COUNTRY PROGRAMME EVALUATION - ifad.org

Republic of India

May 2010

Enabling poor rural peopleto overcome poverty


COUNTRY PROGRAMME EVALUATION

IInternational Fund for nternational Fund for Agricultural DevelopmentAgricultural DevelopmentVia Paolo di Dono, 44Via Paolo di Dono, 4400142 Rome, Italy00142 Rome, ItalyTel: +39 06 54592048Tel: +39 06 54592048Fax: +39 06 54593048Fax: +39 06 54593048E-mail: [email protected]/evaluation

IFAD Office of Evaluation Bureau de l’évaluation du FIDA Oficina de Evaluación del FIDA

Document of the

International Fund for Agricultural Development

Republic of India

Country Programme Evaluation

May 2010 Report No. 2199-IN

Photo on cover page: Self-help groups in India

Source: IOE consultant and India CPE team member, Mr Sarath Mananwatte

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Republic of India


Table of Contents

Currency Equivalent v Weight and Measures v Abbreviations and Acronyms v Abbreviations for Project Titles vi Foreword vii Acknowledgements ix Executive Summary xi Agreement at Completion Point xvii

I. BACKGROUND 1 A. Introduction 1 B. Evaluation Objectives, Methodology and Processes 2

II. COUNTRY CONTEXT 6

A. Overview 6 B. Agriculture and Rural Development 10 C. Government Budget to Agriculture and Rural Development and Official Development

Assistance 15 D. The Country Strategy, Lessons and Experiences of other Selected Donors in India 17

III. THE STRATEGY ADOPTED BY IFAD AND THE GOVERNMENT 20

A. Evolution of the Country Strategic Opportunities Paper 20 B. IFAD Funded Projects and Programmes 24 C. Country Programme Management 26

IV. PORTFOLIO PERFORMANCE 28

A. Characteristics of the Portfolio 28 B. Relevance 34 C. Effectiveness 39 D. Efficiency 46 E. Rural Poverty Impact 49 F. Other Performance Criteria 53 G. Overall Portfolio Assessment 56

V. PERFORMANCE OF PARTNERS 58

A. IFAD 58 B. Government 62 C. Cooperating Institutions 63

VI. ASSESSMENT OF NON-LENDING ACTIVITIES 64

A. Policy Dialogue 65 B. Partnership Building 66 C. Knowledge Management 67 D. Grants 69 E. Overall Assessment 70

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VII. COSOP PERFORMANCE 70 A. Relevance 70 B. Effectiveness 73

VIII. OVERALL IFAD-GOVERNMENT PARTNERSHIP 73 IX. CONCLUSIONS AND RECOMMENDATIONS 74

A. Conclusions 74 B. Recommendations 78

APPENDICES 1. India CPE (Evaluation) Framework 83 2. Definition of Evaluation Criteria Applied in the CPE 93 3. Bibliography 95 4. IFAD-funded Projects and Programmes in India 105 5. Executing Agencies for the IFAD Projects and Programmes 107 6. Financial Analysis of IFAD Loans Allocation to India Projects and Programmes (US$ ‘000) 109 7. Projects and Programmes Ratings by the CPE 111 8. IFAD Grants to India 113 9. Report of the Senior Independent Adviser on the Quality of the CPE Process and its Contents 117 10. List of States/Projects Visited During the India CPE Main Mission 123 11. IFAD Management Self-assessment Prepared by the Asia and the Pacific Division 125 12. Excerpts of the Report of the Chairperson of the Evaluation Committee on the India Country Programme Evaluation 133 TABLES 1. A Snapshot of Operations in India 1 2. IFAD Supported Projects and Programmes in India (1987 – 2009) 3 3. Main Macro-Economic Indicators (2003 – 2007) 9 4 A Sample of Ongoing Centrally Supported Schemes (CSSs) Implemented in India 14 5. Sectoral Allocation of Public Sector Resources: 10th Five-Year Plan (2002 – 2007) Realizations and 11th Five-Year Plan (2007 – 2012) Projections 16 6. ODA to Agriculture and Rural Development, India (2002 – 2007) 17 7. Projects Approved within 2001 COSOP 21 8. Projects Approved within 2005 COSOP 22 9. Summary Description of the Two India COSOPs 23 10. Benchmarking the Percentage of IFAD Loan as Part of the Total Portfolio Cost in Selected

Middle Income Countries and Countries with Large IFAD Project Portfolios 24 11. Cost in US$ per Beneficiary Household and Self-help Group 48 12. CPE Ratings of the India Project Portfolio and Benchmarking with the ARRI 57 13. CPE Rating of Performance of Partners 64 14. Ratings for Non-Lending Activities 70 15. The CPE’s Overall Assessment 73 FIGURES 1. GDP Growth by Economic Activities in India (2003 – 2007) 10 2. Institutions of Project Management and Related Government Bodies 32

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BOXES 1. Panchayati Raj 8 2. Tribal Development: Taking on a Difficult Challenge 29 3. Are the Community Managed Resource Centres Viable? 37 4. Linking Self-help Groups to Commercial Banks in Maharashtra 38 5. Empowering Women in Maharashtra 40 6. NGO Support for Tribal Development 41 7. Supporting Shifting Cultivation in Meghalaya 42 8. Supporting Micro-finance in Uttar Pradesh 44 9. Increased Agricultural Productivity in Tribal Development Operations 50 10. The Need for Research and Extension Linkages in Operations 51 11. Praise and Complaints from Project Directors 59 12. The Role of the State Government in Human Resource Development in the First Orissa Project 63 ANNEXES All the listed annexes below are available upon request from IFAD’s Office of Evaluation ([email protected]). I. Desk Review Notes on Projects, Non-Lending Activities and COSOPs

Orissa Tribal Development Project Tamil Nadu Women’s Development Project Andhra Pradesh Tribal Development Project Maharashtra Rural Credit Project Andhra Pradesh Participatory Tribal Development Project Mewat Area Development Project Rural Women’s Development and Empowerment Project North Eastern Region Community Resource Management Project for Upland Areas Jharkhand-Chhattisgarh Tribal Development Programme National Microfinance Support Programme Livelihood Security Project for Earthquake Affected Rural Households in Gujarat Orissa Tribal Empowerment and Livelihoods Programme Livelihoods Improvement in the Himalayas Post Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil

Nadu Tejaswini Rural Women’s Empowerment Programme Women’s Empowerment and Livelihoods Programme in the Mid-Gangetic Plains Mitigating Poverty in Western Rajasthan Project Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme Policy Dialogue Partnerships Knowledge Management Grants Country Strategic Opportunities Papers

II. CPE Working Papers

Project management and monitoring and evaluation Agriculture and natural resource management Tribal development and institutions Women’s empowerment and capacity building in IFAD projects Rural finance The impact of the economic and financial crisis on small farmers

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III. Dedicated Performance and Impact Assessments

Mewat Area Development Project Jharkhand-Chhattisgarh Tribal Development Programme

IV. CPE Desk Review Report V. CPE Aide Memoire VI. CPE Approach Paper

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Currency Equivalent

Currency Unit = Indian Rupee (INR) US$ 1 = INR 49.24 (09 March 2009)

Weight and Measures

1 acre (ac) = 0.405 ha 1 hectare (ha) = 2.47 acres

Abbreviations and Acronyms

ACP Agreement at Completion Point ADB Asian Development Bank CBO Community-Based Organization CDD Community Driven Development CGIAR Consultative Group on International Agricultural Research COSOP Country Strategic Opportunities Programme CPE Country Programme Evaluation CPM Country Programme Manager CPO Country Presence Office CSS Central Supported Scheme DEA Department of Economic Affairs DEW Corporation for Women’s Development DFID Department for International Development (United Kingdom) DTW Department of Tribal Welfare DWCD Department of Women and Child Development ENRAP Knowledge Networking for Rural Development in the Asia-Pacific

Region ERR Economic Rate of Return EVEREST Evaluation of IFAD’s Regional Strategy FAO Food and Agriculture Organization of the United Nations FNGO Facilitating Non-Governmental Organization GDP Gross Domestic Product GOI Government of India GS Gram Sabhas GTZ German Technical Cooperation IAS Indian Administrative Service ICRISAT International Crops Research Institute for the Semi-Arid Tropics IDRC International Development Research Centre IRD Integrated Rural Development IRDP Integrated Rural Development Programme M&E Monitoring and Evaluation MAVIM Maharashtra Women’s Development Corporation MDA Mewat Development Agency MDGs Millennium Development Goals MFI Micro-Finance Institution MTR Mid-Term Review MVVN Madhya Pradesh Women’s Finance and Development Corporation NABARD National Bank for Agriculture and Rural Development NGO Non-Governmental Organization NRM Natural Resources Management NSS National Sample Survey

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NTFP Non-timber Forest Product ODA Official Development Assistance IOE IFAD Office of Evaluation PCR Project Completion Report PEC Programme Execution Committee PMU Programme Management Unit PPP Purchasing Power Parity RDA Rural Development Agency RNGO Resource Non-Governmental Organization SC Scheduled Caste SEWA Self-Employed Women’s Association SFMC Foundation for Micro-finance (of SIDBI) SHG Self-Help Group SIDBI Small Industries Development Bank of India ST Scheduled Tribe SVCC Social Venture Capital Company TDP Tribal Development Project TDS Tribal Development Society TNWS Tamil Nadu Welfare Society UNDP United Nations Development Programme UNICEF United Nations Children’s Fund UNOPS United Nations Office for Project Services VDC Village Development Council WB World Bank WDC Women’s Development Corporation WDP Women Development Project WFP World Food Programme Abbreviations for Project Titles Andhra Pradesh PTDP Andhra Pradesh Participatory Tribal Development Project Andhra Pradesh TDP Andhra Pradesh Tribal Development Project Gujarat LSP Livelihood Security Project for Earthquake-Affected Rural

Households in Gujarat Himalayas LIP Livelihoods Improvement Project in the Himalayas Jharkhand-Chhattisgarh TDP Jharkhand-Chhattisgarh Tribal Development Programme Maharashtra CAI Convergence of Agricultural Interventions in Maharashtra’s

Distressed Districts Programme Maharashtra RCP Maharashtra Rural Credit Project Mewat ADP Mewat Area Development Project Mid-Gangetic WELP Women’s Empowerment and Livelihoods Programme in the Mid-

Gangetic Plains National Microfinance SP National Microfinance Support Programme North Eastern Region CRMP North Eastern Region Community Resource Management Project for

Upland Areas Orissa TDP Orissa Tribal Development Project Orissa TELP Orissa Tribal Empowerment and Livelihoods Programme Rural Women's DEP Rural Women’s Development and Empowerment Project Tamil Nadu Post-Tsunami SLP Post-Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu Tamil Nadu WDP Tamil Nadu Women’s Development Project Tejaswini RWEP Tejaswini Rural Women's Empowerment Programme Western Rajasthan MP Mitigating Poverty in Western Rajasthan Project

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Foreword

This is the first country programme evaluation (CPE) undertaken in India by the Fund. The evaluation made it possible to assess the results and impact of IFAD-funded activities in the country, and to generate findings and recommendations that will serve as building blocks for the next country strategic opportunities programme (COSOP) for India, planned for 2010.

India is IFAD’s largest borrower, both in terms of the number of interventions financed and resources invested. Since 1979, the Fund has financed 24 agriculture and rural development projects and programmes on highly concessional terms (nine are still under implementation), corresponding to total costs of US$ 1.9 billion including US$ 656 million in loans from IFAD and US$ 877 million in counterpart funding from the Government. The majority of the interventions aimed at promoting tribal development and women’s empowerment, and establishing sustainable rural financial services. IFAD has also provided grants for capacity-building and agriculture research. India is IFAD’s largest developing-country financial contributor, which makes for a special relationship between the Government and the Fund. The CPE confirms the value of IFAD’s work in addressing rural poverty in India. While the Fund has contributed to promoting pro-poor innovations in particular, it has also served as a ‘demonstrator’ of how to design, implement, supervise, and monitor and evaluate pro-poor agriculture and rural development projects and programmes in a systematic manner. Satisfactory results have been achieved, especially with regard to promoting livelihoods among tribal people, empowering women through the formation of self-help groups, and developing rural finance systems at the grassroots level. There is also evidence of policy impact, for example, in ensuring secure land titles for tribal people and including NGOs in development activities. The evaluation found, however, that limited attention had been paid to agriculture (e.g., crop development, research and extension, etc.) in rainfed areas, although more recent operations include agricultural activities. The establishment of market links, engagement with the private sector, and support to panchayati raj institutions (local governance system in rural area) have been limited and therefore deserve greater attention in the next COSOP. This also applies to the forging of partnerships with multilateral and bilateral organizations, and greater attention to knowledge management and policy dialogue. The CPE also underlined the importance of strengthening collaboration with technical ministries within the central government who, among other issues, is responsible for a range of centrally-sponsored schemes in agriculture and rural development. Perhaps the most important message emanating from the CPE is that the context in India has changed significantly since IFAD started its partnership with the Government in 1979. India’s emerging middle-income country status will have important implications on IFAD’s role and focus in the country during the course of the coming decade and beyond. Together with the vast array of national-level technical expertise and funds now available, both through centrally-sponsored schemes and state-financed initiatives, the aforementioned status will pose a challenge to IFAD in terms of articulating its objectives and priorities moving forward. What is however becoming increasingly evident is that the transfer of financial resources from IFAD to the Government will not be the main focus of the partnership in the future, but transfers of knowledge and lessons are likely to be of greater value. All in all, the implications are far-reaching and, after 30 years of cooperation, IFAD and the Government are now at a crossroads. As such, they will need to carefully, and jointly, reflect on alternative options, directions and approaches to pursue, in order to ensure the continued high relevance of their partnership. The evaluation report includes an agreement at completion point, which summarizes the main evaluation findings. It also presents the recommendations agreed upon between the Government of India and IFAD, together with proposals as to how and by whom they should be implemented.

Luciano Lavizzari Director, Office of Evaluation

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Acknowledgements

This country programme evaluation (CPE) was prepared by Ashwani Muthoo, Senior Evaluation

Officer, with support from Jicheng Zhang, Evaluation Research Analyst, and Kendra White, Assistant to the Deputy Director, and with contributions by consultants Basil Kavalsky, Dusmanta Kumar Giri, Michael Macklin, Sarath Mananwatte, Meera Mitra, Kotaiah Pamidi and Laura Gagliardone. Internal peer reviewers from the Office of Evaluation (Luciano Lavizzari, Paul-André Rochon, Majid Benabdellah, Andrew Brubaker and Mark Keating) provided guidance and comments on the approach paper and the draft report. The evaluation also benefited from the contribution of the Senior Independent Adviser, Hans Binswanger, Agriculture and Rural Development Specialist and Honorary Professor at the Institute for Economic Research on Innovation at Tshwane University of Technology, Pretoria, South Africa.

The IFAD Office of Evaluation (IOE) is grateful to IFAD’s Asia and the Pacific Division for their insightful inputs and comments at various stages throughout the evaluation process. Finally, appreciation is also due to the Department of Economic Affairs in the Ministry of Finance, for their constructive collaboration throughout the CPE process, especially for the generous contribution and efforts towards the organization of the CPE National Roundtable Workshop held in Delhi in December 2009.

_______________________________________________________ Director, IFAD Office of Evaluation: Luciano Lavizzari

Lead evaluator, IOE: Ashwani Muthoo Consultants’ team leader, IOE: Basil Kavalsky

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Republic of India


Executive Summary

1. IFAD has been actively engaged in India since 1979. Until 1987 its involvement was based mainly on co-financing five projects designed and supervised by other agencies. Since 1987, however, IFAD has emerged as a significant lender for programmes of rural poverty reduction in India. The 18 projects that IFAD has supported since that period1, as well as the associated strategy formulation and non-lending activities, are the subject of this first country programme evaluation (CPE) for India carried out by IFAD’s Office of Evaluation (IOE). 2. The evaluation found that during the period covered IFAD’s partnership with the Government of India made a satisfactory contribution to the objective of reducing rural poverty. Of the 18 projects evaluated, 16 were rated as moderately or fully satisfactory. In part, this success was achieved through a selective focus on two broad target groups among those living below the poverty line in India: women and tribal communities. In the case of women, in addition to their lower education and health status relative to men, there is evidence that programmes geared to them are more successful in building social capital for the community as a whole than those with membership open to both men and women. India’s tribal population constitutes more than 80 million people, about eight per cent of the total population, but about 16 per cent of the poor. IFAD is the only development agency that has a major focus on reducing poverty in tribal communities. 3. Clarity of objective is a necessary condition for success, but it is not sufficient. What has driven the satisfactory ratings of the IFAD-supported programme in India is the evolution of a model of engagement that has demonstrated its effectiveness in the Indian rural context. The model uses a holistic approach to rural development, which entails the building of community groups, including women’s self-help groups and groups of both men and women for natural resources management in tribal areas. These groups usually comprise 10 to 20 members who meet at two weekly or monthly intervals, contribute savings, and lend those savings to individual members. After two or three cycles of lending and repayment, links are established between these groups and commercial banks which in many cases provide loans to the groups that can be used to generate improved livelihoods. The groups are facilitated by NGOs, which are in turn supported and managed through the project management structure that IFAD and the Government of India put in place. Through the NGOs, the project management unit provides the facilitation and training needed to promote social empowerment and enhance the livelihoods of group members.

4. The relevance of the approach taken has been satisfactory. The evaluation looks at both the objectives of the IFAD-Government partnership and the design of the programmes in support of those objectives in assessing relevance. On objectives, the priority associated with targeting women and tribal communities is evident, but the evaluation raises the concern that this has meant that IFAD has not been able to specifically target other groups that are disproportionately represented among the rural poor, such as scheduled castes, the landless, and unemployed youth. It recognizes, however, that these are difficult to be separated out within the village communities and are often members of self-help groups. On programme design, the evaluation recognizes the appropriateness of the basic model, but questions whether IFAD has been sufficiently strategic in choosing the location of programmes and whether it has paid sufficient attention to the linkages that need to be established between the self-help groups and project management on the one hand and the local representative and administrative governance structures on the other. 5. The effectiveness of the programme is also rated as satisfactory. There is now a considerable body of quantitative evidence demonstrating that the programme has contributed to social empowerment (e.g., more women representatives in local government institutions and greater role for women in decision making),

1 A new project - the North Eastern Region Community Resource Management Project, Phase II - was approved by the Executive Board of IFAD in December 2009; therefore it is not included in the scope of the CPE.

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higher levels of food security (particularly in the projects in tribal areas), increased incomes in villages supported by the project than those that are not part of the project, and so on. The evaluation notes, however, that in the area of livelihoods promotion the success of the programme has been mixed, and in particular that, in many projects, there was little support for increasing agricultural productivity of smallholders, a critical area for longer-term poverty reduction in rural India. Only a small share of the loans to group members went for on-farm activities in the area of crop production, as opposed to a much larger share for animal husbandry which tends to be undertaken by the women members of the groups. There was limited interaction with the national research and extension services to identify successful approaches to be shared with smallholders, particularly in rain-fed areas. The projects in tribal areas have focused to some extent on agriculture, given the limited alternative income sources available to tribal communities, but even there more systematic approaches to involvement of the relevant expertise could yield greater benefits. 6. The evaluation rated the efficiency as moderately satisfactory. The projects have succeeded in reaching a large number of beneficiaries at relatively low cost per beneficiary. There are also a number of good practice examples of constructing local roads, bridges and water structures at costs well below comparators. However, problems have emerged with the processing of projects that could be relatively easily resolved through decisive action on the part of IFAD and the Government of India. The India programme has much longer effectiveness delays than for other countries in the Asia and the Pacific region. There are a number of reasons for these delays: too many effectiveness conditions (a feature of earlier projects), slow processing of legal opinions in the central and state government, and delays in the appointment of project management. Frequent changes in project directors have been another cause of problems (one project had nine directors in ten years). It is no accident that two of the projects with the highest ratings had project directors who remained in place for most of the life of the project at their own insistence. In the cases of the two projects in the portfolio with less than satisfactory ratings, the problem was a lack of a clear up-front understanding and acceptance of the relative roles of the state government and the leading NGO in the management of the project. The evaluation noted that many of these problems were related to the period before IFAD had a significant country presence in India. It is of the view that the expansion of IFAD’s Country Presence Office has contributed to greater efficiency of programme management in recent years.

7. Though the project management arrangements were by and large effective in implementation, it was found that the project monitoring and evaluation systems have mainly focused on input-output measurements, which reflects that the evaluation capacity, especially in the agriculture and rural sector, focusing on results and impact is generally insufficient. There are however some recent initiatives by the Government to establish an independent national body capable of undertaking rigorous and useful evaluations of development projects and programmes. 8. In most cases, the evaluations suggest that the programmes are likely to be sustained. The estimate is that 80 per cent of self-help groups are self-sustaining at the end of project completion, and in many cases (e.g., Andhra Pradesh, Tamil Nadu, and Maharashtra) IFAD projects have been mainstreamed by state governments. In some other cases, a World Bank project in the North East Region is replicating the model developed in the IFAD-funded project on a larger scale. In the area of innovation, the evaluation notes the innovative nature of the basic model that IFAD evolved, and some of the recent innovations in forging greater convergence with government programmes and in promoting linkages with the private sector. It raises the question, however, of whether IFAD could do more in promoting innovations such as the use of renewable energy and information technology in rural India. 9. IFAD’s non-lending activities are rated moderately satisfactory. Obviously a small external agency such as IFAD does not expect to be a major player on the national policy stage in India, but the evaluation team was of the view that, given the role IFAD was playing in the specific area of rural poverty reduction and the experience it has gained in dealing with the constraints to improving the situation of the rural poor, it could and should take a more active role in bringing attention to this spectrum of issues at the national level. It noted that this may require some thought to providing a higher level of IFAD representation in India. This is also a factor in promoting more effective partnerships in India, the area in which the evaluation rated IFAD’s performance weakest overall. It was not evident that partnership building was viewed as a critical element of the effectiveness and particularly of the sustainability of IFAD interventions. Finally, knowledge management was another area where more could and should be done by IFAD to broker

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some of the good practices that are emerging at the project level, and also to promote the development of new knowledge in areas which it identifies as constraints to progress. It was noted, however, that there had been a quantum advance in this area with the expansion of the role of the Country Presence Office in India. 10. During the period under review, IFAD prepared two country strategic opportunities programmes (COSOPs), in 2001 and 2005. The first of these effectively captured the model that had evolved in the period since 1987. The second COSOP clearly delineated key new directions for IFAD such as promoting greater linkage with the private sector, but in practice these new directions were not delineated in the programme. There was a strategic gap in IFAD’s approach to India between 2002 and 2007 which meant that the strategy did not sufficiently reflect the very substantial evolution of the context that took place at the time. Since 2002 the Indian Government has moved rural poverty to a very high place on its policy agenda and added a large number of centrally supported schemes that earmark considerable funding for state governments to carry out programmes to reduce rural poverty. The effectiveness of these schemes is uneven, reflecting the relative capacities of state and local administrative officials. It has become increasingly clear that the challenge for IFAD is to leverage its effective programmes to help make more effective this substantial funding coming from the Government. Since 2007, IFAD has made a start in this direction through the convergence project in Maharashtra which aims at an integration of its approach into the state administration. Another important area in which the situation has evolved is the increasing role of India’s private sector and its interest in and capacity to serve the rural areas. The recent Rajasthan project is an attempt to forge a closer partnership with the private sector, though perhaps this is only an initial step on which IFAD will need to build further in the coming years.

11. Based on the ratings of portfolio performance, non-lending activities, and COSOP performance, the overall IFAD-Government partnership has been rated as satisfactory. In spite of non-lending activities being rated as moderately satisfactory, the approach to non-lending activities is slowly improving in recent years, with increased synergies between lending and non-lending activities that together contribute to furthering the objectives in the COSOP. The table below provides the overall assessment of the partnership.

Summary of the CPE Overall Assessment

Assessment Rating2

Portfolio performance 5

Non-lending activities 4

COSOP performance 5

Overall IFAD-Government partnership 5

12. Overall, the evaluation notes that IFAD has a strong comparative advantage in the model it has established to serve poor women and tribal communities. It urges IFAD to build on that comparative advantage to help the Government tackle some of the serious continuing problems of rural poverty. It commends IFAD’s experience in India as a good practice example of what a relatively small agency, through an effective partnership with the Government of India, a clear set of objectives, and a well-developed model of intervention, can help to achieve, even in a setting as large as India. Recommendations

13. The CPE offers the below broad recommendations for IFAD and the Government to consider in the development of the new India COSOP and future projects and programmes. The recommendations are clustered in two broad categories: strategic and operational issues.

2 Rating scale - 1: highly unsatisfactory, 2: unsatisfactory, 3: moderately unsatisfactory, 4: moderately satisfactory, 5: satisfactory, and 6: highly satisfactory.

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Strategic Issues

14. Give more priority to smallholder agriculture. Sustainable smallholder agriculture should be included as a central strategic objective in the new COSOP, as an engine for promoting pro-poor growth and reducing hunger and rural poverty.

15. Targeting and reduced geographic coverage. IFAD should devote greater emphasis to smallholder farmers, but also continue to support rural women and tribals. The geographic focus should in principle be narrowed, and not expanded beyond the 11 states covered by ongoing operations. 16. Enhance private sector engagement in line with corporate social responsibility principles. Private sector enterprises should be mobilised to deliver rural finance and extension services, provide input supply and access to agro-processing infrastructure, facilitate transport of agricultural produce to market points, promote innovations and upscaling, make information and communication technology more widely available in rural areas, and so on. 17. Innovation with deeper attention to replication and upscaling. The main aim of IFAD-funded projects and programme in India in the future should be to promote pro-poor innovations that can be replicated and upscaled. It is therefore recommended that the new COSOP include a well-defined innovations agenda. 18. Launch a coherent knowledge programme. One of the key aims of the programme would be to fill any knowledge gaps on agriculture and rural development and more generally in rural poverty reduction in the country. 19. Seek deeper convergence with Government. For better effectiveness and efficiency, there must be greater convergence within Government-funded programmes, and between operations and other donor-funded activities and Government-assisted programmes. 20. Widen partnership with Central Government. IFAD needs to engage more proactively with the central Ministry of Agriculture, other technical Ministries, and the Planning Commission to leverage their expertise and resources. 21. Ensure ownership and commitment with State Governments. State governments need to be involved from the very beginning of project design to ensure that they take full responsibility of the activities and act on the issues that IFAD-supported operations are recurrently facing. 22. Increase loan size. This would contribute to lowering transaction and administrative costs for both Government and IFAD, while allowing greater attention to implementation support, learning, and impact achievement. Operational Issues

23. Strengthen the India country office. A strengthened country office is required, inter-alia, to enhance project supervision and implementation support, improve policy dialogue, strengthen cooperation and harmonisation with other donors, and to build partnerships and improve knowledge management. Consideration should be given to establishing the India country office as a sub-regional office.

24. Ensure greater continuity in project directors. Rapid turn-over of some project directors is a systemic concern. Therefore, IFAD should reach a written agreement right at the beginning of project design with state governments that project directors will remain in their positions for at least three years and preferably longer. 25. The need to improve project efficiency. Some of the measures recommended above are expected to contribute to better efficiency, such as limiting the geographic coverage, and ensuring deeper convergence. There are other measures that should be deployed to improve efficiency, including streamlining the flow of

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funds to limit implementation delays, and strengthening the capacity in the project management units and state governments. 26. Resource issues. Greater attention in the future to non-lending activities, implementation support, mobilisation of expertise in conflict-resolution, upscaling of innovations, deeper engagement with government and private sector, and the strengthening of the country office and establishment of a sub-regional office are likely to have additional recurrent administrative resource implications. It is therefore recommended that the management conduct a detailed cost analysis during the formulation of the next COSOP and make the necessary allocations commensurate with the size, focus and coverage of IFAD-supported activities. 27. Evaluation capacity development. In close collaboration with the Asia and the Pacific Division, IOE will explore opportunities for supporting the Planning Commission’s efforts to establish an independent evaluation outfit in India.

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Agreement at Completion Point1

A. Background 1. India is the largest borrower from IFAD, both in terms of number of projects financed and resources invested. The Fund has provided loans for 24 agriculture and rural development projects at highly concessional terms since 1979. The total cost of the project portfolio is US$1.9 billion, including US$656 million in loans from IFAD and US$877 million in counterpart funds from the Government. Currently, 9 out of the 24 projects are under implementation. A large majority of loan-funded projects aimed to promote tribal development, women’s empowerment and development, and establish sustainable rural financial services. IFAD has also provided grant funding for capacity building, electronic networking among projects to enhance communication and knowledge sharing, agriculture research and other areas. At the same time, India is the largest contributor to IFAD from developing countries, and therefore all this makes for a special relationship between India and IFAD. 2. The Office of Evaluation (IOE) undertook a country programme evaluation (CPE) in India in 2009. This was the first CPE done by IFAD in India since the Fund started its operations in 1978. The main objective of the CPE was to assess the performance and impact of IFAD operations, and to generate building blocks that would serve as inputs for the preparation of the new India country strategic opportunities programme (COSOP), which will be prepared by the Fund’s Asia and Pacific Division and the Government of India following the completion of the CPE. 3. This Agreement at Completion Point (ACP) contains a summary of the main findings and recommendations from the CPE. It benefits from the main points emerging from the CPE national roundtable workshop held in New Delhi on 7-8 December 2009. As per the decision of the Executive Board, the ACP will be attached as an Annex to the new India COSOP, which is expected to be presented for Board consideration during 2010. 4. The ACP has been reached between the IFAD Management (represented by the Programme Management Department) and the Government of India (represented by the Department of Economic Affairs, Ministry of Finance), and reflects their understanding of the main findings from the CPE (see Section B below) as well as their commitment to adopt and implement the recommendations contained in section C of the ACP within specified timeframes.

B. Main Evaluation Findings 5. The CPE affirms the value of IFAD’s contribution to addressing rural poverty in India. The Fund has particularly contributed to promoting pro-poor innovations, and served as a ‘ demonstrator’ of how to methodically design, implement, supervise, monitor and evaluate pro-poor agriculture and rural development projects. These two characteristics make IFAD different from other donor organisations operating in India, and can serve to generate lessons and good practices that can be replicated and scaled up by Government and other partners to achieve wider developmental impact on rural poverty. 6. The projects funded by IFAD have achieved satisfactory results, especially in terms of livelihoods promotion amongst tribal people, women’s development, and the promotion of rural finance systems. In particular, women are more empowered and have generally a greater voice in decision making and resource allocation of development projects and programmes. Efforts to promote tribal development have been good, for example in terms of promoting greater access to natural resources, including land and non-timber forest

1 The India Country Programme Evaluation report was finalised in May 2010 and the Agreement at Completion Point was signed by IFAD and the Government of India on 11 March 2011 and 4 April 2011, respectively.

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products which are central to their livelihoods. There is evidence that some of the IFAD-funded projects contributed to peace-building and reducing conflict (e.g., Andhra Pradesh and the North East). However, given the vast numbers of tribal people (more than 80 million) in the country and their very low economic and social status, the agenda remains incomplete and more efforts and resources are required to ensure their full integration into the economy, while at the same time preserving their cultural heritage. IFAD-funded operations have contributed significantly to developing new and successful models for the provision of micro-finance to the rural poor, and for linking them and their organisations to commercial banks. There are however areas in which micro-finance activities can be further developed to ensure an even wider impact on poverty, for example, by supporting microfinance institutions to build rural money transfer systems and networks for effectively and efficiently channelling remittances to and within rural areas. The CPE also found evidence of policy impact, for example, in terms of ensuring secure land titles for tribal people and inclusion of NGOs in development activities. 7. In general, the overall IFAD loan-funded project portfolio achievement in India is satisfactory, and better than the results of IFAD-funded projects in all regions - as reported in the 2008 Annual Report on Results and Impact of IFAD Operations. Performance has been particularly good in terms of relevance of operations and in the impact domains of natural resources management and environment, followed by household income and assets, food security and agricultural productivity, institutions and policies, as well as innovations, replication and upscaling. The area of relative weak performance is the efficiency of operations, where there is room for improvement. 8. The CPE found that frequent rotation of project directors is a cause for concern, and a solution needs to be found for better impact. Another issue is the rather wide geographic coverage of the country programme, with numerous relatively small projects dispersed throughout the country in 17 states. Five projects were designed to cover two or three states, which in some cases are not even contiguous. A wide and fragmented programme coverage poses deep challenges to country programme management, for example, in terms of co-ordination, monitoring, supervision, efficiency and sustainability of benefits. 9. Various innovations have been successfully tested on the ground through IFAD-funded projects and programme, several of which have been replicated and upscaled by the Government and other donors. This is a remarkable achievement. In spite of that, however, the CPE did not discern a systematic or strategic approach by IFAD to replication and upscaling, and the Fund’s grants programme has not been used to its potential for promoting pro-poor innovations. 10. The evaluation found however insufficient attention until the most recent operations to agriculture, which is extremely important given that around 600 million people in the country derive their livelihoods from agriculture-related activities. Selected crop development and research activities were funded through IFAD’s grants but had limited linkages with loan-funded projects. The establishment of market-linkages, engagement with the private sector and involvement of panchayati raj institutions has been limited. One recent interesting feature however is the US$20 million funding raised from the Sir Ratan Tata Trust and other private sector operators in the context of the most recent programme in Maharashtra for, inter-alia, bio-fuels development, promotion of organic cotton, and dairy development including milk collection centres. 11. Project monitoring and evaluation systems have mainly focused on input-output measurements, and evaluation capacity especially in the agriculture and rural sector focusing on results and impact is generally insufficient. There is a proposal currently under consideration of the Planning Commission to establish an independent evaluation outfit in India, which would be responsible for undertaking rigorous and useful evaluations of development projects and programmes. 12. The CPE underlines that the convergence of IFAD assistance with government schemes is extremely important, especially at the district level. The absence of convergence has contributed in the past to poor utilisation and results, as there has been duplication of efforts between departments (e.g., in terms of capacity building of communities), overlapping development activities, and multiple reporting requirements. The newest programme in Maharashtra however is a good example of efforts by IFAD to ensure convergence with Government’s own initiatives.

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13. Performance of non-lending activities (knowledge management, policy dialogue and partnership building) has been moderately satisfactory. IFAD has made important contributions in few policy areas, but resources and capacities for analytic work and knowledge management have been few. In recent years, there are some interesting knowledge management initiatives, but these have not spanned throughout the period covered by the CPE. As mentioned above, there have been some important achievements in policy dialogue (e.g., institutionalising the self-help groups as an instrument for poverty reduction in national policies and programme, the provision of land titles to tribal people, the wide spread involvement of NGOs in development initiatives), but these have not been systematic and largely confined within project-related processes. Engagement in agriculture and rural development national policy formulation has been limited, partly due to inadequate resources. Partnership with government in general is very good, as it is with civil society and the NGO community, but partnership with the private sector and other multilateral organisations working in agriculture in India has not been vibrant, even though there are signs of improvement in the recent past. Partnership in the central government is particularly strong with the Ministry of Finance, and somewhat limited with other key agriculture and rural development-related ministries, and other central agencies. Even though project execution is the responsibility of state authorities, central government agencies have an important role, not least because they are responsible for formulation of national policies and acts, establishing nation-wide priorities and targets for poverty reduction. They also finance large centrally sponsored schemes for agriculture and rural development. 14. A number of grants have been provided in support of the country programme, both from IFAD’s global/regional and country–specific grant windows. Apart from some global/regional grants (e.g., for ENRAP), the evaluation found little evidence that they have much of an impact on the loan funded activities in the country. Country-specific grants tied within selected projects and programmes more directly support project activities, but their total volume has been very small. This is partly due to the fact that the country-specific window only became available following the approval of the IFAD grants policy in 2003. 15. The evaluation concurs with the recent move to direct supervision and implementation, even though there are resource issues that need consideration, especially given the size of the ongoing portfolio in the country. Similarly, good efforts have been made to establish a country presence in India since 2001, which is growing and involved in a range of activities related to the country strategy and programme management. There are challenges however in the current arrangements and the impact it can truly have especially in terms of implementation support, partnership building, policy dialogue, knowledge management, and donor co-ordination is limited - given the level of delegation of authority as well as the size and complexity of the country programme. According to the CPE, a strengthened country office in India would not only contribute to achieving better results in the country, but it could also possibly play a wider role in the sub-continent in terms of enhancing efficiency and improving performance in selected countries in the region as well. The evaluation also concludes that overall the hosting arrangements by WFP may no longer be the most attractive option moving forward for IFAD country presence, partly due to the forthcoming cost increases for services rendered by WFP as well as the limited space available. The temporary nature of staff contracts does not provide required job security and incentives for further enhancing performance. 16. Maybe the most important message from the CPE is that the context has changed significantly in India since the beginning of the IFAD-Government partnership in 1979. The emerging middle income status of India will have important implications for IFAD’s role and focus in the country in the coming decade and beyond, even though the Fund’s lending terms to the country may not change in the next three year (2010-2012) Performance Based Allocation System cycle. Together with the vast amount of national technical expertise and funds available both through centrally sponsored schemes and state financed initiatives, this will pose a major challenge for IFAD in articulating its objectives and priorities moving forward, also in light of the relatively high transaction costs for the government in nurturing and expanding its partnership with IFAD. All in all, the implications are far-reaching, and after 30 years of co-operation, IFAD and the Government are at a cross-road. They will need to carefully and jointly reflect on the alternative options, directions and approaches to pursue, in order to ensure the continued high relevance of their important partnership for the future. But one thing is clear: the transfer of financial resources will not be the main focus of the partnership in the future.

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C. Recommendations 17. In light of the above, what role could a relatively small organisation such as IFAD play in India, especially taking into account that in the near future the Fund may no longer be able to lend to the country on highly concessional terms? The CPE offers the below broad recommendations that the Government of India and IFAD agree to adopt and implement within specific timeframes. The recommendations are clustered in two broad categories: strategic and operational issues. Strategic Issues 18. Recommendation 1:

a. Give more priority to smallholder agriculture. Sustainable smallholder agriculture should be included as a thrust area in the new COSOP, as an engine for promoting pro-poor growth and reducing hunger and rural poverty. Among other issues, this would include an emphasis on promoting the viability and risk-management of farming activities by smallholder farmers, with specific attention to rainfed areas with emphasis also on in-situ water conservation, livestock development, and crop production, including staple cereal and pulse productivity.

b. Deadline: COSOP period 2011-2015 c. Responsible Entity: IFAD and GOI

19. Recommendation 2:

a. Targeting and reduced geographic coverage. In terms of targeting, it is recommended that in future greater emphasis be devoted to smallholder farmers, but also continue to support rural women and tribals. The geographic focus should in principle be narrowed to a smaller group of states, and not expanded beyond the 11 states covered by ongoing operations. Also, two-state projects through one loan and one supervision budget should be avoided in the future. Given IFAD’s positive experiences in India and other countries (e.g., the Philippines), opportunities to work in conflict areas could be pursued in consultation with Government. This will however require projects to include in crisis prevention measures (e.g., flexibility in terms of project area coverage), and adequate expertise will need to be mobilised for supervision and implementation support purposes.

b. Deadline: COSOP period, 2011-2015 c. Responsible Entity: IFAD and GOI


a. Enhance private sector engagement in line with corporate social responsibility principles. The partnership with the private sector should be enhanced further, to deliver rural finance and extension services to the rural poor, provide input supply and access to agro-processing infrastructure, facilitate transport of agricultural produce to market points, promote innovations and up-scaling, make information and communication technology more widely available in rural areas, and so on.



a. Innovation with deeper attention to replication and upscaling. The main aim of IFAD-funded projects and programme in India in the future should be to promote pro-poor innovations that can be replicated and upscaled by government, other donors, the private sector, and others. It is therefore recommended that the new COSOP include a well-defined innovations agenda, which would outline the areas that merit to be prioritised. Some examples of the agenda include promoting innovations in micro-

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finance (e.g., to enable crop insurance, transfer of remittances to the poorest), pro-poor drought and pest resistant agriculture technology, and use of information and telecommunications to link the poor to markets. Moreover, the country strategy should make explicit the approach that will be pursued for replication and upscaling, as this is the ultimate aim of IFAD’s capability to promote innovative approaches. Opportunities for developing and strengthening partnerships with national institutions, such as the Indian Council for Agricultural Research, but also the private sector including foundations, for the implementation of this recommendation should be actively explored. Similarly, partnership with NGOs and other rural institutions need to be further expanded in order to scout for, develop, pilot test and assess innovations emerging from the grassroots level



a. Launch a coherent knowledge programme. The new COSOP should include a distinct and clearly resourced knowledge programme. One of the key aims of the programme would be to fill any knowledge gaps on agriculture and rural development and more generally in rural poverty reduction in the country. It could be funded by grants, but also supported by individual operations financed through loans. This programme could contribute to a wider PI initiative together with other IFAD regional divisions to systematically exchange knowledge on rural poverty reduction drawing upon the experiences, lessons learned, and good practices from the Fund’s operations in other countries and regions, especially in other middle income countries (e.g., Brazil, China, Argentina and Morocco). The programme could include, inter-alia:, activities to document and share both IFAD’s own experience in India, and experiences from IFAD operations in other countries that may be of relevance to the India country programme; and promotion of exchange visits by government officials project staff and members of civil society and NGOs to IFAD-financed projects within and outside India. Another option could be the organisation of thematic workshops in India with prominent guest speakers and other resource persons from other countries with international expertise and reputation in agriculture and rural development issues, focusing on those areas that may be constraining rural poverty reduction in the country at any particular juncture.



a. Seek deeper convergence with government. A very large amount of resources are allocated by the Central and State governments for agriculture and rural development activities. If this funding is to be efficiently used, there must be greater convergence within government-funded programmes, and between operations and other donor-funded activities and Government-assisted programmes. Among other issues, this will require in-depth analysis during project design of other ongoing or planned development initiatives in the districts to be covered by IFAD-supported projects. The aim would be to ensure complementarities in objectives and activities between IFAD-funded and government-financed agriculture and rural development projects and programmes. One way of ensuring convergence is to link project management units more directly with state and district administrations, so convergence can be facilitated during project execution. Further, IFAD-supported projects should build and strengthen the communities’ capacity to access the available schemes of different Government’s departments.


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a. Widen partnership with central government. The Department of Economic Affairs (DEA) in the Ministry of Finance is the nodal entity responsible for external assistance to India including funding provided by IFAD. In coordination with DEA, IFAD needs to engage more proactively with the central Ministries, especially Ministry of Agriculture and Ministry of Rural Development, to leverage their expertise and experience to focus on some of the important areas that help achieve sustainable livelihoods in the agricultural sector. These agencies also play an important role in national policy formulation and legislation, coordination and monitoring and evaluation, as well as in financing large and important centrally sponsored schemes. Among other issues, a wider partnership with key central Ministries can provide an opportunity for the Fund to contribute towards shaping the design of centrally sponsored schemes and national policies and acts, building on IFAD’s own priorities and experiences in the country. Further, IFAD should encourage exposure visits of central government officials to project areas.



a. Ensure ownership and commitment with State Governments. State Governments need to be involved from the very beginning of project design to ensure that they take full responsibility of the activities and act on the issues that IFAD-supported operations are recurrently facing. In particular, State Government should ensure: (i) smooth flow of funds; ii) timely provision of counterpart funds; (iii) their direct participation in Joint Review Missions; (iv) timely follow-up on agreed recommendations; (v) ensure competitive and attractive salaries and allowances, including their timely adjustments, so as to recruit and retain highly qualified project staff, including NGO staff; and (vi) and last but not least, continuity of tenure of Project Directors and key-management staff.



a. Increase loan size. IFAD should consider increasing the average loan size of the operations in the country and undertaking fewer projects in the next COSOP cycle. This would contribute to lowering transaction and administrative costs for both Government and IFAD, while allowing greater attention to implementation support, learning, and impact achievement in general. Such a shift is expected to improve the overall quality of the country programme, and also free up time and resources for greater attention to non-lending activities. Acknowledging the difficulties being occasionally faced in loan disbursements, larger loan size will have implications for targeting and absorptive capacities, and ways will need to be found in future projects to address the corresponding implications. Few examples should be considered: i) greater investments may be made in rural infrastructure including, inter alia, renewable energy technologies, communications and small scale irrigation, which is essential for agriculture and rural development in line with IFAD’s targeting policy of 2006; ii) adoption of a saturation approach in targeting of the poorest families at village and block level; and iii) ensuring provision for an adequate project implementation period of around 8 years. Given the size of the programme, the country and the number of rural poor, it is recommended that financing larger projects should not result in a commensurate cut in IFAD’s administrative budget allocated towards country programme management.


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27. Implementation responsibilities and timeframes. Both IFAD and the Government of India would be responsible for the implementation of the above-mentioned strategic recommendations. They will be appropriately reflected in the new India COSOP, as well as in all the new projects and programmes funded by IFAD following the adoption of the COSOP. Operational Issues 28. Recommendation 10:

a. Strengthen the India country office. There is a need to further strengthen the IFAD country office in India, including the out posting of the country programme manager (CPM) to Delhi and appointment of a full-time coordinator. In general, a strengthened country office is required to enhance project supervision and implementation support, improve policy dialogue, strengthen cooperation and harmonisation with other donors, and further facilitate follow-up on supervision and mid-term review decisions. This would also contribute towards implementation of the CPE recommendations related to the knowledge programme, as discussed above. The role, priorities and organisation of the India country office will need to be reconsidered in developing the new COSOP and implementing the CPE recommendations. This is because the new COSOP is expected to introduce additional priorities and activities, such as a wider focus on smallholder agriculture, a more coherent knowledge programme and systematic engagement in policy dialogue. In this regard, the opportunities, challenges and budgetary implications of out posting the India CPM should be examined in order to bring full decision making and follow-up actions related to IFAD operations closer to the country level. Country office staff should be provided with fixed-term contracts and better mainstreamed into IFAD's overall work force, to provide greater job security and incentives and improve performance. The current hosting arrangements with WFP should be reconsidered, especially in light of the cost escalation in services charged by WFP, and the merits of hiring alternative premises analysed. For example, the possibility of finding premises within the UN complex, World Bank office or other partner institutions would facilitate dialogue and co-operation with other donors. The office infrastructure also needs upgrading, for example, in terms of space and information technology facilities, which are currently constraining the work of the office, inter alia, such as the access to IFAD databases and reports at headquarters. The strengthening of the country office will have important resource implications that would need to be considered to ensure the office’s effectiveness and its ability to contribute to the achievement of COSOP objectives.

b. Deadline: COSOP period, 2011-2015 c. Responsible Entity: IFAD


a. Ensure greater continuity in project directors. Rapid turn over of some Project Directors remains a critical issue in IFAD- funded projects and programme, particularly in the early phases of implementation. This is a systemic concern for IFAD and other multi-lateral development organizations in India. While Central Government and State Government shall endeavour to ensure continuity in project directors to the extent possible, IFAD and the Government could consider alternatives including, inter alia, recruiting from the open market or deputing senior level staff form established civil society organizations.”

b. Deadline: COSOP period, 2011-2015 c. Responsible Entity: GOI

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a. The need to improve project efficiency. There is scope for improving the efficiency of IFAD-funded projects and programmes in the country. Some of the measures recommended above are expected to ensuring better efficiency, such as limiting the coverage of projects to one state, and by ensuring deeper convergence between the IFAD and government programmes. However, there are other measures that should be deployed to improve efficiency, including streamlining the flow of funds to limit implementation delays, strengthen the capacity in the project management unit but also state governments in procurement and other loan administration issues, and ensuring the assignment and continuity of staff to the project with adequate expertise and experience in project management.



a. Resource issues. Among other issues, greater attention in the future to non-lending activities, implementation support, mobilisation of expertise in conflict-resolution, upscaling of innovations, deeper engagement with the central government and the private sector, and the strengthening of the existing country office are likely to have additional recurrent administrative resource implications to IFAD, both in terms of staff time and finances. It is therefore recommended that the management conduct a detailed cost analysis during the formulation of the next COSOP and make the necessary allocations commensurate with the size, focus and coverage of IFAD-supported activities in the country. The additional resources are critical if the CPE recommendations are to be fully implemented, in order to achieve more far-reaching development results on the ground.



a. Evaluation capacity development. In close collaboration with the Asia and the Pacific Division, IOE will explore opportunities for supporting the Planning Commission’s efforts to establish an independent evaluation outfit in India. Given its mandate and specialisation, IFAD’s contribution will be restricted to evaluation capacity development in the agriculture and rural sectors. This will include initiatives to further enhance project-level monitoring and evaluation systems, so that they are also equipped to effectively collect, analyse and report on results and impact in addition to the achievement of physical and financial targets.


