Report No. PID8323

Project Name India-Andhra Pradesh District Poverty (@)

Initiatives Project

Region South Asia Regional Office

Sector Social Funds & Social Assistance

Project ID INPE45049

Borrower(s) GOVERNMENT OF INDIA

Implementing Agency GOVERNMENT OF ANDHRA PRADESH (GOAP),

APSERP (AP Society for Elimination ofRural Poverty),

SWREIS (Social Welfare Residential Education

Institutions Society)

Environment Category B

Date PID Prepared February 22, 2000

Projected Appraisal Date November 25, 1999

Projected Board Date April 18, 2000

1. Country and Sector Background

The main sector issue throughout India, and including Andhra Pradesh, is the

failure over many years of public anti-poverty programs (APPs) to reduce the

number of the poor, particular in rural areas. India continues to display

some of the poorest social indicators in the world.

Since the early 1950s, the Government of India and most state governments

have implemented direct APPs providing wage-employment, productive assets

(such as land or animals), skills, credit and food security to the poor. For

the most part, these programs have been poorly targeted, inefficiently

managed and highly fragmented. In AP itself, despite strong recent efforts at

reform, the last fifteen years have seen a progressive crowding out of

development expenditures by costly and poorly targeted subsidies, by a

rapidly expanding civil service and by interest payments. As a result,

public spending on social development (education, health and maintenance of

essential irrigation and road networks) has been falling as a share of gross

state domestic product (GSDP) and is far short of the state's needs. Many

social indicators in AP are below the national average: 30 percent of the

population still lives below the poverty line; malnutrition among children

aged 0-6 years is about 30 percent; and the female literacy rate (33 percent)

is one of the lowest in India.

Recently, some of the programs of the central government, e.g. self-

employment schemes managed by the Ministry of Rural Employment, as well as

some state governments, including AP, have engaged in social mobilization to

improve their acceptability, utilization and accountability. Some

multilateral aid agencies such as UNICEF and UNDP have also financed small-

scale efforts of this nature. Particularly noteworthy in AP are the women's

self-help group (SHG) movement, non-formal education efforts, and the

Janmabhoomi program (see below), all of which have focus on poverty and

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heightened peoples' awareness and participation in development.

The thrust of GOAP's current strategy is to support a process of

decentralized decision-making in direct APPs, while continuing to promote a

more general fiscal adjustment. The burden of overall fiscal adjustment and

policy reform in primary education, primary health, nutrition, rural roads

and irrigation is being supported by the APERP, which is providing resources

for priority needs. However, APERP cannot provide effective coverage of all

the poor and vulnerable, especially those in regions dependent on risk-prone

rain-fed agriculture or those who lack productive assets or skills through

ill health, disability or illiteracy. To meet the needs of these extreme

poor, GOAP recognizes that there is a need for new policies, institutions and

processes, linked to direct assistance and designed to empower poor rural

communities in the targeting and use of resources.

2. Objectives

The main objective of the project would be to improve opportunities for the

poor to meet priority social and economic needs in the six poorest districts

of Andhra Pradesh (AP). To achieve this, the project would: (i) help create

self-managed grass-roots institutions; (ii) build the capacity of established

local institutions, especially the Gram Sabha/Panchayats and GOAP's line

departments, to operate in a more inclusive manner in addressing the needs of

the poor; (iii) support investment in sub-projects proposed by grass-root

institutions, aimed at initiating or expanding economic activity among the

poor; and (iv) improve access to education for girls to reduce the incidence

of child labor among the poor.

3. Rationale for Bank's Involvement

Based on wide experience of poverty reduction projects in other regions and

experience with rural projects in India, as noted above, the Bank is well

placed to add value by facilitating transfer of innovative ideas to poverty

reduction work in India. More specifically, the Bank would provide:

a international experience with decentralized participatory approaches

such as demand-driven rural investment funds and social funds;

a related experience from other states in India based on its large

portfolio with a number of successful projects with participatory

approaches;

a the large lending capacity to address the overall policy issues and

investment needs in a comprehensive manner; and

a broad experience of the key sectors to be covered by APDPIP.

