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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No.7951

PROJECT COMPLETION REPORT

INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (ARDC IV)

(LOAN 2095-IN/CREDIT 1209-IN)

JUNE 30, 1989

Agriculture Operations DivisionCountry Department IVAsia Regional Office

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ABBREVIATIONS AND ACRONYMS

ARDC - Agricultural Refinance and Development CorporationBIRD - Bankers Institute for Rural DevelopmentCAB - College of Agricultural BankingCALCOB - Committee on Agriculture Loans through Coi_ercial BanksCBs - Comnercial BanksCOTELCOOP - Comittee on Term Lending through CooperativesCRAFICARD - Comittee to Review Arrangements for Institutional CreditDCBs - District Cooperative BanksDOM - District Oriented MonitoringEAPD - Economic Analysis and Publications Department (of NABARD)IRDP - Integrated rural Development ProgrameNABARD - National Bank for Agriculture and Rural DevelopmentPACs - Primary Agriculture CooperativesPLDBs - Primary Land Development BanksRBI - Reserve Bank of IndiaRDPCs - Rural Development Project CoursesRRBs - Regional Rural BanksSCBs - State Cooperative BanksSLDBs - State Land Development Banks

IO oUVICIAL U ONLYTlo WOftL BANK

Wahwqton. D.C. 20433U.S.A.

Oke Wd 0w.- Gw4OpseaImM IEUbauA

June 30, 1989

DIORANDUK TO THE MECUTIV DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on IndiaFourth Agricultural Refinance and Development CorporationCredit Project (ARDC IV)(Loan 2095-IN/Credit 1209-IN)

Attached, for iaformation, is a copy of a report entitled 'ProjectCompletion Report on India - Fourth Agricultural Refinance and DevelopmentCorporation Credit Project (ARDC IV) - (Loan 2095-IN/Credit 1209-IN)"prepared by the Borrower, with an Overview prepared by the Asia RegionalOffice. No audit of this project has been made by the OperationsEvaluation Department at this time.

Attachment

This document has a rstricted distribution and may be used by recipients only in the performanceof their official duties. Its :ontents may not otherwise be disclosed without World Bank authorization.

AL .


INDIA



Table of Contents

Pare No.

Preface ..# .. . ................................................ iBasic Data Sheet ............................................. iiEvaluation Sulnmary ........................................... iv

OVERVIEW

General .......................................... 1Project Objectives and Achievements .... .......... 2Financial and Economic Returns ..... .............. 4Loan Recoveries and Eligibility Criteria .... ..... 5Lending to Small Farmers under IRDP .... .......... 6Regional Rural Banks (RRBs) ..... ................. 7Rehabilitation Programs for Weak SLDBs .... ....... 8Project Impact on Institutional Development ...... 10Financial Performance of NABARD .................. 11Lending Procedures, Supervision andMonitoring by NABARD ...... ..................... 11

Bank Group Performance ...... ..................... 14


I. INTRODUCTION ..................................... 15II. PROJECT IMPLEMENTATION ........................... 18III. PROJECT BENEFITS ................................. 28IV. ROLE OF PARTICIPATING INSTITUTIONS .... ........... 31

Annexes

I. Table 1 - Cost of the Fourth ARDC Credit ProjectAppraisal Estimate ..... .............. 43

Table 2 - Cost of Project - IDA/IBRD Slice:Appraisal Estimates .................... 44

Table 3 (a) and (b):State-wise and Purpose-wise Disburse-ments Under the Project ................ 45

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pate No.

Table 3 (c) State-wise and Purpose-wiseDisbursements Under IRD Program ...... 47

Table 4 - Cumulative Disbursements of FundsUnder the Project... .................. 48

Table 5 (a) and (b):State-wise Details of ActualProject Costs ............ 49

Table 6 (a) U.ats of Minor Irrigation FinancedUnder Non-IRDP Schemes ............... 51

Table 6 (b) Units of Minor Irrigation FinancedUnder IRDP . . . ...... ... . 52

Table 7 - Groundwater Potential in States (19S2). 53Table 8 (a) Diversified Investments - Units

Financed Under Non-IRDP Schemes ...... 54Table 8 (b) Divwrsified Investments - Units

Financed Under IRD Program ........... 55Table 9 - Project Cost and ARDC Disbursements

in Less Developed Areas ................ 56Table 10 - NABARD Disbursements in Less

Developed Areas ........................ 57Table 11 - Small Farmers Coverage ................. 58Table 12 - Staffing Pattern of National Bank

Composition of Staff ................... 59Table 13 - Composition of Staff -

Technical Service ...................... 61Table 14 - Staff Position of National Bank

as of June 30, 1984 .................... 63Table 15 - Resources Mobilization by

ARDC/NABARD ............................ 64Table 16 - Cash Flows ............................. 65Table 17 - Condensed Statement of Income

and Expenditure .............. 66Table 18 - Condensed Balance Sheets ............... 67Table 19 - Financing Agency-wise Position of

NABARD Disbursements ................... 68Table 20 - Total Borrowings of LDBs -

Debentures Floated During the FinancialYear (April-March) ..................... 69

Table 21 - Lending by Land Development BanksCooperative Year (July-June) ........... 70

Table 22 - Land Development Banks -Recovery Performance at Primary Level.. 71

Table 23 - Summary of Land Development BankRecovery (1974-1984) ................... 72

Pat* No.

Table 24 - State Cooperative Banks and CentralCooperatives Banks Sumary of Overduesof Agricultural Advances...as at the End of June ... 73

Table 25 - Direct Institutional Finance forAgriculture ... ..... 74

Table 26 - Indirect Institutional Finance forAgriculture .......... . 75

Table 27 - Bank Group-wise/PopulationGroupwise Distributionof Comercial Bank Offices in India .... 76

Table 28 - India Scheduled Commerclal Banks:Agricultural Advances Overdues -All Loans .............................. 77

II. Pilot Project Studies for Quality Control ofAgricultural Pumpsets ........................... 78

III. Training .......................................... 92IV. Important Policy Decisions During the Project

Period ............................................ 103V. Table 1 - A Study of Minor Irrigation

Scheme in Allahabad District of U.P .... 119Table 2 - A Study on the Working of the Deep

Tubewells in West Bengal, Hooghly andWest Dinajpur .......................... 120

Table 3 - Public Tubewells and River Lifts inOrissa ................................. 122

Table 4 - Public Tubewells and River Lifts inOrissa ................................. 123

Table 5 - Minor Irrigation Scheme in RohtasDistrict of Bihar ...................... 124

Table 6 - Evaluation Study of Dairy Developmentin Malerkotla Area of Sanorur District,Punjab ................................. 125

Table 7 - Evaluation Study of Dairy Scheme inSurat District Gujarat ................. 126

Table 8 - Evaluation Study of Dairy Developmentin Bharatpur District, Rajasthan ....... 127

Table 9 - Evaluation Study of Marine FisheryScheme for Mechanized Boats in BulsarDistrict, Gujarat ...................... 128

Table 10 - Evaluation Study of Inland FisheryScheme in Krishna District of AndhraPradesh ................................ 129

Map - IBRD 15972R1

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INDIA

FOURTH AGRICULTURAL REFINANCE ANDDEVELOPMENT CORPORATION CREDIT PROJECT (ARDC IV)

(Ln. 2095-IN/Cr. 1209-IN)

PREFACE

This is the Project Completion Report (PCR) of the Fourthgricultural Refinance and Development Corporation Credit Project in India,for which a Loan and a Credit in the total amount of US$350 million wasapproved on February 23, 1982. The Loan and Credit were closed asscheduled on June 30, 1984. They were fully disbursed and the finaldisbursement was on November 20, 1984.

The PCR was prepared by the Borrower (NABARD, previously ARDC) andis supplemented by an Overview prepared by the Agriculture OperationsDivision, Country Department IV, of the Asi_ Regional Office. The Overviewdraws heavily on NABARD's report, and is based also on reviews of the StaffAppraisal Report, correspondence with the Borrower, internal Bank memorandaon project issues as contained in relevant Bank files, as well as oninterviews with officials both in the Bank and in NABARD who have beenassociated with the project.

This PCR was read by the Operations Evaluation Department (OED).The draft PCR was sent to the Borrower on March 27, 1989 for comments byMay 8, 1989, but none were received.

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PROJECT COWLETION REPORTuSDIA

FOURTH AORITCLTURAL REFDMANCE AND DEVELOPMENTCOWORATION CREDIT PROJECT (AROC IV)

(LOAN 25-IN/CREDlT 1209-IN)

BASIC DATA SHEETKey Prol-et Date

Appraisal Actual or ActmaI as X ofEstimate Estimated Actuol Appraisal Estlmte

Total Project Cost (US3 Million) 2,JJB.2 - 5/

Total Project Cost (Re M) l6,d96 - !/

Eligible for IDA/11RD Flnnncing (USS U) 1,317.4Eligible for IDA/IBRD Financing (Ru U) 1,5C4 12,61C 119.7

Credit Amount (SON U) 139.6 139.6 191

Date of Board Approval 2/23/82Oate of Effectivene 6/25/82Loan Amount (USS VillIon) 199.0 196.4 100

Dats of Effectiveneos 5/25/82Date of Credit/Loan Agreemnt 2/24/62

Closing Dats 6/30/84 6/36/64

Economic Rates of Return (%) t/ 30Y-61Ub Negative to 5641

Financial Rates of Return (X) t/ 2ex-48x lox-6ex

ubuebr of Direct Beneficiaries 1.4 million 2.2 million 167

STAFF INPUTS

(stff wobs)FY75 FY76 FY77 FYt7 FY7t FY6 FY61 FY62 FY8S FY84 FY85 FY86 FYO7 FY6" TOTAL

Preapproisal .1 1.2 6.7 19.1 26.2

Appraisal 66.8 36.6 92.6

Negotiations 22.6 22.6

Supervision 6.0 29.4 24.6 .3 6.6 .68 .$

Other .1 .6 2.3 3.2

TOTAL .1 .1 .0 1.2 .0 5.7 75.7 67.9 29.4 24.6 .3 .5 6.6 .6 211.6

CUtMLATIVE DISBURSEMENTSFY62 FY6S FY64 FY6S

Appraisal Estiate (US3 Million) .0 190.t 3U.6 34a.4 StActual (US2 Million) 40.6 156.0 34.5 348.9Actual as X of Estimate 161.5 82.6 97.3 97.4Oate of Finai Disburssemt of Loan 11/20/94Date of Final Disbursemet of Credit 6/26/63

aI Tle ARDC IV project was described as la two-year time-slice" of ARDC's ongoilglending program (par& 4.30 of SAR). Total project costs (estimated at Rs 16,690million) were based on aggregate costs of all field-level investments supportedby ARDC refinance including equity contributions of borrowers and portionsfinanced by other banks. Actual total costs of such investments comparable toSAR estimates, are not available at ARDC; however total ARDC refinance duringFY83 and FY84 amounted to RS 15,950 million against SAR estimates of Rs 11,887million. Project costs do not include large-scale inv-stment subsidies providedby central and state goverlments (for examp'.e, 2j2 to 331 of capital costs forIRDP beneficiaries--SAR par&. 5.15).

b/ Based on samples of typical on-farm investments.c/ Both Loan and Credit were fully disbursed. The apparent under-disbursement is.

due to conversion of SDRs to USS equivalent.

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No. of badays specializations Portooc Types ofDate poerons in field Represncted 3/ Rating 5/ Trend Probl 4_

( olr)

Pr peratiem 11179 1 3 A VA A yAReview of rto3jet 6-7/81 2 10 3,3 VA A VA

pr ratiooAppraisal 4-S/81 7 19 A,5,C,D,F,C MA I I

Subtotal m

Supervision 1 2/82 2 7 A,5 1 2 1,0Supervision 2 5-6/82 3 35 A,B 1 2 1,0Supervision 3 10/82 2 24 8,D 1 2 1,0Supervision 4 2-3/83 2 35 B,C 2 2 1,0Supervision 5 5-6/83 2 20 B,C 2 3 1,0Supervision 6 10/83 2 13 B 3 3 1,0Supervision 7 1/84 3 18 8,E 3 3 1,0Supervision 8 3-4/84 2 8 B,E 3 3 1,0

Subtotal 160Total 369

OTHER PROJECT DATA

Borrower: Government of Indiacuiiing Agncy: Agricultural aef mmnce And Develop ent Corporttion (now NALA3I)

Fiscal Year of the Borrower: July 1 - June 30

Nam of Currancy Rupee (is)

Currencr FschOtge Rate:Appraisal Reprt US$1.00 - Rs- 8.0Appraisal Year Average US$1.00 * Rs 10.2Intervening Years Average US$1.00 R is 10.8Completion Year Average US$1.00 - Rs 11.6

Follow-on Project:

ono SeeABARD-I Credit ProjectLoan u br Loan 2635-INLoan Ahouat (US$ million) 375.00Date of Bard Approval 2/25/86

3/ specializations represented: A a Agriculturalist; B * Agricultural Credit Speciali:c;C u Financial Analyst; D a Loan Officer; e - Fisheries Specialist; P - Economics;C - Irrigation Speialist; H - Cooperative Specialist.

4/ Performance Rating: I - Problem-free or minor problems; 2 * Moderate problems;3 a Major problems.

5/ Trend: 1 a Improving; 2 - Stationary; 3 a Deteriorating.

6i Types of Problems: F a Financial; M - Managerial; T * Technical; P - Political;O a Other.

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INDIA



EVALUATION SUMMARY

Introduction

1. The Fourth Agricultural Refinance and Development CorporationCredit Project (ARDC IV) was the fourth in a series of national agricul-tural credit projects supported by the Bank Group in India. The projectwas intended to finance a two-year time slice of ARDC's lending operationscovering the period July 1, 1982 to June 30, 1984. Total project cost,estimated at US$2,086 million, was supported with an Ir Credit of US$160million and a Bank Loan of US$190 million.

Objectives

2. AF mately 45Z of ARDC's lending during the project period wasexpected to i for minor irrigation systems, 33% for pumpset electrifica-tion and farm mechanization and the remainder for a wide variety of on-farminvestments, including plant.tion crops, dairying, poultry, fisheries,storage and market-yards. Bank Group funds under the project were to sup-port these investments with the exception of pumpset electrification, farmmechanization and forestry which were not eligible for reimbursement underthe ARDC IV project. Fifty-five percent of the Bank/IDA funds were ear-marked for loans to small farmers and about 1.4 million farmers wereexpected to benefit under the project.

3. In order to address the principal problem of poor recoveries inagriculture credit, the project contained provisions for: (i) strictercriteria for eligibility of refinance from ARDC based on recovery perfor-mance of commercial and cooperative banks, it was hoped that such strictermeasures would provide the incentive for the banks to focus on their re-covery performance, and (ii) measures to implement rehabilitation programsto strengthen weak LDBs in six states (Maharashtra, Karnataka, Bihar,Madhya Pradesh, Tamil Nadu and Gujarat). US$4.0 million of the IDA/Bankfunds was also allocated to provide continued support for ARDC's trainingprograms in agriculture credit.

Implementation Experience and Results

4. The project was implemented largely as planned; Bank and IDAdisbursements were substantially completed by the original closing date ofJune 1984 (although some final disbursoments were allowed until November1984 under the project). As indicated in the PCR prepared by NABARD,except for the training component, most of the targets under the project

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were met or exceeded. ARDC's refinance for small farmers amounted to 77Xof its total lending and the number of beneficiaries under the project isestimated at about 2.2 million. Analyses by NABARD of a sample of scheme-lending models indicate that vith the exception of public tubewells,investments supported by NABARD were financially and economically viable inthe range 152 to over 50X.

5. Results on overall institutional developments, however, were lessfavorable: agriculture credit continued to suffer from poor recoverics andthe enforcement of revised eligibility criteria for ARDC refinance had nosustained or perceptible impact in this regard. While ARDC and the LDBswent through the formal procedures to prepare rehabilitation programs, itbecame clear that State Governments were unwilling to bear the full burdenof financial rehabilitation nor to take politically unpopular measuresrequired to instill better financial disciplines in the banks andborrowers. ARDC/NABARD also found it difficult to deny its refinance tonon-performing banks for lending under Government priority programs andschemes.

6. ARDC's targets (for loans to small farmers and total benefi-ciaries), for example, were exceeded mainly because of a rapid and signi-ficant expansion of lending under IRDP during the project period. Underthe interest rate structure (fixed by GOI), banks are allowed a margin of3.5% on IRDP lending which is grossly insufficient to carry staff-levelsnecessary for effective supervision of a large number of loans. While theinvolvement of GOI district officers combined with procedures for"automatic-loaning' enabled the banks to meet IRDP lending targets, thiswas achieved at ,he cost of overall "quality" considerations in agriculturelending.

Sustainability

7. Lending for agriculture in India is supported essentially through:(i) commercial banks which are required to lend at least 16% of their totaladvances to agriculture, and (ii) State Cooperative Banks (SCB/DCCBs) whichmobilize deposits (and i.-ceive state government resources) to financemainly short-term (crop) loans. NABARD's role in this structure is mainlyto supplement these resources by channelling GOI/RBI funds at reasonablecosts to refinance part of the agriculture term lending of commercialbanks, Land Development Banks (LDBs) and Regional Rural Banks (RRBs) and toprovide lines of credit for short-term operations of SCBs/DCCBs. The BankGroup funds in turn provided part of the resources required for ARDC/NABARD's refinance of term-lhiding operations.

8. NABARD obtains most of its rerources from RBI and through therecycling of previous advances to the banking system and credit remains animportant instrument for the Government to accelerate capital formation inagriculture and to expand food production. Purely in terms of sustainingits total resource base, IDA/Bank funds while important are not critical.Greater impact of Bank Group involvement has been to give support toNABARD's efforts to bring about improvements in the institutional frameworkfor agriculture credit.

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Findinits and Lessons

9. As an apox-level institution NABARD has been effective ir ensuringthat GOI and Bank Group funds are utilised for lending in agriculturethrough the existing network of commercial and cooperative banks. Nost ofthe physi-al targets under the project were set or exceeded.

10. The main lrassons under ARDC IV (and indeed previous ARDC projects)has been that ARDC/NABARD alone cannot bring about sustained or permanentimproviments in pelicy and institutional environment for agriculture creditthrough its powets to sanction refinance facility. This requires a fullsupport and a h'gher level of commitment by the Central ard State govern-ments and top -.anagement of institutions engaged in agriculture credit. Italso impinger on some difficult and sensitive issues which need to betackled, suzh as irterest rate structure for agriculture, margins allowedfor credit administration and supervision, formulation and implementationof government sponsored programs for poverty alleviation, role Ct creditand subsidies in such programs, lending and supervision procedures ofNABARD and primary lending banks and functions of various government andbanking institutions in agriculture credit as a whole.

11. In the context of the above lessons, the follow-on project(NABARD-I: Loan 2653-IN) contains provisions for GOI to undertake athorough review of agriculture credit and credit institutions and to intro-duce key policy and institutional reforms to strengthen the agriculturecredit in India.


INDIA

FOURTH AGRICULTURAL RYFINANCE AND DEVELOPMMNTCORPORATION CREDIT PROJECT (ARDC IV)

(LOUAN 2095-IN/CREDIT 1209-IN)

Bank/IDA Overview of the Project Completion Report Prepared byNational Bank for Agriculture and Rural Development (NABARD) 1/

General

1. The Project Completion Report (PCR) for the Fourth AgriculturalRefinance and Development Credit Project (ARDC IV) was prepared byNABARD.2/ This overview, prepared by the Bank's Regional staff, supple-ments NABARD's review of the project with the Bank's assessments and observa-tions, focussing on areas not fully covered in the review.

2. The ARDC IV project was the fourth in a series of Bank/IDA projectsbeginning with ARDC I (IDA Credit 540-IN, for US$75 million, 1975-1977),followed by ARDC II (IDA Credit 715-IN for US$200 million in 1977-1979), and ARDC III(IDA Credit 947-IN for US$250 million during 1980-1981). ARDC IV was fol-lowed by NABARD-I (Bank loan of US$375 million), which became effective inSeptember 1986.

3. PCRs for the first three ARDC projects have been reviewed by OED; thelatest Project Performance Audit report for ARDC III was issued by OED inSeptember 1985 (Report No. 5857).

4. These agriculture credit projects followed the Bank Group's decisionto provide country-wide lines of credit through an apex organization insteadof establishing separate credit lines to individual states, ten of which werefi.:nced by IDA between 1969 and 1975. The decision took into account thehigh manpower requlremenLa for supervising separate state projects and thefact that ARDC/NABARD, as the apex-level organization, could perform thesupervisory functions for channelling credit funds to states.

1/ This supplement has been prepared by South Asia Regional staff. Theoriginal version of the PCR prepared by NABARD (previously ARDC), withminor editorial changes, is attached to this overview.

2/ ARDC IV was financed by an IDA Credit (US$190.0 million) and an IBRD Loan(SDR 139.0 million). References in this overview to the Bank includeboth IBRD and IDA.

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S. The PCR reports favorably and adequately on utilization of Bank/IDAfunds and attainment of physical targets under the project: the funds weredisbursed over two years as scheduled; investments financed by NABARD duringthe project period were in line with appraisal targets with significantsupport to small farmers (77% of projects funds). In fact, financial assis-tance to small farmers was in excess of appraisal estimates of 55Z. However,as in the case of ARDC III, the PCR does not deal adequately with theproblems facing agriculture credit in India during the project period: con-tinued high level of overdues, insufficient supporting services to agricul-ture production, inadequate staff and infrastructure at primary lendingunits/branches for effective supervision and administration of credit tofarmers, further weakening of financial viability of lending units, par-ticularly the RRBs and cooperative banks, and a decline in credit disciplinegenerally in many rural areas.

6. While an attempt was made to address these problems under ARDC IV,NABARD's efforts in this regard proved to be less effective than envisaged.Later, these chronic problems became the principal issue in the follow-upproject (NABARD-1), which included as a significant component financing of amajor review of the Agriculture Credit in India. The review is expected toanalyze, among others, the above problems, and outline specific recommenda-tions to strengthen the credit system in the country. Many of the BankGroup's concerns and principal issues during implementation of ARDC IV werevery similar to those under ARDC III. Bank's attempts to address theseproblems through measures such as eligibility criteria, rehabilitation ofweak lending units, etc., should be viewed as a continuous process underthese two projects. Moreover, under tne ongoing NABARD I, steps are beingtaken for institution building and for improving the performance of thebanking system dealing with agriculture.

Project Objectives and Achievements

7. By and large, the project achieved its overall objectives by expand-ing investments in agriculture and by supporting small farmers. Hcwever, inthe area of institution building, project results were less than expectationat the time of appraisal. The project aimed at supporting a two-year timeslice of ARDC's ongoing refinancing program in minor irrigation and otherdiversified lending in farm mechanization, dairy, livestock, horticulture,fisheries development, and for storage and market yards for agricultureproducts. 1/

1/ NABARD's refinance of agriculture loans proceeds on the basis of invest-ment schemes which are prepared by participating banks (commercial banks,Land Developments and Regional Rural Banks--See para 33-41 below fordiscussion of schematic lending).

