House of Commons - International Development

Select Committee on International Development Written Evidence

Supplementary memorandum submitted by the Department for International Development, in response to questions from the International Development Committee

DFID SPENDING AND PROGRAMME

1. How much of the £250 million allocation for 2004-05 has been spent so far and in what sectors and via which instruments?

Please can you provide a detailed breakdown of spending in 2003-04, 2004-05 and projected spending for 2005-06 along the following lines:

— The amount spent in each sector;

— The amount spent through DBS in each target state (and the balance of spending between states);

— The amount spent through DBS in national, centrally managed programmes;

— The amount spent through bilateral support to NGOs.

A sector-wise, state-wise and instrument-wise detail of the actual and proposed spending for 2003-04, 2004-05 and 2005-06 is given in the attached spreadsheet (Annex A). The existing spending proposals for 2004-05 and 2005-06 add up to £243 million and £227 million, whereas the approved aid-framework for these two years is £250 million and £280 million respectively. DFID India is currently examining a number of other possibilities for spending in these two years, and we are confident that we will be able to use the entire approved aid-frameworks for these two years in support of our Country Assistance Plan (CAP) objectives. It is, however, not yet decided which aid instruments will be used to spend the remaining aid-framework and in which sectors or in which states. Therefore, it is not possible to give these details for the full aid-framework for these two years. Details given are only for the existing proposals.

2. What is the proposed balance of spending between different states, and sectors and through each spending instrument (including national programmes supported through DBS) to the end of the CAP period in 2008?

  DFID India has developed a programme resource allocation model to help inform the allocation of aid framework resources for India to the National and the State programmes. The model is based on the so-called "Dyer model" used to inform the allocation of DFID's programme resources globally. The Dyer model allocates resources according to poverty (need) and the quality of the policy environment. We have adapted the model to take account of the federal nature of the Indian system to give us an indicative allocation of funds to our current focus states and the National programme. This model will inform future allocations of programme resources across our India programme. On a purely indicative basis, resource allocation based on the model would be as follows (assuming the India aid framework increases to £300 million in 2006-07):

Programme Indicative (%) 2004-05
(AF-£250m
(£m) 2005-06
(AF-£280m
(£m) 2006-07

(AF-£300m)*
(£m) 2007-08
(AF-300m)*
(£m)

National (including non-partner and multi-state)   45 112 125 135 135

Andhra Pradesh   15.5   39   43   47   47

Madhya Pradesh   11.5   29   33   35   35

Orissa   11.5   29   33   35   35

West Bengal   16.5   41   46   48   48

Total 100 250 280 300 300

* estimated. AF figures beyond 2005-06 not yet agreed.

  Current spending forecasts for the next three years indicate the balance of spending between different states as follows:

Programme 2004-05
(£m) % of total 2005-06 (£m) % of total 2006-07 (£m) % of total

National (including non-partner and multi-state) 147   60 115   51 106   50

Andhra Pradesh   36   15   36   16   31   15

Madhya Pradesh     6     3   18     8   23   11

Orissa   22     9   18     8   15     7

West Bengal   32   13   40   17   37   17

Total 243 100 227 100 212 100

We plan to allocate resources to the five programmes according to the model as far as is practicable. However, the actual outturn will depend on the response of the Government of India (GoI) and focus state governments to various initiatives in this regard, flexibility in the spending pipeline, opportunities to make an impact on the off-track MDGs, and progress made against agreed outcomes under existing proposals. In view of this, it is not possible to provide exact details of balance of spending between focus states and the national programme, and between various sectors, for the entire CAP period to 2008. However, an analysis along these lines for existing proposals in the pipeline is given in Annex A. Current and planned expenditure through NGOs is given in Annex B.

3. How much money is channelled through agencies such as UNICEF and UNDP? Is this part of the programme of bilateral assistance? In which states and what sectors does this funding support?

DFID's current India CAP recognises the importance of harmonised working with and through other development organisations, including multilateral agencies. DFID India has entered into overarching, in-country partnership agreements with the World Bank, Asian Development Bank & UNICEF, and is in the process of developing similar agreements with the UNDP and ILO. We also have Trust Fund arrangements in place to support the World Bank and the ADB in India. Many of these multilateral agencies support implementation of GoI priorities in their areas of expertise eg UNAIDS (HIV/AIDS), UNICEF (child environment), ILO (elimination of child labour), WHO (polio eradication), and UNCTAD (trade negotiating capacity). The details of projects implemented through these multilateral agencies are provided in the attached spreadsheet (Annex C). All funding provided through multilateral agencies by DFID India from the aid allocation for India is counted as part of DFID's bilateral assistance programme to India.

4. Please provide a profile of each state that you work in with comparable poverty indicators. How do changes in poverty indicators link to DFID's work?

See Annex D for a profile of DFID partner states with comparable poverty indicators.

Changes in poverty indicators reflect the efforts of the Indian government at national and state level. The contribution of the international development community is small, and DFID's contribution is only one part of the international effort. Therefore, it is artificial to claim a direct link between a particular DFID intervention and a change in a high-level indicator.

The Millennium Development Goals help to focus our and others' efforts. The Millennium Development Indicators allow for broad comparability between countries. But at the level of individual interventions by DFID, we measure our impact by lower-level and more process-oriented indicators.

5. If readily available,[1] please can you provide a list of the projects that DFID supports? It would be particularly useful to have a list of a list of projects that are relevant to particular MDGs (so we can identify how you propose to help move towards the targets) and DFID supported projects in non-target states (the draft visit programme mentions a DFID funded urban housing project in Kerala for example—it would be helpful to have a list of such projects and whether they are supported bilaterally or through DBS).

See Annex E.

ANDHRA PRADESH

6. What was the total amount of money spent by donors, including the World Bank, in Andhra Pradesh in 2003-04? What percentage of total DFID spend is going to AP and how will this change in the future? What evidence does DFID have to suggest that DBS has directly, or even indirectly, helped to reduce poverty in AP?

The total amount of money spent by donors in AP in 2003-04 was £418 million (loans and grants), including financing from the World Bank. Of the total spending by DFID India, the share to Andhra Pradesh in 2002-03 and 2003-04 was 25% and 43% respectively. For the current year it is expected to be about 19% of total DFIDI spend, with the National and West Bengal programmes taking up larger shares. For future years it is difficult to estimate expenditure, as it will depend on the outcome of discussions with the new state government on their priorities and the future shape of the programme.

Poverty has declined in Andhra Pradesh. The World Bank estimates that the poverty headcount fell from 30.4% in 1990 to 21.6% in 2000. It is too early to say what the impact of the budget support interventions have been on development outcomes for the state. We will have more information when on-going assessment work has been completed, and we can discuss this with the IDC during their visit.

Budgetary assistance is one instrument used by donors at the state level in India, and complements other forms of assistance. The context for state level budgetary assistance in India is different to elsewhere in the world. In Africa, for example, budgetary support is needed to address long-term financing gaps. In India, it is mainly intended to assist with the costs of reform and to provide an incentive for state government to take difficult decisions and tackle harder reforms. It also allows governments to protect and increase spending in key development areas, anticipating a time when government will be able to allocate more of its own resources on these programmes, and it substitutes for higher cost financing, thus reducing government's debt liabilities and improving the prospects for fiscal stability. This type of assistance also provides an opportunity for donors to engage in a broader range of policy dialogue than is normally afforded by projects.

It is widely acknowledged that fiscal and governance reforms are critical for sustained poverty reduction and growth. They are emphasised in the Government of India's Tenth Five Year Plan, and the GoI guidelines on budgetary assistance from donors set targets on reducing the deficit, and requires states to take actions in a number of areas. These recognise that fiscal deficits have been growing in recent years, and a substantial share of the budget is taken by staff costs (including pensions), debt payments, power sector subsidies, and support to public enterprises, squeezing out development spending. Analysis by the World Bank in January this year showed that those states that had accessed donor budgetary assistance, including Andhra Pradesh, had made more progress on key reforms than other states.

In Andhra Pradesh, the aim of the reform programme supported with budgetary assistance was to put the finances of the state on a sustainable path, reorient government expenditure towards pro-poor programmes, and address cross-cutting governance issues critical to improvements in service delivery. It was anticipated that the medium-term reform programme, perhaps taking the state around 7-8 years, would lead to fiscal stability and free up resources in government budgets for development spending.

Key achievements of the fiscal reform programme to date include adopting, and adhering to, a Medium Term Fiscal Framework (MTFF), which sets out targets for reducing the deficit and reorienting public expenditure. Andhra Pradesh achieved the targets in 2001-02 and 2002-03, but initial indications are that there will be some slippage in 2003-04, with shortfalls in revenue. AP has been a leader in power sector reforms and in public enterprise (PE) reforms. In power sector reforms, significant progress was made in structural, regulatory and governance reforms, to improve access, availability and quality of power in the last few years; and AP topped GoI's performance table for reforms. With increased efficiency of the power sector, the power sector financing required from government was reduced, freeing up resources for other areas. AP also made significant progress in its PE reform programme and has provided a model for other states.

Social sector spending in primary health and primary education has increased. Although increased investment was at a slower rate than originally planned by GoAP, expenditure in these areas doubled between 2000 and 2004. Spending on operations and maintenance and capital investment, as well as expenditure on the welfare of weaker sections of society, eg scheduled castes and tribes, have also showed a rising trend.

Strengthening public expenditure management has been a key element of the reform programme. The government carried out its own State Financial Accountability Assessment to a high standard, which allowed it to be accepted by the World Bank and DFID as part of the fiduciary assessments. The findings of the SFAA enabled the government to continue and deepen its budgetary reforms, which aim to give departments more budgetary freedom to achieve their objectives, while tightening compliance to accounting and auditing standards.

Budgetary assistance also allowed DFID to engage with GoAP on a broad agenda of governance reforms in the state. This includes civil service reform, enhancing transparency and citizen orientation of line departments, and anti- corruption. Initiatives taken by the state include developing and rolling out citizen's charters, examining corruption prone processes and how these can be revised, and drafting the Right to Information legislation.