4. Description

Institutional and human capacity building

Community Investment Fund

Educational support for girl child laborers and school drop-outs

Project Management and Monitoring and Evaluation

5. Financing

Total ( US$m)Government 16.6

IBRD

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IDA 111

COMMUNITIES 7.2

Total Project Cost 134.8

6. Implementation

Institutions The key institutional arrangements agreed with GOAP are:

(i) Andhra Pradesh Society for Elimination of Rural Poverty (APSERP)

The management of the project at the state level would be vested in an

independent Society headed by the Chief Minister as the ex-officio Chairman

of the General Body (GB). This body would have a broad representation from

all the key stakeholders who would predominantly be non-officials. The

management of APSERP would be entrusted to an Executive Committee (EC), of

which an eminent non-governmental person would be President and the State

Project Director (below) would be the Chief Executive Officer (CEO). The

President would also be the Deputy Chairman of the GB. The EC would consist

of about 7 members, with 2 or 3 as ex-officio government officials and others

drawn from the GB representing leading agencies and individuals contributing

to rural development, community mobilization and poverty alleviation.

To expedite implementation, maintain operational flexibility and facilitate

transfer of ultimate control to the participating communities, APSERP would

be registered under the Societies (Telengana) Act. draft The Memorandum of

Association (MOA) of the Society would include a description of regulations,

criteria for selection, membership, powers and functions of the GB, the EC

and the State and District Project Management Units (below). In addition,

duties of the Chairman of the EC and the State Project Director (below) have

also been defined. The rules and regulations of the Society would reflect

the operational guidelines for the project agreed with GOAP.

The organizational structure of the APSERP would include:

a State Project Management Unit (SPMU). The SPMU, headed by the State

Project Director, would be responsible to the EC for project implementation.

The Director would be supported by a management team based at headquarters.

The core skills of the SPMU management team would include finance, training,

monitoring and evaluation, community participation and communications. Other

expertise would be obtained as needed through contractual arrangements and/or

partnerships with other agencies.

a District Project Management Unit (DPMU). In each of the six districts a

DPMU would be headed by a District Project Manager with responsibility for

all project activities within the district, including decisions on investment

proposals under the Community Investment Fund (CIF). The core skills of the

DPMU would include finance, training, community development, rural

engineer/sub-project appraisal and procurement. In addition, depending on

need, the DPMUs would draw on other professional services either from a

roster of experts to be maintained in each district and/or from the line

departments of GOAP working in the district.

a Mandal Community Support Cell. Field activities in each district would

be supported by mandal cells. The key functions of the mandal cells would be

community mobilization and group formation/strengthening. The core staff

would include a Social Organizer (SO), who would lead the work, and a

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Community Coordinator (CC). In addition, the DPMUs would engage NGOs, as

necessary, integrating them in the mandal teams. Mandal cells may be

constituted in different ways in different locations depending on available

local resources and the scope of work. Staffing and management of the cells

would either be contracted to local NGOs or to individual contract staff.

The skill mix of the mandal cells would be adjusted in response to the

changing needs of Common Interest Groups.

(ii) Common Interest Groups (CIGs)

The CIGs would the project's key instrument for identifying priority needs at

the habitation/village level. They would be groups of poor people brought

together by a common interest. The project would assist with formation of

new groups as well as with strengthening existing groups (e.g., thrift and

credit self-help groups (SHGs)). The majority of new groups would be

organized on SHG principles. The groups would be helped to develop financial

stability and money management capacity through internal loaning of their own

savings before becoming eligible for assistance under the Community

Investment Fund (CIF) of the project.

a Community Activists, Facilitators and Para-Technicians. An early

activity in the formation of groups would be the identification of community

activists in each project habitation who would become the "founding

members" of new groups. Following appropriate training, activists would work

with district/mandal project staff and NGOs to help mobilize other poor

members of the communities. Based on contributions from all the CIGs

members, in a habitation/village and in response to increasing work load, VOs

would engage a Community Facilitator (CF). The CF, following appropriate

capacity building, would assist all groups with their on-going activities.

His/Her other important function would be to develop close working

relationship with Gram Sabhas/Panchayats in advocating the cause of the poor.

