Financial and Economic Analysis of ICDS Programme in India

Final Report (21 May 2007)

Dr. Swapan Kanti Chaudhuri

World Bank

Table of Contents

List of Acronyms...........................................................................................................1 Executive Summary .....................................................................................................3 1. Background of the Study..........................................................................................7

ICDS Programme & World Bank Assistance........................................................7 Objectives of the Study ........................................................................................7 Structure of the Report .........................................................................................7

2. Introduction ..............................................................................................................8 Child Malnutrition in India .....................................................................................8 Government Initiatives to Improve Nutritional Status .........................................11 Targeted Public Distribution System ..................................................................11 Mid-day Meal Scheme........................................................................................12 Integrated Child Development Services (ICDS) .................................................14 Conclusions........................................................................................................19

3. Financial Analysis and Projections.........................................................................21 Analysis of ICDS Expenditure ............................................................................21 Budget Outlay for the Eleventh plan...................................................................24 Conclusions........................................................................................................27

4. Economic Cost Benefit Ratios and Cost Effectiveness..........................................29 Why Invest in Nutrition .......................................................................................29 Approach to Cost Benefit Analysis (CBA) ..........................................................29 CBA of Food Supplementation...........................................................................30 CBA of Micronutrient Initiatives ..........................................................................34 CBA of Pre-School Education ............................................................................39 Putting All the Components Together ................................................................40 Cost Effectiveness of Alternative Nutrition Interventions....................................41 Conclusions........................................................................................................42

5. Some Recommendations.......................................................................................43 Bibliography ...............................................................................................................45

List of Tables Table 3.1: ICDS expenditure during the Ninth and the Tenth plan periods................22 Table 3.2: Expansion of ICDS projects and AWCs during the Eleventh Plan............24 Table 3.3: Growth in beneficiaries for supplementary nutrition programme...............24 Table 4.1: Benefit cost ratios at the aggregate level ..................................................41 Table 4.2: Cost effectiveness of food & micronutrient supplementation ....................41

List of Figures Figure 2.1: Percentage of underweight children under 3 years & IMR ........................9 Figure 2.2: Underweight children under less than 3 years (%) ..................................10 Figure 2.3: Scatter plot of ICDS coverage vs. percentage of moderate & severely

malnourished children across the states (as on 31.3. 2006) ....................17 Figure 2.4: World Bank assisted ICDS III projects – reduction in percent of

underweight children (0-36 months) .........................................................18 Figure 3.1: Share of food costs during the Tenth Plan...............................................22 Figure 3.2: Per capita food expenditure including GOI share ....................................23 Figure 3.3: Estimated budget outlay on ICDS (without appointment of additional

AWWS) during the Eleventh Plan.............................................................26 Figure 4.1: Benefit cost ratios of supplementary feeding ...........................................34 Figure 4.2: Benefit cost ratios of Vitamin A supplementation.....................................38 Figure 4.3: Benefit cost ratios of iodine supplementation ..........................................38 Figure 4.4: Benefit cost ratios of iron supplementation ..............................................38 Figure 4.5: Benefit cost ratios of pre-school education ..............................................40 List of Boxes Box 2.1: TPDS - the case of missing food grains.......................................................11 Box 2.2: Mid-day meal scheme..................................................................................12 Box 2.3: Norms for ICDS programme ........................................................................15 Box 2.4: Tamil Nadu is different .................................................................................19 List of Annex Annex A: ICDS Projects, Centres and Beneficiaries..................................................48 Annex B: Trends in ICDS Expenditure & Projections.................................................53 Annex C: Benefit Cost Ratio and Cost Effectiveness.................................................58

List of Acronyms

ACDPO Assistant Child Development Project Officer

AIE Alternative and Innovative Education

ANM Auxiliary Nurse Midwife

APERP Andhra Pradesh Economic Reconstruction Programme

AWC Anganwadi Centre

AWH Anganwadi Helper

AWWs Anganwadi Workers

BCC Behavioral Change Commercial

BCR Benefit Cost Ratio CARE Cooperative for Assistance and Relief Everywhere CBA Cost Benefit analysis

CDPO Child Development Project Officer

DALY Disability-Adjusted Life Years

DFID Department for International Development

DFS Double Fortified Salt

DHFW Department of Health and Family Welfare

DPO District Programme Officer

ECE Early Childhood Education

EGS Education Guarantee Scheme

FCI Food Corporation of India

FOCUS Focus on Children Under Six

FPS Fair Price Shops

GDP Gross Domestic Product

GOI Government of India ICDS Integrated Child Development Services ICE Information, education and communication

IDA Iron Deficiency Anaemia

IDD Iodine Deficiency Disorders

IFA Iron Folic Acid

IFPRI International Food Policy Research institute

IMR Infant Mortality Rate

LHV Lady Health Visitor

MDM Mid-Day Meal MoWCD Ministry of Women and Child Development NCAER National Council of Applied Economic Research

1

NCERT National Council of Educational Research and Training

NCMP National Common Minimum Programme

NFHS National Family Health Survey

NP-NSPE The National Programme of Nutritional Support to Primary Education

P&LM Pregnant and Lactating Mother

PEM Protein-Energy Malnutrition

PEO Programme Evaluation Organisation

PETS Public Expenditure Tracking Survey

PMGY Pradhan Mantri Gramodaya Yojna

PSE Pre-school education

SNP Supplementary Nutrition Programme

TINP Tamil Nadu Integrated Nutrition Project

TPDS Targeted Public Distribution System

UNDP United Nations Development Programme UNICEF United Nations (International) children’s (Education) Fund UPA United Progressive Alliance

USD US Dollar

UTs Union Territories

VAD Vitamin A Deficiency WFP World Food Programme WHO World Health Organization

Lac 1,00,000

Crore 100,00,000

Million 10 lacs

Billion 100 crores

2

Executive Summary

Background

The World Bank has supported nutrition improvement programme in India since 1980 with an overall investment of over 700 USD million. The Bank is now in the process of preparing feasibility report for the ICDS IV Reform project involving financial assistance of about USD 450 million. As a part of its project evaluation, the bank examines the economic justification for investment and financial and fiscal feasibility and sustainability of the project.

In this context, the objectives of the present study are two fold: analysing public expenditure on ICDS and assessing the fiscal feasibility of increasing investment on the programme; and assessing the economic costs and benefits as well as cost-effectiveness of child development interventions.

Introduction

In the developing world today, 146 million children under five are underweight (1996 -2005) and more than half of them (78 million) live in South Asia. India, Bangladesh and Pakistan alone account for half the total underweight children despite the fact that these three countries house just 29 percent of the developing world’s under-five population.

India has some of the worst indicators of child well-being - about 46 percent of the children below age three are underweight, 79 percent suffer from anaemia, and 56 percent escape full immunisation. Nearly 23 percent of children born in the country have low birth weight. Micronutrient deficiencies (“hidden hunger”) are also widespread in India. IMR at 57 is still high.

There are couple of states where at least one in two children are underweight, namely Madhya Pradesh, Jharkhand, Bihar, Chattishgarh, Gujarat, Uttar Pradesh, and Meghalaya. The percentage of underweight at the all-India level is higher among rural children (49.0 percent) than urban children (36.4 percent). In terms of gender, under-nutrition prevalence is higher among girls (48.9 percent) than among boys (45.5 percent). Going by castes, malnutrition level is higher among scheduled castes (53.2 percent) and schedule tribes (56.2 percent) than among other castes (44.1 percent). However, not all states exhibit the same trends in gender-wise and caste-wise malnutrition prevalence rates.

Over the past decades, the Government of India and the states have taken several initiatives to improve nutritional status of the population, such as TPDS, mid-day meal programme, and ICDS.

With 58 percent leakage in food grains supply and a delivery cost of Rs. 3.65 for every one rupee of income transfer to the poor, TPDS has failed to become a reliable delivery mechanism for transferring food grains to poor households.

The mid-day meal programme reaches to about 119 million children in over 952 thousand schools and centres in the country. Several studies have provided evidence of improved enrolment and retention rates in schools due to mid-day meal programme, especially among girls. The scheme provides an excellent opportunity to implement nutrition programmes that require mass interventions such as de-worming and micronutrient supplementation.

ICDS scheme is possibly the world’s largest community based programme for early childhood care and development. The scheme caters to children under the age of six

3

years and pregnant and lactating mothers and provides a package of six services viz. supplementary feeding, non-formal pre-school education, nutrition and health education, immunization, health check-up, and referral services. The programme has expanded significantly over the decades. It is now headed towards universalisation of services with quality delivery.

The ICDS programme has now been in operation for over three decades but it does not seem to have made any significant dent in child malnutrition. The analysis made in this study and some earlier studies have not found any correlation between the programme coverage and prevalence of moderate and severe malnutrition.

However, significant reduction in percentage of underweight children in the World Bank assisted ICDS III projects, and outstanding performance of Tamil Nadu in implementing the scheme, is a pointer to the enormous potential of ICDS. This potential needs to be harnessed by addressing, inter alia, the factors that seem to be have impeded the ICDS programme such as: more emphasis on supplementary feeding and neglect of other determinants of malnutrition; Inadequate targeting of at-risk children including children under 3 years of age; wide range of operational problems (leakages, irregular supply of foods, and inadequate institutional capacity); and Inadequate response to some key issues like lack of community participation and lack of convergence of health and nutrition services.

Financial Analysis and Projections

ICDS is a centrally sponsored scheme wherein the central government bears administrative and infrastructure costs and the states and union territories provide supplementary food from their own resources. Since 2005-06 the central government has started providing grant-in-aid for sharing 50 percent of the food expenditure of the states/UTs. Apart from central government, World Bank, World Food Programme (WFP), UNICEF, CARE, and several NGOs also provide financial and other kind of supports to ICDS projects.

Over the last two plan periods, the central and state governments’ expenditure on ICDS, in nominal terms, has shown a spectacular growth – it more than doubled from the Ninth Plan (USD 2.3 billion) to the Tenth Plan (USD 4.7 billion). However, real per capita expenditure has grown at less than 2 percent per year.

The expenditure on supplementary feeding accounted, on the average, 43 to 44 percent during the two plan periods; the share reached 47 percent by the end of the Tenth Plan. At the all-India level, per capita food expenditure is estimated to be Rs. 1.30 (2005-06) and there are many states that spend much less than the revised norm of around Rs. 2 per beneficiary per day.

Following the unversalisation move, there will be significant expansion of the ICDS set up during the Eleventh Plan, with numbers of ICDS project and anganwadi centre going up to 6,291 and 1,453,334 respectively. It is further estimated that the total number of beneficiaries will grow from about 56 million today to 82 million.

Keeping this expansion in view and based on a set of assumptions (mostly regarding unit cost rates), the Eleventh Plan outlay is estimated to size up in big way, lying anywhere between Rs. 521 billion and Rs. 650 billion. At the rate of Rs. 2 per beneficiary per day, food costs will be little over Rs. 16 crore or USD 3.6 million per day. Apart from revenue expenditure, it is envisaged that 5 lacs AWCs will be constructed involving a total capital outlay of Rs. 87.5 billion (USD 2 billion).

Given the ambitious plan size, the union government would require to mobilise additional resources and bear more than 50 percent of the supplementary food budget. Actual spending by the states, of course, will depend on their budget

4

commitment and capacity to absorb allocated funds. An important risk factor is that often public funds (say budget spends on supplementary feeding) do not end up where they were destined for. An appropriate system for mitigating this risk can be evolved only on the basis of PETS.

Economic Cost Benefit Ratios and Cost Effectiveness

The rationale for investment in nutrition programme stems from the argument that improving nutrition status contributes to productivity, economic development, and poverty reduction by improving physical work capacity, cognitive development, school performance, and health by reducing disease and mortality. The economic costs of malnutrition are very high - several billion dollars a year in terms of lost GDP. Income and economic growth are now recognized as outcomes of improved nutrition.

A number of authors have carried out economic analysis for assessing cost-benefit of a specific nutrition intervention and/or evaluating cost effectiveness of alternative interventions. The present study has closely followed the methodologies of two such studies, namely Levin, et al (1993) and Pinstrup-Anderson, et al (1993).

The cost estimates are based on the financial projections for the Eleventh Plan. On the benefit side, the following sources of earnings (wage gains) are considered: earnings from death aversions and that from prevention of productive disability. The future wage gains are calculated taking into account ‘disability adjusted life years (DALYs). The DALYs are calculated using the Excel model developed by Fox-Rushby and Hanson (2001), which builds on relevant formulae outlined by Murray and Lopez (1996). The model is used with suitable assumptions being made regarding the parameters and applying a discount rate of 3 percent as recommended in the World Development Report 1993 (World Bank).

It may be further noted that all costs and benefits are estimated in financial terms only. No attempt has been made to analyse the externalities (i.e., intangible costs and benefits) because of the difficulties in valuing them in money terms.

Cost benefit analysis represents a technique for ascertaining whether an intervention is economically worthwhile. This is measured by dividing estimated economic benefits by the intervention costs, called ‘benefit cost ratio’ (BCR). For an intervention to be investment worthy, benefits must exceed the cost, i.e., BCR should be greater than one. Alongside benefit cost ratios, cost effectiveness is assessed in terms of the following two common parameters: cost per death averted and cost per DALY gained or saved.

The BCR of the food supplementation programme for a period of 3 years is estimated to be less than one meaning thereby that long-duration feeding programme is not viable and, hence, not investment worthy. Sensitivity analysis further reveals that for programme to be viable and investment worthy, feeding period need be shorter (say, about six months) and focus must be on at-risk underweight children and pregnant and lactating women.

Micronutrient initiatives such as Vitamin A, iodine and iron implementations are economically investment worthy; the estimated BCRs are much above the threshold value of one. In terms of cost per DALY saved, micronutrient initiatives are extremely cost effective: USD 16 per DALY for Vitamin A supplementation; USD 9 per DALY for iodine supplementation; and USD 10 per DALY for iron supplementation. The micronutrient interventions are not only cost effective in the Indian context, the estimated costs per DALY compare well with those found in the international studies.

5

Pre-school education is an economically rewarding intervention (BCR is greater than one even under worst case scenario) for early childhood development and deserves more public investment.

Some Recommendations

Strengthening financial management. Given the significant scale up of budget allocation for the Eleventh Plan, it is important to strengthen accounting and financial management systems at every level of the ICDS operation. For effective cost management, it is desirable that the central government take initiatives to undertake ‘public expenditure tracking survey’ in major states in consultation with the respective governments. Another important area to look at is building institutional capacity for better funds management.

Redesigning food supplementation programme. In order to make the programme economically investment worthy, the feeding programme needs to focus on at-risk children, especially those less than three year of age. Besides, the feeding period must be of short duration, say about six months. This calls for redesigning the feeding programme with appropriate entry and exit criteria. This is quite a challenging task and possibly some lessons can be drawn from Tamil Nadu experience.

Emphasis on micronutrient initiatives. It is recommended that ICDS promote children’s access to micronutrient supplementation. If implemented properly, micronutrient supplementation along with short-duration and well targeted feeding programme would contribute significantly in improving nutrition status of children in the country. A national micronutrient investment plan has already been formulated, which needs to be carefully examined and then implemented.

Strengthening pre-school education. Unfortunately, PSE is a neglected aspect of ICDS. It is imperative that this component be strengthened. However, it needs be borne in mind that strengthening PSE require more than just investing more funds, or appointing an additional worker, or relocating the anganwadi centre in the same premise as primary schools. It also requires, for instance, extensive training programmes for anganwadi workers, better facilities (including space) and effective monitoring arrangements. Addressing Some Old Issues and New Initiatives. As mentioned in the introductory note, one of the factors that are impeding the ICDS programme realising its potential is the inadequate response to issues like lack of community participation and lack of convergence of health and nutrition services. With massive scaling up of budget allocation for the Eleventh Plan, it is now imperative to address all such issues. It is also important now to replicate the new initiatives like ‘positive deviance’ that have created good impact in some states, as well as best practices followed in different parts of the country.

6

1 Background of the Study

ICDS Programme & World Bank Assistance

1. Over the past decades, the Government of India and the states have taken several initiatives to improve nutritional status of the population of which the biggest programme has been the nation-wide early child development intervention known as Integrated Child Development Services (ICDS). This scheme caters to children under the age of six years and pregnant and lactating mothers and provides a package of services including nutrition supplementation through feeding. ICDS in India is possibly the world’s largest community based programme for early childhood care and development.

2. The World Bank has also supported nutrition improvement programme in India since 1980 through six projects with an overall investment of over 700 USD million. These projects are: Tamil Nadu Integrated Nutrion Project (TINP I, 1980 – 1989); TINP-II (1991 – 1997); ICDS I (1991-1997); ICDS II (1993 – 2002): ICDS III (1994 – 2006); and ICDS programme in Andhra Pradesh (1999-2000) as a part of Andhra Pradesh Economic Reconstruction Programme (APERP). While ICDS I & II projects mainly supported expansion of the programme, ICDS III, apart from programme expansion, aimed at service quality improvement.

3. The Ministry of Women and Child development (MoWCD) has now made a request for further World Bank assistance (about USD 450 million) for the next phase of the project, to be termed as ICDS IV Reform Project. The Bank team has already completed their Identification Mission and now the preparation of the project is underway.

Objectives of the Study

4. As part of its project preparation requirements, the bank examines the economic justification for investment and financial and fiscal feasibility and sustainability of the project. In this background, the objectives of the present study are two fold:

Analysing public expenditure on ICDS and assessing the fiscal feasibility of increasing investment on the programme; and

Assessing the economic costs and benefits as well as cost-effectiveness of child development interventions.

Structure of the Report

5. The rest of the report is organised in the following way:

Second chapter presents an introductory note on child malnutrition in India, and the government initiatives to improve nutritional status, and nature, scope and impact of the ICDS programme.

Third chapter deals with analysis of ICDS expenditure and projection of budget outlay for the Eleventh Five Year Plan.

Fourth chapter presents the findings of cost-benefit and cost-effectiveness analysis of the ICDS programme

Fifth chapter contains a few recommendations based on the findings of the study.

7

2 Introduction

Child Malnutrition in India

6. Child malnutrition has enormous consequences for child and adult morbidity and mortality1. Children who are undernourished have lowered resistance to infection and are more likely to die from common childhood ailments like diarrhoeal diseases and respiratory infections2. Those who survive, frequent illness sap their nutritional status, locking them into a vicious cycle of recurring sickness and faltering growth. It has been estimated that malnutrition plays a role in about half of all child deaths3. Though isolating the effects of protein-energy malnutrition (PEM) is difficult, it is generally accepted that underweight or stunted children are at greater risk for childhood morbidity and mortality, poor physical and mental development, inferior school performance, and reduced adult size and capacity to work4.

7. In a country where under-nutrition is widespread, the consequences of under-nutrition go well beyond the individual, affecting total labour force productivity and economic growth5. Malnutrition slows economic growth and perpetuates poverty through losses in individual productivity and higher health care costs6.

8. Under-nutrition is also strongly linked to income poverty; the prevalence of malnutrition is often two or three times (sometimes even more than that) higher among the poorest income quintile than among the highest quintile7. Improving nutrition is therefore crucial towards meeting the Millennium Development Goal of eradicating extreme poverty and hunger.

9. In the developing world today, 146 million children under five are underweight (1996 -2005) and more than half of them (78 million) live in South Asia8. India, Bangladesh and Pakistan alone account for half the total underweight children despite the fact that these three countries house just 29 percent of the developing world’s under-five population9.