DFID's budgetary assistance to Andhra Pradesh was the first DFID provided at state level, and it was anticipated that it would be a medium term programme. DFID is committed to assessing the impact of this assistance. An evaluability study of the first tranche was carried out by Oxford Policy Management, and DFID is currently carrying out an interim assessment of this support, which will help us to consider impact more thoroughly. We expect to have preliminary findings available by the time of the IDC visit.

DIRECT BUDGETARY SUPPORT (DBS) AND LEVERAGE: WORKING WITH CENTRAL AND STATE GOVERNMENTS

7. If DBS is predicated on creating a policy dialogue between donors and government, to what extent does DFID's budget support to central or state governments create this dialogue? What are the pros and cons of support at a national level vis-a"-vis support directly to states?

The opportunity for higher-level policy dialogue is one of the important benefits of budgetary assistance, though not the only one (others include greater harmonisation with government priorities and systems, lower management costs, and greater institutional sustainability). We have no doubt that our programme of budget support at both central and state level have created opportunities for such dialogue, and moreover that this dialogue has made a tangible difference to policy design and/or implementation.

At state level, budget support in Andhra Pradesh and Orissa has provided a basis for intensive dialogue over a number of years between state governments, DFID and the World Bank over a range of core policy and institutional issues. These include fiscal reform, public expenditure allocation, anti-corruption, service delivery, administrative reform, and poverty monitoring. Whilst projects if used strategically can also open doors to policy dialogue, they typically allow only a relatively narrow set of sectoral policies to be tackled, rather than the more fundamental issues affecting government-wide performance. In addition the linkage to substantial volumes of fast-disbursing financial resources provides a stronger incentive to states to address issues raised in dialogue.

At the central level, the ongoing negotiations over GoI's Reproductive & Child Health Programme Phase II provide a good example of genuine and fruitful policy dialogue in a programme of budgetary assistance, although it is fair to say that it has been the shift to a sector-wide approach and joint working between all donors and GoI, rather than primarily the funds flow mechanism as such, that has brought about this impact. The dialogue has resulted in a fundamental shift in approach compared to the first phase of the RCH programme, with more emphasis on bottom-up planning, allowing states greater flexibility within broad outlines, much stronger results-orientation arising from performance based financing, equity and social exclusion, and capacity building to improve states' implementation capacity.

Overall, we need to work at both central and state levels to achieve our strategic goals. The relative importance of central and state governments varies sector by sector, depending on whether it is listed as a state, central or concurrent (joint) subject under the Constitution. In practice the issue is more complex than this. In many sectors listed as state subjects, the central government plays an important role through Centrally Sponsored Schemes (eg in the case of health which is a state subject but where the central government plays the main role in funding certain programmes including TB, AIDS and leprosy). There is a strong case for working at state level because state governments are responsible for most development expenditures (in terms of implementation if not always funding) and because many of the critical constraints to better service delivery, for example, lie at state level. On the other hand, working at national level offers the opportunity for wider impact (including in non-focus states) and to address higher-level concerns in sectors where the central government plays an important role in terms of funding and/or setting the policy framework.

8. What are the risks of working through government in the world's largest democracy? What have been the benefits of "deep involvement" with the Government of India? How vulnerable are these benefits to political change? Are assessments of the quality of governance based on assessment of the underlying bureaucracy or mainly on political leadership?

Despite India's credentials as the world's largest democracy, there are both political and fiduciary risks involved in working through government. These arise from the fact that while "systems and procedures" are in place, such as an elaborate planning and budgeting system, decisions by committees, parliamentary oversight, and so on, real pro-poor reform continues to be very slow. The deep-rooted socio-economic inequalities in India make the task of bringing about development extremely complex. And, because public services are sought to be provided within a democratic framework, with many competing groups and vested interests, there is a particular challenge in delivering public services on an equitable and inclusive basis.

On the other hand, there are clear benefits too, of working through government. For one, on the whole, it is a reforming state. Secondly, the scope and reach of government programmes can never be matched by NGO or donor projects. Therefore, for a meaningful impact, one has to be involved in the government's own policies and programmes, and work with the Government to make these more evidence-based, and oriented to benefit the poor.

Despite the recent experience with power sector reforms in AP, it would be wrong to conclude that the involvement with government is highly vulnerable to political changes. On the whole, India has a good track record of political power passing from one party or coalition to another, without major reversals of policies and contracts. But there may, of course, be changes in the pace of reforms, and often also in focus, from government to government, which is in the nature of democratic politics.

The assessments of governance are based on the inter-play of various institutions, such as the executive (at political and bureaucratic levels), the legislature, judiciary, civil society, and so on.

9. DFID has committed to channelling high levels of funding through central programmes to target key areas. What exactly have you got in mind in the way of support to central programmes that will go beyond previous commitments to maternal health, say, or the District Primary Education Programme?

As well as the existing commitments mentioned above, we will spend up to £210 million through the Central Government's universal basic education scheme, Sarva Shiksa Abhiyan, up to £95 million through the National AIDS Control Programme, and up to £98 million through the National Polio Eradication Programme.

DFID India is currently identifying opportunities for future support through Centrally-Sponsored Schemes. We will do this by exploring the overlap between our Country Assistance Plan priorities and the Indian Government's policy agenda, as expressed, for example in the Common Minimum Programme and the Indian Prime Minister's Independence Day Speech.

10. What is your assessment of leakage of funds spent through central programmes and how does this square with your intention to channel more funds through central government? How is DFID going to exercise leverage over GoI programmes?

The risk of leakage of funds is taken seriously by the Indian Government and by DFID India. Since 2002, our approach to managing the risk of leakage of funds has been summarised in the DFID publication "Managing Fiduciary Risk when Providing Direct Budgetary Support". This approach has been agreed with the UK's National Audit Office. It consists of:

(a) performing a fiduciary risk assessment, often jointly with the World Bank, to appraise the effectiveness of public financial management and accountability systems and practices, inherent fiduciary risks and the adequacy of proposed measures to mitigate them;

(b) requiring the Indian Government to take measures to reduce the risk of leakage eg by specifying how funds shall be routed, by requiring improved reporting formats and by appointing specialised finance staff; and

We often manage risk of leakage in conjunction with other donors. For Sarva Shiksa Abhiyan, the assessment of DFID and the World Bank was that strengthened Financial Management Reports (FMRs) would complement the existing, fairly robust, accounting system. For Reproductive and Child Health 2, the assessment of DFID and the World Bank is that the range of mitigatory measures listed in (b) above is required.

11. How does the relationship between state and central government impact upon DFID's relationship with state governments? Is it dangerous to be pushing ahead with budget support in the states when the central government is not convinced?

DFID India has a good relationship with the central government and with partner state governments. In the recent review of our programme with GoI (Department for Economic Affairs) and state government representatives, we agreed clearer procedures for processing new proposals and improving communications between all partners (DEA, state governments, DFID India).

GoI has very recently communicated to us that we should no longer provide states with direct budgetary support or support to public sector enterprise re-structuring, This does not however cover sector budgetary support in our focus states.

12. What would it take for DFID to withdraw support from a state and why?

DFID India would consider a number of factors when considering whether to withdraw from a state partnership. These include: the poverty profile and trends; the political commitment to poverty reduction, reform and development; the need for continued external resources (financial and technical); our comparative advantage and the planned activities of other external agencies; aid effectiveness—the impact of our support to date and our assessment of its likely future impact; the availability of adequate administrative and programme resources; and competing needs elsewhere in India.

13. In oral evidence DFID stated that it is tackling administrative reform and corruption through DBS processes, encouraging State Governments to have medium-term expenditure and fiscal frameworks and through computerisation (Q61). Can you provide more detail on DFID's involvement with specific projects in this area, and in particular the development of financial monitoring systems?

Through policy dialogue linked to budgetary assistance, and through the detailed and comprehensive State Financial Accountability Assessments (SFAAs) undertaken as part of these programmes with DFID support, action plans have been drawn up by state governments (AP and Orissa) for legislative, systemic and procedural improvements across a wide range of budgetary processes including medium-term fiscal planning, budget preparation and approval, budget execution and monitoring, internal audit, accounting, asset management and management of contingent liabilities. Several measures have already been introduced—for example the introduction of Medium Term Fiscal Frameworks, more realistic revenue estimation, improved cash management—whilst others will be implemented in the near future. In AP, DFID is funding the creation of Strategic Performance Innovation Units in key ministries to take forward the implementation of SFAA recommendations. Reviews of procurement procedures have also been undertaken leading to recommendations for improvement that are now being taken up.

In addition, we have provided technical or financial assistance for the implementation of specific reforms including: (i) a 2-stage "Zero-Based" review of the Government of Orissa's investment budget which has successfully led to substantial reprioritization of expenditures; (ii) computerization of government accounts in Orissa; (iii) development of a comprehensive employee database to support improved management of the huge salary and pensions bill; (iv) Impact and Expenditure Reviews of key Ministries in AP which have informed future intra-sectoral expenditure allocation.

Through dialogue and technical assistance linked to budgetary support, we have also supported the introduction of wider governance reforms relevant in this context, including proposed Freedom of Information Acts and formulation of anti-corruption strategies in both AP and Orissa.

14. Does DFID share the World Bank's views and approach in India on all counts? Where/how would DFID say it differs from the Bank in its approach in India? Can you provide examples?

The extent to which DFID and the World Bank share objectives in India, is reflected in a recently signed MoU between us, framing our collaboration. The purpose of the partnership is to enhance our effectiveness in supporting the Government of India's 10th Five Year Plan, and the shared goal with India to achieve the MDGs. The World Bank's Country Assistance Strategy (CAS) (2005-08) is focused on dramatically scaling up impact in order to help improve the quality of life for some of the world's poorest citizens and help India to move closer to achieving the MDGs. This represents a much clearer statement of poverty focus to their work. There is much common ground. The Bank's programme priorities clearly demonstrate this, covering: strengthened fiscal management; reallocation of public resources for priority areas for the poor; improving governance and service delivery; fostering empowerment; educational attainment for all; reducing health risks for the poor; provision of adequate infrastructure; accelerating rural growth; fostering the competitive economy. The CAS signals a shift in their operations towards the poorest states.