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8. Total investment in agriculture supported by NABARD over thetwo-year period was expected to amount to Rs 16.7 billion (SAR para 4.30).Of this, Rs 10.5 billion was forecast as eligible for refinance under ARDC IV(Rs 7.9 billion in minor irrigation and Rs 2.6 billion in other diversifiedactivities). NABARD's own disbursements for investment eligible underARDC IV were projected to amount to about Rs 8.2 billion. 1/ Against thesetargets, actual investments for eligible purposes amounted to Rs 12.6 billion(201 higher) and NABARD's disbursements for such loans of Rs 9.1 billion wereabout 11% more than SAR estimates. About 78X of NABARD's disbursements wereexpected to be for minor irrigation and 222 for diversified lending whereasactual total disbursements (Rs 9.1 billion) were about equally dividedbetween these two categories. The increase in lending for diversified pur-poses was partly due to rapid expansion of lending under the Integrated RuralDevelopment Program (paras 17-19).

9. Other quantitative targets set under the project included the follow-ing:

(a) About 1.4 million farmers were to benefit from the program throughoutIndia;

(b) About 60% of the beneficiaries were small farmers and at least55% of Bank Group funds was earmarked for reimbursing loans to suchfarmers;

(c) About half of NABARD's lending was to be directed to less developedstates (Assam, Bihar, Himachal Pradesh, J&K, Madhya Pradesh, Orissa,Rajasthan, Uttar Pradesh and West Bengal);

(d) Investment supported by NABARD was expected to result in incrementalproduction (mostly of foodgrain), valued at about Rs 5,200 million,and to generate additional employment of 134 million mandays peryear;

(e) NABARD's training programs were expected to benefit 22,000 staff ofparticipating banks.

10. As stated in the PCR, except for training, these targets were sub-stantially met or exceeded: (a) total number of beneficiaries under theproject was estimated at 2.2 million (of which 890,000 were for minor irriga-tion and rural development projects); (b) 77% of NABARD's refinance was inrespect of loans to small farmers; (c) disbursements to less developed states

1/ NABARD's lending for pump electrification, farm mechanization andforestry projects was not eligible for financing by Bank Group fundsunder ARDC IV.

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amounted to 49Z of NABARD's refinance during the project period; (d) totalvalue of incremental production, in 1983-84 prices, was estimated at Rs 10.4billion (Rs 3.6 billion for minor irrigation and Rs 6.8 billion for otherdiversified projects). These investments have generated permanent employmentequivalent to 411 million mandays; and (e) NABARD continued to improve itstraining programs; however, the total number of staff participating in itstraining courses (5,911) was short of the appraisal target and NABARD util-ized only US$2.8 million of the project funds for training against theoriginal allocation of US$4.0 million under the project.

11. Given the large number of loans financed and limited staff capacityat the primary lending units, participating banks did not submit regularprogress reports on physical completion of investments financed. In theabsence of such reliable and complete data on physical completion of invest-ments financed, the above statistics on impact of projects refinanced byNASARD are derived partly from samples in ex-post evaluation studies under-taken by NABARD. Where such sample data were not available, estimates ofinvestment costs, production and employment impact were based on unit costsand "norms" established under each scheme at the time of approval of schemesby NABARD.

12. On balance, it would appear that NABARD's estimates of projectimpact are probably overestimated since they do not take into account invest-ments not fully completed or funds which were diverted for other purposes.In many of NABARD's monitoring and evaluation studies, incomplete or infruc-tious investments and diversion of funds are often given as the main reasonsfor a scheme's failure to achieve its objectives.

Financial and Economic Returns

13. SAR estimates of financial and economic rates of return of invest-ments financed by ARDC were based on 18 investment models built from datacollected in NABARD's ex-post evaluation studies. These models indicatedFRRs of 23% and 48% for investments for minor irrigation, and FRRs in therange of 20Z-43Z for other models (coffee, dairy, fisheries and land develop-ment). A sub-set of 11 of the 18 models indicated economic rates of returnsof between 32% and over 50%.

14. The PCR attempts a comparison of SAR estimates with FRRs and ERRs asestimated for sample beneficiaries in ten other es-post evaluation studies,with the following results:

Scheme State FRI ERR

Ainor Irrigation Scheme Uttar Pradesh 25X 392

Deep Tubewells West Bengal above 50Z above 502

Public Tubevells Orissa negative negative to 4Z

Minor Irrigation Uttar Pradesh 40X 472

Minor Irrigation Bihar above 502 above 50X

Dairy Development Punjab 35X 362

Dairy Scheme Gujarat 252 36Z

Dairy Development Rajasthan 202 292

Maritime Fisheries Gujarat 15% n.a.

Inland Fisheries Andhra Pradesh 282 n.a.

These results indicate that with the exception of public tubewells,investments supported by NABARD were financially and economically viable.

Loan Recoveries and Eligibility Criteria

15. As under previous ARDC projects, poor loan recoveries remained one ofthe principal concerns during the appraisal of ARDC IV. Criteria foreligibility of participating banks for access to NABARD refinance were firstintroduced under ARDC I and continued through subsequent projects. The mainobjective of such criteria on a sliding scale, was to provide an incentiveto banks to improve their recovery performance by linking future refinanceto their collection performance. At the time of appraisal it was felt thatthe criteria applicable at that time had not had the desired impact and weretherdfore revisad under which: (a) lending units were allowed unlimitedaccess to NABARD refinance if collection were 752 or more of demand, 1/(b) refinance to branches with recoveries of 60X-75Z was limited to the levelof their average lending in the preceding five years or average collectionin the preceding three years (whichever was higher), and (iii) refinance tobranches with recoveries of less than 60X was not to exceed actual recoveries

1/ Defined as all repayments overdue at the beginning of the year plusprincipal and interest falling due during the year.

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in the previous year or average annual recoveries in the three precedingyears (whichever was higher).

16. Application of the above criteria was expected to focus greaterattention by the banks on improvement of their recovery performance.Experience under the project, however, showed that expectation in terms ofimproved performance was too optimistic. While the PCR claims that there wassome improvement in recoveries, this was at best, short-lived and probablytha result of rescheduling of loans, and/or reduction in demand through StateGovernment contribution or "blocking" of old overdues. There was no evidenceof sustained, significant improvement of actual cash recoveries from bor-rowers and under the follow-up project (NABARD-I), the criteria were furtherrevised to make them more restrictive for branches with poor recoveries.

Lending to Small Farmers under IRDP

17. Under ARDC IV, NABARD continued its emphasis on Lending to smallfarmers. In fact, as noted above, about 77% of NABARD's refinance during theproject period was for loans to small farmers (against the target of 60%).Total number of beneficiaries (and total employment created) also exceededSAR targets mainly due to rapid expansion of lending to small farmers. Asunder ARDC III, the main driving force for this expansion continued to bethrough lending under the Integrated Rural Development Program. Commenced in1979 through amalgamation of several poverty alleviation schemes, IRDP hassince remained GOI's principal national level program for reduction of ruralpoverty. Share of IRDP lending in ARDC/NABARD's total disbursementsincreased from 1% in 1979 to 16% (under ARDC III) and then to 26% by the year1983/84. IRPD currently absorbs about a third of NABARD's total refinance.NABARD's refinance of IRDP loans constituted 38.8% of total refinanceeligible for reimbursement under ARDC IV. While this rapid expansion hasenabled the implementing authorities to meet lending targets set for IRDP, ithas at the same time raised concerns as to the overall quality of lending.It is unclear whether such loans are being implemented and supervised asintended, and whether the program is yielding the full benefits as intended.

18. IRDP's objective is to identify each year, 600 families below thepoverty line in each of India'-s 5,011 blocks and to provide these selectedbeneficiaries with productive investments which would enable them to crossthe poverty line. Block, District and State plans are drawn up annuallyidentifying types of investments, costs and share of financing by participat-ing banks and NABARD. Selection of beneficiaries and preparation ofindividual investment proposals are handled by the District Rural DevelopmentAgency (DRDA). Investment proposals and simplified loan applications arepresented to local branches of participating banks which theoretically havethe right of refusal; in practice, however, bank branches do not have thestaff resources to examine each application in detail and meeting the targetsoften becomes the overriding factor in banks' approvals. IRDP borrowersgenerally receive subsidies of 25Z-33% (50% for scheduled tribes) which is

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channelled through the participating banks. Banks are allowed a margin of3.5% on IRDP lending which is insufficient to carry staff-levels necessaryfor effective supervision of a large number of loans. Branch field officerstypically handle 1,500-2,500 active borrower-accounts. Several evaluationreports of NABARD and GOI indicate that many IRDP investments do not yieldthe full benefits as envisaged because of inappropriate investments selected,insufficient financial assistance for the selected investments, or inadequatesupporting services for the investment. For example, the most importantinvestment financed under IRDP is dairy development. Viability of IRDP loansfor this purpose is based on borrowers purchasing at least two milch cattle.Many of NABARD's field reports, however, point out that a significant numberof borrowers did not or were not allowed loan for a second buffalo. Findingssuch as these have in fact led to the conclusion by NABARD that at least 20%of IRDP loans have been misutilized and incremental benefits have been lessthan envisaged under the program.

19. On the positive side there is now a greater consciousness of theproblems of IRDP on the part of GOI, NABARD, and participating banks. Theseproblems which became increasingly obvious during implementation of ARDC IVwere addressed during NABARD-1 appraisal. NABARD is also now institutinginternal procedures to ensure a greater participation by lending banks informulation of di.trict plans, selection of borrowers, etc. It is alsoexpected that the Agriculture Credit Review under NABARD-I will make recom-mendation in this regard. It should be noted that unless lending units areallowed required staff to administer and supervise a large number o! bor-rowers, improvement of overall quality of lending under IRDP is likely to beimpaired.

Regional Rural Banks (RRBs)

20. The status of RRBs 1/ demonstrates the adverse effects on financialintermediaries resulting from a rapid expansion of small-farm credit withoutthe required financial support for their operations. As of June 1980, therewere 73 RRBs operating through 2,678 branches. ARDC refinance to RRB's inFY1979/80 amounted to RS 90 million, about 2% of ARDC's disbursements in thatyear. The SAR for ARDC IV noted that while small, RRB participation wasgrowing rapidly and that "as it grows, it may become a major channel fordevelopment loans to small farmers" (SAR para 2.37).

1/ RRB is sponsored by a: Commercial Bank which contributes 50% of its capi-tal and provides management assistance; GOI and State Government provide35% and 15% respectively of its share capital. Inspired by the GraminBank model, RRBs are set up specifically to provide banking services tosmall-farmers and weaker section of the rural population.

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21. RRBs expanded rapidly in the first half of 1980s and by June 1985,there were 183 RRBs with over 12,139 branches, 14.8 million deposit accountsand 6.3 million borrower accounts. In FY1984/85 NABARD's disbursements toRRBs amounted to Rs 1,400 million, about 132 of its total disbursements inthat year. While RRBs proved to be fairly successful in mobilizing ruraldeposits, they were facing severe financial difficulties: unable to covertheir recurrent costs, about 130 RRBs were incurring losses, and 49 of thesehad eroded their entire share capital by December 1984. Loan recoveries byRRBs were also below national averages with about 55X of all RRBs recoveringless than 60% of demand.

22. To address the problem of RiBs, GOI established a 'Working Group onRRBs' in 1986 (The Kalker Cooittee). The Comittee has made several recom-mendations to strengthen the management and viability of RRBs. Theseinclude: increase in share capital of RRBs, amalgamation/consolidation ofnon-viable branches, changes in interest rates charged to RRBs to allow themgreater margins, and setting procedures for appointment and supervision ofRRB managers. Recomendations of the Comittee are presently under con-sideration by GOI.

Rehabilitation Programs for Weak SLDBs

23. Special attention to rehabilitation of weak SLDBs with poor recoveryperformance was first commenced under ARDC III and rehabilitation measureswere originally intended to be tied to the revised, stricter eligibilitycriteria. Application of these criteria would have made LDB of Gujarat andMaharashtra ineligible for ARDC finance and performance of LDBs in four otherstates (Bihar, Himachal Pradesh, Karnataka and Tamil Nadu) was only mar-ginally better. In order mainly not to cut off fresh financing to such LDBs,the eligibility criteria contained provisions that would allow ARDC refinanc-ing if such LDBs had a rehabilitation program agreed with ARDC and in caseswhere 50% of branches (or PLDBs) of SLDB were inaligibLe, the state govern-ment had agreed a time-bound rehabilitation program with ARDC. As it turnedout, application of these provisions (together with the stricter eligibilitycriteria) was deferred in September 1980 at the request of GOt. Rehabilita-tion programs were, nevertheless, prepared although their effectivenessremained doubtful.

24. With the above background, more concerted and focussed measurestowards rehabilitation were again attempted under ARDC IV. Principal provi-sions under the project included the following: (a) setting up of a "StandingComittee" by GOI to oversee and guide efforts for the six LDBs initially,with others to be added at a later date. The six LDBs for immediate atten-tion were Maharashtra, Karnataka, Bihar, Madhya Pradesh, Tamil Nadu andGujarat; (b) appointment of six 'expert teams' one for each LDB (includingsuicable consultants) to carry out organization and management studies of thesix LDBs and to recommend improvement programs; (c) based on these studies,ARDC was to prepare detailed, time-bound rehabilitation proposals to be

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agreed upon by the Standing Committee and the state governments;(d) eligibility criteria under ARDC IV included special provisions applicableto the six LDBs under which ARDC was to withhold refiaance assistance unlessthe LDB had undertaken to carry out financial and management improvements;(e) as part of financial rehabilitation measures, Bank/IDA agreed to thetransfers of specified amounts identified as chronic overdues 1/ to "blockedaccounts" in four of the six LDBs. 2/ Under the eligibility criteria,mounts blocked were not to be taken as a bank's annual demad.

25. As indicated in the PCR, serious attempts were made to implementthese provisions: organization and management studies by expert groups andconsultants were commissioned for the six LDBs originally targetted. In factnine additional LDBs (Orissa, West Bengal, Rajasthan, Himachal Pradesh, UttarPradesh, Jainu & Kashmir, Assam, Tripura and Pondicherry) were identified andmanagement studies undertaken for these; based on these studies, NABARDformulated rehabilitation programs for approval by the Standing Committee(Committee on Term Lending through Cooperatives - COTELCOOP) and stategovernments.

26. However, as it became progressively apparent during project implemen-tation, the LDBs and state governments were very slow or reluctant to imple-ment financial and organizational changes required. The provision in theproject agreement enabling ARDC to withhold refinancing to LDBs not complyingwith the requirements of rehabilitation program was used only once for a verybrief period (between September 1, 1982 to October 15, 1982) to obtain con-firmation from the LDBs that they (and the state governments) had acceptedthe rehabilitation programs approved by COTELCOOP. NABARD was reluctant touse this sanction to enforce the implementation of the measures under theprograms. Without the effective implementation of other corrective measures,the procedures for "Blocking" of old overdue loans became by and large anexercise to circumvent the minimum recovery performance under the eligibilitycriteria. Although Bank/IDA supervision mission devoted considerable time infollowing the ARDC IV provisions regarding rehabilitation, virtually noimprovement was reported in the recovery situation and in the overall finan-cial health of the LDBs targetted for rehabilitation.

27. These disappointing results (and indeed the lessons learnt) regardingrehabilitation efforts under ARDC IV are in many ways similar to those underARDC III and the following conclusions in the ARDC III PCR are generallyapplicable to the ARDC IV also: "The proposed programs in some instancesdealt only with symptoms, without addressing the more important underlying

1/ Generally over 5 years overdue.

2/ Bihar Rs 32 million, Cujarat Rs 185 million, Karnataka, Rs 54 million andMaharashtra Rs 229 million.

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problems. They dealt with removal of obstacles towards taking coerciveaction towards long-term defaulters, blocking of chronic overdues, rephasingof loans and handling incomplete investments. Limited attention was paid tobasic institutional problems, like lack of field staff, inappropriate super-vision and appraisal practices. State governments were reluctant to imple-ment the programs. The experience during ALDC III raises questions concern-ing ARDC's ability to design and institute effective rehabilitation programs,which raises the wider issue of the de facto supervisory role of ARDC inagriculture credit and their effectiveness in instituting adjustments inbasic credit operations cf its client banks. That role, and ARDC's effec-tiveness were never questioned in the appraisal and the subject does notappear in supervision reports. One can raise the question whether in India'spolitical system it is realistic to assume that a more dominant role of a"center" organization would and will be accepted by banks controlled by theStates." (ARDC III PCR, page 31, para 31).

28. The Institution Development Department (IDD) of NABARD continues itsefforts to rehabilitate weak LDBs and NABARD-I project includes covenantstowards strengthening of IDD. Given the past experience, the magnitude ofthe problem and the fact that overall policy and political environment inwhich NABARD operates has not changed materially, it remains unclear whetherresults under NABARD-I will change dramatically without key credit reforms.It should also be noted that under NABARD-I, emphasis has shifted back tostricter eligibility criteria. It is hoped that more severe restric-tions on availability of NABARD's financial assistance would prompt LDBs withpoor recovery performance to take corrective measures for better creditdelivery and administration. The role of NABARD vis-a-vis client banks willalso be examined under the Agriculture Credit Review by the Senior ExpertsGroup.

Project Impact on Intitutional Development

29. The discussion above indicates that while the project succeeded incontributing to NABARD's resources and that while such investments probablydad a positive impact on production, rural employment and incomes, theproject's impact on overall strengthening of institutions handling agricul-ture credit was at best only marginal; the results under the principal com-ponent for institutional development in the project (i.e. the rehabilitationof weak LDBs) were well below expectations. The enforcement of theeligibility criteria had little impact on overall recovery performance nor ongreater credit discipline by participating banks.

33. The experience under the last two ARDC projects in fact raises thequestion whether significant and fundamental changes in agriculture creditinstitutions can be achieved through an all-Tndia apex organization such asNABARD since agriculture credit falls within the jurisdiction of stategovernments. For social/political reasons varying in each state, the stategovernments make policy decisions (including allocation of resources out of

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state budgets to state banks, interest remission, subsidies, etc.) whichdirectly or indirectly affect discipline and institutional environment forcredit. Both the commercial banks, and the cooperative banks look to NABARDprimarily as a source of low-cost funds for their agriculture lending. Thus,virtually the only leverage which NABARD has in order to bring about changesis through its refinance facility to participating banks. In the past,NABARD had been extremely reluctant to utilize this leverage and in caseswhere it has done so (e.g., through eligibility criteria) the results havenot necesuavly been entirely satisfactory.

31. Difficulties of bringing about major institutional changes through theBank loan to NABARD were recognized at the time of appraisal of NABARD-Iproject. As mentioned above, the Bank is attempting a different approachunder this project by having the Reserve Bank of India undertake a thoroughreview of the agriculture credit and credit institutions in India. Thereview will allow GOI to introduce key policy and institutional reformsrequired to strengthen the credit system in the country.

Financial Performance of NABARD

32. Despite prvblems related to recoveries of agriculture loans of par-ticipating banks, overall financial status of ARDC/NABARD has never been atissue. Loan repayments due to ARDC/NABARD continue to be repaid promptly andloans rescheduled by NABARD have been insignificant. In comparison to itspredecessor (ARDC), the financial position of NABARD was in fact significantlystrengthened at the time of its establishment in 1982. Its share capital wasalmost doubled (to Rs 1.0 billion) and with the transfer of credit funds fromthe R3I, total resources of NABARD increased to Rs 45.2 billion (compared toRs 21.4 billion of ARDC). Since the resources from RBI bear no interest,NABARD's profitability is also significantly better than that of itspredecessor; net profits of NABARD increased from Rs 0.9 billion in 1982/83to Rs 2.4 billion 1985/86. Most of NABARD's profits are retained to augmentthe resources available for lending to participating banks.

Lending Procedures, Supervision and Monitoring by NABARD

33. In order to analyse lending procedures of NABARD, it is first neces-sary to distinguish NABARD's lending for IRDP from its lending for schemesand purposes other than IRDP. As discussed in paras 17-19 above, IRDP is anall-India, poverty alleviation scheme in which the District Rural DevelopmentAuthorities (DRDAs) play a key role in identification of borrowers, purposesfor which loans are to be given by banks and release of subsidies to approvedborrowers. Role of participating banks (mainly commercial banks and RegionalRural Banks) is confined to providing resources for the program by way ofloans and then refinancing these through NABARD. Key focus in this processis often the desire to meet pre-established targets. Given the large numberof loans, and limited capacity at rural branches, banks are barely able to

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undertake appraisal of borrowers nor follow-up and effectively superviseloans under IRDP.

34. At the time of appraisal of ARDC IV (May 1981), IRDP was still inthe early stages of implementation and NABARD's total lending for IRDP inFY1980/81 of Rs 132 million constituted less then 3X of its total disburse-ments of Rs 5.0 billion in that year. During implementation of ARDC IV,however, IRDP increased very rapidly and by 9Y1983/84 it absorbed Rs 2.3billion (or about 27X) of NABARD's total disbursements of Rs 8.6 billion. 1/Expansion of this magnitude of a program in which the banking institutionsTrole is limited essentially to provision of resources obviously has had anadverse effect on the overall quality of loan portfolio. Although it isvirtually impossible to measure (or quantify) the effect of rapid increase inIBDP-lending, it is reflected in commercial banks' inability to improve theirrecovery performance and a deterioration in financial status of RegionalRural Banks (see paras 20-22 above) which deal almost exclusively in Lendingto IRDP target groups.

35. There are no evident answers to the issues related to IRDP lending.One possible solution would be for lending units to increase their field andrural branch staff to handle more effectively the appraisal and supervisionof IRDP borrowers and to improve the quality of investments. But this isconstrained by the fact that the interest rate structure and margins allowedto banks on IRDP lending (of 3.5%) is barely sufficient to cover the banks'present cost of the program.

36. Nevertheless, under NABARD-I, steps are being t ken to involveNABARD's regional offices and participating banks in tne process of formula-tion of programs for IRDP lending at the district levels. It is alsoexpected that IRDP lending will be examined under the Agriculture CreditReview (NABARD-I) and appropriate recommendations made to GOI in this regard.

37. NABARD's refinance of participating banks' loans for purposes otherthan IRDP is undertaken on "schematic lending". The underlying purpose underthis approach is to handle relatively large numbers of loan applica-tion/appraisal and yet maintain some degree of "quality-control" on utiliza-tion of NABARD's resources. Participating banks prepare "schemes" forapproval by NABARD, in which loans are defined (e.g., schemes for pump setsor tractors). The scheme also stipulates technical criteria for individualinvestments and minimum conditions which borrowers under the scheme would berequired to satisfy. Once approved, the banks accept and approve loan

./ Increase in IRDP has continued, though at a slower pace in recent years;by 1985/86 IRDP disbursements by NABARD amounted to Rs 3.8 billion--about32Z of total disbursements of Rs 11.9 billion

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applications and refinance these through NABARD within the total amountallocated for a scheme.

38. Apart from checking that refinance applications generally conformto the approved schemes, NABARD does not involve itself in detailed monitoringof individual borrowers or physical completion of investments financed. Itdoes, however, carry out evaluation of a few selected schemes usually 2 or3 years after the investments under a scheme have been completed.

39. Under ARDC IV, NABARD was to undertake 50 such evaluations. Althoughthis target was not achieved during the ARDC IV project period, NABARD hasnow completed the 50 evaluations. The quality of these evaluation reportshas been very good. In addition, under ARDC IV NABARD undertook "dis-trict-oriented monitoring" (D.O.M. studied) under which selectedbeneficiaries and participating banks' performance under various schemes isreviewed within a selected district.

40. As indicated in the PCR, borh evaluation and DOM studies have broughtto light several problems in financing of schemes and constraint: as a resultof which full benefits envisaged under the schemes do not materialize (seesummary at para 2.29 of PCR). The principal problem within NABARD, however,was that there was no effective mechanism to translate lessons learnt fromevaluation and DOM studies into actions directly related to approval of freshscheme proposals. Some efforts towards this are now being implemented underNABARD-I; a unit within the operations complex has been set up to siftthrough evaluation/DOM studies and to prepare recommendation for staffengaged in scheme-approval indicating major types of problems in a givendistrict or under a scheme. It is not yet certain, however, if NABARD wouldbe willing to withhold its approval of a scheme based on findings of itsevaluation/DOM studies of similar schemes implemented previously.