10. India has some of the worst indicators of child well-being. About 46 percent of the children below age three are underweight, 79 percent suffer from anaemia, and 56 percent escape full immunisation10. Nearly 23 percent of children born in the country have low birth weight11. Within the age group under 5 years, India has the highest prevalence of underweight children in the world (49 percent) which is comparable only with countries like Bangladesh (48 percent), Nepal (48 percent) and Ethiopia (47

1 Child malnutrition includes child being underweight-for-age, too short for age (stunted), too thin (wasted), and deficient in vitamins and minerals (micronutrient malnutrition). 2 Michele Gragnolati, et al (2006) cites several studies that find malnutrition as a leading contributor to infant, child and maternal mortality and morbidity. 3 Horton (1999); Pelletier, et al (1995); Pelletier and Frongillo (2003). 4 WHO (1995) 5 Michele Gragnolati, et al (2006) 6 UNICEF (2006a); World Bank (2006) 7 World Bank (2006) 8 UNICEF (2006a). Underweight refers to proportion of under-five children whose weight fall below minus 2 standard deviation (moderate underweight) and minus 3 standard deviation (severe underweight) from the median weight-for-age of the reference population as defined by WHO. 9 Ibid 10 NFHS III (2005-2006) 11 NFHS II (1998-99)

8

percent)12. The prevalence rate is nearly double that of many nations in sub-Saharan Africa and over six times that of China (8 percent).

11. Micronutrient deficiencies (“hidden hunger”) are also widespread in India. The country has the largest number of children in the world with Vitamin A deficiency (VAD), causing 333,000 child deaths every year13. About 75 percent of preschool children and 51 percent of women in India suffer from iron deficiency anaemia (IDA). About 22,000 people, mainly pregnant women, die every year due to severe anaemia. Iodine deficiency has also been endemic in several districts in India. About 6.6 million children are born mentally impaired every year due to iodine deficiency. Besides, 200,000 babies are borne every year with neural tube defects in India due to folic acid deficiency; this is 16 times the global average.

12. While India has achieved impressive economic growth and some success in income poverty reduction in the past decade, the progress in reducing child malnutrition has been rather slow (Figure 2.1). The proportion of underweight children (based on weight for age) below the age of 3 years declined from 51.5 percent in 1992-93 to 47.0 percent in 1998-99 and then to 45.9 percent in 2005-06, reflecting less than half-a-percent point annual reduction14. At this sluggish rate, India will take nearly 88 years to catch up with the underweight children proportion of 8 percent (1996-2004) in China15.

Figure 2.1: Percentage of underweight children under 3 years & IMR

51.547.0 45.9

79

68

57

NFHS I (1992-93) NFHS II (1998-99) NFHS III (2005-06)

Underw eight children below 3 yearsInfant mortality rate

13. Though infant mortality rate (IMR) has declined significantly from 79 infant deaths per 1000 live births in 1992-93 to 68 in 1998-99 and then 57 in 2005-06, it still remains at high level (Figure 2.1). The prevalence rate represents more than double the IMR in China (26 infant deaths per 1000 live births)16.

14. Similarly under-five mortality rate has declined from 109.3 per 1000 (age-specific) population in 1992-93 to 94.9 in 1998-99 and to 85 in 200417. But the mortality rate

12 UNDP (2006) 13 All the figures pertaining to micronutrient deficiencies are quoted from India Micronutrient National Investment Plan 2007-2011 (Micronutrient Initiative). 14 The comparative figures are available in NFHS III national fact sheet. 15 Underweight figure for China is obtained UNDP (2006). 16 IMR for China is obtained from UNICEF (2006b). 17 Mortality rate for 2004 is obtained from UNDP (2006)

9

still continues at high level and it is over two-and-a half times the prevalence rate of 31 child deaths per 1000 population in China (2004)18.

15. The state-wise incidence of malnutrition (underweight for age) among children under 3 years exhibits wide variation (Figure 2.2) 19. There are couple of states where at least one in two children are underweight, namely Madhya Pradesh, Jharkhand, Bihar, Chattishgarh, Gujarat, Uttar Pradesh, and Meghalaya. Inequalities in under-nutrition prevalence are also noticeable among children in rural and urban areas. The percentage of underweight at the all-India level is higher among rural children (49.0 percent) than urban children (36.4 percent). This trend is more prominent in several states like Jharkhand, Arunachal Pradesh, Goa, West Bengal, Chattishgarh, Mizoram, etc. However, in Sikkim, Delhi and Haryana underweight prevalence rate is lower in rural than urban areas.

Figure 2.2: Underweight children under less than 3 years (%)

21.822.623.8

27.028.829.329.429.7

33.133.2

36.236.536.938.039.039.740.441.141.943.544.044.045.946.347.347.4

52.158.459.260.3

MizoramSikkim

ManipurPunjabKerala

GoaJammu & Kashmir

NagalandDelhi

Tamil NaduHimachal Pradesh

Andhra PradeshArunachal Pradesh

UttaranchalTripura

MaharashtraAssam

KarnatakaHaryana

West BengalOrissa

RajasthanIndia

MeghalayaUttar Pradesh

GujaratChattishgarh

BiharJharkhand

Madhya Pradesh

16. In terms of gender, under-nutrition prevalence is higher among girls (48.9 percent) than among boys (45.5 percent). However, this pattern does not characterise every state20. For instance, in states such as Delhi and Orissa, the percentage underweight boys are higher than the percentage of underweight girls21.

17. Going by castes, malnutrition level is higher among scheduled castes (53.2 percent) and schedule tribes (56.2 percent) than among other castes (44.1

18 Under-five mortality rate for China is obtained from UNDP (2006). 19 Unless otherwise stated, analysis of nutritional inequalities is based on NFHS III data. 20 Michele Gragnolati, et al (2006) 21 Ibid

10

percent)22. Once again, this pattern is not common across the states. For example, in Himachal Pradesh, J & K, Nagaland, Arunachal Pradesh and Tripura, underweight prevalence is higher among schedule caste children than among the children belonging to other castes. In contrast, in Assam, Goa and Manipur, the underweight prevalence is higher among other castes than among scheduled castes23.

Government Initiatives to Improve Nutritional Status

18. Over the past decades, the Government of India and the states have taken several initiatives to improve nutritional status of the population, such as distribution of staple foods (e.g. food grains and sugar) at controlled prices through public distribution system, income support schemes (e.g., food-for-work programme), and food supplementation programme for children (including mid-day meal scheme for school-going children) and pregnant women and lactating mothers. By far the biggest nutrition supplementation programme has been the nation-wide early child development intervention known as Integrated Child Development Services (ICDS) programme.

Targeted Public Distribution System

19. The Targeted Public Distribution System (TPDS) is an important policy instrument aimed at benefiting the poorest and most nutritionally vulnerable (namely, population below poverty line) through delivery of minimum requirements of food grains at highly subsidised prices. The programme was launched in 1997. Despite its reach across the country, the TPDS has failed to become a reliable delivery mechanism for transferring food grains to poor households. With 58 percent leakage in food grains supply and a delivery cost of Rs. 3.65 for every one rupee of income transfer to the poor, TPDS has emerged as economically unviable programme (Box 2.1)24.

Box 2.1: TPDS - the case of missing food grains

To assess efficiency and effectiveness of TPDS, the Planning Commission and Ministry of Consumer Affairs, Food and Public Distribution initiated an independent evaluation by the Programme Evaluation Organisation (PEO). The evaluation used relevant process data collected from the various nodes of the delivery system and also relied upon a sample survey of fair price shops (FPS) and households spread over 18 states and have come up with some far-reaching findings as follows:

• About 58 percent of the subsidised food grains issued from the central pool do not reach the BPL families because of targeting errors, non-transparent operation, and unethical practices in the implementation of TPDS.

• Over 36 percent of the budgetary subsidies on food are siphoned off the supply chain and another 21 percent reaches the households above the poverty line.

• The cost of handling of food grains by public agencies is also very high; for one rupee worth of income transfer to the poor, the central government spends Rs. 3.65.

_______________________________________

Source: PEO Report No. 189, March 2005, Planning Commission, GOI

22 Ibid 23 Ibid 24 For further evidence of poor implementation of TPDS refer to Fifth and Sixth Reports of the Commissioners (Supreme Court).

11

Mid-day Meal Scheme

20. The National Programme of Nutritional Support to Primary education (NP-NSPE), commonly known as the Mid-Day Meal (MDM) programme was launched on 15 august 1995 with a view to enhancing enrolment, retention and attendance and simultaneously improving nutritional levels among school going children (Box 2.2). The scheme is the world’s largest school feeding programme reaching to about 119 million children in over 952 thousand schools and centres in the country. The central allocation for the programme is Rs. 5,348 crores (2006-07 BE).

Box 2.2: Mid-day meal scheme

21. .

Mid-Day Meal (MDM) in schools has a long history in India. In 1952, a MDM programme was introduced for disadvantaged children in Madras Municipal Corporation. By the mid 1980s three states viz. Tamil Nadu, Gujarat, Kerala and Pondicherry universalised the cooked MDM programme for children in primary level with their own resources. Mid-day meal was also being provided to children in tribal areas in some states like Madhya Pradesh and Orissa. By 1990-91, 12 states (Tamil Nadu, Gujarat, Kerala, Madhya Pradesh, Maharashtra, Uttar Pradesh, Goa, Tripura, Meghalaya, Mizoram, Nagaland and SikKim) implemented the MDM programme at a large scale with their own resources.

With a view to enhancing enrolment, retention and attendance and simultaneously improving nutritional levels among school going children, the National Programme of Nutritional Support to Primary education (NP-NSPE) was launched on 15 august 1995, initially in 2,408 blocks. By the year 1997-98 the NP-NSPE was introduced in all blocks of the country. In 2002, it was further extended to cover not only children in primary classes of government and government aided local body schools, but also children studying in centres run under the Education Guarantee Scheme (EGS) and Alternative and Innovative Education (AIE) Scheme.

By 2001 a few states were providing cooked meals, but most were only giving monthly ‘dry ration’ (i.e., food grains). The number of states providing cooked meals rose sharply from early 2002 onwards after a Supreme Court order (dated 28 November 2001) that directed all the states and union territories to provide cooked mid-day meals in all the government and government-aided primary schools at least for 200 days. In a follow-up order (dated 20 April 2004), the Supreme Court reiterated the earlier directive and further stated that the central government should make provision for construction of kitchen sheds in the schools and allocate funds to meet the “conversion costs of food grains into cooked mid-day meals”.

NP-NSPE scheme was last revised in June 2006 and as per the revised norms, cooked mid-day meal must have the following nutritional content: 450 calories; 12 grams protein; and adequate quantities of micronutrients like iron, folic acid, Vitamin A, etc. Food grains will be supplied free of cost by GOI @ 100 grams per child per school day. The cooking cost has been fixed at Rs. 2 per child per school day, with Rs. 1.80 as central assistance for NE states and Rs. 1.50 for other states/UTs. In addition, GOI will reimburse the actual cost incurred in transportation of food grains from nearest FCI depots to the primary school subject to the following ceilings: Rs. 100 per quintal for 11 special category states and Rs. 75 per quintal for other states/UTs.

Recognising the need for appropriate infrastructure, assistance for construction of 94,500 kitchen-cum-stores was sanctioned for the first time to states in 2006-07. Besides, assistance to states has been provided for @ Rs. 5000 per school for procuring and repairing kitchen devices. _______________________________________

Source: NP-NSPE Guidelines, Sept. 2006, Department of School education & Literacy, MoHRD, GOI; Economic Survey 2006-07; Recommendations on mid-day meals based on deliberations of the National Advisory council on 28 August 2004 (available on website)

12

22. Mid-day meal programme can offer three potential benefits: educational advancement by improving enrolment and retention rates; nutritional benefits ranging from elimination of class-room hunger to healthy growth of children; promoting social equity such as reducing cast prejudices and class inequalities through sharing of common meal; and narrowing gender gap by encouraging more girls’ attendance in the schools25.

23. Several studies have provided evidence of improved enrolment and retention rates in schools due to mid-day meal programme, especially among girls26. In Tamil Nadu where the meal scheme performs the best, the percentage of children who have attained some educational level is higher if they access meals in school, irrespective of the economic status and the place of residence (rural or urban)27.

24. It has also been found that mid-day meal programme creates cooking jobs for women mostly belonging to underprivileged backgrounds and thereby contributes to gender equity. For instance, in Rajasthan, more than 50,000 needy women are employed under the mid-day meal programme28.

25. A comprehensive study across various countries indicates positive impact of school meals on anthropometric status, health, and cognitive development29. However, in the Indian context, not noteworthy evidence is available to show improvement in nutritional status of children on account of mid-day meals30. Since mid-day meal provides only one-third of the dietary intake and that too for 200-250 days, it is possible that there is no demonstrable improvement in nutritional status of the children31.

26. However, mid-day meal programme provides an excellent opportunity to implement nutrition programmes that requires mass intervention, such as de-worming32. Available experience indicates that these interventions are highly effective; for instance, a combination of mass de-worming with Vitamin A and iron supplementation can significantly enhance nutritional status of children for as little as Rs. 15 per child per year33.

27. The mid-day meal cost per children per school day is estimated to be Rs. 3.11 which includes imputed food grains cost of Rs. 1.1134. Taking into account the present coverage of about 120 million children and considering a minimum of 200 feeding days, the overall programme cost would be Rs. 7,464 crores or USD 1.6 billion per year. This is roughly 0.2 percent of the country’s estimated GDP for 2006-0735.

28. It is generally argued that the cost is less in view of the major role that the mid-day meal programme can play in improving school attendance, eliminating class-room hunger and fostering social equity36. It also appears that the benefits will be even more if mid-day meal programme is linked with micronutrient supplementation.

25 Dreze and Goyal (2003) 26 See, for instance, Dreze and Kingdon (2001); Khera (2002); Bishnupada (2003); Dreze and Goyal (2003); and Viswanathan (2006). 27 Viswanathan (2006) 28 Bhardwaj (2003). 29 Drake, et al (2002) 30 Viswanathan (2006) 31 Nutrition Foundation of India (2003) 32 Dreze and Goyal (2003) 33 Ibid. Also see the cited references, Gopaldas (2003) and Gopaldas and Gujral (2004). 34 The food grains cost per child per school day is obtained from NP-NSPE Guidelines 2004. 35 Advance estimate of GDP in current market price; Economic Survey 2006-07, GOI. 36 Dreze and Goyal (2003)

13

Integrated Child Development Services (ICDS)

29. ICDS scheme is possibly the world’s largest community based programme for early childhood care and development. The scheme caters to children under the age of six years and pregnant and lactating mothers and provides a package of six services viz. supplementary feeding, non-formal pre-school education, nutrition and health education, immunization, health check-up, and referral services. The latter three services (immunization, health check-up and referral services) are delivered through primary health care centres.

30. The integrated child development services are provided through an Anganwadi Centre (AWC) located within a village or a slum area. One AWC normally caters to 1,000 populations in rural/urban projects and 700 populations in tribal project (Box 2.3). ICDS functionaries comprise of Child Development Project Officers (CDPO), District Programme Officers (DPOs), Anganwadi Workers (AWWs) and Anganwadi Helpers (AWHs). Anganwadi worker, a lady selected from the local community runs the anganwadi centre. She is assisted by an anganwadi helper. Both the AWW and AWH are voluntary workers and they are paid honorarium37.

31. The medical officers, the lady health visitors (LHVs) and Auxillary Nurse Midwife (ANM) and female health workers from nearby primary health centre and sub-centre are expected to form a team with AWWs and other ICDS functionaries to achieve convergence of anganwadi and health services38.

Programme Coverage

32. ICDS scheme was launched in 1975 in 33 blocks. Over the years the coverage has increased many folds and it has now (as of 31 March 2006) a network of 5,659 operational projects (out of 6,118 sanctioned projects) and 748,229 operational anganwadi centres (out of sanctioned nos. of 946,060).

33. For food supplementation, the scheme reaches out to 56.22 million beneficiaries, comprising of 46.72 million children (representing 30 percent of estimated child population under 6 years in 2006) and 9.50 million pregnant and nursing mothers39. Pre-school education is provided to 24.49 million children (representing 16 percent of estimated child population under 6 years in 2006). Annex A provides state-wise details the ICDS network and beneficiaries.

34. To ensure coverage of all uncovered habitations/settlements as per the Supreme Court directives (discussed later), the population norms for sanctioning of an AWC have been relaxed and accordingly the states have furnished requirement of 173 additional Projects, 107,274 additional AWCs and 25,961 mini-AWCs40. Taking all 37 The honorarium to anganwadi workers and helpers are decided by the union government. For anganwadi workers it ranges from Rs. 938 per month (for non matriculate) to Rs. 1063 per month (for matriculate with 10 years experience). Honorarium for anganwadi helper is fixed at Rs. 500 per month. Salaries and honorarium for ICDS functionaries are funded by GOI. Apart from GOI honorarium, many states pay additional honorarium and incentives to AWWs and AWHs. They are also allowed paid absence on maternity for a period of 135 days. Since 1 April 2004, central government has introduced Anganwadi Karyakarti Bima Yojana under the Life Insurance Corporation’s Social Security Group Scheme. As on 16 August 2005, 413,229 AWWs and 267,931 AWHs joined the scheme. 38 This convergence of anganwadi and health services has not taken place to the extent it is desired. In fact, lack of convergence is a matter of concern. 39 According to the projection by Census of India, child population under 6 years of age has already declined from 164 million in 2001. Based on the projections for different age groups, 0-6 year child population for the year 2006 is estimated to be 156 million. 40 The directives of the Supreme Court will be discussed after a while.

14

these additions into account, the ICDS network will cover 6,291 ICDS projects, 1,453,334 AWCs and 25,961 mini-AWCs. The number of beneficiaries for supplementary feeding and pre-school education is projected to increase significantly during the Eleventh Five Year Plan. This is discussed in details in the next chapter.

Box 2.3: Norms for ICDS programme

Population Norms

Rural projects: One AWC for 500 – 1500 population

One mini AWC for 150 – 500 population in less populated hamlets/villages

Tribal projects: One AWC for 300 – 1500 population

One mini AWC for 150 – 500 population in less populated hamlets/villages

Urban projects: One AWC for 500 – 1500 population

Nutritional Norms

The nature and type of food provided as supplementary nutrition vary from state to state. The prevalent norms for SNP are as follows:

Beneficiaries Calories (cal) Protein (gm)

Children up to age 6 years 300 8 – 10

Severely malnourished children (on medical advice after health check-up) double of above

Pregnant and lactating mothers 500 20 - 25

Financial Norms

The financial norms for supplementary nutrition programme under ICDS scheme, which was fixed in 1991, have been revised since October 2004 as given under:

Rs. per beneficiary per day Beneficiaries

Old Rates Revised Rates

Children (6 months to 72 months) 0.95 2.00

Severely malnourished children 1.35 2.70

Adolescent girls (under Kishori Shakti Yojna), pregnant & lactating mothers 1.15 2.30

__________________________________________________

Source: Website of W&CD, GOI.

Supplementary Nutrition Programme & Pre-school Education

35. The Supplementary Nutrition Programme (SNP) and the Pre-School Education (PSE) are the two major components of the ICDS programme.

36. SNP aims at supplementing the nutritional intake by 300 calories and 8-10 grams of protein for children and 500 calories and 20-22 grams of protein for pregnant and lactating mothers per day for a minimum of 300 days in a year (Box 2.3). According to financial norms, state is required to spend Rs. 2 per day for a child beneficiary, Rs. 2.70 per day for a severely malnourished child, and Rs. 2.30 per day for every pregnant and lactating mother (Box 2.3). Besides, severely malnourished children

15

are given special supplementary feeding and referred to health sub-centres, primary health centres as and when required. Alongside providing supplementary food, anganwadi workers undertake growth monitoring and nutrition surveillance.

37. Pre-school education intends to contribute to the universalisation of primary education by providing the child with the necessary preparation for primary schooling. It also offers substitute care to younger siblings and thereby enables the older ones, especially the girls, attend school.

