~~~~~~~ ~ ~ ~~~~~~~~~~~~~~~~~~I N D I A c 7 . ~ ,- 3 \RAMAGUNDAM THERMAL POWER PROJECT ' ~ \hsPower Maip Planned For 1985 -ss I < 1 r \ > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IKRI Pr,ljct EthW m st f ' pcd8'I DI M-cc02 c78 te,, A F G H A N I ST T .3 Hydrc p.ec, ct$tc H j ii * ttA Ther-c p-ec clctrbc- ;2 ,App.:cte Pne ocarccc 0 N..O ear pcwecstsct os Px _-1\ C - - - 4CO kV t-,As- ,l -ls - -- --0' kV t-a-c ssmnIccre 0$ opcrctan a| 220k\hv 983-04 r/ t S^.AL r C H I N A t GC bcrscoecn tnc| ) DC tc t! i| b-k ti - - a e c ;I.,u, ' ---F etc-DeDc P on Docccrc ec oTtern Reccon, | ->B Eetcaj cO|PPOC - - - -Orate bactearcec occitaJ .CDOW Lll{' -----R e nternt- sealonbcc-leP P A K I S T A N j ocn,a P K {' > 5'@u<"'-;-;/ Dsn-r) '%o-1 (~~~~~~~H- 0 \ /v9I cce icc- L ,eX UhPPtfN> c,4 fGa, t eB tdOL DES H 3Ge r t/r 9 o 098Jt.Rv Ah yL m sOlXs MPNEA _rf- lO .yc '59 P I N D I A ( >,-n5 '5 7f9 M5 \ _ LANKAX -vZ,-- w *f 3" £s/2~~~~~~~r h r. .ecsoe re: . , ' Re Pr r IA Jttfh' C ircaFoODe ~~~~~~~~~~~~~U ~~~~ r~6 eccrcc )ccctceccc~~~~~~~~~~~~~7 'op ~ ~ ~ AM