One clear difference relates to the scale of operations. The current pipeline of World Bank loans is $13 billion. At this scale, it is difficult always to ensure sufficient strongly demonstrated linkages to outcomes for the poorest. It is for this reason that we have established a Trust Fund with the World Bank in India. This is used to increase the level of poverty and social analysis in support of programme design. These are undertaken by the Bank to strengthen the pro-poor impact of their work. We have also developed a significant level of collaboration at state and national levels, through co-financing health and education programmes and complementary support in rural and urban development and power sector reform. This engagement has provided useful opportunities to encourage a more explicitly pro-poor approach through their programme lending. A second difference is the extent to which decision-making is devolved to country offices. We would welcome even greater devolution of Bank staff to their country offices, particularly of all Task Managers, so that we could build further on our cooperation and interaction with them in-country.

FUTURE PLANS: MINIMALIST OR STRATEGIC?

15. What is DFID's current thinking on the choice of states in which it operates and the most effective mode of operation (ie support through national government v state government v civil society)?

Is the preference for the future "the minimalist option", which would "consolidate the gains of the four state programmes to date"? Or for a "strategic option" that would support "an urgent expansion into an additional very poorly performing state [in both economic and governance terms] as soon as possible in order to gain experience as rapidly as possible"?

16. If DFID does move somewhat toward the Strategic Option, how is this to happen, not least when the Indian Dept for Economic Affairs (DEA) has also signalled its "uncertainty" about assistance for Civil Society Organizations, including some NGOs?

17. Which non-target states, if any, is DFID considering working with in the future (UP, Bihar and Maharashtra were mentioned in oral evidence Q45)? Can you give us some concrete examples of how DFID might work effectively in a state like Bihar or Jharkhand? Can you provide examples of the kind of project you would support (the tribal empowerment programme in Orissa was mentioned in evidence, Q74)? What sort of funds flow might we be looking at? How would this work tie into the Poorest Areas Civil Society programme (PACS)? Are there any lessons from PACS that can be learned at this stage?

We are currently preparing State Assistance Plans for our four partner states, setting out our plans for working at the state level to contribute to achievement of our Country Assistance Plan objectives. We have also commissioned detailed analysis looking at "Working in Difficult Environments" (WIDE) (eg Uttar Pradesh and Bihar, both populous and poor states) and at the effectiveness of Centrally-Sponsored Schemes (CSS).

This analysis will inform our thinking on whether we should start work in an additional state, and if so how, taking account of the viability of CSS as an alternative to scaling up our nationwide impact beyond our existing partner states. Downward pressure on administrative resources, and the level of commitments in existing partner states will need to be considered in deciding where and how we work in the future. Preliminary conclusions of the WIDE and CSS analysis will be ready when the IDC visits India.

Modes of operation are not mutually exclusive, and we plan to continue with a combination of aid channels and modalities, calibrated to maximise our impact and respond to development priorities and opportunities. Similarly, "minimalist" and "strategic" options are not mutually exclusive; we are currently realising some strategic benefits of consolidating our state partnerships and taking our policy dialogue to new levels. We are also exploring how to better exploit the synergies between our national programme and state programmes.

18. To what extent does DFID target maternal mortality and child mortality in its health programmes? How does DFID propose to ensure that service improvements are targeted to excluded groups and to women?

Achieving the Maternal and Child mortality Millennium Development Goals in India will be a significant challenge. Both are reducing, but not fast enough. DFID, in coalition with other development partners including the World Bank, EC and the UN family is currently supporting the Government of India in designing the next phase of its Reproductive and Child Health (RCH) programme for implementation across the country over the next six years (2004-10). This is known as RCHII and DFID is planning to contribute funding of £250 million over the period.

This programme proposes to address the child and reproductive health needs (including maternal health) of the entire population with enhanced technical and financial support to the weakest and most remote States. In addition, DFID is currently supporting the development and implementation of comprehensive health sector strategies in the states of West Bengal, Orissa, Andhra Pradesh and Madhya Pradesh. These strategies endorse the Government of India's 10th Plan goals of reducing maternal, infant and child mortality, aimed towards achievement of the Millennium Development Goals. These health plans are incorporating mechanisms and innovations to further ensure improved equity and effectiveness of health systems to address the wider determinants of maternal and child mortality in an integrated manner.

Evidence shows that outcomes in maternal and child health are very unequal between states, between districts and between social groups. Continued decline in sex ratio, irrespective of social categories, particularly in the north, reflect low social status of women. RCHII is seeking to build consensus for a paradigm shift towards increased focus on access to services that are responsive to the needs of the poorest, particularly women. This involves states identifying those districts and sub-districts and the social categories (eg Scheduled Castes and Scheduled Tribes and Muslims) that have the poorest maternal and child health; bottom-up planning to meet identified needs in context; potential demand-side financing, such as vouchers and insurance for the poor; devolved responsibilities with increased flexibility and funding and clear accountability for improved outcomes. DFID has been at the heart of advocacy for such a change from supply-led solutions towards increased demand-side articulation that will ensure services that are accountable and responsive to the poorest.

DFID AS AN ORGANISATION

19. What changes have been made recently to DFID-I organization? How does this link to your External Evaluation?

The external evaluation of the 1999 India Country Strategy Paper, was useful in guiding our strategy-making. In February 2004 we launched our new Country Assistance Plan (04-08).

We now have more experience stimulating effective partnerships in our four focal states and national programme. Investment in centrally-sponsored schemes has risen, and the implications for our work of the interplay between the State and Union governments are clearer. The move from "sectoral interest" to "state engagement" is well-rooted in our new practice. Co-financing programmes with other agencies has become a more accepted approach.

In order to get a better focus in our work, we have removed non-strategic investments from our portfolio. A Programme Committee now oversees the balance, flexibility and delivery of our programmes.

20. In evidence DFID stated that it was considering deploying more staff at state level (Q73). What are the pros and cons of the current arrangement in which DFID-I is centralised in New Delhi?

State programme teams need to work externally and internally with many partners (government, civil society, other donors, UK Government, DFID India, DFID globally). This work is carried out in Delhi and in partner states. Our state offices are integrated into DFID's global communications network, and state office staff work "virtually" with their colleagues in Delhi. There are, however, resource and opportunity costs in travelling between states and Delhi, and practicalities to overcome in split-site teamworking.

In September 2004 we plan to start a review of our state offices. The review will focus on the objectives and activities of state offices as our programmes evolve. The mix of state office staff needed to deliver against programme objectives will also be considered. The emerging conclusions of the review should be available when the IDC visits India.

21. How much communication is there between DFID in London and DFID-I? To what extent does is the London office involved in decision making?

There is regular and frequent communication (by email, 'phone, video-conference, visits, etc) between staff across DFID India and their counterparts in DFID HQ (London and East Kilbride). As elsewhere in DFID, decision-making is devolved to the country office. However, decisions involving significant policy changes, large financial transfers (according to DFID's rules on delegated financial authority), and politically or media-sensitive issues are referred to the appropriate officials and/or Ministers in London. Separately, to ensure that we benefit from and contribute to broader experience and knowledge, and to inform and take account of wider regional and global developments, we routinely consult relevant colleagues across DFID, in HQ and/or other country offices.

THE PRIVATE SECTOR

22. One area where India seems to have made great strides in recent years is in terms of liberating its private sector. Many core services (health and education) are increasingly being delivered via the private sector. And yet DFID spending seems almost entirely to be directed to the public sector or to NGOs/CSOs. Why is DFID-I not more involved in work with the private sector?

DFID-I consulted the private sector while framing its Country Assistance Plan and is looking at direct engagement in private sector led projects as well as active engagement within the framework of its existing government led programmes:

Direct engagement: The Financial Deepening Challenge Fund is currently supporting five projects through private sector players with a total of £1.8 million approved.

Through windows within government led projects: A private public partnership work plan within the Reproductive and Child Health programme is under design. It aims to leverage private sector participation to improve service delivery and reduce out of pocket expenditure for the client. The design includes social marketing, social franchising and development of ideal contracting and regulatory mechanisms for private sector participation. In the Sarva Shiksha Abhiyan programme in education, there is a window for private sector participation in the implementation framework document. DFID—I is directly supporting (80% of funding) an innovative public-private—NGO partnership involving several large corporations from the IT sector and aimed at rejuvenating 300 deprived primary schools in Hyderabad.

Upcoming initiatives (dependent on approval by the Department of External Affairs, GoI ):

The national team of DFID-I is working on two initiatives in this area:

A Pilot Private Sector Partnership project: This seeks to support and encourage the private sector to undertake activities that impact on the MDGs positively. The project proposes to part fund private sector led projects to test new ways of providing service to and trading with poor people. The project will attempt to create conditions for faster adoption of innovative business practices that provide low cost, high quality products and services to the poor, and build capabilities of the poor to sell their output in wider markets.

A Small and Medium Enterprises Support Programme: This project proposes to work in partnership with the Banking Division of the Ministry of Finance, the Small Industries Development Bank of India (SIDBI) and commercial Banks from the private and the public sector. It is envisaged that the project will improve policies and help create markets for financial and non financial services in sectors that have relatively high potential to generate incomes and employment for poor people. DFID will work jointly with the World Bank, IFC and BMZ.

MISCELLANEOUS

23. We understand that DFID used to have a water and sanitation office (when it was organised into sector offices). What is DFID-I currently doing in the water and sanitation sector?

The sector offices were established to manage sectoral programmes, before DFID devolved its India programme to Delhi, and were integrated into the DFID India office about five years ago.