D. Comments by the IFAD Management and the Government of India

33. IFAD Management. With reference to Recommendation 10 and the original proposal to establish a sub-regional office, IFAD Management highlights that to date it has no mandate to establish additional country or regional office. This recommendation can only be addressed upon the IFAD Executive Board’s decision on the new country presence strategy, scheduled for May 2011. 34. Government of India. The ACP text was discussed with the Joint Secretary and Director of the Department of Economic Affairs (DEA) of the Ministry of Finance in Delhi on 31 January 2011. DEA proposed a revised text for recommendation 11. This new text was accepted and inserted in the ACP.

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E. Comments by the Office of Evaluation 35. As per the process for preparing the Agreement at Completion Point, the Office of Evaluation has this opportunity to express its views on any recommendation contained in the India country programme evaluation report that the IFAD management and/or Government of India disagrees with, either fully or partially. 36. As such, the Office of Evaluation has two comments on: (i) recommendation 10 in paragraph 28 above, related to strengthening of the IFAD country office in India; and (ii) the establishment of an IFAD sub-regional office in New Delhi, recommendation contained in the final India CPE report (see paragraph 33 above containing the IFAD Management comments on this point). 37. IFAD country office in India. As agreed by the IFAD management and the Government of India, there is need to further strengthen the IFAD country office in India, including the out posting of the CPM to Delhi. However, the proposed deadline for the implementation of the recommendation is stated as ‘2011-2015’in this Agreement at Completion Point (see paragraph 28 (b) above). 38. The Office of Evaluation believes it is important to determine an earlier and specific timeframe for the out posting of the India CPM to Delhi. This is important to ensure the permanent physical presence of the CPM in India, which has received historically the largest amount of IFAD assistance in all regions, both in terms of number of projects and loan amounts provided. The Government of India has also requested for an early out posting of the India CPM to Delhi for quite some time. 39. The establishment of a sub-regional office in Delhi. Based on the analysis in the final India CPE report2,the Office of Evaluation recommends that the IFAD Management explore the opportunities for establishing a sub-regional office in Delhi in the near future. As mentioned in the India CPE report, such a sub-regional office would contribute to improving institutional and project efficiency including the overall quality of results on rural poverty in South Asia region. The Office of Evaluation agrees with the IFAD management comment in paragraph 33 above. That is, the possibility of establishing a sub-regional office in India should be included as an explicit provision within the corporate country presence strategy, to be presented by the Management for approval to the Executive Board in May 2011.

2 Which may be downloaded from www.ifad.org/evaluation/public_html/eksyst/doc/country/pi/india/index.htm.

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Republic of India


Main Report

I. BACKGROUND

A. Introduction 1. This is the first country programme evaluation (CPE) of India since IFAD started its operations in 1979. The evaluation has been conducted in accordance with the provisions of IFAD’s Evaluation Policy 1 and follows the methodology and processes for CPEs outlined in the IFAD Office of Evaluation’s (IOE) Evaluation Manual2. 2. India is the largest recipient of the Fund’s resources in terms of loans and grants. Table 1 below provides a snapshot of key data related to the IFAD-supported projects and programmes in the country, which have covered virtually all the poorer states in India, with absence of a handful of relatively affluent states such as Karnataka, Kerala and Punjab.

Table 1. A Snapshot of Operations in India

First IFAD loan-funded project to India: 1979

Total loan-funded projects approved: 24

Total amount of IFAD lending: US$656 million

Lending terms: Highly Concessional3

Counterpart funding from Government: US$877 million

Co-financing from bi- and multi-laterals: US$358 million

Total portfolio cost: US$1.9 billion

Focus of operations: Tribal development, women’s empowerment, micro-finance, institution building and livelihoods.

Major co-financiers: DFID, the Netherlands, UNDP, WFP, and World Bank

Number of ongoing projects: 9 (of which 1 is not yet effective)

Total grant amount:

Global and Regional grants 21 grants between 2002 and 2008 for a total value of US$23.1 million Country specific grants to India 16 grants provided since 1997 for a total value of US$3.3 million

1 Approved by the Fund’s Executive Board in April 2003 (see document EB2003/78/R.17/Rev. 1). Also available on: www.ifad.org/evaluation/policy/index.htm. 2 Available on: www.ifad.org/evaluation/process_methodology/doc/manual.pdf. 3 IFAD provides loans according to three different lending terms: highly concessional, intermediate, and ordinary. According to the IFAD lending policies and criteria, special loans on highly concessional terms shall be free of interest but bear a service charge of 0.75 per cent per annum and have a maturity period of forty years, including a grace period of ten years.

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B. Evaluation Objectives, Methodology and Processes

3. The CPE has two main objectives: (i) to assess the performance and impact of the operations in India; and (ii) to generate a series of findings and recommendations to serve as building blocks for formulation of the forthcoming India results-based country strategic opportunities programme (COSOP), to be prepared by IFAD and the Government of India (GOI) following completion of the CPE. 4. The CPE methodology focuses on analyzing the performance of three mutually-reinforcing pillars in the IFAD-India partnership. These are: (i) the project portfolio (see Table 2); (ii) the non-lending activities, including knowledge management, policy dialogue and partnership building; and (iii) the 2001 and 2005 India COSOPs. The overall performance in each of these three areas has been rated on a scale of 1 to 6 (with 1 being the lowest score and 6 the highest)4. However, throughout the CPE, specific effort has been made to discern the proximate causes of good or less-good performance (i.e., the Why factor), which is critical for generating insights and lessons learned that can contribute to better results in the future. 5. The performance of the project portfolio has been assessed using the internationally-recognized evaluation criteria of relevance, effectiveness, efficiency, rural poverty impact, sustainability, and innovation, replication and scaling up (see definitions in Appendix 2). The performance of partners (including IFAD, GOI and cooperating institutions) has also been evaluated. Eighteen of the 24 projects and programmes in the country have been covered by the CPE5 under the project portfolio assessment. Only 13 out of the 18 projects have been rated across all evaluation criteria, as the most recently approved five projects are too young to be evaluated against all criteria. The oldest project in the cohort is the Orissa Tribal Development Project, approved in 1987 and evaluated by IOE in 1998-1999. Thus the CPE covers about 20 years of IFAD - India cooperation and partnership. The list of the projects and programmes included in the CPE is shown in Table 2 and further information on the projects can be found in Appendix 4. 6. The assessment of non-lending activities entails a review of the relevance, effectiveness and efficiency of the combined efforts of IFAD and the Government in promoting policy dialogue, partnership-strengthening and knowledge management. An overall rating and assessment for non-lending activities has also been generated. 7. Thereafter, building on the analysis conducted in evaluating the portfolio performance and results of non-lending activities, the CPE presents an assessment of the performance of the India COSOPs, including a review of the strategy’s relevance and effectiveness. 8. While each of the three abovementioned CPE pillars (see paragraph 4) has been assessed individually, synergies among the various projects and programmes financed by IFAD in India, including across lending and non-lending activities have also been analyzed by the CPE. Taking this into account, and building on the performance of the COSOP, the CPE has ultimately generated a composite rating and assessment for the overall IFAD – Government partnership.

4 1: highly unsatisfactory, 2: unsatisfactory, 3: moderately unsatisfactory, 4: moderately satisfactory, 5: satisfactory, and 6: highly satisfactory. 5 Six projects in the country portfolio are not included in the CPE. The first five projects supported by IFAD were all approved in or before 1983 and are not included in the CPE. These were mostly large irrigations projects, two of which were co-financed with the World Bank. They were excluded from the analysis, given that they do not represent the typical type of project funded by IFAD over the years and would therefore bring limited value in terms of learning. Besides, a new project - the North Eastern Region Community Resource Management Project, Phase II was approved by the Executive Board of IFAD in December 2009; therefore, it is not included in the scope of this CPE.

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Table 2. IFAD Supported Projects and Programmes in India (1987 – 2009)

Project Name

Project Cost US$

million

Loan US$

million

Board Approval

Loan Effectiveness

Completion Date

Status

1. Orissa Tribal Development Project 24.4 12.2 03 Dec 87 27 May 88 30 Jun 97 Closed

2. Tamil Nadu Women’s Development Project

30.6 17.0 26 Apr 89 26 Jan 90 30 Jun 98 Closed

3. Andhra Pradesh Tribal Development Project

46.5 19.9 04 Apr 91 27 Aug 91 30 Sep 98 Closed

4. Maharashtra Rural Credit Project 48.3 29.1 06 Apr 93 06 Jan 94 31 Mar 02 Closed

5. Andhra Pradesh Participatory Tribal Development Project

50.3 26.7 19 Apr 94 18 Aug 94 30 Sep 02 Closed

6. Mewat Area Development Project 22.3 14.9 12 Apr 95 07 Jul 95 31 Dec 04 Closed

7. Rural Women’s Development and Empowerment Project

53.8 19.2 05 Dec 96 19 May 99 30 Jun 05 Closed

8. North Eastern Region Community Resource Management Project for Upland Areas

33.2 22.9 29 Apr 97 23 Feb 99 31 Mar 08 Closed

9. Jharkhand-Chhattisgarh Tribal Development Programme

41.7 23.0 29 Apr 99 21 Jun 01 31 Dec 11 Ongoing

10. National Microfinance Support Programme 134.0 21.9 04 May 00 01 Apr 02 31 Dec 09 Closed

11. Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

24.0 14.9 12 Sep 01 04 Nov 02 09 Oct 06 Closed

12. Orissa Tribal Empowerment and Livelihoods Programme

91.2 19.9 23 Apr 02 15 Jul 03 31 Mar 13 Ongoing

13. Livelihoods Improvement Project in the Himalayas

84.2 39.9 18 Dec 03 01 Oct 04 31 Dec 12 Ongoing

14. Post-Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu

68.5 29.9 19 Apr 05 09 Jul 07 30 Sep 15 Ongoing

15. Tejaswini Rural Women's Empowerment Programme

208.7 39.4 13 Dec 05 23 Jul 07 30 Sep 15 Ongoing

16. Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains

52.4 30.1 14 Dec 06 4 Dec 09 31 Dec 17 Ongoing

17. Mitigating Poverty in Western Rajasthan Project

62.3 30.9 24 Apr 08 11 Dec 08 31 Dec 14 Ongoing

18. Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme

118.6 40.1 30 Apr 09 04 Dec 09 30 June 18 Ongoing

9. The CPE process entailed five phases, with the production of specific deliverable(s) in each phase:

(i) The preparatory phase included the development of the CPE approach paper at end 2008, which captured the evaluation’s objectives, methodology, process, timelines, key questions and related information. A CPE preparatory mission was conducted to India from 9 to 13 February 2009, to discuss the approach paper with key partners. An inception workshop was held on 13 February in New Delhi. The objective of the workshop was to introduce the CPE consultants’ team, exchange views with multiple stakeholders on the priorities for the CPE, and discuss IFAD’s Evaluation Policy and CPE methodology and process. The preparatory phase included the development and launching of a dedicated web site6 for the India CPE, which contains all deliverables produced during the evaluation, information about the evaluation process including timelines and management arrangements, links to data from the operations in the country, and other details.

6 www.ifad.org/evaluation/public_html/eksyst/doc/country/pi/india/index.htm

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(ii) During the desk work phase, a desk review note was prepared on each of the 18 projects and programmes covered by the evaluation, non-lending activities, as well as on the COSOPs’ performance. Based on the desk review notes, a consolidated CPE desk review report7 was prepared, which was shared with IFAD’s Asia and the Pacific Division (PI) and GOI for their review and comments. The desk review report provided an initial assessment, based on a review of existing evaluative evidence8, of the performance and impact of the country programme, as well as capturing selected issues and hypotheses that required specific analysis during the country work phase of the evaluation. In addition, PI prepared a comprehensive self-assessment on the India country programme, which was based largely on the main questions in the CPE framework9. The PI self-assessment was of good quality and included important information, data and analysis used in the CPE process. Last but not least, Professor M.S. Swaminathan (Chairman of the M.S. Swaminathan Foundation) was requested to prepare a short paper on the impact of the financial and economic crisis on small farmers in India, which has been used in the preparation of the final CPE report.

(iii) The most important activity during the country work phase entailed the fielding of a multi-disciplinary expert team of consultants, which spent five weeks in the country from 13 April to 15 May 2009. It held discussions in New Delhi with the GOI and other partners, and then traveled to 11 different states10 to visit 12 IFAD-funded projects and programmes11 in order to review activities on the ground and hold discussions with beneficiaries and their groups, state authorities, project management staff, NGOs and other partners. An aide memoire 12 was produced at the end of the mission, which was presented at a CPE wrap-up meeting held in New Delhi on 15 May 2009. In parallel, IOE commissioned the Schumacher Centre in New Delhi to undertake dedicated performance and impact assessments of two IFAD-funded projects, namely the Mewat Area Development Project and the Jharkhand-Chhattisgarh Tribal Development Programme. Both assessments followed the IOE project evaluation methodology and were undertaken to supplement the primary data available and strengthen the quantitative and qualitative analysis of the CPE.

(iv) During the report writing phase, IOE prepared the draft final CPE report, which was shared with PI, GOI and other partners, including the Department for International Development (DFID), World Bank, and World Food Programme (WFP)13 for review and comments. The draft report has benefited from a comprehensive internal peer review process, involving the

7 A summary of each desk review note produced may be seen in the appendix of the consolidated CPE desk review report. 8 It is important to underline that the CPE benefited from four previous OE projects evaluations in India, namely of the Orissa Tribal Development Project (1998/1999), Tamil Nadu Women’s Development Project (1999/2000), Andhra Pradesh Tribal Development Project (2001), and the North East Region Community Resources Management Project in Upland Areas (2004/2005). In addition, five corporate level and thematic evaluations by OE covered IFAD operations in India, including on Local Knowledge and Innovations (2002/2003), Direct Supervision Pilot Programme (2004/2005), Organic Agriculture in Asia (2004/2005), Evaluation of PI’s Regional Strategy (2005/2006), and the Field Presence Pilot Programme (2006/2007). 9 The CPE framework is seen in Appendix 1, and it is also included in an annex of the approach paper. 10 States visited during the CPE main mission: Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Meghalaya, Orissa, Rajasthan, Tamil Nadu, Uttarakhand and Uttar Pradesh. 11 The list of projects and programmes visited may be found in Appendix 10. 12 The aide memoire captured the mission’s initial findings and conclusions from the field visits and discussions with various partners. 13 The draft was shared with these donors as they were the major IFAD co-financiers in India or had other forms of partnership with the Fund (e.g., WFP is hosting the IFAD country presence in India). The report was also shared with FAO for review and comments, given their role in agriculture and rural development, and the fact that their evaluation office completed in 2009 a CPE of FAO’s assistance to India.

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Director IOE and five evaluation officers, in addition to the comments of the CPE’s Senior Independent Adviser14.

(v) The final phase of the evaluation entailed a range of communication activities to ensure timely and effective outreach of the findings, lessons learned and recommendations of the India CPE. In particular, a CPE national roundtable workshop was held in India in the week of 7 December 2009 to discuss the main issues and lessons from the evaluation and to generate inputs for the evaluation’s Agreement at Completion Point (ACP) 15 . The ACP has been signed by the Additional Secretary of the Department of Economic Affairs, Ministry of Finance on behalf of GOI and the Assistant President of IFAD’s Programme Management Department. The Evaluation Committee of IFAD’s Executive Board participated in the workshop, as part of its 2009 annual field visit to India. The final CPE report has been issued together with the CPE Profile and Insights16. In this regard, all final deliverables from the CPE are shared in hard copy with GOI, IFAD management, members of IFAD’s Executive Board, and other development organizations in India and elsewhere, and made publicly available in electronic format through the dedicated India CPE website.

14 Mr Hans Binswanger, who reviewed and provided written comments on the main deliverables produced during the CPE. His final written report on the quality of the CPE process and its contents may be seen in Appendix 9. 15 The ACP contains a summary of the main evaluation findings. It also includes the CPE recommendations that the GOI and IFAD Management agreed to adopt and implement within specific timeframes. 16 Profiles and Insights are brochures of 500-700 word each and are aimed at reaching a wider audience, including politicians, policy makers, development practitioners, and others. The Profile contains a summary of the main findings and recommendations from the CPE, whereas the Insights is devoted to one learning theme emerging from the CPE. The purpose of the Insights is to raise attention to and stimulate further debate around the theme covered by the Insights.

Key Points This is the first India CPE since the beginning of IFAD operations in 1978. The main objectives of the CPE are to: (i) assess the performance and impact of the operations in

India; and (ii) generate a series of findings and recommendations to serve as building blocks for formulation of the forthcoming India results-based country strategic opportunities programme (COSOP), to be prepared by IFAD and the Government of India (GOI) following completion of the CPE.

In order to achieve its objectives, the evaluation made an assessment of the project portfolio, non-

lending activities and the performance of the two COSOPs for India. Eighteen out of 23 projects financed by IFAD in the country were included in the evaluation.

The CPE process included five main phases: preparatory, desk work, country work, report writing

and communication and dissemination. Specific deliverables were produced in each phase, which are all publicly available and may be downloaded from the dedicated website established for the India CPE.

The evaluation benefited from the inputs and comments throughout the process of a Senior

Independent Adviser, whose written report on the quality of the CPE process and its contents may be seen in appendix 10 of the final report.

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II. COUNTRY CONTEXT

A. Overview

10. Poverty17. Located in South Asia, India covers an area of 3,287,260 km2 and has a population of approximately 1.14 billion (2008). It is the second most populous country in the world and it is estimated that the population will reach 1.4 billion by the year 2025. In 2007, its population growth rate averaged 1.3 per cent, down from 1.4 per cent in 2006, 2.0 per cent in the 1990s and 2.3 per cent in the 1980s. In 2007, India’s overall fertility rate stood at 2.7 births per woman. India’s population is still predominantly rural, with 72 per cent living in villages of less than 5,000 inhabitants. However, data from India’s national sample surveys and censuses suggests that the rate of migration from rural to urban areas is increasing18. The urban population constituted 28 per cent of the total in 2001, up from just over 25 per cent in the mid-1990s, and is projected to reach 36 per cent around the year 2025. According to World Bank estimates based on 2005 data, 41.6 per cent of India’s population, or 456 million people, live below the poverty line of US$1.25 (purchasing power parity) per day. Although this has decreased steadily from 60 per cent in 1981, as a consequence of population growth, the number of people living under US$1.25 a day increased from 421 million in 1981 to 456 million in 2005. The World Bank further estimates that 33 per cent of the poor in the world now reside in India. Moreover, 828 million people, or 75.6 per cent of the population, live on less than US$2 per day, compared with 73 per cent in sub-Saharan Africa. 11. India’s rural areas account for a substantial majority of the poor, given that 70 per cent of the country’s total population lives there. According to data from the Planning Commission, there has been higher poverty incidence in rural areas than in urban ones from 1973 to 2005. However, the gap in poverty percentage between rural and urban areas is getting less significant in recent years19. In 1999-2000, the population living below national poverty line was 27.1 per cent in rural areas and 23.6 per cent in urban areas. In 2004-2005 the difference in the two percentages was not obvious (21.8 in rural and 21.7 in urban). Partly, domestic migration contributes to the leveling of rural and urban poverty incidence, and another possible reason is that the urban poor do not get commensurate economic benefit in the rapid economy development process. Poverty is more intense in certain states. In 2004-2005, four states accounted for over 50 per cent of India’s population below the poverty line: Uttar Pradesh (19.6 per cent), Bihar (12.2 per cent), Madhya Pradesh (8.3 per cent) and Maharashtra (10.5 per cent). The official data for 2004-2005 used a poverty line roughly equivalent to US$1 a day, but this masks the fact that a very large number of people are clustered around this figure and subject to extreme vulnerability in the event of a poor harvest or a family illness. 12. Health and education levels in India have improved significantly since its independence. By 2007, life expectancy at birth had increased to 66 years for men and 71 years for women, up from 32 years for both sexes in 1951. Mortality rates for the under five years of age had fallen sharply, from 242 per 1,000 in 1960 to 74 per 1,000 in 200520. However, a large proportion of the population continues to suffer and die from diseases and from childbirth complications that could be easily prevented. In terms of education, there have been huge steps forward in getting more children into primary school, especially in recent years, as part of the efforts to meet the Millennium Development Goals (MDGs). Yet, the rates for girls are significantly lower than for boys. The 2001 census recorded the male literacy rate as 75 per cent compared with 53 per cent for women. 17 World Bank: World Development Indicators 2008. 18 One estimate based on National Sample Survey data, for example, suggests an increase from 24.7 per cent in 1992/1993 to 26.6 per cent in 1999/2000. See Srivastava and Sasikumar: An Overview of Migration in India, 2003. 19 According to Planning Commission, Poverty Estimates for 2004-05, the poverty line at all-India level was defined as India Rupee (INR) 356 per capita per month for rural areas, and INR 538 for urban areas. 20 Economist Intelligence Unit (EIU), Country Profile India, 2008.

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13. Institutional context. India has a federal structure of governance, with clearly defined roles and responsibilities for the central (federal) and state and local governments. The country is divided into 28 states and 7 union territories (e.g., Delhi). For administrative, development, and law and order purposes, each state is divided into a number of districts. Each district is further divided into a number of development blocks. 14. The country has a national democratically elected parliament, which is the supreme legislative body of the country. The Central Government exercises its broad administrative powers in the name of the President, whose duties are largely ceremonial. National executive power is centered in the Council of Ministers, led by the Prime Minister. States in India have their own elected governments. State Chief Ministers are responsible to state assemblies (legislature) in the same way the Prime Minister is responsible to the Parliament. Each state also has a presidentially-appointed governor who may assume certain broad powers when directed by the Central Government. In terms of local governance, the Constitutional (73rd Amendment) Act in 1992 came into force to provide constitutional status to the Panchayati Raj institutions (see Box 1). 15. The Central Government is responsible for national policy, coordination and monitoring, and has made increasing use of centrally supported schemes (CSS) in the form of earmarked transfers to support the implementation of national policies. In recent years, CSS have played an important role in helping state governments meet expenditures, such as those needed for increasing access to primary education or for tackling HIV/AIDS in an effort to meet the MDGs. The Central Government ministries are not normally involved in project execution at the state level. Most of the areas directly affected by poverty are under the responsibility of state governments, rather than the Central Government. Among other issues, the states are responsible for primary and secondary education, the health care system, and agriculture and rural development. Project implementation is undertaken through state (technical) departments (e.g., for agriculture, forestry, rural development, etc), together with district and block authorities. 16. Five central ministries are particularly relevant to IFAD’s work: the ministries of finance, agriculture, rural development, tribal affairs, and women and child development21. The Minister of Finance is the country’s Governor to IFAD. In the Ministry of Finance, the Department of Economic Affairs (DEA) is the main interlocutor with IFAD. The Additional Secretary DEA is India’s Executive Director on the Fund’s Executive Board, who also normally participates in IFAD’s replenishment consultations. DEA co-ordinates IFAD’s assistance to India, and among other issues, leads country strategy preparation and loan negotiation processes. DEA also takes responsibility for overall monitoring of project implementation progress, and is the co-ordinating entity for the CPE. 17. In addition to the central ministries, the National Planning Commission set up in 1950 is responsible, inter-alia, for the formulation of the country’s five-year national development plans. For the first eight plans, the emphasis was on a growing public sector with massive investments in basic and heavy industries, but since the launch of the Ninth Plan in 1997, the emphasis on the public sector has become less pronounced. The National Planning Commission also includes a Programme Evaluation Office, set up in 1952, which is the country’s premier organization for conducting evaluations of development programmes, of both national programmes and centrally supported schemes at the state level.

21 There are other sector Ministries of potential importance to IFAD’s work, like the Ministry for Environment and Forests.

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Box 1. Panchayati Raj

18. Agricultural and rural development policies. GOI has a number of national agriculture-related policies and strategies22, and some key ones are briefly referred to in this section. The 11th five-year plan (2007-2012), for example, outlines GOI’s intent to raise the agricultural growth rate to 4 per cent per annum. To that end, the plan’s aim is to accelerate the expansion of irrigation and improve water management in rainfed areas, bridge the knowledge gap through effective research and extension, foster diversification to higher-value horticulture, fisheries and animal husbandry, increase food grain productivity to help ensure food security, facilitate farmers' access to credit at affordable rates, and improve farmers’ access to markets. 19. The National Agriculture Policy23 seeks to actualise the vast untapped growth potential of Indian agriculture, strengthen rural infrastructure to support faster agricultural development, accelerate the growth of agro business, create employment in rural areas, secure a fair standard of living for the farmers and agricultural workers and their families, discourage migration to urban areas and face the challenges arising out of economic liberalization and globalization. 20. The National Policy for Farmers24 was adopted by the Government of India in 2007, with the aim to stimulate attitudes and actions which should result in improvement in the income of farm families, not only to meet their consumption requirements, but also to enhance their capacity to invest in farm-related activities. Therefore, some major goals of the policy are to: protect and improve land, water, bio-diversity and genetic resources; develop support services; strengthen the bio-security of crops, farm animals, fish and forest trees for safeguarding the livelihood; mainstream the human and gender dimension in all farm policies and programmes, and introduce measures which can help attract and retain youth in farming and processing of farm products for higher value addition. 21. The National Environmental Policy (2006) is intended to be a guide to action: in regulatory reform; programmes and projects for environmental conservation; review and enactment of legislations by Central, State and Local Government. The dominant theme of this policy is that while conservation of environmental resources is necessary to secure livelihoods and well-being of all, the most secure basis for conservation is to ensure that people dependent on particular resources obtain better livelihoods from the fact of conservation, than from degradation of the resource. The policy also seeks to stimulate partnerships of different stakeholders, i.e. public agencies, local communities, academic and scientific institutions, the investment community, and international development partners, in harnessing their respective resources and strengths for environmental management.

22 The CPE bibliography in Appendix 3 provides a list of key such policies and strategies. 23 Issued by the Ministry of Agriculture. 24 The policy was developed by the National Commission on Farmers under the Chairmanship of Professor M.S. Swaminthan, and issued by the Ministry of Agriculture.

India’s governance structure below the state government level comprises a tier of representative bodies known collectively as the Panchayati Raj. Mahatma Gandhi advocated it as a decentralized form of government where each village is responsible for its own affairs, as the foundation of India's political system. It was adopted by state governments during the 1950s and 60s as laws were passed to establish Panchayats in various states. It became part of the Indian Constitution with the 73rd amendment in 1992. The basic unit is the village level Gram Panchayat. Members of the Gram Panchayat are elected at a village assembly – the Gram Sabha. The next level, the block or tehsil Panchayat Samiti has a mix of elected and official representatives, as has the District or Zilla Panchayat. The panchayat system differs somewhat from state to state but the broad principle of a hierarchy of representative institutions spanning the village level to the state government is consistent across states.

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22. In addition to the above, there are numerous other government policies, strategies and acts that provide the overall framework for agriculture and rural development in the country, such as Forest Rights Act (2006) and National Water Policy (2002) that provide the overall framework for agriculture and rural development in India. 23. Economic growth has accelerated since the early 1990s, and rates have been particularly high since 2002. The average rate of growth in the past decade has been considerably higher than in previous decades, with real gross domestic product (GDP) growth exceeding eight per cent every year since 2003-2004 and peaking at 9.7 per cent in 2006 (see Table 3). Benefiting from this trend, India has become the world’s tenth largest economy measured in nominal US dollars and rises to the fourth place when measured at purchasing power parity (PPP) exchange rates 25 . India has a two-tier economy: (i) a cutting-edge and globally competitive, knowledge-driven services sector that employs the well-educated middle classes and an increasingly modern and competitive manufacturing sector; and (ii) a sprawling, largely rain-fed agricultural sector that employs the majority of the vast, poorly-educated rural labour force. The GDP per capita, of about US$1,046 in 2007, implies that India is classified as a lower middle-income country26. Table 3 shows the main macro-economic indicators from 2003 to 2007. 24. The latter tier is a significant development, which will have consequences sometime in the future for the Government’s partnership with IFAD. India’s middle income status implies that loans provided to India by IFAD will be on intermediate, rather than on highly concessional terms. That is, according to IFAD’s Lending Policies and Criteria, with US$1,046 annual per capita income, India already at this stage would only be eligible for loans on intermediate terms. However, the Lending Policies and Criteria are being currently revised by IFAD, and the thresholds for determining the lending terms is also being reconsidered in light of the evolution in global economic and financial conditions. It is foreseen that IFAD lending terms to India will remain unaltered in the next Performance Based Allocation Cycle from 2010 to 2012. That is, India is expected to continue benefiting from loans on highly concessional terms in this period.

Table 3. Main Macro-Economic Indicators (2003 - 2007) 2003 2004 2005 2006 2007

GDP (current US$ billion)a 599.5 700.9 810.2 914.9 1,176.9

Real GDP growth (annual %)a 8.4 8.3 9.4 9.7 9.1

GDP per capita (current US$) 563.2 649.2 740.1 824.4 1,046.3

GDP per capita growth (annual %) 6.8 6.7 7.9 8.2 7.6

Agriculture, value added (% of GDP) 21.0 19.2 19.1 18.2 18.1

Consumer price inflation (av; %)b 3.8 3.8 4.2 6.2 6.4

Exchange rate (av; Rs: US$)b 46.6 45.3 44.1 45.3 41.3Exports of goods and services (% of GDP)a

14.8 18.1 19.9 22.2 21.3

Exports of goods and services (annual % growth)a

5.8 28.1 14.8 18.9 7.5

Ratio of external debt to GDP (%)c 18.8 17.7 15.2 19.2 18.8a Source: World Bank, World Development Indicators. b Source: Economist Intelligence Unit, Country Profile 2008, Fiscal year (April-March). c Source: data have been calculated using the external debt stocks and the current GDP from the World Bank Indicators.

25 World Bank, World Development Indicators 2008 26 World Bank country classification 2009

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25. The gradual liberalization of the economy27, which began in the early 1990s and accelerated in the present decade, allowed India to exploit the comparative advantage represented by its population. Even with only 12 per cent of the population having post-secondary education, this still represents over 100 million people given India’s size. The rapid expansion of exports of manufactured goods and services fuelled the high rates of growth from 2003 to 2007. In the post-reform period, from 1992-1993 to 1996-1997, the agricultural sector strengthened and reached an average growth of 4.7 per cent, up from 3.6 per cent in the 1980s28. Since 2000, however, this growth has slowed down to an average of two per cent (see Figure 1). Also, the rapid growth of the past decade has further strained India’s infrastructure. Its poor condition is recognized as, perhaps, the single most important threat to the continuation of the growth of recent years. To this purpose, the Government has made substantial investment in major infrastructure projects over the past decade and there has been significant progress in the telecommunication sector and road construction. Yet, the expansion of the energy sector has not however kept pace with the increase of its demand.

Figure 1. GDP Growth by Economic Activities in India (2003-2007)

Source: Central Statistical Organisation, www. mospi.nic.in/cso.htm, 24 March 2008.

B. Agriculture and Rural Development

26. Agriculture sector29. India has moved from being an agricultural-based to a transforming country30, but with little change in the rural share of poverty. Even though overall a transforming country, India has several agricultural-based states such as Bihar, Punjab, and Uttar Pradesh, and a few urbanized states such as Goa, Maharashtra and Tamil Nadu. 27. Agriculture currently accounts for about 18 per cent of GDP (2007). It provides livelihoods for around 600 million people and is vital for ensuring food security. Arable land accounts for 54 per cent of the country’s total land area, where 23 per cent of the country is demarcated as forest area. Around 3.5 per cent of land area is classified as permanent cropland. Sixty-five per cent of farmers rely on rainfed agriculture, and more or less 33 per cent of arable and permanent cropland of the country is under irrigation, as compared to 47 per cent in China. Women account for around 38 per cent of the total agricultural labour force. Average agricultural growth between 1990 and 2005 has been around 2.5 per cent. In terms of cereals, India’s production was around 219 kilograms per capita (2003-2005), as compared to 313 kilograms in China. Cereal production yields were 2,417 kilograms per hectare

27 India embarked on economic reforms in 1991. The GOI signalled a systemic shift to a more open economy with greater reliance upon market forces, a larger role for the private sector including foreign investment and a restructuring of the role of the Government itself. More specifically, the main areas covered by the reform program were: fiscal deficit reduction, industrial and trade policy, agricultural policy, infrastructure development and social sector development. 28 Economist Intelligence Unit (EIU), Country Profile 2008 29 Data from the World Development Report, Agriculture for Development, World Bank (2008) 30 According to the World Development Report on Agriculture (2008), all countries are classified as either agricultural-based, transforming or urbanized.

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(2003-2005), as compared to 5,095 kilograms in China. The agricultural value added per worker (agricultural productivity) is US$381 in 2001-2003, which is higher than in China (US$368). 28. With the impetus of the Green Revolution of the 1970s, India has achieved self-sufficiency in food grains. Benefiting from agricultural development, the country has become a significant agricultural exporter. From 2005 to 2007, agricultural exports accounted for around 10 per cent of total exports. Agricultural imports amounted to US$5.1 million between 2003 and 2005, as compared to US$8.8 million in agricultural exports. 29. The 2008 peak in food prices highlighted the need to invest more in the agriculture sector to ensure continued food security and rural livelihoods. In addition, unlike in East Asian countries, the shift of the labour force from agriculture to non-agriculture is particularly slow in India. This has led to stagnating levels of agricultural productivity and growing recognition that, in the absence of accelerated agricultural growth, it will be difficult to achieve far-reaching reduction in rural poverty. 30. The relatively slow growth of Indian agriculture is attributable to a number of different factors, many of them long-term in nature, including limited investment in rural infrastructure over the past decades, and the scarce power supplies to rural areas despite the effort, in recent years, to invest more in rural roads. There has been little expansion of irrigation and unclear land tenure in parts of the country, which is a constraint to growth and discourages longer term investments and makes it difficult to borrow using land as collateral. Natural disasters, especially droughts, have kept many areas of rural India in poverty. For instance, in 2009, more than 200 of the 593 districts have been officially declared by state governments as affected by drought, causing severe distress to the production systems of the vast number of small farmers. In fact, rainfall is erratic in 4 out of 10 years, and up to 16 per cent of India’s total area is drought-prone and annually about 50 million people are exposed to crisis31. 31. With regard to education, larger numbers of children attend school in the rural areas, but quality issues persist and curricula are often adapted to academic, rather than vocational or agricultural needs. Rural microfinance has expanded, but productive credit, needed to move from smallholder to commercial production, remains limited. Most of the smallholder farmers and many of the rural entrepreneurs have little to no access to financial services. In addition, financial cooperatives and banks have not emerged as significant service providers. “In India, a country with relatively high rural banking outreach, 45 per cent of smallholder farmers do not have a savings account, and 69 per cent do not have a credit account with formal financial institutions. There is a great need among smallholder farmers, who make up the bulk of the world's poor, for ways to save and manage their money”, said Carlos Cuevas, Deputy Director of Financial Services for the Poor for the Bill & Melinda Gates Foundation. Also, “having access to safe and reliable financial services such as savings, credit and insurance, allows poor farmers to safeguard cash, which they often receive only once a year during harvest. In this way, they can better provide for their families, prepare for emergencies, and build long term financial security”32. 32. Another important constraint to agricultural growth is the lack of irrigation. As mentioned above, less than one third of all cropland is irrigated, making agricultural output heavily dependent on the annual monsoons. The main food grain crops (the kharif or autumn crop − predominantly rice, harvested in September-October) and some cash crops (oilseeds, cotton, jute and sugar) depend on the south-west monsoon that brings 80 per cent of India’s rain, usually within a three-month period from June to mid-September. A second, north-east, monsoon brings lighter rains to the south of the country from mid-October to December. Winter rain in north-western India from October to March irrigates wheat and coarse grains (the rabi crop, harvested in April-May).

31 Drought Stalks India by Rahul Goswami (August 2009), article published by Energy Bulletin of NGO Post Carbon Institute. 32 Arun Kumar, World Bank rural finance scheme to help Indian farmers, 2009.

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33. The evolution of agricultural policies in the country can be divided into three phases: an agrarian reform phase (1950-1965), conferring the right of tenure to the tiller and abolishing intermediaries; a technology-push phase (1965-1980), during which the emphasis shifted from institutional solutions to a technology-led approach; and a subsidies and incentives phase (1985-present), during which, with intensive technologies firmly in place, further growth was promoted by subsidies and incentives. In the 1990s, the minimum support price for cereals increased rapidly, leading to a situation whereby Government agencies in some states now buy as much as 70-80 per cent of marketable surpluses. Some agricultural policies led to a dramatic improvement in agricultural production and poverty alleviation. However, as a general rule, they failed to address a number of inherent, long-standing problems and, in particular, remove the imbalances in landholding that complicated land tenure relations in some states and limited the potential contribution of agriculture to overall economic development. 34. Land tenure. Inadequate access to land and insecurity of land tenure is a critical problem for the rural poor in enhancing their livelihoods. In India, most farmers are marginal land owners and landless. Nearly 63 per cent of rural people own less than 1 hectare of land, and the landless (up to 0.2 ha of land) account for 43 per cent of the rural households. Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labour. 35. Since independence, the Government has initiated several rounds of land reforms to protect small farmers and landless by redistributing lands from large absentee landowners to the cultivators; however, the achievements are discounted because of resistance from large land owners and loose execution. The most recent reforms put emphasis on establishing the basic legal and institutional framework to improve land access by the poor. In this context, tribal’s land rights are of key concern of policy makers. Due to constant encroachment of forest land by mining activities and other industrial development, tribal people, already one of the poorest social groups, are frequently displaced from their traditional land and became landless. This is partly because they do not have any official record owning the forests and watersheds; therefore, forest land right recognition would be a basic provision preventing further deprivation of the tribals. 36. The GOI's goal is to raise the agricultural growth rate to four per cent per annum during the period covered by the 11th five-year plan (2007-2012). To that end, the aim is to: (i) accelerate the expansion of irrigation and improve water management in rainfed areas; (ii) bridge the knowledge gap through effective research and extension; (iii) foster diversification to higher-value horticulture, fisheries and animal husbandry; (iv) increase food grain productivity to help ensure food security; (v) facilitate farmers' access to credit at affordable rates; and (vi) improve farmers’ access to markets. The five-year plans are implemented through allocations to states as well as through centrally supported schemes. 37. Rural development. Since independence, India has been a strong promoter of rural development as a means of improving the lives of the rural poor. It has a dedicated Ministry for Rural Development, responsible for land resources, drinking water, and rural development (such as Panchayati Raj institutions, rural roads, rural electrification, education, and health). Rural

Landless wife and child in Jharkhand, with home-made watering cans used to irrigate vegetables Source: Michael Macklin

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development based on village communities was a core theme of Gandhi’s approach and central to Indian development. Early approaches focused on legislation and institutional development trying to break the stranglehold of large land-owners and money-lenders in the rural areas. These had only limited success. With the evolution of the Integrated Rural Development (IRDP) approach in the early 1970s, India began to build an institutional structure based on the Panchayats and administrative structures at the district and block levels. The focus was on stimulating agricultural growth, linked to the delivery of selective subsidies to the rural poor. While, as indicated, there were some successes in agricultural growth, these were largely based on the large and medium landowners and irrigated agriculture. There was therefore little impact on livelihoods of the rural poor. In many cases the subsidies did not reach the poorest groups. Although government policies paid particular attention to scheduled castes and scheduled tribes who were disproportionately represented among the poor, there was little progress in improving their situation. 38. More recently, community based approaches have became the cornerstone of India’s approach to rural development and addressing rural poverty. In 1989, Prime Minister Rajiv Gandhi became an active supporter of village empowerment. Work began in earnest in the 1990s on supporting the establishment of communal institutions at the village level, many using the model of women’s self-help groups (SHGs). A host of new schemes were put in place, such as Training of Rural Youth for Self Employment, Development of Women and Children in Rural Areas (DWCRA), Supply of Toolkits in Rural Areas and the Million Wells Scheme. In 1999 the IRDP and these other schemes were reviewed and replaced by the Swarnjayanti Gram Swarozgar Yojana (SGSY) which is the major on-going government programme for the self-employment of the rural poor. The basic objective of the SGSY is to bring the assisted poor families (Swarozgaris) above the poverty line by providing them income-generating assets through a mix of bank credit and government subsidy. A very large number of SHGs have been established and there are many success stories. Nearly 50 per cent of group membership consists of scheduled castes and scheduled tribes. On the other hand, this evaluation points to the lack of convergence between self-help groups and the formal district and block level institutions. This raises questions about sustainability of these groups after IFAD-funded projects close. 39. An increasing number of centrally supported schemes to reach the rural poor are being put in place by GOI. The National Rural Employment Guarantee Act (NREGA) of 2005 is a major new initiative to address rural poverty. Like the SGSY, it is a centrally supported scheme providing resources to state governments to employ the rural poor with the objective of providing 100 days of guaranteed employment to a member of each household below the poverty line. The programme is gradually taking form in most states33. The NREGA funds are disbursed at the discretion of the gram panchayat and there are many complaints that jobs do not go to the needy. The panchayat also has discretion in the allocation of cards indicating who belong to those living below the poverty line. Also, there are numerous reports of people getting cards despite not being below the poverty line and thus getting access to food items at substantial subsidies, often as much as 50 per cent. An evaluation by the Planning Commission found that 77 to 80 per cent of rural households that own relatively large landholdings (over four hectares of land) either owned a ration card or had access to other government-distributed rations. Of the people below the poverty line surveyed, only 42 per cent had ration cards. The same survey indicated that another major centrally supported scheme to reach the rural poor, the Mid-day Meals Programme for school children, had 22 per cent coverage. 40. The centrally supported schemes have also supported rural roads construction and education for all. Perhaps because it has measurable outputs which are easier to monitor, there is evidence of success in the rural roads programme, though there is a long way to go and the target for universal all-

33 According to comments from the Government, the National Rural Employment Guarantee Scheme was launched on 2 February 2006 in 200 most backward districts in the first phase, and the scheme has now been expanded to all the districts of the country. There is constant endeavour to smoothen roadblocks encountered in achieving the ultimate goal of the programme.

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season access has been put off from the original objective. Forty per cent of India’s villages still lack all weather roads and are inaccessible at times during the monsoon season. Rural education and health programmes remain of mixed quality and a focus of complaints from SHG members. While data show high primary enrollment rates, rural primary schools are often poorly equipped with teachers absent or uninterested and attendance irregular (often depending on whether a midday meal is being provided). Similarly, rural clinics lack facilities and trained personnel and the poorest villagers rely on the private medical system for any serious health problems, often borrowing from money lenders to pay for treatment and medicines. 41. The table below shows a sample of ongoing centrally supported schemes implemented by Ministries of Rural Development, Agriculture, Tribal Affairs, and Women and Child Development.

Table 4. A Sample of Ongoing Centrally Supported Schemes (CSSs) Implemented in India

CSS Ministry Objective Key activities Year National Rural Employment Guarantee Act (NREGA)

Ministry of Rural Development

Enhance livelihood security in rural areas

Providing at least 100 days of employment in a financial year to eligible households

From 2008

Swarnjayanti Gram Swarozgar Yojana (SGSY)


Improve self –employment for rural poor

Self-help groups are formed, assistance to rural poor for establishing micro-enterprises through bank credit and government subsidy

From 1999

The Pradhan Mantri Gram Sadak Yojana (PMGSY)


Provide all-weather road to the eligible habitations in rural areas

State and local governments are responsible for execution and maintenance

From 2000

Scheme of Marketing Development of Tribal Products/Produce

Ministry of Tribal Affairs

Provide marketing assistance to Scheduled Tribes and to wean them away from exploitative traders

Tribal Cooperative Marketing Development Federation of India Limited was set up as service provider to member federations and a marketing developer for tribal produce

From 1987

National Food Security Mission

Ministry of Agriculture

Increase production and productivity of wheat, rice and pulses on a sustainable basis

Restoring soil fertility at the individual farm level; creation of employment opportunities; and enhancing farm level economy

From 2007

National Agriculture Development Programme


Achieving 4% annual growth in the agriculture sector during the 11th five-year plan period

Encourage the states to invest in agriculture; provide autonomy to the States; and address the agriculture in an integrated manner

2007 - 2012

Livestock Insurance Scheme


Provide protection mechanism to farmers and demonstrate the benefit of the insurance of livestock

The crossbred and high yielding cattle and buffaloes are being insured. The subsidy is provided for a policy of maximum of three years.

2005-2012

Support to Training and Employment Programme For Women

Ministry of Women and Child Development

Empower women Mobilise women in small groups; access to credit; training; employment-cum-income generation programs

From 1986

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42. India has around 89 million tribal people. They represent 8 per cent of total population, but 16 per cent of the country’s poor. Given that they are mainly present in the rural areas, they are about one-fifth of the rural poor. The Government has put in place a large amount of legislation to safeguard their status and an equally large number of programmes to address their continuing poverty, but with little success. As an example, in 2001, only 16 per cent of the tribal population was literate, as compared to the national adult literacy rate of 61 per cent34. Over the years, because of the lack of clear title to their land, tribal groups were increasingly pushed towards the hill areas where they practice shifting cultivation. Many of these areas are also rich in minerals, which have been exploited by private and public companies who acquired the land at the expense of the tribals. Legislation has been put in place recognizing the traditional rights of tribal populations to the upland forest areas they inhabit. The central and state governments have Ministries of Tribal Affairs and some states have established Tribal Development Corporations or Societies to help tribal people access the various centrally supported schemes designed to support the rural poor. 43. The GOI and state authorities alike have increasingly realized the importance of devoting attention to the economic betterment and development of rural women in India. Women constitute 48 per cent of the entire population, but their full integration in society and economic life has been relatively slow. The Indian Constitution guarantees no discrimination on the grounds of religion, race, caste, gender, and place of birth, but in reality rural women have harder lives and are often discriminated against in land and property rights, as well as in terms of access to medical facilities and rural finance. Women undertake the more cumbersome tasks for the day-to-day running of households, including fetching drinking water and fuel wood for cooking. Their nutritional status and literacy rates are lower than for men, and they also command lower wages as labour. With regard to the latter, women earn around Rs.33 per work day, as compared to Rs.47 earned by men. The difference in wage widens for rural non-agricultural labourers, with women getting Rs. 44 per day as compared to Rs.67 for men35. The voice of women in key institutions concerned with decision making is also limited. For example, in 2007, only 8 per cent of seats in the national parliament were occupied by women36. 44. There is increasing recognition of the importance of improving the effectiveness of the GOI’s rural development programmes. With many different ministries and agencies supporting the rural sector, there is little evidence of a holistic view being taken of India’s rural development challenge. Most ministries and agencies view their task as administering a number of programs, with the objective to disburse the funds allocated rather than to achieve tangible results. In many ways India’s rural institutional structure, with its combination of panchayat institutions and the district collector and block tehsildar, is well suited to bringing together the different actors who need to support the overall rural development effort. In the coming years the challenge for the Indian authorities will be to put in place a system of positive incentives for improved performance combined with better monitoring designed to identify cases of administrative ineffectiveness, corruption and misallocation of funds.