An additional resource to support group activities would be the cadre of

volunteer para-technicians (e.g., primary health care, teacher, veterinary

service provider, para-medic etc.) to be developed under the project.

a Village Organizations (VOs). As the CIGs increase in number and gain

experience, they would be federated to form self-managed VOs. These would be

unregistered informal associations of between 10 and 30 CIGs and would

symbolize the collective strength of the poor. VOs would be formed in

response to demands from members for needs that cannot be satisfied by a few

groups working alone.

a Mandal Samakhyas (MSs). Mandals with about 30 VOs would be encouraged

to federate to form a MS. As with VOs, the main rationale for the formation

of a MS would the demand from members for wider support than can be provided

by individual VOs. The MS would: (a) deal with PRIs and mandal-level staff

of government line departments; (b) enter into agreement with APSERP

eventually to take over many of the functions of project staff at mandal

level; (c) train CIGs and VOs with the help of project staff and outside

specialists; and (d) monitor the work of VOs.

(iii) Coordination with Other Programs/Agencies

The institutional mechanisms adopted to avoid overlap and/or conflict with

other APPs and rural development programs would include:

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a State Steering Committee (SSC). This committee would be chaired by the

Chief Secretary, GOAP. Other members would be the senior staff from all

relevant departments of the government. The main functions of the SSC would

be: (a) to facilitate any activity related to the project requiring inter-

departmental collaboration/cooperation; and (b) to promote convergence

between on-going programs by proposing a suitable policy framework and, if

appropriate, issuing Government Orders seeking convergence.

a District Advisory Committees (DAC). These committees would be crucial

to inter-program coordination, which takes place at the district level. They

would be chaired by District Collectors with senior functionaries of line

departments, NGOs and community organizations as members. Participation of

District Collectors at the head of these advisory committees would facilitate

establishment of effective working relationships between DPIP and other APPs

and rural development programs of the government. Wherever appropriate, the

DACs would establish sector working groups to ensure effective linkages

between DPIP and the on-going departmental programs. Such sector linkages

would also facilitate access to technical support for the rural poor from the

line departments.

a Mandal Committees. These committees would provide a forum for close

interaction between Mandal Samakhya, organization of the poor, and the public

officials as well as PRI at the Mandal level. Their main function would be

to monitor implementation of convergence policies and programs. Based on

field observations, they would provide feed-back to the DACs and to DPMU.

They would also play an important role in ensuring that mandal-level line

department staff are responsive to the needs of the poor.

a Village Working Groups. These groups, with the Sarpanch as Chair and

representation from VOs, would coordinate dialogue between the Gram

Sabhas/Panchayats and the poor. Other members would include chairpersons

(Presidents) of other village level committees/associations. These groups

would assemble the development needs of their villages through consensus.

Since other village level committees (Water Users' Associations, Schools

Committees, Mothers' Committees) and the Gram Panchayat also receive funds

from government programs, one important role of the Village Working Groups

would be to identify investment gaps which may be financed under DPIP,

provided they meet the project's selection criteria. This work would be

closely coordinated with the Janmabhoomi process to ensure maximum efficiency

in the allocation and use of the project funds.

a Linkages Between CIGs/SHGs and Lending Institutions. Despite their

relative success, SHGs have not been able to forge effective links with

lending institutions, which are essential if they are to promote micro-

enterprises. The reasons are their weak credit history, their weak business

development capacity (marketing linkages and technical training) and the lack

of resources and incentives in rural bank branches to run micro-finance

programs. As a result of discussion with the banks, NGOs and the State

Government, an agreement has been reached to test a comprehensive rating

instrument, linked to a needs-based training program at village level and in

rural bank branches. The rating system would reduce risks (and transaction

costs) by providing information to potential lenders on the quality and

performance of SHGs. Field-testing of the proposed instrument and its

associated training program would start soon after project launch and

introduced on a pilot basis in each project district.

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a Relationship of CIGs, VOs and MSs with the Panchayati Raj Institutions

(PRIs). GOAP has not yet transferred responsibility to PRIs for many of the

rural development activities mandated under the 73rd amendment of the Indian

Constitution. GOAP prefers to give priority to direct empowerment of poor

communities as a means of securing a greater role for the poor in running the

PRIs. Therefore, it will take time for strong relationships to develop

between PRIs and poor communities. The project would adopt a similar,

gradual approach, consistent with GOAP strategy. The main interaction between

CIGs and PRIs would be within habitations/villages, where the project would

promote a better relationship through regular interactions between Gram Sabha

members/Panchayats and CIGs. It would also aim to prepare proposals to

finance investments in small infrastructure sub-projects endorsed by both

CIGs/VOs and Gram Sabhas/Panchayats. Some of the criteria for judging the

inclusiveness of Gram Panchayats and for accepting their participation in the

project's investment program would be: (a) the level of transparency and flow

of information in relation to the budget and development programs to all

residents of Gram Sabha; (b) the frequency of Gram Sabha meetings and the

degree of participation by the poor; (c) the adult literacy rate, especially

amongst women; (d) child labor and school drop-out rates amongst children;

and (v) key elements of the track record of the Sarpanch in promoting

inclusiveness in social and economic activities.