DFID's current strategy for engagement in water supply and sanitation in India is mainly in collaboration with other partners. At the policy level we have provided funding (£4 million) to the UNDP/World Bank Water and Sanitation Programme (WSP). The WSP works closely with the Government of India's Rural and Urban Ministries, as well as at state level. It focuses on key policy issues such as demand responsive approaches, operational and financial sustainability and approaches to increasing access to sanitation based on a challenge fund approach. WSP has also been engaged in strengthening implementation of GoI's national water programme—Swajaldhara.

At an operational level we recently approved £20 million in support to UNICEF for Water Supply and Sanitation as part of their Child Environment Programme. DFID has supported UNICEF's water and sanitation work for the last eight years. This is a rural programme and targets improved access to water, basic sanitation and safe hygiene practice to those currently unserved in the poorest states in India. In terms of urban areas, our large Kolkata and Andhra Pradesh Urban Services Projects include substantial water and sanitation components.

On broader water resources issues our work in rural livelihoods and watershed programmes has enabled DFID to draw out key lessons at the sub-catchment level. At river basin scale we recently funded an ADB state level study of water resources management issues in Madhya Pradesh. Asia Directorate has recently identified water resources and the potential for conflict, as well as its importance for economic development, at sub national and regional level as an issue for further study. DFID India is contributing to this work.

24. The sustainability of Indian economic growth rests on agricultural reform, including possibly land reforms and radical redistribution policies. Michael Lipton also raised this point in his evidence, suggesting that DFID has "not sufficiently focused on the need to get small-scale poverty-oriented Indian agriculture moving faster again". Why has DFID more or less moved out of this area? What would DFID now focus on if it was to re-engage?

DFID has been supporting the improvement of agricultural livelihoods through large rural livelihoods projects in partner states. These projects have focused on supporting government partners with the implementation of rural development schemes in drought prone areas that depend on rainfed farming systems. An important element of these projects has been to work with small scale farmers, marginalised and vulnerable groups (including scheduled tribes and landless agricultural labourers) to develop locally appropriate and sustainable agricultural practices to tackle poverty and food security. Agricultural productivity and incomes are being tackled through improvements to traditional varieties, cropping practices and improved access to markets. These projects are also helping poor rural people to diversify their livelihood options and improve incomes through rural non-farm activities.

Beyond these state level involvements, there has been limited scope for DFID's involvement at the national level. Many of the subsidy and market distortions are government-created, which combined with low levels of public and private investment severely constrain opportunities for agricultural diversification and growth. The political economy of India's agriculture is complicated and makes it difficult for international donors to engage effectively on agricultural reform issues. While the central government provides the broad policy directions, actual implementation is the responsibility of state governments. DFID India has been undertaking analytical work on pro poor agricultural growth in some states (including Andhra Pradesh and Orissa) to inform sector dialogue and possible programmatic intervention. This work has been looking at a range of issues, including land tenancy, input and agricultural product markets, seasonal migration and the risks faced by small-scale farmers.

25. Which "Drivers of Change" have been identified in India, and to what end? Who are the "pro-reform constituents within government" mentioned on p 17[2] of DFID's Written Evidence (19 May 2004)?

The Drivers of Change study commissioned by DFIDI in 2003, identified the following as catalysts of change:

The private sector

Media

bureaucracy

Local governments

stake-holder groups

reform-minded, innovative politicians

Civil society and social movements

judiciary

Non-resident Indians

trades unions

research community

Professional groupings

Development agencies

Pro-reform constituents within government are to be found at both bureaucratic and political levels. The reference in the written evidence was to both.

26. DFID-I seems to be less enamoured with "big projects" than it once was, perhaps for good reason (costly to set up/manage, etc). Michael Lipton, however, suggested that the pendulum has swung too far, and certainly there have been big project success stories (arguably, the Western and Eastern India Rainfed Farming Projects). What is DFID's current thinking on the pros and cons of "big projects"? Is DFID-I likely to be more involved in larger projects in the future?

We agree that some of our large projects have been successful and we will continue to fund large projects where they are the most appropriate instrument. This has been particularly true for rural and urban sectors at state level and there are a number of initiatives we support (eg Orissa Tribal Empowerment and Livelihoods Project, AP Rural Livelihoods Project, Western Orissa Rural Livelihoods Project, AP Urban Services for the Poor, Kolkatta Urban Services for the Poor, and proposed West Bengal Support to Rural Decentralisation). These projects were based on an assessment that the best way to add value and improve pro-poor services in these sectors was at state level. Watershed based programmes are a good example, where we could have put money in the central watershed schemes but were steered towards large projects at state level complementing these schemes.

In deciding on the appropriate instrument we need to take into account effectiveness and institutional sustainability as well as management burden. We believe programmatic support is generally superior on the latter two criteria but can be outweighed by effectiveness/efficiency considerations. The Western and Eastern India Rainfed Farming projects are good examples of projects with high impact and effectiveness at the grass-roots level. However, as the projects come to an end, issues around sustainability of the implementing agencies and the structures they have created is a concern.

As our portfolio and partnerships have matured, conditions are right for programmatic support in some of our main strategic priorities hence the share of large projects in the portfolio is falling. But large projects continue to be supported where appropriate, and we would not agree that "the pendulum has swung too far" against this form of assistance. In addition, small projects will sometimes be appropriate where the objective is strategic technical assistance or piloting innovations.

August 2004

Annex B

BILATERAL SUPPORT THROUGH NGOs

	(Amounts in £'000) 2003-04 2004-05
2005-06
	Actual	Proposed
Disaster Management Institute	0	50	60
Pro-Poor change	0	500	500
Natural Resource Management (Oxfam)	277	58	0
Natural Resource Management (SPWD)	18	15	0
Western India Rainfed Farming Project	1,261	1,500	1,500
Eastern India Rainfed Farming Project	1	500	100
West Bengal Flood & Rehabilitation	392	0	0
Civil Society Organisation (West Bengal)	60	250	500
CARE Credit and Saving Household Enterprise (CASHE)	1,294	1,300	1,000
Orissa Civil Society Poverty Programme	2	350	600
Community Based Rainwater Harvesting	416	0	0
Community Based Drought Response	526	900	0
Poorest Areas Civil Society	2,005	2,500	3,600
Support to ICRC Programme in J&K	1,000	500	500
Chronic Poverty Research Centre—India	0	800	1,000
Small & Medium Enterprise Programme	0	1,500	3,000
Pilot Private Sector Partnersip Project	0	250	500
INGOs	0	100	4,000
	7,252	11,073	16,860

Annex C

DETAILS OF PROJECTS/MOUs THROUGH MULTILATERAL AGENCIES

Name of Project	Approved Commitment	Spending to date	Sectors covered	Geographic areas covered
(in million £s)
MP team
UNICEF Child Environment Phase I	£17.500	£17.22m	Water, Environment and Sanitation	Chhattisgarh, Maharashtra, Jharkhand, Karnataka, Kerala, Assam, Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal
UNICEF Child Environment Phase II	£20.000	£1.1m	Water, Environment and Sanitation	Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Orissa, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, West Bengal, Tamil Nadu, Uttar Pradesh
AP team
ILO IPEC elimination of Child labour	£2.700	£2.2m	Child labour	4 pilot areas in A.P.
National Team
NACP II ( UNAIDS)	£5.650	$1,900,000	Health	National
Polio (WHO I)	£12.000	£5,194,942	Health	National
Polio (WHO II)	£5.741	$6,163,923	Health	National
Polio (UNICEF I)	£0.859	£858,614	Health	National
Polio (UNICEF II)	£2.200	£0	Health	National
RCH (UNICEF)	£3.267	$5,300,000	Health	National
MMR advocacy (UNICEF)	£2.000	£0	Health	National
Pro Poor Globalisation (UNCTAD)	£5.500	£1,241,828	Trade liberation	National
Water and Sanitation Programme—rural (WSP)	£2.900	£2,350,838	Water and Sanitation	National
ILO Child Labour Survey	£4.300	£0		National
ILO—SEWA	£0.100	£25,000	Sustainable Livelihoods	National
UNICEF Child Birth Registration Rights	£2.300	£1,300,000	Child Rights	National
Orissa Team
Tribal Empowerment and Livelihoods (IFAD)	£9.760	Nil	Livelihoods	Gajapati, Kalahandi, Kandhamal, Koraput, Malkangiri, Nawarangpur, Rayagada in South-West Orissa and Sundergarh in the northern tribal belt
Industrial Policy Resolution-2001	£7.500
UNDP	£0.524	£100,000	Fisheries	Orissa State
UNDP	£0.110	£35,000	Resettlement and Rehabilitation	Orissa State
UNIDO	£0.610	£144,000	Investment Promotion	Orissa State
UNIDO New Commitment to be started	£0.700		Cluster	Orissa State
PLST
ADB Poverty Trust Fund	£20.000	£5m	TA support to strengthen the poverty focus of bank's work in India across a wide range of sectors eg energy, rural and urban development, education, health, Governance, Environment etc.	Gujarat, MP, Assam, Kerala, West Bengal, Uttaranchal, Chhattisgarh, Karnataka, Rajasthan, J&K and North-Eastern States
World Bank Poverty Trust Fund	£4.000	£1.8m (£1.2 in Suspense)	To improve the poverty focus of World Bank's interventions in a wide range of sectors including Education, Health, Rural and Urban development, Structural Adjustments	Karnataka, U.P., A.P., Orissa, and through the GoI for the whole of India
UNICEF influencing social policy	£2.000	NIL	Social Policy	16 states of India
Total Value of Projects chanelled through Multilateral agencies	£124.72

Annex D

DATA ON INDIA AND FOCAL STATES FOR IDC (Prepared 5 August 2004)

POPULATION GROWTH

millions India AP MP Orissa WB

Census 2001 1,027 75.7 60.4 36.7 80.2

Forecast 2015 1,245 87.8 76.9 *40.7 95.1

*Note—the forecasts were made in 1996, and so for MP included what is now Chatisgarh. The figure for 2015 is a DFIDI estimate not official GoI.