41. The schematic lending procedure increasingly adopted (and oftenrequired by NABARD) has never beLn questioned by the Bank. There is no doubtthat schematic lending has been very effective in enabling the banking systemto handle a large number of loans and yet keep the administrative cost down.The offsetting element in this approach, however, is that the overall qualityof lending cannot be maintained at the same level as when a bank branch dealsdirectly and individually with each borrower. Once a scheme is approved,there is a tendency to attain the scheme targets, and individual loanapplications do not get as close attention as otherwise; bank branches ha"ecomplained for example that applicants do not always "fit exactly" the normsand criteria estabLished under a scheme, and that if such applicants areconsidered credit-worchy, the bank has either to accept them contrary to someof the scheme-criteria or reject chem.

42. The Agriculture Credit Review is also expected to review theschematic lending procedures and in particular assess whether or not theschematic lending should continue with or without any modifications.

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Bank Croup Performance

43. By financing the agricultural credit system through NABARD, the Bankhas been able to provide neede resources for investments in the sector.However, considering the problems of the system, including the high levels ofoverdues and the deficiencies in the performance of MABADD and the par-ticipating banks, more intensive and frequent Sank supervision missions werenecessary. In the implementation of the project, the Bank: (a) should havepushed more strongly in getting GO to increase the level of margins allowedto the participating banks; (b) should have questioned more vigorously thebelow-market rates of interest charged by the participating banks; and (c)should have given special attention to the increased level of NABARD's lend-ing under the IRDP program in terms of investments and impact on agriculture.On the positive side, the Bank maintained dialogues with GOI and its actionin the introduction of the pilot project (para 12) was a positive first stepto resolve some of the problems of che agricultural credit syscem.

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INDIA

INDIA FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION C .EDIT PROJECT (ARDC Iv)


I. INTRODUCTION

1.01 The Fourth ARDC Credic Project (ARDC IV), envisaging financial assis-tance of US$350 M was approved by the Board of Directors of the World Bank onFebruary 23, 1982. The total financial assistance to be provided under theproject included retroactive finance of US$15 M in respect of disbursementsmade during January 1 to January 23, 1982. The financial assistance underthe project comprised IDA credit of US$160 H and IBRD loan of US$190 M.

1.02 The main objectives of the project were to: help increase agricul-tural production, rural incomes and employment; give continued emphasis toassisting small farmers and less developed areas; continue efforts forinstitution building through further strengthening of NABARD; improveagricultural lending by banks and give particular emphasis to rehabilitationand strengthening of LDBs; and continue programs for improving quality ofinvestments. The objectives were similar to those of the three general linesof credit completed/implemented earlier by the ARDC.

1.03 NABARD's association with the World Bank group dates back to theformulation of state specific agricultural credit projects between 1969 and1974. The state-specific agricultural credit projects were succeeded bythree general lines of credit and a number of activity-specific IDA/IBRDprojects by channelling term finance to support investments in minor irriga-tion including land development, tree crop development, marketing, horticul-ture, processing, inland and marine fisheries, seed production and sericul-ture. As of June 30, 1984 financial assistance commitced by IDA/IBRD inrespect of various agricultural credit projects amounted cumulatively toUS$2.41 Billion against which US$1.46 Billion had been disbursed.

1.04 'The General Line of Credit' approach, with its national focus,involved a major departure from the state oriented projects earlier supportedby the Bank Group. The enlargement of scope from state-specific projects tothe general lines of credit indicated, inter alia, a growing confidence of

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the gank in the ability of erstwhile ARDC and NABARD in implementing nation-wide projects with greater coverage, flexibility in fixing targets and sanc-tioning of various types of investments, etc. The general lines of credithelp save considerable time for the state governments, and the Bank inpreparation and appraisal of individual state-specific projects.

1.05 Encouraged by the successful implementation of the state agriculturalcredit projects and the three general lines of credit, GOI submitted theproposal for ARDC IV in July 1980 to the Bank Group for approval.

1.06 In the context of the Sixth Five-Year Plan (1980-85), ARDC undertooka detailed review of its perspective lending program and adopted an indica-tive lending program as detailed below:

Projected Lending ProgramYear (Schematic-Term Loans)

(July-June) (Rs Million)

1980-81 4,5001981-82 5,2001982-83 6,0001983-84 6,8001984-85 7,500

30,000

1.07 The indicative lending program for the years 1982-83 and 1983-84formed the core of the project report for the Fourth General Line of Credit.The Project sought a credit allocation of US$350 M (including training) whichwas to support NABARD's lending program of Rs 12,800 M.

Issues during Appraisal and Negotiations

1.08 The project was appraised by the Bank in April/May 1981 on the basisof the project report submitted by ARDC, through GOI, in July 1980. Themajor issue at the time of appraisal related to the high level of overdues inthe rural development banking system and designing of rehabilitation programsfor six weak SLDBs, viz., Bihar, Gujarat, Karnataka, Madhya Pradesh,Maharashtra and Tamil Nadu. Other issues during appraisal related to theintroduction of eligibility criteria for commercial banks and State Coopera-tive Banks, and submission of subloans amounting to US$1 M for post-factoreview by the Bank.

1.09 The project was negotiated in Washington from November 9 to 25, 1981.The discussions during negotiations centered around the issues listed above.In addition, the organizational plans for setting up of NABARD, financialarrangements between G)I aid ARDC, loans to small farmers, setting up ofCommittee on Term Lending through Cooperatives (COTELCOOP), and flexibility

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regarding the percentage of reimbursement by the Bank were also discussed.It was also agreed during negotiations that not less than US$190 M (about 55percent of the total Bank assistance of US$346 M excluding the trainingcomponent under the project) would be utilized in respect of disbursements tosmall farmers. One of the improvements over the Third ARDC Credit Projectwas the enlargement of eligible investments by inclusion of storage andmarket yards. The Indian delegation canvassed for widening the scope ofdiversified investment categories by including financing of biogas, ploughbullocks, bullock-carts, slaughterhouses, sericulture, mushroom development,etc. These were recorded in the Minutes of Understanding.

1.10 As a result of the reduction in the allocations of IDA credit toIndia during fiscal year 1981-82, the financial assistance to support ARDC IVcomprised a blend of IBRD loan and IDA credit.

1.11 Under the three general lines of credit, successfully implementedearlier, the World Bank had been reimbursing at 50% of the disbursements madeby ARDC. However, under ARDC IV the proportion of reimbursement was reducedto 34% in view of the larger size of the lending program and the inclusion ofnew categories of investment, viz., storage and market yards. As there wasno possibility of increasing the amount of Credit/Loan beyond US$350 M, therate of reimbursement was kept at the reduced level of 34Z.

1.12 The Indian negotiating team had indicated that in view of disburse-ment of sizeable proportion of refinance for investments in farm mechaniza-tion (around 22% of ARDC's annual schematic lending) and the latest trend inthe investment-mix for fiscal year 1980-81, the composition of ARDC's lendingwould undergo a change necessitating an appropriate revision in the percent-age of reimbursement. The reimbursement percentage stipulated at 34% wasincreased to 50% of (National Bank) disbursement under the project witheffect from April 1, 1983 in view of the depreciation in the value of theRupee vis-a-vis U.S. dollar.

The Project at Appraisal

1.13 The investment to be financed under the project were estimated tocost Rs 16,690 H (US$2,086.2 H) at the ground level (Annex I Table 1). Asagainst this, the cost of the investments eligible for reimbursement underARDC IV was estimated at Rs 10,528 M. 1/ It was estimated at the time ofappraisal of the Project that about 75.44% of the cost of investments will be

1/ The estimates are based on May 1981 prices. The price contingencies of9% for 1981, 8.5% for 1982 and 7.5% for 1983 onwards compounded annuallyhave been applied to the base cost. Total contingencies work out to 11%of the base cost (Annex I Table 2).

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towards minor irrigation and Land development, 24.222 towards diversifiedpurposes, and the remaining 0.34X on training (Annex 1, Table 2).

II. PROJECT IMPLEMENTATION

Disbursements and Financing

2.01 The disbursements under various project components other than train-ing were completed by March 31, 1984, and the project was closed as scheduledon June 30, 1984. Disbursements by NABARD under the project aggregated Rs9,087.4 M as against the anticipated amount Rs 8,227 M. Claims worthRs 3,488.7 M were sufficient to draw the entire credit/loan (corresponding todisbursements by NABARD of Rs 8,476 M). Under the project, NABARD supportedinvestments at the grass root level (project cost) of Rs 12,614.95 M asagainst the appraisal estimate of Rs 10,528.35 M.

ARDC/NABARD IDA/IBRDProject Cost* Disbursement Credit/Loan

A praisal Actual Appraisal Actual Appraisal Actual(Rs M) (Rs M) (Rs M) (Rs M) (Rs M) (Rs M)

MI & LD 7,943.16 5,316.95 6,389.0 4,483.6 270.0 162.7

Diversified 2,549.67 7,267.50 1,802.0 4,573.0 76.0 184.5Purposes

Training 35.52 30.50 36.0 30.5 4.0 2.8 /a

Total 10,528.35 12,614.95 8,227.0 9,087.1 350.0 350.0

* Excluding investments not eligible for IDA/IBRD funding.

/a The GOI have, however, released the entire rupee equivalent of US$4 Mas grant to National Bank.

2.02 The pattern of investments actually financed under the project wassomewhat different from that anticipated. Minor irrigation and land develop-ment together accounted for 49.34% of the project disbursements as against77.66Z estimated at appraisal. The disbursements under diversified invest-ments, consequently, were higher at 50.32% as compared to anticipated 21.90%.The factors which contributed to the increase in the disbursement ofrefinance for diversified purposes are discussed in a subsequent section.Disbursement on training at Rs 30.5 M was lower than the appraisal estimateof Rs 36.0 M. The expenditure on training accounted for 0.34% of total

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disbursements under the project in comparison to 0.44% envisaged at the timeof appraisal.

2.03 The pace of disbursements by National Bank during the projectimplementation period was generally as per schedule drawn in the appraisalreport (Annez 1 Table 4). The disbursements, as per the appraisal schedule,helped GOI in drawing reimbursement from the World Bank on a continuingbasis.

Minor Irrigation

2.04 The minor irrigation structures under the project covered investmentsboth by individuals and state groundwater development corporations. The costof these structures amounted to Rs 5,194.67 H (Rs 4,064.5 M under non-IRDPschemes and Rs 1,130.62 M under IRDP) (Annex 1 Table 5(a) and 5(b)) as com-pared to the appraisal estimate of Rs 6,702.0 M (excluding price contingen-cies). The National Bank provided refinance of Rs 4,379.0 M, which con-stituted 84.3Z of the cost of minor irrigation works.

2.05 The number of minor irrigation units financed 1/ under the projectwas estimated at 0.80 M, of which 0.63 M, were financed under non-IRDPschemes and the remaining 0.17 M, under IRD Program. For ensuring efficientuse of the irrigation water, lining of water courses and construction ofwater distribution system and sprinkler sets were covered under the project.

2.06 The state/union territory-wise details of the completed unit equiv-alents are given in Annex 1 Tables 6(a) and 6(b). A summary of the same isgiven below:

UnitsInvestment Non-IRDP IRDP Total

Dugwells 126,112 57,S60 183,672Dugwells and Pumpsets 37,389 1,086 38,475Pumpsets 182,986 62,779 245,755Renovation of wells 61,035 20,091 81,126Persian wells 49447 - 4,447Shallow tubewells 203,487 26,906 230,393Deep tubewells 1,371 - 1,371River Lift Irrigation Units 623 - 623Sprinkler sets 7,443 - 7,443Others including water distribution system 7,373 1,313 8,686

Total 632,256 169,735 801,991

1/ Relates to completed unit equivalents of units financed.

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2.07 The number of beneficiaries of the minor irrigation investments underthe project is estimated at 0.85 M. The investments in minor irrigation areestimated to have added to the irrigation potential by 1.27 M ha. About 75%of the National Bank's disbursement of refinance for minor irrigation wasto the small farmers (Annex 1 Table 11).

2.08 The state-vise distribution of investments in respect of minorirrigation indicates that the states of Andhra Pradesh, Madhya Pradesh,Maharashtra and Uttar Pradesh accounted for about 61% of the total disburse-ments by the National Bank under non-IRDP schemes. In the case of IRDP, thestates of Orissa, Andhra Pradesh, Uttar Prade.h, Bihar and Maharashtra intheir order of importance) accounted for 81% of the National Bank's disburse-ments for minor irrigation. In the nine less developed states, the share ofminor irrigation disbursements by National Bank was 57%.

2.09 A number of steps were taken by ertswhile ARDC and National Bank inthe minor irrigation discipline during the project implemencation period.These included measures aimed at increasing efficiency of the pumpsets,relaxation for issue of loans by SLDBs to SEBs for energization of pumpsets,and setting up of standing committees at the regional levels to review,periodically, the unit costs of various items of investment. In view ofpower shortage in certain areas of the country, financial assistance has beenextended to farmers who were already in possession of electric pumpsets, toinstall diesel pumpsets of up to 5 hp as standby arrangements. The detailsof measures initiated by National Bank in the sphere of energization ofpumpsets are indicated in Annex II.

Quality Control of Agricultural Pumpsets

2.10 In the first phase of studies undertaken during ARDC III, a publica-tion entitled "Pilot Project Studies for Quality Control of AgriculturalPumpsets" was published in December 1980. Under Phase II of the program andin compliance with Section 3.04 of ARDC IV, similar studies were taken up innine states of Assam, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh,Orissa, Tamil Nadu and West Bengal. The objectives of these studies weresimilar to those of the first phase studies, viz.: (1) to study theefficiency of a few existing pumpset installation and (2) to prepare ablock/area-wise matrix based on hydrological and agronomic aspects for properselection of agricultural pumpsets in future. The main findings of thesestudies are as follows:

(1) improper pumpset installations resulting in high suction Lift;(2) improper selection of suction and delivery pipe;(3) installation of oversize diesel engines/electric motors; and(4) inadequate maintenance of the equipment/installation.

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Loans for Effecting Improvements in Pumpset Installations

2.11 With a view to improving the efficiency of the agricultural pumpseets,a decision was taken to extend refinance facilities for providing a sup-pLementary loan to the farmers for replaceent of undersized/defective pipingsystem, foot valve and correcting installation/other defects in existingpuapsets (both electric and diesel). This facility was made available tofarmers who had installed pumpsets earlier, with or without bank loan.

Groundwater Evaluation

2.12 The primary unit of planning in India is a 'block'. Groundwaterresource evaluation under AB.DC IV was carried out by the respective stategroundwater department on a block-wise basis and they were categorized aswhite, grey or dark depending upon the extent of groundwater development ineach block. The blocks are categorized as white, grey and dark as per"guidelines for evaluation of groundwater resources" given in Annex I toSchedule l of the Project Agreement. According to the estimates made by thestate groundwater departments, the groundwater balance on all India basis hasbeen estimated at 35.86 H ha m of which about 9.79 M ha m are estimated tohave been developed by 1982 leaving 26.07 M ha m (72.7Z still available forfuture development). Although considerable scope exists for groundwaterdevelopment in most of the states, the states of Haryana, Punjab, Tamil Naduhave reached a relatively high degree of groundwater development. Theseestimates are, however, subject to revision keeping in consideracicn a largenumber of surface irrigation schemes under execution in these states andadoption of refixed norms for groundwater resource evaluation.

2.13 At the initiative of National Bank, the State Governments of Punjab,Haryana, Karnataka and West Bengal have considerably strengthened the staffposition in their groundwater directorates. The control on development ofgroundwater is exercised only in respect of such investments as are taken upwith the help of bank loans. Depending upon the availability of groundwaterresources and theextent of mutual interference of minor irrigation works,the spacing between these works (as are supported by institutional finance)is decided, and control on development of groundwater made effective. Numberof additional minor irrigation units to be financed by banks are cleared inaccordance with the availability of groundwater resources. In respect of the'dark' blocks, the concerned State Governments have been requested to arrangefor micro level surveys to firmly establish the availability of groundwaterresources before minor irrigation schemes are cleared by National Bank.

2.14 The second control relates to spacing between two minor irrigationworks determined as per pump tests data collected by the State GroundwaterDevelopment. The spacing between two-minor irrigation works is kept equal totwice the radius of the influence. At present the minimum spacing betweendugwells with pumpsets and shallow tubewells is fixed at 150 m and 180 mrespectively. These spacing criteria are stipulated by NABARD as part of

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terms and conditions to be observed by banks while sanctioning individualloans. The above controls have worked very well in ensuring planned develop-ment of groundwater resources in the country (see Annex 1, Table 7).

2.15 In terms of Section 3.05 of the Project Agreement, a Model Compensa-tion Scheme for Failed Wells have been drawn up by NABARD and circulated toall the State Governments and participating institutions for adoption. The'Scheme' has been adopted by the Governments of Karnataka, Maharashtra,Kerala and Tripura. The matter is being vigorously pursued with the otherState Governments.

Land Develooment

2.16 The total cost of land development financed under the projectamounted to Rs 122.28 M (Rs 101.6 M in respect of non-IRDP schemes) whichconstituted about 39Z of appraisal estimate of Rs 317 M. The major reasonsfor low disbursements for land developments were high initial cost of landdevelopment works, ineligibility of some of the farmers to avail of loans,and reluctance to undertake the work due to loss of crop income. The disbur-sement of refinance for this activity, under the project, amounted to Rs 91.4M and Rs 13.2 M under non-IRDP schemes and IRD Program respectively. Totalnumber of schemes sanctioned was 298 with refinance commitment of Rs 417.3 M(excluding IRDP). The State-wise analysis of disbursements under LandDevelopment, including disbursements for this item of development made underIRDP, indicates that 24% of the invesement was made in less developed States.Andhra Pradesh and Punjab accounted for about 67% of the disbursement ofrefinance under non-IRDP schemes while under IaD Program the states of Bihar,Hi¢achal Pradesh, Orissa and West Bengal accounted for 80% of the disburse--lent of refinance. One significant feature has been that Madhya Pradesh, aless developed state, absorbed about 13% of disbursements of refinance forland development in the case of non-IRDP schemes under the project.

2.17 The extent of utilization of irrigation potential created in thecommand area of major irrigation projects mainly depends on on-farm develop-ment works such as land levelling, land shaping, construction of channels,etc., carried out by the beneficiaries within the command area of suchprojects. Since the low productivity prior to introduction of irrigation andcrop losses during the period of land development could, possibly, lead todefaults in the repayment of earlier loans, the National Bank liberalized therepayment conditions in such cases with a view to ensure full utilization ofirrigation potential. It has been decided that beneficiaries in commandareas with overdues up to Rs 1,500 in respect of their short-term borrowingswould be eligible for obtaining financial assistance for both investment andproduction credit requirements after conversion/rescheduling of their earlieroutstanding loans for a period of five to seven years. This would enable thebeneficiaries to increase the productivity of their land by adopting improvedagricultural practices, and make it possible for them to clear their dues onthe earlier as well as new loans from out of the incremental income.

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Diversified Investments

2.18 As was the case with ARDC III, the disbursements under diversifiedinvestments substantially exceeded the appraisal estimate of-ARDC IV. Thiswas made possible by considerable increase in the disbursements made by thecommercial banks in respect of these items, as well as spurt in disbursemntsunder IRDP, bulk of which have been for diversified purposes. As against theappraisal estimate of Rs 1,802 M (Annex 1, Table 3(a)), the diversified itemsof developments claimed 79.6X of the total refinance disbursed by theNational Bank under IRD Program during the project period (Annex 1, Table3(c)). Under non-IRDP schemes, the share of diversified activities wasrelatively low at 32X of the refinance disbursed under these schemes (Annex1, Table 3(b)). The total cost of investments for diversified purposesamounted to Rs 7,267.5 M and accounted for 57.75% of the total project costas against the appraisal estimate of 24.3%. The share of the small farmersin diversified investments was 79%. The state/union territory-wise detailsof the units financed under diversified activities are given in Annex 1,Tables 8(a) and 8(b).

2.19 Under non-IRDP schemes, 49.1% of disbursements of refinance fordiversified investments were made in the States of Andhra Pradesh (15.1%),Karnataka (13.8%), Haryana (11.7%) and Punjab (8.5%). In the case of IRDProgram, however, the pattern of disbursement of refinance was different,with 57.7% of refinance assistance having been shared by Tamil Nadu (18.8%),Uttar Pradesh (17.7%), Andhra Pradesh (10.8%) and Bihar (10.4%). The shareof less developed states in availability of refinance for diversified invest-ments was 33.5% for non-IRDP schemes and 47.1% for IRD Program.

2.20 The purpose-wise analysis of disbursement of refinance for diver-sified purposes indicates that dairy development accounted for 20% undernon-IRDP schemes and 42% under IRD Program. In the case of non-IRDP schemes,other important diversified items and their espective share of refinancedisbursed for diversified activities were plantations and horticul (27.6%),poultry development (11.9%), sheep breeding (9.3%), and fisheries (6.5%).Under the IRD Program, the important items and their share of refinancedibursed for diversified activities were bullocks and bullcck carts (40.7Z),sheep/goat breeding (5.7%), and inland fisheries (1.6%).

2.21 The other eligible investments, in particular storage and marketyards did not make much headway and their total share remained at 4% (Storage2% and Market Yards 2%).

2.22 The state-wise and purpose-wise analysis in the case of non-IRDPschemes shows that: under plantations and horticulture, Karnataka toppedwith 27.5% disbursement of refinance followed by Kerala (17.1%), Assam(15.3%1 and West Bengal (10.2%); under poultry, Andhra Pradesh accounted for25% of the disbursements followed by Punjab (22.1%), Karnataka (13.5%) and

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Tamil Nadu (10.3%). In the case of sheep rearing, Andhra Pradesh, Orissa andHaryana were the important states and claimed 92.5% of refinance. Fisheriesturned out to be an important item of investment in the states of Orissa,Karnataka, Andhra Pradesh and Tripura, which altogether accounted for 75% ofthe refinance disbursed for this purpose. -

2.23 Under IRD Program, the purpose-wise and state-wise analysis of dis-bursement of refinance revealed that in the case of dairy development, TamilNadu copped with 24.8% of disbursements and was followed by Uttar Pradesh(18.2%), Eihar (9.1%), Punjab (8.2%) and Karnataka (7.2%). In respect ofbullocks and bullock carts, which is the second most important activity underdiversified items, Uttar Pradesh with 22% of refinance ranked first and wasfollowed by Tamil Nadu (17.9%), Andhra Pradesh (15.0%), Orissa (12.3X) andKarnataka (9.2%).

2.24 Insofar as financing diversified investments is concerned, NationalBank has, under ics charter, a mandate which goes beyond the functions oferstwhile ARDC. Under ARDC, the National Bank is required to provide creditfor the promotion of agriculture, small scale industries, cottage and villageindustries, handicrafts and other rural crafts, and other allied economicactivities in rural areas with a view to promoting integrated rural develop-ment and securing prosperity in rural areas. National Bank, after its estab-lishment, besides liberalizing and expanding the on-going facilities in thenon-farm sector, constituced seven task forces, one each on Handlooms, Coir,Sericulture, Handicrafts, Khadi and Village Industries, and Organization ofMarket Essentials and Tiny Industries in Rural Areas. Based on the recommen-dations of the task forces, the National Bank introduced several new lines ofcredit and initiated a number of policy measures aimed at accelerating theprocess and pace of development of such activities in rural areas. However,the Report on Tiny Industries in Rural Areas is under preparacion.