Universalisation of ICDS with Quality

38. In two landmark orders (in November 2001 and April 2004), the Supreme Court of India has given a clear mandate for universalisation of ICDS programme through wider coverage of habitations (one functional AWC in every settlement), full coverage of all children for supplementary feeding (originally feeding was meant for children belonging to BPL families only), and increased budget allocation for supplementary food (from one rupee to at least to two rupees per beneficiary per day). The present UPA government has also adopted universalisation of ICDS scheme as a part of their National Common Minimum Programme (NCMP).

39. Universalisation also calls for improving quality of ICDS services. In this regard, a wide-ranging measures have been identified, which inter alia include the following: (a) improving content of food supplements; (b) initiating an extensive programme of take-home rations for children under 3 years; (c) improving infrastructure of AWC; (d) revamping training, supervision and monitoring arrangements; (e) appointment of a second anganwadi worker in each AWC, with special responsibility for children under 3 years; and (f) ensuring timely and adequate remuneration of AWC workers41.

40. It is also argued that ‘universilisation with quality’ is not just about expanding the coverage of ICDS or quality improvements; it also means extending the scope of services, with special emphasis on health care and pre-school education42.

Impact of ICDS

41. The ICDS programme has now been in operation for over three decades but it does not seem to have made any significant dent in child malnutrition43. There are at least three recent studies that find little or no association between the presence of an anganwadi centre and nutritional status of the children44.

42. Using multivariate analysis of the 1992-93 NFHS data, the World Bank (2004) estimates that, for boys, having an anganwadi centre is associated with a 5 percent reduction in the likelihood of being underweight but that there is no significant association for girls. Lokshin, et al (2005) finds little evidence of programme impact on child nutrition status in villages with anganwadi centres. In a multivariate model of cross-sectional data collected in Kerala, Rajasthan, and Uttar Pradesh between 2000 and 2002, Bredenkamp and Akin (2004) find that children in villages with anganwadi centres are not significantly less likely to be underweight or ill than other children. Using data from Chattishgarh, Kerala, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh, the authors find that only in Kerala attendance at AWCs is significantly associated with better nutritional status.

41 Dreze and Sen (2004). 42 Dreze (2006) 43 Recall our discussion on child nutrition status at the outset of this chapter. 44 Michele Gragnolati, et al (2006) describes these studies, which are quoted here for ready reference.

16

43. The present study also finds no evidence of correlation between ICDS coverage for food supplementation (measured both in terms of average numbers of child beneficiary per AWC and number of child beneficiaries as percentage of 0-6 year child population) and prevalence of moderate (Grade II) and severely (Grades III & IV) underweight children (Figure 2.3).

Figure 2.3: Scatter plot of ICDS coverage vs. percentage of moderate & severely malnourished children across the states (as on 31.3. 2006)

0

10

20

30

20 45 70 95 120

Average nos. of child beneficiary per AWC for SNP

Perc

enta

ge o

f Gra

des

II, II

I & IV

chi

ldre

n

0

10

20

30

15 25 35

SNP coverage of 0-6 year child population (%)

Perc

enta

ge o

f Gra

des

II, II

I & IV

chi

ldre

n

44. However, some states have witnessed noticeable impact of ICDS in reduction of child malnutrition, especially in those project areas where programme has been implemented well. A case in point is the World Bank assisted ICDS III (Women and Child Development) Project.

45. The project was made effective in October 1999 and completed on March 31, 2006 after 6.5 years of implementation. During this period, as revealed by the end

17

line surveys conducted in 2005, Uttar Pradesh achieved a maximum reduction in percent of underweight children (0-36 months); the reduction was 13 percent points or about 2 percent points per year (Figure 2.4). The other states with significant reduction in percent of underweight children were Tamil Nadu, Maharashtra, Kerala and Rajasthan.

Figure 2.4: World Bank assisted ICDS III projects – reduction in percent of underweight children (0-36 months)

58

52 5143

11

43 4035

45

4

8119

13

8

UP Maharashtra Tamil Nadu Rajasthan Kerala

Baseline Survey (2000) Baseline Survey (2005)

Change in percentage points

46. Regarding effective programme implementation, Tamil Nadu is an outstanding example (Box 2.4). This is brought out by a field survey called “Focus on Children under Six” (FOCUS), which was conducted in 2004 in six states. It was found that functioning of ICDS in Tamil Nadu was far better than other five states in terms of infrastructure and service delivery; nearly 90 percent of the mothers who used ICDS services were satisfied with the service quality45. One reason for the success of ICDS in Tamil Nadu is that women have helped to make health and nutrition political issues, and also hold the system accountable46. Another state which is catching up Tamil Nadu, as pointed out by the same survey, is Maharashtra.

47. The evidence from World Bank assisted ICDS III project (1999-2006) and the Tamil Nadu experience is a clear pointer to the fact that the ICDS programme has enormous potential to improve the nutritional status of children in India. This potential needs to be harnessed by addressing, inter alia, the factors that seem to be have impeded the ICDS programme, such as47:

More emphasis on food-based intervention and neglect of several other determinants of malnutrition, such as high level of exposure to infections, and inappropriate infant and young child feeding and caring practices;

Inadequate targeting of at-risk children; failure to cover children under 3 years of age; and lower per capita budget spends on feeding by many states vis-à-vis the financial norms;

45 The other states are Chattishgarh, Uttar Pradesh, Maharashtra, Rajasthan, and Himachal Pradesh. 46 Jean Dreze (2006) 47 See Michele Gragnolati, et al (2006); Michael Lokshin et al (2005)

18

Wide range of operational problems such as leakages, irregular supply of foods and inadequate institutional capacity (e.g. AWWs not adequately trained, supervised and supported – they are also overloaded); and

Inadequate response to some key issues such as lack of community participation and convergence of health and nutrition services.

Box 2.4: Tamil Nadu is different

The central feature of Tamil Nadu’s experience is initiative and innovation. Tamil Nadu has “owned” ICDS and invested major financial, human and political resources in it. For instance, anganwadis in Tamil Nadu are typically open for more than six hours a day, compared with an average of barely three hours a day in the northern states. Similarly, high child attendance rates in the age group of 0-3 years show that many anganwadis in Tamil Nadu include creche facilities for small children. Tamil Nadu has also developed sophisticated training programmes, including inter-district “exposure tours”.

The question arises as to why Tamil Nadu has done so well in this field, and indeed also in related fields such as mid-day meals and even health services. Some attributes this success to a combination of political initiative and public pressure (each reinforcing each other). On the one hand, “combating child hunger and malnutrition became political priorities in Tamil Nadu well before judicial intervention triggered responses at the centre”. On the other, Tamil Nadu’s relatively informed, articulate and vocal public kept the government on its toes, making it difficult, for instance, “for an anganwadi to remain closed without immediate enquiry”.

Women’s agency also played a crucial role in this success story, in several ways. First, ICDS in Tamil Nadu is managed almost entirely by women, not only at the anganwadi level but also at higher levels. Second, women have helped to hold the system accountable. The “pressure from below”, comes largely from women – women who value the ICDS and are able to voice their demands. Third, women have also helped to make health and nutrition political issues. For instance, women’s votes in Tamil Nadu matter a great deal, and this forces political leaders to respond to their aspirations, including those relating to child development. It is perhaps no accident that the only north Indian state where ICDS is doing relatively well, namely, Himachal Pradesh, has much in common with Tamil Nadu in terms of gender relations and the role of women of society. __________________________________________________

Source: Jean Dreze (2006)

Conclusions

Despite impressive economic growth and some success in reduction in poverty, India has some of the worst indicators of child well-being – about 46 percent of the children below age three are underweight, 79 percent suffer from anaemia, and 56 percent escape full immunisation. Nearly 23 percent of the children have low birth rate. IMR at 57 is still high (double the rate in China). There are couple of states (Madhya Pradesh, Jharkhand, Bihar, Chattishgarh, Gujarat, Uttar Pradesh, and Meghalay) where at least one in two children are underweight.

Over the past decades, the Government of India and the states have taken several initiatives to improve nutritional status of the population, such as TPDS, mid-day meal programme, and ICDS.

With 58 percent leakage in food grains supply and a delivery cost of Rs. 3.65 for every one rupee of income transfer to the poor, TPDS has failed to become a reliable delivery mechanism for transferring food grains to poor households.

The mid-day meal programme that reaches to about 119 million children in over 952 thousand schools and centres in the country provides an excellent opportunity to

19

implement nutrition programmes that require mass interventions such as de-worming and micronutrient supplementation.

The ICDS network has expanded significantly over the decades and it is now headed towards ‘universalisation with improved quality of services’. Unfortunately, the programme has not contributed much in improving nutritional status of the children. The analysis made in this study and some earlier studies have not found any correlation between the programme coverage and prevalence of moderate and severe malnutrition.

However, significant reduction in percentage of underweight children in the World Bank assisted ICDS III projects, and outstanding performance of Tamil Nadu in implementing the scheme, is a pointer to the enormous potential of ICDS. This potential needs to be harnessed by addressing, inter alia, the factors that seem to be have impeded the ICDS programme such as: more emphasis on supplementary feeding and neglect of other determinants of malnutrition; Inadequate targeting of at-risk children including children under 3 years of age; wide range of operational problems (leakages, irregular supply of foods, and inadequate institutional capacity); and Inadequate response to some key issues like lack of community participation and lack of convergence of health and nutrition services.

20

3 Financial Analysis and Projections

Analysis of ICDS Expenditure

48. ICDS is a centrally sponsored scheme wherein the central government bears administrative and infrastructure costs and the states and union territories provide supplementary food from their own resources. Since 2005-06 the central government has started providing grant-in-aid for sharing 50 percent of the food expenditure of the states/UTs. Apart from central government, World Bank, World Food Programme (WFP), UNICEF, CARE, and several NGOs also provide financial and other kind of supports to ICDS projects.

49. In the following paragraphs, we present an analysis of the budget spends on the ICDS programme during the Ninth Plan (1997-98 to 2001-02) as well as an estimated budget outlay for the Tenth Plan (2002-03 to 2006-07).

Data

50. At the outset, it may be noted that while the data on the central government’s release of funds to the states/UTs under ICDS scheme are readily available from the MoWCD, the state-wise data on supplementary food expenses are difficult to obtain48. Surprisingly, MoWCD has not kept any track of the food expenses incurred by the states/UTs49. It is very recently (in fact, following the central decision to fund 50 percent of the food expenditure) that the Ministry has started receiving information from the states/UTs about their spending for food supplementation.

51. For the purpose of the present study, state data on supplementary food expenditure are primarily collected from the Planning Commission website. It may be further noted that the Ninth Plan data on food expenditure as cited in this study reflect allocations by the states/UTs and not the actual expenses; unfortunately, the Tenth Plan documents do not report actual expense figures.

52. Regarding state expenditure for food supplementation during the Tenth Plan, the data for the first three years (2002-03 to 2004-05) are collected from the Planning Commission website and they represent actual expenses. The actual food expenses incurred by the states and the central government during 2005-06 are gathered from MoWCD. For the last year of the Tenth Plan (i.e., 2006-07), food expenditure by the states and union territories are estimated by inflating the previous year figure at 10 percent and then adding the figure to the actual release of funds under GOI share as obtained from MoWCD.

53. All the figures pertaining to GOI grant-in-aid under ICDS (General), World Bank assisted ICDS, and training expenditure over the four years from 2002-03 to 2005-06 are gathered from MoWCD. The figures for 2006-07 are obtained from the respective budget document (Demand Grant No. 59) of GOI.

48 The union government provides main funding support to the states/UTs under the head ‘ICDS (General)’. Special allocations to North East states, or World Bank assistance, are provided separately. 49 Annual Reports of MoWCD for the year 2004-05 presented GoI and state expenditure for ‘ICDS and nutrition’ separately under ‘child budgeting’, covering the period from 1993-94 up to 2002-03 (the last two years’ figures were revised and budget estimates respectively). But the data do not clearly show food expenses incurred by the states/UTs. Since then MoWCD has discontinued reporting state spends on ICDS.

21

Overall Trends in Expenditure

54. Over the last two plan periods, public spends for child development and nutrition, in nominal terms, has shown spectacular growth. The central and state governments’ expenditure on ICDS during the Ninth Plan was Rs. 99.5 billion (USD 2.3 billion), which more than doubled to Rs. 217 billion (USD 4.7 billion) during the Tenth Plan period (Table 3.1). In tandem, average expenditure per beneficiary (0-6 year children and pregnant and lactating mothers) per year increased from Rs. 665 in the Ninth Plan to Rs. 932 during the Tenth Plan, reflecting a growth by 40 percent. But in real terms, the growth has been 9 percent or less than 2 percent per year.

Table 3.1: ICDS expenditure during the Ninth and the Tenth plan periods

Non-food costs1 Food costs2 Total

Period Rs.

crores % Rs. crores % Rs.

croresUSD

million

Per year exp. Rs. crores

Per capita exp. Rs.

Nominal costs Ninth Plan 5,720 57 4,229 43 9,949 2,304 1,990 665 Tenth Plan 12,102 56 9,607 44 21,709 4,730 4,342 932 % growth 112 127 118 105 118 40

Real costs Ninth Plan 4,750 57 3,511 43 8,262 1,913 1,652 552 Tenth Plan 7,836 56 4,808 44 14,047 3,054 2,809 603 % growth 65 77 70 60 70 9

1 Includes ICDS (General), World Bank assisted ICDS, and training programme 2 Includes GOI share since 2005-06; state expenditure includes amount spent under PMGY till 2004-05 after which the scheme was discontinued. Note: For further details refer to Annex B, Table B1

55. Component wise, food expenditure was Rs. 42 billion (USD 979 million) during the Ninth Plan (Table 3.1). This went up to Rs. 96 million (USD 2.1 billion) during the Tenth Plan. In terms of share in total ICDS expenditure, food costs accounted, on the average, 43 to 44 percent during the Ninth Plan and the Tenth Plan respectively. The share reached 47 percent by the end of the Tenth Plan (Figure 3.1).

Figure 3.1: Share of food costs during the Tenth Plan (Percentage)

55 56 59 53

43 45 44 41 47

57 56

44

2002-03 2003-04 2004-05 2005-06 2006-07 Average

Share of non-food costs Share of food costs

22

56. Further scrutiny reveals that the level of food expenses increased significantly since 2005-06 because of the revision of financial norms for food supplementation and release of funds by the central government for sharing 50 percent of the state burden. At present, combined outlay of the states and the union government for food supplementation is nearly USD 2 million per feeding day (calculated considering prescribed norm of 300 feeding days per year).

Per Capita Expenditure on Food Supplementation

57. Per capita expenditure on supplementary feeding (including GOI share) is computed across the states and union territories based on the figures for 2005-06 as recorded by MoWCD. Annex B, Table B2 provides relevant data.

58. It appears that many states are now spending above one rupee per beneficiary per day on food supplementation with, of course, additional grant-in-aid from the central government (Figure 3.2).

Figure 3.2: Per capita food expenditure including GOI share

(Rs. per beneficiary per day)

0.460.580.60

0.870.940.961.001.101.161.181.261.291.30

1.311.341.391.421.531.541.561.611.671.842.042.122.142.162.262.452.53

3.153.46

4.144.82

5.79

1.30

Arunachal PradeshOrissa

DelhiTamil Nadu

Andhra PradeshMadhya Pradesh

West BengalUttaranchal

HaryanaHimachal Pradesh

PunjabMaharashtra

RajasthanIndiaBihar

ChattisgarhKarnataka

GujaratTripuraKerala

D &N HaveliAssam

Uttar PradeshChandigarh

ManipurJammu & Kashmir

Daman and DiuGoa

NagalandJharkhand

MizoramPondicherryMeghalaya

Lakshadw eepSikkim

A & N Islands

59. At the all-India level, average per capita food expenditure is estimated to be Rs. 1.30 per beneficiary per day, which reflects a better scenario than what is being mentioned in the Fifth Report (2004) and the Sixth Report (2005) of the Commissions appointed by the Supreme Court. Both the reports highlighted inadequacy of per

23

capita spends on food supplementation by the states50. However, per capita public spend for a large number of states and union territories still remains much below the enhanced norm of Rs. 2 per beneficiary per day.

Budget Outlay for the Eleventh plan

60. This section presents an estimated budget outlay on ICDS programme for the Eleventh Five Year Plan (2007-08 to 2011-12).

Key Assumptions

61. Expansion of ICDS programme. Following the unversalisation move, there will be significant expansion of the ICDS set up during the Eleventh Plan, with numbers of ICDS project and anganwadi centre going up to 6,291 and 1,453,334 respectively (Table 3.2). In addition, following the relaxed population norms, 25,961 mini-AWCs will come up. For simplicity, it is assumed that additions of ICDS projects and AWCs will take place uniformly over the years during the plan period.

Table 3.2: Expansion of ICDS projects and AWCs during the Eleventh Plan

Projects & AWCs Existing Addition Total Nos. of ICDS projects 5659 632 6,291 Nos. of AWCs 748,229 705,105 1,453,334 Nos. of mini-AWCs 25,961

62. It is further estimated that the number of 0-6 year child beneficiaries for supplementary feeding will increase from the existing level of 46.7 million to about 68 million during the Eleventh Plan (Table 3.3). Similarly, the number of pregnant and lactating mothers is expected to increase from 9.5 million today to about 14 million. Thus, total number of beneficiaries will grow from about 56 million to 82 million, representing an increase by 46 percent. Again for simplicity, it is assumed that increase in coverage of SNP beneficiaries will occur uniformly over the years during the Eleventh Plan.

Table 3.3: Growth in beneficiaries for supplementary nutrition programme

Nos. of beneficiaries in million Existing Addition Total Supplementary feeding programme

0-6 year children 46.72 21.42 68.14 Pregnant & lactating mothers 9.50 4.28 13.78

Total 56.22 25.70 81.92 Pre-school education

3-6 year children 24.49 10.71 35.20

63. Along side the expansion of SNP beneficiaries, there will be increase in the enrolment of 3-6 year children into pre-school education at the AWCs. It is estimated

50 The Fifth Report observed that “… many states have effective expenditure of less than a rupee a day…. In Bihar the state government is spending just 15 paise per day per child on the costs of grain and its conversion to cooked meal!” The sixth Report even observed that inadequate spending on supplementary nutrition “is bound to leave the beneficiary with no significant impact on her/his level of malnutrition. This reduces the supplementary nutrition programme (SNP) in itself to a programme implemented for the sake of implementation rather than a programme strategically looked at to tackle malnutrition”.

24

that the number of children will increase from the existing level of 25 million to about 35 million during the plan period, representing a growth by 40 percent.

64. For further details regarding expansion of ICDS projects, anganwadi centres and beneficiaries, refer to Annex B, Table B3.

65. Revenue expenditure. For the purpose of financial projections, unit costs for various items are assumed based on the budget estimates prepared by the Working Group on Development of Children (hereinafter referred to as Working Group) for the Eleventh Five Year Plan. These are briefly outlined as given under:

Supplementary food budget is estimated @ Rs. 2 per beneficiary per day for 300 days. (The rate is implicit in the Working Group calculation of GOI share in food costs.)

Annual operational costs are provided @ Rs. 15.61 lacs per ICDS project and @ Rs. 30, 860 per AWC. For mini-AWC, operational cost is assumed to be Rs. 9,350 per centre per annum. (These figures are assumed by the Working Group.)

Other annual overheads of ICDS are estimated as follows: maintenance cost of district level ICDS cell @ Rs. 10 lacs per cell; maintenance cost of state level ICDS cell @ Rs. 11.84 lacs; and an annual budget provision of Rs. 5 crores for monitoring and evaluation. (These figures are assumed by the Working Group.)

Based on annual spent under UDISHA, a budget provision is created for training and development of ICDS functionaries @ Rs. 14.55 crores per year. (This expenditure is not considered by the Working Group.)