CENSUS 2001 DATA—POPULATION, CHILDREN, SEX RATIO

Population (millions) Total Male Female Rural Urban Age 0-6

Females for
1,000 males
aged 0-6

India 1,027.0 531.3 495.7 741.7 285.3 157.9 927

AP 75.7 38.3 37.4 55.2 20.5 9.6 964

MP 60.4 31.5 28.9 44.3 16.1 10.6 929

Orissa 36.7 18.6 18.1 31.2 5.5 5.2 950

West Bengal 80.2 41.5 38.7 57.7 22.5 11.1 963

POVERTY NUMBERS USING THE 1999-2000 INDIAN OFFICIAL POVERTY LINE PERCENTAGES APPLIED TO 2001 POPULATION FIGURES

Percentage below the official poverty line Total
Rural
Urban Number of poor (millions) Total
Rural

Urban Number of
poor (m)
2006-07

India 26.1 27.1 23.6 268.3 200.9 67.4 220.1

AP 15.8 11.1 26.6 11.6 6.1 5.5 6.9

MP 37.4 37.1 38.4 22.7 14.0 8.7 19.9*

Orissa 47.2 48.0 42.8 17.3 15.0 2.3 16.3

West Bengal 27.0 31.8 14.9 21.7 18.4 3.3 16.0

*Note—the forecast number of poor in 2006-07 is taken from the GoI 10th Plan and for MP included what is now Chattisgarh. The figure for MP for 2006-07 is a DFIDI estimate not official GoI.

EDUCATION

Analysts use the two National Family Health Surveys in preference to the official Education Department enrolment figures, which are (a) prone to over-inflation and (b) do not cover all schools.

National Family Health Survey reports school attendance for 1992-93 and 1998-99 as follows (%)

Rural M
F
T Urban M
F
T Total

M F T

All India (92) 72.2 52.2 62.6 85.3 79.2 82.4 75.5 58.9 67.5

All India (98) 81.4 69.7 75.7 88.7 86.3 87.6 83.1 73.7 78.6

AP (92) 66.8 46.6 56.8 85.0 76.3 80.6 71.8 54.8 63.3

AP (98) 71.3 56.0 63.9 80.1 78.5 79.4 73.5 61.5 67.7

MP (92) 64.3 46.3 55.9 84.7 81.6 83.2 69.0 54.8 62.3

MP (98) 73.1 58.0 65.7 84.0 77.9 81.2 75.9 62.8 69.6

Orissa (92) 74.7 58.9 67.0 88.2 78.6 83.5 76.8 62.0 69.6

Orissa (98) 77.1 65.8 71.5 78.2 75.4 76.9 77.2 66.8 72.1

WB (92) 68.6 60.1 64.2 83.3 71.8 77.9 72.5 62.9 67.7

WB (98) 72.5 65.9 69.3 78.5 76.1 77.3 73.7 68.0 70.9

Note—MP includes Chatisgarh

For the States, the comparison is not quite exact, since the figures for 1992-93 refer to children aged 6-14 and for 1998-99 is it 6-17. However, one can see the greater increases in female attendance from one survey to the other, which is a healthy sign.

LITERACY—CENSUS 2001

Percentage Literate age 7 and over Total Male Female Number Illiterate (millions) Total

Male Female

India 65.4 75.8 54.2 355.6 128.3 227.3

AP 61.1 70.9 51.2 29.5 11.2 18.3

MP 64.1 76.8 50.3 21.7 7.3 14.4

Orissa 63.6 76.0 51.0 13.4 4.5 8.9

West Bengal 69.2 77.6 60.2 24.7 9.3 15.4

CHILD HEALTH

Deaths per 1,000 live births

All India 1970 1980 1990 2000 Target 2015

Infant mortality rate 127 113 84 68 27

Under 5 mortality rate 202 173 123 94 32

Infant mortality rate (deaths per 1,000 live births) 2000 Target 2015

Andhra Pradesh 65 23

Madhya Pradesh 88 37

Orissa 96 41

West Bengal 51 21

The target for 2015 has been calculated by the World Bank

CHILD MALNUTRITION

Percentage of children under the age of 3 who are underweight for their age

Source—National Family Health Surveys 1992-93 1998-99

India 53.4 47.0

Andhra Pradesh 49.1 37.7

Madhya Pradesh 57.4 55.1

Orissa 53.3 54.4

West Bengal 56.8 48.7

Note—MP includes Chatisgarh

MATERNAL HEALTH

Maternal mortality ratio (deaths per 100,000 live births) (from the Sample Registration System, 1998) % of women who gave birth safely

1992-931998-99

India 350 to 460 34.2 42.3

Andhra Pradesh 159 49.3 65.3

Madhya Pradesh 498 30.0 30.1

Orissa 367 20.5 33.7

West Bengal 266 44.4 44.5

Note—MMR data are unreliable and these point estimates are merely a guide to the scale of the problem

Annex E

NATIONAL PROGRAMME

Prepared for DFID India Programme Review with the Government of India, June 2004

Following the finalisation of the Country Assistance Plan, we have structured the National Programme around three objectives deriving from the Country Assistance Plan. They are:

— "Supporting National Policies and private sector initiatives for livelihoods protection and growth." (CAP section D.2.2).

— "To support reforms and provide resources for the Government of India's Plan to reach MDGs of universal completion of primary education and reduction of mortality and morbidity, focusing on the poorest and the most marginalized." (CAP section D.2.3).

— "Supporting the goals of the Tenth Plan by working with civil society and Government to promote efficient and responsive government and to realize the rights of the poor". (CAP sections D.2.2 and D.2.3).

Objective 1: "Supporting National Policies and private sector initiatives for livelihoods protection and growth." (CAP section D.2.2)

PRE-DESIGN PHASE

1. Chronic Poverty Research Centre (£1.8 million). DFID intends to propose a project concept note to the DEA for a TC programme under which a network of Indian research institutions, supported by the University of Manchester (UK), would contribute to data-collection and analysis on chronic poverty.

2. Pilot Private Sector Partnerships Project (£7 million). DFID's letter of 31 March 2004 to the DEA proposed a TC programme under which DFID would make available support for initiatives seeking private provisioning of services to the poor; a reply is pending. Such a programme would come under the DEA guidelines on the bilateral funding of Civil Society Organisations.

DESIGN PHASE

3. Small and Medium Enterprises Project (£20 million). The main contact for this project is the Secretary, Banking Division, DEA. Mr Sunil Bhargava's letter to the World Bank's Country Director, copied to Charlotte Seymour-Smith and your Joint Secretary, stated that the Division of the DEA dealing with DFID and GTZ/KfW had agreed to the proposal of support by DFID for the TA component of the project. By Charlotte Seymour-Smith's letter to the Joint Secretary of 09/03/04, DFID agreed to join the World Bank's project appraisal mission. Subject to our Director's agreement, DFID intends to propose an Exchange of Letters to the DEA this summer for a £20 million package of technical assistance for the SME sector to be implemented by SIDBI.

IMPLEMENTATION PHASE

4. Support for pro-poor globalization (£5.4 million). This programme is being implemented through an MoU between DFID and UNCTAD, which manages DFID Technical Co-operation (TC) funds. An annual review is scheduled in conjunction with MoIC and UNCTAD in May 2004.

5. National Micro-Finance Support Project (£16.5 million). An annual review is scheduled in conjunction with SIDBI in December 2004.

6. ILO Child Labour Survey (£4.3 million). This TC project is being implemented through an MoU between DFID and ILO, which manages the DFID funding for this Ministry of Labour/NSSO/ILO project.

7. ILO SEWA (£100,000). This TC project is implemented through an MoU between DFID and ILO. The project activity is the design of a larger ILO-SEWA partnership project on social protection for women in the informal economy. The design should be completed during 2004. DFID currently has no position on funding for the larger project.

Objective 2: "To support reforms and provide resources for the Government of India's Plan to reach MDGs of universal completion of primary education and reduction of mortality and morbidity, focusing on the poorest and the most marginalized." (CAP section D.2.3)

PRE-DESIGN PHASE

8. Reproductive and Child Health Technical Assistance (£tba). The Department of Family Welfare has requested its development partners to provide technical assistance during 2004-05, before the mobilisation of the main RCH2 programme. If DFID were to become involved this could be covered by the agreed PCN for RCH2.

9. India—Health Systems Resource Centre (£1.5 million). DFID may propose to the DEA a project concept note for a programme to reinforce the capacity of an Indian organisation, as yet unidentified, to enable it to provide high-quality consultancy advice to the Centre and States on health systems reform. This is currently being discussed with Department of Family Welfare and if approved, would be subsumed under the Technical Assistance component of RCH 2 programme, mentioned under para 5.

DESIGN PHASE

10. Reproductive and Child Health 2 (£250 million). DFID is preparing a package of support of up to £250 million, within the framework of the agreed PCN, in conjunction with the Department of Family Welfare. DFID's understanding is that the sequence of negotiations would be the same as for SSA: Memorandum of Understanding first, then World Bank negotiations and DFID exchange of letters before the end of the calendar year.

11. Support to the National AIDS Control Programme (£123 million, this includes the previous PSH commitment of £28 million). DFID submitted an Exchange of Letters in May 2001 for this and we understand that the project received approval of Cabinet Committee on Economic Affairs in December 2003. We look forward to the DEA's communication of GoI approval. DFID believes that it will be necessary to discuss the modification of the design with NACO to take account of changes to the programme context since 2001.

12. £190 million contribution to SSA 2003-4 to 2006-07. DFID will propose an exchange of letters to the DEA during the coming weeks. The DEA will then request DFID to make disbursements according to the arrangements set out in the MoU signed between DEA, DFID, the World Bank and the European Commission.

13. £20 million contribution to SSA 2003-04. The single £20 million disbursement was released against MHRD Statements of Expenditure in March 2004. As per the Exchange of Letters, the Indian Government will submit audited confirmation of these SoEs. We have noted that the Statements of Expenditure submitted to DFID envisaged an adjustment against DFID's contribution to SSA under its £190 million grant.