Lending in Less Developed States

2.25 Comparatively better developed states attracted relatively largerquantum of refinance assistance because of the availability of necessaryinfrastructural facilities and forward and backward linkages, and above all,the progressive outlook of farmers themselves. However, ARDC/NABARD con-tinued its efforts in reducing regional imbalances among different tegionsof a state as well as between different states. Reducing regional dis-parities, was one of the major objectives set forth under the project. As afirst step, Himachal Pradesh, Jammu and Kashmir, Rajasthan, Northeastern andEastern states, Madhya Pradesh and Uttar Pradesh were identified as lessdeveloped states which needed special attention. Among the steps taken byARDC/NABARD towards promoting agricultural development in these States were(a) extending assistance to banks and state governments in formulatingschemes and conducting workshops on project lending, (b) conducting apre-investment survey in the Northeastern Region and special studies in someof the states with a view to identifying the bottlenecks for credit flow for

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development and recomending appropriate action, (c) providing of 902 to 95Zrefinance on bank loans for schemes in the Eastern and Northeastern regionsto induce member banks to formulate more schemes and take to project lending,(d) holding dialogues with the state governments by the Chairman and theManaging Director of the National Bank to sort out, at the highest level, theproblems in formulation and implementation of schemes, (e) implementating ofother externally-aided projects in states like Madhya Pradesh, Uttar Pradesh,Bihar, West Bengal, Himachal Pradesh and Jamu and Kashmir so as to speed upthe process of development, (f) opening of sub-offices of the National Bankin some of these states with a view to paying special attention to theagricultural development needs of these regions and maintaining close liaisonwith the state governments and banks, (g) formulating appropriate strategyfor development, such as encouraging formation of statutory corporations forundertaking minor irrigation and other items of development; and (h) takingefforts to cover all the blocks in the country with National Bank supportedschemes.

2.26 It was expected that almost half of the National Bank's lending underthe project would be to the less developed States. The appraisal estimates,in this regard, have been met inasmuch as the less developed States receivedalmost 50% of the disbursements amounting to Rs 4,398.4 M during the projectperiod. The Eastern States of Bihar, Orissa and West Bengal had shown slightimprovement in availment of refinance (18.2% during the project period ascompared to 16.8% under the earlier project (Annex 1, Tables 9 and 10).

2.27 However, the Northeastern States accounted for a meagre 3.6% ofdisbursements made in the less developed areas and efforts are being madethrough annual state level discussions and other forums to increase the flowof credit to these areas.

Lending to Small Farmers

2.28 National Bank has been paying special attention to the credit needsof small farmers so that this target group gets a larger share of investmentcredit being made available by it. To ensure larger participation of smallfarmers in the schemes, National Bank has been extending concessional termsof lending to them such as lower downpayment, longer repayment period andlower rates of interest. The project agreement provided that not less thanUS$190 M, i.e., about 55% of the total credit, would be disbursed in respectof loans to small farmers. ARDC/NABARD had disbursed 77% of the refinance inrespect of loans to small farmers, including IRDP beneficiaries, thus exceed-ing the project target of 55%. Under Minor Irrigation Schemes, the percent-age of disbursements for small farmers was 75Z whereas under diversifiedpurposes, the share of small farmers was 79%. Substantial disbursementsunder IRDP for diversified investments contributed to increased small farmercoverage under the Project (Annex 1, Table 11).

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Implementation Issues

2.29 Monitoring and other studies conducted by the National Bank, reviewsof project implementation by the Regional Office of the National Bank, anddiscussions/meetings of the State/District Level Coordination Committees havebrought out the following common problems:

(i) loan eligibility worked out on unrealistic land evaluation methods;

(ii) underfinancing of the investments;

(iii) sanctioning short initial repayment holiday unrelated to thegestation period of investments;

(iv) lack of infrastructural facilities especially in regard to marketingof farm produce;

(v) absence of adequately trained and experienced staff in bank branchesleading to poor follow-up and supervision of loan cases;

(vi) inadequate support from extension services; and

(vii) inadequate branch network in certain areas/states.

2.30 Under minor irrigation investments, the main problems encounteredwere: (i) delays/difficulties in energization of pumpsets, (ii) non-availability of groundwater assessment reports and inadequate staff ;trengthof State Groundwater Departments (SGWDs), (iii) non-availability/shortageof construction materials, (iv) delay in completion of investments, and (v)delay in adoption of scheme to compensate for failed wells.

2.31 As regards land development schemes, the delays have mainly been dueto legal problems encountered while implementing the schemes. Other problemsrelated to lack of technical guidance and ineligibility of farmers to availof loans under the schemes. Under diversified purposes, most of the problemsfaced related to non-functioning of purchase committees, unsatisfactorypost-loan supervision, purchase of animals in higher lactation order, scar-city of quality animals, high cost of feed, low yields due to lack of properfeeding, absence of an efficient extension service (plantation and horticul-ture), inadequate arrangement for product preservation (of eggs), and inade-quate medical care (animal husbandry).

Follow-up Action

2.32 The National Bank has been monitoring the progress in implementationof the various schemes and making efforts aimed at sorting out the variousopetational problems. State governments were requested to strengthen theSGWDs and carry out micro level surveys of blocks categoried as 'dark' for

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reassessment of groundwater potential. The National Sank extended refinanceassistance to SLDBs to enable them to participate, along with the comercialbanks, in financing rural electrification programs of REC. The National Bankcontinued its efforts to improve the quality of minor irrigation investmentskeeping in view the results of the Pilot Project studies on quality controlof pumpsets. The financing banks were also urged to take necessary action inthis regard. The National Bank urged the banks to adopt realistic method ofvaluation of land for determining loan eligibility in individual cases. Thebanks have been requested to sanction initial grace period depending on thegestation period of investment.

2.33 NABARD has set up standing committees in each state to review peri-odically the unit costs of various items of investment. The committees werecomposed of representatives from participating banks, state governments, andconcerned implementing agencies and their views are taken into considerationwhile fixing/revising the unit cost for various items of investment. Thesestanding committees have been functioning effectively.

2.34 The Regional Offices stepped up effective participation in the for-mulation of District Credit Plans and Annual Plans. Procedure for availmentof refinance was simplified in regard to some special schemes and powers ofsanction of refinance assistance by the Regional Offices of the National Bankwere enhanced. Emphasis was also laid on promoting diversified investments,and in giving licenses for opening new branches of the CBs/RRBs, a deliberateattempt is made to ensure that unbanked centers get priority.

Training

2.35 Expenditure under the training component of the project amounted toRs 30.5 M as against appraisal estimate of Rs 36 M. During the projectperiod a total of 5,911 persons have been trained under various programsconducted by CAB, Pune and BIRD, Lucknow. During the project period, 53courses were conducted at CAB as against the commitment of 60 courses. Anumber of technical courses were also organized covering the areas of animalhusbandry, plantation and horticulture, forestry and fisheries. A total of28 such courses were conducted in which 699 trainees participated. At 14junior level training centers of SLDBs, 154 training courses were conducted.A total of 3,548 persons had attended these Eraining programs during theproject period. The training of field staff of the LDBs received particularattention and 67 re-orientation programs were conducted covering i,664trainees. In pursuance of the recommendations made by CRAFICARD, theNational Bank had set up a committee on 'Training in Rural Developmentthrough Credit' (TRUDEC). The committee has since submitted its report. Therecommendations made by the said committee are under implementation. Inpursuance of the recommendations of the COTELCOOP, special training programswere devised for the officers of six weak SLDBs. Programs on recoverymanagement, effective communication techniques and general management andexecutive development were organized in this regard (Annex III).

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Compliance with Covenants

2.36 The National Bank complied with all the covenants of the ProjectAgreement.

III. PROJECT BENEFITS

Physical Impact

3.Oi The investments in minor irrigation (both private and public) andland development under non-IRDP schemes are estimated to have created newirrigation potential for 1.10 M ha. Under IlD program private minor irriga-tion investments added to the irrigation potential by 0.17 M ha. Underdiversified investments, 0.056 M ha were brought under plantation and hor-ticulture crops (tea, coffee, coconut, citrus, mango, guava, etc.) undernon-IRDP schemes. The area brought under chese crops was, however, negli-gible in the case of rRD program. Other benefits include financing of 0.985M milch animals (0.805 M under IRDP and 0.180 M under non-IRDP schemes),5.282 M layer birds (1.305 M under IRDP and 3.977 M under non-IRDP schemes),2.674 M, sheep/goats (1.617 M under IRDP and 1.057 M under non-IRDP schemes),0.040 M pigs (0.034 M under IRDP and remaining under non-IRDP schemes), 0.006M ha of inland fisheries (of which 0.003 M ha under IRDP) and 0.115 M unitsof miscellaneous investments (of which 0.007 M units under IRDP). Otherinvestments financed under non-IRDP schemes were 1039 fishing boats, storagegodowns (storage capacity of 0.386 M tons) and construction of 37 marketyards. Under IRDP 0.702 M bullocks and 0.158 M bullocks and carts were alsofinanced.

3.02 The private minor irrigation investments financed under the projecthave benefited 0.63 M and 0.17 M individuals under non-IRDP schemes and IRDProgram respectively. In addition, the investments in 1994 deep tubewellsand river lifts have benefited about 0.05 M persons, whose lands fall in thecommand area of these structures. The investment in land developmentbeneficed abouc 0.04 M persons. Thus, about 0.89 M persons were benefitedfrom investments in minor irrigation and land development under the project.A large proportion of the beneficiaries (about 0.67 h) under minor irrigationand land development were small farmers.

3.03 The impact of the project in terms of increased production of

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foodgrains and commercial crops, and other products is discussed below. 1/The main objective of increased production of foodgrains, milk, eggs, fish,meat (poultry birds, sheep/goats, etc.) was achieved. Investments in minorirrigation and land development enabled the beneficiaries to adopt improvedcropping pattern, use higher level of inputs (fertilizers, high yieldingseeds, insecticides/pesticides, etc.) and switch over to improved farmingtechniques, resulting in increased production of foodgrains and cash crops.At full development of project investments 2/ the incremntal foodgrainsproduction, mostly of wheat, paddy and other cereals is estimated at 1.80 Mtons (appraisal estimate of 1.71 M tons). The value of incremental produc-tion of foodgrains is estimated at Rs 2457 M (at 1983-84 prices). Besides,the production of commercial crops such as oilseeds (groundnut, rapeseed andmustard), sugarcane and cotton are estimated to have increased by 0.14 Mtons, 3.02 M tons and 0.003 M tons respectively. The value of the incremen-tal production of cash crops is estimated at Rs 1148 M. Thus, the invest-ments in minor irrigation and land development at full development haveresulted in an incremental value of production of Rs 3605 M (appraisalestimate of Rs 4,000 M).

3.04 With investments in diversified activities, the incremental output ofmilk was estimated at 850.85 M liters and 251.2 M litres from IRDP andnon-IRDP schemes, respectively. The production of eggs has gcne up by1,215.5 M (of which 960.9 M under non-IRDP schemes). The increase in produc-tion of fish from inland fisheries was of the order of 0.07 M Qtls (of which0.04 M Qtls under IRDP). The incremental output of marine fisheries isestimated at 0.30 M Qtls. The production of tea and coffee is assessed tohave increased by 0.2 M Qtls and 0.05 Qtls respectively. The incrementalproduction of coconut is estimated at 67.1 M nuts. The production of other

1/ The study conducted in 15 states by National Bank on implementation ofIRD Program showed that nearly 20% of the sample farm sector-units werenon-financial. Keeping this in view, the additional production estimatedto have accrued from the investments under IRD Program has been reducedto the extent of 20 percent. In the case of investments under non-IRDPschemes, no such allowance has been made in the absence of any firmestimate of the extent of non-functional investments.

2/ In the case of dairy, poultry, sheep rearing and fisheries, benefitsstart flowing within six months from the investment. However, in thecase of MI, benefits reach the optimal level some 3-4 years after thecompletion of investment. In the case of horticulture and plantations,the time-lag is even more. The initial gestation period itself is about3-5 years and it takes another 2-5 years to reach the full developmentstage. As the project was only for a two year period, most investmentactivities (other than plantation and horticulture) would have onlystarted yielding benefits.

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horticultural crops like mango, citrus and guava, etc. have also gone up(precise estimate not available).

3.05 The value of incremental output of 1983-84 prices from investments indiversified activities is estimated at Rs 6823 M (as against the appraisalestimate of Rs 1200 M); the increase is mainly due to the Larger share ofthese activities in the project investment. Of the incremental output fromdiversified activities, the ILD Program contributed Rs 3943 M (57%). Thecontribution of IRDP in value of incremental output from diversifiedactivities was relatively higher due mainly to the fact that 61% of disburse-ment of refinance by the National Bank for these activities were under IRDProgram. Altogether, the value of incremental production from all invest-ments at full development is estimated at Rs 10,428 M (appraisal estimateRs 5,200 at 1980-81 prices).

Financial Analysis

3.06 A wide variety of investments were 'inanced under the project, whichwere dispersed in different parts of the country with varying agro-climaticconditions. The estimated benefits and rates of return are based mainly onex-post evaluations and other studies conducted by the National Bank, conmer-cial banks and research institutions (Annex V). The minor irrigation invest-ments financed under the project were found to be financially viable and theFRR ranged from 10% to above 50% (as against the appraisal estimate of 23% to48%). The FRR ranged from 14% to 35% in the case of diversified investments(as against the appraisal estimate of 20% to 43%). The application of sen-sitivity test of 10% increase in investment cost or 10% reduction in benefitsshowed that the investments would be financially viable except in the case ofinland and marine fisheries. The ERR ranged from 15% to above 50% forvarious investments except in the case of Deep Tubewells (DTWs) and RiverLift Irrigation (RLI) installed in Orissa.

3.07 The investments finavced and undertaken under the project havecreated employment opportunities of both recurring and non-recurring nature.The employment effects have significantly improved with substantial propor-tion of financing under the project going to diversified investments and forinvestments under IRD Program which are labor-intensive in nature. The minorirrigation and land development investments are estimated to have creatednon-recurring employment of 221 M mandays and annual recurring employment of201 M mandays. The diversified investments at full deveLopment are expectedto have created non-recurring employment of about 35.5 M mandays and annualrecurring employment of about 210 M mandays. Thus, a permanent annualincrease in employment of 411 M mandays has been created with the implementa-tion of the project. The total employment opportunities created are muchhigher than the appraisal estimate (140 M mandays) because of larger share ofdiversified investments and coverage of a large number of beneficiaries underIRD Program.

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IV. ROLE OF PARTICIPATING INSTITUTIONS

National Bank for Agriculture and Rural Development 1/

4.01 The National Bank for Agriculture and Rural Development (NABARD) cameinto existence on July 12, 1982. The National Bank took over the functionsof erstwhile Agricultural Credit Department (ACD) and Rural Planning andCredit Cell (RPCC) of Reserve Bank of India and Agricultural Refinance andDevelopment Corporation (ARDC). The National Bank was established forproviding credit for promotion of agriculture, small-scale industries, cot-tage and village industries, handicrafts and other rural crafts and otherallied economic activities in rural areas with a view to promoting integratedrural development and securing prosperity in rural areas. The mandate of theNational Bank is, thus, much larger than the collective mandate of theinstitutions whose functions it took over. It provides refinance for short,medium and long term loans for agriculture and rural development.

4.02 The National Bank is entrusted wich the responsibility concerningpolicy planning and operations in the field of agriculture and other economicactivities in the rural areas. As an apex institution, it provides refinanceto the institutions purveying investment and production credit for financingvarious developmental activities in the rural areas. The National Bank'srefinance is available to State Land Development Banks (SLDBs), StateCooperative Banks (SCBs), Scheduled Commercial Banks (CBs) and Regional RuralBanks (RRBs). The National Bank is also accredited with the responsibilityof institution building foe improving the health of the credit deliverysystem in the country.

4.03 The National Bank faced acute staff problems on repatriation of itstrained staff to RBI. The Bank took steps to recruit staff at differentlevels from the open market and campus recruitment of management graduates,technical staff, etc. The staff position in the various technical dis-ciplines was also strengthened. The staff strength in different disc:piinesin the Bank during the project period is given in Annex 1, Tables 12, 13 and14).

Scheme Formulation

4.04 The thrust of the training programs for senior/middle level officersof the financing banks had been to enable them to formulate schemes ofagriculture/rural development. The National Bank continued its efforts inthis direction during the project period and even the State Governments had

1/ The details of organization and management of the National Bank alongwith its role in ruraL development has been dealt in detail in StaffAppraisal Report on NABARD-I Credit Project (Report No. 5594-IN).

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been urged to set up project preparation and monitoring cells. Our persist-ent efforts have fructified and the quality of schemes formulated and sub-mitted by the participating banks for our consideration is much better. Tosupplement efforts in this regard, the National Bank had circulated detailedguidelines along with checklists to the concerned institutions for prepara-tion of different types of schemes. The Bank also took initiative in prepar-ing some pilot projects on innovative schemes and sent the same to variousfinancing banks/State Government departments. The coverage of the ruraldevelopment program has also been enlarged after establishment of theNational Bank. The non-farm sector which was hitherto relatively neglectedhas been bestowed special attention and as a consequence of such measures,the refinance of Rs 670 M was disbursed for Industries, Services, Business(IS8) under IRD Program during project period.

Appraisal

4.05 The schemes received from the participating financing banks areappraised by the National Bank on the basis of the techno-economic normsevolved by it. Besides such appraisal by the Bank, an assessment ofadministrative and organizational capacity of the financing bank branches,availability of supporting services, availability of the constructionmaterial/assets of the right quality and at appropriate prices, etc. are madebefore a scheme is formally considered for sanction. Wherever necessary thefield visits are undertaken to collect first hand information and to verifythe validity of the assumptions made in the scneme. The feedback receivedfrom the DOM and evaluation studies are also given consideratioa while sanc-tioning schemes.

4.06 With a view to ensuring speedy appraisal and sanction of schemes atthe Regional Office level, the National Bank not only enhanced the powers ofsanction of schemes of the regional-in-charge, but also strengthened thestaff in the Regional Offices by posting more experienced staff in operationsand in various technical disciplines. The techno-economic norms used forappraisal are updated as and when found necessary. Staff are alsofamiliarized with appraisal techniques under various training programs. Inthe case of IRD Program, however, the appraisal of individual loan proposalswas to be made by the financing banks. The National Bank's study of IRDPshowed that the loan cases were not appraised properly for want of adequatelytrained staff with the banks. Lack of familiarity with financing of some ofthe items of investments (ISB components) under IRD Program was anotherfactor responsible for this type of situation. The banks have, therefore,been advised to overcome these deficiencies.

Monitoring and Evaluation

4.07 The National Bank continued to attach considerable importance toproject monitoring and evaluation, which provide very useful feedback forimproving the performance of on-going projects and designing better projects

-33-

in future. Both desk reviews and field studies are undertaken to identifyoperational problems and constraints and suggest timely solutions.

4.08 The long delays in filing of the prescribed returns by the par-ticipant banks and the inaccuracies in the information supplied therein hadseverely curtailed their usefulness as an instrument of desk monitoring inthe National Bank. With a view to preparing draft procedures to ensureproper monitoring of and reporting on the progress in the implementation ofschemes refinanced by NABARD, and to prepare standard formats to be used byfinancing banks in preparing returns for submission to NABARD on progress ofrefinanced schemes, a sub-committee was constituted by ARDC in January 1982in terms of Section 3.03 of Article III of the ARDC IV Project Agreement.The Sub-Committee comprised senior officers of NABARD, SBI, CEI, SLDBs, andRBI.

4.09 The Sub-Committee recommended for adoption of a new system of returnsand analysis and detailed guidelines on the system were issued to the par-ticipating banks. The new system was introduced in October 1982. The newsystem provides for a quarterly review of financial achievements under eachongoing scheme on the basis of respective returns from the banks. It couldfacilitate a more e-en disbursement of NABARD's refinance and effective deskmonitoring. The half yearly returns on physical achievements are intended toenable the National Bank to monitor physical progress under the schemes interms of complete and incomplete, and successful and infruitous investments.However, inordinate delays in submissicn of even the revised returns by thefinancing banks have severely limited their utility as an instrument of deskmonitoring in the National Bank.

4.10 After switching over from scheme-oriented monitoring to dis-trict-oriented monitoring in 1981, it was decided to progressively increasethe coverage of districts under DOM from 25Z (100 districts) in 1981 to33-1/3% (135 districts) in 1982, 40% (in 162 districts) in 1983 and 50% (202districts) from 1984 onwards. District-oriented monitoring studies wereundertaken in 95 districts and 87 districts during 1982 and 1983 respec-tively. During January-June 1984, 47 DOM studies were undertaken. Theachievements in terms of the number of studies conducted fell short of thetargets due to staff constraints faced as a result of repatriation of trainedstaff to the Reserve Bank of India after formation of NABARD. The NationalBank has also taken certain initiatives to improve upon the follow-up actionon the findings of these studies. After the conduct of study, the observa-tions of the study team are discussed at the meeting of NABARD officers,representatives of the financing banks and the concerned district officers.The course of action is decided in this meeting so that the concerned banksand departments of state government could take suitable steps in the matter.

4.11 With a view to ascertaining the constraints in implementation of IRDProgram a study was undertaken covering_5 states, 30 districts, 60 blocks and1498 program beneficiaries. The findings of the study were placed before the

-34-

Board of Directors of the Bank. Copies of the report were sent to Governmentof India (the Ministry of Finance, Agriculture and Rural Development) Plan-ning Comission and Reserve Bank of India. As follow-up, the Commis-sioners/Directors Institutional Finance, of the concerned states have beenadvised about the deficiencies observed in the program implementation. Theshortcomings noticed in the implementation of the program at the level of thefinancing banks and the BDOs/DRDAs have been lifted and the suggestions toimprove the implementation of the program have been made by the NationalBank. They have been further advised to initiate appropriate action atdifferent levels.

4.12 During implementation of ARDC IV, 61 ex-post evaluation studies (21by ARDC/NABARD, 35 by CBs and 5 by research institutions) were undertaken.Of these studies 25 had been published, 17 completed and 19 were in progressas at the end June 1984. The CBs have shown better performance in the con-duct of evaluation studies. The progress in the case of research institu-tions had been slow, because many of them had not been familiar with evalua-tion of bank financed projects. The new progress in the finalization of thestudies undertaken by the National Bank has been slow mainly due to shortageof staff at senior levels in the EAPD. Efforts at improving the evaluationmethodology in terms of sampling design, and analysis of data, includingdisaggregated forms, etc., have continued. To improve upon skills of theprofessional staff of CBs in the planning and conduct of the evaluationstudies, National Bank has been interacting with them on a continuing basis.The program of evaluation studies to be taken up by various CBs is finalizedin the meeting convened by the National Bank.

4.13 As a follow-up action on the findings of the evaluation studies, eachof the published reports is reviewed and a brief note detailing major studyfindings and follow-up action required at various levels, i.e., NationalBank, financing banks, etc., is prepared to facilitate action by operationaldepartments.

4.14 With a view to ensuring involvement of the LDBs and RRBs in themonitoring of on-going schemes, the National Bank provides financial assis-tance to these banks. It had disbursed Rs 0.39 M from its R&D Fund to sixLDBs during the project period, for setting up of technical monitoring andevaluation cells and to partly cover the cost of the key personnel.