C. Government Budget to Agriculture and Rural Development and Official Development

Assistance 45. The annual Government budget for agriculture and rural development during the period 2002-2007 (i.e., the period covering the 10th five-year plan) was around US$13,895 million, representing 19

34 Data refers to 2000-2005, from Table 1 in the 2008 World Development Report of the World Bank. 35 United Nations report: ‘Women in India - How free? How equal?’ and the GOI website. Data on population and literacy are based on Census 2001. 36 World Bank World Development Indicators 2008, Table 1.5.

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per cent of total government budget37. This figure includes allocations for agriculture, irrigation, and rural development. Excluding rural development, the total allocation for agriculture (including irrigation) in the same period would be US$9,739 million, which is around 11 per cent of the budget. 46. Table 5 below shows the actual budget spent between 2002 and 2007, but also the projected allocations for agriculture and rural development in the 11th five-year plan period. Although the percentage allocated to agriculture and rural development is marginally lower during the 11th five-year plan period as compared to the actual realizations in the 10th five-year plan, the total amount allocated in the 11th five-year period is more than double the realizations in the 10th five-year plan.

Table 5. Sectoral Allocation of Public Sector Resources: 10th Five-Year Plan (2002 - 2007) Realizations and 11th Five-Year Plan (2007 - 2012) Projections

In US$ million, exchange rate US$ / INR=44.74 (December 2006)

Sectors

10th five-year plan (2002-2007) 11th five-year plan (2007-2012) Five year

realizations Percentage

of total Annual

realizations Projected allocation

Percentage of total

Annual projections

Agriculture and Allied activities

13,568 3.75 2,714 30,483 3.74 6,097

Irrigation and Flood control

25,126 6.95 5,025 47,011 5.77 9,402

Rural Development 30,780 8.51 6,156 67,293 8.26 13,459 Total for Agriculture and Rural Development

69,474 19.21 13,895 144,787 17.77 28,957

Total Government Outlay 361,748 814,644

47. According to data from the OECD-Credit Reporting System, the average total Official Development Assistance (ODA) committed by bilateral and multilateral donors to India was around US$4.2 billion per annum in 1996-1997, then fell to around US$1.8 billion per annum in the period 1998-2001 and has increased again since 2002. In 2006, total ODA commitments to India were US$4.5 billion and the number rose to US$5.8 billion in 2007. 48. In 2003, Government of India took a decision that the transaction costs of small amounts of aid from many different donors outweighed the benefits and 22 bi-lateral donors were asked to conclude their collaboration with the country. Collaboration with a handful of larger donors (DFID, EU, Germany, Russian Federation, and US) would continue. This policy decision was part of the Government’s aim to both reduce dependency on external aid and limit the transaction costs of managing ODA. 49. From 2002-2007, the total ODA commitments in agriculture and rural development to India were US$1.97 billion, averaging around US$329 million per annum, with a peak in 2007 of US$517 million. ODA commitments to agriculture alone in the same period were around US$282 million per annum. ODA to India for agriculture and rural development was around 2.4 per cent of Government’s budget for the sector in the same period. 50. The largest financial support for Indian agriculture and rural development comes from the World Bank, Japan, IFAD, Germany and the UK. In addition, the German Agency for Technical Cooperation (GTZ) contributes financial support for rural development, focused on two specific projects: Regional Economic Development in Uttarakhand and the Rural Financial System Development Programme. Other significant donors to India are the Asian Development Bank (ADB),

37 The source of the data in paragraphs 45-46 and table 5 is the 11th five year plan document, Volume 1, Chapter 3, Annexure 3.1 on sectoral allocation for public sector’s resources.

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United Nations Development Programme (UNDP) and World Food Programme (WFP.) At the same time, the Food and Agriculture Organization of the United Nations (FAO) is active in providing knowledge services for the rural sector. From 2002 to 2007, the World Bank (IDA) committed about US$1,149 million of ODA to agriculture and rural development in India, while Japan contributed around US$451 million, Germany US$99 million and UK US$60 million. Table 6 shows the commitments of the major donors in the agriculture and rural development sector. 51. Based on discussions with several Government of India officials, it appears that the transactions costs for Government in furthering its partnership with IFAD are relatively high, as compared to their cooperation with some other multi-lateral donors. For example, the time that officers spend in managing the IFAD country programme is similar or even more at times in relation to the resources provided by IFAD, as compared to the time spent on the portfolios of other multilaterals, some of whom provided significantly greater resources to the country than IFAD. The officers did however mention that, in spite of this, Government deeply values its partnership with IFAD, in particular, due to the Fund’s exclusive focus on the rural poor, agriculture and rural development and innovations, bottom up and participatory approaches and flexibility.

Table 6. ODA to Agriculture and Rural Development, India (2002 – 2007)

Donors Average annual commitment (US$ million, current price)

Percentage of ODA committed the sector

Percentage of donor commitment as compared to government outlay to the sector

World Bank 191.47 58.11% 1.38%

Japan 75.17 22.81% 0.54%

IFAD 26.57 8.06% 0.19%

Germany 16.58 5.03% 0.12%

UK 10.08 3.06% 0.07%

Notes: 1. IFAD commitments are the approved loans to India from 2002 to 2007. 2. The ODA data are from OECD-Credit Reporting System; the average annual ODA to India to agriculture and rural development 2002 – 2007 is US$329 million according to OECD-DAC statistics. 3. The government outlay data are from the 11th five-year plan 2007-2012; the average annual government outlay to agriculture and rural development 2002 – 2007 is US$13,895million.

D. The Country Strategy, Lessons and Experiences of other Selected Donors in India 52. This section provides a brief outline of the priorities of other major donors active in agriculture and rural development in India. It also contains a synopsis of the main lessons learned and experiences documented in country programme evaluations conducted by their respective evaluation offices. 53. The World Bank’s India country strategy for 2009-2012 is closely aligned with the GOI’s 11th five-year Plan. Over this period, the Bank plans to provide US$14 billion in loans and grants to India. The strategy has three priority areas for support. These are: (i) enhancing agricultural productivity, competitiveness and rural growth, with strong emphasis on improving water resources management and strengthening rural non-farm-sector growth; (ii) improving access to assets, including rural finance, and sustainable natural resource use; and (iii) strengthening institutions of the poor and promoting rural livelihoods. In addition to its support to nationwide programmes, such as the National Agricultural Innovation Project of the Indian Council of Agricultural Research, recent interventions have dealt with watershed management, community development and support for rural livelihoods in Andhra Pradesh, Assam, Karnataka, Orissa, Tamil Nadu and Uttar Pradesh. The independent evaluation group of the Bank conducted a country assistance evaluation in 2001. Among other issues,

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the evaluation underlined the need for more emphasis on fiscal discipline at the central level and progress in structural reforms in agriculture and the implementation of an effective rural development strategy. In addition to making deeper efforts to mainstream gender beyond the social sectors, the evaluation recommended wider attention to monitoring the poverty and gender impacts of Bank-assisted projects and programmes. It also recommended that new lending be only provided to reforming states, and to limit Bank involvement in non-reforming states to policy dialogue as well as economic and sector work. 54. DFID’s largest country programme and country office are in India. In 2002-2007, DFID provided more than £1 billion to India, and from 2008 to 2011, it will be investing another £825 million. In the past, it focused on four priority states: Andhra Pradesh, West Bengal, Orissa and Madhya Pradesh. According to its current plan it will expand coverage to some of the poorest states in the country. DFID’s 2008-2015 country plan focuses on four areas: education, health and nutrition, inclusive growth and governance reform. An evaluation of DFID’s India programme covering the period 2000-2005 (issued in 2006) recommended that DFID further strengthen its efforts on targeting aid, tighten up the monitoring of its programme, and improve knowledge management. 55. WFP has provided over US$1 billion in food and development assistance to India since 1963. Over the past decade, the two main programme activities have been support to forestry and to supplementary feeding programmes, with a geographical concentration on rural areas. The objectives of its 2008-2012 country programme for India are to: (i) strengthen Government capacity to carry out food-based safety-net programmes; and (ii) improve nutrition for women and young children and the livelihoods of vulnerable communities that have to contend with depleted natural resources. Around US$33 million will be granted during this country programme phase. The mid-term evaluation of the India country programme (2003-2007) found that, among other issues, community participation was greater in projects co-financed with IFAD and there was good uptake of micronutrient fortified blended food by women and children. One of the most important lessons was to balance technical expertise in food fortification and procurement with social expertise on targeting and participation. 56. ADB. The core focus of ADB in India is poverty reduction through infrastructure-led growth. The Country Partnership Strategy for 2009-2012 aims to support Government in its efforts toward poverty reduction and inclusive growth as emphasized in the 11th five-year plan. The priority sectors for the Bank will be energy, transport, urban development, water resources management, agribusiness infrastructure, finance, and governance. The country assistance programme evaluation of 2007 outlined the significant contributions to the development process, through supporting project design and implementation, advisory services and policy dialogue at the state level. According to its internal evaluation, ADB failed to add much value in the provision of knowledge products and services and risk mitigation. ADB operations suffered from limited delegation to its India Resident Mission, weak sustainability especially in roads and urban sectors, and from limited participation of the private sector (excluding the financial sector). The evaluation recommends strengthening the India Resident Mission by greater delegation of authority, enhancing non-lending activities, shifting ADB funding where possible from public to private/non-sovereign windows, and concentrating resources in a manageable number of focus states. 57. UNDP’s current country programme (2008-2012) focuses on: (i) poverty reduction; (ii) democratic governance; (iii) crisis prevention and recovery; (iv) environment and energy; and (v) HIV and development. It aims to enhance capacity development for effective, accountable and participatory decentralization and a rights-based approach to achieve the MDGs, especially targeting women and girls. The programme aims to address gender inequalities and strengthen partnerships with the private sector in seven states: Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh. The Evaluation Office undertook an assessment of development results38 of the India country programme in 2002. Among other issues, the evaluation found the need to avoid

38 Which is the terminology used in UNDP for country programme evaluations.

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multiplicity of objectives and to focus on fewer themes and limit geographic coverage, as well as to ensure inter-sectoral linkages among programmes. The mid-term review of the previous UNDP country programme (2003-2007) while recognizing some successful initiatives, stressed the need to move towards fewer, and more strategically focused, areas to support the implementation of national flagship programmes and priorities, as well as forging close linkages for capacity development at the state and district levels. 58. FAO is a long-standing partner in India’s agricultural development. FAO’s current focus in India is mainly on plant production activities, forestry, fisheries, nutrition, and food quality and safety. The 2009 evaluation of FAO cooperation with India (covering the period 2003-2008) found that, among other issues, “the organisation did not have a vision for its work in India…. and that national needs have not been prioritised nor has FAO identified the areas in which it has a comparative advantage”. The effectiveness of FAO’s work has been positive for most national projects, whereas the picture is mixed for regional and global initiatives. FAO is seen as technically competent and its normative products are generally appreciated, but there was some disquiet about the quality of some assistance provided. The evaluation recommended, inter-alia, for FAO to widen its support to India in the area of food quality and safety within the context of the development of the National Medium term Planning Framework for India, to utilise its comparative advantage in developing more effective water delivery systems, and to set up a taskforce to assist the FAO Representative in India to meet the requests that the country presents to the organisation.

Key Points Economic growth has accelerated since 1991, the year in which India launched wide-ranging economic

and structural reforms. Growth rates have been over 8 per cent per annum between 2003 and 2008. India is classified as a transforming country, according to the World Bank, with a two-tier economy,

which includes a prosperous urban middle class employed in the globally competitive, knowledge-driven services and manufacturing sectors; and a large number of rural poor working in agriculture.

According to the World Bank, around 33 per cent of the world’s poor live in India. Around 456 million

people live below the poverty line of US$1.25 (purchasing power parity) per day. Agriculture constitutes about 18 per cent of the GDP (2007) and its growth accelerated to 4.7 per cent

per annum in the 1990s, but has slipped back to 2 per cent per annum in the current decade. Average agricultural growth between 1990 and 2005 has been around 2.5 per cent.

Factors accounting for the slow growth include: inadequate policy framework and institutional support; a

lack of investment in infrastructure and irrigation; poor quality of rural education; and inadequate access to financial services for smallholder farmers.

The GOI has recognised rural poverty as the most serious development issue facing India and has

established the 11th five-year plan (2007-2012), which has a major focus on raising agricultural productivity and growth. Since 2002, the Government has allocated around 18 per cent of its national budget on agriculture and rural development.

The main donors working in agriculture and rural development face a similar challenge in defining their

role and focus in a country which has ample financial and human resources for its own development.

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III. THE STRATEGY ADOPTED BY IFAD AND THE GOVERNMENT

A. Evolution of the Country Strategic Opportunities Paper

59. The overall priorities of IFAD in India have been largely consistent over the past 20 years. In the period 1978–1987, the Fund was mainly a peripheral co-financier, supporting the irrigation sub-sector and funding five projects aimed at enhancing agriculture production and productivity. Thereafter, it became a key partner in mainly financing operations for tribal and women's development. This focus has been maintained up to the present day, with some evolutions in approaches of interventions. The lesson from this early experience was that IFAD could not provide sufficient technical and financial support for nation-wide irrigation programmes in India, and therefore was unable to play a significant catalytic role in poverty reduction through these types of programmes. As the Fund started to develop a comparative advantage in grassroots development through targeted projects and programmes, IFAD shifted its emphasis towards integrated rural development programmes (or multicomponent projects), starting with the Orissa Tribal Development Project in 1988. This project employed a holistic approach to rural development, building community institutions and natural resource management through low cost interventions in soil and water conservation, land tenure registration, adaptive research and extension, capacity building of local institutions, livelihood and rural infrastructure and NGO involvement. This approach has largely driven the programme until the present. 60. The first COSOP. Before 1999, the country strategy was not captured in a formally written document. The country strategy was largely reflected in the design of the projects and programmes funded by IFAD. The first formal India country strategic opportunities paper (COSOP) was developed in 1999 and included a financing framework of US$100 million. An enhanced version of the same document was discussed in the Board in December 200139, which stated that a further update of the COSOP would be provided in late 2003. 61. This COSOP reflected the intervention approaches that had evolved in the late 1980s and 1990s, and defined IFAD’s role as a catalyst in rural poverty alleviation in India. This would entail promoting pro-poor innovative approaches to be replicated and upscaled by the Government and others. Through analysis of rural poverty opportunities and constraints as well as lessons learned from IFAD experience, it identified the Fund’s strategic niche in India. The main strategic thrusts proposed in the 2001 COSOP were: (i) increase popular participation and empower the poor; (ii) strengthen grassroots institutions; (iii) create greater access of the poor to resources, including land and water, and support services and human resource development; (iv) improve financial services to the poor; and (v) generate sustainable incomes for the poor from non-farm enterprises, upheld by market linkages and rural connectivity40. The target group would be restricted to scheduled tribes, scheduled castes and women. 62. Three of the five projects and programmes included for financing in the 2001 COSOP focused on tribal areas. Of the remaining two, one was a nationwide project to support Micro-Finance Institutions through the Small Industries Development Bank of India (SIDBI), and the other was an unforeseen project in response to the devastating earthquake in Gujarat in January 2001. The latter project was not originally part of the COSOP, when it was first adopted in 1999. Additional financing over and above the financing framework was provided for the Gujarat project. The list of projects financed within the 2001 COSOP is shown in Table 7.

39 The India COSOP was one of the first such documents discussed in the Executive Board, as part of a trial period in developing procedures for review of COSOPs by the Board. 40 These have been summarised from paragraph 38 in the COSOP document.

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Table 7. Projects Approved within 2001 COSOP

Project Title Total Cost US$

million

IFAD Loan Financing

US$ million

Jharkhand-Chhattisgarh Tribal Development Programme 41.7 23.0

National Microfinance Support Programme 134.0 21.9

Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

24.0 14.9

Orissa Tribal Empowerment and Livelihoods Programme 91.2 19.9

Livelihoods Improvement Project in the Himalayas 84.2 39.9

63. The second COSOP. A second country strategy for India was presented for Board consideration in December 2005, covering the programme cycle of 2005-2009.41 The goal of the country strategy was for “IFAD to continue its partnership with India, particularly in assisting the Government of India to achieve its target of reducing the poverty ratio by 5 percentage points by 2007 and 15 percentage points by 2012.” 64. The 2005 COSOP reaffirmed the key strategic thrusts of the 2001 COSOP, but recognized the need for greater priority to be given to increasing agricultural productivity including coastal fisheries, as well as expanding geographic coverage to include the mid-Gangetic plains. The 2005 COSOP identified three major strategic thrusts, which are: (i) capacity building, including building of grassroots institutions and institutional strengthening among support agencies; (ii) promoting and protecting the access of marginalised groups to resources, including natural resources 42 , and (iii) promoting the diversification of livelihood opportunities within the on-farm and off-farm sectors as avenues out of poverty for the poor. The COSOP also outlines the rationale for IFAD’s continued engagement in India, which includes the promotion of replicable innovations and institutional sustainability, a focus on remote and marginal areas where the presence of major donors is usually limited and IFAD is often the sole external donor in the project area, and responding to Government demand. 65. Targeting was to be based on poverty incidence, with emphasis on scheduled tribes, scheduled castes and women, as well as coastal fishing communities. The country programme would focus on microfinance and women’s empowerment, mainly through supporting grassroots institution-building, as well as on expanding livelihood opportunities among tribal populations in the poorest agro-ecological zones. A lending programme of US$190 million was approved for a period of five years from 2005-2009, even though the COSOP says the lending levels of IFAD to India would range from US$110 million to US$119 million. The list of projects approved within the 2005 COSOP is shown in Table 8. However, it should be noted that the first project listed in Table 8 was approved in April 2005, whereas the COSOP was reviewed by the Board in December 2005. 66. Aside from the project interventions, the COSOPs include an overview of IFAD’s non-lending activities in terms of policy dialogue, knowledge management, and partnership building. In both the 2001 and 2005 India COSOPs, the opportunities for partnership building and areas for policy dialogue were delineated, but there was no explicit treatment of knowledge management priorities and activities.

41 During the discussion of the 2001 COSOP, the Board had requested an update in 2003. This was subsequently merged into the preparation of the new COSOP, presented in 2005. 42 Including forests lands, highly degraded land, water and fisheries, financial resources, etc.

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Table 8. Projects Approved Within 2005 COSOP

Project Title Total Cost

US$ million

IFAD Loan Financing

US$ million Post-Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu

68.5 29.9

Tejaswini Rural Women's Empowerment Programme 208.7 39.4

Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains

52.4 30.1

Mitigating Poverty in Western Rajasthan Project 62.3 30.9

Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme

118.6 40.1

North Eastern Region Community Resource Management Project II 38.2 20

67. In terms of partnership, both COSOPs emphasise the need for engaging with key bilateral and multilateral donors (but no reference is made to FAO in either strategy). Attention is also devoted to partnership with civil society organisations and NGOs. Notably, the 2005 COSOP pointed out the opportunities to build partnership with the private sector in the areas of microfinance, market linkages and rural enterprise development. However, neither COSOP is explicit about partnership with Government institutions, and the expected roles of different tiers of government. 68. Both COSOPs identified areas for policy dialogue, centred on the following areas: (i) protection of tribal peoples’ rights (e.g., in terms of access to forest resources, land titles, etc); (ii) enhancing the participation of women in local government bodies and their access to credit and financial services; (iii) liberalisation of the financial system to provide a better environment for micro-finance; (iv) land reform to improve women’s access to productive resources. The 2005 COSOP outlines the approach to policy dialogue, which would include networking with like-minded partners, propagating reform knowledge by carrying the messages of successful policy reform from isolated projects to multiple platforms through workshops, occasional reports, exposure visits by key stakeholders, planned media campaigns, as well as promoting the professional development of critical personnel at the central and state levels. 69. To recap, Table 9 provides a summary of the main elements contained in the two COSOPs developed for India thus far.

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Table 9. Summary Description of the Two India COSOPs

PRINCIPAL ELEMENTS

COSOP 2001 COSOP 2005

Overall goal

Support the Government’s efforts to promote development policies with greater emphasis on initiative and participation.

Assist GOI to reduce poverty ratio by 5 per cent by 2007 and 15 per cent by 2012.

Major strategic thrusts

Increase popular participation; Strengthen grassroots institutions; Create greater access of the poor to

resources, including land and common-property resources;

Improve financial services to the poor; Generate sustainable incomes for the

poor from non-farm enterprises including market linkages

Grassroots institution building and the institutional strengthening of support agencies;

Promoting and securing the access of marginalized groups to resources;

Promoting the diversification of livelihood opportunities within the on-farm and off-farm sectors.

Geographic priority

Not explicitly articulated, but can be discerned based on the projects financed under the COSOP: Chattishgarh, Gujarat, Jharkhand, Meghalaya, Orissa, and Uttarakhand. In addition, one national wide programme on rural finance was funded under the COSOP.

Mid-Gangetic Plains (Bihar and Uttar Pradesh), North-East, Coastal Areas, Rajasthan, Madhya Pradesh, Maharashtra and Tamil Nadu.

Subsector focus

Empowerment, social capital and institution building;

Micro-finance and income generation; Livelihoods and natural resources

management including and watershed development; and

Rural infrastructure.

Broadly similar as in 2001 COSOP. Coastal areas resources management, sustainable agriculture, and market linkages in one project.

Main partner institutions

Ministry of Finance Ministry of Tribal Affairs State government departments and

agencies (see Appendix 5) DFID and WFP NGOs (e.g., SEWA), community-

based organizations (CBOs) and private sector

Ministry of Finance Ministry of Women and Child Dev. State government departments and agencies

(see Appendix 5); WFP NGOs, CBO and private sector

Target group Scheduled Tribes, Scheduled Castes, and Women.

Same as for the 2001 COSOP, including coastal fisheries communities

Country programme funding

Total lending of US$100 million during the COSOP period43. No specific budget defined in COSOP for grants and non-lending activities.

Total lending would range from US$110 to US$119 during the COSOP period. No budget defined in COSOP for grants and non-lending activities.

Country programme and COSOP management44

CPM and programme assistant based in Rome, supported by a national country presence officer and one programme assistant in New Delhi. In all but one case, projects were supervised by co-operating institution(s).

CPM, programme assistant and secretary based in Rome. National country presence officer, assistant programme officer, and 3 other staff in New Delhi country office. All ongoing projects have been directly supervised by IFAD since the beginning of 2008.

43 This figure is taken from the 1999 COSOP, as there is no reference to lending volumes in the 2001 document. 44 COSOP management was not described, as this is a feature of the results-based COSOP format adopted by the Board in September 2006.

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B. IFAD Funded Projects and Programmes 70. Since 1979, IFAD has financed 24 projects and programmes in the country45, approving loans for a total of US$656 million, with a total project cost of US$1.9 billion. It financed approximately 34 per cent of total project costs. Of the 24 projects, nine are ongoing46, and 15 are closed. All loans have been provided on highly confessional lending terms47. The principal co-financiers supporting the assisted projects and programmes in India have been: the World Bank (US$250 million), DFID (US$74 million), WFP (US$37 million), and the Government of the Netherlands (US$12 million). It should be pointed out however that DFID cofinancing of US$10.5 million envisaged at the time of Board approval did not actually materialize in the Jharkhand-Chhattisgarh Tribal Development Programme. 71. Benchmarking the percentage of IFAD loan as part of the total project cost, as shown in the table below, we see that the IFAD’s contribution to India’s agriculture and rural development is somewhat lower, as compared with other middle income countries and countries with large portfolios, as well as compared to overall IFAD operations. Among other issues, this could reflect the deep ownership and commitment of the Government in IFAD-funded operations, yet at the same time leaves room for widening IFAD’s investments in the country.

Table 10. Benchmarking the Percentage of IFAD Loan as Part of the Total Portfolio Cost in Selected Middle Income Countries and Countries with Large IFAD Project Portfolios

(As of September 2009)

Selected countries and IFAD

Percentage of IFAD loan as part of total

portfolio cost

Total IFAD loan

commitment48 (US$ million)

Total portfolio cost

(US$ million)

Number of total

Projects49

Number of ongoing

projects and those not yet

effective

Argentina 53.03% 84.0 158.4 5 3

Brazil 35.25% 161.7 458.7 7 4

China 38.34% 590.6 1,540.4 23 7

Egypt 40.78% 190.1 466.2 9 2

Ethiopia 38.09% 287.9 755.8 15 5

India 34.26% 636.4 1,857.7 23 9

Indonesia 46.38% 333.5 719.1 13 2

Nigeria 29.30% 187.5 639.9 9 5

Pakistan 20.96% 440.9 2,103.3 23 6

Total IFAD operations (-2008) 50

37.72% 10,537.0 27,937.80 648 204

45 The list of the IFAD financed projects and programmes is shown in Appendix 4. 46 One of these projects is not yet effective. 47 See footnote 3. 48 Not including project commitments cancelled. 49 Not including project cancelled. 50 Data from IFAD Annual Report 2008

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72. The loan allocation according to the IFAD project type (sub-sector) classification 51 is as follows, in order of funding: 7 rural finance projects for US$207 million (33 per cent of total IFAD loan allocation to India), 8 rural development projects for US$192 million for rural development (30 per cent), 5 agriculture development projects for US$125 million (19 per cent), and 3 irrigation projects for US$110 million (18 per cent). Further analysis of the breakdown of IFAD loan allocation by component and target group may be seen, respectively, in Appendix 6. Among other issues, it reveals that a significant amount of resources have been invested in institution building and capacity development, followed by rural finance, and that very few resources were for agricultural activities (e.g., crops, research, extension, small-scale irrigation). It is useful to clarify that the 18 per cent allocated to irrigation were for projects financed in the late 1970s/early 1980s, which are not very representative of IFAD’s approach as they were mostly large infrastructure projects. 73. The CPE will further argue - as the analysis unfolds - that IFAD has not invested much in agriculture in India in the past. In fact, some of the 5 projects classified as agriculture development included few agriculture-related activities, apart from the more recent Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme. For example, the Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat was classified as agricultural development, but only 22 per cent of the total IFAD loan in this project was allocated to agriculture (for integrated land and water management, agriculture development, livestock and fodder development, and nursery and plantation development)52. Part of the reason for this is the way IFAD assigns the “project type”. That is, if 50 per cent of more of project costs (excluding project management and M&E) are for the same activities as one of the IFAD project types, then that particular type is assigned to the project. If not, the project is classified as general agricultural development53, which was the case in the Gujarat project. Three of the five projects classified as agriculture projects were tribal development projects, which were in reality integrated rural development projects. They mainly focused on rural infrastructure, health, education, social mobilisation, water-shed management, and some agriculture activities (such as horticulture, fruit tree plantations to reduce shifting cultivation, water harvesting, etc). 74. Lending Mechanism. Loans to India have been provided by IFAD on highly concessional54 terms. Loans are provided to the Central Government for operations at the state level. That is, the borrower is the Government of India and not the state governments (except in one project National Microfinance Support Programme, where the borrower is the Small Industries Development Bank of India (SIDBI), and the loan is guaranteed by the Central Government). 75. Lending mechanisms in other IFIs operating in India vary. India remains the World Bank’s largest single borrower. Roughly half of the World Bank (IDA) loans to India are interest free. All Bank loans are also to the Central Government, which are then channelled to state authorities. 76. ADB’s lending to India includes both sovereign and non-sovereign operations. The sovereign lending is signed by the Central Government, and then channelled to states. ADB has shifted support from central to state-level Government since 1996, and the ADB 2007 India Country Assistance

51 Each IFAD project is classified according to one of the following 10 types (sub-sectors): agriculture development, rural development, credit and financial services, research/extension/training, irrigation, storage/processing/marketing, livestock, fisheries, rural settlement and programme loans. 52 See table 2 in the project document approved by the Board (document EB 2001/73/R.20/Rev.1). 53 See page 19 of IFAD’s PPMS manual, January 2009. 54 In IFAD operations, there was a change in lending policy in relation to the terms of highly concessional loan: for the loans approved beginning in April 1994, no interest required, but an annual service charge of 0.75 per cent, and the maturity is 40 years, with a grace period of 10 years (included in the maturity period); for the loans approved prior to April 1994, no interest required, but an annual service charge of 1 pre cent, the maturity is 50 years, with a grace period of 10 years (included in the maturity period).

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Programme Evaluation stated that moving operations to the state-level was highly relevant55. Non-sovereign operations is related mainly to involving private sector in financing infrastructure and utilities, such as power generation, power transmission, and national highways development financing. Based on the experience in non-sovereign lendings, the ADB evaluation recommended shifting funding from public to the private or non-sovereign window, whenever feasible. In 2008, ADB approved sovereign lending US$1,808 million in total, and non-sovereign lending of US$1,068 millions. 77. As mentioned previously, the Fund has also provided non-lending services comprising policy dialogue, partnership building, and knowledge management. These activities are difficult to track, as IFAD does not have a systematic programme and reporting systems for non-lending activities in the same manner as it does for lending, even though in more recent years more attention is being devoted to non-lending activities building on its project-based experiences. 78. There are a variety of technical assistance grants that India has benefited from. These include regional/sub-regional grants (e.g., IDRC for ENRAP, which aims to promote communication and knowledge sharing, using a combination of electronic and other vehicles), and country-specific grants (e.g., to IRRI in relation to the Programme for Accelerating Technological Adoption to Enhance Rural Livelihoods in Disadvantages Areas of India). Appendix 8 provides a full list of regional/sub-regional and country-specific grants to India. In addition, it is to be recalled that IFAD has a global grants window (e.g., as the one provided to Bioversity International for a Programme on Impact Evaluation Approaches for Agriculture Research for Development), but they are not considered in the CPE, as their impact on any individual country programme is extremely challenging to discern.

C. Country Programme Management

79. In line with the results-based COSOP format adopted by the Board in September 2008, this section would contain a description on country presence arrangements, supervision modalities, annual country programme implementation review workshops and country programme management team arrangements. Once again, it is fair to recall that both the India COSOPs were developed before 2006, and therefore all these elements are not explicitly covered in the two COSOPs. 80. Supervision arrangements. Until 2008, all projects but one financed by IFAD in India were supervised by co-operating institutions. The World Bank supervised the first five operations and the Rural Women’s Empowerment Project in the mid-1990s, whereas UNOPS was entrusted with responsibility of supervising 14 projects and programmes. One project (the Jharkhand-Chhattisgarh Tribal Development Programme) has always been directly supervised by IFAD since its effectiveness, in the context of the Direct Supervision Pilot Programme approved by the Governing Council in 1997. The two projects approved respectively in 2008 and 2009 are directly supervised by IFAD. 81. Following the evaluation by IOE of the Direct Supervision Pilot Programme (DSPP) in 2004/2005, and the adoption by the Board of IFAD’s supervision policy in December 2006, the Asia and the Pacific Division (PI) decided that all ongoing projects in India under supervision by co-operating institutions would from 2008 onwards be supervised directly by IFAD. In addition, PI decided that all new operations in India approved in 2008 and onwards would also be supervised directly by IFAD. This decision was built on a key DSPP evaluation finding that direct supervision by IFAD as compared to supervision by co-operating institutions was superior, especially in terms of focus on results and IFAD specific issues such as gender mainstreaming and targeting. 82. Therefore, at present IFAD is undertaking direct supervision and providing implementation support in all the nine ongoing projects and programmes in India. Supervision missions normally entail the participation of the staff from the IFAD country office and whenever possible, of the India

55 ADB, Country Assistance Programme Evaluation, 2007.

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CPM, in addition to short-term consultants hired with different sub-sector expertise depending on the nature of the project being supervised. Country office staff also provides regular implementation support in selected areas as they emerge during execution and constantly monitor project progress. 83. Country presence. The India country office was set up in India in 2001, making it one of IFAD’s first country offices (or Field Support Units as it was known then). It was established even before the launching of the Field Presence Pilot Programme (FPPP), which was adopted by the Board in December 2003. The India country office was formally brought under the FPPP, and in fact, its experiences till the approval by the Board of the FPPP informed the design of the pilot programme. 84. The country office was established under an agreement with WFP with IFAD in 2001. IFAD was to bear 80 per cent of the salary cost of the field support manager and 100 per cent of the salary of his/her assistant. Under this cost-sharing arrangement, the field support manager was to spend 20 per cent of his/her time on WFP-related issues. WFP would provide office space and other backstopping including equipment and transportation. Contracts were issued by WFP as per their rules and regulations. At the outset of the country presence, its main aim was to support projects and strengthen communication and interaction with GOI. 85. A new memorandum of understanding was signed on 1 June 2004 with WFP for further strengthening IFAD’s country presence in India. This allowed the country office to be brought under the FPPP, which led to an expansion of its mandate to get involved in policy dialogue, knowledge management, implementation support and partnership strengthening. Under this memorandum of understanding, WFP recruited a country presence co-ordinator and an assistant to the country presence coordinator. All contracts were governed by WFP rules and regulations. 86. A new agreement was signed on 20 December 2007. Under this agreement, IFAD would cover 100 per cent of the costs of staff, and provide a 4 per cent service fee to WFP. The costs of premises and other general utilities and services would be shared by WFP and IFAD. This agreement ensured that the CPM would have total responsibility and directly supervise the country presence co-ordinator overall all substantive matters, whereas the latter would be responsible for supervising the other staff in the country office. This agreement was renewed on 30 January 2009, which led to the extension of the partnership with WFP for hosting IFAD country presence until end of 2011. The total cost of the country office in 2009 is estimated at US$262,000, out of which US$200,000 are for staff costs. 87. Thus far, the India country office has had two country presence co-ordinators since 2001.56 They were officers from the Indian Administrative Service, whereas the current acting co-ordinator has a technical background and was previously an implementation support staff in the country office. At present, the office has a total of five staff members, including the acting co-ordinator, two implementation support specialists, an officer devoted to knowledge management, and an assistant programme officer.

56 The first officer’s title was IFAD Facilitator.

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IV. PORTFOLIO PERFORMANCE

A. Characteristics of the Portfolio

88. Before giving an overview of portfolio performance, an account is provided of the main target groups of IFAD-supported activities in India, and the engagement model adopted to provide support and services to the target groups. 89. Targeting the rural poor. The main target group of the IFAD-supported projects in India is the rural poor, defined as those living below the poverty line. More specifically, the operations funded in the country have by and large focused on two main groups: women living below the poverty line and scheduled tribes, and also include scheduled castes to some extent. Seven projects out of the 18 projects covered by the CPE were entirely devoted respectively to women’s and tribal development. Emphasis is due to the fact that rural women bear heavier burdens than their male counterparts and evidence suggests that programmes geared towards lifting rural women out of poverty have greater impact and sustainability than those which are gender neutral. Similarly, tribal groups are disproportionately represented among the poor. They comprise eight per cent of the total population but nearly 16 per cent of the poor. The Fund’s support for tribal development has been a notable feature of the country programme as IFAD is the only major external donor considering it as a core element of its programme in India (see Box 2).

Key Points The country strategy has been largely consistent in the past 20 years, with major emphasis on tribal

people and women. Micro-finance, grassroots institution development and livelihoods have been prominent vehicles for pursuing rural poverty reduction efforts. Limited attention has been devoted to agriculture.

IFAD-supported projects and programmes have had a very wide geographic coverage, and only a

handful of relatively more prosperous states (e.g. Punjab and Kerela) have not been included. India has also benefited from grant resources, for example, for promoting electronic connectivity to

facilitate information and knowledge exchange. The Fund has gradually also engaged in non-lending activities, including policy dialogue, knowledge

management, and partnership building, even though the COSOPs did not indicate that resources were specifically earmarked for the purpose.

An IFAD country office was established in 2001 in partnership with WFP. All projects and

programmes are being directly supervised since January 2008. The CPM is based in Rome and is supported by a programme assistant and a secretary shared with two other CPMs.

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Box 2. Tribal Development: Taking on a Difficult Challenge

90. Engagement model. IFAD has developed a clear and consistent model for its operations in India, combining elements of the top-down Integrated Rural Development (IRD) approach with those of the bottom up Community Driven Development (CDD). The philosophy behind integrated rural development was that if rural development was to succeed it needed to be holistic, covering infrastructure, enhanced agricultural productivity, and social development. It was driven by plans prepared in Rural Development Agencies with limited participation by the beneficiary communities. The development at Comilla under Dr. Akhtar Hameed Kahn’s approach to IRD, which demonstrated that microcredit could be used efficiently by the very poor and could often serve as a route out of poverty, was an important evolution of the concept. This was subsequently institutionalized by Prof. Muhammad Yunus through Grameen Bank. In the late 1980s, most development practitioners had despaired of the viability of the integrated rural development model. It seemed too administratively complex and, after the initial wave of investments, the rural infrastructure, schools and hospital buildings often fell into disrepair as communities and overstretched Rural Development Departments had little incentive or capacity to maintain them. The CDD approach in the 1990s sought to organize

communities to create a demand for development services which could then be met mainly by government or donor funding, often channelled directly to the communities, and in part through cash or in-kind contributions from the communities themselves. The community was assisted in defining its own priorities and preparing plans for programme implementation. While CDD programmes have generated a great deal of enthusiasm at the local level, they were often criticised in the past for bypassing local administrations, which play an important role in ensuring the interface of regional and community plans and services. In recent years, a consensus has evolved on the need to build convergence between the community and the local government for successful CDD programmes57.

57 Hans P. Binswanger-Mkhize, Jacomina P. de Regt, and Stephen Spector, Scaling Up Local & Community-Driven Development (LCDD) - A Real World Guide to Its Theory and Practice.

The tribal areas of India were neglected for many years and the encroachment of government and private interests on forests and mineral resources pushed the tribal groups onto increasingly degraded land making survival a constant struggle. In the cases where compensation was provided for land taken over, the recipients generally became landless migrant labourers once the compensation payments were used up. At the same time, the tribal areas were starved of the social and physical infrastructure needed for the people to play a role in India’s growing modern economy. All these factors have resulted in the tribal areas becoming fertile ground for elements opposed to Government control and seeking return of tribal lands. These groups, especially the Naxalites, have resulted in serious security problems for Government and donor officials in tribal areas and, as a consequence, have made it difficult to provide the development services needed. Over the past twenty years, IFAD has established a reputation in India as being one of the few organisations willing to develop programmes in the tribal areas. The project management unit staff includes people from tribal communities. Even among the dissident groups, there appears to be respectful for what IFAD is trying to achieve and a willingness to accept its interventions in these areas. In some states (for example, Andhra Pradesh), IFAD-supported projects has contributed to reducing conflict as documented in the evaluation by OE of the Andhra Pradesh Tribal Development Project in 2001.

Income generating activity in Maharashtra Source: Michael Macklin

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91. In general, the IFAD-funded projects and programmes in India have a holistic view of rural development, beginning with the community and its needs. The formation of groups of beneficiaries has been a prominent feature in the projects, as a vehicle for delivering services to the poor. Groups also use their collective capacity to articulate their priorities and lobby in broader village or community for their development needs. This also serves to bring the needs of the poor to the attention of local governments. Almost all projects and programmes follow this approach. This is particularly important, given the tendency of agriculture and rural development ministries and departments to focus on the specific programmes they administer, rather than seeing them as part of a broader approach for rural poverty reduction. 92. The operations in India use three specific instruments in support of the main target group (women and scheduled tribes). The instruments are: (i) Institution-building and capacity development, through increasing empowerment and voice

of groups and individuals at the village-level. The projects and programmes promote the establishment of self-help groups and other community groups, supported by NGOs, and use membership savings and internal lending as an instrument for group cohesion and sustainability. The Fund’s support for social development, including village health and education programmes, can also be categorized as part of overall capacity development.

(ii) Micro-finance, mainly fostering linkages between commercial banks and SHGs, but also

through Micro-Finance Institutions (MFIs). (iii) Livelihoods promotion including the provision of economic infrastructure such as rural roads,

small irrigation schemes, the facilitation of individual and group efforts to enhance on-farm production and undertake small-scale off-farm investments, and supporting larger investments by communities and groups.

93. Capacity building and institutional development. The IFAD-funded projects and programmes in India employ a range of different institutional structures, as they move up from the grassroots to the national level. (i) In most cases, the grass roots institution supported is the self-help group in which 10-20

villagers, predominantly women living below the poverty line (also, there are projects with men’s or mixed self-help groups), come together to contribute two-weekly or monthly dues as savings, and lend saved funds to their members. Also, a broader purpose is empowering women and developing livelihood support programmes. Self-help groups are generally facilitated by NGOs. Some recent projects have substituted NGOs by trained facilitators and animators drawn from the self-help groups themselves (for example sahyoghinis in Maharashtra). The tribal projects have been holistic in character. Given the traditional culture of the tribal societies, the self-help group concept has been a component, rather than the central feature of these interventions. 58 Some tribal development projects have used mixed natural resource management groups rather than groups women oriented; though others have employed the self-help group mechanism.

(ii) At the village level, IFAD has sought to institutionalize participatory processes, by supporting

Gram Sabhas, or by forming groups such as Village Development Committees and Program Execution Committees, with representation in these groups of self-help group members. The

58 The basic SHG/microfinance model, while a useful adjunct in tribal projects, works less well than in other areas. Tribal communities are reluctant to undertake the internal lending that is part of the self-help group system and most groups have very large savings balances relative to loans. Borrowing has been used for group projects rather than to help support livelihoods or consumption needs of individual members.

31

Fund has supported facilitation to these groups to prepare Village Development Plans including livelihoods interventions and prioritization of community infrastructure. The tribal programmes have included community driven development, such as the use of Village Employment Funds for creation of village-level infrastructure.

(iii) At the cluster level (ranging from a group of three or four villages to a much larger number of

villages at the block-level), the projects have utilized NGOs recruited by the project management to support development of self-help group federations or community managed resource centres. The NGOs usually appoint cluster coordinators, who are responsible for the management and supervision of the village-level facilitators who generally cover three to five self-help groups each.

(iv) At the district level, usually a project manager and supporting staff, including an accounting and

a senior supervisor from the contracted NGO, are responsible for coordinating programmes within the district and for partnering with district administration to achieve the so called ‘convergence’. An example is aligning and synergising the programmes with those directly supported by the central or state governments through the district administration.

(v) The Project Management Unit is generally located at the state level. In most cases IFAD has

supported the creation of an autonomous project management units with an appointed Project Director (usually an Indian Administrative Service officer) and a dedicated staff responsible for general direction of the project and partnering with the state government and other relevant agencies. Exceptions have been the use of the Women’s Development Corporation as implementing agency, and of NABARD and SIDBI for the implementation of the two micro-finance support projects. An outlier to the model was the use of an NGO (Self Employed Women’s Association) as the implementing agency in the Gujarat project. In the event, this did not prove a workable approach for a variety of reasons that will be discussed later.

94. The project management units and NGOs are perhaps the two key elements in the institutional model described above. The first provides direction, control and oversight and monitors progress. Unlike some other donors, IFAD-assisted project directors are part of the overall administrative structure and are generally deputed by the state government. In principle they report to the state government in carrying out their functions. The second key element of the model is the use of NGOs for day-to-day project field support and operations. In general, the project management units contract a number of NGOs in each project, and the NGO cluster coordinators are supervised directly by the district manager of the project management unit. Figure 2 provides a schematic illustration of the institutional architecture in projects and programmes supported by IFAD in India. 95. As discussed in the section on Country Background, India has a well-developed system of local self-government, the Panchayati Raj. As is clear from the description above and Figure 2 below, these institutions do not form part of the formal management structure and institutional framework for IFAD programmes. There are points of intersection. When it is proposed to establish a self-help group in a village, the NGO facilitator generally visits the Sarpanch, the elected head of the Gram Panchayat, to secure his - or in rare cases, her – agreement to setting up the group. In tribal areas, discussions are held with the village headman – a hereditary position. Members of self-help groups are increasingly being elected to panchayat membership and are able to bring the concerns of self-help group members to a wider forum. In a number of cases, especially in Maharashtra, self-help group members held special joint meetings on the day prior to a scheduled Gram Panchayat meeting to identify issues they wished to raise at the panchayat. There is therefore a fair degree of inter-action, but the question remains as to whether a more formal link with the Panchayats should form part of IFAD’s approach.

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Figure 2. Institutions of Project Management and Related Government Bodies

SHG

NGOs

Gram Panchayat

SHG Federation

Zilla Panchayat

Block Officer /

Tehsildar

Project Manager at District Level

Project Director at State level

Line departments/ District officials

District Office

Collector

Ministry of Finance/ Line ministries of State Government

Government Structure Line Project Management Line

SHG Facilitators in Villages

96. Another element of support for capacity building is social infrastructure. This has been a particularly important feature of the tribal development projects where access to health and education services by the community have tended to be limited and standards fall well below the national average. Some of these projects have encouraged the use of Community Health Officers, that are, local health auxiliary workers who are given training and supported to provide simple medical services or referral at the local level. In the Andhra Pradesh Tribal Development Project, Community Health Officers have successfully improved the access to primary health care and reduced mother and child epidemics. 97. In four projects59, the Fund has supported education programmes through construction of school buildings and providing teaching facilities. Even where projects did not explicitly include social components, the self-help groups have often chosen to support them. In the Tejaswini Rural Women’s Empowerment Programme, the self-help groups insisted on continuing and expanding the pre-existing Midday Meal Programme of the Integrated Child Development Scheme as part of the project. Indeed, in some situations where the Government of Maharashtra was slow in supplying grains, the groups used their own savings to purchase food for the meal. 98. Rural Finance has been a vital tool in poverty reduction in the India country programme. In compliance with national policies, the rural and semi urban branches of commercial banks (nearly 49 000 as of June 2008) constitute nearly two-thirds of the total commercial bank branch network, with an average population of 15 000 each. Further, to reach the hitherto excluded sections of the population – mainly the poorest groups – India has developed a policy environment for two alternative systems of micro-finance delivery: a self-help group/commercial bank linkage model, and

59 Andhra Pradesh Tribal Development Project, Mewat Area Development Programme, the North Eastern Region Community Resources Management Project for Upland Areas, and Orissa Tribal Development Project.