IMPLEMENTATION PHASE

14. UNICEF—Accelerating RCH (£3.3 million). This TC project enabled UNICEF to support States' preparations to participate in RCH2, and was implemented under an MoU between DFID and UNICEF. DFID is awaiting final reports to permit project closure.

15. Partnerships for Sexual Health (PSH) (£28 million). DFID has been financing its support for the National AIDS Control Programme from this old project pending Government approval of DFIDs £95 million package (see above). As indicated by our letter of 27 November 2003 to the Joint Secretary and by Martin Dinham on 24 March 2004, the Technical Co-operation (TC) funds under Partnerships for Sexual Health are exhausted and ongoing disbursements are therefore unprocedural. DFID is exploring options for addressing this difficulty, but a suspension of disbursements may be necessary.

16. Pulse Polio (£98 million). This project is implemented in partnership with the Department of Family Welfare, the WHO and UNICEF. An annual review is envisaged for the second half of 2004. The outstanding audited statements for £65 million of DFID grants are a major concern. Our most recent correspondence on this matter was a letter from the Secretary Family Welfare of 27 April 2004, which we will forward to headquarters to determine whether it permits expenditures to be discharged. In that letter the Secretary Family Welfare also requests DFID to help fund a resource gap of USD217 million for the 2004-05 Pulse Polio campaign.

17. Polio—WHO (£5.7 million). This TC project permits the WHO to support the national Pulse Polioprogramme and is implemented under an MoU between the WHO and DFID.

18. Polio—UNICEF 2003-04 (£859,000). This TC project permitted UNICEF to support the Information, Education and Communication (IEC) activities of the national Pulse Polio 2003-04 campaign, and is implemented under an MoU between UNICEF and DFID. DFID is awaiting final reports to permit closure. DFID is considering a UNICEF proposal to extend the programme into 2004-05.

19. Management Development for Senior Urban Public Health Officers (£1.5 million). This TC project is implemented under a contract between DFID and the Water Engineering and Development Centre, Loughborough University, UK and Administrative Staff College of India, Hyderabad. This has worked closely with the Ministry of Urban Development and Poverty Alleviation. It has just completed (end March) and a project completion report will be undertaken.

20. Support for Water and Sanitation Programme (£3.0 million). This TC project funds the World Bank's WSP programme and is implemented under an MoU between DFID and the World Bank. It is also known by its full name of "Translating Rural Water Supply and Sanitation Policy Reforms into Reality"

Objective 3: "Supporting the goals of the Tenth Plan by working with civil society and Government to promote efficient and responsive government and to realize the rights of the poor" (relevant to CAP sections D.2.2 and D.2.3)"

PRE-DESIGN PHASE

21. India Safety Security and Access to Justice (£12 million). Our letter of 24 September 2002 informed the DEA of possible DFID activity in this area. A project concept note under this head is currently under discussion with the Ministry of Home Affairs.

22. Civil Society Co-operation Programme (£15 million). DFID's letter of 10 March 2004 to the DEA proposed a TC programme under which DFID would directly provide capacity-building support to civil society organisations for them to be more effective in working with governments on poverty issues. Such a programme would be subject to the DEA guidelines on the bilateral funding of CSOs.

DESIGN PHASE

23. Capacity-Building for Poverty Reduction (£7 million). The DEA requested DFID to work on a project design with the Ministry of Personnel by its letter of 10 December 2001. The Ministry is considering a draft Project Memorandum, which would form the basis of an Exchange of Letters with the DEA in the usual manner.

IMPLEMENTATION PHASE

24. Poorest Areas Civil Society Programme (£27 million). This TC project in support of civil society organizations began in 2001. It is governed by DEA guidelines on bilateral agencies' support for civil society organizations. We informed DEA on the implementation arrangements of the project by our letter of 26 April 2004. The April 2004 batch of new sub-projects will require DEA approval before funding.

25. UNICEF Child Birth Registration 2003-04 (£2 million). An extension to this TC programme supporting UNICEF's co-operation with the Indian Government to raise the rate of child birth registration in deprived areas is being considered. The programme will be for 3 years and implemented under an MoU between UNICEF and DFID.

ANDHRA PRADESH PROGRAMME

DESIGN PHASE

1. International Programme on the Elimination of Child Labour Phase 2.

Proposed expenditure: £2-3 million approx, 2004-07.

Purpose: To mainstream the strategies and programmes trialled in the first phase. It is envisaged that the ILO will focus on transferring and expertise, and support the implementation of various programmes. The Phase II of the project will also focus on developing methods and models to tackle difficult-to reach children and child labour in urban areas, which was not covered in the first phase.

IMPLEMENTATION PHASE

2. AP Rural Livelihoods Programme, £46 million, 1999-2006.

Expenditure to date: £8.4 million.

Purpose: To support Government of Andhra Pradesh to implement comprehensive pro-poor watershed-based sustainable rural livelihoods approaches in five districts of Andhra Pradesh. The Mid Term Review of the project took place in November 2003. The review noted that the project is making good progress and is likely to achieve its purpose. The next review will be in September 2004.

3. AP Urban Services for the Poor programme, £94.4 million, 1999-2006.

Expenditure to date: £22.9 million.

Purpose: The poor in Class 1 towns benefit from improved access to more appropriate and sustainable services. The Mid Term Review of the project took place in February 2004. The review noted that the project is making good progress and is likely to achieve its purpose. The next review will be in January 2005.

4. Revised National Tuberculosis Control Programme, £20.4 million, 2000-05.

Expenditure to date: £4.5 million.

Purpose: We are supporting the Government of India's programme in AP. This project seeks to achieve sustainable improvements in the quality, effectiveness and accessibility of the TB services in Andhra Pradesh especially for the poor, women and other under-served groups. The mid-term review of this project was held in January 2004. The main issues raised were:

(i) need for renewed efforts on raise awareness of TB and availability of free treatment;

(ii) more emphasis on training for officials; and

(iii) need for strengthening of drug management systems.

5. District Primary Education Programme, £46.5 million, 1996 to 2005.

Expenditure to date: £29.7 million.

Purpose: To support the implementation of the Government of India's District Primary Education Programme (DPEP) in five districts of Andhra Pradesh. The project aims to improve quality of primary education services (formal and non-formal), increasing enrolment, retention and learning achievements, especially among the disadvantaged groups. It also aims to strengthen the capacity at national, state and district level to plan, manage and evaluate the provision of primary education. Government of India leads six-monthly Joint Review Missions of donors supporting DPEP. The last review of the project was held during November 2003 and good progress is being made. Next review is planned for July 2004.

6. Economic and Public Sector Reform I and II.

DFID contribution: first tranche £65 million 2001-02; second tranche of £55 million in 2003-04.

Budgetary assistance provided to the Government of Andhra Pradesh in support of its medium-term reform programme. Based on the Government of India's guidelines, the programme focuses on key policy reforms, particularly fiscal reform, to improve the environment for poverty reduction and accelerated growth, and to improve service delivery to the poor.

The programme has six components

— Poverty monitoring and pro-poor policy formulation and implementation;

— Structural measures to improve the investment climate and facilitate growth;

— Public enterprise reform;

— Fiscal reform, including the composition of expenditure and improving public expenditure management;

— Strengthening governance, including civil service and administrative reforms to improve performance and accountability, and renewed efforts to tackle corruption;

— Sectoral reforms in health, education and the power sector.

Assistance is provided on completion of agreed prior actions. The programme is co-financed by the Power Sector Reform, Phase II, £15 million, January 2004 to July 2006.

Expenditure to date: £1 million.

Purpose: To provide technical assistance to the state Government, Regulator (Andhra Pradesh Electricity Regulatory Commission), Distribution Companies and the Transmission Company (APTransco) to establish an efficient and commercially viable and customer-oriented power utilities in AP. This support will need to be revisited in light of the priorities of the new government.

8. Governance Reform Project, £5.9 million, September 2001 to March 2005.

Expenditure to date: £2.8 million.

Purpose: To support the establishment of a Centre for Good Governance (CGG) to assist the Government of Andhra Pradesh to implement its governance reform programme. The last review was conducted in November 2003. It showed that CGG had been effectively established and was producing good analysis. The main issues were:

(i) the need for an overarching state committee to oversee and guide the programme; and

(ii) strengthening of General Administration Department to strengthen the link between analysis and implementation.

9. Economic Restructuring Project, £11.4 million, November 1998 to September 2006.

Expenditure to date: £7.5 million.

Purpose: To provide technical assistance to support the introduction of VAT and the implementation of government's public enterprise reform. Assistance complements the World Bank's AP Economic Restructuring Programme support. The VAT support has come to an end. Support for public enterprise reform will need to be revisited in light of the priorities of the new state government.

10. Technical Assistance Support for Developing AP Medium-Term Health Sector Strategy (£597,000—2001 to 2005).

Expenditure to date: £386,000.

Purpose: To assist GoAP to develop a strategy to enable it to meet its own goals and the Millennium Development Goals on health. The strategy, which is focussed on improving the health outcomes of the poor, identifies five key areas. These are improved service delivery, better integration with the formal and informal private sector, strengthening district level management structures, addressing human resource and institutional issues to achieve greater efficiencies, and ensure increased and more efficient financing for the sector.

COMPLETED

11. Andhra Pradesh Energy Efficiency Project, £42.7 million, 1994-2003.

Total spend: £35 million.

Purpose: To assist GoAP to upgrade and strengthen electricity distribution systems in the districts of Mahbubnagar, Nalgonda and Khammam. It established a new system (SCADA—Supervisory Control and Data Acquisition Centre) for energy efficiency by helping the utility to manage supply and provide better quality of service to customers. It also funded new infrastructure (substations, power lines etc) and refurbishment of existing facilities.

12. Power Sector Reform, Phase I (£28 million—March 1999 to February 2004).

Total spend: £26 million.