4.15 To gain new perceptions on the growing delinquency in repayment ofcredit, the National Bank had undertaken studies on both supply and demandsides of credit during the project period. The supply side study was under-taken departmentally in the states of Bihar, Gujarat, Karnataka, MadhyaPradesh and West Bengal. The demand side study was contracted to researchinstitutions and was taken up in 10 states covering states with good and badrecovery performance. The results of the studies were discussed in a seminarheld at New Delhi on February 6, 1984 and was attended by senior officersfrom Covernment of India, State Governments and the financing banks.

-35-

4.16 As a follov-up action on the findings of these studies, detailedguidelines were issued to banks to undertake case-by-case analysis of theoverdue loan accounts and provide appropriate relief in genuine cases bysuitably rescheduling/rephasing the demand in the events of occurrence ofnatural calamities. Besides, the financing banks were requested to ensureproviding initial grace period, proper loan maturities and adequate financeto the beneficiaries along with proper follow-up and supervision of loans.

4.17 The National Bank had established Research and Development Fundduring 1983, with the objective of expending it on matters of importance toagriculture, agricultural operations and rural development includingfacilities for training, dissemination of information and promotion ofresearch studies and techno-economic and other surveys in the field of ruralbanking, agriculture and rural development. During the project period 27research studies were contracted to the research institution of repute forundertaking studies on technical and economic aspects of rural developmentprogram, repayment performance of borrowers of agricultural credit, develop-ment of proto-type of catamaran of ferro-cement, etc. The total cost ofstudies contracted to the research institutions aggregated to Rs 4.71 M. Ofthe contracted studies, 13 studies have been completed and the remaining areunder way. This included also studies funded under credits irom SwissDevelopment Cooperation (SDC) and Overseas Development Association (ODA).

Institution Building

4.18 In the context of its perspective lending program during the SixthFive Year Plan, National Bank made earnest efforts towards institution build-ing, so that the participating banks are able to increase both quantum andquality of lending. In the case of LDBs, the revised eligibility criteriawas made applicable from January 1, 1982 and the lending eligibility of eachof the PLDB/branch of SLDB was worked out based on the recovery position ofthe PLDBs/branches of SLDBs for the period ended June 30, 1981. The neweligibility criteria applicable to LDBs provided that lower levels ofrecovery will qualify for declining amounts of refinance from the NationalBank and it differed from that applicable under Third ARDC Credit Project,which excluded PLDB/branch of LSDB from refinance unless its overdues were65X of less (including 10Z notional reduction on account of state govern-ments' contribution to LDBs' share capital).

4.19 The recoveries had showed some improvement during 1981-82 but thefollowing year (1982-83) being a drought year gave a setback to the recoveryefforts of the financing institutions. COTELCOOP had been reviewing therecovery position of SLDBs in general and that of weak SLDBs in particularand approved various measures aimed at improving the organizational,managerial and financial aspects. These measures were drawn up based on thefindings of O&M studies conducted by the expert groups. The study reports ofthe expert groups had been forwarded to the respective state governments and

-36-

the concerned banks. National Bank had drawn up plans for improvement of thefinancial and managerial competence of the concerned banks in consultationswith COTELCOOP and based on the views of the banks and state governments.

4.20 National Bank made efforts to improve participation of SCBs and RRBsin lending programs. As a result of these efforts, the involvement of SCBsin availment of refinance during the project period at Rs 666.4 M hadincreased to nearly ten-fold as compared to the Rs 69.6 M during Third ARDCCredit Project. Likewise the amount of refinance availed of by RRBs had goneup from Rs 380 M during 1981-82 to Rs 670 M during 1983-84. National Bankconsiderably expanded the curricula of its training programs with a view toimproving skills and functional efficiency of personnel of the state govern-ments and the member banks.

4.21 National Bank provided grants from R&D Fund for strengthening ofTechnical, Monitoring and Evaluation (TME) Cells of LDBs, RRBs and SCBs. Thegrants sanctioned from the fund for appointment of key personnel in the TMECells of SLDBs, SCBs, and RRBs amounced to Rs 3.11 M as at end June 1984.The National Bank also sanctioned assistance from che 'Fund' to three RRBsfor setting up TME Cells.

Strengthening of Credit Delivery System

4.22 With a view to improving the quality of lending and supervision overthe utilization of credits, the National Bank prepared ano implemenced aPilot Project. The objective of the Pilot Project, which covers three dis-tricts viz., Aurangabad (Maharashtra), Hoshangabad (M.P.) and Sabarkancha(Gujarat), is to upgrade and strengthen the credit delivery system. TheProject covers all lending institutions operating in these districts. Theemphases are to provide adequate staff to the credit institutions at theground level so that the number of borrowers supervised by each official iskept to a manageable level, to intensify training of the field staff and theborrowers and to introduce structured working activities for the field andsupervisory staff. The project also envisages modernization of systems andprocedures followed by LDBs. In the case of cooperative banks and RRBs, theNational Bank has agreed to bear a major part of incremental staff cost for aperiod of five years.

Important Policy Decisions

4.23 Some of the important policy decisions taken by the National Bankduring the project period were (i) providing a higher scale of refinance toLDBs, (ii) allowing options for SLDBs to reduce special development deben-tures floated by them from 1-1-1982 onwards either in equal annual instal-ments or in equated annual instalments by LDBs, (iii) applying revisedeligibility criteria for LDBs, (iv) setting eligibility criteria for CBs andRRBs, (v) introducing registers for maintenance of DCB by CBs and RRBs,

-37-

(vi) revising interest rates (from April 1, 1983), (vii) simplifying proce-dure for release of refinance under IRDP, and (viii) covering new activitiessuch as farm forestry, stand-by oil engines, improvements in pumpset instal-lations, dry land farming, financing of windmills, etc. under refinancefacility.

Resource Mobilization

4.24 The sizeable growth in the business of the National Bank was madepossible by its efforts to raise additional resources. Total resourcesraised increased by nearly two-fold from Rs 6,728.4 M as at end June 1982 toabout Rs 11,878 M in 1983-84. The pattern of resources mobilization shows anincrease in the proportion of local resources to total resources, pointing togreater internal resource mobilization. The assistance from the World BankGroup and bilateral donors had declined. The amount of repayments of loansco the National Bank though increased in absolute terms from Rs 2,712. M toRs 4,090 M, declined as a proportion of local resources to 40% in 1983-84.The debt equity ratio which stood at 15:1 in 1981-82 reached the statutorylimit of 20:1 in 1983-84 (Annex 1, Tables 15, 16, 17 and 18).

Land Development Banks

4.25 The Land Development Banks (LDBs) had been the main purveyors ofinvestment credic to the farmers in the country. Their loan portfolio hadbeen increasing over the years. From 1981-82 to 1983-84 their lendings hadincreased by 19% from Rs 3,690.43 M to Rs 4,395.40 M. The disbursements ofloans by the LDBs in different staces had exhibited an increasing trend withthe exception of LDBs in the States of Rajasthan, Bihar, Orissa and Tripura.The increase in disbursement of loans among the LDBs ranged from 3% in WestBengal to 100% in Karnataka during 1981-82 to 1983-84. The share of LDBs inrefinance from National Bank had dropped from 38% in 1981-82 to 35% in1983-84. During the project periud, LDBs availed refinance of Rs 3,759.2M out of total project disbursemeit of refinance at Rs 9,056.6 M. Theirshare in the disbursement of the National Bank was 41.5Z (Annex 1, Table 19!.

4.26 The growth in loan business of LDBs was accompanied by steadyincrease in diversification of their portfolio. Thus, during the projectperiod 27% of refinance drawn by LDBs from the National Bank was for diver-sified purposes compared to only 14% during Third ARDC Credit Project period.

4.27 The growth in LDBs' loan operations was facilitated by che NationalBank's lending programs, particularly in the States of Andhra Pradesh, Bihar,Kerala, Karnataka, Maharashtra, Madhya Pradesh, Uttar Pradesh, Rajasthan,Punjab and Haryana. The share of special development debentures in the totaldebentures floated by all LDBs taken together went up from 73% in 1981-82 to77% in 1983-84 (Annex 1, Tables 20 and 21).

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4.28 The increase in the overdues of LDBs has been a matter of concern ofthe National Bank, Reserve Bank of India and Government of India. The levelof overdues continued to remain high forming about 38.5% of demand forrecovery at the primary level (PLDBs/SLDBs branches) during 1983-84. TheSLDBs under rehabilitation viz. Karnataka, Madhya Pradesh, Maharashtra, TamilNadu, Uttar Pradesh and West Bengal, had revised the 'Demand' on account ofoccurrence of natural calamities. Other 10 weak SLDBs resorted to blockingof chronically overdue accounts and an amount of Rs 609 M was blocked during1981-82 to 1983-84. The analysis of the position of overdues of LDBs duringthe period from June 1982 to June 1984 revealed that Kerala and Haryana SLDBsmaintained a satisfactory level of recoveries around 75% of demand. PunjabSLDB maintained a very satisfactory recovery (around 90%). Uttar PradeshSLDB also maintained its level of recoveries at 66% during the two yearsended June 1982 and 1983 and improved the recoveries to 72% by end of June1984. In 1983-34, there was general improvement in recoveries of 15 SLDBs.However, in the case of 4 SLDBs the overdues were more chan 50% of thedemand. These 4 SLDBs were Assam (62.8%), Bihar (58%), Pondicherry (51.20%)and Tripura (80.6Z) (Annex 1, Tables 22 and 23). On the whole, an improve-ment in the level of recoveries was obseried during the project period whichwas mainly on account of various measures taken by the National Bank, Govern-ment of India and Reserve Bank of India.

4.29 With a view to acquiring a better perception of the problem of delin-quency in the repayment of institutional credit, the National Bank haddepartmentally undertaken studies relating to the supply side of credit infive states. The demand side studies were undertaken in 10 states, includingtwo states with good recovery position through research institution. Thefindings of these studies were discussed at a seminar on repayment ofinstitutional credit.

4.30 The supply side studies revealed that the overdues were partlyexplained by the following deficiencies in the lending and recovery proce-dures of the lending institutions: (i) Non-rescheduling of demand in yearsof natural calamities, (ii) absence of initial grace period, (iii) shorterloan maturities, (iv) foreclosure of loan accounts and treating the entireloan amount as demand in one year in the event of infructuous investment ormisutilization of loan, and (v)misclassification of small farmers (therebydenying them longer loan maturities). The studies showed that if adjustmentsfor these deficiencies were made, the eligibility for lending of thePLDBs/branches of SLDB would improve.

4.31 The demand side studies, which were undertaken to identify thereasons for good and bad repaymert by the sample borrowers, brought out thefollowing major findings. Firstly, the level of overdues was higher forinvestment credit (term loans) than for crop loans (short term credit).Secondly, a considerable proportion (30% to 45%) of the default in respect ofinvestment credit (extended by PLDBs) was over 5 years oLd, whereas in thecase of short-term crop loans (borrowed from PACS) it was typically less than

-39-

two years old. Thirdly, large farmers defaulted more than the small farmers.Fourthly, 25X-35X of the defaulters were those who had made partial repay-ment, the rest had defaulted the entire amount. The studies on demand andsupply sides of credit had shown that unwillful default was caused by(i) under-financing (resulting in incomplete investment), (ii) short loanmaturity, (iii) personal calamities (death, fire and theft, etc.),(iv) absence of contact between banks and borrowers, and (v) wrongpsychological approach by banks. The studies also had identified(i) promises or prospects of write-uff, (ii) utterances by local leaders,(iii) propaganda by affluent defaulters, and (iv) absence of effective penalaction against defaulters, to be the important cause of such a default.

4.32 The LDBs were advised by the National Bank in December 1983 to under-take a case-by-case analysis of their overdue loan portfolio with a view toproviding relief to deserving borrowers in whose case eligible conces-sions/reliefs had not been extended due to defective loaning policy. As aresult of this exercise, a realistic picture of their level of overdues wasanticipated through rescheduling/rephasement of demand, isolation of cases ofincomplete investment, failed wells, etc. The exercise has been completed in13 out of 19 SLDBs by ensuring provision of relief to ultimate borrowers indeserving cases.

Status of RehabiLitation of Six Weak SLDBs

4.33 In accordance with the covenants of Project Agreement, the NationalBank; arranged Organization and Management Studies of Six SLDBs, viz., Bihar,Gujarat, Karnataka, Madhya Pradesh, Maharashtra and Tamil Nadu in 1982. Thestudies were conducted by expert groups consisting of credit and managementexperts. The study reports were considered by COTELCOOP, a standingcommittee established by National Bank to advise it on term lending throughcooperatives and on the development and strengthening of these cooperativebanks. Based on the recommendations made in the reports and the suggestionsat COTELCOOP meetings, the National Bank finalized program of improvement inthe management, organization and financial position of these banks and com-municated the measures/recommendations to the State Governments and theconcerned banks. The concerned State Governments and SLDBs have acceptedmost of the recommendations and the implementation is in progress. Theimplementation of the rehabilitation program is monitored and reviewed at theState level by the standing committee under the Chairmanship of Secretary(Cooperation) or Agricultural Production Commissioner to the State Govern-ment. A Central Task Force headed by the Additional Secretary, Ministry ofAgriculture and Cooperation, Government of India, also visits the Statesperiodically and reviews the status of the implementation of the rehabilita-tion programs. The National Bank also closely monitors the implementation ofthe program by the SLDBs. Mid-term evaluations of the progress of implemen-tation of the rehabilitation program by the SLDBs is, by and large, satisfac-tory. The SLDBs and the State Governments have.taken action in respect ofmost of the recommendations relating to loan-policies and procedures,

-40-

strengthening of technical cells, organizational improvements, etc. However,the recomoendations which require legal amendments and financial commitmentsfrom the State Government are still under consideration of the respectiveState Governments.

4.34 In the second phase, the National Bank organized Organization andManagement (O&M) studies of additional nine SLDBs, viz., Orissa, West Bengal,Himachal Pcadesh, Jammu and Kashmir, Rajasthan, Uttar Pradesh, Assam, Tripuraand Pondicherry. The study reports have been considered by the COTELCOOP andrecommendations for improvements in Organization and Management have beencommunicated to the concerned State Governmen:s and the respective State LandDevelopment Banks. The implementation of rehabilitation programs by theseSLDBs is being monitored by the National Bank and the recommendations pursuedvigorously with the respective State Governments/SLDBs for acceptance andimplementation. In the third phase, OM study teams were set up for AndhraPradesh, Kerala and Haryana SLDBs; the reports of these teams have since beenfinalized and for-warded to respective State Governments/SLDBs seeking theirsuggestions/comments on the measures suggested in the reports. The O&M studyin respect of SLDB in Punjab had been deferred in view of th~e distu:bedconditions in the State.

4.35 The rehabilitation program drawn up by National Bank focused on(i) measures to increase the recovery of LDBs, (ii) removal of legal con-straints on action against defaulters, and (iii) revision of operational andtechnical guideLines concerning personnel and training-policies, financialmanagement, record keeping, loan appraisal and supervision of loans.

State Cooperative Banks

4.36 The participation of State Cooperative Bank's (SCBs) in implementa-tion of National Bank's refinanced schemes had been quite encouraging. TheNational Bank had disbursed refinance of Rs 666.4 M to all the SCBs puttogether during the ARDC IV project period (Annex 1, Table 19). The amountof refinance (Rs 666.4 M) availed of by SCBs during the project period wasalmost ten times the amount of refinance (69.6 M) availed of by them duringThird ARDC Credit Project period. The SCBs had participated in implementa-tion of minor irrigation schemes in the States of Orissa, Maharashtra andKarnataka. In other States their involvement was confined to financing ofdiversified activities, especially under IRD Program. Among the States,Orissa (Rs 162.9 M) ranked first followed by Uttar Pradesh (Rs 146.5 M),Tamil Nadu (Rs 126.0 M), Rajasthan (Rs 42.0 M), Kerala (Rs 36.0 M) andHaryana (Rs 35.5 M). The amount of refinance availed of by SCBs in otherstates ranged from Rs 0.1 M in West Bengal to Rs 19.9 M in Maharashtra.

4.37 The overdues uf SCBs among different States/Union Territories rangedfrom 0% in Orisa :o 90.4% in Manipur as at end June 1984 (Annex 1, Table 24).The overdues of SCBs in Bihar, Tripura and Union Territory of Goa, Daman andDiu were more than 50% as at end June 1984. In the States of Himachal

-41-

Pradesh and Assam the overdues in the Eastern and Northeastern States wasmainly due to shortage of experienced staff required to ensure properfollow-up and supervision of loans.

4.38 Keeping in view the CRAFICARD recoummendations, guidelines were formu-lated by the National Bank and communicated to State Governments for select-ing PACs for their reorganization and developing them into truly multipurposeservice institutions. The State Governments were to select 10-15 societiesfrom each disteict, and by June 30, 1985, 4399 PACS had been selected in 16States/Union Territories. The program has received encouraging responseparticularly from Uttar Pradesh, Tamil Nadu, Rajasthan, Maharashtra, Punjab,Karnataka and Haryana. With a view to rehabilitating weak CCBs in the Statesof West Bengal, Rajasthan, Bihar and Karnataka, evaluation studies were takenup through outside agencies such as Administrative Staff College of India,Hyderabad, Indian Institute of Management, Ahmedabad and other experts. Theevaluation studies sought to identify the impediments to the alreadyinitiated rehabilitation measures and to formulate a more effective programof rehabilitation.

Commercial Banks

4.39 Over the years, the Commercial Banks (CBs) have assumed much greaterimportance in purveying institutional finance for agricultural and ruraldevelopment. Total agricultural credit (direct and indirect finance)provided by them during the years 1979-80 to 1983-84 is given in Annex 1,Tables 25 and 26.

4.40 CBs' share in National Bank's refinance has grown steadily from 41%in 1976-77 to 50% in 1983-84. Under the project, the share of the CBs intotal disbursements of the National Bank was at 51%. The agricultural loanportfolio of CBs is more diverse than that of LDBs. Out of the totalrefinance availed of by CBs under the project, Rs 3661 M (79%) was for diver-sified purposes. The expansion of agricultural credit by CBs can beattributed to (i) RBI's stipulation of a minimum level (40%) of lendings topriority sectors, including agriculture, and (ii) multi-&gency approach coassist agricultural development. To support this policy, Reserve Bank ofIndia has been giving due consideration to the needs of rural and semi-urbanareas while licensing new branches.

4.41 The number of scheduled commercial bank branches went up to 45,332 asat the end of June 1984 (Annex 1, Table 27). Since CBs provide both invest-ment and production credit from the same branch, they had been able toenlarge their lending operations and also significantly improve their sharein National Bank's refinance. They have greater flexibility in their lendingprocedures, especially in the matter of collateral and can use their discre-tion in regard to the type of security to be taken while granting loans toultimate borrowers.

-42-

4.42 A conference of CBs was organized by the National Bank duringFebruary 1984 as a part of the strategy to further improve the effectivenessof the credit delivery system and to review the performance of CBs in thefield of rural credit. To improve quality of agriculcural lending CALCOBsuggested that each branch of a commercial bank engaged in agriculturalcredit should have at least one qualified/trained agricultural field officer.CALCOB's recomendations were accepted by Reserve Bank of India and suitableguidelines to CBs were issued.

4.43 As with the LDBs, CBs have also been facing problems in recoveringtheir dues. The level of overdues at the all-India level has remained staticat around 47Z in recent years. The overdues have been consistently high inNortheastern, Eastern and Western Regions of the country (Annex 1, Table 28).The Committee on Agricultural Loans through Commercial Banks (CALCOB) set upby ARDC in April 1979, formulated proposals for linking up refinance fromNational Bank to recovery performance/past lending of implementing branchesof commercial banks. The scheme of determining eligibility of branchesbecame operative with effect from July 1, 1983. In order to assess therealistic picture of overdues of CBs, they have been advised to analyze theoverdue loan-portfolio on case-by-case basis and to extend appropriate relieflike extension of repayment period, etc., in deserving cases. It is hopedthat the realistic picture of overdues will emerge after the exercise iscompleted.

Regional Rural Banks

4.44 The Regional Rural Banks (RRBs) were established in 1975. The numberof RRBs grew from 107with 4795 branches at the end of December 1981 to 162with 8727 branches at end June 1984. Their participation in National Bank'sassisted programs of schematic lending has been gradually increasing from 6%during the year 1981-82 to 9% during 1982-83 and further to 10% during theyear ended June 1984.

4.45 With a view to improving the involvement of RRBs in schematic lendingand enabling them to formulate viable schemes independently, National Bankagreed to provide, on request, assistance to RRBs from its Research andDevelopment Fund for setting up technical, monitoring and evaluation cells,by way of grants on a tapering basis up to a period of five years.

4.46 To meet the growing training needs of RRBs' staff, National Bankestablished in September 1983 its own training institute called, "BankersInstitute for Rural Development (BIRD)" at Lucknow. BIRD runs two channelsand has a capacity of 27 participants per channel, as on June 30, 1984. BIRDhad conducted 15 courses and trained 404 staff of RRBs. In addition to this,the OLTCs of LDBs also extended training facilities to RRB staff and duringthe project period had trained 894 staff of RRBs. For senior/middle levelofficers of RRBs, a few seats are kept in RDPCs conducted by CAB Pune.

-43 - ANNEX ITable 1


INDIA


(CREDIT 1209-IN/LOAN 2095-IN)

Cost of the Fourth ARDC Credit Project

Appraisal Estimate

RsM U$M

Minor Irrigation

Minor Irrigation 6,702.0 837.7Land Development 317.0 39.6Pumpset Electrification 2,:98.0 274.8Soil Conservation/Reclamation 137.0 17.1

Subtotal 9,354.0 1,169.2

I. Diversified LendingPlantation and Horticulture 402.0 50.2Farm Mechanization 2,819.0 352.4Tivestock 766.0 95.8Fisheries 419.0 52.3Forestry 135.0 16.9Storage 296.0 37.0Market Yards 414.0 51.8Others 383.0 47.9

Subtotal 5,634.0 704.3

II. Training 32.0 4.0Base Cost 15,020.0 1,877.5Price Contingencies 1,670.0 208.7

Total Project Cost 16,690.0 2,086.2

43-

ANNUITabl7e 2

PIOJICT CONPLITIOW UU1T?