Implementation. Detailed implementation arrangements are as follows:

(i) CIF Component: Preparation, Appraisal and Approval of Sub-Projects

The project would allow CIGs to submit proposals to DPMUs for financing from

funds allocated to the district from the community investment fund (CIF),

either on their own or together with other local organizations, including

Gram Panchayats. Funds would be allocated in response to demand generated

and the effectiveness of utilization by the participating groups. It is

expected that this approach would encourage competition between districts for

additional funds. The sub-project would be evaluated using agreed criteria.

This information would be widely publicized by DPMUs.

It is expected that the demand for sub-projects would cluster in three broad

areas: (a) vocational training for social needs, e.g., para-health workers,

para-veterinarians, para-teachers, child care services etc. and strengthening

of publicly provided social services; (b) training for on-farm and non-farm

income generating activities, e.g., agricultural extension, processing and

marketing activities, development of small enterprises etc. as well as

provision of common supporting facilities; and (c) small infrastructure

(multi-purpose community halls, expansion/rehabilitation of local schools,

rehabilitation of irrigation tanks, community drainage system, inter-

habitation roads). Proposals for infrastructure facilities would be

discussed and agreed with Gram Sabhas/Gram Panchayats and CIGs and

coordinated with Janmabhoomi before submission to the DPMU to ensure funding

of only those activities not funded by others.

Potential participants would have a range of investment options from which to

choose and would be expected to show their commitment through up-front cash

or in-kind contributions. The level of contribution would be sector specific

and included in the eligibility criteria. These contributions would be

consistent with other schemes being implemented in the same villages, e.g.,

Janmabhoomi. The full cost of operation and maintenance would be the

responsibility of the group members or Panchayats initiating the investment

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proposals, who would be encouraged to keep these contributions in a separate

account.

(ii) Capacity Building Component

Training strategy and annual implementation plans would be prepared by the AP

Academy for Rural Development (APARD). Overall supervision would be the

responsibility of the SPMU supported by DPMUs. A number of different

agencies would be employed to conduct the training activities. In the

initial stages regular training courses would be run to prepare project

staff, NGO staff and community facilitators/activists to support group

formation and development and to prepare simple sub-project proposals. For

the community level training, resource persons from the mature groups and/or

federations would be identified and trained as trainers.

Training programs for groups would aim to enhance the capability of CIGs to

identify and analyze problems, to apply skills and resources to solve them

and to work towards making these activities self-sustaining. Since thrift

and credit management would be promoted as an entry point activity with all

groups, training modules would emphasize group formation, group management,

financial management and federation building.

Existing groups (mostly thrift and credit SHGs formed by women) would require

a flexible approach. Members of SHGs may demand training support under the

project only for the specific economic activity in which they are already

engaged in order to access investment funds from the lending institutions.

In other cases, SHGs may already be operating as CIGs through common economic

activities or may form new CIGs to start common activities. In all cases it

is expected that groups would demand support both for skill enhancement and

for creation of common assets/services. The process of classification and

ranking of existing groups (maturity, functionality, effectiveness) to decide

on the nature of support to be provided under the project would be

facilitated by the proposed rating system mentioned above.

Other district level activities would include: awareness building campaigns

and demonstrations relating to social or economic activities; training of

Gram Sabhas/Panchayats; and skill enhancement and reorientation/sensitization

of participating line departments.

(iii) Educational Component: Support for Girl Child Laborers and School

Drop-outs

Implementation of this component would be coordinated by the Social Welfare

Residential Educational Institutions Society (SWREIS). However, DPMUs would

play an important role in selecting girls to be assisted under the project,

focusing in mandals with the highest concentration of child labor and school

drop-outs. Although project interventions would be implemented through

existing institutions, the project would strengthen leadership and

educational modules. In addition, funds would also be used to improve

educational facilities, raise the number of teachers and provide management

support to SWREIS.