33

separate non-bank micro-finance institutions. Both have expanded rapidly in the last decade. There were over five million self-help groups, as of March 2008, of which 3.6 million were credit-linked with banks, with a total borrowing of US$3.4 billion. Over the last decade, micro finance organizations have also recorded rapid growth in terms of number, size, penetration and outreach. There is no centralized data base. According to one estimate, the number is around 120060. In 2007-2008, the micro-finance institution channel served about 14.1 million clients or about two out of five micro finance clients in India. Micro-finance institutions credit portfolio reached an all time high of Rs.59.54 billion (US$1.191 billion) by 2007-200861. 99. The micro-finance strategy in India was to enhance financial services to women, also by leveraging counterpart funding from the domestic banking system. Of the 18 projects under evaluation, only one, the Orissa Tribal Development Project, did not have any credit component. Though two other projects – Mewat Area Development Programme and Rural Women’s Development and Empowerment Project– did not have any formal institutional or rural finance support components, the self-help groups were a part of the community development component. IFAD provided loan funds for on-lending by institutions only under two projects – Maharashtra Rural Credit Project and National Micro-finance Support Programme. All other projects promote demand stream strengthening mainly through the mechanism of self-help groups or by creating a facilitating environment to leverage bank loans to project clients. 100. The Fund has carefully avoided a rigid approach to micro-finance and adopted model neutrality supporting both the self-help group/commercial bank linkage and the micro-finance institution model. The total rural finance components (institutional finance and rural finance support service), constitutes nearly a quarter of the total portfolio cost in India. The rural finance components are financed to the extent of 16 per cent while the domestic banks funded 75 per cent of the components62, thus providing substantial leveraging of IFAD funds from the banking system. The direct loans for micro-finance, for the Maharashtra Rural Credit Project and National Micro-Finance Support Programme, represent only 11.20 per cent of the loan portfolio in India. Thus, the main involvement of IFAD was the support for self-help group development as informal thrift and credit organizations to facilitate the credit flow from the banks under the current national policy framework. 101. Livelihoods promotion. The self-help groups and tribal community organizations have been supported through rural livelihoods components in many operations. The capacity of NGOs and others was built to provide advice and training in the area of rural livelihoods. Activities include: (i) natural resource management; (ii) crop productivity through adopting new varieties and inputs; (iii) livestock; (iv) horticultural production; (v) non timber forest products; and (vi) off farm employment. Other components, in specific cases, have included aquaculture and fisheries in the coastal communities in the Post-Tsunami Sustainable Livelihoods Programme for Coastal Communities of Tamil Nadu. 102. Over time, livelihoods and income generating activities have become increasingly central in all operations. While present in the earlier programmes, they became focus only later when there was awareness that taking the rural poor to the next stage, once some of the basic institutional, physical and social infrastructures were in place, required higher productivity and income. The approach undertaken aimed to help the poor identify income-generating activities and provide technical and financial support to get those activities off the ground. A number of models can be discerned. First, for on-farm activities, many projects have made use of the concept of Farmer Field Schools to demonstrate new crops or techniques to farmers; second, Joint Liability Groups were created in contiguity with self-help groups, for undertaking investments that are beyond the capacity of the

60 Source: Micro Finance India: State of the sector report 2008. 61 The Bharat Micro finance report: Side by side; by SA DHAN. 62 The balance came mainly from the savings of the SHGs.

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individual. In some cases, these investments are made at either the cluster or the federation level. Third are the ‘bread and butter’ investments made by self-help group members who take a small step forward in an area where they have some experience, traditional knowledge, or expertise. Among the approaches there are also the development of the community managed resource centres in the Tejaswini Rural Women’s Empowerment Programme (in Maharashtra), support for venture capital companies in Meghalaya and Uttarakhand under the Himalayas Livelihoods Improvement Project, and the marketing strategy formulated in the Orissa Tribal Empowerment and Livelihoods Programme that included the creation of marketing facilities in rural areas. 103. An important aspect of the livelihoods components is the support for small scale physical infrastructure, mainly for tribal development. This support has included small-scale irrigation and land improvements (e.g., soil conservation). In some cases, IFAD has also promoted the formation of water user groups for the maintenance of the works. In addition, these interventions have supported the construction and upgrading of small rural roads and bridges, to ensure that producers have access to the market and villagers have access to government services. For example, in the North Eastern Region Community Resource Management Project and the Orissa Tribal Empowerment and Livelihoods Programme investments have been made in productive rural infrastructure supporting livelihoods (e.g., small-scale irrigation), and maintenance funds have been set up and management committees formed. 104. A particularly important development with regard to the development of rural infrastructure has been the introduction of the centrally supported scheme in 2005, the National Rural Employment Guarantee Act, which is intended to provide employment to those below the poverty line in rural areas. There is an interesting possibility here of linking this employment to the provision of funding by IFAD for associated costs of works (materials, supervision, etc.). This could substantially increase IFAD’s capacity to support small scale infrastructure, provide the basis for maintenance and could also increase the efficiency and effectiveness of investments made under this centrally supported scheme. But, to date, the IFAD-funded operations have taken limited advantage of the plethora of centrally supported schemes in agriculture and rural development financed by the Central Government. 105. Another important component of the livelihoods model is the coverage of natural resource management issues. This has been particularly important in the tribal projects which incorporated the goal of reducing podhu (shifting cultivation) and restoring the sustainability of the natural resources. The North Eastern Region Community Resources Management Project for Upland Areas was especially notable in this respect for its inclusion of a community-based biodiversity conservation and natural resource management programme. A particular focus of these projects has been forestry and the development of non-timber forest products.

B. Relevance 106. The relevance of the portfolio has been evaluated through a detailed analysis of each of the 18 projects covered by the CPE, which are listed in Appendix 4. Generally speaking, it can be said that the objectives of all projects were relevant in terms of their alignment with the India COSOPs, Government policies for agriculture and rural development, as well as the needs of the poor. They also were consistent with the main directions contained in IFAD’s regional strategy for Asia and the Pacific dated 2002. While assessing relevance, the CPE also examined whether the projects have appropriate strategies and approaches to achieve their objectives, for example, in terms of the components selected, the financial allocation for activities, and the institutional arrangements defined. 107. On the whole, the portfolio’s focus on women living below the poverty line has been important both for its direct impact on their livelihoods and its indirect impact on the sustainability of poverty reduction. Even among the population living below the poverty line, women are seriously disadvantaged as the priority in nutrition, education and health care is given to men and boys in the household. At the same time, women are a major source of the community’s social capital, and have a

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shared interest in communal issues and commitment to the long-term welfare of the household and community that is often lacking among the men. 108. The attention to tribal development has been equally important because tribal people are disproportionately highly represented among the rural poor and their situation has worsened over time. With the deforestation and exploitation of mineral resources, much of which are located in traditional tribal areas, the tribal populations have been pushed into marginal areas or have migrated to join the ranks of the rural and urban poor elsewhere. The focus has been on districts where the tribal population exceeds 50 per cent of the total. IFAD has been the only donor prioritising tribal development and its experience in preparing programmes to support this group constitutes a major comparative advantage in its operations in India. 109. A number of other groups – scheduled castes, the landless, unemployed youth - are also disproportionately represented among the poor and are falling through the net. The presumption has been that programs geared to women living below the poverty line would have reached them in the same proportion as their representation among the rural poor. In practice, it is unclear that this has happened. The scheduled castes are relatively evenly distributed among India’s rural population – this distribution is inherent in their status as service castes within the village community. However, there are differences in the treatment accorded to scheduled castes, with discriminatory practices still prevailing in some parts of the country which constitute a major constraint for them to move out of poverty, given restrictions on their access to communal assets63. There is no systematic data on representation of scheduled castes among self-help group members in the projects and programmes. 110. The landless face a special problem in that they often migrate for long periods to work on temporary construction projects or as seasonal agricultural labourers. The self-help group instrument, with its emphasis on regular meetings and payment of dues, makes it difficult for such landless people to participate in them. Unemployed youth – a category in which men are disproportionately represented - is part of the population that has not been systematically targeted in the operations, but only in projects in the tribal areas of Andhra Pradesh. In several project sites, such as Uttarakand, where farms are mostly rain-fed and with an average farm size of less than one acre, incomes from food-grain based agriculture are poor and do not offer youth the prospect of a decent livelihood. Consequently, about 60 per cent of the farm male youth are migrating to metropolitan centres, thus vocational and information technology training is needed to facilitate it and support those remaining in finding gainful employment. In addition, with such a high rate of migration, the remittance incomes are becoming significant and offer opportunities for investment in alternative enterprises that could promote employment for youth. IFAD has wanted to target all these groups and documents, such as the COSOPs, include rhetoric about the importance of serving them. However, as opposed to tribal populations that are for the most part location-specific, these groups are widely dispersed among the population living below the poverty line and it is difficult to design programmes that target them effectively. 111. In terms of geographic coverage of the portfolio, the relatively random allocation of operations across Indian states also raises relevance issues at the country programme level, which is increasingly being considered by IFAD as the unit of account, rather than the project level. As with other donors, there is tension between a concern to focus on the poorest states and the capacity of the concerned states to administer effectively and to benefit from development programmes. IFAD has worked both in poorer states but also richer ones64. The extremely wide dispersion of operation across the country

63 According to comments from the Government, measures have been taken by the Government to ameliorate the conditions of Scheduled Castes. Any instance of discrimination against lower caste person comes to the knowledge of Government, necessary legal/penal action is taken under the relevant law. 64 For example, three projects, including two recent ones, have been largely focused on Maharashtra, which is a relatively rich state with high levels of capacity despite its poor areas. In 1999, IFAD had planned to support tribal areas in Bihar and Madhya Pradesh, which are amongst India’s poorest states, but the project fell into an area covered by the newly created states of Jharkhand and Chattisgarh. In December 2006, IFAD finally

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Primitive tribal group Source: Dr Dusmanta Kumar Giri

raises various issues that merit consideration, such as higher costs and efforts for monitoring and evaluation, supervision and implementation support, and deeper challenges in building synergies among operations, and achieving impact and promoting sustainability. 112. A specific issue is that some projects funded by IFAD cover more than one state, and in some cases the states are not even geographically contiguous. In four cases, one loan covers two states with separate project management units. These are: the Jharkand-Chattisgarh Tribal Development Project; the Himalayas Livelihoods Improvement Programme (Uttarakhand-Meghalaya); the Tejaswini Rural Women’s Empowerment Project (Maharashtra-Madhya Pradesh); and the Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains (Uttar Pradesh and Bihar)65. Even when the states are contiguous, as in the Tejaswini and the mid-Gangetic projects, the actual project areas are some distance from each other and, in all cases, have completely separate project management units and are supervised as independent projects. In some cases, there is an attempt to ensure that the target group is the same (tribals in Jharkhand-Chhattisgarh, and women in Tejaswini and the mid-Gangetic). The Himalayas project, however, links a tribal and a non-tribal state, widely separate in location. Even when the target group is largely the same, as in Tejaswini, the nature of the programmes is vastly different – in Maharashtra the programme serves a mature system with experienced supporting agencies; in Madhya Pradesh the objective is to promote new self-help groups and support tribal communities. These two-state programmes are different from nation-wide or multi-state projects, such as the National Microfinance Support Programme and the Rural Women’s Development and Empowerment Project, which were designed to scale up the basic Micro-finance and self-help group approaches, or a regional project like the North Eastern Region project designed to apply the same approach in a number of small states with very similar underlying conditions. The CPE found the two-state operations to be complex, especially within the diverse administrative, socio-economic, cultural and agro-ecological context prevailing in the country. This finding is also underlined in the self-assessment by the Asia and the Pacific Division as an area that needs reconsideration in the future. 113. IFAD has supported projects in most Indian states. The exceptions have been Karnataka, Kerala, Jammu and Kashmir, Punjab and some of the North-Eastern areas. In the states where the Fund is active, generally three to six districts are covered, out of an average of about 30 districts in most of the larger states. The question often raised is whether this gives the programme a sufficient critical mass of activities to support a policy dialogue at the level of the state government and to provide a significant impact on state policies. As mentioned earlier, the Central Government has also pointed to the high transaction costs associated with such a widely dispersed programme – for example in terms of exercising its oversight function and in ensuring coordination. 114. In support of women’s empowerment and tribal development, programmes for institution building, micro-finance and livelihoods promotion have been financed by IFAD. Taken together, this three-pronged strategy represents a holistic approach to improving the situation of the rural poor, and

provided its first loan supporting projects in Bihar (under the project on mid-Gangetic Plains), one of the poorest states with large numbers of scheduled castes. 65 An amendment (2009) to the Loan Agreement for the Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains was made to establish a single Project Management Unit at NABARD, with two state-level managing units.

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has been relevant to the achievement of this objective. There are questions however about some of the programme elements that have been given relatively low priority. 115. On institution-building, IFAD has been somewhat ambivalent about the linkages between the self-help groups and apex structures at the block, district and state levels. For example, the Maharashtra Rural Credit Project encompassed a clear structure using federations of self-help groups at the block level. The subsequent Tejaswini Rural Women’s Empowerment Programme, also mainly in Maharashtra, chose to bypass the federation mechanism and opted instead for Community Managed Resource Centers at the district and block level. Despite their name, they appear to be operating in a top-down manner rather than bottom up approach represented by the federations, though they are designed to respond to demand generated from self-help groups for technical and livelihoods support (see Box 3). Other projects seem to operate without an intermediate structure, using instead the district level project management unit representative to supervise the cluster level coordinators from the NGOs. A more systematic effort is needed to evaluate alternative approaches and to support one or two that seem to be best placed to provide effective support to sustainable self-help groups and effective livelihoods programmes.

Box 3. Are the Community Managed Resource Centres Viable?

116. Although a case could be made for giving more priority to local capacity building efforts through support for better quality education and health services, IFAD has limited itself to a reactive response given the scale of the issue. The Fund has provided support for health and education in four operations in response to demands from the communities in which the projects are based. This has been mainly the case in the tribal projects, where communities place a very high priority on the potential role of education and health in dealing with poverty. These issues are also implicit in the women’s empowerment projects since self-help groups play an important role in supporting access of rural women to health services and influencing members to keep their daughters at school. It is difficult to argue for IFAD going systematically beyond this and taking a more pro-active role, given the huge scale of the issue and the limited capacity and expertise the Fund has to deal with them. A more effective strategy would be to engage the representatives of the health and education ministries in steering committees and project management units. 117. Micro-finance programmes have been well designed in relation to the objectives. As indicated earlier, there are two dominant micro-finance models. The Tamil Nadu Women’s Development Project and the Maharashtra Rural Credit Project, developed the model of self-help groups linked to commercial banks through NGOs (or sometimes through the direct efforts of the commercial banks) so that members of self-help groups can keep deposit accounts and borrow directly from the banks.

The Community Managed Resource Centre model has been successfully piloted by a well-reputed NGO (MYRADA) and is being upscaled in Maharashtra as part of the Tejaswini project. In spite of this, observations in the field have raised questions about the viability of the model. These Centres consist of about 25 members, of which 17 are executive members, including President, Vice President, Secretaries, and a Treasurer. On the technical side, the Centre has three managers: one on entrepreneurship, another on organization, and the third on communication. Each manager is supported by extension field workers called ‘sahyoginis’, drawn from the communities themselves. Each of them serves 4-5 villages and are primarily concerned with social issues and not trained in any of the technical on- or off-farm areas covered by the project. The NGOs involved in the project are not equipped or staffed to handle agricultural support and formal linkages have not been developed with line departments to service self-help technical needs. The project provision of one livelihoods officer to three districts and one business development officer to six districts at Centre level can only have very limited impact, for these staff have no mobility and because of low salary provisions are relatively junior and in-experienced. The line of accountability for Centre officials is also unclear. While a government official recruits Centre personnel, they are supposedly accountable to the Centre’s Governing Board. In Maharashtra these Centres have replaced the self-help group federations, which were much more clearly community owned. The experience with these Centres will need very careful monitoring and a flexible approach to fine-tuning this instrument if it is to prove effective.

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Alternately the banks lend to the self-help groups as a group and members guarantee the group’s borrowings (see Box 4). In the second model, the National Microfinance Support Programme, an intermediary (the Small Industries Development Bank of India – SIDBI) supports micro-finance institutions which in turn take the initiative to set up groups of women (mainly but not exclusively) to save on a regular basis, keep their funds with the micro-finance institution and borrow as required. Both IFAD and the Reserve Bank of India have rightly judged that there need not be a single exclusive model. The support given by the Government to these two approaches has led to India having one of the largest micro-finance systems in the world, covering 10 per cent of the population.66 The supported projects and programmes, according to most observers, have helped catalyze this development.

Box 4. Linking Self-help Groups to Commercial Banks in Maharashtra

118. There is scope however for a broader approach to financial products that tackles issues such as insurance against vulnerability and channelling of migrant labour remittances, etc. In addition to those already included, there is a large group of vulnerable, for example those whose incomes are under US$2 a day, who could be swept also back into the category of people living below the poverty line by family illnesses, accidents, poorly calculated borrowing from money-lenders, etc. The self-help group itself is a powerful tool for tackling some of these problems. Many of the loans taken were to deal with the costs of treatment for illnesses for example and, in most cases, these would otherwise have led to borrowing from money-lenders at a rate of five per cent a month, as compared to the one to two per cent a month charged by self-help groups, commercial banks or micro-finance institutions67. 119. The livelihoods activities are trying many different approaches and a more systematic framework would identify the most effective. The livelihoods components have been the most difficult to design as they go beyond entrepreneurship training and vocational skills development and often propose and support particular investments to the communities. The approach presumes that project management unit staff, assisted by NGOs, has the knowledge of the market and the business skills to propose viable investments and then assist the establishment of management structures and marketing channels. Recent projects, such as the Mitigating Poverty in Western Rajasthan and the Convergence of Agricultural Interventions in Maharashtra’s Distressed District Programme, propose to base this on value chain analysis and to bring in the private sector for developing the marketing aspects of the livelihood components. 120. The livelihood activities appear to have provided less support than might have been warranted for the development of on-farm livelihoods, especially agriculture. Clearly, the easiest wins for

66 Despite the size of the system, India still has a long way to go to reach the penetration of the Bangladesh micro-finance system for example, which covers 60 per cent of the population. In 2008 it was reported that 73 per cent of farm households in India had no access to formal sources of credit. 67 The effective cost of loans from money-lenders is even higher since 10 per cent of the loan is usually taken off the top, so that a borrower of Rs1,000 only receives Rs900, but pays interest on Rs1,000.

The Firsipur branch of the Bank of Maharashtra is financing more than 400 self-help groups in the district. On average, they lend about US$1,600 per group. The Bank has set up its own in-house NGO to support these efforts. Loans go only to the group, not to individuals (though the group normally on-lends these loans to its individual members). Rates of recovery on the loans are 99 per cent. Aside from the lending to self-help groups which is profitable for the Bank, the programme has brought in ancillary business through self-help groups members establishing deposit accounts and borrowing as individuals. The impact of the commercial banks linkage to the self-help groups is attested by the members. In Urali Devachi village in Haveli block, self-help group members’ loans have provided the wherewithal to purchase a flour mill, and the working capital for a market stall selling refreshments and a shop selling saris. Members have used loans to pay off past borrowing from money lenders, and for education, and health needs.

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livelihood support of the rural poor are likely to come from higher crop production for small land-owners or share-croppers, and indeed for the landless as the demand for their labour increases. This has proven a difficult area for the operations. Part of the problem lies in the difficulty of tapping into the formal structure of line ministries, research institutions and extension services. These play very little role in relation to the small landowner and the rural poor more generally. IFAD has not so far been able to assist in forging these links through its programmes. 121. Overall, the relevance of the portfolio of projects is considered satisfactory. There is little issue with the appropriateness of their objectives and designs. The concerns and issues noted above relate mainly to the many other aspects of the rural poverty complex which are not at present being covered adequately by IFAD, other donor or any government agency. The Fund is a small player even in the limited field of its focus and it does not have the capacity to cover all the areas described above. Its concentration on core target groups and a limited set of instruments over the past two decades has by and large been appropriate. 122. Over the 20 year review period, differences in relevance can be discerned. The early projects and programmes merit a very positive assessment on relevance as they constructed the model of intervention in India from the ground up and used an effective mix of specific and nationwide programmes to generate a catalytic effect. However, the strategy and programme seem to have run aground before the 2005 COSOP. The latter adds little new thinking to its 2001 COSOP and rationalizes the pressures to incorporate programmes in which IFAD had little comparative advantage, such as the Tamil Nadu Post-Tsunami project and the mid-Gangetic Plains projects. In the past two years there is evidence of fresh strategic thinking in the Fund’s approach with the development of new approaches to integrate the private sector into projects such as the Mitigating Poverty in Western Rajasthan, and a stronger emphasis on convergence with state and local government agencies as well as attention to agriculture through the Maharashtra project approved in 2009.

C. Effectiveness

123. In assessing effectiveness, the CPE aims to determine the extent to which the objectives of the projects financed in India were achieved. However, instead of providing a project by project account of effectiveness, this section analyses effectiveness according to the main cross-cutting objectives of the portfolio, which include the improvement in women’s livelihoods, tribal development, institution building and development of sustainable micro-finance system. 124. The CPE found far-reaching achievements across the portfolio in the improvement of poor women’s livelihoods in rural India, including in Andhra Pradesh, Maharashtra, Mewat, Tamil Nadu and other states. Data and information collected and analysed by the CPE from individual projects illustrate that there has been significant advances in the overall status, incomes, empowerment and welfare of women. In Uttarakhand, under the Himalayas Livelihoods Improvement Project for example, women self-help group members were elected to the position of Gram Pradhans (for example heads of the Gram Panchayat) in 170 out of 669 Panchayats in project villages. In those operations for which impact surveys are available, show an unequivocal advance in the self-confidence and assertiveness of self-help group members. In the Rural Women’s Development and Empowerment Project, for example, 90 per cent reported that they were able to articulate their opinions, needs and suggestions much more freely within the family; 90 per cent reported that they had increased access to and control over resources such as land, their house and livestock; and 77 per cent reported greater participation in decision making regarding sale or purchase of moveable assets. In the Tamil Nadu Women’s Development Project, 50 per cent of women self-help group members, reported having visited new places and travelled longer distances, while 90 per cent had inter-acted with institutions such as Banks, NGOs and project agencies, for the first time in their lives. 125. The performance and impact study in the Jharkhand and Chhattisgarh project reveals that the operation has allowed women to get increasingly involved in collection of non-timber forest produce (such as Sal leaves) and sell them in local markets. However, the study also noted that greater

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effectiveness would be achieved if the project stressed value addition and promoted market-linkages. The other performance and impact study in the Mewat Area Development Programme found that milk production increased from 2.8 million litres in 1997-1998 to 7.9 million litres in 2003-2004, and that more than 12,000 women were actively involved in 74 milk cooperative societies established under the project, which contributed to dairy development and better incomes for women. Finally, Box 5 provides an example of empowering women in Maharashtra.

Box 5. Empowering Women in Maharashtra

126. A number of tribal projects have been evaluated in-depth by IOE in India. Projects and programmes in tribal areas are generally complex interventions covering a wide range of activities. The first tribal project, the Orissa Tribal Development Project, ran into problems, partly due to the limited culture at the time in the state of working with NGOs. While subsequent programs have learned from this model and used a community development framework to determine the activities undertaken, the operations for tribal development remain work in progress with uncertainty about what works best, and the need for careful monitoring and follow up. The post Orissa Tribal Development Project generation of tribal projects have generally started with the formation of groups: self-help groups, often not exclusively women; natural resource management groups with a focus on forest and fisheries conservation; and Village Development Committees set up in order to prepare Village Development Plans and determine the use of community driven development grants available for social and economic infrastructure. IFAD’s institutional model using NGOs (e.g., Outreach and Myrada) has been particularly important in ensuring the effectiveness of these different approaches (see Box 6). Moreover, evidence from independent evaluations (e.g., in Andhra Pradesh and North East) suggests that IFAD-funded projects have contributed in reducing conflict in districts targeted by the corresponding operations. This is partly attributable to the bottom-up, participatory approaches of the projects financed by IFAD, targeting of the poorest, as well as

The Shakuntala self-help group in the village of Garade was formed under the Maharashtra Rural Credit Project in 1995. In the words of the members: “Before the formation of the group, women were not allowed to leave their houses.” In the self-help group they experienced the outside world. “We were not allowed to speak in front of men. With the self-help group we have confidence in ourselves.” In this village, group action by the women was successful in forcing the closure of a shop selling alcohol in the village. The Maharashtra State Goverment has taken a strong line on women’s participation in the Gram Sabhas, and partly as a result, the Gram Panchayat consists of seven men and four women, and one of the self-help group members was formerly the head of the Gram Panchayat. In the village of Urali Devachi, where every woman is a self-help group member, group power has been exercised to get action on a number of common problems such as the pollution of the local water supply, better access to electricity, and dealing with domestic violence. The self-help groups have established the mechanism of a Mahila Gram Sabha (a women’s assembly) which groups participants the day before a meeting of the Gram Sabha, to determine which issues they want the women members to take up at the Gram Sabha. One member of this self-help group described how her life had been turned around. “I was a deserted wife and was isolated from the village. I was asked to join the self-help group. Now I have become a group animator and also look after other groups. The self-help group gave me a new life.”

Primitive tribal group village in Chhattisgarh Source: Dr Dusmanta Kumar Giri

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their commitment to inclusive poverty alleviation at the grassroots level. Similar experience is being witnessed in the Jharkhand-Chattisgarh project, currently under implementation. 127. The operations for tribal development have resulted in substantial improvements in infrastructure in tribal areas. The North-Eastern Region Community Resources Management Project is a particularly good example. The project has invested in substantial small irrigation schemes, catchment dams, land improvements, etc. in order to deal with some of the erosion problems associated with shifting cultivation in the region. The issue with physical infrastructure is always whether these investments are maintained and this proved a problem in the first tribal project in Orissa, but subsequently IFAD has supported the establishment of natural resource management groups and Water Resource Committees to deal with these problems. In addition, there is scope for utilizing resources made available under the National Rural Employment Guarantee Act for maintenance and, in some cases, this seems to be happening. The infrastructure components of the North-Eastern Region project were very popular with the villagers given the relative underinvestment in infrastructure in the area. The subsequent Himalayas Livelihoods Improvement Programme in Meghalaya was originally designed without an infrastructure component, but in response to popular demand, IFAD later reallocated a part of the loan funds for it.

Box 6. NGO Support for Tribal Development

128. Livelihoods promotion is the most important part of the tribal interventions, but also the most problematic. All the tribal projects have devoted resources to supporting the development of rural livelihoods. The projects provide some direct loan funding of these components but most of the funding goes for the provision of expertise to design and supervise the required investments, with the loans funded through linkages with commercial banks. One encouraging development is that the linkages with government officials, particularly the line ministry local representatives, tends to be much stronger in the tribal operations than in others. In the West Garo Hills in Meghalaya, under the North-Eastern Region Community Resources Management Project, a local district horticulture officer has promoted the growing of flowers, with the support of the project management unit. The villagers have built up a significant trade in locally produced flowers. The district animal husbandry officer has started up a hatchery for Kuroiler chickens with support from the project and there has been considerable take-up of these in the area68. However, other examples raise more serious questions. The project management unit in Meghalaya has supported substantial investment in a tea factory and an aloe vera gel production plant; farmers have been advised to plant black pepper in the area; and in one village, no less than four self-help groups are being assisted in developing separate one acre fish farming plots. The market analysis underpinning these investments seems largely based on intuition and local knowledge and while some of these programmes may be successful, they are not ‘owned’ by the tribal populations and their viability in the absence of continued close supervision from the project management unit is open to question. The projects have generally been on more solid ground when it

68 Kuroiler chickens are a hardy breed, developed by an Indian NGO, which is highly efficient and particularly well suited to free range production in villages.

Naira, a young woman in her twenties with a bachelor’s degree, is working as a cluster coordinator for one of the facilitating NGOs in Meghalaya, under the Himalayas Livelihoods Improvement Programme. The river that runs through the area had been over-fished, with villagers using dynamite and nets with holes too small for young fish to pass through. Together with the project management unit, Naira proposed to the villagers that an area of the river be set aside as a fish sanctuary and that the villagers ban the use of dynamite and only use nets with larger holes. This has now been in place for two years and the fish stocks have been fully restored to earlier levels, so that all the villages bordering the river now have ample fish supplies. A villager brought Naira a crab that had been found in the river. After researching this on the internet, Naira found that it was a fresh-water species native to the river that had been thought to be extinct previously. The villagers have now been alerted to the need to preserve this species.

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comes to on-farm development through adding livestock and diversifying crop production, especially through the reintroduction of traditional crops in these regions (see Box 7).

Box 7. Supporting Shifting Cultivation in Meghalaya

129. Despite the efforts of IFAD and the Government, tribals remain a group with limited voice in Indian society. The tribal projects and programmes have given the Fund an important voice in the national policy debates on tribal rights. Land rights of tribals have been a particularly difficult issue given the absence of written records and the interests of the private sector in getting access to valuable forests and the even more valuable mineral resources that often lie underneath them. In some cases, tribal groups were given cash compensation for the land with predictable results, once the resources were exhausted, so they became landless migrant labourers in other communities. In support of Indian legislation offering land rights to tribals, in the first Orissa project, the Fund successfully pioneered an approach whereby rights in traditional forest land were given jointly to husbands and wives. The second Orissa project is building on this and supporting the provision of land titles on sloping land to tribals. However, the issue of tribal lands remains a complex problem especially because the law administration, by the state governments, often does not benefit the tribal populations. 130. The institutional models promoted under IFAD operations have proven to be effective at the grass roots level. The self-help groups and other community groups have helped empower communities, especially women, to define their priorities and use the group mechanism as a means for getting local governments to take notice of their concerns. They have also been effective in providing a potential for improved living standards, realized by many group members, and a rudimentary insurance mechanism to deal with the vulnerability, the scourge of village life for the poor. In the past, the only recourse was the money-lender. Now, in village after village, villagers use self-help group internal loans for paying off money-lenders and others who were able to avoid borrowing from them. The impact this has had on the quality of life of self-help group members should not be under-estimated. In sum, IFAD-supported projects have played a critical role in the development of grassroots organisations, such as the Village Development Committees and especially self-help groups by building their capacity in terms of organisation, management, savings and credit, undertaking collective actions for community development, and so on. 131. However, they have not yet succeeded in forging adequate links with local governments. The importance of developing links between communal groups established at the village level and local governments is vital to ensure, among other issues, the required support, resources and services for grassroots development. The Panchayati Raj in India is the set of institutions providing the links between the community and state governments through a series of village, block and district

Seeing the large swaths of hillsides in Meghalaya, with the forest cleared for shifting cultivation, the immediate reaction is that they cannot be environmentally benign. Therefore the priority, for improved natural resource management, becomes the elimination of shifting cultivation and persuasion of the tribal communities to turn to settled agriculture in the valley bottoms supplemented through terracing. This was indeed the starting point of IFAD’s approach to agriculture in tribal areas, and evaluations of some of the earlier programs record, as important success indicators, the percentage of podhu or jhum cultivation transformed into settled cultivation (45 per cent in the case of the North Eastern Region project). The project management unit of the Himalaya project in Meghalaya has reached a different conclusion. Shifting cultivation is an intrinsic part of the tribal system and tradition and, in the view of many experts, is consistent with effective natural resource management provided a cycle long enough for the complete recovery of the land. The project management unit in Meghalaya is trying to move the villagers from six to eight years slash and burn cycles to 12 years. In addition, small investments are being undertaken through water catchments and erosion prevention to increase yields from shifting agriculture. The project management unit strongly feels that the alternative of producing varieties of high-yielding rice, which are not native to the hill areas, in the valley bottoms, using fertilizers and pesticides, is much more threatening to the environment than better managed shifting cultivation. In addition, they are encouraging the planting of a range of traditional diversified crops on the hillsides.

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panchayats. The system works unevenly and, in many states, it has been captured by elites to a degree which makes effective linkage with units such as self-help groups difficult. Despite this there is scope for more formal interactions between project management, self-help groups and the panchayat institutions, to bring the latter more directly into the structure. Brazil has made very effective use of benchmarking local government achievements in providing economic and social infrastructure, and there could be experimentation along similar lines, with awards to the panchayat with the best results and wide publicity given to outcomes. 132. Recent operations are building deeper links with state governments. The second (ongoing) Orissa tribal development project and the most recent Maharashtra project use different models of integrating project management units with state governments. In Orissa, the integration works through the secondment of line ministry officials to the project management unit, while in Maharashtra the project management unit is a state agency which works directly with ministries and supports the development of community managed resource centres at the block level. 133. The support for micro-finance development is a success story. As indicated, there were two IFAD-supported projects69 through which two different models of micro-finance development were pioneered (see paragraphs 98-100). Yet, almost all projects and programmes in India have successfully included the provision of micro-finance to self-help groups. The positive experiences and good practices promoted under IFAD-financed projects in linking self-help groups to commercial banks convinced Government to promote the self-help group-bank model in other women’s development projects in India. Essentially, micro-finance works by reducing risk and transactions costs through funding groups rather than individuals, allowing them to retail funds among their members. Groups begin by collecting two weekly or monthly payments from all members and then lending to selected group members. The lenders usually wait for one or two cycles of self-help groups internal lending to be completed successfully70 and then provide support to SHGs through commercial banks (in the case of most IFAD-supported projects). The evidence suggests that the micro-finance mechanism is effective in providing support for the poorest groups in the villages, especially among women. In interviews in self-help groups even the poorer members were able to access loans to deal with emergencies and pay off money-lenders. 134. The Maharashtra Rural Credit Project enabled the National Bank for Agricultural and Rural Development (NABARD) to establish the model and operating principles for its support. Commercial bank credits provided under the project were more than four times the originally projected levels and recovery rates for loans to self-help groups were 100 per cent. Loans to self-help groups in other projects have also exceeded projections and had very high recovery rates. The Rural Women’s Development and Empowerment Project, for example, had recovery rates of 99 per cent. Under the National Micro Finance Programme, the IFAD-funded loan was important for the Small Industries Development Bank of India (SIDBI, the project’s executing agency) in providing second tier capital and long-term funding, which enabled an expansion of its support to underserved states, and to take a larger share of the risk of micro-finance lending (see Box 8).

69 Maharashtra Rural Credit Project and the National Micro-Finance Programme. 70 Each cycle usually takes about eight months.

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Box 8. Supporting Micro-finance in Uttar Pradesh

135. Beyond the need to increase coverage, there is still a large and challenging agenda in the micro-finance sector. The product range falls short of the needs of the poor. The holistic development of the micro financial services market including all its components: micro insurance, micro money transfer and remittance, diversified savings and credit products, has not taken place. The self-help groups’ linkages with service providers, livelihood support organizations and markets have to be strengthened to enable self-help groups to reach higher scale, graduate to an enterprise financing model and realize their full economic and social potential. The higher tier institutions of the self-help group institutional system require consolidation and investment in capacity building. There is need for comprehensive capacity building of all stakeholders, requiring systematic and large investments. Equally, there are constraints for orderly, sustainable and quality growth of micro finance institutions. Some of the important issues are: improving governance and bringing more transparency into their functioning, reduction in operational costs, finding equity funds without mission drift71, mobilization of resources for financial cost reduction, human resource development and training systems, soft funds for capacity building, self regulation and above all a legal regulatory architecture, flexible and sensitive to the needs of the industry and yet effective for growth and risk management. 136. As indicated, the approach taken towards the livelihoods promotion was to help the poor identify activities that can be undertaken and provide technical and financial support to get them off the ground. In the Western Rajasthan project, the support to income generating activities is available for a wide range of vulnerable poor, including landless agricultural labourers, small and marginal farmers, owners of marginal land and wastelands, traditional artisans, women, and young people with no employable skills. Livelihoods activities support, under the project, includes three sub-components: income generation, marketing and employment creation, and rural credit. The first seeks to develop SHGs into marketing groups to improve farm-gate prices and appropriate linkages with the markets and private sector. The second promotes the development of marketing groups as a means of enhancing the rural poor’s negotiating power in the local market. The third supports self-help group -bank linkages and enhances access to financial services. 137. Three models for enhancing livelihood can be discerned: (i) On-farm support. For on-farm activities, some projects make use of the concept of Farmer

Field Schools to demonstrate new crops or techniques to farmers, which proved to be successful in many projects. During the intervention of the Himalayas Livelihoods Improvement Programme in Uttarakhand, the local livelihoods were enhanced through the introduction of

71 The drift between profit, maket share and social benefit.

Two years ago Raj Kumar, a man of about thirty, left the NGO for which he was working to establish a new micro finance institution. He is based in Lucknow and has a small branch office in Sitapur about 100 kilometers away. Raj obtained a US$140,000 loan from the Trust MICROFIN network which had in turn borrowed resources from SIDBI from the IFAD loan. One of the conditions of the loan is that the micro finance institution should only serve poor households. To meet this criterion, Raj does not use Government guidelines to assess poverty, but surveys the village to assess housing conditions, land holdings and household assets. Those eligible are invited to enter joint liability groups consisting of two to five people. At this stage of his operation Raj is only lending money to individuals with existing enterprises. While the loan is to an individual, the joint liability group provides a guarantee. No loans are being provided for agriculture. In Asodhar village, Khairabad block, villagers had borrowed for a new loom for weaving dhurries (local rugs), a motorcycle repair shop, a wood contractor, a push cart selling small household items, and expanding the range of offerings of a roadside tea stall. In this latter case, the stall owner had a 200 per cent increase in her income and is now employing a helper in the stall. Although the loans are somewhat more expensive than those given by self-help groups (two per cent a month as against one and a half per cent a month) they are still far less expensive than those provided by money-lenders.

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improved and more intensive paddy production systems giving higher yields, diversifying cropping, improved poultry development, and terrace riser Napier grass planting for increased fodder production. In this regard, there is a concern about the limited technical input provided for on-farm activities and the lack of consistent linkages with extension and research agencies. An initiative undertaken through the Jharkhand-Chhattisgarh project, to introduce new varieties of pulses from ICRISAT72 and improve diversification and cropping intensity through an on farm seed multiplication, did not meet expectations as the programme size was very small and the seed exchange not well managed.

(ii) Collective capacity to reach markets. A second model relates to the creation of joint liability

groups which indeed can be congruent with self-help groups, for undertaking investments that are beyond the capacity of the individual. In some cases, these investments are made at either the cluster or the federation level. One successful example in this respect is the operation of milk marketing cooperatives supported by the Mewat Area Development Project. They were managed by self-help group members as part of the collective activities taken by the groups. By project completion, of the 285 milk marketing cooperatives established, 232 were still in operation, 80 per cent of which were profitable and the remaining 20 per cent had reached the break even point. The success of milk marketing cooperatives was attributed to a backup price support scheme for improving market competitiveness, and the effective facilitating function of the self-help groups. In a more recent project, as an innovative feature of the Livelihoods Improvement Project in the Himalayas, an independent Social Venture Capital Company was established in Uttarakhand to promote enterprise and business development in a number of value chains and to provide or facilitate technical support. Due to the late start up, its operations have mainly been in service delivery rather than business development. However, there is little doubt that collective approaches are an important potential instrument for enhancing market access for the rural poor.

(iii) Household-based activities. Perhaps the most successful livelihoods interventions have been

the small investments made by self-help group members who take a small step forward in an area where they have some experience or expertise, be it raising the number and quality of their livestock, running a small shop and enlarging their product range, or increasing their output of cottage products. These household-based economic activities are an important income source for rural women and other vulnerable rural poor. In taking up these activities, self-help group members leverage the micro-finance and technical services of project interventions, and these activities contributed significantly to increased family incomes. Examples from impact surveys undertaken by the projects themselves reveal 44 per cent increase of family incomes in the Maharashtra Rural Credit Project, and the 73 per cent increase in incomes of self-help group members in the Tamil Nadu Women’s Development Project.

138. Market linkage. Promoting access to markets was under emphasized in design and under resourced in implementation, except in a few projects approved in recent years (see next paragraph on private sector). Access to markets was not included in the Tamil Nadu Women’s Development Project. In the tribal development projects in Orissa and Andhra Pradesh, marketing was mentioned in design, but few activities were actually undertaken to promote market-linkages of local produce, particularly non-timber forest produce. The projects designed following the 2001 COSOP did give a little more attention to access to markets, even though corresponding activities were implemented only after activities related to production were put in place. One reason for limited attention to access to markets is that earlier women’s and tribal development projects often put priority on food self-sufficiency, rather than on increasing incomes. Another reason is that many IFAD-supported projects in India have been mainly implemented in remote, upland and marginal areas with little existing market infrastructure, thereby making the task of developing market-linkages even more challenging.

72 International Crops Research Institute for Semi Arid Tropics.

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139. Private sector. A commendable feature of recent IFAD-assisted projects and programmes is the involvement of the private sector in project implementation to integrate the small scale economic activities of the rural poor into the local value chains. These activities also need to be embedded into the government development programmes for leveraging public resources, legal and policy support. In the Western Rajasthan project, the project management unit is supported by the Private Sector Liaison Office located within the Marwar Chamber of Commerce and Industry. The Private Sector Liaison Office will promote partnership between the marketing groups and large buyers to reduce the number of steps in the value chain and ensure better prices. In addition, commercial banks will be providing financial services to marketing groups. In the case of most recent Maharashtra programme, the marketing issue is being given even more emphasis, as the project executing agency is the Maharashtra State Agricultural Marketing Board; and corporate sector agencies, such as Arvind Mills Limited, and Tata Chemicals Limited, are key implementing partners for marketing purposes. Although these initiatives sound promising, a caveat here is that these projects are barely at the take-off stage, and the partnership building with the private sector is not seen on the ground yet. The effectiveness of the involvement of private sector needs to be assessed once the project has made concrete progress. 140. Overall, the effectiveness of the portfolio is rated satisfactory. The projects that strike out in new directions in terms of institutional development and livelihoods promotion are still too new to be rated on effectiveness grounds. Most of the closed projects are assessed on the basis of their objectives related to women’s empowerment and tribal development, based on the model described earlier. These objectives have been achieved and indeed some elements of the model, namely grass roots institution building through SHGs and micro-finance, are rated highly satisfactory.

D. Efficiency

141. Efficiency is a measure of how economically resources and inputs (funds, expertise, time, etc) are converted into results. The India CPE has used a variety of indicators to assess the efficiency of projects and the portfolio at large. 142. With respect to the design and management of the projects and programmes, there are many positive features – high levels of consultation, clearly defined objectives, ownership on the part of state governments, and well qualified implementing agencies. These features tend to more than compensate for some of the flaws in design that can be observed in individual projects and in some cases across-the-board. These include: too many project components and implementing agencies; an overly optimistic assessment of the capacity and poverty orientation of the implementing agencies; inadequate benefit and poverty monitoring and implementation arrangements; lack of project management to take advantage of built-in-flexibility to make mid-course corrections; a fixed menu of interventions with little flexibility for adjusting to local needs; and a lack of design parameters to ensure sustainability. 143. The operational efficiency of IFAD-funded projects and programmes, especially with regard to social and community infrastructure, has been high as a consequence of community contributions in the form of labour and local construction materials. An analysis of the data suggests that, as compared to original cost estimates, most infrastructure is being achieved with cost savings of between 10 and 30 per cent. This either comes in the form of less expenditure, or through a larger number of structures than originally projected. In the North Eastern Region project, for example, 638 kilometres of roads were constructed as against the original target of 170 kilometres, but the outlay was only 40 per cent of the originally projected amount. In Chhattisgarh bore wells and hand pumps were installed at a cost equivalent to about 70 per cent of the standard costs used by the World Bank for these items. The performance and impact study in Mewat found that the project constructed 325 tube wells as compared to the target of 100, with 186 per cent cost over run for this activity. A similar study in Jharkhand and Chhattisgarh revealed that the project has done well in Jharkhand in promoting aquaculture, with 97 per cent of targets reached utilising only 22 per cent of planned costs.

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144. For projects where there is a quantification of the economic rate of return (ERR), the modal values appear to fall into the 15-25 per cent range. For instance, the estimated pre-project ERR of the North Eastern Region project is 15 per cent; Jharkhand-Chhattisgarh project, 14 per cent; the Gujarat project, 22 per cent; second Orissa project, 14 per cent; and Himalayas Livelihoods Improvement Project, 27 per cent. This range of returns is validated in those cases where the IOE in-depth evaluation was able to recalculate the ERR, for example, in the case of the North-East Region project. 145. As mentioned earlier, all projects in India are directly supervised by IFAD since the beginning of 2008. The evaluation found direct supervision and especially implementation support to be better and more appreciated by all local partners, as compared to supervision by co-operating institutions. For example, partners and project authorities conveyed that direct supervision and implementation support has contributed to better communication and resolution of bottle necks in a more timely manner. The India country office staff is heavily involved in supervision and implementation support, and have been able to promote more active networking and knowledge sharing among projects. Finally, one most important fact is that direct supervision and implementation support has enabled IFAD to pool resources allocated for the purpose and improve efficiency and quality73, as compared to supervision by co-operating institutions. 146. As recognised in the self-assessment by the Asia and the Pacific Division, the India portfolio has been subject to major delays in ensuring loan effectiveness following loan approval by the IFAD Executive Board. The average time lapse between loan approval and effectiveness is 13.4 months across the portfolio, as compared with the regional average (for Asia and the Pacific) of 9.3 months. Moreover, most projects have not been completed within the estimated timeframes, requiring one to two (and in some cases three) extensions to the original closing dates. These factors reduce project efficiency which would otherwise have been rated as satisfactory, because IFAD (and the Government) is required to devote greater administrative resources and time to follow-up on issues that are delaying effectiveness, as well as to supervision and implementation support activities beyond the original closing dates. 147. A number of factors seem to drive these delays. On the IFAD side, some of the earlier projects had a large number of effectiveness conditions which required time to fulfil. On the Government side, an important factor seems to be the amount of time invested in appointing the project manager and staff. As it is difficult to proceed with such appointments prior to loan signing, the process tends to begin only once the loan is signed. In more recent projects, such as the West Rajasthan programme, the Project Director was nominated prior to loan negotiations and, as a result, the project was declared effective in a record time of about seven months74. Another area that causes delays is when a legal opinion from the Government is required to meet a particular loan effectiveness condition (e.g., for the establishment of a specific institutional mechanism for project execution). The fact is that, since IFAD-funded projects are executed at the state level, two legal opinions are required, from both the state and central governments. This tends to be done sequentially, causing delays in the process. Finally, the fund flow mechanism in most states is complicated and time consuming, which has consequences in the speed of implementation. 148. As also raised by the Asia and the Pacific Division as a concern, the CPE found that efficiency is being constrained by rapid turnover of the Government officials assigned to IFAD-funded projects. High turnover is a characteristic of the career stream of Indian Administrative Service officers

73 The average cost of supervision per year of a project in India is around US$21,000 (net of ICO staff salary cost), which is much lower than the funds paid to UNOPS which were around US$60,000. 74 The Department of Economic Affairs has formulated a Project Readiness Checklist to improve project preparedness at inception. On IFAD’s side, as per the new General Conditions of IFAD approved in September 2009, IFAD-funded projects would automatically be treated as “entry into force” after the Loan Agreement has been signed by both parties.