INIA

POUTh lAGICULTUaAL DZVIEUACI AND ElVKaOTCOUUOIATIOW CREIT DJ3CT (AIDC IV)

(CREDIT 1209-INILOA 2095-IN)

Cost of Project

IDA/lI5D Slies: Appraisal Estimates

Total ARDC it- IDA Total ADC la-Cost financing Credit Cost fiamciais Actual

Minor Irrigation andLand Developmnt 7,943.16 6,389.0 2,159.4 992.7 798.6 270

6,702.0317.0

7,019.0SC/R 137.0

7,156.0

Price Contingencye 1iz 787.16

7,943.16

I. DiversifiedLanding 2,549.67 1,802.0 609.1 406.1 300.2 76

2,297 -

Price Contingency* iz 252.67

2,549.67

II. Trainintg llS 35.5 36.0 32.4 4.4 4.4 4

10,528.5 8,227.0 2,800.9 1,403.2 1,103.2 350

NDOJ

MaM Cf :UMr (Ac v( RIDff 12-DVtwI 2095-iN)

State-wiu d tgn!!-!i. Diuinmets U the Ptojert(a IEIliw)

DivrsifLd h ma

HUzNir Lrdatiin StstateIbn I_ie tid Din- 9aqVx=t Bullodc C ib trtit Iniott altspm t d et A t[ Pltdz s r diP F An Dy Oru 8 lamb Othwmel Theal T

hd.rt Ptduh 464.5 26.3 490.8 55.3 73.6 142.7 1.4 20.0 99.1 170.1 0.8 - 8.0 571.0 1.061.8A acdh Pdm - - - - - - - - - - - - - -

_mm 28.8 0.1 26.9 75.3 0.1 0.9 1.4 3.9 5.6 3.4 0.6 - 9.0 100.2 129.1Bihur 393.5 2.0 395.5 8.8 10.5 21.8 2.9 1.0 116.2 14.4 1.6 7.7 137.4 322.3 711.8Owb iph - - - - 0.9 - - - 1.0 0.1 - - 0.7 2.7 2.7Delhi - - - - 0.6 - 0.1 - 4.2 0.4 - - - 5.3 5.3(;Ca 0.1 - 0.1 2.5 0.3 - - 1.6 0.8 0.4 - - - 5.6 5.7(hderst If.3 5.6 150.9 0.1 6.6 1.8 - 10.8 69.5 21.6 5.8 - 12.9 129.3 28D.2H ly n 253.5 5.0 258.5 5.1 17.0 21.5 4.1 0.3 110.0 41.8 1.0 27.3 75.5 306.2 562.1Hi dcbl Prodb 0.2 1.5 1.7 5.6 1.8 1.6 - - 14.0 8.3 - 3.2 34.5 36.2Jbau & Kudwdr 0.3 - 0.3 3.2 1.1 14.9 - - 14.5 13.8 - - 13.5 61.0 61.3Krmntick 192.0 0.3 192.3 135.0 28.6 - - 22.8 10.7 106.9 - - 37.5 437.5 63.3

(rAls 92.4 2.5 94.9 83.8 O.5 5.9 - 13.1 62.0 18.3 - - 0.3 111.9 271.81bdya Pr dei 520.7 11.7 532.4 0.8 4.6 1.0 - 0.2 25.7 14.4 23.9 - 9.5 10.3 612.7IUi"nhtru 679.2 4.0 683.2 11.5 16.4 1.4 - 4.0 74.7 16.1 3.0 2.0 0.3 129.4 812.6hwnpur - - - - - - - 1.0 - 0.2 - - 0.8 2.0 2.0"401myay- - - - - - - 0.3 0.9 - - - 0.9 2.1 2.1tHkord - - - - - - - - 0.6 - - - - 0.6 0.6N1lnd - - - - - - - - - 0.9 - - 0.9 0.9

Cr1is 387.1 4.1 391.2 27.1 1.7 28.2 0.1 56.5 56.4 139.8 9.1 - 8.5 32.4 718.6Fuddiwer"y - - - - - 0.6 - 0.1 3.1 0.1 - - - 3.9 3.9Punjab 48.1 36.1 84.2 11.7 48.4 5.2 - - 167.1 32.3 9.6 - 16.4 29M. 374.9tajsnimn 50O.5 1.9 152.4 2.1 0.5 47.2 0.1 - 40.3 77.8 3.2 68.7 14.5 254.4 406.8

Tan MotNu 40.9 - 40.9 27.4 24.3 25.7 0.4 7.9 30D.3 2M0.2 - - 9.7 598.9 639.5Tdpr 0.4 - 0.4 2.6 0.1 0.5 0.4 10.5 4.8 1.4 - _ 2.5 22.8 23.2Utter Prme.h 868.6 - M8.6 3.0 6.6 1.9 - 1.1 241.8 250.0 24.9 - 78.4 6W .7 1,46.3woot BowI 112.9 3.5 116.4 50.4 13.1 1.7 1.1 6.7 10.2 4.8 0.2 5.9 0.3 94.4 210.0 F8

Ibtal 4.379.0 106.6 4.4B3.6 311.9 257.1 324.5 12.0 161.8 1,531.5 1.137.6 84.6 111.6 439.8 4.,sn.o Li0S.6

PROJECT C1HPLETIM RMINT

INDIA

MEIRTH AC.RICUJLTIFRAL OFWINAIWE APOI IW.Vfl.WI4ENTCOEeS'ATIEU GIDIT PIltJICT (A:%1 3V)

mrePT 17fin9 flWn 209

6tpt.-w*.e mg Puro"eu-iue bishzIre*"ts coder Lb i1 rebti(as million)

- - DiS*jLji i~~~~~~~pureetsSt,lat.Ima ?laeatioe ad VerticuLltare

Mi ekf tliklitiet -UeepIMiser La_ few- Coat Ncllet Crd

Ttin1L3hIt Ixi.iziii. nInI.U J 112g. ha In SRM f M Ctrni. 191tr !31tU IkeeiaM fiefterr [ils kIn itore YUAg &kK 1A 91 1.1n

Andhra Pr1d111 342.6 25.5 368.1 - - 33 411 41.0 529 10. - 1 .1 34.3 0.0 - 1.0 260.3 636.4Arseaetl Pdoes - - - - - - - - - - - - -_Aetna 2.2 - 2.2 M. 9 0 - - - 149 - - - 0.1 3.3 0.1 .1..4 IN.6siba 300.6 - 1004 1.2 3.2 2.1 - 0.9 9.1 1.4 1.7 S.6 11.4 1311 Clw.di*sah - _ - - - 6 - - - _ - .6 0.6Delhi _ _ _ _ 0.5 _ _ - I.0 - _ _ 2.3 2.3

C. -2.3 2._ 0.3 1.4 4.2 4.2ctoejart 129.4 3.6 333.2 - - 0.3 0.1 3.6 - .9 29.3 3.6 - 3.0 M6.) 93. 5I

.rysee 249.1 5.0 254. 2.0 2.0 16.2 13.2 2.9 - 65.0 1.0 21.3 75.5 20A.3 462.4Nis.cb.l Pradesh _ - 5 5 5 1.0 0.3 -. 1 -. * 1.1J_ * Kashmir - 1.2 1.2 0.3 0.9 - - 3.3 - S.) 5.39.eet.hie 161.3 0.5 1 33.6 - 14.2 23.9 ".9 135.0 26.6 - - 21. 24.5 e- _ 3.1 I44.0 421.6 IKerala 42.4 2.4 45.0 - 4C 6.0 71.1 *1. 0.4 - - 4. 31. # _ 0.3 305.4 150.6Naduls Prad.eh 520.1 13.1 511.6 _ _ _ 0.0 1. - - - 3.9 23.9 - .6 "3. 542.1N.at.iebti* 624.0 3.t 621.1 _ _ - 3.3 33.5 15.3 . .4 - 3.2 26.5 3.0 2.0 - 05.0 692 .

mossised ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~. 0.9 - 0.92. 23

"~~~~~ ~ ~~~ - -- . - - - - 0.6- - -. - 0.4 0.6

orisa 206.2 0.2 204.4 1 5 24.4 25.9 0.6 2.1 0.* 36.6 16.0 9.3 4.4 33.0 324.4Fmadichmrgy- - - - - - -- -- ---Punjab 4.531 36.3 33.2 1 -1 I 46.1 - 13. 9.6 - 323 15134 232.6maja,tb_ 1229.6 -. 133.2 2.3 2.1 0.1 6.2 _ 5.4 3.2 G8.1 133.0 9.1 20.9imiu 10d 19.5 - 1 .5 9 13.2 1.3 - 21.6 213. 3.1 - 1.6 0.3 * - 9. 1.3 911.1Trlpurd 0.4 - 0.6 2.4 - - 0.2 2.6 0.1 0.5 0.4 10.3 4.5 - _ .5 20. 21.3wttrt ptrd"eb 751.0 - 51.0 - - - 3.0 3.0 3.0 - - 13. 27.2 24.9 - 53.0 113.0 1.4.West seete -Au .. L ~jL ALl-0 .. z .. " Ad .1L JI I-iJ IiW _d,~. IU M.. J JI

Tetal 1L9 IJIL 1 iLl __.1 X. 11.l _ - I- *. 2 il LULl 2 LI

t 1 LJlld 2Li L 92s Nl.ll t 2||.w l LX ll*.o Bst 1,11,* N.l I.*.l s.se.~~~~~~~~~a