For the "bridge" school course, the focus would be on older girls from the

existing pool of child laborers/school drop-outs. The "bridge" school would

provide 12- to 15-month non-formal remedial education for girls aged 11 to 14

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who have been out of the formal education system for a long time and at

present are largely neglected. After completing this course, students would

sit an exam for entrance to a regular residential school, or go to a day

state school for secondary education. To ensure effective coordination with

on-going programs of the Department of Education, District Primary Education

Project (DPEP) and Integrated Child Development Services Project (ICDS), and

also to benefit from the pioneering work being undertaken by an NGO, MV

Foundation, in educating child laborers in the state, SWREIS would establish

a coordination committee with representation from all the relevant agencies.

(iv) Information Education and Communication (IEC)

IEC activity would ensure continuous dissemination of information based on

implementation experience across the range of stakeholders. Implementation

would be coordinated by a professional in the SPMU and all workers coming in

direct contact with communities would be trained to meet IEC needs. Initial

activities would emphasize the project's philosophy, objectives, norms,

methodology, procedures and processes to ensure participation by the poor

communities in the project. The project would use the full range of IEC

tools, including print as well as electronic media, local folk drama and

face-to-face interactions, including workshops.

(v) Monitoring and Evaluation (M&E)

A three-part monitoring and evaluation system has been proposed, with

emphasis on learning from implementation experience. This will go on across

the three DPIPs being prepared simultaneously (the two other states where

similar projects are being prepared include Rajasthan and Madhya Pradesh).

The three parts are: (a) input and output monitoring; (b) monitoring of the

processes by which poverty alleviation and other development outcomes are to

be achieved; and (c) impact evaluation. The first two would be conducted

continuously throughout the project.

a The SPMU/DPMUs would be responsible for input/output monitoring at all

levels through a computerized MIS. Activities to be monitored would include:

allocation and use of project funds for various inputs; delivery of other

targeted inputs (training of staff and potential clients, construction of

residential schools and other organizational inputs); use of the CIF costs of

different types of sub-projects; progress of community institution building;

number and type of workshops and training modules implemented; number of girl

children enrolled in schools; and reduction in child labor.

a Process monitoring is crucial for rapid adjustment to project

design/approach based on implementation experience. This would be undertaken

by an independent agency with access to data gathered by the MIS. It would

use this information and its own assessments to judge the quality of project

implementation, particularly in the areas of institutional development at the

village level, client satisfaction with project inputs and mechanisms to

ensure inclusiveness. It would assess the extent to which the poor have been

included in the process of project selection, design, and implementation at

the individual and community levels, focusing on the dynamics of CIGs, VOs

and MSs. The approach to process monitoring would encourage self-assessment

by CIGs (i.e. identification of DPIP processes that community members

themselves regard as important, analysis by them of the extent to which these

processes are operating according to plan, and the development by them of an

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action plan).

a Impact evaluation would be carried out in three stages using an

independent agency. The first stage would establish the baseline. The

baseline survey would seek feedback on characteristics of sustainable groups

and federations and their impact in two project districts which are already

part of the UNDP-financed SAPAP and have seen quite extensive group

formation. The second stage would coincide with the mid-term review of the

project. By this time it would be possible to evaluate the project's success

in building appropriate and sustainable local institutions, including the

strength and quality of linkages with PRIs and banks. The third stage,

coinciding with the end of the project, would evaluate sustainability of the

institutions and the sub-projects supported by the project, its impact in

reducing poverty as well as inequality and degree of participation by the

poor and vulnerable in decision making bodies.

(vi) Reporting and Mid-term Review (MTR)

The SPMU would submit to IDA a six-monthly progress report and a

comprehensive annual report. The annual report would cover all quantitative

and qualitative aspects of implementation progress, including implementation

plans for the following year.

The MTR would be an in-depth assessment of progress and an opportunity to

change course where appropriate. As an input to the MTR, APSERP would

commission specific studies on: (a) effectiveness and efficiency of the

institutional and implementation arrangements; (b) impact of the project's

training program, including the pilot program on credit rating, on the

quality and performance CIGs/SHGs and their access to credit from the lending

institutions; (c) fiscal impact on the state budget and effectiveness of DPIP

as well as other anti-poverty programs, in the context of AP Vision; and (d)

overall impact assessment of the project as a part of the M&E work. The TORs

for the proposed studies would be developed by APSERP and amended as

necessary based on comments provided by IDA.