A separate estimate is prepared for recruiting additional AWW to look after exclusively the pre-school activities. It is assumed that additional workers will be provided in 50 percent of the ICDS projects (to be precise, in 3,146 projects) during the Eleventh Plan. Incremental honorarium is calculated @ Rs. 12,000 per AWW per year. Many states pay additional honorarium to anganwadi workers; the weighted average rate across the states is estimated to be Rs. 411 per month and the same rate is assumed for the purpose of present analysis. (Working Group has not created budget provision for additional AWW)

66. Capital expenditure. The Working Group has created budget provisions for construction of 5 lacs anganwadi centres @ Rs. 1.75 lacs per AWC during the plan period. The same is being considered in the present projection. Also, following the clue from the Working Group estimates, provision is being made for supply of equipments, furniture, etc. @ Rs. 187 crores per year.

Financial Projections

67. The Eleventh Plan outlay (base case) for child development and nutrition under ICDS scheme is estimated to be Rs. 544 billion or USD 12 billion (Figure 3.3). This includes capital budget for construction of AWCs, equipment, furniture, etc. to the tune of Rs. 97 billion. But, it excludes annual recurring cost of engaging an additional AWW. Thus, the (base case) plan size is going to be 2.5 times the budget spends during the Tenth Plan.

68. Appointment of an additional AWW (in 50 percent of the ICDS project) will require an aggregate allocation of about Rs. 11 billion (USD 241 million) towards payment of honorarium. This translates into an annual allocation of Rs. 2.2 billion (USD 48 million). If the newly recruited AWWs get an additional honorarium at an average rate

25

of Rs. 411 per month from the respective state governments, the aggregate honorarium will go up further by Rs. 5 billion, representing an increase by 45 percent. Annually, additional honorarium burden will be Rs. 1 billion or USD 22 million. With additional AWWs, the Eleventh Plan outlay on ICDS scheme will ultimately scale up to Rs. 560 billion.

Figure 3.3: Estimated budget outlay on ICDS (without appointment of additional AWWS) during the Eleventh Plan

4296

215

57

121

330

99

217

544

Food Cost Non-Food Cost Total

(Rs. billion)

Ninth Plan Tenth Plan Eleventh Plan (Projection)

69. At the rate of Rs. 2 per beneficiary per day, food costs for 82 million beneficiaries (68 million 0-6 year children and 14 million pregnant and lactating mothers) will be little over Rs. 16 crore or USD 3.6 million per day. At this rate, aggregate food costs will be about Rs. 49 billion (USD 1 billion) per year.

70. In the present projection, it is assumed that number of beneficiaries (and, hence, food spends) will increase uniformly over the 5-year period and as such aggregate food budget for the Eleventh Plan is estimated to be Rs. 215 billion (USD 4.7 billion), representing an average share of 48 percent in the total revenue budget. Of this amount, the central government will share 50 percent, i.e., Rs. 107.5 billion.

71. Apart from revenue expenditure as outlined above, it is envisaged that 5 lacs AWCs will be constructed under ICDS scheme involving a total capital outlay of Rs. 87.5 billion (USD 2 billion). The central government will share 50 percent of the amount. The centre will also provide final support to the states/UTs for purchase of equipments, furniture, etc. to the tune of Rs. 9 billion (USD 205 million).

72. Further details regarding financial projections are given in Annex B, Table B 4.

Sensitivity Analysis

73. The base case estimates as outlined above are sensitive to several factors; two scenarios are considered here:

Scenario I: According to the Supreme Court directive, addition of new ICDS projects and anganwadi centres must be in operation during 2007-08. If this happens, as well as additional beneficiaries are also covered during 2007-08, then the Eleventh Plan outlay (without additional AWWs) will amount to Rs. 621 billion as against the earlier estimate of Rs. 544 billion that assumes uniform growth of projects and centres over the years. This is an increase by

26

14 percent. With additional AWWs, budget outlay will further scale up to Rs. 637 billion – nearly three times the Tenth Plan size for ICDS scheme.

Scenario II: The base case projection assumes increase in coverage of SNP beneficiaries by 26 million (uniformly spread over the 5-year period) due to expansion of ICDS projects and AWCs. If the increase in coverage remains just half of the assumed number (i.e., 13 million), the Eleventh plan outlay will scale down from Rs. 544 billion to Rs. 521 billion, a decline by 4 percent. But like in Scenario I, if the entire increase in coverage takes place in the very first year of the Eleventh Plan, the plan outlay will shrink from Rs. 544 billion to Rs. 602 billion, representing an increase by 11 percent.

74. Thus, the required Eleventh Plan outlay for child development and nutrition programme under ICDS scheme may lie anywhere between Rs. 521 and 650 billion.

Fiscal Sustainability and Risk

75. In the light of the above forecast, it is important to assess the fiscal sustainability of the estimated plan outlay. In this regard, it may be noted that the central government has budgeted Rs. 4,761 crores for ICDS scheme for the year 2007-08, which represents an increase by 16.5 percent over the previous year. Assuming that the central budget support will continue to grow at this rate and the state budget allocation will increase at 10 percent per year, the available public financing during the Eleventh Plan is expected to be Rs. 417 million. This means there would be shortage of funds for about Rs. 127 billion as compared to the required (base case) plan outlay of Rs. 544 billion , leading to complete curtailment of capital budget (for AWC construction, equipment, furniture, etc.) and revenue budget for appointing a second anganwadi worker, as well as a significant reduction in the SNP budget.

76. Thus, given the ambitious plan size, the central government needs to mobilise additional resources to meet the required plan outlay. Besides, it is doubtful whether all the states would be able to provide matching budget allocation for availing of 50 percent funding support of the central government for food supplementation. It appears that the union government would be required to bear more than 50 percent of the supplementary food budget. It may be noted here that the Working Group has recommended 85:15 sharing arrangement for the Eleventh Plan.

77. Actual spending by the states, of course, would largely depend upon their budget commitment as well as institutional capacities to absorb increased allocation of funds, including the central allocation. It may not be out of place to mention here that financial management of any scheme at the operational level is generally weak, and with significant scaling up of budget allocations the issues of cost management become very important.

78. Often public funds and material resources (say budget spends on supplementary feeding) do not end up where they were destined for. This is the biggest risk factor. An appropriate risk mitigation system can be evolved only on the basis a deep understanding of where, how, and to what effect allocated funds are spent. This insight can be gained only through Public Expenditure Tracking Survey (PETS).

Conclusions

Over the last two plan periods, the central and state governments’ expenditure on ICDS, in nominal terms, has shown a spectacular growth – it more than doubled from the Ninth Plan (USD 2.3 billion) to the Tenth Plan(USD 4.7 billion). However, real per capita expenditure has grown at less than 2 percent per year.

27

The expenditure on supplementary feeding accounted, on the average, 43 to 44 percent during the two plan period; the share reached 47 percent by the end of the Tenth Plan. At the all-India level per capita food expenditure is estimated to be Rs. 1.30 (2005-06) and there are many states that spend much less than the revised norm of around Rs. 2 per beneficiary per day.

The Eleventh Plan outlay is estimated to size up in big way, lying anywhere between Rs. 521 billion and Rs. 650 billion. At the rate of Rs. 2 per beneficiary per day, food costs will be little over Rs. 16 crore or USD 3.6 million per day. Apart from revenue expenditure, it is envisaged that 5 lacs AWCs will be constructed involving a total capital outlay of Rs. 87.5 billion (USD 2 billion).

Given the ambitious size of the plan, the union government would require to mobilise additional resources and bear more than 50 percent of the food budget support. Actual spending, of course, will depend on the state commitment and capacity to absorb increased allocation of funds. An important risk factor is that often public funds (say budget spends on supplementary feeding) do not end up where they were destined for. An appropriate system for mitigating this risk can be evolved only on the basis of PETS.

28

4 Economic Cost Benefit Ratios and Cost Effectiveness

Why Invest in Nutrition51?

79. It is generally argued that improving nutrition status contributes to productivity, economic development, and poverty reduction by improving physical work capacity, cognitive development, school performance, and health by reducing disease and mortality. Poor nutrition perpetuates the cycle of poverty and malnutrition through three main routes:

Direct losses in productivity from poor physical status and losses caused by disease linked with malnutrition;

Indirect losses from poor cognitive function and deficits in schooling; and

Losses caused by increased health care costs.

80. Whatever may be the routes, the economic costs of malnutrition are very high -several billion dollars a year in terms of lost GDP52. Income and economic growth are now recognized as outcomes of improved nutrition.

81. The evidence and experience suggests that investments on specific interventions can accelerate improvement in nutrition status, especially such programs as breast feeding promotion, integrated child care programs, and micronutrient fortification and supplementation. The economic benefit cost ratios are found to be significantly high in such programs53.

82. In the above backdrop, an attempt has been made in this chapter to undertake economic cost benefit analysis (CBA) for the ICDS programme. The analysis pertains to three important components, namely (a) food supplementation, (b) micronutrient initiatives, and (c) pre-school education.

Approach to Cost Benefit Analysis (CBA)

83. A number of authors have carried out economic analysis for assessing cost-benefit of a specific nutrition intervention and/or evaluating cost effectiveness of alternative interventions. The present study has closely followed the methodologies of two such studies, namely Levin, et al (1993) and Pinstrup-Anderson, et al (1993)54.

84. For the purpose of cost benefit analysis, programme costs for supplementary feeding, micronutrient initiatives and pre-school education are calculated with reference to a cohort of beneficiaries, which represents average of the year-wise

51 This section is primarily drawn from World Bank (2006), Repositioning Nutrition as Central to Development – a Strategy for Large Scale Action. This report cites several relevant studies, some of which will be referred in course of discussion in this chapter. 52 For instance, it has been estimated that the current value of actions which would result in one birth of a normal weight baby instead of low birth weight is USD 580. Over half of this comes from increased productivity over the child’s lifetime. This means that interventions that cost less than USD 580 per child affected would be justified in pure economic terms. See Behrman, et al (2004). Studies in India reveal that productivity losses (manual work only) from stunting, iodine deficiency, and iron deficiency together are responsible for a loss of 2.95 percent of GDP. See IFPRI (2003) and Horton (1999). 53 Behrman, Alderman, and Hoddinott (2004) 54 Mention could also be made of other authors such as Berg (1987), PROFILES (1995) and McGuire (1996); Phillips and Sanghvi (1996, World Bank) provides guiding principles and examples of economic analysis of nutrition projects.

29

numbers of beneficiary projected over the Eleventh Plan period. The cost estimates are based on the financial projections for the Eleventh Plan (Chap. 3).

85. The basic method of estimating economic benefits is to identify the positive effects of programme interventions. In this regard, this study estimates the following benefits:

Potential future earnings (wage gains) from death aversions; and

Potential future earnings (wage gains) from preventing productive disability.

86. The future wage gains are calculated taking into account ‘disability adjusted life years (DALYs)55. The DALYs are calculated using the Excel model developed by Fox-Rushby and Hanson (2001), which builds on relevant formulae outlined by Murray and Lopez (1996). The model is used with suitable assumptions being made regarding the parameters and applying a discount rate of 3 percent as recommended in the World Development Report 1993 (World Bank).

87. It may be further noted that all costs and benefits (i.e., potential future earnings) are estimated in financial terms only. No attempt has been made to analyse the externalities (i.e., intangible costs and benefits) because of the difficulties in valuing them in money terms.

88. Cost benefit analysis represents a technique for ascertaining whether an intervention is economically worthwhile. This is measured by dividing estimated economic benefits by the intervention costs, called ‘benefit cost ratio’ (BCR). For an intervention to be investment worthy, benefits must exceed the cost, i.e., BCR should be greater than one.

89. In this study, BCRs are computed based on a set of assumptions, which are largely evidence based or derived from available statistics. These are discussed at appropriate places. Also, sensitivity analysis is being carried out with reference to critical assumptions, which is expected to provide valuable insights into the design and implementation issues of specific interventions.

90. Alongside benefit cost ratios, it is important to evaluate cost effectiveness of alternative interventions. For instance, it may be necessary to know which alternative nutrition interventions would be more cost effective. Cost effectiveness is generally assessed in terms of the following two common parameters:

Cost per death averted; and

Cost per DALY gained or saved.

91. To get a proper perspective, estimates of the above two parameters for different nutrition interventions are compared with those of some notable international studies.

CBA of Food Supplementation

Background

92. A meta-analysis of the findings of six studies from Tanzania, Papua New Guinea, Bangladesh and India reveals that mild to moderate malnutrition (as measured by

55 The concept of DALYs was first introduced in the World Development Report 1993 (World Bank) and Disease Control Priorities in Developing Countries (1993) as a method for estimating the global burden of disease and as an outcome measure for use in cost effectiveness analysis. DALYs represent sum of the present value of future years of lifetime lost through premature mortality, and the present value of years of future lifetime adjusted for the average severity (frequency and intensity) of any mental or physical disability caused by a disease or injury. See Fox-Rushby and Hanson (2001).

30

low weight-for-age) is associated with elevated child mortality and that there is an epidemiologic synergism between malnutrition and morbidity56. A related study using survey data from Ethiopia, Malawi, Guatemala and India indicates that 42-57 percent of all child deaths (in the samples of 6 to 59 months) are due to malnutrition’s potentiating effects on infectious disease57. Children are generally exposed to the highest risk of malnutrition and associated mortality during and immediately following the weaning period (6 to 24 months)58.

93. Malnutrition in children also inhibits their growth, affects their cognitive development, and reduces their subsequent school performance and labour productivity59. A study in Philippine found a strong effect of childhood nutritional status, as measured by low height-for-age (stunting), on the labour productivity of sugarcane workers; the elasticity of height on productivity was estimated to be 1.38, meaning thereby that a difference of 1 percent in the height of adult workers is associated with a 1.38 percent difference in their wages60.

94. In women during pregnancy and before, protein-energy malnutrition (PEM) contributes to morbidity and mortality and to low birth weight of their infants, which in turn increase the risk of malnutrition and mortality in infants61. Such increased risk is also associated with PEM in women during lactation. Work capacity and labour productivity in adults are negatively affected by PEM during childhood and adulthood.

95. Several studies have shown that raising dietary intake through supplementary feeding can have beneficial nutritional consequences for young children, including effects on growth, activity, cognitive development and compensation of energy lost during illness62.

96. For women, increasing energy intake during pregnancy increases the birth weight of the baby63. In general, the average increase in birth weight achieved by supplementation is modest, about 100 gram64. There are other post-natal effects beyond birth weight. In trials in Indonesia and Colombia, energy supplementation of chronically energy-deficient women during the third trimester was found to be effective in promoting the growth of infants65.

56 Pelletier, et al (1993) 57 Pelletier, et al (1994) 58 Pinstrup-Andersen (1993) 59 Ibid 60 Haddad and Bouis (1990) 61 Pinstrup-Andersen (1993) 62 A notable among these studies was carried out in four villages in Guatemala (1969-1977). The longitudinal study noted the effects of food supplementation on growth and physical and mental development in early childhood. The impact was found to be greater in children with lower socio-economic or nutritional status and higher prevalence of morbidity. Weight gain was most pronounced during the first two years of life, and height gain in the first three years. Gains between 3-7 years were not significant. See Schroeder et al (1995). The long-term effects were later investigated in the Guatemalan Oriente Study (1969-1989) which followed up the children originally supplemented to assess effects in adolescence. Results show that after 15 years with no additional intervention, the group that received the supplement as young children maintained most of the original gains in height and weight, showed increased physical capacity and had better performance on various cognitive and behaviour tests. See Pollit et al (1993). For further details see Food Supplementation for Women and Young Children, Nutrition Toolkit (World Bank). This toolkit summarises several studies including those cited here. 63 Food Supplementation for Women and Young Children, Nutrition Toolkit (World Bank) 64 Villar and Rivera (1988) 65 Kusin et al (1992); Mora et al (1981)

31

97. However, food supplementation programme is harder to implement effectively. Reviews of the impact of large-scale programmes for supplementary feeding find little evidence of success due to variety of problems, including leakage, inadequate targeting, and inadequate institutional capacity for programme implementation66.

98. Of course, there are some success stories too. A large scale programme in Chile substantially reduced childhood malnutrition67. In India, the Tamil Nadu Integrated Nutrition Project (TINP) achieved remarkable gains through selective and limited-duration feeding68. In general, food supplementation works best when it is used to motivate and educate mothers to care for their children’s health, when it can be concentrated within a crucial interval (during pregnancy, for example), or when it provides additional, non-nutritional benefits69.

Assumptions

99. This section presents economic cost benefit analysis of food supplementation with reference to a target group, comprising of 59 million 0-6 year children and 12 million pregnant and lactating mothers (P&LM). The target group represents average of the year-wise numbers of beneficiary projected over the Eleventh Plan.

100. The base case analysis rests on a set of assumptions as outlined below:

Feeding periods are assumed to be three years for children and one year for pregnant and lactating mothers.

It is assumed that food supply is free from any leakage. This assumption is unrealistic and, hence, relaxed under sensitivity analysis.

Non-food costs of ICDS are apportioned to different activities in the following way. At first, 40 percent of the overheads are charged to child feeding activities and 36 percent to PSE. The percentage shares are worked out based on a national level study (NCAER, 2001), which found that AWWs spend, on the average, 39.8 percent of their time on feeding activities and 36.3 percent on PSE activities. The balance portion (24 percent) of the non-food costs is distributed equally among the three activities - child feeding, feeding or supply of take home ration to P&LM, and PSE activities.

On the whole, the programme costs (food plus non-food costs) work out to be USD 22 per child per year and USD 20 per P&LM per year.

The number of underweight children (Grades I to IV) in the target group is estimated to be 27.44 million. This estimate is based on the statistic that 46.5 percent of the total child beneficiaries under the supplementary feeding programme were underweight as on 31 March 2006. Applying the under 5 year child mortality rate of 72.8 per 1000 population to this sub-set, number of expected child deaths is calculated as 2 million, out of which 50 percent is

66 Michael Lokshin, et al (2005), Development and Change 67 World Development Report 1993 (World Bank) 68 The supplementary feeding was provided to those who were severely malnourished and those (6 - 35 months) with faltering growth. The selected children were fed for at least ninety days. If they failed to gain at least 500 grams in weight, they were referred to health care centres and feeding was continued for up to 180 days. Intensive nutrition education was imparted to mothers of at-risk children. Food supplementation was also offered to women whose children were being fed, to those who had numerous children, and to those who were nursing while pregnant. Because food was provided to the participants only when required, food was only 13 percent of the project’s total cost. See World Development Report 1993. 69 Ibid

32

assumed to be the death cases on account of malnutrition70. Going a step further, it is assumed that food supplementation would result in death aversion in 50 percent of the cases. This translates to about one million cases of child death aversion due to food intake over the programme period. The assumption of 50 percent death aversion sounds quite optimistic, especially when there is no epidemiologic evidence available to support it. In respect of P&LM, the present study assumes no cases of death aversion due to food supplementation.

Malnutrition cause productive disability. It is assumed that about 50 percent of severely underweight (Grades III & IV) children, estimated to be 1.17 million, would suffer from malnutrition related adulthood productive disability71. Similarly, applying the national level percentage of anaemic women, namely 57.9 percent (NFHS III), the number of anaemic women is estimated to be about 7 million (in the target group of 12 million) and it is assumed that 50 percent of them, 3.5 million in number, would run the risk of PEM related productive disability.

The base case analysis further assumes that supplementary food intake would be cent percent effective in preventing estimated cases of productivity disability of severely underweight children and anaemic P&LM.

The labour market participation rate at the national level is 39.1 percent (Census of India 2001) and same is assumed for wage gain calculation. Based on the NSS 61st round data (2004-05), annual wage rate is estimated at Rs. 15,834, which reflect average of wage rates for illiterate and literate up to primary level.

Benefit Cost Ratio & Sensitivity Analysis

101. Annex C, Tables C1.1 and C.2 provide step-wise computation of BCR based on the above assumptions.

102. The base case analysis shows that BCR of the food supplementation programme is less than one (0.76 to be precise), meaning thereby that the feeding costs spanning over three years exceed the economic benefits. In other words, long-duration feeding programme is not viable and, hence, not investment worthy.