- 48 - AI

~~~~~~~~~~~~~~~~ - ^3C

* 1 ~- A .UOL/ ___ AS MJL- -

___s _ _- E z _

MI_M tDgr- PWU/a ddo m

A_&M _te6ob In.9 0 L7 .3 t.7 35.3 1.4 1.9 65.0 10.1 - 3O7 42.5_ .dn Mm" - - - - - - -_ _ _ _ _ _

_ 1.8 0.1 1.7 0.4 0.1 0.9 1.4 3.2 4.5 3.4 4.9 8. 2.5_ 95~~~~~~.1 2.0 95.1 5.6 7.J 21.J 2.9 0.1 U.5 14.4 131i 290.9 3MA

ammdLeh - - - - 0.3 - - - 1.0 0.1 0.7 2.1 2.1D0i - - - - 0.1 - 0.1 - 2.4 0.4 - 3.0 8.0GM 0.1 - 0.1 - - - - 0.2 0.8 0.4 - 1.4 1.5

15.7 - 15.7 - 3.2 1.8 - 1.9 41.4 21.6 1.1 71.0 83.74.2 - 4.2 3.7 0.8 3.3 1.2 0.3 45.0 41.8 - 96.1 10.3

Hin _1h 0.2 1.5 1.7 0.1 - 1.6 - - 13.7 8.3 3.1 M.8 3.5J& 5* 0.3 - 0.3 2.0 1.0 14.0 - - 1.4 3.8 13.5 55.7 56.0VAI _Inka 10.5 0.2 10.7 - - - - 1.0 84.2 104.9 1.4 191.5 AM2

1A 46.8 0.1 49.9 - 0.1 5.9 - 8.8 45.0 113 0.2 78.3 1.2t_ .24 P=dwb 0.6 - 0.6 - 1.1 1.0 - 0.2 23.8 14.4 8.9 49.4 50.0t _hmoibm 55.2 0.3 55.5 - 1.0 - - 0.8 46.2 16.1 0.3 64.4 119.9

,mpg - - - - - - - 0.2 - 0.2 - 0.4 0.4- s - - - - - - - - - - . -

_olW - - - - - - - _

OEM U1.9 3.9 1h38 1.2 1.1 1.1 - 19.7 40.4 139.8 4.1 207.4 394.2w _ 1, . I- - - - - 0.6 - 0.1 3.1 0.1 - 3.9 3.9

pbd& 3.0 - 3.0 - 1.7 5.2 - - 96.0 32_3 4.1 139.3 142.3FejaIsbm 21.1 1.1 2L2 - 0.4 41.0 0.1 - 34.9 77.8 1.5 155.7 177.9

mma kmX21.4 - 21.4 - 2.5 22.2 0.4 6.3 2¢2.0 20.2 - 526.6 548.0lTyp= - - - - - - - 0.2 0.3 1.4 - 1.9 1.9Uctlw 1awwo WA - 117.8 - 2.8 1.9 - - 214.6 250.0 25.4 494.7 612.3kta _LVI 4.2 3.2 7.4 0.4 1.3 1.7 1.1 0.9 4.0 4.8 - 14.2 21.6

lil 703.4 716. 21.7 40 159.3 8.6 45.8 1.176.2 137.6 2D0L 2.796.2 3.5.8

- 49 -

ADIU 1Table 4


INDIA

FOURTH AGRICULTURAL REFINANCE AND DCV NLOPE?CORPORATION CREDIT PROJECT (ARDC IV)


Cumulative Disbursements of Funds Under the Project(Million ha. m.)

IDA to ARDC/NABARD ARDC/NABARD to BanksUpto Period Ended Apprisal Actual Conmitment Disbursements

(USSmT (Rs M) (Es M) (Rs M)

March 82 - - -June 82 40.00 385.99 13,212.7 998.00September 82 70.00 891.34 13,962.4 2,595.04December 82 90.00 1,009.21 15,050.1 2,890.79March 83 130.00 1,343.14 16,438.4 3,587.77June 83 190.00 1,950.53 19,079.8 4,775.32September 83 260.00 2,334.13 20,018.9 6,500.01December 83 280.00 2,735.65 21,309.4 7,355.42March 84 330.00 3,476.19 23,241.8 8,392.81June 84 350.00 9,087 .45

- 50 -

ANNEX 1Table S(a)


INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPENTCORPORATION CREDIT PROJECT (ARDC IV)

(CRPDIT 1209-INILOAN 2095-IN)

State-wise Details of Actual Project Costsand NABARD Disbursements (Non-IRDP)

(Rs Million)

Minor Irrigationand Land Development Diversified Purposes

Project NABARD Project NABARDState Cost Disbursements Cost Disbursements

Andhra Pradesh 406.99 368.10 322.01 268.30Arunachal Pradesh -

Assam 30.38 27.20 113.98 81.40Bihar 323.19 300.40 40.55 31.40Chandigarh - - 0.81 0.60Delhi 3.09 2.30Coa - - 5.77 4.20Cujarat 166.26 135.20 75.22 58.30Haryana 279.70 254.30 264.08 208.10Himachal Pradesh - - 9.22 7.70Jammu & Kashmir - - 6.56 5.30Karnataka 200.26 181.60 301.79 246.00Kerala 48.62 45.00 125.91 105.60Madhya Pradesh 611.37 531.80 40.79 30.90Maharashtra 673.98 627.70 79.73 65.00Manipur - - 1.90 1. 60Meghalaya - - 2.72 2.10Mizoram - - 0.79 0.60Nagaland - - 1.18 0.90Orissa 226.40 204.40 145.25 120.00Pondicherry - - - -Punjab 91.95 81.20 182.41 151.40Rajasthan 142.36 130.20 131.73 .98.70Tamil Nadu 21.19 19.50 93.86 72.30Tripura 0.47 0.40 28.85 20.90Uttar Pradesh 821.41 751.00 144.73 113.00West Bengal 120.58 109.00 104.91 80.20

Total 4,165.11 3,767.00 2,227.84 1,776.80

- 51 -

MWE1Table 5(b)


INDIA


(CREDIT 1209-TN/LOAN 2095-IN)

State-wise Details of Actual Project Costsand NABARD Disbursements under IRDP

Minor Irrigationand Land Development Diversified Purposes

Project NABARD Project NABARDState Cost Disbursements Cost Disbursements

Andhra Pradesh 197.48 122.70 548.42 302.70Arunachal Pradesh - - - -Assam 2.83 1.70 35.25 18.80Bihar 156.04 95.10 532.15 290.90Chandigarh - - 3.94 2.10Delhi - - 5.62 3.00Goa 0.17 0.10 2.62 1.40Gujarat 25.99 15.70 132.56 71.00Haryana 7.00 4.20 179.56 96.10Himachal Pradesh 2.82 1.70 50.24 26.80Jammu & Kashmir 0.50 0.30 101.35 55.70Karnataka 17.52 10.70 354.22 191.50Kerala 81.13 49.90 138.53 78.30Madhya Pradesh 1.00 0.60 91.99 49.40Maharashtra 84.82 55.50 117.27 64.40Manipur - - 0.75 0.40Meghalaya - -

Mizoram -Nagaland - - - -Orissa 291.86 186.80 360.62 207.40Pondicherry - - 7.31 3.90Punjab 5.00 3.00 261.16 139.30Rajasthan 35.87 22.20 278.77 155.70Tamil Nadu 33.69 21.40 926.38 526.60Tripura - - 3.56 1.90Uttar Pradesh 195.79 117.60 880.78 494.70West Bengal 12.33 7.40 26.62 14.20

Total 1,151.84 716.60 5,039.66 2,796.20

E~ur JJEla1G RERr

DVIA

EKJUJH AdUIUJ~RAL RDITAMM AND DEH.AW~N atDIT WUKr (AFDC n

(RHrT 12-11ODM 2D95-110

nits of Minor Irrigatiu FInIE'd c w Nm-MP 8c1(Ru tllln)

StateAUnion Woell 6 erim Proation StaLcw Deep Spcddle- LaIDwi -

Ibrritory Dulis Pa! Pp t Paumt Whlp of Wells 1Taeel1 D*bewiu1o pLW Sbt cC "t (be 0dme

Adira Pradesh 26,447 - 21.219 - 2D.373 12.005 - - - 14.799 -

AMsm - - 56 - - 5.833 - - - - -

Bihar 2.992 - 30.582 2.000 - 8.075 - - - - -

Oijarat 4.833 - 4.422 - - - 618 - 111 2.(36 -

Harynm - 394 4.742 - - 10.885 117 - 6.363 1.954 60

Karnataka 8.246 339 14.041 - 5.004 1.463 - - 35 35 9S4

KeraL 9.751 - 2.540 - 1.416 - - - 10 W3 384

IbVra Prtaieh 13.748 - 40,924 2.447 14.648 - - - 101 4.254 -

Ibharushtra 2.295 28.287 16.1W - 13.358 - - 80 - 1.280D 1.945

Orims 20.98D 7.261 2.585 - 827 2.446 3(5 517 - so 850

Punjab - - 2,521 - - 1.084 178 - - 11.543 -

Rsjamtiwm 5.242 - 10.419 - 4.951 - - 4 823 291 1,01A

Ib il Nbdu 645 1.108 4.844 - 664 - - - - - -

Uttar Praide 650 - - - - 135.360 /a - - - - -

West Dungal 283 - 27.923 - - 26.187 153 22 - 120 2___

Ibtal 126,112 37.389 182.976 !.'447 61.035 ZD3.487 1.371 623 7.443 37,265 7.3J3

/a Includes popseto with boring (86.323). td3mels (33.571) and wing)e pxpose borins (16.475).

- 53 -MwI

Mt. 6(b)

vz~i mmm M vV

(MM 12D9W-D&I 29-DO

uits it Mwr zidt 1_ d 1 lIP

DuI11 I Pm,tiCU aLd Dwl-s2 E Mmu R a w of WNW 260101" odi .a t (be)

A ftanP 13,114 10.489 - 4,13 337 914 375Almost - 50 - - 218 - 71Bihm 1.530 15,291 - - 3,621 - 930Gas - 31 - - -OQijat 1.177 212D - 948 -

aZYMIC, - 431 - - 370 19 -

al Prad wh57 _ _ _ - 1.04SJmi &Ka.b - 83 - - _K=td 340 1.524 - 223 318 - 193KrarLa 4.358 10,850 - 1.235 - .- 81?hikya Pradesh 39 131 - - - -

Mhbomahtra 4,575 4.153 - 5.065 - 229Origin 28.572 4.681 - 5.856 7.114 - 2.197P- jab - 360 - - 230 223 -Rajaathin 842 2.903 180 227 - 157 644

il Ndu 315 4.790 71 1.058 - - -Uttr PRash 2.637 4.573 835 1.326 14.083 - -Wa e Bwal 61 262 - - 615 - 1.939

Total 57.560 62.779 182.976 AM.091 26.906 1.313 7.704

/a Idudes .ets vith boring (86.323), tlubels (33.571) and cinle prpose boring (16.475).

- 54 .M I

Mle 7

IDVIA

Omm cra EBID= (AXC IV)

C ur PotO.a in Stati (18)(Mirno, ha. a.)

1i- ri Not Stop dSr. rkoss Pe iLable Not EL- Groundt"No. State Pcarge Pacx-e tcio Bel o welopmt

1. t aPradeAh 5.27 3.69 0.74 2.95 202. ABam 1.86 1.30 0.09 1.21 73. Bibar 3.90 Z.73 0.68 2.05 254. GUj art 1.81 1.27 0.51 0.76 405. Hazyara 1.09 0.98 0.78 0.20 so6. Himabu1 Prae 0.08 0.06 0.01 0.05 177. Jmu & Kassm.r 0.25 0.18 0.01 0.17 68. K 1.86 1.30 0.18 1.12 149. Kerala 0.95 0.67 0.08 0.59 12

10. Mad Pra 8.19 5.73 0.48 5.25 811. Makarhtra t(Waterd) 5.13 3.59 0.71 2.88 2012. Mwxm.xw 0.01 0.008 Negigible 0.008 -13. Mae"aya 0.03 0.02 Negligible 0.0214. Naplad 0.005 0.003 Negigible 0.003 -

15. OtiSSa 2.95 2.07 0.13 1.94 616. Pumjab 1.72 1.20 1.10 0.10 9217. Rajastha 1.49 1.34 0.43 0.61 4118. Sqkkim N.A. N.A. N. N.A.

19. T-1 1d 3.06 2.14 1.15 0.99 54

20. Tripzra 0.08 0.06 Negligible 0.06

21. Uttar Praodh 8.92 6.24 2.34 3.90 37

22. West Buw1 2.26 1.58 0.38 1.20 24

1TDl 50.91 35.86 9.79 26.07 27

FOA HROLWAJ UIiMMIIM AS I3EM M

:rmu am n=O

(I IM- M( -,D

D,imLii Iawo.t - Ubita Rimme Ihur NhD-I3F q 0

th~~~~~~~~~~~~a) -c) ni -) ro= rt)tql )Tin '.A)

hndu, Ftshdo - - 443 3,.59 976,769 69B.96 - 19 370 16,326 3.50 - 1.690ftk_ - - - - - _ - _ _ _ _ _ _

^ 6.008 - - - - - - - 82 722 3.OW0 _ 960Eib3 - - 256 53,M90 - - 5 52 4,972 T,S00 3 l.13DOndiprh - - - 12.460 - - - - - - - - U,Dt13 - - - - 10.307 - - - - 1,000 - _ _Go - - 10 6.310 - _ _ - _ _ _Qaub t - - - 5 71.36D - - 74 - 14.796 26.700 - 2.75Hbym - - - 1.615 316.769 l00.5'. 3.483 - - 37.50M 4.310 6 16.30HI"a hldh -- - 635 33.W30 - - - - 155 - - *0Jam & KAiair - 3.200 4.016 I 2.153 399 - - - 1.648 - - -

Kmtd. - 1.65 1.0(0 8.557 461.998 - - 216 - 8S.02 - _ 7I360KAjLA - - - 9.389 7.361 - - 12 25 6.076 - - 30

wbaP hub* - - - 160 75.077 - - - - 1.276 112.610 - 135N*AUkr btr- - - 2.30D 291.690 13.007 - 18 21 16.D4 13.0O0 1 --ifu - - - - - - - - 54 - - - 160

Hmaya - - - - - - - - 17 s30 - - IfIEap - - - - - - - - - 250 - - -N?Lmnd - - - - - - - - - - 4,OD - -otim - - 20 5s.m2 11.315 160.783 150 593 U5 6.218 39,39 - 915

Rs8stw - - - - - - - _ _ _ _ _ _

Fucjab - - - 2.636 861,538 34.156 41.500 - WRajiadma - - - 7n. 1,50 5042 - - - 26 135.510 24 2.15

al nwu 54 | 1-330 - 446.360 2761P9 - 1CV - 3.19 - -' 1.9D ;7111Pc 134 .-- Ii 67 3.0, 4,53 1,034 - so 2,s0 - - '6Utt r ftndN. 1 - i - 3to 74.92, - -, 4 14.330 113.910 - 11.330 a4'tim t J Flo lz - _ I.X6 237.536i - _ - 360 3,3X 1,000 3 _ 5

7bt l 7.103 4. r.o7 37.070 3.976,538 1,C56,65 5L4U1I.OD IL73 179.9S 396.100 37 48,l3

PRFJEF U1iLW FOE=

RHI /MaUWL REFM AND TDNOUaRKQ CEDZr I:rE WWC IV)

(ailDrr i2-zN/WL 2095-rN)

Diversified Invunts - thnts FImxcsI wwIe IIRD

SttAkdm M*W ShqGost Wllorkrtto 6 d t ture Pailtry Bing P4y Fidseries Ddr balOA & Carts Otbu

(ha) (no.) (no.) (no.) (he.) (no.) () (no) (n)

AJdza Prad 2.538 516.665 459.484 5.842 165 58,037 116.,)9 21.48D -AnwAdul Ftehd - - - - - - - -ham 115 3.150 11.000 5.250 270 3.316 2.520 436 1.60DBDi 1.708 236.500 219.515 11.830 8 64.963 17.570 - 43.827Chigm rh - 9.785 - - - 625 152 64 18DDIbi - 1.520 - 325 - 1.510 348 - -

an - - - - 16 560 140 125 -Qajarat - 96.330 18.390 - 250 27.651 4.308 5.945 361H zy n 1.155 23.400 34.300 5.150 25 26.664 6.260 8.055 -NiUchal Pr deh 31 - 15.250 - - 9.7V - 2.925 1.228Jmma u Kehadr 607 30.60D 128.500 - - 7.565 11.98D 53 4.390Kanataka - - - - 82 62.296 116.273 - 471Itsala - 1.250 45.496 - 518 26.457 16.162 1.580 955Hbdhy Pradesh - 45.500 14.385 - 17 13.847 4.885 4,470 2.133FWhIzuitra - 33,930 - - 65 30.046 - 5.080 91Iwdpuw - - - 19 - 36 --

Hmka=_ - - - -_ _-

Hizormd - - - - _ _ _ _-

Ori..a 348 33.330 12.940 - 1.525 22.712 76.824 21.335 1.223FVndidhwry - - 510 - 12 2.020 204 95 -Punjab - 59.420 57.695 - - 70.716 - 11.835 1.178Rajasthan - 11.60D 366.800 480 - 22.562 12.383 2D.20S 537lbiA I Ndu - 77.277 195.280 1.360 364 198.230 87.62D 37.426 -Iipura - - - - 17 210 1.750 - -

Uttar Pr dea - 86,550 19.760 - - 152.800 226.,OI 16.298 8.240Iest Bengal 141 36.545 17.690 4.150 70 6U - 1,12D

lbtal 6.643 1.3I0.532 1.616.995 34.387 3.423 005.208 702,434 58,4187 66.494

a.

- 57 -

ANNU I

PROJ%CT COMPLZTION REPORT

INDIA

FOURTH AGRICLTIURAL REFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (ARDC IV)

(CKDIT 1209-IN/LOAN 2095-IN)

Proiect Cost and ARDC Disbursments in Lses Developed Ares

Total Investment ARDC/NAABRDCost Disburameuts

Rs Million

Assam. Manipur, Meghalaya.Mizora, Maqaland and Tripura 222.66 157.9

Bihar 1051.93 717.8

Himachal Pradesh 62.38 36.2

Jammu and Kashmir 108.41 61.3

Madhya Pradesh 745.15 612.7

Orissa 1024.12 718.6

Rajasthan 588.73 406.8

Uttar Pradesh 2042.71 1476.3

West Bengal 264.44 210.8

TOTAL 6110.43 4398.4

As percentage to All India Total 48.55 48.57

- 58 _

m=.a 910

RIMMIs-~ is L _

im wY/ Xin, am- P/A/Pig Ami. DEL" & P ,ist Lb_ 0 TaSCA Lmod & x sib"

A_ 2B.9 75 3 2.4 3.9 5.6 0.6 - 3.4 9.0 129.1

ai.w 395.5 8.8 35.2 1.0 116.2 1.6 7.7 14.4 L37.4 717.8

':ndal ftwink 1.7 5.6 3.4 - 14.0 - - 8.3 3.2 36.2

J_M i 1A 4 0.3 3.2 16.0 - 14.5 - - ll8 13.5 61.3

.adwa iB lad 51L2.4 0.8 5.8 0.2 25.7 23.9 - 14.4 9.5 612.7

pz - - - 1.0 - - - 0.2 o0 2.0

tAOMINA - - - 0.3 0.9 - - - 0.9 2.1

tz - - - 0.6 - - - - 0.6

Nmp"od - - - - - 0.9 - - - 0.9

oc_ M191.2 Z.1 30.0 56.5 56.4 9.1 - 3.8 5.5 715.6

PAjaB1 5U2.4 2.1 Q7.8 - 40.3 3.2 68.7 77.8 14.5 406.8

~ga 0.4 2.6 1.0 10.5 4.8 - - 1.4 2.5 23.2

Utur 8 05.6 3.0 8.5 1.1 241.8 24.9 2 250.0 78.4 1U6.3

wit _1 .6. 50.4 .- 9 6.7 VZ 0 2 4 0 TJL 2W.8 1W.9 166.0 &.2 531.0 64.4 8. 53 2M.5 -U.4

ErIa= afnzrICT RHE-rr

HIEIN AMICLL2WL IWEU AND DIAIDLcaRUEIAtn (cID!? F la (ANc IV)

(CRE)IT 1209-DwOAM 2D95-DO

iMir IrrdPtiOn & lAvd Dri )qmt Divrsified Prpom A RllDiAhr t Dizbtuwits Didvu- mm_

Sr. Stato/huimo btotl AMC to ga11 An S to Tot.a NIC to -11 Am Z to lbUI ADC to gl1 As S toMD. Territory Faars notal DidmurmmaU fEru Total DimbUxmnta F MnTOW

I Andihr Prli, 490.8 266.6 54 571 458 8D 1.061.8 724.6 662 Azrunchal Pauh - - - - - -3 Aum 28.9 28.9 OD 100.2 18.7 19 129.1 47.6 374 BihUr 395.5 375.4 95 322.3 294.2 91 717.8 669.6 93S CMwi&Prh - - - 2.7 2.1 78 2.7 2.1 786 Dklbi - - - 5.3 4.0 75 5.3 4.0 757 Gms 0.1 0.1 100 5.6 2.7 48 5.7 2.8 498 Qajarat 150.9 24.7 16 129.3 97.8 76 29D.2 122.5 449 Hbrym 258.5 196.3 76 304.2 176.6 58 562.7 372.9 66 'o

10 HImdh l FIrdaMib 1.7 1.7 100 34.5 32.5 94 36.2 34.2 9411 Jami & Kaubrlr 0.3 0.3 IOD 61.0 61.0 10 61.3 61.3 I1012 Kesntaka 192.3 141.0 73 437.5 325.3 74 629.8 4f6.3 7413 KmadLt 94.9 89.6 94 183.9 152.3 83 278.8 241.9 U14 nbdIDb raridah 532.4 357.1 73 8D.3 55.3 69 612.7 442.4 7215 Min udtrF 683.2 595.0 87 129.4 92.7 72 812.6 667.7 as16 Ibapur - - - 2.0 0.4 20 2.0 0.4 2D17 )h0b . - - - 2.1 - 0 2.1 - -18 Hkorm _ - 0.6 0.6 100 0.6 0.6 10019 lkpilnd - - - 0.9 0.7 78 0.9 0.7 7820 (hium 391.2 364.4 93 327.4 293.0 89 711.6 657.4 9121 P1ndfidmry - - - 3.9 3.9 I00 3.9 3.9 l1022 FWijab 84.2 47.1 56 29D.7 215.6 74 374.9 262.7 7023 ktjauthu 152.4 119.8 79 253.8 179.5 71 406.8 299.3 7424 btil Nadu 40.9 36.0 88 596.9 541.9 90 639.8 577.9 90 lR25 Itipurf 0.4 0.4 100 22.8 2.9 13 23.2 3.3 14 V.26 Utter ftadmdh 868.6 597.6 69 607.7 551.8 90 1.476.3 1.149.4 7827 Wikt Bonwl 116.4 100.4 86 94.4 45.8 49 210.8 146.2 69 ie

TIntl 4.463.6 3,372.4 75 4,572.4 3,609.3 79 4.056.6 64961.? 77

- 60 -

AM= ITa ble 12Page 1

PIOJECT COKPLETION REPORT

INDIA

FOURTH AGRICULTURAL R FIMANCE AND DEVELOPKENTCORPORATION CREDIT PROJECT (ARDC Iv)


Staffing Pattern of National BankComposition of Staff

No. of Staff As on July 1 As on July 1 As on Dec.31 As on MarchAs on 1982 1983 1983 1984

I. ProfessionalsA. Financial Services F.

Grade F 6 9 10 10E 28 36 42 41D 61 77 89 88c 219 200 217 222B 519 502 446 408A 592 675 671 651

B. Economic Services F+Grade F 1 1 1 1

E 1 2 2 1D 2 1 NIL NILC 7 9 26 22B 23 52 31 31A NIL NIL NIL NIL

C. Technical Services(Discipline WiseStatement givenseparately) F+Grade P NIL NIL NIL NIL

E 3 4 4 4D 4 6 8 8C 9 23 28 28B 29 64 72 72A NIL NIL NIL NIL

- 61 -

ANN ITable 12Page 2

No. of Staff As on July 1 As on July 1 As on Dec.31 As on MarchAs on 1982 1963 1963 1984

D. Lesal Services F+Grade F NIL NIL NIL NIL

E NIL NIL 1 1D 1 1 NIL NILC NIL NIL NIL NILB 2 2 1 1A NIL NIL NIL NIL

E. National LanguageServices FGrade F NIL NIL NIL NIL

E NIL NIL NIL NILD NIL NIL NIL NILC NIL NIL 1 1B 8 8 6 6A 5 4 4 4

F. SecretarialService F+Grade F NIL NIL NIL NIL

E NIL NIL NIL NILD NIL NIL NIL NILC NIL NIL 1 1B 1 1 2 2A 5 5 4 1

C. OthersClerical, Security, 2079 1867 1171 1113Steno/Typists,Caretaking, Subor-dinate & Miscel.Services

- 62 -

AMS ITable 13Page 1

PROJECT COMPLFTION REPORT

INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCOROE0ATION CREDIT PROJECT (ARDC IV)


Composition of StaffTechnical Service

No. of Staff as on 1.7.82 1.7.83 12.31.83 1.3.84

LD/SC/A F - - - -E - - - _D 1 1 1 1C 1 4 5 5B 2 14 18 10

TOTAL 4 13 24 24

MI/HY/IE F - - -E - 1 1 1D 1 - 1 1C 7 11 14 14B 17 24 24 24

MOTAL 25 36 40 40

Animal Husbandry/D Farms F - - - -

E 1 1 1 1D - - _C - - _

B 3 12 13 13TOTAL 4 13 14 14

Fisteries F - - -

E 1 1 1 1D - - _C - 1 1 1B 5 8 8 8

TOTAL 6 10 10 10

- 63 -

£1113 Itable 13Page 2

No. of Staff as on 1.7.82 1.7.83 12.31.83 1.3.84

Horticulture/Com.Forestry F - - - -

E 1 1 1 1D 2 2 3 3C 1 5 5 5B 1 5 5 5

TOTAL 5 13 14 14

Agri. Eng. F - - -E - - _-

D - _ _-

C - _ _-

B 1 1 2 2TOTAL 1 I 3 I

Electrical. Eng. F - - -

E - _D - - _-

C - - 1 1B - - 1 1

TOTAL - - 2 2

Cottage and VillageIndustry F - - -

E - - _-

D - 2 2 2C - 1 1 1B - -

TOTAL - 3 2 2

Civil Eng./M.Y. F - - -

E - - _-

D - - - _C - 1 1 1B - 1 1 1

TOTAL - 2 2 2

- 64 AN I1Table 14


INDIA

P01TH ACRICULTUtAL URFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (AaDC IV)


Staff Position of National lank as of June 30, 1984

Officers Head Office Regional Office TotalGroup A F 4 F &

Eco. Tech Others Cco. Tech Others

F. 3 - - - - - 3

F 10 - - - - - 10

E 28 5 1 17 - - 51

D 58 5 - 52 3 - 118.

C 108 11 5 214 22 - 360

B 111 22 11 301 62 5 512

A 280 - 11 402 - 2 695

TOTAL 598 43 28 986 87 7 1749

Group B 514 - - 630 - - 1194(Clerk/Typist/Steno)

Croup C 236 - - 189 425(Subordinates)

GRCDTOTAL 1348 43 28 1855 87 7 3368

- 65 -

ADUI ITable 15

PROJECT COIPLETION IEPORT

INDIA

FOURTH ACKICULTURAL REFINANCE AND DEVELOPNEDTCOSPORATIOU CREDIT PROJECT (ARDC IV)

(CREDIT 1209-IYILOAY 2095-IN)

Resources Kobilization by ARDWNABARD(Rs Ki-ion)

Sources As on June 30 1982-83 1982-83 1983-841982 (1.7.82-11.7.82)

RUI Bonds (Noet) 2026 10 300 303

Repayments from borrovers 2712 192 3033 4090

Accretion to share capitaland reserves 160.6 - 458 333

Contribution to NRC (LTO) - - 2270 3250Fund from RBI and NABAUD

Contribution to NRC (Stab.) - - 830 850Fund from RBI and NABARD

Special loan A/C 14.1 - 14.0 32

Borrovings under generalline of credit from RBI - - 1780 1350

Total Local Resources 4912.7 182 8685 10208

Add IDA/Bilateral Credit(Net) 1815.7 416 1140 1670

TOTAL 6728.4 598 9825 11878

Local resources as a 73.0 30.4 88.40 85.9percentage of totalresources

AUM T

-66- 'ria1

PROJECT COMPLEPTIO REPOtT

INDIA

FOURT! AGR UCULTURAL REFIMUACH AMD DEVELOPHEIICoRPORATION CREDIT PROJECT (ARDC IV)


Casb Flows(Rs Million)

Resources 1981-82 1982-83 1982-83 1983-84(1.7.82-11.7.82)

GOIDA 2262.0 446.0 1480.0 2000.0

Bonds 660.0 - 385.0 385.0

RBr (General Line of Credit) - - 1780.0 1350.0

NRC (LTO) Fund 2000.0 - 2270.0 325.0.0

NRC (Stab.) Fund - - 830.0 850.0Total Borrowing 4922.0 446.0 6745.0 7835.0

Repayment by borrower 2712.0 192.0 3030.0 4090.0

Share Capital _ - 1000.0 -

Sub-Total 7634.0 638.0 10775.0 11925.0

Accretion to Reserves 160.6 - 458.0 333.0

Special Loan Account 14.1 14.0 30.0Total Cash Flow 7-08.7 638.0 11247.0 12288.0

Disbursements

IDA Sch emes 3890.0 - 4410.0 3120.0

Non-IDA Schemes 2110.0 - 2616.0 5794.0Total Disbursemeats 6000.0 - 7026.0 8914.0

Non-Schematic Lendings - - 2050.0 520.0

Repayment to

GOI 446.5 30.1 340.0 333.7Bonds 46.0 - 85.0 82.5

IBI 524.7 10.0 - -Repayment of ARDC Share Capital - - 575.0 -Total Cash Outflow 7017.2 40.1 10076.0 9850.2

Excess (+) of Deficit (-)of cash inflow over outflow +791.5 +597.9 +1171.0 +2437.8

-67 - Aifl ITabLe 17


INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION CReDIT PROJECT (ARDC IV)


Condensed Statement of Income and Expenditure(Rs Million)

1981-82 1982-83 1982-83 1983-84(1.7.82-11.7.82)

Income

Interest earned on(i) IDA Loans/Debentures 657.8 22.8 794.8 993.7(ii) Other Loans/Debentures 484.7 17.6 510.0 639.0(iii) Non-Schematic Loans - - 771.5 915.8

Other Income 164.7 5.6 418.7 702.7

Total Income 1307.2, 46.0 2495.0 3251.2

Expenditure

Interest paid on(i) COI/IDA Loans 586.3 19.5 681.7 832.4(ii) RBI Loans 227.0 9.2 479.6 825.7(iii) Bonds and Debentures 205.9 7.3 235.3 270.4(iv) SLA 5.7 0.2 6.9 8.6(v) Research & Development Fund 4.3 - - -

Salaries and Staff Benefits 61.7 2.1 113.4 116.2

General Expenses 22.6 0.6 39.1 64.9

TotaL Expenditure 1113.5 38.9 1556.0 1918.2

Profit before tax 193.7 7.1 939.0 1433.0Transfer to special reserve - - 50.0 30.0(Research & Development Fund)Transfer to NRC (LTO) Fund - - 470.0 1000.0Transfer to NBC (Stab.) Fund - - 80.0 100.0

Tax _- - -

Profit after tax 193.7 7.1 339.0 303.0Dividend 33.1 1.0 - -

Net Surplus 160.6 6.1 339.0 303.0

- - ~~~~~~~~~~68 A-

T -b 01 1*

mer

*~~~~~~ Om a n = ( M

192- CaI MC

MI-U l1.7.82-.7.82 - iAdm atID 920 9

a, m Ho d atBDo5.3 64 .8 l .ma 27

M |O 5,236.0 5,.Z3. S.= 7.096.0 8=.0

ML Dv _ 6,371.0 6.05L 6, 6 0W 8 o

LAM 41OI.0 4.4m.0 4.4a 5.in.0 6_IO

otbw Ddmm~~~ 3X.15. 3,1a0.0 3.10 3.SL.0 3.a.0

Mmmm-wcic= a - .- 9.68 U.725.5 0 S

IT_ot Acm a1L1m 310-0 40.0 40 379.2 V9.6

Intocs AC= a _NM 381.7 44.0 44 445.5 S L

Otb A_E 1,378.5 2,664.1 8 996 9,610.9 ll.657

-m Am 21.3%.4 21.822.9 38,840 45.s.-4 9!E52

LA;1;t4i an CmLa

-=sm Ddm _j 3,761.3 3,761.3 3.761 4,061.1 4,363.6

-WW 68.8 68.8 69 --

LAM- tzs =

(i Mk h 7.263.0 7,679.0 7.679 8.356.0 9.i3.0

(U 0Q 3.33.0 3,338.0 3.33 3,8aN.C 4.443.0

W£ <m I=- 5X9.3 5.129.3 - - -

(W 9xtT

bo=fm *sm on4LLia af Ccot -- 7.250 9.041.0 1.390.6

NC =) 1 - 10.25 =2.5.0 15.770.0

'NB (Stab.) -to - 3,650 4.410.0 5.330.0

OCb LT bL4^_ 472-4 497.3 1.063 WL66 699.6

Dao T-4 -M 20.042. 20,473.7 T3.070 42.957.7 50,M6.8

yE u _m S7S.0 575.0 1.000 1.Q0M.0 1.000.0

hww d Udic;-o lc 76e.6 774.2 770 1.31.7 1.S62.4

Tocal co "I ~~1,W4.6 1.340.2 ljl70 2,231.7 2ZS62.

Tu I 11l n Q*irm 2..4 21.822.9 38.840 4 S .11W.4 52.932

D*t/squit fto (Stacw Ft'o) 13:1 15:1 19:1 20:1

AM= I- 69 - S -

(Cm=L impamo am-ino-ioi RCqnfdi at inc Dzvmoo

Oma im31m)

DF~~ E _ W a

?NManm 51.0 366.5 53.5 41.1 '.322 463.3 - 5.0 5.0 368.1 69.7 1.Obl.E

A~~~~ 3. - 133 14.9 LaO. 114.9 - 1.9 1.9 21.2 1M.9 13.1

aibw =~~.8 56.6 30B.4 48.6 35S.9 4W.5 - 1.9 1.9 300.4 417.A 717.8conmalxb- - - - 2.7 2.7 - - - - 2.7 2.7

D" ~ - - - 5.3 5.3 - - -5.3 5.3

Gas - - - - 5.7 5.7 - -- 5.7 5.7

33.1 14.9 40.0 10. 1 11.8 237.9 2 L3 233 135.2 145.0 28.2

197.8 57.9 255.7 56.5 215.0 271.5 - 35.5 ss.5 254.3 308.4 562.7

MAN1w I=dw - 4.8 4..8 - 31.'. 31.4 - - - - 36.2 36.2

Jina&Ka - 2.1 2.1 - 48.8 48.8 - 9.4 9.4 - 61.3 61.3

KMMR=ka 140.1 160.1 280.2 60.7 23.6 334.3 0.8 14.5 15.3 18..6 4*8.2 629.8KS1la 36.3 72L0 1083 8.7 125.8 134.5 - 36.0 36.0 45.0 233.8 278.8

mw va awm 2.5 3.5 21.0 325.3 74.5 399. - 2.9 2.9 531.8 80.9 612.7

mohmmohm 567.5 73.9 641..4 53.0 96.3 1.5.3 7.2 12.. 19.9 627.7 18K.9 81.2.6Mm4m ~- - - - 0.5 0.5 - 1.5 1.5 - 2.0 2.0

Im1.qkla - - - 1.8 1.8 - 0.3 0.3 - 2.1 2.1

pbsin - - - - 0.6 0.6 - - - - 0.6 0.6

bbpdmd - - - - 0.9 0.9 - - - - 0.9 0.9

Oman ~~63.9 90.6 154.5 3s.0 26.7 345.7 55.5 162.9 218.4 M4.4 514.2 718.6

pmddmzy - - - - 3.9 3.9 - - - - 3.9 3.9

Iwijab 23.4 100.9 154.3 27.8 192.e =X.6 - - - 81.2 2C. 7 374.9

R&jM=bw ~ 105.4 10.6 116.0 24.8 224.0 248.8 - '.2.0 42.0 1.30.2 276.6 4(6.8

Moi Nad 15.6 81.8 97.4 3.9 412.5 4.16.4 - 136.0 126.0 19.5 633.3 639.8

mmplza ~- 1.6 1.6 0.4 19.7 20.1 - 1.5 1.5 0.4 22.8 23.2

Lit= P , 660.0 23.8 683.8 91.0 555.0 64.0 - 146.5 146.5 751.0 725.3 1.476.3

-mt bul7.8 2. 4. 82 776 U. - 041 0.1 109.0 IW8 210.

~Ta1 2. 733. 5 1.M5.7 3,5. 970.0 3,661.0 4..631.0 63.5 6M.9 666.4 3,767.0 5,289.6 9.C6.6-

t1-is kgi.ml DEa ri_a.ut Rs 716.6 M d ?aw IC MP).

-70-

AM I

.me_

~~~~o -n PM M AI.~ ~ ~ ~ ~ ~~~MPR ,m~-

_~~~I U00 D.O p05.3 mod WE0. do i. now" 1 .0 W.2 l

_,1 -- 0 .0 -D0 35. . 2 10. - 5.0 7I 6 .0 37.2 5M.0

-1 40.2 23.1 92.7625.0 tD.9 LO0.0 L 17.9 38.0 108. 27 Si_m md 36. 245 3.96. 1.9 z 36.3 91.9 6.5 38.0 5.8tW 97 S.5 10.0 =58 36.0 73.8 M.0 2910 U4. =.7 4.0

Yewh 743 92.0 7L 10.0 3 L478l. 39.30.0 3 6.3 1U0.0 336.0 Im.0

Li. udom fv=MMI 13. 21.0 2..5 3. S7 S 751 55.0 79.6 S5.

_co 21. 6. 38 4 l.7 -. .043 4.0 S .62.0

lo 401.2 23.1 3 92.7 2.0 12759 20.0 S1672 70.0 S26.S 275.