(vii) Financial Management

The project's financial management system is currently under development. The

system would be documented in a Project Financial Management Manual. The

Manual would be adopted by the GOAP, APSERP and SWREIS as the document

governing all financial management aspects of the project. At the APSERP

(SPMU and 6 DPMUs), the Head Office of the SWREIS, and the State Finance

Department, the financial management system would be computerized. Each

CIG/GP would maintain simple accounts for sub-projects implemented by them,

and the main focus at the village level would be local-level transparency and

social audit by the community.

Flow of Funds: GOAP would provide funds for the project to the APSERP (SPMU)

and to the SWREIS. SPMU would retain a part to finance its own activities

(costs associated with M&E, special studies) and pass on the balance to the 6

DPMUs for project implementation. They would use the funds for activities

directly under their control, including sub-projects being implemented by

CIGs or GPs. Beneficiary cash contributions would be deposited in the

project accounts of the relevant local organizations (CIGs/GPs). Wherever

possible, maintenance accounts would be opened by CIGs or GPs to receive

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contributions from participants or other sources to cover O&M needs of assets

created by CIGs or GPs. Similarly, SWREIS, which would utilize the funds for

its activities and pass on funds to its constituent educational institutions.

Audit: The Project Auditors would be a firm of Chartered Accountants,

appointed by the APSERP. Their TOR would be included in the Project

Financial Management Manual. In addition to these TOR, the qualifications of

the firm of accountants would be reviewed by IDA. The auditors would be

selected in accordance with the World Bank's Guidelines for selection of

consultants.

Disbursements Mechanism: The computerized system would be operated and

Project Management Reports (PMRs) would be prepared from the beginning of the

project. Disbursement from the IDA Credit would initially be made according

to the Bank's current transaction-based disbursement procedures

(reimbursements with full documentation or against SOEs and direct payments).

This arrangement is necessary to provide time for staff to be trained in the

operation of the financial management system, and for the system to be fully

operational. The disbursement mechanism would be converted to the new

procedures (based on PMRs), after an adequate period of implementation

experience and after the satisfactory operation of the financial management

system has been demonstrated (including timely generation of satisfactory

quality PMRs). The target date for this conversion would be no later than 24

months from the start of the project.

7. Sustainability

AP has been in the forefront of the CIG/SHG movement since early 1960s and

has the largest number of such groups in the country. The experience with

such groups has shown that, with adequate support, CIGs can manage both

social and economic activities and develop self-reliant federations capable

of establishing productive links with civil society, development agencies and

government line departments. As such, they have shown themselves to be

remarkably sustainable. To ensure a similar outcome under the project,

extensive provision would be made for capacity building within CIGs/SHGs and

their federations and for overcoming credit constraints with the lending

institutions. At the same time, the emphasis on demand (priority needs

backed up by willingness to share costs) rather than on externally identified

needs would ensure community commitment to DPIP investments and improve their

chances of sustainability. In addition, to ensure that the public goods

created are properly maintained, the project is requiring development of

such proposals in collaboration with PRIs, with up-front agreements on

operation and maintenance arrangements.

Linkages between the project and PRIs/line departments at the local level

would contribute to the transfer of experience and learning and enhance

sustainability in the long run. More specifically, by adopting participatory

and transparent procedures under the CIF, and involving the Gram Panchayats

in this process, the project would have a significant demonstration effect.

At the same time, empowerment of the communities to demand a critical minimum

base of governance and accountability for the delivery of basic services

would go a long way to establishing a more equitable relationship with

government. Though the project would be implemented initially by an

autonomous Society, it would still depend for much of its operations on

existing institutions. As presently conceived, not all the proposed DPIP

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structures would necessarily survive in the long run. They should disappear,

or become institutionalized, once alternative service delivery models have

been absorbed into the PRIs, GOAP line departments and the district

administration.