103. Incidentally, the base case of zero percent leakage and cent percent programme effectiveness in improving productivity represents a highly unrealistic scenario on two counts. First, it is a well known fact that food supply is not free from leakage. In fact, anecdotal evidences and a recent World Bank funded ‘public expenditure tracking survey’ in a state indicate significant level of food leakages along the supply chain, from food storage centres to anganwadi centres.

104. Second, it is quite doubtful that a food budget of Rs. 2 per beneficiary per day can provide the prescribed intake of calories and protein for children and P&LM72. So food intake programme can never be cent percent effective in preventing productive disability leading to wage gains.

70 Mortality rate is obtained from Demographic Indicators: 2001-20026, Census of India 2001. 71 It may be noted that 1.99 percent of child beneficiaries under the supplementary feeding programme was severely underweight as on 31 March 2006. 72 See Chapter 2, Box 2.3 for calorie and protein norms. In an approach note on Eleventh Plan, the Department of Women and Child Development & Social Welfare, Government of West Bengal has suggested an increasing in budget allocation for supplementary food, from Rs. 2 to Rs.3 per beneficiary per day, so as to meet the calorie and protein norms.

33

105. In view of the above, a sensitivity analysis is carried out assuming different feeding periods (ranging from six-month to three-year at an interval of 6 months) and different levels of leakage and programme effectiveness. Three scenarios are being considered including the base case (Figure 4.1)

Figure 4.1: Benefit cost ratios of supplementary feeding

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0.5 1.0 1.5 2.0 3.0Supplementary feeding period (year)

Bene

fit c

ost r

atio

Scenario I: 0% leakage & 100% programme effectivenessScenario II: 25% leakage & 75% programme effectivenessScenario III: 50% leakage & 50% programme effectiveness

106. The sensitivity chart clearly reveals that short-duration feeding programme, say about 6 months duration, is economically viable and investment worthy, with BCR of 1.5 even under worst scenario (Figure 4.1).

107. In fact, a TINP kind of programme design can make the programme more cost effective. TINP supplemented only those children who were malnourished or whose growth was faltering. Different children came under TINP supplementation as and when their growth faltered; on the average, 75 percent of children got supplementation at different times73. Taking clue from this experience, if we assume that a short duration well targeted feeding programme can be delivered at 75 percent of the estimated food cost, then BCR will increase from 1.5 to 2 even under the worst scenario case.

CBA of Micronutrient Initiatives

Background

108. Vitamin A deficiency. It is now well recognised that Vitamin A deficiency (VAD) causes varying degrees of vision loss and is the primary cause of acquired blindness in children. It also increases the severity of and mortality from a variety of infections. India has the largest percentage as well as the largest absolute number of Vitamin A deficient children in the world74. VAD precipitates the death of 330,000 children every

73 Heaver (2003) 74 Controlling Vitamin & Mineral Deficiencies in India (Micronutrient Initiative)

34

year in the country and 57 percent of children in less than 6 years age group are at potential danger from sub-clinical Vitamin A deficiency75. 109. A meta-analysis of eight mortality trials indicates that improving the Vitamin A status of children (aged six months to five years) reduce mortality rates by about 23 percent76. 110. Iodine deficiency disorders. It has been found that Iodine deficiency disorders (IDD) causes mental retardation, delayed motor development, and stunting, as well as neuromuscular, speech, and hearing disorders77. In India, an estimated 6.6 million children are born mentally impaired each year due to iodine deficiency in mothers; overall the country’s intellectual productive capacity has been reduced by around 15 percent due to IDD78. 111. A meta-analysis demonstrates that adequate iodine supplementation before and during pregnancy to women living in severe ID areas could prevent their children from intelligence deficit, especially for those born 3.5 years after the iodine supplementation programme was introduced79. 112. Iron deficiency anaemia. The most common micronutrient disorder is the iron deficiency anaemia (IDA). It reduces physical productivity and children’s capacity to learn in school. A number of studies have shown that the group with chronic iron deficiency in infancy did not catch up to the group with good iron status in cognitive scores over time80. Women suffer especially because menstruation and childbearing raise their need for iron, and anaemia (a shortage of iron in the blood) increases the risk of death from haemorrhage in childbirth81. 113. The problem is significant in India where 58 percent of pregnant women (age 15-49 years) are anaemic82. IDA affects 51 percent of reproductive age women and 75 percent of children in the country83. This has serious consequences, with high productivity losses and death of an estimated 22,000 persons each year from severe anaemia, mostly pregnant women84.

Assumptions

114. In the background of the above, this section presents economic analysis of the micronutrient initiatives with reference to the following target groups:

Vitamin A supplementation: 49 million 0-5 year children (estimated from the projected nos. of children in 0-3 years & 3-6 years age groups)

Iodine & iron supplementation:

6 million pregnant women (estimated assuming that 50 percent of the projected nos. of P&LM is pregnant women)

75 Ibid 76 Beaton et al (1993) 77 World Development Report 1993 (World Bank) 78 India Micronutrient National Investment Plan, 2007-2011 (Micronutrient Initiative) 79 Ming Qian, et al (2005) 80 Lozoff et al (2006) came to this conclusion from a longitudinal study in Costa Rica. They also present the findings from earlier studies. 81 The observations in this paragraph are noted in World Development Report 1993. 82 NFHS III 83 India Micronutrient National Investment Plan, 2007-2011 (Micronutrient Initiative) 84 Ibid

35

115. The key assumptions underlying the base case analysis is summarised below:

Vitamin A supplementation

Vitamin A supplementation programme will continue for 3 years and during this period each child in the target group will be given 2 doses of syrup per year at an estimated delivery cost of Rs. 4.0485.

The number of children in the target group with sub-clinical VAD is estimated to be around 28 million; this figure is arrived at by applying the prevalence rate of 57 percent (mentioned earlier) to the target population (49 million). Out of 28 million children with sub-clinical VAD, little over one lac child deaths may be precipitated at a mortality rate of 0.41 percent. The mortality rate is derived from two reported figures - child population (140.7 million) in the age group 9-59 months and child deaths (0.33 million) due to VAD86.

Based on the World Development Report 1993 and meta-analysis by Beaton et al, it is further assumed that Vitamin A supplementation would help averting 24 percent of at-risk children87. In absolute term, the number of cases of death aversion is estimated to be 30,000.

Another component of economic benefits from Vitamin A supplementation is the productivity gain through blindness aversion. The blindness prevalence rate as of 2004 was 1.1 percent88. Based on this statistic, it is assumed that one percent of the potentially at-risk children for sub-clinical VAD (28 million in numbers) – around 2.8 lacs children - may suffer from partial to total blindness. It is further assumed that Vitamin A supplementation would help 25 percent of them, or 70,000 children out of 2.8 lacs, avoid blindness; and in 50 percent of such cases of blindness aversion - 35,000 children in numbers - productivity disability will be prevented leading to wage gains.

Iodine supplementation

Programme duration for iodine supplementation will be one year and the cost of double fortified salt (DFS) is estimated to be Rs. 44 per beneficiary89.

As mentioned earlier, an estimated 6.6 million children are born mentally impaired each year on account of IDD. Relating this number to an estimated 23.9 million live births (calculated by multiplying 2001 population of 1,028.6 millions by crude birth rate of 23.2 percent), the prevalence rate of mentally impaired new born babies is estimated to be 27.7 percent. At this rate, the number of at-risk pregnant women is estimated to be 1.66 million out 6 million in the target group.

In the base case analysis, it is assumed that iodine supplementation through DFS would help prevention of productive disability of new born children in 5 percent of cases. That is, an estimated 80,000 women would not give birth to mentally impaired children and as such enhance the future wage gains of the newly born children. It may be noted here that the assumed 5 percent rate of prevention of productive disability is a conservative one, especially in

85 Ibid 86 These figures are cited in India Micronutrient National Investment Plan, 2007-2011 (Micronutrient Initiative). 87 The World Development Report 1993 (World Bank) observed that of the 8 million deaths of children per year due to VAD, between 1.3 million and 2.5 million might be prevented by eliminating VAD. This gives an average rate of death aversion of [((1.3+2.5)/2)/8=] 24%. 88 Source: Rajya Sabha Un-starred Question No. 1712, dated 89 India Micronutrient National Investment Plan, 2007-2011 (Micronutrient Initiative)

36

view of the fact (as mentioned earlier) that iodine deficiency disorder has reduced the country’s intellectual productive capacity by around 15 percent.

Iron supplementation

Programme duration for iron supplementation to anaemic women will be one year and the cost of providing iron folic acid (IFA) tablets is estimated to be Rs. 19.94 per beneficiary90.

About 58 percent of pregnant women (age 15-49 years) are anaemic in India. Assuming this prevalence rate, the expected number of anaemic pregnant women in the target group is estimated to be 3.47 million. Out of this sub-set, 0.1 percent or 3,000 pregnant women is expected to run the risk of death due to severe anaemia91. The base case analysis further assumes that iron supplementation would lead to 25 percent death aversion and accordingly wage gains are computed for 750 severely anaemic pregnant women.

Iron supplementation also improves productivity of anaemic women. It is assumed that productivity will improve for 20 percent of an estimated 3.47 million anaemic women. That is, wage gains will accrue to 6.9 lac anaemic pregnant women.

Labour participation rate, wage rate, and programme effectiveness

The labour participation rate and annual wage rates assumed to be the same as specified in the previous section and the wage gains are calculated assuming 75 percent programme effectiveness.

Benefit Cost Ratio & Sensitivity Analysis

116. Based on the above assumptions, benefit cost ratios of the three micronutrient interventions are computed. The base case calculations are presented in details in Annex C, Tables C2 to C4.

117. The economic benefits of Vitamin A supplementation far exceed the programme costs in the base case - the estimated BCR is 11 (Figure 4.2). Sensitivity analysis further reveals that the programme remains investment worthy even under the worst scenario with an estimated BCR of 2.8. 118. Similarly, iodine supplementation programme is economically beneficial with an estimated BCR of 22.7 (Figure 4.3). Even under the worst scenario, benefits exceed the programme costs; BCR is estimated to be 3.8. 119. The iron supplementation programme also promises higher economic return. The estimated BCR is 27.5 and the programme appears economically attractive even under the worst scenario (Figure 4.4). The estimated worst case BCR is 4.6. 120. On the whole, micronutrient interventions are investment worthy with economic benefits far outweighing the programme costs. As discussed later in this chapter, these interventions are cost effective too.

90 Ibid 91 As mentioned earlier an estimated 22,000 persons die each year from severe anaemia, mostly pregnant women. Assuming that all the death cases relate to anaemic women and they come from an estimated population of 16.5 million pregnant (calculate by multiplying population of 28.5 million by the prevalence rate of 57.9 percent), death rate works out to be 0.1 percent. All the figures are culled out from India Micronutrient National Investment Plan, 2007-2011 (Micronutrient Initiative).

37

Figure 4.2: Benefit cost ratios of Vitamin A supplementation

11.1

6.5

2.8

Scenario III: Deaths averted 12%;blindness averted 15%; productive

disability 25%; programeffectiveness 50%

Scenario II: Deaths averted 16%;blindness averted 17%; productive

disability 34%; programmeeffectiveness 75%

Scenario I: Deaths averted 24%;blindness averted 25%; productive

disability 50%; programmeeffectiveness 75%

Figure 4.3: Benefit cost ratios of iodine supplementation 22.7

9.0

3.8

Scenario I: Productivedisability 5%; program

effectiveness 75%

Scenario II: Productivedisability 2.5%; program

effectiveness 75%

Scenario III: Productivedisability 1%; program

effectiveness 50%

Figure 4.4: Benefit cost ratios of iron supplementation 27.5

13.9

4.6

Scenario I: Deathsaverted 25%; productivedisability 20%; program

effectiveness 75%

Scenario III: Deathsaverted 12%; productivedisability 10%; program

effectiveness 75%

Scenario III: Deathsaverted 6%; productivedisability 5%; program

effectiveness 50%

38

CBA of Pre-School Education

Background

121. A longitudinal study in India finds that exposure to ‘early child hood education’ (ECE) facilitates enrolment and retention in the primary grades. This impact is evident not only in the initial stages but in sustained way right through the primary grades92. The same study also concludes that the impact of ECE can be maximized by effecting qualitative improvement in activity based pedagogy.

122. ECE also plays a significant role in erasing the disadvantages that young children experience when they grow up in poverty, hunger and malnutrition, broken families, and crime93.

123. This section presents economic cost benefit analysis of PSE component of the ICDS scheme.

Assumptions

124. The economic analysis is carried out with reference to a cohort of 31 million children, which represents average number of beneficiaries projected for the Eleventh Plan. The present analysis rest on the following assumptions:

The programme costs are estimated in the same way as discussed under food supplementation programme. The estimated cost is USD 16 per beneficiary per year. This is slightly less than three-fourth of the per capita food supplementation cost (USD 22) for children. It may be further noted that the programme cost estimate includes additional budget outgo for engaging an additional AWW in 3,146 ICDS projects.

It is envisaged that the economic benefits of pre-school education will come from completion of primary/secondary education leading to incremental wage earnings94.

According to the projection of Ministry of Human resource Development, GOI, the net enrolment ratio in primary grade will reach 100 percent by 2009-10 from the current level of 93 percent (2007-08). In this background, it is assumed that all the PSE children in the cohort (31 million in numbers) would enrol themselves into primary class.

The national average promotion rate in primary classes is 82 percent95. It is assumed that pre-school education will increase the promotion rate from 82 percent to 100 percent, i.e., by 18 percent point. This means that PSE would be instrumental in pushing 6 million children (estimated by multiplying the target population of 31 million by 18 percent) to complete primary education.

Not all of the 6 million children will enter into labour market after completion of primary/secondary education. At an estimated labour participation rate of 33 percent (in the age group of 15-19 years), 2 million children will enter the labour market and earn wages much higher than the illiterate labour force96. It is further assumed that out of 2 million, 25 percent or half-a-million children

92 Kaul et al (1993), NCERT 93 Schweinhart et al (1993) 94 For a good discussion on the methods of estimating economic benefits of ECE, refer to Jacques van der Gagg et al (1997) 95 NIEPA (2006), Elementary Education in India – Analytical Report 2004-05 96 Age specific labour participation rate is estimated using NSS 61st Round (2004-05) data.

39

will complete secondary education and thereby earn more than those with primary level education.

The incremental wage rate for literate up to primary level is estimated to be Rs. 10,177 per annum (assuming 150 employment days per year)97. Similarly, incremental wage rate for literate up to secondary level is assumed at Rs. 13, 550 per year (considering 200 employment days in a year)98. Generally a wage equation is estimated to derive incremental wage rates, but this has not been attempted here since disaggregate data necessary for running regression are not readily available. However, sensitivity analysis is carried out with different wage rate assumptions.

Benefit Cost Ratio & Sensitivity Analysis

125. Given the above assumptions, BCR of the PSE programme is calculated. Annex C, Table C5 provides all the details. 126. The base case analysis clearly shows that unlike the food supplementation programme, pre-school programme promises significant economic return. At an estimated BCR of nearly 7, PSE programme is far more investment worthy than the supplementary feeding programme. Sensitivity analysis further reveals that the pre-school programme would remain economically viable and attractive even under assumptions of lower incremental wage rates. The worst case estimated BCR is 3.8.

Figure 4.5: Benefit cost ratios of pre-school education

5.7

4.63.8

Baseincrementalwage rate

20% lowerincrementalwage rate

33% lowerincrementalwage rate

Putting All the Components Together

127. In the background of the discussion made hitherto, it now becomes imperative to undertake economic cost benefit analysis at the aggregate level. Putting all the findings together, the overall position emerge as follows.

128. First, the integrated child development programme without large scale and long duration feeding programme is economically viable and investment worthy even under worst scenario – the worst case BCR is estimated to be 3.8 (Table 4.1). However, as mentioned earlier, the food supplementation programme can be made

97 Incremental wage rate is calculated based on NSS 61st Round (2004-05) data. 98 Ibid

40

economically viable investment only when the programme is well targeted and the feeding period is of shorter duration (around six months). 129. Second, among the alternative nutrition interventions for children and pregnant and lactating mothers, micronutrient initiatives (such as Vitamin A, iodine and iron supplementations) offer maximum economic return with composite BCR ranging from 16 under best scenario to 5 under the worst scenario (Table 4.1). 130. Finally, pre-school education is an economically rewarding intervention for early childhood development and deserves public investment.

Table 4.1: Benefit cost ratios at the aggregate level

BCR Interventions Best

scenarioWorst

scenario Food supplementation (children; 3 year) 0.8 0.3 Micronutrient initiatives 16.2 4.9

Vitamin A supplementation (children; 3 year) 11.1 2.8 Iodine supplementation (pregnant women; 1 year) 22.7 7.6 Iron supplementation (pregnant women; 1 year) 27.5 9.4

Pre-school education (children; 3 year) 5.7 3.8 Total -without food supplementation 5.9 3.8

Total -with food supplementation 2.2 1.0

Cost Effectiveness of Alternative Nutrition Interventions

131. Alongside benefit cost ratios, cost effectiveness of alternative interventions has been evaluated in terms of cost per death averted and cost per DALY saved. The tables in Annex C present all the calculations.

Table 4.2: Cost effectiveness of food & micronutrient supplementation

Cost per death averted (USD) Cost per DALY saved (USD)International study International study

Inte

rven

tion

Target group Present study* Original

cost Inflation adjusted

cost**

Present study* Original

cost Inflation adjusted

cost** Food 0-6 years children 4,605 1,942 2,719 207 40 56 aFood P&LM 733 1,026 112 24 33 aVit A 0-5 years children 651 325 455 16 9 13 b

Iodine Pregnant women 1,250 1,750 9 19 26 bIron Pregnant women 7,286 800 1,120 10 13 18 b

* The reported figures correspond to Scenario II **The figures are adjusted for inflation taking 1993 as base year and using inflation calculator of US Bureau of Labour Statistics. According to this calculator 1 USD in 1993 is equivalent to 1.40 USD in 2007. a. Pinstrup-Andersen, et al (1993, Disease Control Priorities in Developing Countries) b. Levin, et al (1993, Disease Control Priorities in Developing Countries)

132. The World Development Report 1993 found micronutrient programmes to be the most cost effective among all nutrition and health interventions. The same conclusion is arrived at in the present study. In terms of cost per DALY saved, micronutrient

41

initiatives are extremely attractive: USD 16 per DALY for Vitamin A supplementation; USD 9 per DALY for iodine supplementation through DFS ; and USD 10 per DALY for iron supplementation through IFA tablets (Table 4.2).

133. The micronutrient interventions are not only cost effective in the Indian context, the estimated costs per DALY compare well with those found in the international studies (Table 4.2). However, costs per deaths averted are higher in India than those reported in the international studies.

134. For instance, cost per death averted under iron supplementation programme is estimated to be USD 7,286, which is much higher than inflation adjusted figure of USD 1,120 per death averted as estimated by Levin et al (1993). The higher cost per death signifies that likelihood of deaths due to severe anaemia is almost negligible (0.1 percent) and as such supply of IFA tablets to a target group of six million pregnant women for the purpose of death aversion is not an investment worthy intervention. The economic rationale for such programme, therefore, lies not in death aversion but in wage gains through prevention of productive disability.

Conclusions

Long-duration (3 years) and large scale feeding programme is not economically viable; for programme to be viable and investment worthy, feeding period need be shorter (say, about six months) and focus must be on at-risk underweight children and pregnant and lactating women.

Micronutrient initiatives (Vitamin A, iodine and iron implementation) are economically investment worthy and most cost effective nutrition interventions; cost per DALY saved for each intervention compares well with the estimates reported in the international studies.

Pre-school education is an economically rewarding intervention for early childhood development and deserves more public investment.