Purpose: Project provided technical assistance to support the implementation of the Government of Andhra Pradesh's power sector reform programme, alongside a World Bank investment loan. The project did not fully achieve its purpose, in part because the complexity and difficulty of the reform was underestimated during design. Good progress was achieved in:

(a) "unbundling"' of the vertically integrated structure into separate generation, transmission and distribution businesses;

(b) development of an independent regulator;

(d) improved efficiency, technical performance and quality of supply. Progress on addressing other issues, particularly relating to the supply of power to agriculture, was more limited.

13. International Programme on the Elimination of Child Labour, £2.8 million, 1999-2004: Support provided to ILO.

Total spend: £2.5 million.

Purpose: Support to the International Labour Organisation to pilot and trial approaches to tackling and eliminating child labour. The programme was developed in consultation with members of the community and builds on the successful components of other ILO IPEC projects in India. Project staff work with employers, NGOs and parents to raise awareness and build support for children to go to school rather than being in employment.

MADHYA PRADESH PROGRAMME

PRE-DESIGN PHASE

Title Purpose Proposed Value Status

Mid Day Meal Scheme To support GoMP in effectively delivering its MDM scheme in rural areas. This will include development and implementation of an appropriate and effective monitoring and evaluation programme for the scheme £5.5 million The Chief Minister requested for support to the scheme. Discussions ongoing with GoMP which will lead to GoMP submitting PCN to DEA for DFID support by end of June 2004.

Disaster Management
Project To support preparation of disaster management plans for vulnerable districts of Madhya Pradesh £0.1 million DEA sent us the proposal on 12 May 04. This is to be discussed and considered.

DESIGN PHASE

Title Purpose Proposed Value Status

Support for Public Sector Undertaking Reforms in Madhya Pradesh GoMP loss making PSUs restructured, and private sector and entrepreneurial activity in MP increased through reduced public sector role £1.35 million The TC funds are in support of AsDB Public Resource Management for Poverty Reduction Loan. DEA approved the PCN on
21 September 2001. Discussions with GoMP on the programme implementation ongoing.

Building Capacity for Decentralised Governance for Improved Pro-Poor Service Delivery To support the establishment of an effective and responsive public service in Madhya Pradesh £6.5 million DEA approved the PCN on
9 October 2002. Four design studies were completed by December 2003. Discussions ongoing with GoMP on the way forward.

Environment Planning and Co-ordination (EPCO) Mainstreaming environment issues in the development efforts of GoMP £1 million Approval is awaited from DEA on the letter of
18 November 2003 sent by MOEF on the project proposal on "Organising , Strengthening and repositioning of EPCO" with DFID assistance.

UNICEF Child Environment Programme—Phase II Support government to improve access to, use of and control over safe water and sanitation, and to improve hygiene, achieved through operationalisation of sector reforms £20 million The second phase of the programme is envisaged to apply the models and lessons learnt during Phase I to support the operationalisation of sector reform. The project involves activities in 14 states (Andhra Pradesh, Assam, Bihar, Chatisgarh, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal) and at the national level. Internal approval is expected by
July 2004. This TC project will be implemented through an MoU between DFID and UNICEF.

Strengthening Capacities for Pro-Poor Change Effective measures for pro-poor change developed and operational Provisionally £1 million This initiative supports the State government and civil society organisations in Madhya Pradesh to strengthen capacities for pro-poor change. Approval is awaited on the PCN that was submitted to DEA on
3 March 2004.

IMPLEMENTATION PHASE

Title Purpose Proposed Value Status

Support for the reform of the power sector in MP To create an efficient, accountable and financially viable power sector which ceases to be a burden on
state finances £10 million (TC) TA support of an AsDB loan. Mid-term review concluded on 11 May 2004. The review report is awaited.

MP Rural Livelihoods project Livelihoods of the rural
poor, especially tribals sustainably enhanced £16.4 million
FA: £13.88 million
TC: £2.52 million
DEA approved the proposal in December 2003. GoMP officially launched the project in February 2004. The start up activities have begun.

MP Swasthya Sewa Jeevan (Healthy life Services) Guarantee Scheme Enhanced capacity of GoMP to plan and deliver services that affect the health
outcomes of poor people £17.65 million
FA: £14.45 million
TC: £3.2 million
DEA approved the proposal in December 2003. And with subsequent approval from the new goverment in GoMP received in February 2004, the start up activities have begun.

ORISSA PROGRAMME

Objective 1: Supporting governance and fiscal reforms

DESIGN PHASE

1. Poverty Reduction Budgetary Support (DBS—£25 million): Orissa Socio-Economic Development Loan/Credit: This programme is a joint operation between DFID and the World Bank, in support of the GoO's reform programme. GoO has completed a number of "prior actions" required in order to access a combined grant/loan tranche from both donors. GoO, Bank and DFID look forward to dialogue with DEA soon on the GoO's Medium Term Fiscal Plan, power sector reform, and handling of the PRBS appraisal and negotiations process.

2. Orissa Public Enterprise Reform Programme phase II (OPERP II): £30.487 million is awaiting DEA approval. The Project Memorandum along with the Exchange of Letters has been submitted to Mr Vivek Mehrotra, Joint Secretary, DEA on 6 April 2004. Approval will facilitate financing of Government of Orissa's proposal, approved by DEA on 25 March 2003. OPERP II has a FA component of £29.8 million and a TC of £0.687 million.

3. OPSRP: OPSRP started in 1999 with a commitment of £20.2 million. GoO had sent a letter of request to DEA in August 2003 for an extension of the project by two years. The extension phase will include:

(i) poverty reduction strategy;

(ii) revenue generation;

(iii) civil service reform;

(iv) expenditure management and planning (including treasury computerisation);

(v) rural local government reform;

(vi) departmental poverty initiatives; and

(vii) centre for good governance to implement the above.

IMPLEMENTATION PHASE

4. Orissa Power Sector Aid—(project will be completed shortly).

5. Hirakud Rehabilitation—(project will be completed shortly).

6. Orissa Gridco Restructuring (TC £6 million): DFID provides technical assistance to the Orissa Electricity Regulatory Commission (OERC) on the following components: Gridco, Long Term Tariff Policy, Multi Buyer Trading, Regulatory Information Management Systems, Loss Assessment study, training and institutional strengthening, rural electrification, communications and publicity and programme management.

7. Industrial Policy Resolution: This project assists the Government of Orissa with technical assistance of £7.5 million and works in partnership with UNIDO, UNDP and other service providers with the aim to improve the climate for socially and environmentally responsible investment and enterprise development. A review is to be planned in conjunction with the government, tentatively scheduled for June 2004.

8. Orissa Civil Society Poverty Programme (TC—£1.5 million): This programme was launched in March 2004 for a period of three years with the main objective of strengthening government civil society programme in the state, and strengthening advocacy for improving service delivery to the poor. Seventeen organisations have been short-listed on the basis of well defined, robust and transparent procedure for assessing bids. These NGOs will be funded on approval from DEA which is awaited.

Objective 2: Promoting health development

DESIGN PHASE

9. Health Sector Support £100 million: PCN to provide support to the health sector, coinciding with GoO's Health Vision—2010 was approved in March 2002. Currently support is being provided to DoHFW, GoO to prioritise and cost their action plans to implement the sector strategy. We look forward to a proposal from GoO through DEA by August- September 2004 to fund the GoO's sector strategy.

IMPLEMENTATION PHASE

10. Interim Health Sector Support (£1.18million): Joint MoHFW—DFIDI annual review was held on 6-7 May 2004. MoHFW have principally agreed to a no cost extension of the project to March 2005. We are awaiting a request from DoHFW, GoO for an extension.

11. District Primary Education Project (£45.2 million): This is a national funded programme covering eight districts in Orissa. GoI Joint Review Mission (GoI, DFID, World Bank, UNICEF) is scheduled from 8-21 July 2004.

12. Orissa Reconstruction of Primary Schools (£32.7 million): This support is to reconstruct 3,500 primary schools destroyed during the cyclone of 1999. Funds flow from DEA to Orissa State Disaster Mitigation Authority (OSDMA), which is the monitoring agency. Orissa Primary Education Project Authority (OPEPA) is the implementing partner. A joint MHRD-DFID annual review was recently conducted in April 2004. DEA attended the wrap up meeting and was copied on the aide-memoire.

We have recently changed the funding pattern to pre-funding. DEA is in agreement with this change.

Objective 3: Improving sustainable livelihoods

PRE-DESIGN PHASE

13. Land rights: The Government of Orissa Forests Department and Department of Revenue have been in discussion with DFID for supporting a Project on strengthening various aspects of Land Administration. They intend to propose a project concept note to DEA requesting for support from DFID.

IMPLEMENTATION

14. Orissa Tribal Empowerment and Livelihoods Project—(£9.76 million): OTELP is an IFAD-designed project developed in consultation with the Ministry of Tribal Affairs (MoTA) and the Government of Orissa's ST and SC Development Department, as a long-term development intervention in the tribal belt of Orissa.

IFAD have approved a loan of about US$20 million for OTELP, and declared the Republic of India-IFAD Programme Loan Agreement effective as of 15 July 2003. IFAD and GoO, through MoTA and DEA, requested DFID to co-finance the programme to help meet the gap in financing. DFID have agreed to provide a TC grant of £9.760 (about US$13 million) as co-funding support for the first five years.

DFID is currently awaiting DEA approval for on grant of funds to Government of Orissa through a MOU with IFAD. DFID has formally written to Mr Sanjiv Arora, Director, Europe on 15 March 2004 requesting for approval. The on—granting had been earlier confirmed by Mr Dharmendra Sharma, Director (FB), DEA, (his letter dated 11 February 2003 to IFAD's Country Portfolio Manager refers), mentioning that the Finance and Company Affairs Minister had agreed to allow transfer of DFID assistance to the Government of Orissa as a grant.

15. Western Orissa Rural Livelihoods Project—(£32.75 million). This programme is under implementation by exchange of letters between Government of India and Government of UK. Orissa Watershed Mission is implementing the 10-year project as a sub- scheme within the MoRD. The project is currently in its fourth year of implementation.