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normally appointed to Project Director positions, who tend to rotate at two yearly intervals or even sooner. In the case of the first Orissa project, the evaluation suggested that high turnover of Project Directors contributed to the limited project effectiveness and efficiency75. In the case of the Tejaswini project, the Government of Maharashtra has changed the Managing Director of MAVIM, the project’s executing agency three times since 2007. In the case of the Tamil Nadu Women’s Development Project, the Project Director’s insistence on remaining in her post for an extended period of time was judged by the evaluation as a major factor in the success of the project. Starting with the Mewat Area Development Project, IFAD has included provisions in loan agreements to the effect that there should be no more than three changes of project director during the life of a project. This appears to have contributed to greater stability, although not to the desired extent. 149. An important indicator of project efficiency is the cost per beneficiary (see Table 11). There are of course significant differences in programme coverage, which make the comparison between one project and another difficult. The figures do, however, provide an indicator of the costs of replicating and upscaling the programmes. The high cost per beneficiary in the initial Orissa project is an outlier, and reflects both its status as the first tribal project and some of the unusual difficulties encountered. While costs per beneficiary tend to be somewhat higher than in World Bank agriculture and rural sector operations in India, this may be partly explained by the pilot nature of IFAD operations and the focus on intensive programmes in difficult areas, rather than the extensive programmes supported by the World Bank76.

Table 11. Cost in US$ per Beneficiary Household and Self-help Group Household cost in tribal development projects

Project Total Cost Total HH Cost per HH Orissa Tribal Development Project 24,400,000 12,500 1,952Andhra Pradesh Tribal Development Project 46,500,000 63,370 734Andhra Pradesh Participatory Tribal Development Project 50,300,000 76,810 655Orissa Tribal Empowerment & Livelihoods Project 91,200,000 75,000 1,216North Eastern Region Community Resources Management Project for Upland Areas

33,200,000 23,000 1,443

Household cost in microfinance projects Project Total Cost Total HH Cost per HH

Maharashtra Rural Credit Programme 48,300,000 155,374 311National Micro Finance Support Programme 134,000,000 4,633,000 29SHG cost in projects*

Project Total Cost Total SHG Cost per SHGTamil Nadu Women’s Development Project 30,600,000 5,207 5,877Andhra Pradesh Tribal Development Project 46,500,000 1,231 37,774Andhra Pradesh Participatory tribal Development Project 50,300,000 3.043 16,530Mewat Area Development Project 22,300,000 1,728 12,905Rural Women’s Development and Empowerment Project 53,800,000 17,647 3,049North Eastern Region Community Resources Management Project for Upland Areas

33,220,000 3,168 10,486

Orissa Tribal Empowerment & Livelihoods Project 91,200,000 3,500 26,057Post-Tsunami Sustainable Livelihoods Programme for the Costal Communities of Tamil Nadu

68,590,000 3,000 22,863

Note: The data for average cost per SHG are simply the total cost of the project divided by the number of SHGs. It needs to be recognised that in a number of projects, for example the Orissa Tribal Empowerment and

75 The Department of Economic Affairs agrees with this point, and it has been taking up the matter regularly with state governments in the state portfolio review meetings and other such forums. 76 A clear example is the low cost per self-help group in the Rural Women’s Development and Empowerment Project cofinanced with the World Bank. This programme was designed to extend the self-help group model to nine states.

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Livelihoods Programme, there are major livelihoods components and the organization of SHGs is ancillary rather than being the central feature of the project. 150. The future scale and coverage of the operations will need to be a major element in the upcoming COSOP. The Department of Economic Affairs has expressed concerns about the high transactions costs associated with small loans, particularly in the case of those covering two states. Moreover, costs for supervision, implementation support, training of project staff, monitoring, and co-ordination are higher in projects covering two states. 151. Overall, efficiency is rated moderately satisfactory. Because IFAD projects are targeted on the more remote and most marginal and risk prone rain-fed areas and on some of the more deprived communities in India, the implementation of the operations is especially challenging. In general, the project management units are effective units with substantial commitment to the projects they are working on and with reasonable levels of support from the Fund through training activities, supervision and follow up. With some exceptions there is ownership of the programmes at the state government level and project directors have good access to senior state officials. As explained above, however, there is scope for enhancements in project management to increase the efficiency of IFAD-funded projects and programmes.

E. Rural Poverty Impact

Household Income and Assets 152. The projects and programmes have had a significant positive impact on household incomes. The operations, for which post-completion impact surveys have been carried out, are consistent in finding that the households involved into the activities of the projects had larger increases in incomes than those left out. Household incomes in the Maharashtra Rural Credit Project increased by an average of 44 per cent during an eight year period. The Tamil Nadu Women’s Development Project enabled about 45 per cent of self-help groups’ member households from the two poorest categories to improve their economic status. By contrast, only 7.5 per cent of non-member households reported a similar improvement. In some cases, however, particularly in the tribal projects, a significant part of the increase appears to have been derived from wages paid for employment in project-related construction, which may not be sustained after project completion. 153. The picture is more mixed as far as household assets are concerned. Micro-finance has allowed many families to acquire livestock, and small equipment for off-farm activities. Perhaps the most important productive asset in rural areas is land. IFAD has taken on the issue of land ownership in its tribal projects. It has played an important role by organizing land registration for tribal populations; ensuring that it is jointly owned by husband and wife; and by adding its voice to others in persuading the Government of India to recognize the traditional rights of tribal populations in the forested areas they occupy and use for their livelihoods77. In the projects located outside tribal areas, issues of land ownership are much more politically and socially contentious. Human and Social Capital and Empowerment 154. As indicated earlier, the evidence suggests that there have been major advances in the role of women in decision-making both at the family level and within the community. There has been an increase in women elected to Gram Panchayats in villages covered by the operations. A similar trend may be observed in the tribal projects and programmes, where tribal people indicate that they are now much more confident about airing their grievances and can more easily obtain a hearing for them.

77 The Indian Parliament passed the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act in December 2006.

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155. Formal health and education programmes have not been a consistent feature in the country programme. One example where they did feature was in the Gujarat project. A significant focus on education and health was built into the project, with 53,280 households to be assisted through education and health activities planned to reach over 280,000 women through camps and mobile health services. However, this partly reflected the modus operandi of SEWA, the participating NGO. The apparent success of the Community Health Officer model, whereby local women are trained to provide basic health services, raises the questions as to why IFAD has not made this a more consistent part of its programme and whether such a model could be effectively mainstreamed. Education is a more difficult subject as it remains unclear what type would most usefully support the community development model and once that is determined, how best could such educational support be put in place? Given their scale, some well-designed research and studies could be useful mechanisms for bringing good practices to the attention of the relevant line ministries at the national, state and local levels. Food Security and Agricultural Productivity 156. The completed evaluations suggest that there have been improvements in food security, partly as a result of project wage employment and WFP food for work. This is particularly striking in the tribal projects. In Chhattisgarh (under the Jharkhand-Chhattisgarh Tribal Development Project), about 60-70 per cent of households reported greater food security at the end of the project. In the second Orissa project, the proportion of families enjoying food security throughout the year increased from 21 per cent in 2004 to 72 per cent in 2008. In some other operations there have only been modest improvements compared with households outside the project. In the first Orissa project, for example, food security improved by 20-30 per cent over a period of six years, which was no better than the ‘without project’ households. 157. The general sense is that raising agricultural productivity is central to addressing rural poverty in India and that only the tribal operations have given this the priority it requires. Around half of the projects covered by the CPE (eight of eighteen) reported improvement of agricultural productivity. For the most part these were tribal development projects where the emphasis was placed on livelihoods development and the projects and programmes supported soil and water conservation and improvement, as well as a range of agricultural, horticultural and livestock activities (see Box 9). In Utnoor area, through the second Andhra Pradesh project, for example, the productivity of local paddy increased by 11 per cent, high yielding variety paddy 35 per cent, wheat 46 per cent, millet 68 per cent, and pulses 99 per cent, and vegetables 42 per cent. In general, the improvement of agricultural productivity was driven by the introduction of new farming technologies and high yielding varieties, and amelioration of water and land conditions. Some tribal operations also developed effective linkages with research institutions such as ICRISAT to promote new crops, varieties and technologies. Even in some tribal projects however, results were mixed. In the first Orissa project, for example, the lack of agricultural expertise and extension services was not given sufficient attention.

Box 9. Increased Agricultural Productivity in Tribal Development Operations

In Khalbora village in Chattisgarh, Farmers Field Schools were held from January to May 2009. Twenty farmers were included in the first batch. The traditional practice was broadcasting of seed. Through the project, farmers were introduced to the technique of line farming, which has the potential for doubling yields. Four different farmers’ fields were taken for cultivation, with broadcasting done in two and line planting in two. The difference is striking and the farmers interviewed indicated that they would undertake line planting in future. In Kharena village, farmers received help from ICRISAT in planting groundnuts and some farmers were taken to Hyderabad for exposure to groundnut production techniques. They have planted groundnuts during the summer and this year they expect to sell about Rs 250,000 worth of the crop. Having seen this success, other villages are now also taking up groundnut production.

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158. The Fund’s main problem with supporting effective approaches to enhancements in agricultural productivity, however, relates to the operations that target women’s empowerment. Crop production in rural India is for the most part a male preserve. While women work in the fields from time to time, the major decisions on what to plant and cultivate are taken by men. Questions concerning agricultural productivity are understandably almost never the subject of discussion at self-help groups. Equally, relatively less micro-finance loans are taken for crop production purposes. This contrasts with animal husbandry where women generally play a significant role in the purchasing and rearing of animals. Even there however, outside of the tribal operations, has been relatively little attempt to adopt a more systemic approach to livestock improvement. In acknowledging the untapped potential of women in increasing agricultural productivity, IFAD needs to consider very carefully how to address this inherent design flaw in the basic approach and experiment with inclusion of agricultural production groups with male membership in the women’s empowerment projects and programmes. For example, mobilizing the support and participation of male farmers, particularly the male family members of self-help group members, could be an option for self-help groups to take initiatives in introducing new practices in farm. In this regard, future strategies should consider a more inclusive gender approach, adopting a farming–system delivery model that serves the complete household including youth, to improve overall farm efficiency and profitability.

Box 10. The Need for Research and Extension Linkages in Operations

159. An important constraint to smallholder production in India are the broad range of issues related to land tenure – the availability of land, share-cropping arrangement, security, registration and titling. IFAD’s involvement in this range of topics has been limited, focussed solely on the issue of tribal land holdings in the context of early projects. Even in the tribal context however, the issue needs to be kept under review. In the case of some areas of the Meghalaya project, for example, land is owned by the tribal leaders and is made available to individuals for two years at a time. This obviously means that no one is willing to undertake the expenses needed for permanent improvements of the land. In general, land tenure in India is a very difficult area, but its centrality to increasing production suggests that IFAD needs to keep it within its sights. Where there are approaches which have been piloted and offer some promise of success IFAD may want to consider supporting these. Some states have introduced very interesting innovations in the area of computerizing land records and making these available for settlement of land disputes. This is an area where IFAD support might help to mainstream these approaches.

Operational links with research and other technology providers have not been well developed under most projects. Additionally, the projects and programmes have not been involved in technology generation through adaptive on-farm research. India has one of largest agricultural research systems in the world and its network of Indian Council of Agricultural Research stations and State Agricultural Universities represents a very large technical resource base. Because most operational areas are remote and often marginal rain-fed areas they have rarely received the priority focus of researchers who usually prefer undertaking research in less risk prone environments. However, given the complexity and location specific nature of production issues in rain-fed project areas, on farm research is essential to develop or refine adoptable low cost technologies in both livestock and dry-land crop production that is appropriate to resource poor farmer beneficiaries. Because the most critical productivity constraint is water, its conservation and use efficiency should be a prime research concern in the typical IFAD project area. Given the importance of animal husbandry to many poor communities and especially to women, animal fodder production both from arable crop by-products and communally grazed areas is a critical issue, but one that has received little practical research attention. The productivity and feed value of staple cereal and pulse straws, the major ruminant animal feed, and increasing fodder quantity and quality from commonly managed common and wastelands, are of particular importance.

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Natural Resources and the Environment 160. IFAD has focused on natural resource management in the tribal development projects. In these, it has tackled an important paradigm – that of increasing encroachment on tribal lands by those wishing to exploit natural resources and the ever-greater degradation of those lands, all of which has moved the tribal populations further upland where shifting cultivation systems have led to erosion and increasing impoverishment. The multi-pronged approach has proved well suited to dealing with this set of interlinked issues: it has lent support to efforts to persuade the Government to amend the legislation on tribal land rights and, with WFP assistance, has supported the tribal populations to undertake small conservation projects. Many of the earlier tribal operations supported reductions in the amount of shifting (jhum or podhu) cultivation and helped tribal people increase the amount of non-timber forest produce they harvested from the forests. While this approach may still be preferable where there is land available that can be cropped using conventional approaches, in some of the recent tribal projects, as indicated earlier, the project management unit has looked at ways of reducing the environmental costs associated with shifting cultivation. This approach is consistent with an increased emphasis on organic farming and the revival of some of the traditional varieties of upland crops. This is an area that would benefit from careful analysis and research. 161. Given the marginal resource status, especially water availability, of typical operational areas, it could be argued that a similarly comprehensive natural resource management intervention is critical for sustainable development and warrants strong emphasis in non-tribal projects as well. In the typical project agro-climatic situation, a program of in-situ water conservation, soil conservation, conservation farming and optimal use of locally available organic nutrients integrated within planned community managed watershed plans is fundamental to provide a less risk prone production base. In the ongoing project portfolio this approach has, for example, been partially implemented in Jharkhand-Chhattisgarh with a main focus on the construction of water harvesting ponds, gulley plugs and field bunds. Regrettably, the impact of this activity has been affected by poor fund flows, management issues, and slow disbursement so that achievements and effectiveness are falling short of project targets. 162. Environmental and climate change considerations are strongly connected with natural resource management issues: the greening of overgrazed community lands and the in-corporation of agro forestry especially fodder and fuel trees into farm practice would both have positive environmental impact as well as improving livelihoods. The use of renewable energy sources to reduce fuel wood needs and drudgery and to benefit livelihoods in general has not yet been explored as a possible project component. There is a wide range of solar powered renewable energy opportunities on the shelf that have not reached the village 78 . Technologies in crop drying, solar stoves, village lighting, paddy parboiling for example are available and adoption would have positive environmental impacts as well as offering opportunities for simple improved post-harvest processing and storage as well as improving the quality of life.

78 At the Indian Energy Research Institute and with the Central Arid Zone Research Station.

Wet-paddy land Source: Dr Dusmanta Kumar Giri

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Institutions and Policies 163. IFAD has created a parallel system for the delivery of operations alongside the regular government channels. The focus has been mainly on grass roots institutions and this has made important contributions in catalyzing the development of self-help groups and communal groups in tribal areas. The issue to consider, however, is whether the projects and programmes are too heavily dependent on the oversight and direction provided by the project management units. For some of them, this is a sustainability issue but, viewing the portfolio as a whole, it raises the question as to whether IFAD is helping build the institutional linkages between the community-level institutions and local panchayats, block and district officials, and state governments. 164. Over time, IFAD has become increasingly conscious of the divergence between its own approach and the need for the state and local bureaucracy to function more effectively in supporting rural development in India. The situation has eased somewhat over recent years as the Government has become more accepting of the role that NGOs can play, inter alia, in promoting a voice for rural communities and in lobbying for improved service delivery in rural areas. Increasingly, the Fund is reviewing the convergence of its own approach and that of the Government administration in an effort to develop models for implementation in future projects. From this perspective, two recent projects are extremely important. In the second Orissa project, the line ministries have seconded specialist staff to the project management unit thus creating strong linkages with the state government. In the most recent Maharashtra project, convergence with Government programmes and the coordinating role of the State Agriculture Marketing Board is central to the design. 165. The policy contribution has been particularly important in relation to tribal issues and in promoting self-help groups and micro-finance as vehicles for reducing rural poverty. For example, through its tribal development projects it has enabled the issuance of land titles to tribal people, and through the National Micro Finance Support Programme it has lobbied with the Reserve Bank of India, which agreed to include commercial bank lending to micro-finance institutions. Also, IFAD lobbied with the then Minister of Finance in 1999/2000 to support the further expansion of self-help groups through the Government budget, which was approved by the national parliament and then implemented through a variety of national programmes and schemes. The narrowness of the basic focus has been criticized by some but this group of operations, in a large number of states, has served to solidify the importance of tribal issues and women’s empowerment/micro-finance in the Indian political consciousness. The policy contributions flow from the type of projects it supports and their effectiveness. The past India COSOPs essentially built on a set of projects that were under implementation and tried to capture their essence in the strategy. Overall Rural Poverty Impact 166. The overall rural poverty impact of the programme is rated satisfactory and the ratings for the individual impact domains may be seen in Table 12.

F. Other Performance Criteria Sustainability 167. There are four different mechanisms by which the operations can be sustained after project completion. First, there is sustainability that comes from embedding project management in a successful institution. In these cases, the creation of institutional structures and the incentives put in place lead to the continuation of the project even after the project management unit and the associated oversight and capacity building it provides are taken out of the equation. Perhaps the two most successful examples of this, in the portfolio, are the two micro-finance projects (Maharashtra Rural Credit Project and National Micro-finance Support Programme). The key in these cases was the support provided for two well-established and effective institutions (NABARD and SIDBI) in building up their own capacity to support and administer micro-finance programmes. There also

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appears to have been sustainability in the cases of those projects which utilized the Women’s Development Corporations at the state level to manage and oversee the projects (the Tamil Nadu Women’s Development Project and the Rural Women’s Development and Empowerment Project). In the case of Maharashtra, the interventions have essentially been scaled up to the state level with MAVIM (the Women’s Development Corporation of Maharashtra) having responsibility for continuing and extending the activities. Not all states have Women’s Development Corporations however, and not all Corporations are of quality comparable to those in Tamil Nadu and Maharashtra so the challenge, if this route is followed in future, would be to build up the capacity of the participating Women’s Development Corporations. 168. Second, there is sustainability from building up viable grass roots institutions which empower their members and build financial capacity. In the case of self-help groups for example, project completion reports estimate sustainability rates from the number of SHGs that are self-sustaining and have not incurred significant losses in their internal lending. In completed projects this is generally of the order of 60 to 90 per cent of the groups established. In the tribal projects, the project completion reports show some degree of confidence about the continuation of the Village Development Committees, but concern are raised about the effect on incomes once project-related construction comes to an end. There are questions however, whether the fact that a large number of groups are still functioning effectively by project closing constitutes a sufficient condition for sustainability. The need for institutional support, either through agencies such as the Women’s Development Corporation or through the continued engagement of NGOs, seems an important consideration. In one survey of self-help groups, over 80 per cent of their members were of the view that sustainability depended on the continuing support of NGOs. A particularly interesting case in point is the Gujarat project where an NGO (SEWA) was in charge of project management. With SEWA having a continued presence in the area, and the beneficiaries being SEWA members, the project has continued despite the premature closure of activities. The Jeevika programme supported by the project was implemented entirely by the SEWA members; project ownership increased over time, and once the major sources of external funding were suspended, the SEWA members resolved to continue the programme’s initiatives under the new name “Sajeevika” meaning: alive and continuing. SEWA’s ability to involve and motivate the communities played a crucial role. 169. A third model of sustainability is where the programme continues to be supported by funding from state or central government agencies after the closing of the operation. A striking example of this is the North Eastern Region project, where the success of the project has led the North-East Council to continue funding the project management unit in situ, thus enabling it to continue the approach built successfully through the project. The Women’s Development Corporation programmes cited above fall partly into this category as well since the continued funding by the state government has been a consequence of the demonstrated effectiveness of these programmes in forming and building the capacity of self-help groups. Encouraged by the success of the first Tamil Nadu project, the state government adopted the programme as state policy under the caption “Mahalir Thittam” during 1997-1998, with improved elements, particularly formation of Panchayat level and block level federations of self-help groups. Mahalir Thittam has been gradually extended to cover all districts in the state so it provides a good example of replication and upscaling as well as sustainability. The second Andhra Pradesh project and the second Orissa project also fall into this category, since the models for tribal development built up in these programmes are now being supported and funded through state government agencies. 170. A fourth model of sustainability is where the operation is scaled up through support from other donors – in IFAD’s case, this is almost exclusively the World Bank. In three projects, large World Bank follow-up projects have been undertaken or are planned. In the first of the three (Tamil Nadu Women’s Development Project), there was no explicit coordination or link between the IFAD and World Bank programmes. The Rural Women’s Development and Empowerment Project was undertaken jointly by the Fund and the Bank in nine states. With the success of the North Eastern Region project, the Government has requested the World Bank to extend the project to states not covered in the initial programme and IFAD remains associated with the programme through

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knowledge sharing. The Bank has worked closely with the Fund’s CPM in drawing up the design, and this could well be an important model for future scaling up of operations. 171. In recent projects and programmes, exit strategies are part of their design. In the Tejaswini and mid-Gangetic plain projects, there is much greater focus on the need to build sustainability into project design by explicitly including an exit strategy that will make it possible to gradually wean institutions off their dependence on direct facilitation and support. In three of the states covered by these projects, however, Madhya Pradesh, Uttar Pradesh and Bihar, the focus is on promoting the development of new self-help groups in very difficult environments. It seems optimistic to envisage that in a single project cycle, these self-help groups could become entirely self-standing. In similar cases, IFAD may need to consider the options of either supporting these programmes for a second cycle or getting an up-front commitment from the state government to continue funding the project management units and the NGOs after the operation closes. 172. The overall assessment of sustainability is moderately satisfactory. The sustainability issue for IFAD is essentially whether the model can be institutionalized into the operations of local administrations and state governments. IFAD needs to consider this as a systemic issue in India, in the context of the upcoming COSOP. Successful projects and programmes are an insufficient condition for sustainability. Projects that have manifested satisfactory or better sustainability are those where there was clear institutional responsibility for continuing the programme, where the state government proposed a continuation or where a World Bank project has been or will be undertaken. The tribal development projects are proving a difficult sustainability challenge and perhaps the Government and IFAD need to consider how tribal development societies or corporations, which already exist in some states and have been supported through some interventions, can be made into more effective institutions to provide a possible institutional home for future projects of this kind. Innovation, Replication and Scaling Up 173. According to IFAD’s innovation strategy, an innovation can be of a technical, social or institutional nature. A practice is considered innovative if it is new in a given context and can “stick” after it is piloted. 174. In general, the India country programme has a highly innovative content. In particular, IFAD-funded projects and programmes have supported the introduction of innovative institutional models at different levels. For example, the support provided to the development and refinement of self-help groups has led to them becoming essential instruments for women’s empowerment and poverty reduction. The introduction of Tribal Development Societies for project execution in the Jharkhand-Chhattisgarh project was innovative. This was the first time when a project for tribal development was not entrusted for execution as usual to the concerned line department at the state level. In fact, the use of the self-help groups and village development committees in poor and tribal communities and the institutionalization of links with micro-finance institutions have been important contributions to India’s rural development programme. The innovative nature of these efforts in the 1990s has been widely recognized. 175. The Fund was innovative by pushing the involvement of NGOs in the first Andhra Pradesh, Orissa and Tamil Nadu projects, even though in some instances there were challenges in ensuring NGO’s full and proper participation (e.g., in Orissa), partly due to the limited prevailing culture at the time of partnerships between Government and NGOs in development activities at the grassroots level. These projects provided the momentum for opening up service delivery to the rural poor beyond the traditional line departments. 176. Moreover, IFAD has been active in devolving responsibility to the village communities and strengthening the role of their institutions in planning and managing development initiatives. Another example of innovation is the Mewat Development Agency model, used in the Mewat project. It is a government body executing projects with the support of line departments and Panchayati Raj

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Institutions (on the Government side). In addition, it works with NGOs/CBOs, cooperatives on the civil society side, market institutions and donors. With the line departments and NGOs working in the same project, the Mewat Development Agency completes the convergence. The line departments do the technical works and provide hardware supported and supervised by Panchayati Raj Institutions; and the NGOs, self-help groups and cooperatives do the social development, mobilization, participation etc. With the line departments, the costs are optimized and sustainability is ensured as they are supported by the NGOs. The Mewat Development Agency model can be taken by any district level agency and is easy for replication. 177. There are other innovations across the portfolio, some of which merit underlining. Under the Mewat project, milk marketing cooperatives were introduced to increase household income of rural women through dairy production. The North Eastern Region project created participatory natural resources management groups for village level planning and implementation, with considerable attention to gender mainstreaming. The Rural Women’s Development and Empowerment Programme introduced cultural media and actions to involve poor rural masses in the process. The social venture capital company in the Himalayas project provides equity funding for business development. The mobilisation of significant resources from the private sector and the Sir Ratan Tata Trust funds in the recent Maharashtra operation can also be considered an innovative move towards deeper public-private partnership. 178. There have been various examples of replication and upscaling of successful innovations, some of which have been discussed in the previous section of the report. To recap, the following are key examples: (i) the Government of Tamil Nadu expanded the broad approach of the Tamil Nadu Women’s Development project from six districts to cover the entire state with its own funds, following the closure of the IFAD-funded project in 1998; (ii) the World Bank replicated the same project across nine states in India in 1996 and invited IFAD to act as a co-financier in the project; (iii) the Government and World Bank are currently planning to expand the IFAD-funded Northern Region project from 3 to 5 states in the North East. In addition, one of the most far-reaching achievements has been the upscaling of the self-help group concept into national government policy and schemes, which is having an extremely wide impact on rural poverty at large. 179. The evaluation notes that while there are several examples of replication and upscaling, the role played by IFAD in the process does not appear to have been systematic. That is, projects and programmes were not designed in the past with the ultimate objective of ensuring their replication and upscaling, and neither was resources allocated to IFAD staff to pursue this agenda in a proactive and strategic manner. There was limited attention to policy dialogue, knowledge management and partnership building in the past, which are essential ingredients for ensuring replication and upscaling, and the lack of adequate country presence and supervision through co-operating institutions until recent years also did not assist in the process. Related to these aspects, another constraining factor was the over-emphasis on the project level in the past, rather than on the country strategy and programme level. This is however now changing rapidly with the country programme being considered the unit of account rather than the project level, which will provide a more favourable environment for replication and upscaling. The argument that good and successful innovative ideas are bound to be picked up by Government and others is valid, but upscaling for IFAD is too important to be left to chance. 180. The overall assessment of the portfolio in terms of innovation, replication and scaling up is assessed as being satisfactory.

G. Overall Portfolio Assessment 181. The overall portfolio assessment is derived based on the ratings for relevance, effectiveness, efficiency, rural poverty impact, sustainability, and innovation/replication/upscaling. In conclusion, the CPE rates the India project portfolio satisfactory. In part this reflects the view that the whole is greater than the sum of the parts and that the cumulative contribution of the operations to women’s

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empowerment, micro-finance and tribal development is considerable given the size of the programme. Table 12 below provides an overview of the ratings of the portfolio across the various evaluation criteria used. It also benchmarks the performance of the India project portfolio with figures from the 2008 Annual Report on the Results and Impact of IFAD Operations (ARRI), produced by IOE. It is revealing that the performance of the India project portfolio is better in various evaluation criteria as compared to the performance of IFAD operations globally, especially in terms of relevance, effectiveness, rural poverty impact, sustainability, and innovations, as well as in terms of IFAD’s own performance (which is moderately satisfactory or better in 85 per cent of the projects in India as compared to 54 per cent in all regions). As for IFAD operations in other countries, efficiency is rated relatively lower than other criteria.

Table 12. CPE Ratings of the India Project Portfolio and Benchmarking with the ARRI

Evaluation Criteria Portfolio

Assessment

Percentage of projects in the portfolio with a moderately satisfactory or better rating79

Percentage of IFAD projects in all regions with moderately satisfactory or better rating from the 2008 ARRI80

Core performance criteria

Relevance Effectiveness Efficiency Project performance

5 5 4

4.7

100 85 69

85

96 74 65

86

Rural Poverty Impact

Household income and assets Human and social capital and empowerment Food security and agricultural productivity Natural resources and the environment Institutions and policies

5 5 5 4 5 5

92

92 85

92

100

92

69

71 65

68

53

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Other performance criteria

Sustainability Innovation/replication/scaling up

4 5

85 92

48 72

Overall portfolio achievement 5 85 74

79 Evaluation criteria that have a rating of 4 (moderately satisfactory), 5 (satisfactory) or 6 (highly satisfactory) are all considered satisfactory. 80 To make the benchmarking more meaningful, the data contained in the ARRI for the entire block from 2002-2007 has been used for comparison purposes (see section V in the 2008 ARRI).

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V. PERFORMANCE OF PARTNERS

A. IFAD

182. IFAD deserves credit for the overall coherence of the country strategy. Both country strategies were developed following wide consultation with local stakeholders and partners. The Asia and the Pacific Division has consulted widely on the selection and design of projects, ensuring ownership by Government in most cases. Mid-term Reviews and implementation support activities have been used skillfully to turn around a number of difficult projects with unpromising beginnings. The Mewat and North East projects are two examples, which in the end turned out to be successful operations on the whole. 183. Moreover, in the short period that IFAD has been directly supervising and providing implementation support to projects, it has successfully moved away from a model of six monthly visits to one of frequent inter-action with project management units, government agencies, NGOs, and other executing partners. In fact, supervision and implementation support is now undertaken as joint reviews together with Government and other partners, which enhances quality and ownership in the process. 184. The Fund has organized a large number of training events (e.g., on gender mainstreaming and results-based management) and has tried to develop a communications network among project agencies. A vibrant country programme management team has been established, which provides active inputs in the overall country programme management. In addition, over the years, IFAD has built a strong relationship with the Government at various levels, contributed to wider acceptability of

Key Points The project portfolio underpins the country strategy of support for empowering poor rural women and

tribal development. IFAD used three instruments for this purpose: capacity building, micro-finance and livelihoods improvements.

Projects and programmes were generally well designed. Their objectives were well aligned with the

needs of the poor, and government and IFAD policies. The strategies adopted by projects to meet their objectives were also coherent, even though insufficient attention was devoted to establishing market-linkages and private sector involvement. Recent operations however recognise the importance of both these aspects.

In terms of effectiveness, in general projects achieved their objectives and in particular played a

catalytic role in the development of SHGs and micro-finance institutions. There has been good impact on household income, social capital and women’s empowerment, while the tribal development projects influenced policies and natural resource management. The programme had a limited impact on agricultural productivity outside the tribal areas however.

There is room for improvements in efficiency and sustainability of IFAD-supported projects. Some of

the factors that have led to moderately satisfactory efficiency include delays in effectiveness, wide geographic coverage of projects, complicated flow of funds mechanisms, as well as delays in the appointment of project directors. Sustainability has been factored in the design of recent operations, which have plans for exist strategies. Important determinant of sustainability include anchoring project management units within existing institutional structures, and paying deep attention to ensuring the robustness of grassroots institutions.

The portfolio has a reasonably high innovative content and there are important examples of

replication and upscaling. However, projects and programmes were not designed with the ultimate aim of replication and upscaling. Moreover, the role of IFAD in replication and upscaling was not systematic or strategic, but this is also partly due to past operating model and few resources allocated for this purpose.

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partnering with NGOs and civil society organizations for grassroots development, devoted much attention to promoting pro-poor innovations, and not refrained from working in districts with high prevalence of insecurity, such as in Andhra Pradesh, Jharkhand-Chattisgarh, Orissa and the North East. 185. Finally, the India country programme has been used strategically by the Fund, as a testing ground also to further develop its own operating model. For example, India was included in IFAD’s Direct Supervision Pilot Programme (1997) and Field Presence Pilot Programme (2003). The overall experiences in these pilot programmes have provided significant insights that have contributed in shaping IFAD’s overall approach in these important areas. 186. At the same time, there have been some shortcomings. First, for an 18-month period in 2004-2006, the country programme in India was largely managed by an Associate Professional Officer, owing to the delay in appointing a senior CPM commensurate with the importance of the country and the portfolio. This was unfortunate timing with the 2005 COSOP under preparation and the crisis over the Gujarat project coming to a head. Second, IFAD has not established service standards for its own contacts with the project management units in areas such as providing timely feedback and responses to queries, even though with strengthened country presence and direct supervision there are visible improvements in this area. It also needs better back-up systems for dealing with situations where the CPM or other staff is away. Third, the Fund has not established a wide enough dialogue with the National Planning Commission or the relevant line ministries in New Delhi, which among other issues would be important for national policy formulation in agriculture and rural development. Nor has it done enough to partner with other donor agencies. At the state level, contact with line departments other than the designated partner agency has been uneven.

Box 11. Praise and Complaints from Project Directors

187. The establishment of a sizeable country presence office in New Delhi has made a positive contribution to performance of the country programme81. The country presence office now has five staff and shares offices and technical services with WFP. It is the largest IFAD country presence in all regions. The office is financed in large part out of the project supervision budget and administrative fees received from donors for managing cofinancing in IFAD-funded projects. It is a cost-effective operation and has resulted in a more visible presence for IFAD in India, and is contributing to achieving better overall development effectiveness. The staff is committed, well-qualified and competent but severely over-stretched, given the wide range of topics and geographic area covered by IFAD operations, and especially the number of ongoing projects in the country.

81 See, for example, the India Country Working Paper prepared in the context of the corporate-level evaluation by OE of the Field Presence Pilot Programme (2007). Moreover, the assessment of the IFAD country office in India captured in paragraphs 187-191, has benefited from the useful contribution of Ms Semina Fazelbhoy, Human Resources Assistant at IFAD, who participated in part of the CPE’s main mission.

The praise for IFAD:

Flexible and willing to take advice on the need for changes in project design and approaches; Listens to the views expressed by Government, project management units and others; Provides opportunities for useful inter-actions and networking among project management units; Has high level commitment among staff.

The complaints about IFAD: Project appraisal documents are excessive in length and detailed prescriptions; Slow response to letters and enquiries; Some staff in the country office lack the required seniority; Some of the training programmes – which are usually decided in consultation with the country

programme management team and the project directors - could be more relevant.

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188. The staff has received more responsibility in particular with regard to supervision and implementation support, co-ordination among projects, organizing training programme for project directors and staff, and knowledge management, which has enabled a higher level of engagement with projects. A strong country presence has also facilitated the identification of new partnerships and related opportunities, for example, with the private sector in the two most recent projects funded, improved communication and information flows with and among projects and Government authorities, and enabled more timely follow-up actions. However, the major decisions related to country strategy, loan and grant resource allocation, programming priorities and high level dialogue with Government and others still is within the responsibility of the CPM based in Rome. 189. Although recently more efforts have been made to fully integrate the country presence within IFAD’s overall systems and procedures, this still remains an area of challenge – which is however a corporate issue for IFAD in all regions as well. For example, the country presence staff is still not fully integrated into IFAD’s overall workforce, and their contracts are issued by WFP. The latter is a cause for concern, as the (temporary) type of contracts provided to country presence staff has implications for their overall effectiveness, job security and incentives. In general, the Fund is reaching a point where it needs to review the arrangements with WFP and consider whether to rent its own facilities in New Delhi. Moreover, to achieve deeper results in policy dialogue and partnership building may require a different arrangement for IFAD’s country presence in India, especially because representation in New Delhi is not on an equivalent level with other multilateral institutions. IFAD needs a strong and adequately resourced country presence in India – one which would be commensurate with the fact that India is the largest borrower from IFAD, but also the major donor from IFAD List C member countries. The strengthening of the country presence will have resource implications that need to be considered by the IFAD management. The Government of India and other partners met during the CPE all underlined the importance of the aforementioned, and suggested for IFAD to also explore the possibilities of outposting the CPM to India. 190. The CPE believes there is merit also in exploring the possibility of converting the India country office to a sub-regional office, covering operations in selected South Asian and other countries as well. This would be consistent with the provisions in the Agreement at Completion Point of the evaluation on the Field Presence Pilot Programme (FPPP), discussed with the Board in September 2007. The FPPP evaluation concluded, inter-alia, that “the subregional model appears to be an interesting, cost-efficient model-as corroborated by the experience of a number of other development organizations – to bring IFAD closer to the ground”82. The establishment of a sub-regional office in New Delhi with responsibilities for selected countries would be consistent with the practice of other UN organizations that already have regional or sub-regional offices in New Delhi, such as WHO, UNIFEM, UNESCO, ILO, UNIDO, and UNODC83. The Evaluation Committee of IFAD’s Executive Board at its 59th session in October 2009 also underlined that the Fund may like to selectively experiment with establishing sub-regional offices, given that, due to cost considerations, IFAD would

82 Agreement at Completion Point, paragraph 14, Evaluation of IFAD’s Field Presence Pilot Progamme, 2007 83 WHO South-East Asia Region Office covers Bangladesh, Bhutan, Democratic People's Republic of Korea; India; Indonesia; Maldives; Myanmar; Nepal; Sri Lanka; Thailand; Timor-Leste.

The Sub-regional Office of UNIFEM South Asia is based in New Delhi, India. It covers nine countries of the region, i.e., Afghanistan, Bangladesh, Bhutan, India, Iran, Maldives, Nepal, Pakistan and Sri Lanka.

The UNESCO New Delhi Office is mandated to cover six countries of South Asia: Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka.

ILO New Delhi Sub-regional Office covers Afghanistan, Bangladesh, India, Iran, Nepal Pakistan, Sri Lanka.

The UNIDO Regional Office covers Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka.

UNODC Regional Office for South Asia (ROSA) in New Delhi is mandated to implement the goals of the organization in six countries: India, Bangladesh, Bhutan, the Maldives, Nepal and Sri Lanka.

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not be in a position to set-up a country presence for the time being in each and every country covered by IFAD operations. 191. Apart from bringing IFAD closer to the ground and achieving better efficiency in terms of travel time and costs, there are various others reasons supporting the establishment of an IFAD sub-regional office in South Asia. These include the: (i) magnitude of rural poverty in the sub-continent, where around 40 per cent of the poorest people in the world live; and (ii) large number of IFAD-supported ongoing projects (32) in the seven countries in South Asia84. Moreover, with strengthened human and organizational resources, the sub-regional office could bring direction supervision and implementation support closer to the countries concerned, speed up the response time to country and project requests, facilitate knowledge sharing among the projects and countries covered by the sub-regional office, promote policy dialogue on sub-regional issues, and further enhance the profile and visibility of IFAD in India and the sub-region at large. 192. The move since 2008 to direct supervision and implementation is highly important and was a bold decision, especially in light of the large size of the ongoing portfolio. It has enabled IFAD to get closer to the grassroots and gain better understanding of context issues, as well as the opportunities and challenges related to project execution. All partners met expressed their appreciation for this decision. IFAD has increasingly made use of local expertise in the process, which is a contributing factor to lowering supervision and implementation support costs. Moreover, there is wider continuity in the process, and the supervision model is moving from IFAD alone assessing implementation performance to joint reviews by IFAD, the co-financiers, partner agencies and others concerned. Therefore, supervision and implementation support is becoming a more participatory exercise, where problems and solutions are jointly identified with key implementing partners. However, there are areas of challenge. For example, the timing of missions has to be decided based on the schedule of the CPM when s/he decides to participate in such activities. This is not facilitated by the CPM’s physical presence in Rome - in spite of ever improving telecommunications. The large number of ongoing operations implies that supervision and implementation support planning and follow-up needs very careful consideration, and systems for quality assurance are not sufficiently robust. The latter however is a wider systemic issue of concern to the supervision and implementation support processes across the board in IFAD operations, and not limited to the activities in India. 193. IFAD self-assessment. The self-assessment provided by the Asia and the Pacific Division (PI) covers mainly the period of the 2005 COSOP (2005-2009). Although this is less than the 20-year span of the CPE, it provides valuable data and information upon the operations guided by the most recent country strategy. In combing the achievement, deficiencies, and opportunities and constraints, the self-assessment recognizes the unique strength of IFAD in developing an institutional framework linking women and tribal people to the government programmes, micro finance institutions, NGOs, and other formal institutions and sectors. The innovative feature in project design and supervision was highlighted as well. To enhance replication and scaling up, the importance of knowledge management and partnership building was well acknowledged, which is corroborated by the initiatives taken in recent projects and a knowledge management strategy being prepared in process. Apart from the partnership with Government, NGOs and other international institutions, the self-assessment mentioned the endeavour in mobilising private sector in building market infrastructure and enhancing value chain in Maharashtra Convergence Project. On the other hand, the self-assessment also acknowledges the parts falling short in the operations, particularly in non-lending activities. It noted that partnership building with state governments, research institutes and other UN agencies should be enhanced, and knowledge management was not sufficiently emphasized in design and resourced in implementation. Hence, the synergy between loans and non-lending activities (including grants) were not in place. In terms of project design and operation, the model of one loan

84 As of 2009 September, there are 7 ongoing projects in Bangladesh, 1 in Bhutan, 9 in India, 2 in Maldives, 3 in Nepal, 6 in Pakistan, and 4 in Sri Lanka.

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covering two states has proved less effective and not efficient, and the frequent delays in loan signing, loan effectiveness and project start up affected efficiency. 194. The CPE assesses IFAD’s overall performance in India as satisfactory. This reflects that, on balance, the positive contributions by all the IFAD country programme management team members working on the India country programme outweigh the shortcomings outlined above in the CPE analysis and in IFAD self-assessment.

B. Government

195. At the outset, it is important to underline that this section entails an overall assessment of both central and state governments and their agencies involved in IFAD-supported operations. IFAD’s main partner agency in the central Government, the Department of Economic Affairs in the Ministry of Finance, has maintained a long and close dialogue and cooperation with the IFAD management. Despite the fact that the Fund is not a major donor from a financial perspective and therefore the transaction costs of its partnership with IFAD are relatively high, the Department has been very supportive of IFAD’s role in India’s agriculture and rural development complex, and has been forthcoming in terms of advices on strategy and operational issues. The Ministry has provided valuable support also to all independent evaluations conducted by IFAD in the country, and encouraged an open and transparent dialogue focusing on learning lessons that can lead to better results on the ground. Moreover, the Ministry of Finance has been a strong advocate of IFAD within India in general, and been instrumental in ensuring the country’s active participation in IFAD governing body discussions and mobilizing significant domestic contributions towards the periodic replenishment of IFAD resources. For example, India has been a member of the Evaluation Committee of IFAD’s Executive Board for about a decade, making insightful contributions towards enhancing the Fund’s development effectiveness. 196. The interaction between the Ministry of Finance and other technical ministries in the central Government has not been as strong on issues related to the country programme, such as in project design. This is however partly also limited by the fact that IFAD itself has not proactively reached out to other key central technical ministries. In addition, there has been limited follow-up on a couple of key points, which are systemic issues across the country. First, there is concern with the rapid turnover of project directors, which is a characteristic that also affects the operations of other donors. Related to this is the lengthy time taken in the appointment of project directors, as this has consequences in declaring loans effective. On another broadly related issue, the importance of ensuring staff with a mix of competencies and experience in project management units was found to be important, especially given the focus on innovation and the need to improve project efficiency. A second issue relates to the delays in getting legal approvals on matters related to the country programme, both at the state and the central levels, which have contributed to the high average time between loan approval and effectiveness. 197. The experience with state governments underlines the importance of their ownership of IFAD-supported projects and programmes. In most cases, IFAD has had strong commitment and good support for the implementation of programmes from state governments. The two less positive cases relate to the first Orissa project and the Gujarat project, as the respective state government was not comfortable with the design of the operation. In particular, in both cases, there were concerns with the role and responsibilities entrusted to the NGO involved (SEWA in Gujarat and Agragamee in Orissa). For much of the period under review, the Governments of the two states with the largest concentrations of rural poor, Uttar Pradesh and Bihar, have shown little interest in undertaking IFAD-supported projects (for example, the IFAD-funded project in the Mid-Gangetic Plains covered Uttar Pradesh and Bihar was declared effective in December 2009, close to three years after its approval by the Fund’s Executive Board).

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Box 12. The Role of the State Government in Human Resource Development in the First Orissa Project

198. It also suggests the importance of involving state, district and local governments in project design and implementation. A number of problems at the various levels of local government have shown up during implementation, including the example provided in Box 12 above. In some projects, timely release of funds for project expenditures has been an issue. In most of them, the involvement of line departments in the activities has been limited and much more a function of the chance interest of a particular government official than a more systematic approach. As discussed earlier, there is limited effort to synergize the expenditures of the project with the various government programmes administered by the line agencies. At the district level, the involvement of district officials is uneven. In some districts, the collector takes a strong personal interest in the programme but, in others, they seem hardly aware that the project is being undertaken in the district. Again, there is a balance to be struck between IFAD’s efforts to engage these ministers and officials, and the responsibility of the administration to take a holistic view of development challenges which encompasses the operations. 199. The CPE assesses the performance of central Government as satisfactory, and moderately satisfactory for state governments. On balance, however, the CPE assesses the overall performance of Government as moderately satisfactory, given that the state governments have a much larger role in project design, execution, monitoring and evaluation.

C. Cooperating Institutions 200. Until about two years ago, UNOPS was the main institution responsible for supervision of IFAD operations in the country. For most of the period under review, it provided effective supervision of process aspects, but did not follow up sufficiently, particularly on technical issues. Supervision funding was limited and these efforts were supplemented by the hands-on efforts of the CPMs. The view of most project completion reports and evaluations is that UNOPS generally did a good job of identifying problems, particularly relating to process. An excellent example of effective UNOPS supervision is the Mewat project, where the agency in charge of the project decided to dispense with NGO support. UNOPS wrote a letter of protest to the Chief Secretary of the State insisting that the decision contravened the loan agreement and was detrimental to the project. The order dismissing the NGOs was subsequently cancelled. A later UNOPS supervision mission for the same project exposed misappropriation of funds under the project and a special audit was undertaken by the state government. 201. While UNOPS receives substantial commendations for its efforts on process, the general sense is that it did not take sufficient interest in the substantive aspects of projects, and was not able to provide effective follow-up. In situations where there was a need for technical consultants to provide advice to the project management unit, UNOPS was not funded at a level which made this possible,

The state government of Orissa was vested with full responsibility for implementing the first Orissa project through technical line agencies. Although the project management unit had 175 staff members covering all aspects of the project, it never operated at full strength. The Project Managers were replaced frequently (nine in as many years), and some of them did not have the necessary qualifications. The human resources development (HRD) component of the project included the development of model villages, support to education and training, and a health care programme. These activities were contracted out to a reputed NGO, Agragamee, which has long-standing experience of working with tribal people. In the initial period, Agragamee held training sessions to build up awareness and motivate people, as well as to share knowledge with the tribals on important environmental and social concerns. However, in the course of implementation, the relationship between Agragamee and the project management unit became a ‘power-struggle’, which led to the NGO’s premature withdrawal from the project. Consequently, the HRD activities were absorbed into regular government programmes. The absence of NGO involvement, lack of a participatory approach and inadequate staff in the HRD wing of the project management unit proved to be the major reasons for the underperformance of HRD activities.