42

5 Some Recommendations

Strengthening Financial Management

135. The Eleventh Plan outlay is estimated to size up in a big way, lying anywhere between Rs. 500 billion (USD 11 billion) and Rs. 650 billion (USD 14 billion). Given such scale up of budget allocation, it is important to strengthen accounting and financial management system at every level of ICDS operation – from district to block to anganwadi centre.

136. For effective cost management, it also necessary to understand where, how, and to what effect allocated funds are spent. An important risk factor is that often public funds do not end up where they were destined for. As mentioned in Chap. 4, anecdotal evidences and a recent World Bank funded ‘public expenditure tracking survey’ in a state indicate significant level of food leakages along the supply chain, from storage points to anganwadi centres. It is, therefore, desirable that the central government take initiatives to undertake ‘public expenditure tracking survey’ in major states in consultation with the respective governments.

137. Another important area to look at is building institutional capacity for better funds management. It is quite common to find that with increased allocation, respective departments fail to absorb funds. An allocated fund often goes out of the treasury system but sleeps in different bank accounts in the districts/block level.

Redesigning Food Supplementation Programme

138. Universalisation of ICDS, including large scale supplementary feeding, now carries a legal mandate (directives by the Supreme Court) as well as a political mandate (an agenda under National Common Minimum Programme of the UPA government). Besides, there is an equity angle of universalisation. For instance, it is argued by Jean Dreze (2006) that universalisation of ICDS would curb the intergenerational perpetuation of social inequality by creating more equal opportunities for growth and development in early childhood. It would also foster social equity by creating a space where children eat, play and learn together irrespective of class, caste and gender.

139. Notwithstanding all the directives and arguments, long-duration (three years) and large-scale supplementary feeding, as revealed in this study, is not economically viable. The costs far outweigh the economic benefits. In order to make the programme economically investment worthy, the feeding programme needs to focus on at-risk children, especially those less than three year of age. Besides, the feeding period must be of short duration, say about six months. This call for redesigning the feeding programme with appropriate entry and exit criteria. This is quite a challenging task and possibly some lessons can be drawn from Tamil Nadu experience (Chap. 2, Box 2.4).

Emphasis on Micronutrient Initiatives

140. The benefits of micronutrient supplementation (such as Vitamin A, iodine and iron implementation) for child growth, health, and cognitive development are well documented and the present study has shown that they are economically investment worthy and most cost effective nutrition interventions The estimated cost per DALY saved for each micronutrient intervention compares well with the estimates reported in the international studies.

43

141. It is recommended that ICDS promote children’s access to micronutrient supplementation. If implemented properly, micronutrient supplementation along with short-duration and well targeted feeding programme would contribute significantly in improving nutrition status of children in the country. A national micronutrient investment plan has already been formulated, which needs to be carefully examined and then implemented.

Strengthening Pre-School Education

142. Universalisation with quality is not just about expanding the coverage of ICDS or quality improvement. It also means extending the scope of ICDS services, especially placing pre-school education and health care at the centre of the programme. The present study has clearly brought out that pre-school education is an economically rewarding intervention for early childhood development, even with the additional costs of engaging a second AWW to look after the PSE activities. The programme definitely deserves more public investment. 143. Unfortunately, PSE is a neglected aspect of ICDS. It is imperative that this component be strengthened. However, it needs be borne in mind that strengthening PSE require more than just investing more funds, or appointing an additional worker, or relocating the anganwadi centre in the same premise as primary schools. It also requires, for instance, extensive training programmes for anganwadi workers, better facilities (including space) and effective monitoring arrangements.

Addressing Some Old Issues and New Initiatives

144. As mentioned in the introductory note, one of the factors that are impeding the ICDS programme realising its potential is the inadequate response to issues like lack of community participation and lack of convergence of health and nutrition services. With massive scaling up of budget allocation for the Eleventh Plan, it is now imperative to address all such issues. It is also important now to replicate the new initiatives like ‘positive deviance’ that have created good impact in some states, as well as best practices followed in different parts of the country.

44

Bibliography

Beaton, George H, R Martorell, K A L’Abbe, B Edmonston, G McCabe, A C Ross and B Harvey (1993), “Effectiveness of Vitamin A Supplementation in the Control of Young Child Morbidity and Mortality in Developing Countries”, A project of the International Nutrition Program, Department of Nutritional Sciences, University of Toronto.

Behrman, Jere R, Harold Alderman and John Hoddinott (2004), “Nutrition and Hunger”, in Global Crises, Global Solutions, ed. Bjorn Lomborg, Cambridge university Press.

Bhardwaj, R K (2003), “Mid-Day Meals in Rajasthan”, paper presented at a woekshop on Mid-Day Meal Programmes in Schools in India convened by the Nutrition Foundation of India, New Delhi, 1 August.

Bredenkamp, C and J S Akin (2004), “India’s Integrated Child Development Services Scheme: Meeting the Health and Nutritional Needs of Children, Adolescent Girls and Women? Background paper for the World Bank Report (Michele Gragnolati, et al, 2006): India’s Undernourished Children – A Call For Reform and Action.

Census of India 2001, Population Projections for India and states 2001-2026.

Drake, L C Maier, M Jukes, A Patrikos (2002), “School-Age Children: Their Health and Nutrition” in a report prepared for the sub-committee on Nutrition Working Group on Nutrition and School Age Children, SCN News, December.

Dreze, Jean and Geeta Gandhi Kingdon (2001), “School Participation in Rural India”, Review of Development Economics, 5.

_______ and Aparajita Goyal (2003), “Future of Mid-Day Meals”, Economic and Political Weekly, 1 November: 4673-83.

_______ and Shonali Sen (2004), “Universalisation with Quality: An Agenda for ICDS, report prepared for National Advisory Council (available at www.righttofoodindia.org

_______, (2006), “Universalisation with Quality: ICDS in a Rights Perspective”, Economic and Political Weekly, 26 August: 3706-15.

Fox-Rushby, J A and K Hanson (2001), “Calculating and Presenting Disability adjusted life Years (DALYs) in Cost Effective Analysis”, Health Policy and Planning, Oxford University Press.

Gopaldas, Tara (2003), “Gujarat’s Improved Midday Meal Helps Children Learn”, Nutriview.

_______ and S Gujaral (1994): Educability before Education: A Nutrition Health Education and Sensitization Handbook, Tara Consultancy Services.

Gragnolati, Michele, Caryn Bredenkamp, Meera Shekar, Monica Das Gupta and Yi-Kyoung Lee (2006), India’s Undernourished Children – A Call For Reform and Action, World Bank

________ (2006), “ICDS and Persistent Undernutrition – strategies to Enhance the Impact”, Economic and Political Weekly, 25 March: 1193 – 1201.

Haddad, Lawrence J and Howarth E. Bouis (1990), “The Impact of Nutritional Status on Agriculture Productivity; Wage Evidence from the Philippines”, Pediatrics.

45

Heaver, Richard (2003), “India’s Tamil Nadu Nutrition Program: Lessons and Issues in Management and Capacity Development”, World Bank Health, Nutrition, and Population Discussion Paper.

Horton, Susan (1993), “The Economics of Nutritional Interventions” in Nutrition and Health in Developing Countries, ed. Richard D. Semba and Martin W. Bloem, Human Press Inc.

International Food Policy Research Institute (2003), “Going after the Agriculture-Nutrition Advantage”, IFPRI Forum, September.

Kaul, Venita, Chitra Ramachandran and G C Upadhyaya (1993), Impact of Early Childhood Education on Retention in Primary Grades, National Council of Educational Research and Training

Khera, Reetika (2002), “Mid-Day Meals in Rajasthan”, The Hindu, 13 November.

Kusin, J A, S Kardjati, J M Houtkooper and U H Renqvist (1992), “Energy Supplementation during Pregnancy and Postnatal Growth”, Lancet.

Levin, Henry M, Ernesto Pollitt, Rae Galloway, and Judith McGuire (1993), “Micronutrient Deficiency Disorders” in Disease Control Priorities in Developing Countries, ed. Dean T Jamison, W Henry Mosley, Anthony R Measham and Jose’ Luis Bobadilla, Oxford University Press.

Lizoff, Betsy, Elias Jimenez and Julia B Smith (1996), “Double Burden of Iron Deficiency in Infancy and Low Socioeconomic Status”, available on www. Archpediatrics.com

Lokshin, Michael, Monica Gas Gupta, Michele Gragnolati and Oleksiy Ivaschenko (2005), “Improving Child Nutrition? The Integrated Child Development Services in India”, Development and Change.

Mehta, Arun C (2006), Elementary Education in India – Analytical Report 2004-05, NIEPA.

Micronutrient Initiative, Controlling Vitamin & Mineral Deficiencies in India

Micronutrient Initiative, India Micronutrient National Investment Plan 2007-2011.

________ India Micronutrient National Investment Plan, 2007-2011

Ministry of Women and Child development, Govt. of India, Working Group on Development of Children for the Eleventh Five Year Plan (2007-2012).

Mora, J et al (1981), “The Effects of Nutritional Supplementation on Physical Growth of Children at Risk of Malnutrition”, American Journal of Clinical Nutrition.

Murray, C J L and A D Lopez (1996), Global Health Statistics: A Compendium of Incidence, Prevalence and Mortality Estimates for over 200 Conditions, Harvard University Press.

NCAER (2001), Concurrent Evaluation of Integrated Child Development Services. Programme.

Nutrition Foundation of India, New Delhi (2003), “A Report of the Workshop on Mid-day Meal Programmes in Schools in India – the Way Forward”, mimeo, 1 August.

Phillips, Margaret and Tina G Sanghvi (1996), The Economic Analysis of Nutrition Projects – Guiding Principles and Examples, Human Development Department, World Bank.

Pinstrup-Andersen, Per, Susan Burger, Jean-Pierre Habicht, and Karen Prterson (1993), “Protein-Energy Malnutrition” in Disease Control Priorities in Developing

46

Countries, ed. Dean T Jamison, W Henry Mosley, Anthony R Measham and Jose’ Luis Bobadilla, Oxford University Press.

Planning Commission, Govt. of India (March 2005), Performance Evaluation of Targeted Public Distribution System (TDPS).

Pollit, E et al (1993), Supplementary Feeding and Cognition: Effects over Two Decades, Monographs, Society of Research in Child Development.

Prlletier, David L, Edward A Frongillo, Jr.,Dirk G Schroeder and Jean-Pierre Habicht (1994), “A Methodology for Estimating the Contribution of Malnutrition to Child Mortality in Developing Countries”, Journal of Nutrition.

__________, Edward A Frongillo and Jean-Pierre Habicht (1993), “Epidemiologic Evidence for a Potentiating Effect of Malnutrition on Child Mortality” American Journal of Public Health, August.

Qian, Ming, Dong Wang, William E Watkins, Val Gebski, Yu Qin Yan, Mu Li and Zu Pei Chen (2005), “The Effects of Iodine on Intelligence in Children: A Meta-analysis of Studies Conducted in China”, Asia Pacific Journal of Clinical Nutrition.

Rajivan, A K (2004): “Towards a Malnutrition Free Tamil Nadu: A Case Study” in M S Swaminathan and P Medrano (eds), Towards a Hunger Free India, East West Books, Madras.

Schroeder, D G, R Martorell, J A Rivera, M T Ruel and J P Habicht (1995), “Age Differences in the Impact of Nutritional Supplementation on Growth”, Journal of Ntrition.

Schweinhart, Lawrence J, H V Barnes and D P Weikart (1993), “ Significant Benefits from The High/Scope Perry Pre-School Study through Age 27”, Ypsilanti, Michigan High/Scope Press.

Sethi, Bhisnupada (2003), “Mid-Day Meal Programme and its Impact in Improving Enrolment in Rayagada District”, mimeo, Lal Bahadur Shastri National Academy of Administration, Mussoorie.

Supreme Court (August 2005), Sixth Report of the Commissioners.

_______ (2004), Fifth Report of the Commissioners.

UNDP (2006), Human Development Report 2006.

UNICEF (2006a), Progress for Children – A Report Card.

_______ (2006b), The State of the World’s Children 2006. Van der Gagg, Jacques and Jee-Peng Tan (1997), The Benefits of Early Child Development Programs: An Economic Analysis, Education Department, World Bank.

Villar, J and J Rivera (1988), “ Nutritional Supplementation during Two Consecutive Pregnancies and the Interim Lactation Period: Effect on Birth weight”, Pediatrics.

Viswanathan, Brinda (2006), “Access to Nutritious Meal Programmes – Evidence from 1999-2000 NSS Data”, Economic and Political Weekly, 11 February:497-506.

WHO (2003), World Health Report

World Bank (2006), Repositioning Nutrition as Central to Development – A Strategy for Large Scale Action.

________ (2004), Attaining the Millennium Development Goals in India: How Likely and What Will It Take to Reduce Infant Mortality, Child Malnutrition, Gender Disparities and Hunger-Poverty and to Increase School Enrolment and Completion.

________ (1993), World Development Report 1993: Investing in Health.

47

________ (1994), Enriching Lives.

Annex A: ICDS Projects, Centres and Beneficiaries

Table A1: Growth in ICDS projects in recent years

Sanctioned Operational Sanctioned Operational Sanctioned Operational Sanctioned Operational

1 Andhra Pradesh 363 350 363 351 363 351 376 3632 Arunachal Pradesh 58 56 58 57 58 58 79 583 Assam 196 151 196 195 196 195 219 1964 Bihar 394 171 394 183 394 249 538 3945 Chhattisgarh 152 152 152 152 152 152 158 1526 Goa 11 11 11 11 11 11 11 117 Gujarat 227 227 227 227 227 227 260 2278 Haryana 116 116 116 116 116 116 128 1169 Himachal Pradesh 72 72 72 72 72 72 76 72

10 Jammu & Kashmir 121 120 121 120 140 121 140 12911 Jharkhand 204 152 204 152 204 152 204 20412 Karnataka 185 185 185 185 185 185 185 18513 Kerala 163 163 163 163 163 163 163 16314 Madhya Pradesh 336 336 336 336 336 336 367 33615 Maharashtra 370 363 370 368 372 372 416 37216 Manipur 34 34 34 34 34 34 34 3417 Meghalaya 32 32 32 32 32 32 39 3418 Mizoram 21 21 21 21 21 21 23 2119 Nagaland 54 52 54 54 54 54 56 5420 Orissa 326 308 326 326 326 326 326 32621 Punjab 142 142 142 142 142 142 148 14222 Rajasthan 257 257 257 257 257 257 274 25723 Sikkim 5 5 5 5 5 5 11 524 Tamil Nadu 434 431 434 434 434 434 434 43425 Tripura 40 39 40 39 40 39 51 3926 Uttar Pradesh 836 518 836 742 834 819 835 83427 Uttaranchal 99 54 99 96 99 99 99 9928 West Bengal 358 340 358 352 358 355 416 35729 A & N Islands 5 5 5 5 5 5 5 530 Chandigarh 3 3 3 3 3 3 3 331 Delhi 29 28 29 28 29 28 34 2832 Dadra & N Haveli 1 1 1 1 1 1 2 133 Daman & Diu 2 2 2 2 2 2 2 234 Lakshadweep 1 1 1 1 1 1 1 135 Pondicherry 5 5 5 5 5 5 5 5

5652 4903 5652 5267 5671 5422 6118 5659

2003-04 2004-05 2005-06Sl. No. States/Uts

All India

2002-03

48

Table A2: State-wise ICDS projects and AWCs*

Sanctioned up to

31.3.2005

Sanctioned during 2005-

06

Total sanctioned Operational

Sanctioned up to

31.3.2005

Sanctioned during 2005-

06

Total sanctioned Operational Reporting

1 Andhra Pradesh 363 13 376 363 56,204 9,562 65,766 56,364 56,272 1552 Arunachal Pradesh 58 21 79 58 2,359 678 3,037 2,359 1,777 413 Assam 196 23 219 196 25,416 6,659 32,075 25,447 25,335 1304 Bihar 394 144 538 394 60,813 19,715 80,528 57,767 50,998 1475 Chhattisgarh 152 6 158 152 20,289 9,148 29,437 20,286 20,241 1336 Goa 11 0 11 11 1,012 0 1,012 1,012 1,012 927 Gujarat 227 33 260 227 37,961 3,523 41,484 37,498 37,429 1658 Haryana 116 12 128 116 13,546 2,813 16,359 13,546 13,546 1179 Himachal Pradesh 72 4 76 72 7,354 10,894 18,248 7,354 7,354 102

10 Jammu & Kashmir 140 0 140 129 18,772 0 18,772 10,398 10,297 8111 Jharkhand 204 0 204 204 24,171 6,683 30,854 21,792 21,065 10712 Karnataka 185 0 185 185 40,301 11,313 51,614 40,689 40,646 22013 Kerala 163 0 163 163 25,393 3,258 28,651 25,376 25,376 15614 Madhya Pradesh 336 31 367 336 49,787 9,537 59,324 49,594 49,257 14815 Maharashtra 372 44 416 372 62,716 12,864 75,580 64,130 64,130 17216 Manipur 34 0 34 34 4,501 0 4,501 4,501 4,498 13217 Meghalaya 32 7 39 34 2,218 961 3,179 2,265 2,265 6718 Mizoram 21 2 23 21 1,361 231 1,592 1,361 1,215 6519 Nagaland 54 2 56 54 2,770 265 3,035 2,770 2,770 5120 Orissa 326 0 326 326 34,201 3,279 37,480 33,953 34,124 10421 Punjab 142 6 148 142 14,730 2,691 17,421 14,730 14,730 10422 Rajasthan 257 17 274 257 35,821 11,041 46,862 35,817 35,763 13923 Sikkim 5 6 11 5 500 488 988 500 499 10024 Tamil Nadu 434 0 434 434 42,677 3,049 45,726 42,677 42,677 9825 Tripura 40 11 51 39 3,874 2,220 6,094 3,768 3,745 9726 Uttar Pradesh 834 1 835 834 106,059 31,498 137,557 104,879 103,910 12627 Uttaranchal 99 0 99 99 6,658 1,134 7,792 6,657 6,639 6728 West Bengal 358 58 416 357 57,540 17,100 74,640 54,961 54,912 15429 A & N Islands 5 0 5 5 527 94 621 621 621 12430 Chandigarh 3 0 3 3 300 29 329 329 329 11031 Delhi 29 5 34 28 3,902 526 4,428 3,852 3,852 13832 Dadra & N Haveli 1 1 2 1 138 77 215 138 138 13833 Daman & Diu 2 0 2 2 87 10 97 87 87 4434 Lakshadweep 1 0 1 1 74 0 74 74 74 7435 Pondicherry 5 0 5 5 677 11 688 677 677 135

5671 447 6118 5659 764709 181351 946060 748229 738260 132* As on 31.03.2006** Average is calculated by dividing nos. of operational AWC by nos. of operational ICDS project.

Average nos. of AWC per project**

All India

ICDS Projects Anganwadi Centres

States/UtsSl. No.