16. Community based drought response—(£1.4 million). This programme is being implemented through a MoU between DFID and CARE, which manages DFID Technical Co-operation (TC) funds. An annual review was held in April 2004. This is a twenty-one month project began in January 2003.

WEST BENGAL PROGRAMME

This note provides an update on progress on the different initiatives in DFID India's West Bengal programme. The update has been provided under the proposed strategic objectives of DFID's support to the state (the objectives will be discussed with GoI and GoWB as part of finalising DFID's State Assistance Plan for West Bengal).

Objective 1: Strengthening policy and administrative efforts towards better human development outcomes

DESIGN PHASE

1. Health Sector Development Initiative (HSDI—upto £100 million over five years). DEA approved the Project Concept Note in September 2001. The objective of this programme will be to promote enhanced and equitable utilisation of quality health services by poor people. HSDI will be implemented in partnership with Department of Health and Family Welfare, GoWB. The programme design was appraised in March 2004, and an internal submission within DFID for approval of first year of support is expected in the next couple of months.

IMPLEMENTATION PHASE

2. District Primary Education Project (DPEP—£74 million combined for two phases over seven years). The Department of School Education, GoWB is responsible for project implementation. The project is reviewed every six months through GoI and multi donor joint review missions. A concern for DFID is that both phases continue to slow spend. If DPEP II pattern of expenditure continues there will be a projected underspend of approx. £10-£12 million (33% of approved commitment) when the project ends in 2006. Discussions are currently underway strengthening the effectiveness of the programme, and on GoWB's request for extension of Phase 1 of the project to utilise some of the underspend.

Objective 2: Strengthening rural and urban decentralisation for improved access to more accountable and better quality services and opportunities, especially for the poor

DESIGN PHASE

3. Strengthening Rural Decentralisation in West Bengal (up to £130 million): DEA approved the project concept note for this programme via Mr Velukutty's (Under Secretary—EEC. II) letter of 23 October 2002 to Steve Burton. Our main interlocutor in West Bengal is the Principal Secretary for the Panchayat Rural Development Department. Design and appraisal was completed in February 2004. Subject to our Secretary of State's approval, DFID intends to propose an Exchange of Letters to the DEA this summer for upto £130 million package of TA and programme support to be implemented by the PRDD, GoWB.

4. Civil Society Support Programme (£7 million): DEA letter of 26 February 2003 approved a project concept note for a proposed TC programme under which DFID would directly provide capacity-building support to civil society organisations for them to be more effective in working with government on poverty issues in West Bengal. Our main interlocutor for this programme within GoWB has been the Panchayat and Rural Development Department. Design and appraisal was completed in January 2004. Subject to our Head of DFIDI's approval, DFID intends to seek DEA approval for the programme. Such a programme would come under the DEA guidelines on the bilateral funding of Civil Society Organisations.

IMPLEMENTATION PHASE

5. Kolkata Environmental Improvement Project: (KEIP—£28.3 million of FA and TC combined, over six years) being implemented in partnership with the Asian Development Bank. KEIP is aimed at improving service delivery and enhancing the accountability of the Kolkata Municipal Corporation towards citizens, particularly the poor. The Municipal Affairs Department GoWB is responsible for project implementation. The project is now in its second year of implementation and was last reviewed in April 2004.

6. Kolkata Urban Services for the Poor Programme: (KUSP—£102 million of FA and TC combined, over seven years). The main objectives of KUSP are: improving urban planning and governance; providing access to basic services for the poor; and, promoting economic growth in the KMA. The programme will mainly focus on the KMA areas outside the KMC. The Municipal Affairs Department GoWB is responsible for programme implementation. The programme was launched in January 2004 and will be annually reviewed jointly by GoI and DFID. In accordance with the Project Memorandum, technical assistance in project management and organisational development are to be initiated at the start of project. The formal DEA approval of the terms of reference of these two assignments are awaited.

Objective 3: Supporting policy reforms contributing to pro-poor growth, fiscal stabilisation and effective governance

IMPLEMENTATION

7. Public Sector Enterprise (PSE—£27 million of FA and TC combined, over three years): This project is implemented by the Department of Public Enterprises and Industrial Restructuring. PSE is aimed at reduction of budget support to Public Sector Enterprises in West Bengal. Three of the four enterprises (to be retained with the GoWB ownership for the time being) have already implemented an Early Retirement Scheme. Management restructuring of these enterprises are in progress. For ten other enterprises that are going for Joint Venture Transformation, the process of finalising the Joint Venture Partners are at an advance stage and will be finalised by June 2004.

MULTI-STATE PROGRAMMES

IMPLEMENTATION PHASE

1. Karnataka Watershed Development programme, £15.2 million, 1996-2005.

Expenditure to date: £5.6 million.

Purpose: To develop replicable approaches for development in three drought prone districts of Karnataka, which empower poor people (including marginalised groups) to demand better services, to gain access to expanded and diversified livelihoods, and to assist government to respond to their needs. The last Annual Review took place in February 2004 and the next is scheduled to be held in February 2005.

2. Credit and Savings Household Enterprise programme, £9.8 million, (1999-2006).

Expenditure to date: £4.7 million.

Purpose: To increase the incomes and household economic security of the poor, especially women, principally through the provision of micro finance. Support is provided through a Non-Government Organisation (CARE). The project operates in Andhra Pradesh, Orissa and West Bengal. The programme would now be extended into MP but through a limited focus on capacity building. The last Annual review of the project was held in December 2003 and the next review is due in October 2004

3. Western Indian Rainfed Farming Project, £24.88 million FA: £15.09 million; TC: £9.79 million.

Purpose: To sustainably enhance the livelihoods of 675,000 poor rural people in areas of Western India, and to widely disseminate approaches developed in the project. The project area includes Dahod and Panchmahals (Gujarat); Jhabua, Dhar and Ratlam (Madhya Pradesh); and Banswara and Chittaurgarh (Rajasthan). The Mid term review was carried out in conjunction with MoEF in October 2003. The project will be completed by March 2006.

4. UNICEF/GOI: Child Environment Programme Phase 1, £17.5 million (TC).

Purpose: More Poor Households adopt improved hygiene behaviours, use safe water supplies and hygiene toilets in a sustainable manner. This programme in being implemented through an MoU between DFID and UNICEF, which manages DFDI TC funds. The programme is operational in six states—Orissa, Rajasthan, Madhya Pradesh, Uttar Pradesh, West Bengal and Andhra Pradesh, and supports at national level. The project will be coming to an end by the end of June 2004.

5. Oxfam: Natural Resource Management Bunelkhand Project, £1.1 million (TC).

Purpose: To promote sustainable livelihood options for village communities, especially dalits, tribals and women and creating an environment for long term social and political change. This TC support to Oxfam is being implemented in the Bundelkhand region of Madhya Pradesh and Uttar Pradesh. This is a five year project and will be coming to a close by the end of September 2004.

6. Natural Resources Management in Western Himalayas, £0.18 million (TC).

Purpose: To support ongoing and forthcoming work on Natural Resource Management carried out by the Society for Promotion of Wastelands Development in Himalayan Region. This TC support to Society for Promotion to Wastelands Development (SPWD) is being implemented in the Western Himalayan range in Uttaranchal. This is a five year project and will be coming to an end by the end of September 2004.

7. Himachal Pradesh Forest Sector Reform Project, £8.247 million (FA: £5.247 million).

Purpose: To establish and implement an integrated and cost effective strategy for sustainable forest management and enhanced livelihoods of the poorest forest dependent women and men in Himachal Pradesh. This project builds on the phase 1 of the programme that got completed in March 2001. The project was approved in March 2002, however the actual implementation started in January 2003 due to delays in start up activities. The first Annual review was conducted in August 2003. The second Annual Review to be conducted in conjuction with MoEF is tentatively scheduled for August 2004.

8. Lok Jumbish (£34.42 million).

Purpose: Lok Jumbish is a primary education project, which has been operating in Rajasthan since 1992. The LJ project aims to universalise primary education in 13 districts of Rajasthan. Project is due to close on 30 June 2004. The project authorities have submitted to DEA for approval a number of proposals for TC funds support. An urgent approval of the proposals from DEA is needed so that the proposals can be implemented within the project period (ie before 30 June 2004)

9. Shiksha Karmi (£20.14 million).

Purpose: Shiksha Karmi is a dynamic initiative to extend universal primary education (UPE) to remote villages and hamlets in Rajasthan where government education has collapsed or is non-existent. Project is due to close in June 2005. We are planning an annual review in September 2004.

10. Eastern India Rainfed Farming Project (£8 million).

Purpose: This mixture of FA and TC project officially started in 1995 and is scheduled to end in March 2005. Originally planned for five years, the project was extended to March 2003 in 1998 and granted a further two-year extension in 2002. It is implemented by Gram Vikas Trust which was set up in 2000 by the original implementers, Krishak Bharati Cooperative Ltd, to manage this project and (WIRFP). An annual review took place in April 2004 and the main issue for concern is that the project is not taking serious the exit and consolidation strategy. DFID has advised GVT and KRIBCHO that we will not grant the project another extension and consequently no DFID disbursements will be made beyond March 2005.

COMPLETED

11. Cochin Urban Poverty Reduction Project, £11.9 million, (1998 to 2004).

Overall spending: £8.8 million.

Purpose: To secure better access by the poor to improve services and livelihood opportunities. The last review was held in November 2003. Some of the key achievements of the project include:

(i) substantial improvement in the capacity of the beneficiary group to identify their needs, plan, implement and to monitor activities by themselves;

(ii) improvement in access to livelihood opportunities;

(iii) improvement of financial status through economic development initiatives;

(iv) improved in-slum infrastructure; and

(vi) convergence with other Government of Kerala programmes like Kudumbashree.

1 We assume that such a list would be easy to provide/print out from DFID-I's existing databases. We understand that the number of projects is probably very high and are not expecting DFID-I to spend time and resources compiling an exhaustive list. Back

2 Ev 61 Back



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