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nor did they come back to IFAD and insist that funding was needed to hire this expertise. In addition, as mentioned earlier, in the two-state projects, UNOPS was often not able to visit both states on its annual missions. At the same time, UNOPS maintained considerable continuity of its staffing of supervision in India, and many Project Directors expressed appreciation of the inter-actions and the quality of the advice received during the annual visits. 202. Overall, the performance of the co-operating institutions is also considered moderately satisfactory. Table 13 below shows the summary ratings for the individual partner agency assessed.

Table 13. CPE Rating of Performance of Partners

Partner Agency Rating

IFAD 5

Government 4

Co-operating Institution 4

VI. ASSESSMENT OF NON-LENDING ACTIVITIES 203. The non-lending activities comprise a group of interventions which are, for the most part, an extension of the operations. As a relatively small lender with a focused mandate, the projects and programmes serve not only to contribute directly to rural development, but to promote a wider policy dialogue, to build partnerships with Government, other donors, NGOs and civil society, and to share knowledge among the concerned stakeholders (project units, government authorities, financial institutions, small enterprise associations, service providers and others). The one exception to this is the small grants programme. While it can be used in association with projects (and have been so used in a number of cases in India), it can also finance independent programmes and activities, at the regional or country level.

Key Points The performance of IFAD is assessed as satisfactory, and that of Government and co-operating

institution is moderately satisfactory in each case. IFAD has promoted participatory processes for country strategy formulation and project design,

much appreciated by local partners and stakeholders. It has also made good efforts to establish a country presence in India, and the recent decision to undertake direct supervision and implementation support in all projects in India is far-reaching. However, some key issues remain with country presence and direct supervision, which will have to be addressed in the near future for better development effectiveness.

The government has played an active part in IFAD operations, in spite of the high transactions costs

involved. It has advocated for IFAD in India, and continues to appreciate and support the Fund’s activities. Some issues of concern relate to the slow release of funds by some state governments, and excessive turnover of project directors.

UNOPS supervision was good in general, even though the contribution it made in resolving technical

issues and proposing timely follow up actions were somewhat limited.

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A. Policy Dialogue 204. The policy dialogue carried out at the project level has drawn the attention of policy-makers to the needs of tribal people. The operations added their weight to those lobbying the Government for ensuring that the rights of the tribal people to traditional tribal lands were taken into account through legislation and implementation at the state level. IFAD was particularly instrumental in ensuring that land rights were given equally to both husband and wife in project areas (e.g., Orissa). In those tribal areas where it has active programs, its project management units are able to monitor the implementation of Government legislation and bring issues to the attention of the authorities. 205. Another area where the operations have had a policy impact is in the use of NGOs to support tribal development and women’s empowerment. In the past decade the views of the central and state Governments have evolved from seeing NGOs as opposing development projects, to recognising the potentials of partnership with both environmental advocacy and developmental NGOs. While this shift is not directly attributable to the projects and programmes, they certainly form part of a fabric of operations demonstrating the positive role that NGOs can play in supporting disadvantaged groups, such as women, scheduled castes and scheduled tribes. 206. Operations have also been effective advocates for the potential of the self-help group/microcredit combination for promoting rural development. Beginning in the late 1980s the Tamil Nadu Women’s Development Project and later the Maharashtra Rural Credit Project helped to support NABARD in developing the model of self-help group support from commercial banks. This was subsequently extended through the support to Micro-Finance Institutions in the National Microfinance Support Programme carried out by SIDBI. These programmes also have played a role in the dialogue between the Reserve Bank of India and the Ministry of Finance on regulation of the microfinance sector. 207. The External Review of the Results and Impact of IFAD Operations (2002) concluded that the Fund had achieved positive results through its policy dialogue with the GOI and state governments, especially in the area of forest management policy. It also mentions the important policy dialogue on the role of community-based organizations in the management of their own natural resources – a concept supported by the 73rd Amendment to the Indian Constitution. The North Eastern Region project, Jharkhand-Chhattisgarh project and the second Orissa project have been working on details for implementing these constitutional provisions. In its policy dialogue, IFAD is helped by the special relationship with India, as it is the largest recipient country-contributor. India regards itself as a true partner of the Fund and not merely as a client. 208. Policy dialogue at the national level has been limited, for example, in terms of formulation of national policies and acts on agriculture and rural development (e.g., National Policy on Farmers 2007, Forests Rights Acts 2006 covering Scheduled Tribes, National Water Policy 2002, etc). Similarly, policy dialogue and co-ordination has also been insufficient with donor agencies. 209. Overall, the policy dialogue is rated moderately satisfactory. In spite of the above, more could have been done to build on IFAD’s special relationship with the Government through drawing the attention of the authorities to some of the broader systemic issues that have arisen during the course of implementing the operations (e.g., the issue of frequent transfer of project directors). In fact, outside the handful of government agencies that deal directly with the Fund, there is little knowledge of its experiences and innovations. Contributing to national policy debate in a large country like India requires, inter alia, the ability to undertake or have access to analytic work on key policy issues, knowledge management, and a sufficient presence at an appropriate level to gain access to high level policy platforms.

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B. Partnership Building 210. The partnership with the Government has been positive as far as the key counterpart ministry is concerned (the Ministry of Finance) but the links with the line ministries have been scant. The relationships with Central-sector ministries (for example the Ministries of Agriculture, Rural Development, Environment and Forests, and Women and Child Development) and the Planning Commission, have not been close, and this was a particular handicap with regard to the Rural Women's Development and Empowerment Project, where the counterpart ministry’s lack of commitment led to slow implementation. 211. Partnerships with state governments are a particular challenge given the wide geographical coverage of the programme and the high transaction costs of maintaining close relationships in the states. There have been very good examples of such partnerships in the cases of the first Tamil Nadu project, the most recent project in Maharashtra, as well as in the Tejaswini project, where the Government has taken leadership in the programme. But there are also less positive examples such as the first Orissa project and in Gujarat, where IFAD was unable to win the full confidence of the state government and effectively broker a partnership relationship between the state government and a key NGO. Another important test will be the mid-Gangetic plains project, where the Government of Uttar Pradesh has not shown strong commitment to the programme as yet. The Fund also needs to be more pro-active vis-à-vis state governments in areas such as the timeliness of project funding, staff recruitment and salaries, and convergence of the line ministries activities with the projects and programmes. 212. The partnerships with the donor community have also yielded mixed results thus far. For instance, the relationship with DFID has not been easy, in particular in the Jharkhand-Chhattisgarh project. The preparation of this project was started in Madhya Pradesh and Bihar, two of DFID’s focus states, and it committed itself to supporting the programme by cofinancing the IFAD loan. When two new states, Jharkhand and Chhattisgarh, were carved out of Madhya Pradesh and Bihar, the project areas fell into the new states. Nothing changed, but because the new states were not focus areas for DFID it withdrew its support. Moreover, DFID pledged support to the second Orissa project, but did not follow through with the second tranche of its funding, after deciding that the quality of supervision and monitoring activities, carried out at that time through UNOPS, did not justify further funding. The World Bank is also a somewhat awkward partner for IFAD, given its large presence in New Delhi and the sheer scale of its lending activities. In some cases, the World Bank has expressed interest in scaling up the approaches developed by the operations. While this is most welcome, a more formal approach to partnership and scaling up with the World Bank may be preferred, given that the Fund does not itself have the necessary resources. 213. Partnerships with the UN system tend to be opportunistic and not part of a strategic approach reflecting common interests. The main partnership has been with the WFP, which houses the IFAD country presence office in New Delhi. There is a question of how best to manage the increased access to food that WFP provides in the early stages of the IFAD-WFP cooperations. IFAD has had good collaboration with UNIFEM in promoting gender mainstreaming across the portfolio, and a number of studies and joint workshops have been organised together with UNIFEM on the topic. Communication with the FAO representative in India appears to be good, but the occasional situation where the paths of the two agencies cross, scarcely qualifies for the rubric of partnership. Also, the relationship with the UNDP has been weak. The sense is that IFAD has chosen to work outside the UN’s coordination framework. The Fund, at its own urging, was invited to participate in the coordination group for UN agencies in New Delhi, but in fact has not attended recent meetings. Also, IFAD has become a member of the UN Country Team in India and is now in a position to fulfil the larger mandate of the UN Development Assistance Framework (UNDAF) agreed between the UN and the Government. This has definitely increased IFAD visibility within the UN family. 214. As far as the NGOs are concerned, since 1980 the Fund has been very active and effective in establishing partnerships, for example with Outreach and Myrada. In recent years, development

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NGOs have become an important presence in rural India, providing essential cohesion in the operations and a range of services, such as: capacity building, social mobilization, training, conduct of studies, and advocacy. The CPMs for India have always been conscious that, without competent NGO support, the interventions would face enormous difficulties. The Fund has been working with both resource NGOs, operating at the national level especially in capacity building, and facilitating NGOs acting at the local level. For example, the Himalayas project engaged 15 NGOs in Meghalaya and 28 in Uttarakhand. Unfortunately, sometimes, problems between the NGOs and the state governments have negatively affected project implementation. For its part, IFAD has provided training and capacity-building assistance to the NGOs and promoted useful knowledge-sharing. 215. IFAD has not established partnerships with Indian Institutes and Universities. India’s high quality research institutes and academic institutions provide the potential to strengthen the analytic base of the work the Fund does and to capitalise on the rich materials it generates through project monitoring. The management should consider a partnership with a specific institute to do contract analytic work on issues of rural development, using projects and programmes as source material. For example, IFAD has used its grant programme to support the Consultative Group on International Agricultural Research (CGIAR) and has developed relationships with some of its institutions such as the International Rice Research Institute (IRRI) and the International Maize and Wheat Improvement Center (CIMMYT), the International Centre for Integrated Mountain Development (ICIMOD) and the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT). While this support is consistent with the Fund’s general mandate, only in the case of ICRISAT, has it had direct meaning for its programme in India. 216. IFAD has recently put some effort into strengthening its relationships with the private sector. The relationship with the private sector has not as yet benefited from a visible engagement strategy. Yet, for improving the livelihoods, there is a clear need for such linkages to be strengthened in areas such as marketing. There is increasing awareness of this gap and recent operations have put emphasis on strengthening these relationships. The recent Maharashtra project has included significant cofinancing from the private sector and the Sir Ratan Tata Trust. Efforts are underway in the Western Rajasthan project to involve the private sector, and the Venture Capital Company that is being established in Meghalaya and Uttarakhand in the Himalayas and Post Tsunami projects also has the potential of establishing links with the private sector once fully operational. 217. Overall, the efforts to build partnership are rated moderately unsatisfactory. Partnership building has high transaction costs in the short term and, in fairness, IFAD has had neither the resources nor the local presence required to do this effectively. Yet, it is not evident that those are the constraints to building partnerships. By and large they have not been part of the operational strategy, and references in the COSOPs seem to be lip service rather than reflecting genuine commitment. Even at the current level of the Fund’s presence in New Delhi it can build much closer and more effective partnerships. Given the importance of convergence with Government programmes and policies, partnership building needs to figure much more prominently on the radar screen in the future.

C. Knowledge Management 218. Through the preparation, implementation and supervision of the operations, IFAD is in a position to share the experience of an intervention with a wide range of partners and stakeholders. Since 2003, the Fund has instituted a system of nationwide portfolio reviews, which bring together all key managers of projects and programmes and enable the new staff to benefit from the experience of ongoing activities. The reviews are now held twice a year, and are often held in a state capital and combined with visits to project sites85. For most of the period under review, the CPM for India has 85 On this matter, the Department of Economic Affairs underlined that all projects are reviewed through bi-annual tripartite review meetings, comprising the Department of Economic Affairs, the concerned multilateral partners and the project authorities (including representatives of central Ministries and state Governments). Moreover, in 2009, the review meetings for IFAD-assisted projects were held in April and October respectively.

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been the repository of much of the knowledge that the Fund acquired in the country, but increasingly, with the expansion of the country presence, the CPO has been able to play this role, carry out training and escort project management unit officers on study tours to other projects. 219. There are many examples of good practice in knowledge sharing at the project level. For example, the North Eastern Region project has used communications very effectively to share lessons learned about self-help groups and women’s empowerment. The project has been very active in producing informational material, such as posters, training manuals, newsletters, pamphlets and audio-visual CDs. The Mewat project took a participatory approach to preparing and implementing the project, well before this became a cornerstone of development practice. As a result, the project management unit increased awareness of the project among Government officials, NGOs, beneficiaries and other partners. The first Andhra Pradesh project had open training sessions for teachers, community school volunteers and village education workers, with considerable emphasis on improving teaching methods and monitoring educational standards. Furthermore, a comprehensive survey of access, capacity and enrolment was undertaken with a view to rationalizing educational institutions and school complexes. In Madhya Pradesh, the Tejaswini project has developed colourful charts with pictures that can be used for groups whose members are largely illiterate to record the progress the group is making. Some projects have also been developing more sophisticated and useful approaches to monitoring and evaluation. More needs to be done to document these good practices and share them more widely. 220. The Fund has a range of other knowledge products and activities that play a useful role in promoting knowledge about the programmes it supports in India. The background studies for the 2005 COSOP are important pieces of work. IFAD could and should have made a greater effort to disseminate them. Other important exercises are: the country programme issues sheets, the newsletters and the Knowledge Networking for Rural Development in the Asia-Pacific Region (ENRAP). This network links together the programmes and offices in the different countries of the same region and allows access to documents, discussions, special events, and others. More specific for India is ENRAP IFAD in India, a website with a dedicated knowledge sharing section divided into: human stories, lessons learned, innovations, impact, and project implementation. IFAD also organizes workshops and knowledge management events for the Asia region which allow the India project management units to share experiences with their colleagues in other countries. 221. However, as acknowledged in the IFAD (PI) self-assessment, knowledge management is still one weak link of the India country programme86. The capacity of the country office and project management units in documenting and disseminating implementation experience and lessons is still not sufficient, though there was one step forward made in 2008 in organising capacity building events for quality documentation and better knowledge capture. 222. At present, the country office in New Delhi is preparing a draft knowledge management approach paper to evolve a knowledge management strategy for the country programme 87 , establishing more systematic horizontal and vertical knowledge-sharing and knowledge management, and promoting convergence instead of seeing projects as separate ‘islands of excellence.’ 223. Overall, knowledge management is rated moderately satisfactory. The sheer scale of its knowledge activities is quite impressive in relation to the overall size of the programme and the resources IFAD has at its disposal. A great deal of useful learning is taking place and the decision to prepare an approach paper is indicative of a genuine commitment to strengthen further this aspect of the activities and a recognition of how central it is to the effectiveness and impact of operations. All in

86 IFAD (PI) self-assessment, section B: Falling short. 87 IFAD (PI) self-assessment.

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all, knowledge management is scored merely as moderately satisfactory, as there was limited activity in this area throughout the period covered by the evaluation, with things picking up mostly in the past few years.

D. Grants 224. The grant programme for the countries IFAD supports can be divided into two broad categories: global/regional grants and country-specific grants (see Appendix 8 of the list of grants). The global/regional grants are ad hoc studies and activities often driven by the central technical departments in IFAD as part of their involvement in global partnerships. India has had some involvement in 21 global/regional grants, of which six have been fully disbursed, eight partly disbursed and five have not yet started disbursing. No information is available about disbursements for the remaining two. The grants cover most of the sectors of interest to the Fund: technology, improving income and marketing, farm activities, indigenous people, gender, livelihoods, environment, rural finance, and policy dialogue and knowledge-management. While these grants are often for worthy purposes, they do not seem to have much involvement from the CPM or the country presence office, and, in many cases, the supervision of the grant-supported projects by the concerned central department of IFAD seems to be limited. 225. India has received 16 country specific grants usually directly related to 10 project operations. (i) Five of these grants are so-called special operations facilities (SOFs) and have been disbursed

for ensuring a smooth start up of an operation during the initial years of its implementation. These grants were used for recruiting project expediters, organizing project start-up workshops, training project staff and NGOs, organizing orientation visits to other projects, etc. These were provided for the Gujarat project, the Rural Women’s Development and Empowerment Project, the North Eastern Region project and the second Orissa project.

(ii) Another part of the grants have been disbursed for more general support of the operations,

through creating resources for the self-help movement including capacity building, resource centre, fellowship programmes and information sharing initiatives; supporting agricultural extension reform to reach rural women in India; and accelerating technological adoption to enhance rural livelihoods in disadvantaged areas of the country.

(iii) Two grants that have not yet been disbursed have been given in association with the operations

though not directly connected with them. One supports a community-led state alliance against hunger in Meghalaya, and the second supports an initiative for enhancing livelihoods through drudgery reduction in Uttarakhand.

(iv) The last two country-specific grants are a US$600,000 allocation to the Western Rajasthan

project and a US$1 million allocation to the most recent Maharashtra project as a way of cofinancing the IFAD loans to cover some of the technical assistance costs of the project that the Government was unwilling to borrow for. In some other projects grant cofinancing from DFID has provided funding for this purpose. IFAD’s funding of these grants raises a serious question of moral hazard and is bound to lead to pressure from other states in future for similar treatment.

226. While many of the grants in and of themselves have been useful and most have been given for worthwhile activities, there is no guiding strategic vision for the design and use of these grants, their allocation is opportunistic and arbitrary, and they are inadequately monitored and supervised. The question arises whether global/regional grants should be within the purview of the COSOP and not treat them as any part of the country allocation. There should be clear accountability for these including monitoring arrangements, and a requirement for consultation with the concerned CPMs prior to approval. The country-specific grants on the other hand need to be and are not as yet fully incorporated in the COSOP, their objectives are not always clearly defined and accountability and

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monitoring arrangements limited. At present, the grant programme represents an important missed opportunity for increasing the effectiveness of the operations, for example through the identification and filling of key knowledge gaps. As IFAD-supported projects are often located in risk-prone areas, location specific technologies and remedies are highly demanding; therefore, opportunities are available to use grant as a project component to finance specific research actions and consultancies for determining suitable solutions to local situations.

E. Overall Assessment 227. Overall, non-lending activities are rated moderately satisfactory (see Table 14). Most of the non-lending activities are mainly ad hoc and not strategic. It would seem that a number of opportunities have been missed in this regard and that, at a relatively low cost, IFAD could do more to provide and use expanded non-lending services more effectively − even in such a large country as India. These activities need to be integrated into the overall strategic programme. In addition, IFAD needs to define clear accountability for these activities and implement a monitoring system for recording the policy dialogue, partnerships and knowledge sharing activities, together with the grant financed interventions.

Table 14. Ratings for Non-Lending Activities

Type of non-lending activity Rating

Policy Dialogue 4

Partnership Building 3

Knowledge Management 4

Overall assessment 4

VII. COSOP PERFORMANCE

A. Relevance

228. The first COSOP (2001) was a reflection of the programme that had evolved since the late 1980s. Work on the COSOP was begun in 1999 and at that stage IFAD had effectively put in place the model linking communal groups to micro-finance and livelihoods promotion programmes. The

Key Points The non-lending activities are an extension of its project activities. The policy dialogue is rated moderately satisfactory. Given the small size of IFAD’s programme it

has had a significant impact on promoting women’s empowerment and micro-finance and supporting more enlightened policies for tribal development. Policy dialogue at the national level has been insufficient.

The partnership efforts are rated moderately unsatisfactory. The approach has been opportunistic

rather than systematic and except for NGOs, there appear to have been some missed opportunities to partner more effectively with other donors, agencies and the private sector.

Knowledge management is rated moderately satisfactory. A large number of activities have been

undertaken especially in recent years, but more peer learning and spread of good practices from one project to another could be achieved.

There is little evidence of a strategic approach to the provision and use of grants. Evidence of links

between grant results and loan operations are not apparent.

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COSOP articulated the model, correctly identifying the central role that capacity building played in these programmes. New project proposals mainly extended the model to new locations. At this point, the strategy was not well understood and there was a need to consolidate the basic approach. 229. Between 1999 when work began on the first COSOP, and 2005 when work was completed on the second, there was a substantial evolution in GOI policies and programmes for rural development. With the acceleration of Indian growth and the recognition that something needed to be done for the lagging rural regions, new programmes were put in place to expand road access to villages, primary education, and a range of social benefits. In preparation for the 2005 COSOP a large number of background studies were undertaken to provide the underpinnings of the programme88. Though these papers form a valuable tour d’horizon of rural poverty issues in India, there was a significant gap. The issues of convergence of the national rural programmes, and between IFAD and the Government programmes were of growing significance and with hindsight would have merited separate treatment. 230. The 2005 COSOP essentially continued the strategies enunciated in the 2001 COSOP, but did not reflect the evolution of GOI policies. It included a number of crosscutting issues, which were supposed to be addressed through IFAD interventions, related to gender, HIV/AIDS, sustainable agriculture and NGO involvement89. By 2004, with four additional years of implementation and a number of efforts to mainstream the basic approach in place, there was an opportunity to go beyond what had emerged as the Fund’s comfort zone. Largely at the urging of the GOI, it was decided to include two new projects – the Tamil Nadu Post-Tsunami project and the mid-Gangetic plains project. In practice, however, these merely moved the established IFAD model to two new settings – disaster relief and a region recognized as the core of the rural poverty problem. On the face of it these new directions were high risk and in the case of the relief programme of doubtful strategic impact. One useful step forward in the 2005 COSOP was the recognition that more focus was required on raising agricultural productivity outside of the tribal areas and this is well reflected in the COSOP discussion. 231. A number of issues that had emerged in the course of implementation of the operations were not systematically treated in the COSOPs. Despite the reiteration in both COSOPs of the importance of targeting Scheduled Castes, this had proven a very difficult problem to handle given the fact that scheduled castes were so widely dispersed among the population. Similarly, the difficulty of bringing landless migrant labourers into the self-help group mechanism was emerging as a significant constraint to reaching the poorest groups. Non-tribal operations had only a limited focus on agriculture and more needed to be done to evolve replicable models of productivity improvement on small farms. The international discussion on models of community development was reaching a conclusion that sustainable community development programmes needed effective links to decentralized local governments. This was another area where the programme would have benefited

88 These studies, issued as background papers for the COSOP of 2005, are as follows:

No.1442-IN: Status of HIV/AIDS

No.1443-IN: Microfinance Sector: Issues and Strategy for Future Interventions

No.1444-IN: Rural Poverty and the Semi-Arid Tropics: Profile, Determinants and Possible Interventions

No.1445-IN: Rural Poverty in Western India

No.1446-IN: Rural Poverty Situation in Gangetic Plains: Profile, Determinants and Possible Interventions

No.1447-IN: Rural Poverty among Coastal Fishers: Profile and Possible Interventions

No.1448.IN: Some Themes in Agricultural Policies

No.1449-IN: Agricultural Trade and Poverty

No.1450-IN: The Status of State Finances

No.1451-IN: Sustainable Development Strategy for the Poorer Regions of Madhya Pradesh 89 PI self-assessment.

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from greater focus. Finally, the country programme has not been able to mainstream HIV/AIDS into its programme to the extent that was desired by the COSOP. While this is an issue to be addressed at the design stage, the capacity of the project staff to tackle it also needs to be kept in view. Given that a plethora of agencies already address this argument, IFAD should develop a different perspective90. 232. With hindsight, the timing of the 2005 COSOP was less than ideal. By 2007, with the new CPM in place and a strengthening of the country presence officer in New Delhi, the evolution of the context had become much clearer and one of the first initiatives undertaken was to steer a Government requested loan to tackle the problem of farmer suicides in Maharashtra in the direction of achieving greater convergence among state government agencies in tackling rural development problems. A request to support poor farmers in arid regions of West Rajasthan has the potential for developing strong market linkages and an enhanced private sector dimension. The implementation of the programme subsequent to the COSOP has therefore encompassed a number of strategic directions that were not envisaged when the document was prepared. These have the potential for establishing a new basis for IFAD’s programme which should be reflected in the next COSOP. 233. The COSOPs covered non-lending activities, but did not sufficiently integrate them into the strategy. Areas for policy dialogue were examined. The 2001 COSOP gave prominence to the protection of tribal people’s rights and land titling. In the 2005 COSOP, three major areas in macro-policy reform were identified for bringing about a difference: differentiated policies towards market driven agriculture, land reform, and social risk management policies. It was not clarified, however, how IFAD could move the national debate forward on such broad and controversial issues. Opportunities for deepening partnership with Government, NGOs, and private sector were also considered and it was noted that the potential for partnership building was significantly enhanced through the expanding operations of the country presence office. However, there was little examination of the opportunities for harmonization with other bilateral and multilateral donors and agencies working in agriculture and rural development, such as the World Bank, DFID, WFP and FAO. The analysis of partnerships with bilaterals and multilaterals was retrospective, and there was no concrete guidance for stepping up joint approaches and actions. Even in 2005, the Fund as an institution lacked a well-articulated knowledge management strategy and thus the treatment in the COSOPs is implicit rather than explicit and reflects the training and portfolio reviews carried out in the context of the operations. Finally, the grant programme is mentioned in the COSOPs, but again there is no integration into the overall programme essentially driven by the projects. 234. The COSOPs were widely consulted with Government and NGOs and reflected their views. The 2005 COSOP in particular was the product of extensive consultations that culminated in a workshop in New Delhi in January 2004. The final product reflected a reasonable consensus among participants and was fully consistent with the views of the Government. There was not as yet general recognition of the key importance of convergence in rural development programmes and of the potential role that IFAD could play in assisting this process. The NGOs and Government clearly saw the value in IFAD continuing in the niche it had occupied since the mid-1980s of supporting women’s empowerment, micro-finance and livelihoods programmes, and particularly tribal development. 235. The relevance of the COSOPs is rated satisfactory. This is a composite of a highly satisfactory rating for the 2001 COSOP, a moderately satisfactory rating for the 2005 COSOP, and a satisfactory rating for the adaptation of the portfolio that has taken place subsequently.

90 PI self-assessment.

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B. Effectiveness 236. Since the India COSOPs were in large part snapshots of a well-developed ongoing programme, their effectiveness reflects largely the effectiveness of the portfolio, rather than being an independent variable. The COSOPs closely reflected the projects/programmes, both on the ground and in the pipeline, and the objectives were essentially components of almost every intervention in India. As a consequence, in this particular case there is no disconnect between the effectiveness of the COSOP and that of the programme in India. The lending and non-lending activities approved since 1999 have made significant progress in relation to the three key thrusts of the COSOPs: capacity-building of grassroots institutions; access to natural resources and social and financial resources; and diversification of livelihood opportunities. 237. As a consequence, the CPE rates the effectiveness of the COSOPs as satisfactory. The programmes on the ground, as discussed earlier, have been effective in promoting women’s empowerment and tribal development and in playing a catalytic role in the development of nationwide programmes for self-help groups, other communal organizations and micro-finance development. In conclusion, the overall performance of the COSOP - which is a combination of the ratings for relevance and effectiveness - therefore is also considered as satisfactory.

VIII. OVERALL IFAD-GOVERNMENT PARTNERSHIP 238. Table 15 below contains the overall assessment of the CPE of the IFAD-Government partnership. It is based on the ratings of portfolio performance, non-lending activities and COSOP performance. It is important to note that the final score is not a simple arithmetic average of the three individual ratings, but is based on an informed and objective judgement of the evaluation team. The overall partnership has been rated as satisfactory, in spite of non-lending activities being rated as moderately satisfactory. This is because the approach to non-lending activities is slowly improving in recent years, with increased synergies between lending and non-lending activities that together contribute to furthering the objectives in the COSOP.

Table 15. The CPE’s Overall Assessment

Assessment Rating

Portfolio performance 5

Non-lending activities 4

COSOP performance 5

Overall IFAD-Government partnership 5

Key Points The COSOPs were syntheses of the ongoing programmes rather than reflecting a new strategic vision. While this was appropriate for the 2001 COSOP, the 2005 COSOP would have benefited from a more

careful view of the evolution of the country context and particularly the need for convergence with Government programmes.

Overall the COSOPs are rated satisfactory for both their relevance and effectiveness given the close

link with the programmes and the general consensus of Government and the NGO community on the approach taken.

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IX. CONCLUSIONS AND RECOMMENDATIONS

A. Conclusions

239. Government-IFAD partnership has produced significant results. In spite of the changing context, the CPE is of the view that there is substantial value in the Government-IFAD partnership, and that the Fund has played and can continue to have an important catalytic role in promoting rural poverty reduction in India. In this regard, there are two areas where the partnership has achieved significant contributions in the past. These include: (i) promoting replicable pro-poor innovative approaches, especially in terms of institutional development - such as linking self-help groups of women and tribal people with rural financial service institutions, government departments, NGOs and other service providers; and (ii) a demonstration effect in terms of the rigour and attention needed to design, supervise, and monitor and evaluate inclusive and grassroots-oriented agriculture and rural development operations in marginal and remote locations. These two characteristics make IFAD different from other donor organisations operating in India, and can serve to generate lessons and good practices that can be replicated and scaled up by Government and other partners to achieve wider developmental impact on rural poverty. 240. On balance, the country programme has made significant contribution to rural poverty reduction in India. The focus on tribal development, micro-finance and women’s empowerment in the past has manifested satisfactory results. The achievements documented in numerous independent evaluations by IOE in the past and this CPE reveal that the overall economic and social welfare of women have been enhanced largely. Women are more empowered and have generally a greater voice in decision-making and resource allocation of development projects and programmes (see paragraphs 114 and 124). 241. Efforts to promote tribal development have also been good, for example in terms of promoting greater access to natural resources, including land and non-timber forest products which are central to their livelihoods. There is evidence that some of the IFAD-funded projects contributed to reducing conflict (e.g., Andhra Pradesh). There are also other tangible results, such as contribution of some projects in ensuring more secure land titles for tribal people. However, given the vast numbers of tribal people (more than 80 million) in the country and their very low economic and social status, the agenda remains incomplete and more efforts and resources are required to ensure their full integration into the economy, while at the same time preserving their cultural heritage (see paragraphs 108 and 126). 242. IFAD-funded operations have contributed significantly to developing new and successful models for the provision of micro-finance to the rural poor, and for linking them and their organisations to commercial banks. There are, however, areas in which micro-finance activities can be further developed to ensure an even wider impact on poverty, for example, by supporting micro-finance institutions to build rural money transfer systems and networks for effectively and efficiently channelling remittances to and within rural areas (see paragraph 118). 243. The evolving context and the consequences for the partnership. India is now classified as a middle income country. If the trends of the past decade in economic growth persist, it will soon be a major economic powerhouse globally with other emerging countries like Brazil and China. Its economy is expanding, its human resource base and agriculture research capabilities and academic institutions are advanced, and domestic funding for agriculture and rural development is ample. This also implies that the financial component of overseas development assistance is not as attractive to India as for many other countries, but transfers of knowledge and experiences in rural poverty reduction are likely to be of greater value. Yet, poverty is still widespread in India, with 41.6 per cent of the people still living below the poverty line of US$1.25 per day, while 75.6 per cent live on less than US$2 per day. Moreover, according to recent World Bank data around 33 per cent of all the poor people globally live in India. This implies the need for continued focus and attention on the country

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by multilateral organisations and the development community at large, especially if the millennium development goals are to be achieved, and hunger and rural poverty reduced significantly in India. 244. The emerging middle income country status of India91 will have important implications for IFAD’s role and focus in the country in the coming decade and beyond, even though the Fund’s lending terms to the country may not change in the next three year (2010-2012) Performance Based Allocation System cycle92. Together with the vast amount of national technical expertise and funds available both through centrally supported schemes and state financed initiatives, this will pose a major challenge for IFAD in articulating its objectives and priorities moving forward, also in light of the relatively high transaction costs for the Government in nurturing and expanding its partnership with IFAD. All in all, the implications are far-reaching, and after 30 years of cooperation, IFAD and the Government are at a cross-road. They will need to carefully and jointly reflect on the alternative options, directions and approaches to pursue, in order to ensure the continued high relevance of their important partnership for the future. But one thing is clear: the transfer of financial resources will not be the main focus of the partnership in the future. 245. The importance of agriculture. In spite of being classified as a transforming country93 and given the heterogeneity and size of the country and its population, agriculture has been and is likely to remain one of the most fundamental sectors at the basis of India’s economic growth and rural poverty reduction efforts. Agriculture accounts for about 18 per cent of GDP. It provides livelihoods for around 600 million people and is vital for ensuring food security. In fact, many states within the country are still agriculture-based (e.g., Bihar and Uttar Pradesh). With the impetus of the Green Revolution of the 1970s, India has achieved self-sufficiency in food grains but inequality remains widespread. Benefiting from agricultural development, the country has become a significant agricultural exporter, with agricultural exports accounting for around 10 per cent of total exports during 2005-2007. However, the 2008 peak in food prices highlighted the need to invest more in the agriculture sector to ensure continued food security and rural livelihoods. In addition, unlike in East Asian countries, the shift of the labour force from agriculture to non-agriculture is particularly slow in India. This has led to stagnating levels of agricultural productivity and growing recognition that, in the absence of accelerated agricultural growth, it will be difficult to achieve far-reaching reduction in rural poverty. The Government is cognizant of the importance of agriculture, and aims to raise the agricultural growth rate to four per cent per annum during the period covered by the 11th five-year plan (2007-2012). 246. There are areas that have not been sufficiently emphasised in the past in the Government-IFAD partnership. First and foremost, agriculture and the vast number of smallholder farmers have not really been at the centre of the country programme, for example in terms of investments in livestock development, land management, agricultural research to develop low-cost, pro-poor technologies and extension services. The recent programme in Maharashtra is however a welcome change in this direction, with its clear focus on farming systems and market-linkages in order to improve agricultural profitability. Attention is also devoted to agricultural-related activities in the Western Rajasthan project, and the tribal development projects have also included some agriculture activities (e.g., horticulture and water conservation). A clear-cut focus on agriculture (in particular in the rainfed areas) is extremely important in a country where 65 per cent of farmers rely on rainfed agriculture and are quite often affected by severe droughts. Moreover, apart from in the first Orissa project, the complex land tenure systems in the country has not been addressed sufficiently, which is another

91 World Bank country classification 2009. 92 According to IFAD’s current Lending Policies and Criteria, India would now only be eligible for loans on intermediate terms. However, the Lending Policies and Criteria are being currently revised and new threshold levels will be presented to the Governing Council in February 2010. 93 A transforming country is one in which agriculture contributes less to growth, but poverty remains overwhelmingly rural - see 2008 World Development Report of the World Bank on Agriculture.

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constraining factor in ensuring increased productivity and better incomes for the rural poor (see paragraphs 119-120 and 129). 247. The convergence of IFAD assistance with government schemes is extremely important, especially at the district level. The absence of convergence has contributed in the past to poor utilisation and results, as there has been duplication of efforts between departments (e.g., in terms of capacity building of communities), overlapping development activities, and multiple reporting requirements. The newest programme in Maharashtra however is a good example of efforts by IFAD to ensure convergence with Government’s own initiatives (see paragraphs 38, 164 and 211).

248. Markets and private sector engagement is another area insufficiently covered by the Government-IFAD partnership. The 2001 COSOP did recognise the importance of market issues, but largely for non-farm enterprises. The 2005 COSOP made a passing reference to the need for provision of market information in promoting and protecting the access of marginalised groups to resources. While selected projects undertook some activities – such as the construction of rural roads - that can be considered essential for promoting access to markets, few projects had specific components or activities focusing on value chain development, market infrastructure development, and linking small farmers with bigger agri-businesses. While there have been efforts in involving the private sector, for example commercial banks have provided loans to rural women, this has been too timid an approach, which was not commensurate with the potential offered by a partnership with the private sector that has emerged as the thriving factor in the economic development of India in the last 10-15 years. One recent interesting feature however is the US$30 million funding raised from the Sir Ratan Tata Trust and other private sector operators in the context of the most recent programme in Maharashtra for, inter-alia, bio-fuels development, promotion of organic cotton, and dairy development including milk collection centres (see paragraphs 138-139). 249. Institution building. One distinctive activity was the support provided to self-help groups. While self-help groups were not first established by IFAD in India, the Fund had a decisive role in supporting their development as important grassroots organisations within the overall institutional architecture of the local governance system. For example, the Fund has made an important contribution in ensuring that self-help groups are embedded as a central instrument in publicly supported programmes for agriculture and rural development in rural areas. Similarly, in spite of some initial challenges, IFAD has made major inroads in actively involving NGOs and other civil society organisations, which are increasingly emerging as complementary organisations together with government departments in undertaking development activities at the grassroots level. 250. The 73rd amendment to the Indian constitution in 1993 provided constitutional status to Panchayati Raj institutions, which are empowered to prepare plans for local economic and social development, oversee the implementation of development activities, and levy, collect and appropriate taxes, duties, fees and tolls. They are therefore a fundamental pillar in the local governance system. Thus far IFAD has not provided direct support for Panchayati Raj institutions or for working more directly with them through projects. While the head of the Gram Panchayat is invariably consulted when self-help groups are formed, they are not explicitly brought into the decisions and management structures of projects supported by IFAD. Generally speaking, while the Fund has contributed to institution building in the India country programme, it has only in a limited manner promoted the integration and development of the range of institutions that form part of the overall local governance system, including the private sector, NGOs, civil society, local administration and elected bodies (see paragraph 131). 251. Portfolio performance. The overall IFAD loan-funded project portfolio achievement in India is satisfactory, and better than the results of IFAD-funded projects in all regions - as reported in the 2008 Annual Report on Results and Impact of IFAD Operations. Performance has been particularly good in terms of relevance of operations and in the impact domains of natural resources management and environment, followed by household income and assets, human and social capital and empowerment, institutions and policies, as well as innovations, replication and upscaling. The area of

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relative weak performance is the efficiency of operations (i.e., how economically are resources and inputs transformed into results on the ground), where there is room for improvement. 252. The CPE found that frequent rotation of project directors is a cause for concern, and a solution needs to be found for better impact. Another issue is the rather wide geographic coverage of the country programme, with numerous relatively small projects dispersed throughout the country in 17 states. Five projects were designed to cover two or three states, which in some cases are not even contiguous 94 . A wide and fragmented programme coverage poses deep challenges to country programme management, for example, in terms of co-ordination, monitoring, supervision, efficiency and sustainability of benefits (see paragraphs 146-148). 253. Though the project management arrangements were by and large effective in implementation, it was found that the project monitoring and evaluation systems have mainly focused on input-output measurements, which reflects that the evaluation capacity especially in the agriculture and rural sector focusing on results and impact is generally insufficient. There are however some recent initiatives by the Government to establish an independent national body capable of undertaking rigorous and useful evaluations of development projects and programmes (see paragraph 142). 254. Various innovations have been successfully tested on the ground through IFAD-funded projects and programme, several of which have been replicated and upscaled by the Government and other donors. This is a remarkable achievement. In spite of that, however, the CPE did not discern a systematic or strategic approach by IFAD to replication and upscaling, and the Fund’s grants programme has not been used to its potential for promoting pro-poor innovations (see paragraphs 177 and 179). 255. A number of grants have been provided in support of the country programme, both from IFAD’s global/regional and country–specific grant windows. Apart from some global/regional grants (e.g., for ENRAP), the evaluation found little evidence that they have much of an impact on the loan funded activities in the country. Country-specific grants tied within selected projects and programmes more directly support project activities, but their total volume has been very small. This is partly due to the fact that the country-specific window only became available following the approval of the IFAD grants policy in 2003. 256. Performance of non-lending activities (knowledge management, policy dialogue and partnership building) has been moderately satisfactory. IFAD has made important contributions in few policy areas (e.g., land tenure for tribals in Orissa), but resources and capacities for analytic work and knowledge management that are essential for effectively engaging in policy processes have been few. In recent years, there are some interesting knowledge management initiatives (e.g., the recruitment of a knowledge management officer and the development of a dedicated web site for the country office), but these have not spanned throughout the period covered by the CPE. There have been some important achievements in policy dialogue (e.g., institutionalising the self-help groups as an instrument for poverty reduction in national policies and programme, the provision of land titles to tribal people, the wide spread involvement of NGOs in development initiatives), but these have not been systematic and largely confined within project-related processes. Engagement in agriculture and rural development national policy formulation has been limited, partly due to inadequate resources available for the purpose (see paragraphs 207 and 220). 257. Partnership with Government in general is very good, as it is with civil society and the NGO community, but partnership with the private sector and other multilateral organisations working in agriculture in India has not been vibrant, even though there are signs of improvement in the recent past. Partnership in the central government is particularly strong with the Ministry of Finance, and

94 The five projects are: North Eastern Region CRMP, Jharkhand-Chhattisgarh TDP, Himalayas LIP, Tejaswini RWEP, and Mid-Gangetic WELP.

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somewhat limited with other key agriculture and rural development-related ministries, and other central agencies. Even though project execution is the responsibility of state authorities, central government agencies have an important role, not least because they are responsible for formulation of national policies and acts, establishing nation-wide priorities and targets for poverty reduction. They also finance large centrally supported schemes for agriculture and rural development (e.g., livestock insurance scheme, national agriculture development programme, national rural employment guarantee act, etc). The Fund has not devoted sufficient reflection in the past on whether and in what manner the organisation could develop a more engaging partnership with the central Government in supporting the development of pro-poor national policies (e.g., national policy for farmers, 2007) and priorities in the agriculture and rural sectors (see paragraphs 122, 164 and 231). 258. IFAD supervision and country presence. The evaluation concurs with the recent move to direct supervision and implementation, even though there are resource issues that need consideration, especially given the size of the ongoing portfolio in the country. Similarly, good efforts have been made to establish a country presence in India since 2001, which is growing and involved in a range of activities related to the country strategy and programme management. There are challenges however in the current arrangements and the impact it can truly have especially in terms of implementation support, partnership building, policy dialogue, knowledge management, and donor co-ordination is limited - given the level of delegation of authority as well as the size and complexity of the country programme. According to the CPE, a strengthened country presence in India would not only contribute to achieving better results in the country, but it could also possibly play a wider role in the sub-continent in terms of enhancing efficiency and improving performance in selected countries in the region as well. The evaluation also concludes that overall the hosting arrangements by WFP may no longer be the most attractive option moving forward for IFAD country presence, partly due to the forthcoming cost increases for services rendered by WFP as well as the limited space available. The temporary nature of staff contracts does not provide required job security and incentives for further enhancing performance (see paragraphs 189-191). 259. Moving forward. In light of the above, what role could a relatively small organisation such as IFAD play in India, especially taking into account that in the near future the Fund may no longer be able to lend to the country on highly concessional terms? The CPE recommendations in the next section provide some broad directions for Government and IFAD to consider in taking forward its partnership in the context of developing the next COSOP. Moreover, an eventual increase in the lending terms could be offset by a renewed vision and emphasis for the partnership between India and the Government, one which would also build on the Fund’s comparative advantage, track record and specialisation in the Indian context over the past 30 years.