49

Table A3: State-wise SNP beneficiaries*

A0-3 years 3-6 years Total verage per AWC** Nos. Average per

AWC** Nos. Average per AWC**

1 Andhra Pradesh 969,393 1,515,375 2,484,768 44 628,021 11 3,112,789 552 Arunachal Pradesh 50,505 37,989 88,494 50 13,629 8 102,123 573 Assam 683,842 576,171 1,260,013 50 148,176 6 1,408,189 564 Bihar 2,031,678 1,987,613 4,019,291 79 835,489 16 4,854,780 955 Chhattisgarh 852,232 577,996 1,430,228 71 374,103 18 1,804,331 896 Goa 20,963 18,608 39,571 39 9,267 9 48,838 487 Gujarat 740,208 825,520 1,565,728 42 280,575 7 1,846,303 498 Haryana 499,536 455,452 954,988 70 237,555 18 1,192,543 889 Himachal Pradesh 198,448 151,097 349,545 48 77,827 11 427,372 58

10 Jammu & Kashmir 153,270 120,520 273,790 27 69,858 7 343,648 3311 Jharkhand 676,162 747,706 1,423,868 68 426,069 20 1,849,937 8812 Karnataka 1,159,647 1,280,680 2,440,327 60 601,064 15 3,041,391 7513 Kerala 377,107 525,848 902,955 36 162,478 6 1,065,433 4214 Madhya Pradesh 1,379,750 1,271,112 2,650,862 54 614,455 12 3,265,317 6615 Maharashtra 2,182,497 2,654,820 4,837,317 75 739,851 12 5,577,168 8716 Manipur 94,493 84,412 178,905 40 38,704 9 217,609 4817 Meghalaya 87,457 103,864 191,321 84 34,298 15 225,619 10018 Mizoram 70,676 43,438 114,114 94 27,741 23 141,855 11719 Nagaland 157,921 105,154 263,075 95 44,179 16 307,254 11120 Orissa 1,822,200 1,895,389 3,717,589 109 661,331 19 4,378,920 12821 Punjab 128,637 423,687 552,324 37 204,479 14 756,803 5122 Rajasthan 1,339,408 1,210,000 2,549,408 71 615,434 17 3,164,842 8823 Sikkim 19,040 11,893 30,933 62 5,581 11 36,514 7324 Tamil Nadu 662,254 1,063,995 1,726,249 40 496,491 12 2,222,740 5225 Tripura 62,199 86,006 148,205 40 22,088 6 170,293 4526 Uttar Pradesh 3,895,756 3,871,187 7,766,943 75 1,473,434 14 9,240,377 8927 Uttaranchal 225,005 153,253 378,258 57 90,199 14 468,457 7128 West Bengal 1,864,426 2,015,976 3,880,402 71 463,266 8 4,343,668 7929 A & N Islands 13,671 9,707 23,378 38 5,287 9 28,665 4630 Chandigarh 20,006 14,557 34,563 105 8,418 26 42,981 13131 Delhi 238,423 149,384 387,807 101 76,933 20 464,740 12132 Dadra & N Haveli 6,120 5,815 11,935 86 2,020 15 13,955 10133 Daman & Diu 3,492 3,602 7,094 82 1,792 21 8,886 10234 Lakshadweep 1,998 2,015 4,013 54 965 13 4,978 6735 Pondicherry 22,732 6,714 29,446 43 9,344 14 38,790 57

22,711,152 24,006,555 46,717,707 63 9,500,401 13 56,218,108 76* As on 31.03.2006** Average is calculated by dividing the nos. of beneficiary by the nos. of reporting AWCs.

All India

States/UtsSl. No.

P& LM Total BenerficiariesChildren

50

Table A4: State-wise pre-school beneficiaries*

Average per AWC** Nos. ANos. verage per

AWC** Nos. Average per AWC**

1 Andhra Pradesh 757,985 13 770,033 14 1,528,018 272 Arunachal Pradesh 19,110 11 18,851 11 37,961 213 Assam 462,335 18 432,476 17 894,811 354 Bihar 1,156,622 23 1,066,080 21 2,222,702 445 Chhattisgarh 289,918 14 298,082 15 588,000 296 Goa 9,223 9 9,385 9 18,608 187 Gujarat 721,644 19 682,856 18 1,404,500 388 Haryana 242,805 18 212,647 16 455,452 349 Himachal Pradesh 61,909 8 59,829 8 121,738 17

10 Jammu & Kashmir 63,493 6 57,832 6 121,325 1211 Jharkhand 375,750 18 393,209 19 768,959 3712 Karnataka 630,339 16 634,806 16 1,265,145 3113 Kerala 263,006 10 261,199 10 524,205 2114 Madhya Pradesh 780,052 16 764,014 16 1,544,066 3115 Maharashtra 1,398,217 22 1,307,427 20 2,705,644 4216 Manipur 56,890 13 57,032 13 113,922 2517 Meghalaya 48,199 21 48,237 21 96,436 4318 Mizoram 25,473 21 24,995 21 50,468 4219 Nagaland 56,674 20 49,191 18 105,865 3820 Orissa 472,010 14 471,695 14 943,705 2821 Punjab 233,505 16 208,385 14 441,890 3022 Rajasthan 639,731 18 624,716 17 1,264,447 3523 Sikkim 4,986 10 5,197 10 10,183 2024 Tamil Nadu 535,833 13 528,162 12 1,063,995 2525 Tripura 51,086 14 49,966 13 101,052 2726 Uttar Pradesh 2,108,544 20 1,972,837 19 4,081,381 3927 Uttaranchal 91,370 14 90,768 14 182,138 2728 West Bengal 813,696 15 828,059 15 1,641,755 3029 A & N Islands 5,001 8 4,708 8 9,709 1630 Chandigarh 7,198 22 7,359 22 14,557 4431 Delhi 78,598 20 72,956 19 151,554 3932 Dadra & N Haveli 2,533 18 2,427 18 4,960 3633 Daman & Diu 1,778 20 1,809 21 3,587 4134 Lakshadweep 2,015 27 2,003 27 4,018 5435 Pondicherry 2,774 4 2,920 4 5,694 8

12,470,302 17 12,022,148 16 24,492,450 33* As on 31.03.2006** Average is calculated by dividing the nos. of beneficiary by the nos. of reporting AWCs.

TotalBoys Girls

All India

Sl. No. States/Uts

51

Table A5: State-wise nutritional status of children*

Nos. % Nos. % Nos. % Nos. % Nos. %1 Andhra Pradesh 2,368,485 47.3 1,626,917 32.5 1,008,451 20.1 8,124 0.2 5,011,977 100.02 Arunachal Pradesh 38,499 54.1 21,930 30.8 8,945 12.6 1,799 2.5 71,173 100.03 Assam 356,121 57.3 178,457 28.7 74,186 11.9 12,778 2.1 621,542 100.04 Bihar 7,947,923 70.4 1,285,123 11.4 1,115,816 9.9 938,554 8.3 11,287,416 100.05 Chhattisgarh 674,933 43.7 559,516 36.2 289,638 18.8 20,341 1.3 1,544,428 100.06 Goa 24,629 57.7 14,546 34.1 3,418 8.0 57 0.1 42,650 100.07 Gujarat 980,635 36.4 1,061,565 39.4 625,327 23.2 26,974 1.0 2,694,501 100.08 Haryana 903,809 53.3 582,393 34.4 204,326 12.1 3,607 0.2 1,694,135 100.09 Himachal Pradesh 189,889 59.2 98,442 30.7 32,096 10.0 414 0.1 320,841 100.0

10 Jammu & Kashmir 71,130 53.0 45,160 33.6 17,721 13.2 255 0.2 134,266 100.011 Jharkhand 295,579 47.8 197,763 32.0 113,411 18.3 11,566 1.9 618,319 100.012 Karnataka 1,109,952 45.2 915,132 37.3 420,309 17.1 9,909 0.4 2,455,302 100.013 Kerala 1,015,749 61.5 515,128 31.2 120,523 7.3 978 0.1 1,652,378 100.014 Madhya Pradesh 2,243,239 50.1 1,430,839 31.9 758,170 16.9 49,093 1.1 4,481,341 100.015 Maharashtra 3,921,371 51.7 2,874,213 37.9 772,107 10.2 17,268 0.2 7,584,959 100.016 Manipur 161,466 88.6 8,151 4.5 12,138 6.7 571 0.3 182,326 100.017 Meghalaya 88,219 61.3 42,577 29.6 12,816 8.9 307 0.2 143,919 100.018 Mizoram 78,514 78.5 15,680 15.7 5,064 5.1 774 0.8 100,032 100.019 Nagaland 135,352 91.0 10,848 7.3 2,201 1.5 290 0.2 148,691 100.020 Orissa 1,704,397 42.3 1,523,030 37.8 769,013 19.1 35,892 0.9 4,032,332 100.021 Punjab 1,152,815 63.4 585,665 32.2 71,459 3.9 9,600 0.5 1,819,539 100.022 Rajasthan 973,358 45.8 720,397 33.9 427,720 20.1 4,746 0.2 2,126,221 100.023 Sikkim 17,600 71.9 5,633 23.0 1,204 4.9 54 0.2 24,491 100.024 Tamil Nadu 2,306,467 60.2 1,396,188 36.4 128,161 3.3 2,094 0.1 3,832,910 100.025 Tripura 69,293 67.5 24,155 23.5 8,654 8.4 565 0.6 102,667 100.026 Uttar Pradesh 2,483,003 47.4 1,645,163 31.4 1,046,365 20.0 64,472 1.2 5,239,003 100.027 Uttaranchal 140,353 55.8 77,693 30.9 32,896 13.1 506 0.2 251,448 100.028 West Bengal 1,987,431 46.5 1,569,935 36.7 690,722 16.2 27,386 0.6 4,275,474 100.029 A & N Islands 20,975 90.7 1,770 7.6 351 1.5 42 0.2 23,138 100.030 Chandigarh 23,557 67.2 9,999 28.5 1,521 4.3 0 0.0 35,077 100.031 Delhi 118,945 45.5 90,164 34.5 52,249 20.0 259 0.1 261,617 100.032 Dadra & N Haveli 1,976 19.1 5,353 51.7 2,912 28.1 118 1.1 10,359 100.033 Daman & Diu 1,752 44.0 1,619 40.6 613 15.4 0 0.0 3,984 100.034 Lakshadweep 0 0.035 Pondicherry 13,935 50.2 11,398 41.0 2,443 8.8 0 0.0 27,776 100.0

33,621,351 53.5 19,152,542 30.5 8,832,946 14.1 1,249,393 2.0 62,856,232 100.0* As on 31.03.2006

Grade II Grade III & IV Total

All India

Sl. No. States/Uts Normal Grade I

52

Annex B: Trends in ICDS Expenditure & Projections

Table B1: Allocation and expenditure under ICDS Scheme

ICD

S (G

ener

al)

Wor

ld B

ank

assi

sted

ICD

S

Trai

ning

pro

gram

Allo

catio

n fo

r NE

stat

es

Sub-

tota

l

Shar

e (%

)

Stat

e2

Gov

t. of

indi

a3

Sub-

tota

l

Shar

e (%

)

Per y

ear e

xp.

Exp.

per

AW

C p

er y

ear4

Exp.

per

ben

efic

iary

per

ye

ar5

Ninth Plan 5,720 57 4,229 4,229 43 9,949 2,304 1,990 44,557 665Tenth Plan 9,420 1,539 329 815 12,102 56 7,286 2,320 9,607 44 21,709 4,730 4,342 67,109 932

% growth 112 127 118 105 118 51 402002-03 1,505 381 57 1,943 57 1,486 1,486 43 3,429 718.892003-04 1,459 413 49 1,921 55 1,585 1,585 45 3,506 724.52004-05 1,727 426 66 2,219 56 1,763 1,763 44 3,982 866.542005-06 2,299 317 78 368 3,062 59 1,168 975 2,143 41 5,205 1158.42006-07 2,430 1 78 447 2,957 53 1,285 1,346 2,630 47 5,587 1262

Ninth Plan 4,750 57 3,511 3,511 43 8,262 1,913 1,652 37,002 552Tenth Plan 6,092 1,038 213 493 7,836 56 4,808 1,402 6,210 44 14,047 3,054 2,809 43,422 603

% growth 65 77 70 60 70 17 9

1 Source: MoWCD; the figures for 2006-07 are obtained from Demand for Grants (Demand No. 59), MoWCD, 2006-07

3 Since 2005-06, GoI meets 50% of the food expenses; data obtained from MoWCD.4,5 Figures are calculated using the statistics as given under:

(lacs)166227375562

Perio

d/Ye

ar

Non food cost-GOI (Rs. crores)1 Food cost (Rs. crores)

Tota

l (R

s. c

rore

s)

Tota

l in

mill

ion

USD

Unit costs (Rs.)

Nominal cost

Real cost (1995-96 as base year)6

2 Ninth Plan figures represent plan allocation by states/Uts and obtained from the website of the Planning commission. Tenth plan data up to 2004-05 are actuals and obtained from the Planning Commission. The figures for 2005-06 and 2006-07 are gathered from MoWCD. The state expenditure includes spends under PMGY from 2002-03 to 2004-05. It may be noted that PMGY allocation has been discontinued since 2005-06.

Beneficiaries (child & P&LM)No. of AWCs Average Average Per AWC

31/3/1997 (End of Eigth Plan) 347,408 298,359 197 6631/3/1992 (End of Seventh Plan) 249,310

6731/3/2006 748,229 646,972 469 72

31/3/2002 (End of Ninth Plan) 545,714 446,561 301

6 Allocation and expenditure in real terms has been calculated using inflation rates based on 52-week WPI (Source: Economic Survey, 2006-07).

SNP (Plan) (Rs. Cr) PMGY (Rs. Cr) Total (Rs. Cr)Ninth Plan 3,853.48 375.03 4,228.51Tenth Plan 6,099.53 1,186.95 7,286.482002-03 1,073.82 412.05 1,485.872003-04 1,224.93 360.00 1,584.932004-05 1,347.72 414.90 1,762.622005-06 (RE) 1,168.12 0.00 1,168.122006-07 (BE)* 1,284.93 0.00 1,284.93* Estimated increasing the previous figure at 10%.

Period/YearNominal

53

Table B2: State-wise expenditure for SNP (2005-06)

Sl No. State / UT

State exp. (Rs.

crores)

GOI release

(Rs. crores)

Total (Rs. Crores)

Nos. of beneficiaries

as on 31.12.20051

Exp. Per beneficiary

per day (Rs.)1 Andhra Pradesh 41.01 47.45 88.46 3,135,779 0.942 Bihar 107.28 82.61 189.89 4,830,280 1.313 Chattisgarh 39.97 31.33 71.30 1,778,581 1.344 Goa 2.00 1.15 3.15 48,687 2.165 Gujarat 48.59 33.40 81.99 1,919,846 1.426 Haryana 22.35 18.11 40.46 1,162,745 1.167 Himachal Pradesh 7.94 6.60 14.54 409,043 1.188 Jammu & Kashmir 18.47 3.44 21.90 343,648 2.129 Jharkhand 119.50 7.61 127.11 1,730,598 2.45

10 Karnataka 53.39 73.80 127.19 3,052,039 1.3911 Kerala 29.65 17.38 47.03 1,020,478 1.5412 Madhya Pradesh 40.00 54.58 94.58 3,271,078 0.9613 Maharashtra 108.08 98.69 206.77 5,341,811 1.2914 Orissa 9.24 66.98 76.22 4,351,045 0.5815 Punjab 11.89 12.47 24.36 643,709 1.2616 Rajasthan 67.98 55.34 123.32 3,169,250 1.3017 Tamil Nadu 20.74 37.04 57.78 2,207,248 0.8718 Uttar Pradesh 277.91 181.25 459.16 9,148,569 1.6719 Uttaranchal 8.17 7.06 15.23 462,333 1.1020 West Bengal 54.97 63.48 118.45 3,965,785 1.0021 A & N Islands 3.21 0.80 4.01 23,098 5.7922 Chandigarh 1.41 0.76 2.17 39,285 1.8423 D &N Haveli 0.46 0.23 0.69 14,704 1.5624 Daman and Diu 0.43 0.14 0.57 8,875 2.1425 Lakshadweep 0.53 0.08 0.60 4,863 4.1426 Delhi 1.02 7.37 8.40 467,800 0.6027 Pondicherry 2.49 0.86 3.35 35,395 3.1528 Arunachal Pradesh 0.00 1.13 1.13 81,753 0.4629 Assam 22.71 30.67 53.38 1,106,895 1.6130 Manipur 6.65 6.65 13.29 217,609 2.0431 Meghalaya 15.92 6.87 22.79 219,352 3.4632 Mizoram 5.35 4.71 10.06 132,383 2.5333 Nagaland 10.79 9.29 20.08 296,489 2.2634 Sikkim 4.26 1.18 5.44 37,664 4.8235 Tripura 3.76 4.07 7.84 170,293 1.53

All India 1,168.12 974.59 2,142.71 54,849,010 1.30

Source: MoWCD

1. The beneficiaries include 0-6 year children & pregnant and lactating mothers.

1 Data obtained from Lok Sabha Unstarred Question No. 1744, dt. 08.08.2006, available on Indiastat.com website. Als, note the following:

2. In the origanal data sheet the beneficiaries figure for Manipur was missing. The nos. of beneficiaries as on 31.3.2006 was 2,17,609 and the same has been included in the above table.

54

Table B3: Projected nos. of ICDS projects, AWCs & beneficiaries

5,659 459 6,118173 173

5,659 632 6,291

748,229 197,831 946,060107,274 107,274400,000 400,000

748,229 705,105 1,453,33425,961

2007-08 2008-09 2009-10 2010-11 2011-12 Average889,250 1,030,271 1,171,292 1,312,313 1,453,334 1,171,292

0-3 years children excluding mini AWCs (million) 22.71 10.58 33.290-3 years children in mini-AWCs (million) 0.13 0.13

Sub-total 22.71 10.71 33.423-6 years children excluding mini AWCs (million) 24.01 10.58 34.593-6 years children in mini-AWCs (million) 0.13 0.13

Sub-total 24.01 10.71 34.72Total 0-6 years children 46.72 21.42 68.14

44%

2007-08 2008-09 2009-10 2010-11 2011-12 Average0-3 years children (million) 24.85 27.00 29.14 31.28 33.42 293-6 years children (million) 26.15 28.29 30.43 32.58 34.72 30

Total 51.00 55.29 59.57 63.85 68.14 59

Nos. of P&LM excluding mini-AWCs (million) 9.50 4.23 13.73Nos. of P&LM in mini-AWCs (million) 0.05 0.05

Total 9.50 4.28 13.78

2007-08 2008-09 2009-10 2010-11 2011-12 AverageP&LM (million) 10.36 11.21 12.07 12.92 13.78 12

Nos. of PSE beneficiaries excluding mini-AWCs 24.49 10.58 35.07Nos. of PSE beneficiaries in mini-AWCs 0.13 0.13

Total 24.49 10.71 35.20Total as % of 2006 child population 23%

2007-08 2008-09 2009-10 2010-11 2011-12 Average3-6 years PSE children (millio 26.63 28.78 30.92 33.06 35.20 31

1 Calcuted based on the following assumptions:Nos. of 0-3 years children per AWC 15Nos. of 0-3 years children per mini -AWC 5 1/3Nos. of 3-6 years children per AWC 15Nos. of 3-6 years children per mini -AWC 5 1/3

2 Calcuted based on the following assumptions:Nos. of P&LM per AWC 6Nos. of P&LM per mini-AWC 2 1/3

3 Calcuted based on the following assumptions:Nos. of PSE children per AWC 15

Expansion programme - ICDS projects

Expansion programme - AWCs

Year-wise phasing

Year-wise phasing

Total as % of 2006 child population

Addition of AWCs based on revised population normsAddition of AWCs for universalisation during Eleventh Plan

Existing Addition

Existing

SNP beneficiaries - children1

SNP beneficiaries - pregnant & lactating mothers2

Year-wise phasing

PSE beneficiaries (3-6 years children)3

Year-wise phasing

Existing Addition Total

Total

Existing Addition

Existing

Operationalisation of ICDS projects as sanctioned up to 31.03.2006Addition of projects based on revised population norms

Total

Operationalisation of AWCs as sanctioned up to 31.03.2006

Total AWCs excluding mini-AWCsAddition of mini-AWCs based on revised population norms

AWCs excluding mini-AWCs

TotalAddition

Total

Addition Total

Nos. of PSE children per mini-AWCs 5 1/3

55

Table B4: Financial projections (Eleventh Plan)

Existing Addition TotalFood supplementation for 0-6 years children 2,803.06 1,285.20 4,088.26Food supplementation for P&LM 570.02 256.80 826.82