8. Lessons learned from past operations in the country/sector

The project design reflects lessons learned from several on-going and

completed Bank-financed rural development projects in India. These have

shown the importance of community participation and ownership in achieving

efficiency and sustainability. They have also demonstrated how communities

can contribute towards investment and operational costs if they are assured

of good service. The UP Sodic Lands Project has shown how the poor can

establish their own organizations and engage in multiple activities in order

to mitigate risks and participate more fully in the development process.

Similarly, the Integrated Watershed Development Projects, the Karnataka and

UP Rural Water Supply and Sanitation Projects and the AP Forestry Project

have all demonstrated the viability of user groups and their potential to

manage project activities as well as to mobilize community contributions.

These projects have also demonstrated the potential value of successful

partnerships between community organizations, NGOs and the Government.

An important lesson from the UNDP-assisted SAPAP, which includes AP, is that

it is not enough to mobilize communities for social action - they need also

to have investment opportunities alongside social mobilization. Hence, DPIP

seeks not only to mobilize communities but also includes support to

facilitate linkages with the credit institutions to open investment

opportunities for the rural poor in economic activities. Another lesson of

the UNDP Project, which is relevant to this project, is that NGO involvement

must be selective and focused.

At the operational level the main lessons incorporated in to the project

design are: (a) creation of a decentralized project management structure with

full control over the sub-project approval process to expedite decisions and

to minimize political interference; (b) development of streamlined

procurement and disbursement rules and regulations to ensure speedy

implementation; (c) inclusion of competitive employment conditions for the

project management staff to attract and retain competent and motivated

individuals; (d) inclusion of detailed operational manuals, computerized MIS,

standardized financial management procedures, regular and rigorous auditing,

and quantitative and qualitative monitoring and evaluation; and (e)

incorporation of physical and financial sustainability conditions in the sub-

project eligibility criteria to ensure a continued flow of benefits.

9. Program of Targeted Intervention (PTI) Y

10. Environment Aspects (including any public consultation)

Issues : From an environmental perspective, the two components

that are of concern are the Community Investment Fund (CIF) and the

construction of residential schools. To address these concerns, an

Environmental Management Framework (EMF) has been developed for the CIF, and

Guidelines for the Environmental Impact Assessment (EIA) of Residential

Schools have been drafted.

The CIF would encompass income-generating and small-scale infrastructure

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investments. In most cases the small size of these interventions would not

lead to environmental impacts of any significance. All sub-project proposals

would, however, be subject to an environmental screening exercise in order

to:

a prevent execution of sub-projects with potentially significant negative

environmental impacts;

a decrease potential minor negative impacts through modifications in sub-

project design, location or execution;

a prevent or mitigate cumulative negative impacts as the result of

multiple small-scale investments;

a enhance the positive impacts of sub-projects; and

a prevent additional stress on environmentally sensitive areas.

To meet these objectives, the Environmental Assessment Report (EAR) provides

for: (a) a methodology and administrative structure for environmental

management; b) an environmental capacity building and awareness raising

program ; and (c) an environmental supervision and monitoring plan.

An EIA of residential school construction aims to ensure that a number of

environmental principles are incorporated into the school's design,

construction and management. These principles are intended to protect human

health, promote environmental sustainability, and safeguard the welfare of

affected communities. The EIA process would include: (a) screening in

consultation with communities in the immediate areas to identify possible

issues; (b) incorporation of environmental considerations in the engineering

design of the schools with a particular attention to issues identified during

screening; and (c) supervision to ensure that environmental mitigation

measures have been effectively implemented.

11. Contact Points:

The InfoShop

The World Bank

1818 H Street, NW

Washington, D.C. 20433

Telephone: (202) 458-5454Fax: (202) 522-1500

Task Manager

Ashok Kumar Seth

The World Bank

1818 H Street, NW

Washington D.C. 20433

Telephone: (202) 458-1438Fax: (202) 522-2420

Note: This is information on an involving project. Certain components may not

be necessarily included in the final project.

Processed by the InfoShop week ending Fabruary 25, 2000.

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Annex

Because this is a Category B project, it may be required that the borrowerprepare a separate EA report. If a separate EA report is required, once itis prepared and submitted to the Bank, in accordance with OP 4.01,Environmental Assessment, it will be filed as an annex to the PublicInformation Document (PID) .

If no separate EA report is required, the PID will not contain an EA annex;the findings and recommendations of the EA will be reflected in the body ofthe PID.

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