B. Recommendations

260. The CPE offers the below broad recommendations for IFAD and the Government to consider in the development of the new India COSOP and future projects and programmes. The recommendations are clustered in two broad categories: strategic and operational issues. Strategic Issues 261. Give more priority to smallholder agriculture. Sustainable smallholder agriculture should be included as a central strategic objective in the new COSOP, as an engine for promoting pro-poor growth and reducing hunger and rural poverty. Among other issues, this would include an emphasis on promoting the viability and risk-management of farming activities by smallholder farmers, with specific attention to rainfed areas with emphasis also on in-situ water conservation, livestock development, and crop production, including staple cereal and pulse productivity (see paragraphs 245-246). 262. Targeting and reduced geographic coverage. In terms of targeting, it is recommended that in future IFAD should devote greater emphasis smallholder farmers, but also continue to support rural

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women and tribals. The geographic focus should in principle be narrowed to a smaller group of states, and not expanded beyond the 11 states covered by ongoing operations. Also two-state projects through one loan and one supervision budget should be avoided in the future. However, the CPE recognises that national programmes that focus on knowledge management and policy dialogue may be pertinent moving forward, as they can contribute towards promoting the innovation and upscaling agenda of the Government and IFAD (see paragraphs 241 and 252). 263. Given IFAD’s positive experiences in India and other countries (e.g., the Philippines), opportunities to work in conflict areas could be pursued in consultation with Government. This will however require projects to include crisis prevention measures (e.g., flexibility in terms of project area coverage), and adequate expertise will need to be mobilised for supervision and implementation support purposes (see paragraphs 126 and 241). 264. Enhance private sector engagement in line with corporate social responsibility principles. The partnership with the private sector should be enhanced further, for example with agriculture-related entrepreneurs, who can among other issues deliver rural finance and extension services to the rural poor, provide input supply and access to agro-processing infrastructure, facilitate transport of agricultural produce to market points, promote innovations and upscaling, make information and communication technology more widely available in rural areas, and so on (see paragraph 248). 265. Innovation with deeper attention to replication and upscaling. The main aim of IFAD-funded projects and programme in India in the future should be to promote pro-poor innovations that can be replicated and upscaled by Government, other donors, the private sector, and others. It is therefore recommended that the new COSOP include a well-defined innovations agenda, which would outline the areas that merit to be prioritised. Some examples of the agenda include promoting innovations in micro-finance (e.g., to enable crop insurance, transfer of remittances to the poorest), pro-poor drought and pest resistant agriculture technology, and use of information and telecommunications to link the poor to markets. Moreover, the country strategy should make explicit the approach that will be pursued for replication and upscaling, as this is the ultimate aim of IFAD’s capability to promote innovative approaches. Opportunities for developing and strengthening partnerships with national institutions, such as the Indian Council for Agricultural Research, but also the private sector including foundations95, for the implementation of this recommendation should be actively explored. Similarly, partnership with NGOs and other rural institutions need to be further expanded in order to scout for, develop, pilot test and assess innovations emerging from the grassroots level (see paragraphs 239 and 254). 266. Launch a coherent knowledge programme. The new COSOP should include a distinct and clearly resourced knowledge programme. One of the key aims of the programme would be to fill any knowledge gaps on agriculture and rural development and more generally in rural poverty reduction in the country. It could be funded by grants, but also supported by individual operations financed through loans. This programme could contribute to a wider PI initiative together with other IFAD regional divisions to systematically exchange knowledge on rural poverty reduction drawing upon the experiences, lessons learned, and good practices from the Fund’s operations in other countries and regions, especially in other middle income countries (e.g., Argentina, Brazil, China, and Morocco). 267. The programme could include, inter-alia, activities to document and share experiences from IFAD’s own experience in India, distillation and promotion of relevant lessons and experiences from IFAD operations in other countries that may be of relevance to the India country programme, promotion of exchange visits by Government officials, project staff and members of civil society and NGOs to IFAD-financed projects within and outside India. Another option could be the organisation of thematic workshops in India with prominent guest speakers and other resource persons from other countries with international expertise and reputation in agriculture and rural development issues,

95 For example, National Innovation Foundation.

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focusing on those areas that may be constraining rural poverty reduction in the country at any particular juncture (see paragraphs 244 and 256). 268. Seek deeper convergence with Government. A very large amount of resources are allocated by the central and state governments for agriculture and rural development activities. If this funding is to be efficiently used, there must be greater convergence within Government-funded programmes, and between operations and other donor-funded activities and Government-assisted programmes. Among other issues, this will require in-depth analysis during project design of other ongoing or planned development initiatives in the districts to be covered by IFAD-supported projects. The aim would be to ensure complementarities in objectives and activities between IFAD-funded and Government-financed agriculture and rural development projects and programmes. One way of ensuring convergence is to link project management units more directly with state and district administrations, so convergence can be facilitated during project execution. Further, IFAD-supported projects should build and strengthen the communities’ capacities to access the available schemes of different Government’s departments (see paragraph 247). 269. Widen partnership with central Government. IFAD needs to engage more proactively with the central Ministry of Agriculture and other Ministries to leverage their expertise and experience to focus on some of the important areas that help achieve sustainable livelihoods in the agricultural sector. These agencies also play an important role in national policy formulation and legislation, co-ordination and monitoring and evaluation, as well as in financing large and important centrally supported schemes. Among other issues, a wider partnership with key central Ministries can provide an opportunity for the Fund to contribute towards shaping the design of centrally supported schemes and national policies and acts, building on IFAD’s own priorities and experiences in the country. For example, partnership with the Ministry of Agriculture needs development. While there is some collaboration with the Ministry of Tribal Affairs and Ministry of Women and Child Development, these too could be further expanded. Opportunities to also establish partnership with the Ministry of Rural Development should be explored, as they are responsible for a number of centrally supported schemes of relevance to IFAD, such as the National Rural Employment Guarantee Act and Bharat Nirman (a business plan for promoting rural infrastructure including roads and irrigation), but also take the lead in all matters related to Panchayati Raj institutions. Further, IFAD should encourage exposure visits of central Government officials to project areas (see paragraph 257). 270. Ensure ownership and commitment with state governments. State governments need to be involved from the very beginning of project design to ensure that they take full responsibility of the activities and act on the issues that IFAD-supported operations are recurrently facing. In particular, state governments should ensure: (i) smooth flow of funds; ii) timely provision of counterpart funds; (iii) their direct participation in Joint Review Missions; (iv) timely follow-up on agreed recommendations; (v) ensure competitive and attractive salaries and allowances, including their timely adjustments, so as to recruit and retain highly qualified project staff, including NGO staff; and (vi) and last but not least, continuity of tenure of Project Directors and key-management staff (see paragraph 252). 271. Increase loan size. IFAD should consider increasing the average loan size of the operations in the country and undertaking fewer projects in the next COSOP cycle. This would contribute to lowering transaction and administrative costs for both Government and IFAD, while allowing greater attention to implementation support, learning, and impact achievement in general. Such a shift is expected to improve the overall quality of the country programme, and also free up time and resources for greater attention to non-lending activities in the future. Acknowledging the difficulties being occasionally faced in loan disbursements, larger loan size will have implications for targeting and absorptive capacities, and ways will need to be found in future projects to address the corresponding implications. Few examples should be considered: (i) greater investments may be made in rural infrastructure including, inter alia, renewable energy technologies, communications and small scale irrigation, which is essential for agriculture and rural development in line with IFAD’s targeting policy of 2006; (ii) adoption of a saturation approach in targeting of the poorest families at village and

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block level; and (iii) ensuring provision for an adequate project implementation period of around 8 years. Given the size of the programme, the country and the number of rural poor, it is recommended that financing larger projects should not result in a commensurate cut in IFAD’s administrative budget allocated towards country programme management (see paragraphs 244 and 252). Operational Issues 272. Strengthen the India country office. There is a need to further strengthen the IFAD country office in India. In general, a strengthened country office is required to enhance project supervision and implementation support, improve policy dialogue, strengthen cooperation and harmonisation with other donors, and further facilitate follow-up on supervision and mid-term review decisions. This would also contribute towards implementation of the CPE recommendations related to the knowledge programme, as discussed in paragraph 266 above. 273. The role, priorities and organisation of the India country office will need to be reconsidered in developing the new COSOP and implementing the CPE recommendations. This is because the new COSOP is expected to introduce additional priorities and activities, such as a wider focus on smallholder agriculture, a more coherent knowledge programme and systematic engagement in policy dialogue. In this regard, the opportunities, challenges and budgetary implications of out posting the India CPM should be examined in order to bring full decision making and follow-up actions related to IFAD operations closer to the country level. The core personnel of the country presence office in New Delhi should eventually be enhanced through the addition of an agriculture and rural development economist to contribute to the analytic work required for the preparation of project and programmes as well as the supervision and implementation support. Country office staff should be provided with fixed-term contracts and better mainstreamed into IFAD's overall work force, to provide greater job security and incentives and improve performance. The current hosting arrangements with WFP should be reconsidered, especially in light of the cost escalation in services charged by WFP, and the merits of hiring alternative premises analysed. For example, the possibility of finding premises closer to or within the UN complex or World Bank office would facilitate dialogue and cooperation with other donors. The office infrastructure also needs upgrading, for example, in terms of space and information technology facilities, which are currently constraining the work of the office, inter alia, such as the access to IFAD databases and reports at headquarters. The strengthening of the country office will have important resource implications that would need to be considered to ensure the office’s effectiveness and its ability to contribute to the achievement of COSOP objectives. 274. The Agreement at Completion Point of the evaluation on the Field Presence Pilot Programme, discussed by the Board in September 2007, contains a recommendation for IFAD to experiment with sub-regional offices. Recognising this recommendation might have some corporate implications for IFAD to consider, the CPE recommends that, as a contribution to the forthcoming IFAD country presence policy to be developed in 2011, consideration be given to establishing the India country office as a sub-regional office. The idea would be to establish an office which could cover a number of countries in the region - in addition to India - that can be efficiently and feasibly covered from New Delhi, such as Afghanistan, Bhutan, Maldives, Myanmar, Nepal, Sri Lanka, and others. The CPE recognises that the eventual establishment of a sub-regional office would require consultations with the representatives of the neighbouring countries to be covered from the India office. 275. The sub-regional office is expected to contribute towards lowering IFAD’s overall administrative costs of managing the various country programmes, facilitate knowledge sharing among staff and the countries covered by the office, and bring IFAD closer to the action on the ground. This recommendation would be consistent with the approach followed by several multilateral organisations (e.g., WHO, UNIFEM, UNESCO, ILO, UNIDO and others), whose New Delhi offices cover their activities in other countries in the region. Obviously, the establishment of an IFAD sub-regional office would have implications in terms of organisation and structure, management and responsibilities, and resources, in addition to those mentioned under paragraphs 30-31 concerning the strengthening of the India country office (see paragraphs 256-258).

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276. Ensure greater continuity in project directors. Rapid turn-over of some project directors remains a critical issue in IFAD-funded projects and programmes, particularly in the early phases of implementation. While this is a systemic concern for IFAD and other multilateral development organisations in India, IFAD should reach a written agreement right at the beginning of project design with the state governments that qualified Project Directors will remain in their positions for at least three years and preferably longer. Failing this agreement, IFAD should consider alternatives including, inter alia, recruiting from the open market or deputing senior level staff from established civil society organization. These agreements with state governments should be captured in the Financing Agreements and monitored and enforced by Central Government (see paragraph 252). 277. The need to improve project efficiency. There is scope for improving the efficiency of IFAD-funded projects and programmes in the country. Some of the measures recommended above are expected to ensuring better efficiency, such as limiting the coverage of projects to one state, and by ensuring deeper convergence between the IFAD and Government programmes. However, there are other measures that should be deployed to improve efficiency, including streamlining the flow of funds to limit implementation delays, strengthening the capacity in the project management unit but also state governments in procurement and other loan administration issues, and ensuring the assignment and continuity of staff to the project with adequate expertise and experience in project management (see paragraph 251). 278. Resource issues. Among other issues, greater attention in the future to non-lending activities, implementation support, mobilisation of expertise in conflict-resolution, upscaling of innovations, deeper engagement with the Central Government and the private sector, and the strengthening of the existing country office and establishment of a sub-regional office in India are likely to have additional recurrent administrative resource implications to IFAD, both in terms of staff time and finances. It is therefore recommended that the management conduct a detailed cost analysis during the formulation of the next COSOP and make the necessary allocations commensurate with the size, focus and coverage of IFAD-supported activities in the country. The additional resources are critical if the CPE recommendations are to be fully implemented, in order to achieve more far-reaching development results on the ground (see paragraphs 254 and 256-258). 279. Evaluation capacity development. In close collaboration with the Asia and the Pacific Division, IOE will explore opportunities for supporting the Planning Commission’s efforts to establish an independent evaluation outfit in India. Given its mandate and specialisation, IFAD’s contribution will be restricted to evaluation capacity development in the agriculture and rural sectors. This will include initiatives to further enhance project-level monitoring and evaluation systems, so that they are also equipped to effectively collect, analyse and report on results and impact in addition to the achievement of physical and financial targets (see paragraph 253).

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India CPE (Evaluation) Framework1

Key Questions Main sources of data and

information Portfolio Performance

Project Relevance • Are project objectives realistic and consistent with India’s national agriculture and rural development strategies and policies, the COSOP and relevant IFAD sector and sub sector policies, as well as the needs of the rural poor? • Was the project design (including synergies among activities and services, financial allocations, project management and execution, supervision and implementation support, and monitoring and evaluation arrangements) appropriate for achieving the project’s core objectives? • How coherent was the project in terms of its fit with the policies, programmes and projects undertaken by the Government and other development partners in India? • Was the project design participatory in the sense that it took into consideration the inputs and needs of key stakeholders, including the Government, executing agencies, co-financiers and the expected beneficiaries and their grassroots organizations? • Did the project benefit from available knowledge (for example, the experience of other similar projects in the area or in the country) during its design and implementation? • Did project objectives remain relevant over the period of time required for implementation? In the event of significant changes in the project context or in IFAD policies, has design been retrofitted? • What are the main factors that contributed to a positive or less positive assessment of relevance?

Project Effectiveness • To what extent have the objectives of the project and its components been attained both in quantitative and in qualitative terms? • If the project is not yet complete, is it likely that so far unattained objectives may be accomplished in full/in part before its closure? • What factors in project design and implementation account for the estimated results in terms of effectiveness? • In particular, what changes in the overall context (e.g., policy framework, political situation, institutional set-up, economic shocks, civil unrest, etc.) have affected or are likely to affect project implementation and overall results?

Project Efficiency

• What are the costs of investments to develop specific project outputs (e.g., what is the cost of constructing one kilometre of rural road)? The quality of works/supplies needs to be fully (and explicitly) recognized for such input/output comparisons. • Is the cost ratio of inputs to outputs comparable to local, national or regional benchmarks? • What are the loan costs per beneficiary (both at the time of appraisal and at the time of evaluation) and how do they compare to other IFAD-funded operations (or those of other donors) in the same country and/or other countries?

Government of India Plans; IFAD policy statements and India COSOPS. Interviews with IFAD managers, GOI and project officials. Evaluations of completed projects, Project Completion Reports, Mid-term reviews and supervision reports. Surveys of project beneficiaries. Evaluations of completed projects, Project Completion Reports, Mid-term reviews and supervision reports. Surveys of project beneficiaries. Interviews with project managers.

1 The questions in the appendix are essentially a generic list developed for all IFAD CPEs. While they are not all equally relevant in the India case they provide a useful ex ante check-list and have therefore been included. In addition a number of specific issues that are of concern in the India context have been added to the framework.

AP

PE

ND

IX 1

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India CPE (Evaluation) Framework

Key Questions

Main sources of data and information

Portfolio Performance

• How does the economic rate of return at evaluation compare with project design? • What are the administrative costs per beneficiary and how do they compare to other IFAD-funded operations (or those of other donors) in India of other countries, especially in South Asian Countries? • A number of IFAD projects have had substantial delays in effectiveness? What has been the cause of these delays and how costly have these delays been? • By how much was the original closing date extended, and what were the additional administrative costs that were incurred during the extension period? • What factors helped account for project efficiency performance?

Rural Poverty Impact I. Household income and assets • Did the composition and level of household incomes change (more income sources, more diversification, higher income)? • What changes are apparent in intra-household incomes and assets? • Did farm households’ physical assets change (farmland, water, livestock, trees, equipment, etc.)? Did other household assets change (houses/pucca houses, bicycles, radios, television sets, telephones, etc.)? • Did households’ financial assets change (savings, debt, borrowing, insurance)? • Were the rural poor able to access financial markets more easily? • Did the rural poor have better access to input and output markets? • Do the better health and education promoted by the programme allow the rural poor to obtain higher incomes and more assets? II. Human and social capital and empowerment • Did rural people’s organizations and grassroots institutions (such as SHGs, water user groups) change?• Were the SHGs established under the project effective in empowering women in the community and promoting gender equity? • Are changes in the social cohesion and local self-help capacities of rural communities visible? • To what extent did the project empower the rural poor vis-à-vis development actors and local and national public authorities? Do they play more effective roles in decision-making? Did the devolution process facilitated by the project? • Were the rural poor empowered to gain better access to the information needed for their livelihoods? • Did the rural poor gain access to better health and education facilities? • Two important social areas - youth and migration – have not figured prominently in IFAD’s programme in India. Should there have been a greater effort to integrate these issues into the programme? III. Food security and agricultural productivity • Did cropping intensity change? Was there an improvement in land productivity and, if so, to what extent? Did the returns to labour change? How many tribal households have transferred from subsistent shifting cultivation to economic agricultural activities? Did children’s nutritional status change (e.g., stunting, wasting, underweight)?

Evaluations of completed projects, Project Completion Reports, Mid-term reviews and supervision reports. Surveys of project beneficiaries. Interviews with beneficiaries and project managers.

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Key Questions

Main sources of data and information

Portfolio Performance

• Did household food security change? • To what extent did the rural poor improve their access to input and output markets that could help them enhance their productivity and access to food? IV. Natural resources and the environment • Did the status of the natural resources base change (land, water, forest, pasture, fish stocks, etc.)? In tribal development, how many shifting cultivation land were treated with sound conservation measures? • Did local communities’ access to natural resources change (in general and specifically for the poor)? • Has the degree of environmental vulnerability changed (e.g., exposure to pollutants, climate change effects, volatility in resources, potential natural disasters)?• Have the projects facilitated the implementation of policies and legislation such as those relating to the access of the poor to natural resources, adaptation to climate change, and the protection of biodiversity? V. Institutions and policies • Were there any changes in rural financial institutions (e.g., in facilitating access for the rural poor)? • How did public institutions and service delivery for the rural poor change? • What improvements were discernable in local governance, including the capacity and role of government departments, NGOs, the private sector, and elected bodies and officials? • Were there any changes in national/sectoral policies affecting the rural poor? • Did the regulatory framework change insofar as its impact on the rural poor? • Did market structures and other institutional factors affecting poor producers’ access to markets change? Note: For each domain, the evaluation should describe the impact achieved and also the underlying reasons (i.e., the “why” factor) behind the observed or expected changes.

Project Sustainability • Was a specific exit strategy or approach prepared and agreed upon by key partners to ensure post project sustainability? • What are the chances that benefits generated by the project will continue after project closure, and what factors militate in favour of or against maintaining benefits? What is the likely resilience of economic activities to shocks or progressive exposure to competition and reduction of subsidies? • How robust are the institutions that have been established under IFAD projects, and are they likely to be able to ensure the continuation of benefits to the rural poor? • Is there a clear indication of Government commitment after the loan closing date, for example, in terms of provision of funds for selected activities, human resources availability, continuity of pro-poor policies and participatory development approaches, and institutional support? Did the IFAD project design anticipate that such support would be needed after loan closure?

Visits to sites of completed projects and interviews with beneficiaries and project managers. In selected cases consideration will be given to commissioning new surveys.

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Key Questions Main source of data and


• Do project activities benefit from the engagement, participation and ownership of local communities, grassroots organizations, and the rural poor? • Did the NGOs involved continue their support to village organizations after project closure? • Are adopted approaches technically viable? Do project users have access to adequate training for maintenance and to spare parts and repairs? • Are the ecosystem and environmental resources (e.g., fresh water availability, soil fertility, vegetative cover) likely to contribute to project benefits or is there a depletion process taking place? • IFAD is one of the few agencies that have operated in conflict situations in India. Are there lessons from IFAD’s involvement in such situations?

Innovations, Replication and Scaling Up • What are the characteristics of innovation(s) promoted by the project or programme? Are the innovations consistent with the IFAD definition of this concept? • How did the innovation originate (e.g., through the beneficiaries, Government of India, IFAD, NGOs, research institution, etc) and was it adapted in any particular way during project/programme design? • Are the actions in question truly innovative or are they well-established elsewhere but new to the country or project area? • Were successfully promoted innovations documented and shared? Were other specific activities (e.g., workshops, exchange visits, etc.) undertaken to disseminate the innovative experiences? • Have these innovations been replicated and scaled up and, if so, by whom? If not, what are the realistic prospects that they can and will be replicated and scaled up by the Government, other donors and/or the private sector?

Performance of Partners

IFAD • Did IFAD mobilize adequate technical expertise in the project design? • Was the design process participatory (with national and local agencies, grassroots organizations) and did it promote ownership by the borrower? • Were specific efforts made to incorporate the lessons and recommendations from previous independent evaluations in project design and implementation? • Did IFAD adequately integrate comments made by its quality enhancement and quality assurance processes? • Did IFAD (and the Government) take the initiative to suitably modify project design (if required) during implementation in response to any major changes in the context, especially during the MTR? • What was the performance of IFAD in projects that are under direct supervision and implementation support? In the case of the supervision of a cooperating institution, how effective was IFAD in working with the institution to carry out the mandated task? In both cases, has IFAD exercised its developmental and fiduciary responsibilities, including compliance with loan and grant agreements?

Interviews with GOI and state and local governments. In depth reviews of project documents. Discussions with IFAD managers. Interviews with partner agencies, NGOs and IFAD managers.

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•Was prompt action taken to ensure the timely implementation of recommendations stemming from the supervision and implementation support missions, including the MTR? • Did IFAD undertake the necessary follow-up to resolve any implementation bottlenecks? • Where applicable, what is the role and performance of IFAD’s country presence team in India (including proxy country presence arrangements)? Did IFAD headquarters provide the necessary support to its country presence team, for example, in terms of resources, follow-up and guidance, adequate delegation of authority, and so on? • Has IFAD made proactive efforts to be engaged in policy dialogue activities at different levels in order to ensure, inter alia, the replication and scaling up of pro-poor innovations? • Has IFAD been active in creating an effective partnership and maintaining coordination among key partners to ensure the achievement of project objectives, including the replication and scaling up of pro-poor innovations? • Has IFAD, together with the Government, contributed to planning an exit strategy? Government of India • Has the Government assumed ownership and responsibility for the project? Judging by its actions and policies, has the Government, including national, state and local governments, been fully supportive of project goals? • Has adequate staffing and project management been assured? Have appropriate levels of counterpart funding been provided on time? • Has project management discharged its functions adequately, and has the Government provided policy guidance to project management staff when required? • Did the Government ensure suitable coordination of the various departments involved in execution? • Has auditing been undertaken in a timely manner and have reports been submitted as required? • Did the Government (and IFAD) take the initiative to suitably modify the project design (if required) during implementation in response to any major changes in the context? • Was prompt action taken to ensure the timely implementation of recommendations from supervision and implementation support missions, including the MTR? • Has an effective M&E system been put in place and does it generate information on performance and impact which is useful for project managers when they are called upon to take critical decisions? • Has the Government (and IFAD) contributed to planning an exit strategy and/or making arrangements for continued funding of certain activities? • Have loan covenants and the spirit of the loan agreement been observed? • Has the Government facilitated the participation of NGOs and civil society where appropriate? • Have the flow of funds and procurement procedures been suitable for ensuring timely implementation? • Has the Government engaged in a policy dialogue with IFAD concerning the promotion of pro-poor innovations?

Interviews with GOI officials and IFAD managers.

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Cooperating Institution• Should there have been greater involvement of partners such as the UN agencies and other development agencies in the design, financing and implementation of the programme? • Has the supervision and implementation support programme been properly managed (frequency, composition, continuity)? • Has the cooperating institution complied with loan covenants? • Has the cooperating institution been effective in financial management? • Has the cooperating institution sought to monitor project impacts and IFAD concerns (e.g., targeting, participation, empowerment of the poor and gender aspects)? • Have implementation problems been highlighted and appropriate remedies suggested? Have the suggestions and related actions been followed in the next supervisions? • Has the cooperating institution promoted or encouraged self-assessment and learning processes? • Has the supervision process enhanced implementation and poverty impacts? • Has the cooperating institution been responsive to requests and advice from IFAD when carrying out its supervision and project implementation responsibilities? Community-Based Organizations (CBOs) and NGOs • How effectively have NGOs fulfilled their contractual service agreements? • Have NGOs/CBOs acted to strengthen the capacities of rural poor organizations? • Did NGOs/CBOs contribute to the sustainability of project activities?

Interviews with representatives of cooperating institutions. Project Completion Reports, Mid-term Reviews and evaluations of completed projects.

Non-lending Activities

Relevance

• Are policy dialogue, partnership-building, and knowledge management objectives clearly outlined in the COSOP? Are they in line with the needs of the poor and are they consistent with the strategic objectives of the COSOP and lending operations, as well as with the Government’s priorities? • Do the selected non-lending activities provide sufficient support for country programme objectives as per COSOP, as well as the loan portfolio in the country? • Were resources earmarked for non-lending activities and explicitly outlined in the COSOP (e.g., in the form of grants and/or the IFAD administrative budget)? • Was the selected mix of policy dialogue, partnership-building and knowledge management appropriate and relevant? • Were the advisory services delivered by other partners taken into account in selecting the focus of non-lending work?

Review of IFAD documentation on non-lending activities. Discussions with counterparts responsible for implementing these activities.

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information Non-lending Activities

Effectiveness

• Describe the extent to which non-lending activities achieved their objectives if they were explicitly articulated. • How did non-lending activities contribute to the replication and scaling up of innovation promoted by IFAD? • Has IFAD systematically engaged in and contributed to the deliberations of donor working groups related to agriculture, food issues and rural development? • How much progress has been made as a result of non-lending activities in furthering the application of the provisions contained in the Paris Declaration on Aid Effectiveness in terms of ownership, alignment, donor coordination and harmonization, managing for results and mutual accountability? • With regard to knowledge management, was the COSOP’s strategic objectives and project design and implementation properly informed by IFAD experiences in India and elsewhere? • Were the most appropriate approaches deployed to achieve the desired results? • What have been the roles of the IFAD country representative, where applicable, and of the main Government institutions in making non-lending services effective?

Efficiency

• Could alternative instruments and activities be implemented to reduce costs in non-lending activities? • What were the costs of the different types of non-lending activities and how do they compare to IFAD benchmarks (where available)? • Was the administrative burden on country officials minimized?

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Key Questions Main sources of data

and information COSOP Performance

Relevance Assessment of the alignment of strategic objectives • Were the objectives set out in the COSOP consistent with the overarching objectives of the prevailing IFAD strategic framework and relevant corporate policies? • Were the strategic objectives identified in the COSOP consistent with the Government’s strategies and policies, such as the PRSP and agricultural sector framework, for agriculture and rural development as well as economic and social development? • Were the strategic objectives clearly defined and suitable for achieving sustainable rural poverty reduction? Was the basic approach adopted by IFAD, focused on support for women and socially excluded groups, too narrowly defined in terms of a broad strategy for rural poverty reduction? Should there have been an attempt to encompass issues such as youth, migration and addressing conflict in the rural areas? • Did the poverty analysis (economic and sector work) provide an adequate basis for the development of overall strategy, including the selection of the main elements of the COSOP (refer to Evaluation Manual)? • Are the strategic objectives aligned with the priorities of other bilateral and multilateral donors working in agriculture and rural development in the same country? If other donors pursued other priorities, should they have been convinced to align with IFAD? Evaluating the coherence of the main elements of the COSOP • Did the strategy succinctly articulate IFAD’s comparative advantage and competencies in the country (i.e., country positioning)? • Were the target groups clearly identified in terms of the nature of the assistance that IFAD would provide? • Did IFAD select the most appropriate subsectors for investments? • Were the geographic priorities defined in the strategy consistent with the definition of the target groups? • Were the main partner institutions (e.g., for project execution, supervision and implementation support, community mobilization, co-financing) the correct ones for meeting the country strategy objectives? • Were specific objectives defined and resources allocated for non-lending activities, including policy dialogue, partnership-building and knowledge management? • Were appropriate synergies foreseen within and among investment activities and between lending and non-lending activities? That is, did IFAD’s overall assistance constitute a coherent country programme? For example, in terms of supervision and implementation support, the roles of the country programme management team and country presence arrangements. Country positioning is a measure of how well the organization responded to (or even anticipated) the evolving development challenges and priorities of the Government, built on the organization's comparative advantages, and designed its country strategies and programmes in a manner that took into consideration the support available from other development partners. • Did IFAD assess the extent to which the global policy environment (trade, migration, etc.) and exogenous factors (e.g., climate change, exposure to natural disasters) should guide the choice of lending and non-lending instruments and the priorities for IFAD engagement through lending and non-lending services?

Review of COSOP. Interviews with GOI and IFAD managers.

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Key Questions Main sources of data

and information COSOP Performance

Country programme management and COSOP management • Did the Fund and Government of India select appropriate supervision and implementation support arrangements? • How did country presence support the COSOP strategic objectives? Was the most suitable country presence arrangement established in the country? • Were lessons learned and recommendations set forth in independent evaluations properly reflected in the country strategy? • Were sufficient administrative and human resources made available for the implementation of the country strategy by both IFAD and the Government? • Did the CPM and country presence officer have appropriate skills and competencies to promote the policy dialogue and partnership-building objectives identified in the COSOP? • What is the quality of the COSOP results management framework, project status reports, and aggregated RIMS reports and country programme sheets? Were Management actions in connection with this information system appropriate? • Was the COSOP monitoring and evaluation performed properly? Were annual country programme reviews undertaken in a timely manner and were the corresponding recommendations implemented within the required time frames? • As the COSOP is dynamic, was it modified to reflect changes at the country level? • Did the CPMT concept function appropriately and make the required contribution to country programme management?

Effectiveness

• To what extent were the main strategic objectives included in the COSOP achieved? • If a new COSOP is not yet foreseen, is it likely that so far unattained objectives may be achieved in full or in part? • What changes in the context have influenced or are likely to influence the fulfilment of the strategic objectives? Was the COSOP properly adapted mid-course to reflect changes in the context? • Did the Fund devote sufficient attention and resources to promoting effectiveness?

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APPENDIX 2 Definition of Evaluation Criteria Applied in the CPE

Criteria DefinitionA

Project performance

Relevance The extent to which the objectives of a development intervention are consistent with beneficiaries’ requirements, country needs, institutional priorities and partner and donor policies. It also entails an assessment of project coherence in achieving its objectives.

Effectiveness The extent to which the development intervention’s objectives were achieved, or are expected to be achieved, taking into account their relative importance.

Efficiency A measure of how economically resources/inputs (funds, expertise, time, etc.) are converted into results.

Rural poverty impactB

Impact is defined as the changes that have occurred or are expected to occur in the lives of the rural poor (whether positive or negative, direct or indirect, intended or unintended) as a result of development interventions.

Household income and assets Household income provides a means of assessing the flow of economic benefits accruing to an individual or group, whereas assets relate to a stock of accumulated items of economic value.

Human and social capital and empowerment Human and social capital and empowerment include an assessment of the changes that have occurred in the empowerment of individuals, the quality of grassroots organizations and institutions, and the poor’s individual and collective capacity.

Food security and agricultural productivity Changes in food security relate to availability, access to food and stability of access, whereas changes in agricultural productivity are measured in terms of yields.

Natural resources and the environment

The focus on natural resources and the environment involves assessing the extent to which a project contributes to changes in the protection, rehabilitation or depletion of natural resources and the environment.

Institutions and policies

The criterion relating to institutions and policies is designed to assess changes in the quality and performance of institutions, policies and the regulatory framework that influence the lives of the poor.

Other performance criteria Sustainability

The likely continuation of net benefits from a development intervention beyond the phase of external funding support. It also includes an assessment of the likelihood that actual and anticipated results will be resilient to risks beyond the project’s life.

Promotion of pro-poor innovation, replication and scaling up

The extent to which IFAD development interventions have: (i) introduced innovative approaches to rural poverty reduction; and (ii) the extent to which these interventions have been (or are likely to be) replicated and scaled up by government authorities, donor organizations, the private sector and others agencies.

Overall project achievement This provides an overarching assessment of the project, drawing upon the analysis made under the various evaluation criteria cited above.

Performance of partners IFAD Government Cooperating institution NGO/CBO

This criterion assesses the contribution of partners to project design, execution, monitoring and reporting, supervision and implementation support, and evaluation. The performance of each partner will be assessed on an individual basis with a view to the partner’s expected role and responsibility in the project life cycle.

A. These definitions have been taken from the Organisation for Economic Co-operation and Development/Development Assistance Committee Glossary of Key Terms in Evaluation and Results-Based Management and from the IFAD Evaluation Manual (2009). B. It is important to underline that the IFAD Evaluation Manual also deals with the “lack of intervention”. That is, no specific intervention may have been foreseen or intended with respect to one or more of the five impact domains. In spite of this, if positive or negative changes are detected and can be attributed in whole or in part to the Project, a rating should be assigned to the particular impact domain. On the other hand, if no changes are detected and no intervention was foreseen or intended, then no rating (or the mention “not applicable”) is assigned.

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APPENDIX 3

Bibliography General references: Asian Development Bank, Asian Development Outlook, 2008

Asian Development Bank, India Country Strategy and Program Update 2006 - 2008, Manila, 2005

Asian Development Bank, Key Indicators of Developing Asian and Pacific Countries, 2007

Department for International Development, India Country Plan 2008 - 2015: ‘Three Faces of India’, London, 2008

European Commission, India: Country Strategy Paper 2007 - 2013, Brussels, 2008

GTZ Sustainet, Sustainable agriculture: A pathway out of poverty for India’s rural poor, Eschborn, 2006

Hans P. Binswanger-Mkhize, Jacomina P. de Regt, and Stephen Spector, Scaling Up Local & Community Driven Development (LCDD), A Real World Guide to Its Theory and Practice, 2009

IFPRI, Indian Agriculture and Rural Development: Strategic Issues and Reform Options, Washington DC, 2005

IMF, India: 2007 Article IV Consultation - Staff Report, Staff Statement, Public Information Notice on the Executive Board Discussion and Statement by the Executive Director for India, Washington DC, 2007

Kakwani N., Poverty measurement matters: an Indian story, Brasilia, United Nations Development Programme, International Poverty Centre, 2004

Kumar Arun, World Bank rural finance scheme to help Indian farmers, newKerala.com, Washington, 9 June 2009

Mahub ul Haq, Human Development in South Asia 2002: Agriculture and Rural Development, Karachi, Oxford University Press, Human Development Centre, 2003

OECD, Agricultural Policies in Non-OECD Countries: Monitoring and Evaluation, Paris, 2007

OECD, International Development Statistics, 2008

Shah A. and Guru B., Poverty in Remote Rural Areas in India: A Review of Evidence and Issues, Working Paper No. 139, Ahmedabad, Gujarat Institute of Development Research, 2003

Singh R.P., Kumar R. and Singh N.P., Economic Growth and Sustainability in North-East Region of India: A Perspective, Journal of Rural Development, 2005, 24 (1): 89-104

Srivastava P., Poverty Targeting in Asia: Country Experience in India, Discussion Paper No. 5, Tokyo, ADB Institute, 2004

Srivastava N. and Sharma P. (eds), Protecting the Vulnerable Poor in India: The Role of Social Safety Nets, New Delhi, World Food Programme, 2006

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Sundaram K. and Tendulkar S. D., Poverty in India, An Assessment and Analysis, Manila, Asian Development Bank, 2003

Swedish International Development Cooperation Agency, Country strategy: India 2005 - 2009, Stockholm, 2005

The Economist Intelligence Unit, India Country Profile, London, 2008

UNDP, Country Programme for India (2008 - 2012), New York, 2007

UNDP, Human Development Report 2007 - 2008, New York, 2008

USAID/India, Strategy 2003 - 2007, Washington DC

World Bank, India Country Briefings & Country Overview, 2007

World Bank, Country Strategy for India 2005 - 2008, Washington DC, 2004

World Bank, Development Policy Review, Inclusive Growth and Service Delivery: Building on India’s Success, Washington DC, 2006

World Bank, India: Re-energizing the Agricultural Sector to Sustain Growth and Reduce Poverty, Washington DC, 2004

World Bank, World Development Indicators, India, 2008

World Bank, World Development Report: Agriculture for Development, Washington DC, 2008

Government of India policies and strategies:

Bharat Nirman, A time-bound plan for rural infrastructure by the Government of India in partnership with State Governments and Panchayat Raj Institutions 2005 - 2009, Ministry of Rural Development, 2005

Ministry of Agriculture, Department of Agriculture & Cooperation, National Agriculture Policy, 2000

Ministry of Agriculture, National Agriculture Development Programme (Rashtriya Krishi Vikas Yojana - RKVY), 2007

Ministry of Agriculture, National Food Security Mission, 2007

Ministry of Agriculture, National Policy for Farmers, 2007

Ministry of Environment and Forests, National Forest Policy, 1988

Ministry of Law and Justice, The Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989

Ministry of Rural Development, National Rural Employment Guarantee Act-2005, 2005

Ministry of Rural Development, Rural Roads Development Plan - Vision 2025, 2007

Ministry of Water Resources, National Water Policy, 2002

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Planning Commission, 11th Five-Year Plan 2007 - 12, 2008

Prime Minister's Office, National Common Minimum Programme of the Government of India, 2004

Evaluations conducted by other organizations:

Asian Development Bank, Country Assistance Program Evaluation for India, 2007

Canadian International Development Agency, Evaluation of India-Canada Development Cooperation, Gatineau (Quebec), 2005

FAO, Evaluation of FAO cooperation with India in the period 2003-2008, 2009

Heath J., An Evaluation of DFID’s India Programme 2000-2005, London, Department for International Development, 2006

International Development Center of Japan, Country Assistance Evaluation of India, Tokyo, Ministry of Foreign Affairs of Japan, 2004

UNDP Evaluation Office, Country Evaluation: India, New York, 2002

World Food Programme, Summary Report of the Mid-Term Evaluation of the India Country Programme 2003-2007, 2007

Zanini G., India - The Challenges of Development: a Country Assistance Evaluation, Washington DC, World Bank, 2001

IFAD strategy and policy documents:

Anti-corruption policy, 2005

Country Strategic Opportunities Paper (COSOP), 2001

Country Strategic Opportunities Paper (COSOP), 2005

Decision Tools in Rural Finance, 2002

Evaluation policy, 2003

Framework for a Results-based and Impact Management System, 2003

IFAD Policy for Grant Financing, 2003

IFAD Strategic Framework 2007-2010, 2007

Innovation Strategy, 2007

Knowledge Management Strategy, 2007

Land Policy, 2008

Rural Enterprise Policy, 2004

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Rural Finance Policy, 2000 and 2009 (update)

Strategy for Poverty Reduction in Asia and the Pacific, 2002

IFAD evaluations:

Direct Supervision Pilot Programme, 2005

Evaluation of IFAD’s Regional Strategy (EVEREST) in Asia and the Pacific, Country Working Paper, 2006

Field Presence Pilot Programme, 2007

IFAD’s Regional Strategy for Asia and the Pacific, 2006

Local Knowledge and Innovations, 2004

Organic Agriculture, 2005

IFAD projects evaluations:

Andhra Pradesh Tribal Development Project, 2001

North Eastern Region Community Resource Management Project for Upland Areas, 2005

Orissa Tribal Development Project, 1999

Tamil Nadu Women's Development Project, 2000

IFAD projects and programmes documents:

Andhra Pradesh Participatory Tribal Development Project Appraisal Report, 1993

Loan Agreement, 1994

Mid-Term Review, 1999

Project Completion Report, 2003

Report and Recommendation of the President to the Executive Board, 1994

Andhra Pradesh Tribal Development Project Project Completion Evaluation, 2001

Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme Programme design report, 2009


99

Jharkhand-Chhattisgarh Tribal Development Programme Appraisal Report, 1999




Supervision Report, 2002






Livelihood Security Project for Earthquake Affected Rural Households in Gujarat Appraisal Report (Implementation Edition), 2002

Desk Paper on “How can improved service delivery in governments increase citizen trust? The Jeevika Program for Earthquake Recovery”


Livelihoods Improvement in the Himalayas Appraisal Report (Implementation Edition), 2004

Mid Term Review Report (Meghalaya and Uttarakhand), 2009


Maharashtra Rural Credit Project Appraisal Report (Implementation Edition), 1992





Mewat Area Development Project Appraisal Report (Implementation Edition), 1995



Project Status Report, 1999

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Mitigating Poverty in Western Rajasthan Project Appraisal Report, 2008



National Microfinance Support Programme Appraisal Report, 2000





North Eastern Region Community Resource Management Project for Upland Areas Appraisal Report (Implementation Edition), 1997

IFAD and TANGO International, Case study report, 2008

Interim Evaluation, 2006





Self-assessment report presented to IFAD Interim Evaluation Team, 2005

Orissa Tribal Development Project Project Completion Evaluation, 1999

Orissa Tribal Empowerment and Livelihoods Programme Appraisal Report, 2002


Mid-Term Review / Phase I Review Report, 2006



Post Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu

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Appraisal Report, 2005




Rural Women’s Development and Empowerment Project Mid-Term Review reports (Bihar and Jharkhand, Gujarat, Haryana, Karnataka, Madhya Pradesh,

and Uttar Pradesh), 2001


Tamil Nadu Women’s Development Project Project Completion Evaluation, 2000

Tejaswini Rural Women’s Empowerment Programme Appraisal Report (Implementation Edition), 2006

First Joint Review Mission Report (Madhya Pradesh), 2008

Joint Review Mission Report (Maharashtra), 2008


Women’s Empowerment and Livelihoods Programme in the Mid-Gangetic Plains Appraisal report, 2006


UNOPS documents on IFAD projects and programmes:

Andhra Pradesh Participatory Tribal Development Project Supervision Report, 1996






Livelihood Security Project for Earthquake Affected Rural Households in Gujarat Supervision Report, 2005

Livelihoods Improvement in the Himalayas Supervision Mission Report, 2007

Maharashtra Rural Credit Project Supervision Report, 1994

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Mewat Area Development Project Supervision Report, 1996









National Microfinance Support Programme Supervision Report, 2002



North Eastern Region Community Resource Management Project for Upland Areas Supervision Report, 2007

Orissa Tribal Empowerment and Livelihoods Programme Supervision Report, 2005



World Bank documents on IFAD-cofinanced projects:

Rural Women’s Development and Empowerment Project Implementation Completion Report, 2006

Staff Appraisal Report, 1997

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Websites:

Government of India: http://india.gov.in

ENRAP: www.enrap.org

ENRAP IFAD in India: www.enrap.org.in

World Bank India: www.worldbank.org./india

World Bank World Development Indicators: http://go.worldbank.org/U0FSM7AQ40

The Jeevika Project: www.jeevikasewa.org/project_monitoring_and_evaluation.htm

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IFAD-funded Projects and Programmes in India

Project Name Project Type

Total Project

Cost US$

million

IFAD Approved Financing

US$ million*

Cofinancier Amount

US$ million

Counterpart Amount

US$ million

Board Approval

Loan Effectiveness

Project Completion

Date

Cooperating Institution

Project Status

**

1. Bhima Command Area Development Project IRRIG 100.0 50.0 50.0 18 Sep 79 14 Dec 79 31 Oct 84 World Bank CD

2. Rajasthan Command Area Development and Settlement Project

RURAL 110.6 55.0 55.6 19 Dec 79 03 Mar 80 30 Jun 88 World Bank CD

3. Sundarban Development Project RURAL 37.8 17.5 20.3 03 Dec 80 04 Feb 81 31 Dec 88 World Bank CD

4. Madhya Pradesh Medium Irrigation Project IRRIG 232.1 25.0 140 (WB) 67.1 17 Dec 81 17 Sep 82 30 Sep 87 World Bank CD

5. Second Uttar Pradesh Public Tubewells Project

IRRIG 182.2 35.3 91 (WB) 55.9 21 Apr 83 06 Oct 83 31 Mar 90 World Bank CD

6. Orissa Tribal Development Project RURAL 24.4 12.2 1.4 (WFP) 10.8 03 Dec 87 27 May 88 30 Jun 97 UNOPS CD

7. Tamil Nadu Women’s Development Project CREDI 30.6 17.0 13.6 26 Apr 89 26 Jan 90 30 Jun 98 UNOPS CD

8. Andhra Pradesh Tribal Development Project RURAL 46.5 19.9 6.8 (Netherlands) 0.5 (UNFPA)

19.2 04 Apr 91 27 Aug 91 30 Sep 98 UNOPS CD

9. Maharashtra Rural Credit Project CREDI 48.3 29.1 2 (UNDP) 0.5 (WIF)

16.6 06 Apr 93 06 Jan 94 31 Mar 02 UNOPS CD

10. Andhra Pradesh Participatory Tribal Development Project

AGRIC 50.3 26.7 5.3 (Netherlands) 18.2 19 Apr 94 18 Aug 94 30 Sep 02 UNOPS CD

11. Mewat Area Development Project RURAL 22.3 14.9 7.3.0 12 Apr 95 07 Jul 95 31 Dec 04 UNOPS CD

12. Rural Women’s Development and Empowerment Project

RURAL 53.8 19.2 19.4 (WB) 14.8 05 Dec 96 19 May 99 30 Jun 05 World Bank CD

13. North Eastern Region Community Resource Management Project for Upland Areas

AGRIC 33.2 22.9 10.3 29 Apr 97 23 Feb 99 31 Mar 08 Direct by IFAD CD

14. Jharkhand-Chhattisgarh Tribal Development Programme

RURAL 41.7 23.0 10.5 (UK: DFID)1 8.1 29 Apr 99 21 Jun 01 30 Dec 11 Direct by IFAD2 OG

15. National Microfinance Support Programme CREDI 134 21.9 23.5 (UK: DFID) 88.5 04 May 00 01 Apr 02 31 Dec 09 Direct by IFAD CD

1 This co-financing did not materialise, following Board approval of the project by IFAD. 2 This was one of the 15 projects directly supervised by IFAD, as part of the direct supervision pilot programme approved by the Governing Council in 1997.

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IFAD-funded Projects and Programmes in India

16. Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

AGRIC 24.0 14.9 4.9 (WFP) 4.0 12 Sep 01 04 Nov 02 09 Oct 06 UNOPS CD

17. Orissa Tribal Empowerment and Livelihoods Programme

AGRIC 91.2 19.9 40.0 (UK: DFID) 12.3 (WFP)

18.8 23 Apr 02 15 Jul 03 31 Mar 13 Direct by IFAD OG

18. Livelihoods Improvement Project in the Himalayas

CREDI 84.2 39.9 44.3 18 Dec 03 01 Oct 04 31 Dec 12 Direct by IFAD OG

19. Post-Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu

CREDI 68.5 29.9 38.6 19 Apr 05 09 Jul 07 30 Sep 15 Direct by IFAD OG

20. Tejaswini Rural Women's Empowerment Programme

CREDI 208.7 39.4 0.26 (to be determined)

168.9 13 Dec 05 23 Jul 07 30 Sep 15 Direct by IFAD OG

21. Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains

CREDI 52.4 30.1 22.3 14 Dec 06 04 Dec 09 31 Dec 17 Direct by IFAD OG

22. Mitigating Poverty in Western Rajasthan Project

RURAL 62.3 30.9 31.3 24 Apr 08 11 Dec 08 31 Dec 14 Direct by IFAD OG

23. Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme

AGRIC 118.6 40.1

16.0 (Sir Ratan Tata Trust) 14.5 (Commercial banks) 5.8 (Private sector)

37.6 30-Apr 09 04 Dec 09 30 June 18 Direct by IFAD OG

24. 2 North Eastern Region Community Resource Management Project II

RURAL 38.2 20 14.9 17-Dec-09 NYE

24 projects in all

* All IFAD loans are provided on highly concessional terms ** CD= Closed projects, OG= Ongoing projects, NYE= Not yet effective

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Executing Agencies for the IFAD Projects and Programmes Project/Programme Executing Agency/s

Orissa Tribal Development Project Harijan and Tribal Welfare Department, Government of the State of Orissa.

Tamil Nadu Women’s Development Project Tamil Nadu Corporation for the Development of Women.

Andhra Pradesh Tribal Development Project Tribal Welfare Department of the State of Andhra Pradesh; Girijan Cooperative Corporation; Commercial Banks and Non-Governmental Organizations.

Maharashtra Rural Credit Project National Bank for Agriculture and Rural Development; and Rural Development Department of the Government of Maharashtra.

Andhra Pradesh Participatory Tribal Development Project Department of Tribal Welfare State of Andhra Pradesh and Girijan Cooperative Corporation.

Mewat Area Development Project Mewat Development Agency, Government of the State of Haryana.

Rural Women’s Development and Empowerment Project Department of Women and Child Development; Ministry of Human Resource Development (Government of India); Women’s Development Corporations of the States if Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh and Uttar Pradesh.

North Eastern Region Community Resource Management Project for Upland Areas

North Easter Council.

Jharkhand-Chhattisgarh Tribal Development Programme State Governments of Bihar and Madhya Pradesh through respective Tribal Development Societies.

National Microfinance Support Programme SIDBI and SIDBI Foundation for Microcredit. Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

Self-Employed Women’s Association.

Orissa Tribal Empowerment and Livelihoods Programme Ministry of Tribal Affairs and Scheduled Tribes and Scheduled Castes Development Department, Government of Orissa.

Livelihoods Improvement Project in the Himalayas Government of India; state governments of Meghalaya and Uttaranchal and respective rural development societies.

Post-Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu

Tamil Nadu Welfare Society for Self-Help Groups.

Tejaswini Rural Women's Empowerment Programme Maharashtra Women’s Development Corporation; Madhya Pradesh Women’s Finance and Development Corporation.

Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains

Ministry of Women and Child Development.

Mitigating Poverty in Western Rajasthan Project Department of Rural Development and Panchayati Raj, Government of Rajasthan.

Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme

Maharashtra State Agricultural Marketing Board.

North Eastern Region Community Resource Management Project II Ministry of Finance of North Eastern Region

Source: Presidents’ Reports of the IFAD projects and programmes in India.

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Financial Analysis of IFAD Loans Allocation to India Projects and Programmes (US$ ‘000)

1 The figure includes part of the unallocated resources and/or the contingencies, which have been equally distributed to each component. 2 The original component was named: ‘sustainable agriculture and market linkages’, therefore the related IFAD loan amount, as recorded at appraisal, has been equally divided to be inserted into two different sub-categories of the Livelihood Promotion column: agriculture and others respectively. 3 The original component was named: ‘agriculture and natural resources development’, therefore the related IFAD loan amount, as recorded at appraisal, has been equally divided to be inserted into two different sub-categories of the Livelihood Promotion column: agriculture and natural resources management respectively. Notes:

‐ The total IFAD loan allocation only includes the projects under evaluation. ‐ The number with the parenthesis indicates the project as listed under Target Group. ‐ The sub-category ‘Others’ under Livelihood Promotion includes: economic activities, disaster management, enterprise development, surveys and studies and infrastructure.

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Projects and Programmes Ratings by the CPE

1 Overall project achievement reflects the combined assessment of relevance, effectiveness, efficiency, rural poverty impact, sustainability and innovation. As per IOE evaluation guidelines, the performance of partners is not included in the aforementioned.