Total 3,373.09 1,542.00 4,915.092007-08 2008-09 2009-10 2010-11 2012-12 Average

Food suppl for 0-6 years children 3,060.10 3,317.14 3,574.18 3,831.22 4,088.26 3,574Food suppl for P&LM 621.38 672.74 724.10 775.46 826.82 724

Total 3,681.49 3,989.89 4,298.29 4,606.69 4,915.08 4,298% to total revenue exp (D1) 50 49 48 47 47 48

Existing Addition TotalOperational cost of ICDS projects @ Rs. Lacs 15.61 883.37 98.66 982.03Operational cost of AWCs @ Rs. Lacs 0.3086 2309.03 2175.95 4,484.98Operational cost of mini-AWCs @ Rs. Lacs 0.0935 24.27 24.27

Total 3192.40 2298.88 5491.28

2007-08 2008-09 2009-10 2010-11 2011-12 AverageOperational cost of ICDS/AWCs 3,652.18 4,111.95 4,571.73 5,031.50 5,491.28 4,572Other overheads3 66.94 66.94 66.94 66.94 66.94 67Training and development4

14.55 14.55 14.55 14.55 14.55 15Total 3,733.67 4,193.44 4,653.22 5,112.99 5,572.77 4,654

Existing Addition TotalAppointment of additional AWWs (nos.) 314,600 314,600Annual salary (Rs. Crores) 377.52 377.52

2007-08 2008-09 2009-10 2010-11 2011-12 AverageAnnual salary (Rs. Crores) 75.50 151.01 226.51 302.02 377.52 227

2007-08 2008-09 2009-10 2010-11 2011-12 TotalD.1 Total without additional AWWs 7,415.15 8,183.33 8,951.50 9,719.68 10,487.85 44,758D.2 Total with additional AWWs 7490.66 8334.34 9178.02 10021.70 10865.37 45,890

2007-08 2008-09 2009-10 2010-11 2011-12 Total1,937.18 1,937.18 1,937.18 1,937.18 1,937.18 9,685.90

2007-08 2008-09 2009-10 2010-11 2011-12 TotalF.1 Total without additional AWWs 9,352.33 10,120.51 10,888.68 11,656.86 12,425.03 54,443F.2 Total with additional AWWs 9427.84 10271.52 11115.20 11958.88 12802.55 55,576

2007-08 2008-09 2009-10 2010-11 2011-12 TotalG.1 Total without additional AWWs 2050.95 2219.41 2387.87 2556.33 2724.79 11,939G.2 Total with additional AWWs 2067.51 2252.53 2437.54 2622.56 2807.58 12,188

Rs. Crores

Year-wise phasing

C. Appointment of additional AWWs for PSE activities5

Year-wise phasing

B. ICDS (General) overheads2

Year-wise phasing

A. Estimated cost of food supplementation1

Rs. Crores

Rs. Crores

Year-wise phasing

D. Total revenue expenditure (Rs. crores)

E. Capital expenditure (Rs. crores)6

Year-wise phasing

F. Grand total (Rs. crores)

G. Grand total (million USD)

Year-wise phasing

Year-wise phasing

56

Table B4: (Contd.) 1 Calcuted based on the following assumptions:

Food cost per beneficiary - Rs. per day 2.00Food supplementation - days per year 300

It is also assumed that all the AWCs will provide SNP.2 Calcuted using the rates assumed in the Working Group report3 Calcuted as given under:

Rate AmountNos. Rs. Lacs Rs. Cr

Maintenance cost of district level ICDS cells 578 10.00 57.80Maintenance cost of state level ICDS cells 35 11.84 4.14Monitoring and evaluation expenditure 5.00

Total 66.944 Estimated as shown below:

Rs. CroresAmount spent per year under UDISHA (2000-01 to 2004-05) 9.70Escalation factor to account for increased requirement of training 50%Estimated per year cost 14.55

5 Estimated based on early child education budget in the Working Group Report:ICDS blocks to be covered 50% Nos. 3,146Nos. of AWCs @ 100 AWCs per ICDS block Nos. 314,600Annual honorarium @ Rs. Lacs 0.12 Rs. Crores 377.52

6 Calculated as given under:Rate Amount

Rs. Lacs Rs. CrConstruction of AWCs (civil works) 100,000 1.75 1,750.00Equipments, furniture, etc (Working Group) 187.18

Total 1,937.18

Computation of average additional honorariumOperational

AWCs % Addl. Honorarium

1 Andhra Pradesh 56,364 11.88% 4002 Goa 1,012 0.21% 24763 Haryana 13,546 2.85% 2004 Himachal Pradesh 7,354 1.55% 2005 Jammu & Kashmir 10,398 2.19% 262.56 Jharkhand 21,792 4.59% 2507 Karnataka 40,689 8.57% 5508 Kerala 25,376 5.35% 4009 Maharashtra 64,130 13.51% 400

10 Punjab 14,730 3.10% 40011 Sikkim 500 0.11% 75012 Tamil Nadu 42,677 8.99% 80713 Tripura 3,768 0.79% 78014 Uttar Pradesh 104,879 22.10% 20015 Uttaranchal 6,657 1.40% 150016 West Bengal 54,961 11.58% 40017 A & N Islands 621 0.13% 50018 Chandigarh 329 0.07% 40019 Delhi 3,852 0.81% 50020 Dadra & N Haveli 138 0.03% 50021 Daman & Diu 87 0.02% 50022 Lakshadweep 74 0.02% 50023 Pondicherry 677 0.14% 460

474,611 100.00%Weighted average addl. Honorarium Rs./month 411

Rs./year 4932

amount per year (Rs. Cr)

* The nos. of AWCs for construction is assumed to be I lac per year in the Working Group report.

Nos. per year*

57

Annex C: Benefit Cost Ratio and Cost Effectiveness

Table C1.1: BCR and cost effectiveness of food supplementation

programme (Base case, Scenario I)

Program cost (Rs. Crores) 18,520Leakage 0%

0-3 years children million 293-6 years children million 300-6 years children million 59P&LM million 12

Programme duration (i.e. feeding period) Year 3

Cost per year (Rs. Crores) 3,574 2,234 5,808Total program cost (Rs. Crores) 10,722 6,702 17,424

Rs. 984USD 22

Cost per year (Rs. Crores) 724 372 1,096Rs. 913

USD 20Program benefits - wage gains (Rs. Crores) 14,133Underweight (Grade I to IV ) children3 million 27.44Under 5 year mortality rate4 per 1000 pop 72.8Likeli hood of under 5 years child deaths million 2.00

Rate 50%million 1.00Rate 50%

million 0.50Severe underweight (Grade III & IV) children7 million 1.17

Rate 50%million 0.59Rate 57.9%

million 6.95Rate 50%

million 3.48Labour market participation rate11 39.1%Annual wage rate12 Rs. 15,834Program effectiveness in improving productivity 13 100%Discounted wage gains due to child death aversion14 Rs. Crores 5,494.60Productivity gains for severe underweight children15 Rs. Crores 6,483.62Productivity gains for P&LM Rs. Crores 2,154.50Benefit cost ratio 0.76

Rs. 174,240USD 3,821

DALY saved - children million 25.68DALY saved -P&LM million 3.48

Rs. 6,785USD 149Rs. 3,149USD 69

INR/USD = 45.60 (Average exchange rate for April-Dec 2006)

Target group (per year)

Likeli hood of malnutrition related child deaths5

Anaemic pregnant women (15-49 years)9

Malnutrition related adulthood productivity disability of children8

Programme cost for 0-6 years children

Programme cost for P&LM

Deaths averted by food supplementation program6

Cost per P&LM beneficiary per year

Food cost

Food cost

Cost per child beneficiary per year

Non-food cost2

Malnutrition related health and and productivity disability of P&LM10

Cost per child death averted

Cost per DALY saved - children

Cost per DALY saved - P&LM

Total

Non-food cost1 Total

58

Table C1.1: (Contd.)

1, 2 Estimated as given under:ICDS (general) overheads Rs. Crores 4,654Apportionment to food supplementation for 0-6 years children @ 40% Rs. Crores 1,862(AWWs spend, on the average, 39.8 percent of their time in feeding activities; NCAER, June 2001)Apportionment to PSE activities @ 36% Rs. Crores 1,675(AWWs spend, on the average, 36.3 percent of their time in PSE activities; NCAER, June 2001)Balace overheads are distributed eqally to the following activities

Food supplementation for 0-6 years children Rs. Crores 372Food supplementation for P&LM Rs. Crores 372PSE activities Rs. Crores 373

3 Calculated based on nutrition status data for 0-5 years children as on 31 March 2006:Nos. in million %

Normal 33.6 53.49%Grade I 19.2 3

0.47%Grade II 8.8 4.05%

Grade III & IV 1.2 1.99%Total 62.9 100.00%

1

4 Source: Demographic Indicators: 2001-2026, Census of India 2001

5

6 Rate assumed7 See footnote 3 8 Rate assumed

9 Source: NFHS III10 Rate sssumed 11 Source:Census of India 2001

13

Assumed

17.75

15

Productivity gain estimation assumes DALY gained as calculated using DALY calculator: 23.56

14 Wage gain estimation assumes productive life expectancy as calculated using DALY calculator:

12 Wage rate is average of rates for illiterate and literate up to primary level. See footnote in the CBA for PSE component of ICDS.

59

Table C1.2: Sensitivity Analysis Leakage 0%

Programme effectiveness 100%

Child P&LM0.5 3.53 637 25 691.0 2.05 1,274 50 691.5 1.44 1,911 74 692.0 1.11 2,547 99 693.0 0.76 3,821 149 69

Leakage 25%Programme effectiveness 75%

Child P&LM0.5 2.48 768 35 1121.0 1.44 1,535 69 1121.5 1.01 2,302 104 1122.0 0.78 3,070 138 1123.0 0.54 4,605 207 112

Leakage 50%Programme effectiveness 50%

Child P&LM0.5 1.51 1,029 55 2291.0 0.88 2,057 110 2291.5 0.62 3,086 165 2292.0 0.48 4,115 220 2293.0 0.33 6,172 330 229

LegendsBCR Benefit cost ratioCPCDA Cost (USD) per child death avertedCPDS Cost (USD) per DALY saved

Program duration (year)

CPDSProgram duration (year)

CPDSBCR CPCDA

BCR CPCDA

Program duration (year)

BCR CPCDA CPDS

60

Table C2: BCR and cost effectiveness of Vitamin A supplementation (Base case)

Program cost (Rs. Crores) 59.39Leakage 0%

million 49Programme duration Year 3

Syrup - 2 doses Delivery cost Total0.71 3.33 4.04

Program benefits - wage gains (Rs. Crores) 659.36Rate 57%

million 27.93Rate 0.41%

million 0.11Rate 24%

million 0.03Rate 1%

million 0.28Rate 25.0%

million 0.07Rate 50%

million 0.04Labour market participation rate9 39.1%Annual wage rate10 Rs. 15,834Program effectiveness in improving productivity11 75%Discounted wage gains due to death aversion12 Rs. Crores 329.68Productivity gains from blindness aversion13 Rs. Crores 329.68Benefit cost ratio 11.10

Rs. 19,797USD 434

DALY saved million 1.41Rs. 421USD 9

INR/USD = 45.60 (Average exchange rate for April-Dec 20067)

Blindness prevalance6

Blindness averted7

0-5 years childrenTarget group (per year)1

Cost per beneficiary per year (Rs.)2

Potential prevalence of sub-clinical Vitamin A defficiency3

Likelihood of Vitamin A deficiency related mortality4

Deaths averted by Vitamin A supplementation program5

Productivity disability8

Cost per death averted

Cost per DALY saved

61

Table C2: (Contd.)

1 Estimated from the projected nos. of children in the age groups 0-3 years and 3-6 years in AWCs2 Source:India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative

Child population in the age group 9-59 months million 140.7Vitamin A deficiency prevalence rate 57%Child deaths precipitated by Vitamin A deficiency million 0.33Mortality rate 0.41%

5 Assumed based on the following findings:

7, 8 Assumed9-11 See footnotes in the earlier tables.

17.75

13 Productivity gain estimation assumes DALY gained as calculated using DALY calculator: 23.56

3 About 57% of preschoolers and their mothers have sub-clinical Vitamin A deficiency. Source:Controlling Vitamin & Mineral Deficiencies in India; Meeting the Goal, The Micronutrient Initiative

12 Wage gain estimation assumes productive life expectancy as calculated using DALY calculator:

4 Estimated based on the following information culled out from India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative:

a. World Development Report 1993 observed that of the 8 million deaths of children per year due to VAD, between 1.3 million and 2.5 million might be prevented by eliminating Vitamin A deficiency. This gives an average rate of death aversion of [((1.3+2.5)/2)/8=] 24%. b. Meta-analysis by Beaton, et al (1993) also found that even in areas with low prevalence of visible Vitamin A deficiency, improvement of Vitamin A status reduced child mortality by 23%.

6 Blindness prevalence rate as of 2004 was estimated to be 1.1 percent. Source: Rajya Sabha Unstarred question no. 1712, dated 17.12.2004 as cited in Indiastat.com (see website). Age-group wise prevalance rates not readily available.

62

Table C3: BCR and cost effectiveness of iodine supplementation (Base case)

Program cost (Rs. Crores) 26Leakage 0%

million 6Programme duration Year 1

DFS Delivery cost Total40.00 4.00 44.00

Program benefits - wage gains (Rs. Crores) 599Rate 27.7%

million 1.66Rate 5.0%

million 0.08Labour market participation rate5 39.1%Annual wage rate6 Rs. 15,834Program effectiveness in improving productivity 7 75%Productivity gains8 Rs. Crores 599.19Benefit cost ratio 22.70DALY saved9 million 1.34

Rs. 197USD 4

INR/USD = 45.60 (Average exchange rate for April-Dec 20067)

1 Assumed that 50% of the projected nos. of P&LM is pregnant women. 2 Source:India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative

27.7%

5 - 7 See footnotes in the earlier tables.16.13

9 DALY gained factor is calculated using DALY calculator: 22.3

8 Productivity gain estimation assumes productive life expectancy as calculated using DALY calculator:

4 Assumed based on the fact that the country's overall intellectual productive capacity has been reduced by around 15 percent due to 'iodine deficiency disorders' (Source:India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative).

3 An estimated 6.6 million children are born mentally impaired each year (Source:India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative). Relating this figure to an estimated 23.9 million live births [2001 population of 1028.6 million x crude birth rate of 23.2], prevalence rate of mentally impaired new born babies works out to be

Cost per DALY saved

Productivity disability4

Target group (per year)1 Pregnant women

Cost per beneficiary per year (Rs.)2

Likelihood of mentally impaired live births due to iodine deficiency in mother3

63

Table C4: BCR and cost effectiveness of iron supplementation (Base case)

Program cost (Rs. Crores) 12Leakage 0%

million 6Programme duration Year 1

IFA tablets Delivery cost Total5.00 14.94 19.94

Program benefits - wage gains (Rs. Crores) 328Rate 57.9%

million 3.47Rate 0.1%

million 0.003Rate 25%

million 0.001Rate 20%

million 0.69Labour market participation rate7 39.1%Annual wage rate8 Rs. 15,834Program effectiveness in improving productivity9 75%Discounted wage gains due to death aversion10 Rs. Crores 7.9700Productivity gains Rs. Crores 320.39Benefit cost ratio 27.45

Rs. 159,467USD 3,497

DALY saved11 million 0.54Rs. 221USD 5

INR/USD = 45.60 (Average exchange rate for April-Dec 20067)

1 Assumed that 50% of the projected nos. of P&LM is pregnant women. 2 Source:India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative3 Source: NFHS III

Population of pregnant women million 28.5Anaemic prevalence rate 57.9%Nos. of anaemic pregnant women million 16.5Estimated deaths due to severe anaemia million 0.022Mortality rate 0.13%

5 Assumed6 Assumed7- 9 See footnotes in the earlier tables.

17.2

11 DALY gained factor is calculated using DALY calculator: 24.6

Likelihood of death from severe anaemia4

Deaths averted by iron supplementation program5

Target group (per year)1 Pregnant women

Cost per beneficiary per year (Rs.)2

Potential prevalence of anaemic pregnant women3

10 Wage gain estimation assumes productive life expectancy as calculated using DALY calculator:

4 Estimated based on the following information culled out from India Micronutrient National Investment Plan 2007-2011, The Micronutrient Initiative

Cost per DALY saved

Productivity disability6

Cost per death averted

64

Table C5: BCR and cost effectiveness of pre-school education (Base case)

Program cost (Rs. Crores) 6,825Scale down of the assumed incremental wage rate 0%Target group (per year) 3-6 years children million 31Programme duration Year 3

Food cost Non-food coat1 TotalCost per year 0 2,275 2,275Total program cost 0 6,825 6,825

Rs. 734USD 16

Program benefits - wage gains (Rs. Crores) 39,122Rate 100%

Nos. in million 31Rate 18%

Nos. in million 6Rate 33%

Nos. in million 2Rate 25%

Nos. in million 0.5Incremental annual wage rate for literate up to primary level6 Rs. 10,177Incremental annual wage rate for literate up to secondary level7 Rs. 13,550Benefit cost ratio8 5.73INR/USD = 45.60 (Average exchange rate for April-Dec 20067)

1 See footnotes in CB analysis of food supplementation program.2 Enrolment rate is assumed based on NER data (Source: MoHRD, GOI) as given under:

Enrolment ratio in primary & upper primary classes

Primary U Primary Primary U Primary(I-V) % (VI-VIII) % (I-V) % (VI-VIII) %

2002-03 93 60 79 502003-04 96 71 81 552004-05 99 78 84 612005-06 102 85 87 672006-07 105 92 90 742007-08 109 106 93 822008-09 112 118 97 902009-10 116 130 100 10020010-11 113 118 100 10020011-12 112 117 100 100

* Gross enrolment ratio (GER)= total enrolment in Grades I-V ÷ population of age 6-11 years**Net enrolment ratio (NER)= total enrolment in Grades I-V, 6-11 years age ÷ population of age 6-11 years

Labour market participation with primary education4

Out of above, labour market participation with secondary education5

Programme cost for 0-6 years childrenRs. Crores

Enrolment to primary class after PSE2

Completion of primary education due to PSE3

Cost per PSE child per year

GER (boys + girls)* NER (boys + girls)**

65

Table C5: (Contd.)

Promotion, dropout & retention rate in primary classes(2003-04 & 2004-05) Grades I-VAverage promotion rate (%) 81.53Average drop-out rate (%) 10.64Average retention rate (%) 7.83

Total 100.00 Source: Arun C Mehta, Elementary Education in India - Analytical Report 2004-05, NIEPA4 Age-specic labour market participation rate is calculated as given under:

(%)Age group Male Female Male Female15-19 year 49.1 23.8 36.5 10.9 33.3Source: NSS, 61st Round (2004-05)

Male FemalePopulation 531.28 495.74

(million) 51.7% 48.3%Rural 381.14 360.52

71.7% 72.7% 72.2%Urban 150.14 135.22

28.3% 27.3% 27.8%Source: Census 2001

6,7 Calculated as given under:Average wage/salary earningsin age group 15-59 years (2004-05)

Rural Urban All (estimated)not literate 60.42 77.34 65.12literate up to primary 91.23 105.16 95.1secondary/higher secondary 148.39 178.29 156.69Source: NSS, 61st Round (2004-05)

Employment Inflation Wage ratedays per year Annual wage adj factor 2006-07

not literate 150 9768.00 1.10 10,745literate up to primary 200 19020.00 1.10 20,922secondary/higher secondary 200 31338.00 1.10 34,472

3 The national average promotion rate in primary classes is 82 percent as given under. It is assumed that PSE would increase promotion rate from 82 percent to 100 percent by eliminating drop-out and retention in the classes.

17.758 Wage gain estimation assumes productive life expectancy as calculated using DALY calculator:

All (estimated)

(Rs. Per day)

(Wage rates in Rs.)

Rural Urban

66