* The ratings are based on dedicated performance and impact assessment evaluations undertaken within the framework of the CPE.

Evaluation Criteria

I. Core Performance Criteria

Relevance 4 6 5 5 5 6 6 5 5 6 4 6 4 5 4 5 5 6 5

Effectiveness 3 5 4 5 5 5 5 5 4 5 3 5 5 Na Na Na Na Na 5

Efficiency 2 5 4 5 5 5 3 4 4 5 2 4 3 Na Na Na Na Na 4

Project performance 3.0 5.3 4.3 5.0 5.0 5.3 4.7 4.7 4.3 5.3 3.0 5.0 4.0 Na Na Na Na Na 4.7

II. Rural Poverty Impact 4 5 5 5 5 4 5 5 4 5 3 5 5 Na Na Na Na Na 5

Household income and assets 4 6 5 5 5 5 5 5 5 5 3 5 Na Na Na Na Na Na 5

3 5 5 5 5 5 5 6 4 5 3 5 5 Na Na Na Na Na 5

4 4 4 4 5 4 4 5 4 4 3 5 4 Na Na Na Na Na 4

5 Na 5 Na 5 Na Na 5 Na Na NA 5 Na Na Na Na Na Na 5

Institutions and policies 4 6 5 5 5 4 6 4 4 4 3 5 5 Na Na Na Na Na 5

III. Other performance criteria

Sustainability 2 6 4 5 5 4 5 5 3 5 4 5 4 Na 4 Na Na Na 4

3 6 5 4 5 5 5 5 4 5 4 5 4 Na 4 Na Na Na 5

3 5 5 5 5 5 5 5 4 5 3 5 4 Na Na Na Na Na 5

Partner performance

IFAD 4 5 5 5 5 5 4 5 4 5 2 4 3 Na Na Na Na Na 5

Government 3 5 5 5 5 4 3 4 3 5 2 4 4 Na Na Na Na Na 4

Cooperating Institutions 4 6 4 5 5 5 6 3 4 5 2 3 3 Na Na Na Na Na 4

Orissa TDP

Tamil Nadu WDP

Andhra Pradesh TDP

Mahara-shtra RCP

Andhra Pradesh PTDP

Mewat ADP

Rural Women's DEP

North Eastern CRMP

Jharkhand-Chhattisgarh TDP

National Micro-finance SP

Gujarat LSP

Orissa TELP

Himalayas LIP

Tamil Nadu Post-Tsunami LSP

Tejaswini RWEP

Mid-Gangetic WELP

Western Rajasthan MP

Mahara-shtra CAI

CPE Portfolio Assess-ment

and empowerment

Food security and agricultural productivityNatural resources and the environment

Innovations, Replication and Upscaling

IV. Overall project portfolio achie

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IV. Overall project portfolio achievement

II. Rural poverty impact

I. Core performance criteria

Innovations, replication and scaling up

Chhattisgarh TDP

HimalayasLIP

RajasthanMP Assessment

Na

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IFAD Grants to India

Appendix 8 – Table 1. IFAD Country Specific Grants to India

Type Number Recipient Title Approval Effectiveness Closing IFAD Financing

US$ Disbursement Status

Grants for IFAD-Funded Projects

E-36 India Environmental Grant: Andhra Pradesh Tribal Development Project 03/02/1997 03/02/1997 12/04/1999 35 000 80% closed

R-502K India Technical Assistance Grant: Andhra Pradesh Tribal Development Project 20/11/2000 20/11/2000 19/03/2002 22 000 73% closed

R-502P India Technical Assistance Grant: Andhra Pradesh Tribal Development Project 20/11/2000 20/11/2000 23/04/2002 3 400 100% closed

S-33 India Special Operational Facility Grant: Rural Women's Development and Empowerment Project 27/05/1997 27/05/1997 30/01/2004 60 000 21% closed

E-21 India Environmental Grant: North Eastern Region Community Resource Management Project for Upland Areas 19/05/1994 19/05/1994 12/04/1999 100 000 98% closed

S-38 India Special Operational Facility Grant: North Eastern Region Community Resource Management Project for Upland Areas

02/10/1997 02/10/1997 23/05/2003 60 000 83% closed

E-21A India Environmental Grant: North Eastern Region Community Resource Management Project for Upland Areas 19/05/1994 19/05/1994 12/04/1999 10 000 100% closed

S-79 India Special Operational Facility Grant: Jharkhand-Chhattisgarh Tribal Development Project 07/10/1999 14/06/2000 31/05/2005 60 000 91% closed

S-101 India Special Operational Facility Grant: National Microfinance Support Programme 28/08/2000 14/11/2001

06/04/2004 Cancelled

60 000 0% closed

S-145 India Special Operational Facility Grant: Orissa Tribal Empowerment and Livelihoods Programme 28/10/2002 17/04/2003 10/07/2007 60 000 99% closed

S-134 India Special Operational Facility Grant: Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

31/12/2001 22/10/2002 31/01/2006 90 000 98% closed

C-967 India Loan Component Grant: Livelihoods Enhancement through Drudgery Reduction Initiative in Uttaranchal 24/07/2007 21/01/2008 30/04/2010 100 000 40% Ongoing

C- 1029 India Loan Component Grant: Mitigating Poverty in Western Rajasthan Project 24/04/2008 11/12/2008 30/06/2015 608 000 Ongoing

C-1106 India Loan Component Grant: Convergence of Agricultural Interventions in Maharashtra's Distressed Districts Project 30/04/2009 1 008 000 Ongoing

Other Grants to

India 242

Chaitanya India

NGO/ECP Grant - Creation of Resources for the Self-Help Movement: Capacity Building, Resource Center, Fellowship Programmes and Information Sharing Initiatives

23/12/2002 11/07/2003 16/01/2008 50 000 100% Closed

881 IRRI Accelerating technological adoption to enhance rural livelihoods in disadvantaged areas of India

14/09/2006 16/05/2007 31/12/2010 1 000 000 43.5% Ongoing

Total 16 grants

3 326 400

Note: 1. Grant data are from LGS. 2. Disbursement data are from PPMS.

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Appendix 8 - Table 2: Regional Grants Covering India (2002-2008)

Large Global/Regional PI/PT/EAD

Grant No.

Implementing Agency

Programme Approval

Year / Effectiveness

Completion and Closing

Grant Amount (IFAD)

Co-financing

Disbursement (as of June

2008) Countries

634 IRRI/CIMM

YT

Multistakeholder Programme to accelerate Technology Adoption to Improve Rural Livelihoods in the Rainfed Gangetic Plains (builds on TAGs 148 and 263)

11/12/2002 effective

22/09/2003

30/06/2007 31/12/2007

1 500 000 0 100% Bangladesh, Nepal, Pakistan, India (NARES)

651 CIFOR

Programme For Improving Income-Generation for Forest Communities through IFAD's loan portfolio in the Asia and the Pacific region


15/04/2004

31/12/2007 30/06/2008 Extension Granted

900 000 0 95% China, India, Nepal

655 FAO (non CGIAR)

Organic Production of Underutilized Medicinal, Aromatic & Natural Dye Plants (MADP) Programme for sustainable rural livelihoods in Southern Asia


28/03/2006

31/03/2009 30/09/2009

1 400 000 0 34.71% India, Nepal, Sri Lanka

705 IPGRI

Programme for overcoming poverty in coconut growing communities


07/09/2005

30/09/2008 31/03/2009

1 000 000 0 93.62%

China, Ghana, India, Indonesia, Jamaica, Malaysia, Mexico, The Philippines, the United Republic of Tanzania, Vietnam and Thailand

706 IRRI

Programme for Managing Rice Landscapes in the Marginal Uplands for Household food security & Environmental sustainability


26/07/2005

30/09/2008 31/03/2009

EXTENSION REQUESTED

1 190 000 810 000 68.9% India, Laos, Nepal and Vietnam

773 ICIMOD

Programme for Securing Livelihoods in the Uplands and Mountains of the Hindu Kush-Himalayas - Phase II

19/04/2005, effective

29/09/2005

30/09/2009 31/03/2010

1 200 000 400 000 56.4%

Bangladesh, Bhutan, China, India, Nepal and Pakistan

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774 INBAR Programme for Enhanced bamboo rattan based small holder livelihoods opportunities


24/10/2005

31/12/2008 30/06/2009

1 500 000 0 100% China, Philippines, India

811 FAO IAAH Supporting a community led state alliance against hunger in Meghalaya


22/03/2006

31/03/2008 30/09/2008

127 730 0 0% India

821 FAO

Pro-Poor Policy Formulation, Dialogue and Implementation at the Country Level


08/02/2007

31/03/2010 30/09/2010

1 500 000 626 000 46.32%

China, India, Indonesia, Cambodia, Vietnam, Nepal, Pakistan, Sri Lanka

836 INBAR

Developing Approaches, Tools, Methods and Institutional Arrangements to Increase Scalability and Adaptive Replication of Bamboo and Rattan Options in Investment Projects


30/03/2006

30/06/2007 31/12/2007

190 000 0 95% China, India, Philippines

861 Glasgow

Caledonian University

Sustainable gender sensitive agricultural extension reform to reach rural women in India


28/09/2006

31/01/2009 31/07/2009

198 760 0 50.31% India

875 APRACA

Programme for Accelerating the Financial Empowerment of Poor Rural Communities in Asia and the Pacific Through Rural Finance Innovations

14/09/2006, effective

11/01/2007

31/03/2012 30/09/2012

1 200 000 1 500 000 20% All Asian countries

899 Bioversity

International (IPGRI)

Programme for Empowering the Rural Poor by Strengthening their Identity, Income Opportunities and Nutritional Security through the Improved Use and Marketing of Neglected and Underutilized Species


26/07/2007

30/09/2010 31/03/2011

1 400 000 43.57% India (Bolivia, Peru, Yemen, Italia)

954 ICRISAT

Programme for Harnessing the True Potential of Legumes: Economic and Knowledge Empowerment of Poor Farmers in Rainfed Areas in Asia


17/10/2007

31/12/2011 30/06/2012

1 400 000 0 40.25% India, Nepal, Vietnam

956 IDRC Programme for Knowledge Networking for Rural Development in Asia/Pacific Region ENRAP III

18/04/2007 effectove

14/09/2007

30/09/2010 31/03/2011

1 085 000 1 061 000 47.93% all ongoing IFAD projects in Asia

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974 ICRISAT

Programme for Linking the Poor to Global Markets: Pro-poor Development of Biofuel Supply Chains


03/12/2007

31/12/2010 30/06/2011

1 500 000 0 0% China, India, Philippines, Vietnam

998 UNOPS Asia and the Pacific Region Asian Project Management Support (APMAS) programme

13/12/2007 22/12/2022 approved

1 400 000 400 000 0% Camdodia, Lao PDR, India, Viet Nam

1032 ICRAF

World Agroforestry Centre (ICRAF): Programme on Rewards for Use of and Shared Investment in Pro-poor Environmental Services (RUPES II)

25/04/2008 22/12/2022 approved

1 500 000 2 400 000 0%

China, India, Indonesia, Nepal, Philippines, Vietnam

1034 FAO/SEWA

Food and Agriculture Organization of the United Nations/Self Employed Women's Association (FAO/SEWA): Medium-term Cooperation Programme with Farmers' Organizations in Asia and the Pacific Region

25/04/2008 22/12/2022 approved

1 420 000 533 000 0%

India, Nepal, Sri Lanka, Cambodia, Indonesia, Laos, Myanmar, Philippines, Vietnam, China

1037 INBAR

International Network for Bamboo and Rattan (INBAR): Programme for Enhanced Bamboo-based Smallholder Livelihood Opportunities - Phase II

25/04/2008 22/12/2022 approved

1 250 000 4 117 000 0% India, Nepal, Philippines

Small Regional

763 ICIMOD & TEBTEBBA

Decade of Indigenous people in Asia (Assessment)


21/09/2005

31/03/2007 31/12/2007 no cost ext

198 950 63000 94.97%

Bangladesh, Bhutan, China, India, Nepal, Cambodia, Indonesia, Philippines

Total 21 grants

23 060 440

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APPENDIX 9

Report of the Senior Independent Adviser on the Quality of the CPE Process and its Contents

Hans P. Binswanger-Mkhize

January 13, 2010 1. Thank you for giving me the opportunity to serve as senior independent advisor on the India CPE.

I provided a review of the evaluation mission report and of the final report, and participated in the dissemination mission and the associated field visits, all of which I enjoyed.

2. The CPE report was produced by an excellent evaluation team with a strong consultants’ team

leader and good guidance from the IOE team. It produced a comprehensive and very well written report. The line of reasoning is clear, and the conclusions and recommendation follow from the analysis. They emphasize the usefulness of IFAD projects in India in the past and foresee an equally useful role in the future, for which recommendations are made. The team had harmonious relationships with the IFAD country team and benefited from its support. Conversely the country team saw the review as a learning opportunity, rather than a threat. Relationships with government were also excellent, as indicated by the strong support provided by government to the dissemination event in New Delhi. Finally the team responded well to my suggestions, in particular the one to embed the history of IFAD interventions in a better discussion of the history of rural development in India itself, and of its efforts to strengthen decentralization and participation.

3. The report discusses the history of IFAD interventions in India and in particular the objectives and

accomplishments under the 2001 and 2005 COSOPs.It does so by placing the contribution of IFAD in the context of the longer term history of ARD in India and of recent trends. The discussion provides an understanding what the current key issues in Indian ARD are that need to be addressed, and how to deal with the central issue of scaling up in the future, and with the connection of the IFAD projects to state or national government financed projects.

4. The report emphasizes the following features of the IFAD program that contributed to its success:

a. IFAD projects are based on a convergence into a holistic view of rural development that involves empowerment and capacity development, micro finance and livelihoods promotion. For example in tribal development it typically combines the following interventions: A village empowerment funds for infrastructure (CDD), self-help groups (SHG), and micro finance.

b. The report is particularly positive about the empowerment and capacity development

components via self-help groups and in the natural resource management areas. It suggests that IFAD innovations were scaled up in state, national and other donor projects. These include: (i) promoting replicable pro-poor innovative approaches with regard to a new institutional framework for agriculture and rural development, which includes linking self-help groups of women and tribal people with rural financial service institutions, government departments, NGOs and other service providers; and (ii) a demonstration effect in terms of the rigor and attention needed to design, implement, supervise, and monitor and evaluate inclusive and grassroots-oriented agriculture and rural development operations in marginal and remote locations.”

c. During the field visits of the dissemination we not only got a chance to see the self-help

groups on the ground, but also learned how the whole movement had been scaled up so that by now tens of millions of women all over India are members of such groups.

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5. The report also analyzes the following weaknesses in the program:

a. The issue of performance evaluation: The sustainability and impact of projects in tribal areas has not been established; while there are many indications of the success of SHG, the projects which supported them did not include any impact evaluations which would have quantified their impacts and documented the causes for success.

b. Policy dialogue and knowledge management have not been as strong as desirable. This was associated with inadequate knowledge transfer even within the IFAD portfolio.

c. Replication and scaling up has not been systematically approached. The traditional approach to projects will no longer work: The approaches promoted by IFAD have largely been mainstreamed in India. Therefore the case of taking the IFAD model to new location is no longer convincing.

d. Livelihoods and income generation components have been relatively weak: From the report and our field visits it is clear that livelihoods have been strengthened in a demand-driven way via the SHG and via the micro-finance interventions; but that a more structured value chain approach to livelihoods has been missing that would have focused on the demand side as well as on the technology side; and that agriculture in particular has been relatively neglected. Indeed it is just such support that the self-help groups the mission visited are demanding.

e. In the micro-finance area it suggests that several systemic issues need to be better addressed. In particular it states that the micro insurance needs to be looked.

6. Finally the report identifies a set of issues that received limited attention: dry land agriculture;

facilitating technology transfer for increasing the productivity of small farmers; supporting migrant workers; private sector involvement and market-linkages; land tenure issues; partnerships with central government agencies and other donors; using the country’s excellent information technology basis for agriculture and rural development purposes.

7. The report is a good input for the forthcoming COSOP. The COSOP preparation, however, needs

to take account of a number of dilemmas with which poverty-targeted interventions of IFAD are confronted with and that are not fully addressed in the report. They include:

a. Mainline institutions are usually poorly motivated and equipped to target poor areas and

poor people. Given these difficulties it is no accident that IFAD has chosen to use parallel systems involving communities, self-help groups and NGOs, but that model also encounters limitations that are fully discussed in the report. The broadening of the interventions for the target groups, in particular with respect to their insertion into value chains, requires integration of services and skills the mainline institutions can provide with the implementation mechanisms of the poverty-targeted interventions. Anchoring interventions within mainline institutions is also necessary for scaling up.

b. IFAD clearly has done pioneering work in tribal areas, and the tribal groups are a very large

poverty group. They are also threatened by outsiders wanting their resources, as well as an increasing number of Naxalite rebel groups that are threatening their lives and in some cases the state itself. Yet the IFAD approach is called a work in progress.

c. Tribal groups and women are not the only poor, but so are members of scheduled castes,

youth, and temporary migrants. Yet they are dispersed within the general population, or highly mobile and therefore difficult to reach. An organizational framework for targeting them has not been developed under the IFAD projects, and I do not know of any other.

d. Focusing on women is highly desirable, and has been a success in the IFAD operations. Yet

if agriculture is to be promoted, men also need to be involved. It is not clear what

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organizational models could be used without undermining the focus on and benefits for women.

e. Poor people derive their livelihoods from multiple sources, including farming, wage labor,

temporary migration, trading, etc. The model IFAD is using lets the self-help groups and communities decide which of these activities should be prioritized. Yet there is also an understanding that to really support sustainable income growth, more agricultural development in poor communities and among poor people, and their linkage to value chains is required. Should the selection of activities of the communities and groups be the determinant factor, or should agricultural priorities be enhanced by project design choices from above?

f. This dilemma is further aggravated by the fact that supporting agricultural innovations and

investments requires different institutional and organizational models than those typical of IFAD projects, or more generally local and community-driven development programs. The organizing principles derive from the value chain itself, and go from the firms involved in managing marketing and processing to the smallholder farms, input suppliers and other agricultural services. Neither poverty nor gender, nor co-residence is easily used to form the corresponding communities, but they instead have to be based on common interest in the product of the value chain. These communities will go beyond the village or even groups of villages. Membership of better off farmers is desirable, since they can help the viability of the institutions and the value chain.

8. In advocating for more emphasis on agriculture, the COSOP needs to deal with dilemmas number

four, five and six.

a. Dilemma one is more easily addressed by framing IFAD projects firmly as LCDD projects, that involve co-production of services by communities, local governments, sector specialists, and NGOs and other private sector actors. While the report deals with all these co-producers, it still pays very little attention to local government, and instead spends a lot of time on dealing with the roles of the central and state governments. (What is said on these is of course important). More is needed on local government, especially the poor development of the Panchayati Raj system in the poverty states. What are appropriate funding mechanisms for local government via the intergovernmental fiscal system, and how can the silo nature of the centrally and state sponsored schemes be overcome via reforms?

b. As far as the dilemma two is concerned, that approaches on tribal groups is a work in

progress suggests to me that IFAD’s future program should focus primarily on these areas, as it has the best basis to make progress here for all of India. If IFAD were to succeed here, it would deserve the Nobel Prize.

c. Dilemma number three about targeting additional poverty groups may just have to be left

unresolved. In the absence of any models of how to target migrant workers, youth and scheduled castes in IFAD operations, it seems a stretch to ask the organization to also deal with them. There is enough to do in the areas where it has competence.

d. In the report, most successful investments are said to be those of individuals. That suggests

that private choices of productive activities as practiced by IFAD are indeed appropriate and necessary, rather than imposition from above of a focus on agriculture.

e. But private choice also creates a dilemma for marketing and connections to value chains:

During our field visits we found that MAVIM (the Women’s Development Corporation of Maharashtra) is now setting up support centres for the self-help group that ultimately are expected to become self-sustaining by providing support to the self-help organizations in each of the villages in the area of linkage to markets, value chains, finance, training and

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other support functions. This effort is in its infancy, but if successful, would provide a model for solving the dilemmas five of who should choose the investment activities, and dilemma six of the alternative organizational model required by value chain promotion. Other modes of federations are being tried in Andhra Pradesh and other states. They will need to be carefully followed in order to derive lessons for the next COSOP.

f. In Senegal, dilemmas five and six were solved in another way, namely by designing two

different projects: A local and community-driven development project (LCDD) with a geographic basis for action at local government and community level, and a project in support of commercial and export agriculture, with organizations based on specific commodities. While both projects collaborated among each other and with local government, and while both benefited some of the poor, they were not poverty targeted along the lines of IFAD. I am not at all clear how a project or even parallel projects would be able to simultaneously deal with freedom of choice of the beneficiaries, the organizational dilemmas, and intensive poverty targeting. I am therefore not sure that the emphasis on strengthening agricultural interventions in IFAD projects is a feasible recommendation (what a strange thing to say for an agricultural economist!).

g. If incomes have been rising in the projects, as stated in the report, and women have been

empowered, then why try to go beyond this to field crops and to include the men? That will only complicate the project design. The fact that most money from self-help groups went for livestock rather than crops may not only reflect the preponderance of women in these groups but more importantly that crop finance cannot be done via micro-finance. This is shown by the fact that no micro-finance institution in the World has yet been able to finance crop production in dry land areas. Focusing on crop production activities of men therefore not only involves the development of an organizational framework for including poor men, but also a different way of making credit available. Alternatively it would imply a move towards grants, as is done in some of the mainline interventions. Including the men will therefore require specific organizational and process innovations which may not yet be in IFAD’s arsenal.

9. As stressed my book on scaling up LCDD, scaling up requires very careful and participatory

assignment of the specific functions and tasks to the co-producers, and resolution of the funding problems of all of them. While there are general principles and guidelines, such assignment of functions and responsibilities cannot be worked out in an office, but has to be worked out in the field with those who are supposed to execute the functions part of the group that determines them. And it will differ from region to region. Resolving these issues will properly address problem of entirely parallel channels that the report puts centre stage.

10. Suggestions for further activities in preparation of the next COSOP.

a. While there are some good examples of linkages with private sector the successful example given are for milk, a success all over India. Clearly if the forthcoming COSOP is to emphasize private sector linkage, a review should be undertaken of what else is going on in India, and perhaps in China, as the future program cannot be expected to do small pilots but must be able to scale up successful experiences.

b. Undoubtedly the next COSOP will focus more on tribal groups. Here too a review of

successful approaches all over India, not just IFAD experience, is needed, so that the need for further experimentation is reduced and the work can focus more on scaling up.

c. The issue of micro-insurance needs further thought: Clearly the SHG are multi-purpose

groups which, besides support to income generation projects, also provide support to members who experience and individual-specific shock that can be insured within small groups. The question then becomes what a specific micro-insurance product would add to

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this. Note that micro-insurance, if it is to be anchored in the small groups or within villages, will never be able to insure systemic or covariant shocks such as those coming from the weather or the market price. I am therefore skeptical on what micro-insurance can do in this area.

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APPENDIX 10

List of States/Projects Visited During the India CPE Main Mission

13 April– 15 May, 2009

IFAD Office of Evaluation

Date State Related projects Team members

participated April 20- 22

Uttar Pradesh National Microfinance Support Programme Mr B. Kavalsky Mr P. Kotaiah

Women’s Empowerment and Livelihoods Programme in the mid-Gangetic Plains (Uttar Pradesh)

Gujarat Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

Mr S. Mananwatte Ms M. Mitra

Rajasthan Mitigating Poverty in Western Rajasthan Project

Mr M. Macklin Mr D.K. Giri

April 23- 26

Maharashtra Tejaswini Rural Women’s Empowerment Programme (Maharashtra)

Mr B. Kavalsky, Mr P. Kotaiah, Mr S. Manawatte, Ms M. Mitra, Mr M. Macklin, Mr D.K. Giri

Maharashtra Rural Credit Project Convergence of Agricultural Interventions in Maharashtra’s Distressed District

April

27 -29

Meghalaya North Eastern Region Community Resource Management Project for Upland Areas (Meghalaya)

Mr B. Kavalsky Mr D.K. Giri

Livelihoods Improvement Project in the Himalayas

Tamil Nadu Post-Tsunami Sustainable Livelihoods Programme for the Coastal Communities of Tamil Nadu

Mr P. Kotaiah, Ms M. Mitra

Tamil Nadu Women’s Development Project

Jharkhand Jharkhand-Chhattisgarh Tribal Development Programme (Jharkhand)

Mr S. Mananwatte, Mr M. Macklin

May 4-8

Madhya Pradesh

Tejaswini Rural Women’s Empowerment Programme (Madhya Pradesh)

Mr B. Kavalsky, Ms M. Mitra, Mr J. Zhang, Ms S. Fazelbhoy

Orissa Orissa Tribal Empowerment and Livelihoods Programme Mr P. Kotaiah, Mr S. Mananwatte

Uttaranchal

Livelihoods Improvement Project in the Himalayas

Mr M. Macklin

Chhattisgarh Jharkhand-Chhattisgarh Tribal Development Programme (Chhattisgarh)

Mr D.K. Giri

May 14 Gujarat Livelihood Security Project for Earthquake-Affected Rural Households in Gujarat

Mr A. Muthoo

Total: 11 States were visited by the main mission

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APPENDIX 11

IFAD Management Self-assessment prepared by the Asia and the Pacific Division

8 April 2009

1. While the current CPE covers the entire period of our presence in India since 1979 most of this self-assessment refers to the period covered by the current COSOP (2005-2009).

2. The major strategic thrusts of IFAD during the last COSOP have been on:

(a) Capacity building of the grassroots institutions especially of the marginal groups and institutional strengthening of support agencies; (b) Promoting and protecting access of marginalised groups to resources and ensuring their sustainable management including natural resources such as forest, land, water, financial resources and even invisible indigenous knowledge, etc. (c) Promoting diversification of livelihoods opportunities both within the farm and non-farm sectors as avenues out of poverty for the poor.

3. There was a strong emphasis on the targeting principles to be used through both geographic

selection and specific groups within the priority area including SC, ST and women. In addition, Monitoring and Evaluation (M&E) processes were to be strengthened with the objective of improving the country programme and knowledge management (KM) and participation of the private sector was to be sought, for microfinance activities and sustainable livelihoods.

4. The COSOP (2005 – 2009) had identified interventions in the areas of microfinance services

and women empowerment, improving livelihoods opportunities in semi-arid tropic areas, improving livelihoods opportunities in mid-Gangetic plains and separate interventions for coastal fishing communities and tribal in the North East.

5. There were a number of crosscutting issues, which were identified for addressing through the

interventions, and these relate to gender, HIV/AIDS, sustainable agriculture and NGO involvement.

6. While recognising the need for effective KM and policy dialogue there was an emphasis to

explore opportunities for strategic linkages with other bilateral and multilateral donors and strengthen partnerships with NGOs and other national and local institutes.

7. In this background, the self-assessment for CPE has been presented in bullet points, by and

large along the elements of the Country Programme (i.e., design, supervision and loan administration, grant-loan linkages, knowledge management, partnership development and policy dialogue) and in line with the SWOT analysis, under the four following sub-heads:

(a) Fulfilling the mandate (Strengths) (b) Falling short (Weaknesses) (c) Constraints (d) Opportunities

A. FULFILLING THE MANDATE

8. We have been able to achieve its goal of targeting by continuing to have a focus on the

marginalised and resource-poor areas like forests, uplands, arid, coastal and rain fed area. The current COSOP cycle saw new interventions in Madhya Pradesh and Maharasthra, Uttar

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Pradesh and Bihar, Tamil Nadu (second loan for Post-Tsunami), and Rajasthan. One more intervention is planned in the North-East to complete the COSOP cycle in line with its lending targets (in fact these targets have been surpassed already in view of the additional loan approved for the Post-Tsunami)

9. We have introduced successful process innovations both in design and supervision. In design,

we enhanced ownership by local governments and stakeholders. This has been recognized in Rajasthan by GOR who has requested the World Bank to adopt our design methodology. In supervision, we adopted the concept of Joint Review Mission, where emphasis is given to the concepts of mutual accountability and partnerships, strengthening our relationships with project management units and

10. Both ongoing and new projects have been able to target vulnerable groups through a process

of wealth ranking validation by the community. This has now been acknowledged by the Government of India and is considered a key strength of our assistance.

11. We are mainly recognised as an international pioneering financial institution for the SHG

movement in India and for the consistent focus over the years on women’s empowerment and tribal development. Not only have we been able to support women’s access to financial services but also their improved economic, social and political empowerment which is reflected in their increased participation in the political process and in their elections in the local government bodies. Along with our partners, we have been able to contribute to developing processes leading to the development of strong, stable and self-sustaining grassroots-level institutions that are able to address larger community issues (political voice, access to assets, negotiating services, self-mobilized to build capacity) and improve livelihoods other than meeting credit needs of their members. However, our challenge remains in doing a better job in showcasing best practices of SHG institutionalisation, particularly for communities with minimum development exposure and low literacy levels.

12. Over the years, there has been considerable increase in the size of the India Country

Programme making it the largest programme globally. Despite the size of our interventions which continues to be extremely small in comparison to India’s own domestic resources, our assistance continued to be valued by GOI for our coherent, and perhaps unique, focus in addressing neglected areas and marginalised groups and for our efforts in testing new ideas.

13. Over the years, there has also been a widening focus of interventions with perceptible shifts

from basic irrigation projects aimed at strengthening agricultural infrastructure to holistic rural development encompassing institutional building, empowerment and sustainable livelihoods.

14. Since January 2008 there has been a very important strategic shift in PI’s supervision policy

with the decision to adopt direct supervision of all IFAD supported projects in Asia. This has given the opportunity of a closer relationship between projects and IFAD, higher levels of horizontal collaboration and knowledge sharing where the India country office can play a strategic and cost-effective role.

15. India field presence started in 2001 with a cost-sharing arrangement with World Food

Programme. The renamed India country office (ICO) is currently the largest country office of IFAD, having being strengthened in terms of human resources and having received transfer of responsibilities in particular with regard to the areas of supervision, implementation support and knowledge management. This has enabled a higher level of engagements with the projects and increased sense of ownership of the country programme.

16. The entire supervision process is now seen more in terms of a joint review with an attempt to

build greater ownership not only to the project staff from government but also to other

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stakeholders and implementing partners including the NGOs and communities. Terms of References of the Joint Review Mission (JRM) are prepared based on priorities indicated by the PMU, discussions are held after field visits with all stakeholders at workshops, and the recommendations of the JRM are agreed before the Aide Memoire is discussed and finalised in an action taken format. This is proving as an effective mechanism to enhance ownership and compliance of mission recommendations.

17. Experience of programme implementation has also revealed that supervision process is more

effective when there is a consistent approach between missions. In other words, there is a need to have a continuity of thought process in the successive JRMs so that the project is steered unidirectional. With the appointment of Implementation Support Specialists in ICO there is now both institutional memory and continuity in the JRMs. The timely follow up and implementation support provided by the ISS is another improvement in terms of IFAD’s engagement with the projects.

18. One of the major challenges of ‘direct supervision’ was to demonstrate that not only would it

be qualitatively better but also more cost efficient. This efficiency is being achieved by promoting engagement of grant-funded partners, utilising the services of other IFAD-supported project staff, making full use of ICO resources, scouting local expertise, and adopting the policy of demand driven implementation support.

19. Our cost-efficiency can be demonstrated not only by the capacity to cope with a very

demanding task of supervision and implementation support of 12 projects (with a budgetary allocation of 8 loans) but with the capacity to finance portfolio review activities and training to all project staff on priority areas such as M&E and RIMS, RB-AWPB, financial management and procurement, gender mainstreaming, knowledge management etc.

20. There has been a concerted effort to build capacity on M&E issues in the last two years and,

although it is still work in progress, this has yielded positive results. Perceptible change can be seen in ongoing projects that have reached mid-term and those that are in operation post-midterm. The M&E systems of these projects are up and running but more emphasis is required with regards to RIMS reporting. It is felt that Projects require strong support to integrate M & E requirements and hence the need to have focused capacity building in the first year of project implementation.

21. There has been substantive improvement in the loan administration, which has been possible

due to the grant of online access to the IFAD loan administration database to ICO. As a result there has been an improved coordination with CAA&A (DEA) on issues relating to loan administration. It only highlights the importance of the integration of ICO into the HQ system and a small example of the value addition of ICO.

22. During direct supervision, it was observed that financial management, audit and procurement

issues mostly remained neglected during earlier supervisions. These are critical areas requiring close attention and needed to be integrated in the supervision exercise. There has been an effort now to involve a financial management expert and develop capacity within ICO to look at these issues.

23. In recent times, there has been a major thrust on knowledge sharing and management within

the country programme and KM tools like the website, publications and other media have been used to achieve improved knowledge management. A KM strategy has been held in abeyance pending the CPE. Initial experience shows that improved KM led to better horizontal collaboration among the projects and an improved project design and implementation. Hence, ICO has been spearheading efforts to build capacity in the project on process documentation and use of various KM tools.

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24. The partnership with GoI and the state Govts has worked well. However, we still need to do a lot more to engage the state Govts. in policy dialogue and impress upon them the possibility of up scaling successful IFAD interventions.

25. The ICO has also provided an opportunity for IFAD to scout local strategic partnerships and

be more present in meetings, seminars and conferences. Among other things, IFAD also became a member of the UN Country Team in India and is now in a position to fulfill the larger mandate of the UN Development Assistance Framework (UNDAF) agreed to between the UN and Govt of India. This has increased our visibility within the UN family

26. Our work in India is very strongly anchored in the partnership with Civil Societies. NGOs

have proved to be reliable and effective partners in supporting grassroots institution building efforts in our projects. This delivery model in conjunction with the Community Based Organisaitons has become an effective alternate model of routing development support to the people and is being adopted selectively by the Govt.

27. In the recent times there has been renewed emphasis on consolidating partnerships with

international agencies especially those that are recipients of grant funds from IFAD such as ICRISAT, ICIMOD, ENRAP-IDRC, FAO, CIFOR, etc. This has led to immense benefits for the projects [such as sharing of learning, enhanced capacity of the project team, quality of implementation effectiveness, adoption of new technology, etc.].

28. We started to create greater awareness among the projects on the on-going grant funds and

ways to access, as much as the need for greater integration of grant funds with investment funds. Each ISS has been assigned with focal point responsibilities for each of the ongoing grants.

29. Thanks to the presence of ICO, partnership opportunities have multiplied in all directions

with development agencies, NGOs, commercial banks and private sector. The partnership with Sir Ratan Tata Trust is impressive and it is growing very fast.

30. In addition, a number of in-house partnerships have evolved, encouraged by the idea to bring

the HQ closer to the field. PT, PD, OA, ILC, FA, among others. 31. NERCOMP has been recognized as one of the model projects and all 8 States in the North-

East have requested its replication

B. FALLING SHORT

32. The Project design cycle starts with a limited involvement of Govt. counterparts. Project proposals are submitted to IFAD by DEA without a proper screening process and an assessment of the ownership by relevant executing agencies/State Governments. In one case we were given a one-line proposal and told “IFAD has to scout for the appropriate executing agency”. They retain a limited involvement during design. In this regard we need much more cooperation from our GOI’s counterpart.

33. Project start-up heavily suffers from the gap between design and implementation. The ideal

scenario pursued by us requires the early appointment of the Project Management Team during formulation stage, their exposure to ongoing IFAD-supported projects before appraisal stage, and the drafting of the implementation manual before loan negotiations. We also require support to pre-qualify implementing partners (NGOs, banks, private sector) during design to avoid surprises during implementation.

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34. The last two project designs of MPOWER and CAIM have seen the establishment of a Local design team that led the design process. This has been a partial success because of lack of resources. We perhaps need to assist partner Govts with funds provided by IFAD.

35. Delays in the loan signing and effectiveness of the project continued during the last COSOP

cycle. While there were some reasons beyond our control there were some areas which could be improved upon. An attempt was made during the MPOWER project to improve upon this lacunae and the project has been signed and become effective in almost a record time. Some of the features like having some of the conditions of effectiveness made as pre conditions of loan negotiations certainly reduced the delay. Further steps like drafting the PIM along with the core project team before the negotiations would certainly hasten the start up. It would also be useful if a grant element were introduced in the design process which funds key project staff during the design stage. This could lead to much better results.

36. Two States projects is too cumbersome. It was informally agreed with DEA to discontinue

this practice but this agreement requires a formal sanctioning. 37. M&E is still an area that requires strong attention. Although we can clearly see a growing

capacity among our projects, there is still a lot to do, in particular with the introduction of RIMS. Lack of technical support for RIMS has been a key constraint (new software has not been provided to the projects).

38. The Audit of project accounts is another area of concern. The quality of audit by the CAs also

leaves much to be desired. There is a need to build capacity of the projects on audit issues as well, so that the fiduciary interests are safeguarded.

39. The lack of effective synergies between the loan and the grants portfolio prevented the most

effective leveraging of the Grants for the India Country programme. Although some steps have been taken in recent times to improve this collaboration, a lot more could still be achieved if the complementarities between the two could be envisaged and built in the design stage itself. This would require also much more in-house coordination at IFAD Hqs, while the current arrangement is that CPM is a decision taker of initiatives taken independently by other divisions without any consultations with our projects.

40. The country programme has not been able to mainstream HIV/AIDS into its programme to

the extent that was desired by COSOP. While this also is an issue that needs to be addressed at the design stage itself , the capacity of our project staff to tackle this also needs to be kept in view. With a plethora of agencies already addressing this issue, which falls within their core competency area the matter, could be looked at in a different perspective.

41. Knowledge Management was until recently the weakest link of the India Country Programme.

The level of documentation and dissemination of project implementation experience within the projects was extremely low. In the last one year there has been a major leap forward in this area with the launch of the website, release of publications, organization of capacity building events for quality documentation and knowledge capture. There has been lot of positive feedback about all these initiatives and now there is a need to evolve a KM strategy for the country programme, which may await the CPE exercise.

42. Working relationship with relevant line ministries like Agriculture, Rural Development,

Panchayati Raj etc. need to be strengthened. Too often DEA neglects the importance to invite them to wrap-up meetings or else they are invited but they don’t attend. Although recently we achieved some progress thanks to the presence of the ICO we should be in a position to do more. Progress in this area is directly linked to the progress in KM.

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43. Some efforts have been made also to have effective collaboration with the private sector in some of our new projects. Still, this is a new area with a lot of untapped potential.

C. CONSTRAINTS

44. The high turnover of the Project Directors and project staff as well as of FNGOs staff has a

serious impact on the pace and quality of project implementation. There needs to be a standard clause in our loan/project agreement to have an assurance from the states during negotiations that they would ensure a minimum tenure of Project Directors and key staff. Similarly, a more competitive remuneration package for the project and FNGO staff would also perhaps slowdown the turnover. An alternative would be to implement projects outside Government’s framework, as we tried in some projects with the establishment of legally independent Society.

45. IFAD has experimented with two different Project Management Structures, (Independent

Society as in JCTDP, NERCORMP, LIPH and Govt. Departments /agencies as in Tejaswini, PTSLP, OTELP) and it has been found that both have their own strengths and weaknesses. However, on a balance perhaps the Society model is more appropriate as it has greater operational flexibility and autonomy. Nonetheless, we have the distinct belief that DOF is more reluctant to release funds through these Societies. This has been a constraint in loan disbursement and project performance.

46. There continues to be a dearth of strong local FNGOs in the backward areas where projects

are under implementation (Chhattisgarh, Madhya Pradesh, Meghalaya etc.). There is thus a need for developing a strategy to build FNGO capacity during the initial project implementation phase as part of the project design. In fact financial management, coordination with a large number of actors and M & E could be the critical areas of capacity building that should be made part of start-up activities.

47. IFAD’s commitment in institution building in remote areas implies the need of adequate

implementing period. This issue is raised every now and then, together with the issue of complexity. We believe it is a constraint that we need to factor in but not something that should shift IFAD’s commitment from the most difficult areas.

48. Likewise, we need to factor in the issue of low disbursement which we are experiencing in

some of our projects in the initial years of implementation. Take the NERCOMP project as an example, considered by GOI as one of the most successful projects. Because of its long investment in building and strengthening grassroots-level institutions, most of its disbursements happened in the last two out of the nine years of implementation.

49. The fund flow mechanism in most of the States is too complicated and time consuming, with

negative consequences on the speed of implementation. There have been number of instances when ICO had to step in to sort out the issue of availability of funds to the PMUs. Our loan agreements with the States include the assurance that they should release quarterly installments as per the AWPB. However this assurance is not enforced

50. There have been frequent delays by the projects in submitting Withdrawal Applications as a

result of which the disbursement of IFAD loan indicates a much lower figure compared to the expenditure incurred on the ground. An effort is now being made to bridge this gap and upgrade capacity of the staff in the states and projects on loan administration issues.

51. Participation of concerned Ministries in the Union Govt and Departments in the State Govts

remains inadequate. The greater involvement of the government in JRM processes might facilitate an enhanced policy adoption and integration of IFAD’s good practices into

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government programmes and policies. We are trying to include this point as assurance in future loan agreements

E. OPPORTUNITIES

52. We need to build a robust pipeline to avoid some waning of ownership on account of various

factors in some of the states and hence shuffle priorities. This would give us flexibility in resource allocation. However, we should still aim at having the project cycle between 12-15 months. Hence the question is: how can we do both, taking into account the rule of one loan/year? This would require some flexibility granted by IFAD’s EB in submitting two loans per year in case of need.

53. New projects interventions in the new COSOP cycle must address sustainable development

and climate change as cross-cutting issues. It is now recognized that our target group is one of the most vulnerable sections to climate change and hence our projects need to tackle this issue upfront. IFAD’s global experience in this regard would certainly be valued and appreciated by the Govt.

54. IFAD needs to reengage with the Ministry of Agriculture and this gives us an opportunity to

focus on some of the important areas that would help achieve sustainable livelihoods in the agriculture sector. Conservation agriculture and organic farming are some of the areas where MoA has a strong interest and where IFAD’s interventions could test new models for their replicability.

55. The start up support that is being provided to the projects has a lot of room for improvement.

Rather than viewing start up activity as a one-time event, we need to recognise it as a process that extends over a much longer time frame. During this period the Implementation Support Specialist responsible for that project/cluster needs to interact regularly with the project and provide it with in house support from ICO on different subjects so that the project is anchored firmly. This would surely lead to faster project implementation and take off. It is felt that in order to provide pro-active assistance in identifying and addressing gaps required during the early stages of implementation there might be a need to provide for additional resources. Additionally, there is a need to sensitise the respective State Governments about this modality, so that they can demand support from ICO.

56. The projects have still not been able to come up with an effective and successful model of

‘social audit’ that would satisfy a lot of requirements on ‘community based monitoring’. Social audit processes based on different socio-cultural settings in the projects need to evolve. These successful processes or ‘models’ needs to be shared with other projects so that each project can come up with their own model.

57. We may consider converting our annual PRW led by DEA into an event where all Govt.

partners, Projects and us retreat to discuss issues relating to project implementation and have a serious policy dialogue with govt.

58. PRIs form the backbone of the democratic decentralization in Indian Polity. However, they

have not been integrated well enough in the IFAD supported projects because these democratically elected bodies have suffered from elite capture. While this may be true in some cases the fact also is that they are the only constitutionally mandated representative bodies at the village level. We need ‘to work with them’ while not necessarily ‘working through them’. This would be an important aspect that would help us leverage larger resources for our target group through ‘Convergence’ and also make our interventions ‘sustainable’ in the long run. We would also need to build their capacity to be transparent and accountable.

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59. The efficacy of NGOs in promoting micro finance and livelihood support services (BDS; skill enhancement; marketing) has been very limited and we continue to struggle in this very important area of working towards sustainable livelihoods. This is quite true considering that historically NGOs have been organizations that have a social and welfare development orientation. Now with increasing focus on market linkages of the poor the NGOs being the facilitators need to have a commercial orientation to become service providers like BDS, skill enhancement, and marketing. Initiatives in this direction have been taken in Uttarakhand, Orissa and Jharkhand where NGOs facilitate social mobilization in villages are also engaged with marketing Consultancy Agencies like MART, AIDMAT, Organic Boards, Inhere, etc.

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APPENDIX 12

Excerpts of the Report of the Chairperson of the Evaluation Committee1 on the India Country Programme Evaluation

1. The Committee welcomed the India country programme evaluation (CPE). The Committee underlined its concurrence with the CPE’s recommendations, and focused its attention on the agreement at completion point (ACP), as members have previously had the opportunity to interact with IEO and Management on the CPE report per se. 2. The representative of India2 conveyed his Government’s satisfaction both with the CPE and with the analysis and recommendations included in the report, notably that the future IFAD country programme for India should focus on rural smallholder farmers, women and tribal communities. He also used the opportunity to call on IFAD, as recommended by the CPE, to consider increasing loan size (within the performance-based allocation system [PBAS]), and drew attention to the need to focus on partnership with the private sector and to introduce a tighter geographic focus to the IFAD-financed programme in the country. The Committee conveyed its appreciation for the feedback comments provided by the Government of India. 3. Management also expressed satisfaction with the high quality of the CPE. One issue raised is that of the turnover of project directors, which was noted by all stakeholders. The representative of India explained that, given India’s federal structure, staffing decisions are made at the state level. Having said this, he also indicated that the Government was aware of this concern and welcomed the observations in this regard in the ACP. 4. In response to a query from Committee members, IFAD Management explained that the ACP is not the new country strategy, but rather the response agreed upon by IFAD and the Government to the issues raised in the context of the CPE, which will be further elaborated in the new country strategic opportunities programme (COSOP). 5. Management indicated that there will be no stand-alone IFAD country office in India or elsewhere. It was explained to the Committee that, based on the self-evaluation of IFAD country presence, Management will revert to the Executive Board with a COSOP in 2010 and in that context the possibility of an IFAD sub-regional office in India might be considered. 6. Management informed the Committee that the PBAS allocation will be a total of US$142 million, and the country strategy will propose that only two US$71 million operations be financed over the coming PBAS period. This will help reduce transaction costs and increase efficiency (one of the issues raised by the CPE). 7. To clarify an issue raised by the Committee, IFAD Management also explained that it is progressing beyond “business as usual” in India, and new projects are already moving on from the more traditional operations that have been developed in the past. Further reflection on IFAD’s new role in India is being undertaken in the context of the development of the new COSOP. 8. In response to concerns raised by Committee members about the proposed sub-regional office in New Delhi, Management agreed that revisions should be proposed to the Government of India in the ACP with regards to the matter of the country office and the sub-regional office, as per the discussion with the Evaluation Committee at its sixty-second session.

1 Executive Board — Ninety-ninth Session, Rome, 21-22 April 2010, (EB 2010/99/R.5).

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9. Some Committee members noted the Government of India’s intention to develop an independent evaluation body and IEO’s commitment to provide assistance in its establishment. IEO clarified that support provided will be consistent with the evaluation capacity development approach outlined in the paper on this topic recently reviewed by the Committee in the course of its January 2010 session.

Republic of India

May 2010



COUNTRY PROGRAMME EVALUATION

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