Y _m Dwll5.2 40.0 laN.8 36.0 73.8 13.0 5.7 60.0 5.7 30.0

.. -I Pmdo& MO5 3s60 80.8 12.0 93.8 27OA 139.6 95.0 3D.3 50.1 JwFzdm $32.7 U.O Q. 14.9 3.0 3%3. 25. 0 348.3 14.0 33.2 40B.0

ium 13- 20. 7.7 _- 36.1 -. 0.2 0.8 79.1 0.60

ZwUFlu 1 1 4ii.6 9V.8A. 2B.0 360.7 5 2U5.0 925.8 9X.0 2 D.96 0 @.0


INDIA

FOURTH AGRICULTURAL REFINANCE AND OEVELOPMENTCORPORATION CREDIT PROJECT (AROC IV)

(CREDIT 12O9-IN/LOAN 209S-IN)

LEndIng by Land Dcvclopment BanksCooperative Year (July-Junel

(Rs Million)

'ame of the State 1979-S0 1980-81 1981-82 19t2-83 096Total ARDC Total AROC Total AROC TOt ARM

Schemoe Schemes Schomes Sch.a _ Schemes

North-rn Region

Haryana 256.03 164.0) 314.88 216.42 352.84 284.80 346.71 194.24 367.10 267.00Hilachal Pradesh 2.09 0.75 2.76 1.36 8.72 5.54 9.67 7.22 9.20 7.10Jammu & Kashmlr 4.41 3.22 3.S2 1.89 P.49 3.48 9.48 5.11 10.40 5.20Punjab 229.69 129.17 360.15 220.31 445.74 341.6S 446.31 323.89 485.90 345.60Rajasthan 179.29 69.46 189.27 74.92 211.75 98.31 241.10 1II.61 r 69.00 110.90

1. North-Eastern Region

Asma 1.99 0.04 3.41 0.03 1119 5.00 12.24 7.70 15.00 12.30Tripura 2.27 - 5.84 - 3.51 2.26 0.31 0.30 1.10 1.10

11. Eatlern Region

Biher 84.77 61.31 142.76 126.34 291.45 251.72 202.i6 167.11 100.SO 83.70Orissa 116.99 79.29 t0O.06 83.29 95.96 69.99 90.01 82.21 73.S0 S.59077.58 40.58 65.84 40.01 65.43 53.96 6s.16 57.49 67.60 63.601V. Central Region

Madhya Pradesh 164.09 134.34 142.92 119.15 379.57 117.82 206.58 176.S8 249.70 190.70Uttar Pradesh 582.50 410.87 524.6) 390.44 484.32 353.00 536.00 416.07 852.90 545.10

Western Region

Gujarat 39.t5 15.31 56.57 14.12 139.95 31.06 144.60 116.65 215.10 155.20Maharashtra 413.21 291.93 541.70 429.03 412.55 391.73 599.21 567.96 585.10 S50.301 Southern Replan

Andhra Pradesh 55.36 520.15 711.44 631.59 481.29 429.22 695.84 613.50 829.80 566.70Karnataka 66.90 51.83 191.66 139.90 192.98 131.43 269.95 237.12 345.10 346.30eralsa 174.95 60.40 236.91 70.8s 211.55 139.73 216.26 162.92 255.30 149.50Tain1 Nadu 76.0S 35.72 38.64 19.42 92.77 36.48 140.50 59.N 102.40 60.50Pondlcherry 0.82 0.18 0.96 0.15 0.37 0.19 1.17 0.45 1.10 0.50

11 India Total 3081.53 2096.56 3635.90 2569.22 3690.53 2167.57 4238.11 3308.04 4395.40 3502.10

U I- 77 -w 2

ra mO -wa In-ae

Sd z'M S3r. O0_k oWM= ova

N. s Dmmd C l W_ to O_ D_. cuctn m s= to D a m h2 t

A IS1 FP 815.6 497.6 3110 39.0 919.9 4683 451.6 49.1 1.100.2 60.1 496.1 42 9.5 3.0 6.5 06.4 12.3 4.2 8.1 65.9 16.2 6.7 U..3 6;

3 H 32466 26L0 63.5 19.6 388.9 287.1 101.8 26.2 451.5 3A.0 /a 107.5 24 K 414.3 245.8 168.5 40.7 431.0 29.6 /a 151.4 35.1 47.0 29.1 157.9 3L

5 KIba 1111.9 96.0 20.9 17.6 14V.2 114.5- 32.7 2L2 174.3 141.9 32.4 I

6 ra Pm~h 411.0 242.5 168.5 41.0 436.9 249.8 177.1 41.5 419.6 248.8 10.8 27 Oi 143.8 72.8 71.0 49.4 V1.3 70.5 105.8 5. . 97.5 36.9 27a FP*ab 328.2 293.2 35.0 10.7 415.1 371.4 43.7 10.5 415.1 437.4 V.7 99 paja.b 261.2 155.5 106.1 40.6 315.1 175.9 139.2 44.2 373.0 20.1 164.9 4.o t-;l ) 499.9 244.2 255.7 51.2 4U.8 19.9 216.9 52.7 43.4 234.1 M5 - 46Iwt AP1 187.4 63.0 1.244 66.4 196.5 81.0 115.5 58.7 188.8 95.2 93.6 49

3 Dco-3- 3.3.6 169.6 144.0 45.9 411.4 166.0 245.4 59.6 414.6 174.2 2i0.4 58

2 a.j=t 242.3 174.3 68.0 28.1 25.2 154.0 M.2 44.0 373.4 192.2 18.4 483 :ba1 P 9.5 5.0 4.5 47.4 10.2 5.4 4.8 47.1 9.5 6.9 2.6. 27, j & e 14.9 8.1 6.8 45.6 15.2 6.7 8.5 55.9 16.9 8.6 8.3 49

, I _ 788.4 458.4 330.0 41.9 831.6 455.8 375.8 45.2 853.1 432.1 421.0 49* F s'any 4.2 1.4 2.8 66.7 3.8 1.0 2.8 73.7 4.1 2.0 2.1 517 T=Pza 2.9 0.9 2.0 69.0 4.8 1.3 3.5 72.9 6.2 1.2 5.0 80.3 ut=t Eid_ 991.4 655.0 336.4 33.9 1.030.3 666.1 342.2 33.9 1.045.8 752.0 293.8 28

ALU Iz'.a Toul 5.882.0 3.649.3 2.232.7 38.0 6.396.5 3.755.5 2.643.0 41.3 6,96i.9 4,216.1 2.678.8 38.

CDLS d Gam n m & 1,inwt s , f eai vaU3 s SaU inbld44 a/c m_uns PA 84.2 .14iU for 1982- m Rd 107.0 PIC0 .11 fw 19M44.


INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (ROC IV)

(CREDIT 1209-IN/LOAN 2095-IN )

Su_*ry of Land Development anok Recovery (1974-1984)

Positinn as of June 30 1974 1975 1976 1977 i9701 1979 1980 to61 isa. 19 4

1. State L with unit-ry*t ructure)

66.4 66.4 65.2 42.0 38.2 40.5 23.4 74.2 54.1 40.4L54.6 27.6 43.1 36.6 31.3 25.3 21.0 23.7 71.9 50G j 1

Himachal Pradesh 43.9 41.3 50.0 36.2 42.4 27.1 37.5 51.1 52.6 52.9 72.6Ja-u and Kashmir 69.6 67.3 61.9 53.1 61.6 50.4 50.0 52.1 54.4 44.1 51.2Maharashtra 55.5 41.5 39.5/b 37.2 42.4 80.6/b 53.P 34.# 569.I 34.8LV 50.6Pondicherry - - - - - 43.7 S8.8 54.2 31.0 66.1 47.9Tripura - - - - - 33.3 27.1 20.2

Uttar Pradosh 77.3 75.0 83.1 76.1 73.3 62.4 75.3 70.0 66.1 M83Weighted Average 4 -I1 34" g50 5 F 47.6 57.4 46.2 N 1EI

II. Primpry LDOsAndhra Pradesh 78.0 78.0 74.6 -1.0 72.6 66.6 70.0 57.9 61.0 50.9 56.3Assam 22.2 22.2 31.S 44.1 44.1 46.6 31.6 35.1 31.6 34.1 37.0Horyana 99.6 96.2 97.9 96.6 89.1 91.6 69.6 90.0 60.4/b 73.6f/ 97.0Karnataka 62.0 S.9 58.1 46.6/b 48.0 52.0/b 54.8 47.3 59.3 64. 13 16.4Kerala 60.6 70.9 70.9 76.5 61.8 81.7 80.5 84.2 62.4 77.8 9 9.1Madhyr Pradesh 52.1 53.1 59.9 46.S S2.1 43.6 32.6 SO.0 59.0/b 5s9 Lb 53.7Orison 50.0 43.1 68.0 46.9 67.2 57.2 39.6 60.5 50.6 41.2 53.4PunJob 65.0 83.0 69.2 77.9 80.S 87.3 67.2 66.6 69.3 99.5 99.4R9jesthan 54.5 63.4 73.4 64.2 60.0 62.5 46.6 5989 59.4 51.8 62.2Toall Nadu 76 8 60.2 63.6 51.6/b 27.8/b 19.2/b 11.3 33.6 4.6 9 47.3/b 39.1West Bengal 5868 70.8 76.J5 77.2 '2.3 62.1 62.7 41.3 64 413/

Weighted Average- It lO 5 -f 56.6 S3" 3 4_ N A 1i

/a Expressed as percentage of demnd (principal and interest falling due during the year plus Ovwrdues from previous -jers).

/b After rescheduling during the year.

.~~~~[ . . ii

Ann I74 I Tblo 24

PIOMCT CHPLZT!O LUOSRT

INDIA

FOURTH ACICULTUILAL rUINANCU AND DCVlOPHENTCOSPOS.ATIO CUDIT PIOJICT (ARDC IV)

(CREIT 1209-IN/LOAM 2095-IV)

State Cooperative 8anks and Central Cooperatives Ranks Sumary of Overdues*of Agricultural Advances (Short, Medium and Lont Term) as at the end of June

(2 to demad)legion/State/ At SCB Level At CCB LevelUnion Territory 2980 1981 1982 1983 1984 1980 1981 1982 1983 1984

I. Northern Region

Haryana 0.2 NIL NIL NIL 0.4 26.8 21.5 28.4 30.5 32.3Himachal Pradesh 80.1 79.5 82.3 49.7 44.8 44.6 39.0 36.1 16.3 52.8Jamnu & Kashmir 16.4 17.3 21.5 18.4 17.9 48.0 49.7 44.1 25.3 42.1Punjab 0.8 5.9 2.4 0.3 0.3 23.0 20.7 20.9 22.0 21.3Rajasthan 14.6 11.4 9.1 10.5 9.5 40.5 39.6 41.1 42.7 44.1

II. North-Eastern Region

Assam 97.0 96.1 74.7 81.8 46.3 88.9 76.8 42.2 21.5 33.5Kanipur 71.2 67.7 68.4 78.3 90.4 e e e e eTripura 95.0 76.1 83.8 83.9 8%.5 e e e e e

III.Eastern Region

Bihar 62.8 51.6 48.3 48.3 54.1 78.8 62.3 61.4 74.2 58.4Orissa 0.1 NIL NIL 0.02 NIL 29.1 29.8 31.7 32.9 40.2West Bengal 34.7 38.4 20.6 33.9 37.8 49.2 40.1 53.2 56.3 56.9

IV. Central Region

Madhya Pradesh 9.4 1.5 0.1 3.6 10.7 44.0 38.8 37.6 37.6 35.9Uttar Pradesh 4.6 6.1 14.4 6.7 11.2 33.6 40.2 41.6 47.2 48.7

V. Western Region

Gujarat 5.S 7.9 10.3 11.1 10.5 40.6 48.3 29.9 33.5 42.9Kaharashtra 5.0 7.9 4.1 2.1 6.8 49.2 43.0 37.7 40.5 45.4Co&, Diu, Daman 49.4 52.0 71.6 89.4 75.7 e e e e e

VI. Southern Region

Andhra Pradesh 18.0 18.3 8.1 7.8 8.9 45.4 35.7 38.8 43.3 34.5Karnataka 12.2 21.4 16.3 15.5 11.0 47.8 53.3 45.8 38.5 52.0Kerala 1.0 2.8 1.3 1.0 1.2 19.9 19.5 20.9 22.0 16.5Tamil Nadu 15.9 0.8 3.8 3.0 3.5 61.9 27.6 39.7 37.5 60.2All India 12.0 9.8 8.7 7.4 10.0 42.2 37.0 35.8 37.8 41.4

Q Not applicabie since that State comes under 2 tier structure.

* Expressed as a percentage of demand (principal and interest) falling due during theyear plus overdues from previous year.


INOIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (AROC IV)

(CREDIT 1209-IN/LOAN 2095-1N)

Direct Institutional Finaoeo for Agriculture(Rs Croros)

Loans Issued Durn Loans Outstandino as of June 20Source of Finance 1579-80 S90-S1 1961-52 l -83 ,g*3- 4 lo90 1081 0102 9e13 N4

1. Cooperatives /a I.821.1 2,024.5 2.479.OP 2,716.9P 3.026.8V 3,850.1 4.315.0 4.821.OP S.155.OP 5.7220Of(45.5) (30.9) (34.0) (37.4) (41.0) (84.3) (73.4) (60.7)e (88.8)f (9.0)

Of whicth:(a) Short-term loans by PACS 1,259.6 1,386.5 1.795.5 1,908.1 2.098.0 1.696.7 1l9077R 214.5 2.225.2 2.500.0(b) Medium and long-term

loans by PACS/LOBs /b 561.5 643.0 683.1 808.8 930.0 2.153.4 2,407.3 2.672.3 2.*2906 3.222.0(318.6) (363.0) (363.9) (425.8) (469.0) (1.476.3) (1.650.4) (1.354.7) (2.047.4) (2.252.0)

11. State Governments /c 132.5 144.2 15?.3 187.8P 220.3F1

11. Scheduled CDwmercial Banks(oxcluding RROS) /d 974.5 1.262. 8R 2.363.8 3.043.3R 3.954.2 4,739.0 .

Of which:(a) Short-term loans 454.5 517.0 949.2 1.161.5(b) Term lans 520.0 745.8 1 414.6 1,881.8

IV. Regional Rrarl Banks /2 105.3 180.4 273.1 381.9 509.4

V. Total Direct Finance 2,928.1 3.435.5 6.319.2R 7.538.7R(I to IV). of which:(a) Short-term loans 1,846.6 2.046.7 2.751.2 3.249.6(b) Medium and long-term 1,081.5 i.388.6 3.56680 4.269.1

loans

= Estimates R = Revised P Provisional . Not availablea Figures In blackets relate to short-term finance provided by RRBs and other commercial banks through PACs.b Figures In brackets relate to long-term loans by LD8s.c Takon as short-term loons and relate to financial year April-March. However. owing to noon avllAbility

of data rngarding outstanding levels, those are not Included In the total.d Loans Issued relats to financal4 yoar April-March while outatondings are as on June 30.a lakon as short-term loons - revised date.f Date relate to public sector bonks and are as on December 1982 and 1983.

ource: (1) NABARD '(11) Reserve Bank of IndiF

(111) Annual udgoets of State Government.


INDI A

FOURTH AGRICULTI'RAL REFINANCE AND DEVELOPMENTCORPORA1ION CREDIT PAOJECT jARCjIV)

(CREOIT S200-IN/LOAN 2095-lN)

Indirect Institutional Fin-nc- for Agriculture(Rs Croresr

L i*ns Isued Durinn the Vear L gns Outstpon i * a of NA*

Source of Finance !I7 -0 to 0-8 1981-82 1962-83 1983- 4 1030 1901 19|2 12I

1. Cooperatives /p 694.9 1,154.0 1.497.4E 1.95S.6E 2.400.01 342.86 63.3 639.71 1337.69 1,700.01

Of which:(a) State Cooperativo Bnkas /b 44S.6 619.3 862.2 1.200.4 1.550.0 229.3 399.4 SSS.9 on 3. 1.000.0

(b) Central Cooperative lanks /c 440.3 534.2 63S.2 755.2 850.0 113.0 236.9 264.1 46 .7 700.0

It. Scheduled Comercial Wanks(Excluding 1R1S) /c 733.4 998.3 1.151. /a 1,266.4 /2

elf. Rogional Rural Banks 12.7 16.1 21.4 23.1 26.?

IV. Rural Electrification Corporatior 166.4- 163.2+ 191.5* 251.8S 303.2- 761.0. 931.5+ 1,0S2.2- 1.292.7* 1.433.8 1

Corporation /d

Total Indirect Finance (I to IV) 1,869.9 2.564.2

= Estimtes= Financial vear (April-March) data

a Taken as short-term loans.*b Loans Issued Include food procuremnt finance but these are not Included In loans outstanding which mainly cover direct advances givwn to

non-agricultural credit societies operating at apen, regional or primary level.

'c Break-up of these data Into short and term loans are not available.'d Taken as long-term loans.'a Date relate to public sector banks and are as on December 1962 and 1983.

wourc*s: (i) NA6ARD(1i) Reserve Bank of Indi1

(11) Rural Electrification Corporation (Annual Reports)

H!0

FM= 04MCN RErM

DOIA

EM AQU(IL2 REFMMA XD awMa1t1UAflG CFDu r NEU (ANDC IV)

(UKiIT 1209-I OWM 2D95-DO

Bu. krupda/f1pilation £Lkwiu Distributio of CrciAl dn Ott office in IndiA(Re iUim)

HLtr- tro- No-

plitm poit PlAtSdu- Fart Sai- Part Sau-

Bdt cowp NFuwl Uzm Urban T= ITAl n Ual tUbin Urbm m Ibtotal buml Urb Udz Tam Tbtal

State M&k of flils 462 796 163 150 1.571 326 1.749 767 613 6.396 3,449 1.773 768 626 6,636(29.4) (50.7) (10.4) (9.5) (100.0) (51.1) (27.3) (12.0) (9.6) (100.0) (52.0) (26.7) (11.9) (9.4) (10.0)

Asuociam taiik of 358 375 86 75 894 1.371 894 405 295 2.965 1.446 913 439 319 3,117State Bwk of drdia (40.0) (42.0) (9.6) (8.4) (10D.0) (46.2) (30.1) (13.7) (10.0) (1C0.0) ('6.4) (29.3) (14.1) (10.2) (100.0)

14 atic wlimed DBdks 703 1,465 928 1.072 4.168 8.861 4,043 2.972 2.691 18.567 9.373 4.12D 3.063 2.760 19.316(16.9) (35.1) (22.3) (25.7) (1OD.0) (47.7) (21.8) (16.0) (14.5) (100.0) (48.5) (21.3) (15.9) (14.3) (I10.0)

6 DWSA otianstmlld 1.40D 693 593 501 3.187 1.445 703 612 516 3.276BFilA in 19W0* (43.9) (21.8) (18.6) (15.7) (100.0) (44.1) (21.5) (18.7) (15.7) (10.0)

Pjgtnl Rai am&b 6.046 382 44 1 6.473 7.853 456 50 1 8,360(93.4) (5.9) (0.7) (-) (100.0) (93.9) (5.5) (0.6) (-) 1O0.O)

Otlrn ( IdA1 u. 337 708 279 364 1.688 1.733 1.275 796 687 4.491 1.806 1,297 817 07W 4.267(20.0) (41.91 (16.5) (21.6) (100.0) (38.6) (28.4) (17.7) (15.3) (1OD.0) (39.0) (2L0) (17.7) (15.3) (1OLO.)

lbtal 1.850 3.344 1.456 1.661 8.321 22.678 9.036 5.577 4.788 42.079 25.372 9.262 5.769 4.M29 45.332(22.3) (40.2) (17.5) (VD.0) (10D.O) (53.9) (21.5) (13.2) (11.4) (IOD.0) (56.0) (20.4) (12.7) (10.9) (100.0)

* l&b of cdfiw - an July 19. 1969 are iludad uhr -othr ni wl BD Gmra

Ibt: 1. Figumm in bm&etam pammtA_ to do total in eudi bak aWp.2. Cariflmticn of (wtsmua bau- = populatin up to 10.000.

nmai-udm 10.001 to I 1*h. Udz = mar I IdJh to 10 lMm ?Htropditi = O(er 10 lJm Part tn = Ckadi. EMamb.llome, Ibpmttltin. oa. ftIsmp. fkt Iair. 1amdbi.r Kidla. ViIm*ptr_. nbdccrin and _b=o.

lb T__*P J _-_*n_ _

PRwtlF.-r r.trlrTimz F'tvrmr

FrlIMT AMr ICSILfURAL ErIPNANCF AN1' IWVnFAWFNTCOhPORATUIE CREDIT PROJEct (ARD: lV)

(cRCnTT l2119-lWt AN 2%)9%-]N)

India Shebduled Cae_rcic| gesks; Aaricultural Adv_ceOvertues - A11 Loans

(Re million)

As _ Jame 30. 190 Aa Jmp 30o 1231 A e Juse 30. Ipl As - Jews _0. 1 _0If I of I of7

man of Stott/ Overdoes Overdoes Oerdoes rTAm Tcitoi kd4 etrdm to nhm OMd _ hrnme to Demand Don 0Ov er _ hmi- -I I I Ij i

l PoRT13hI Am" 1303.5 549.9 30.5 2.433.1 170.4 35.1 3,106.5 1.167.6 37.9 4*125.5 1,535.9 35.3Nary.e. 359.3 131.2 33.7 476.5 195.3 41.3 536.6 279.4 43.9 336.4 334.0 40.2Ujuachal Pradesh 61.5 25.0 45.5 72.2 40.7 56.4 57.0 30.1 52.8 110.3 57.4 52.0Ja s & Kashmir 23.0 12.7 45.4 71.4 36.9 51.7 75.4 30.3 50.9 93.9 54.6 53.2lunjab 666.2 161.2 15.6 1.192.8 273.0 23.3 13562.9 421.1 26.9 2,120.5 559.5 25.4Rajeethem 396.6 166.1 46.9 503.3 271.7 53.9 619.9 327.3 52.9 794.2 415.5 52.3Chamdigarb 13.4 3.7 27.6 51.2 7.3 15.2 93.0 37.6 40.4 39.3 50.6 55.7Delhi 43.3 27.0 55.9 65.9 33.5 58.4 61.3 33.3 53.9 77.0 43.3 56.2

1i. *0T1 MnaR URcGo 57.7 39.5 58.5 76.5 52.1 53.1 94.1 52.9 U.0 124.5 01.3 *5.7

Asses 32.2 23.9 74.2 43.7 33.7 77.1 4.1 33.6 72.9 31.4 43.2 70.4Manipur 4.5 3.4 75.6 4.6 3.0 62.5 7.1 5.4 76.0 3.4 5.4 76.2Neghaleay 4.2 3.2 76.1 8.7 6.1 70.1 13.6 10.0 73.5 20.7 13.7 55.2N.Sel.ad 0.7 0.3 42.9 1.4 0.5 35.7 4.9 2.4 49.0 5.1 3.3 54.lTripmre 16.1 S.7 54.0 16.S 6.2 43.3 20.9 10.6 50.7 25.9 14.2 54.3Arumacbel Pradebh - - - 1.1 0.5 54.5 0.9 0.6 66.7 0.9 0.*6 .2

Niger.. - - - - - - ~~~~ ~~~~ ~~~~~ ~~~~~~0.5 0.3 50.0 0.9 0.3 37.3 CDSihki} - - - - - - - - - 0.2 0.1 37.3

11. Uj233353m 579.7 420.2 51.3 1,542.7 1,015.9 65.9 1.561.2 13004.5 64.3 1,339.8 3,194.8 *4.5giber 415.5 266.0 64.5 577.2 359.2 62.2 576.2 342.5 59.4 677.0 433.5 61.1Otriss 217.2 120.1 55.3 346.4 225.6 65.1 401.5 236.9 59.0 474.9 239.5 51.2West *agel 4.7 32.0 68.5 617.4 430.3 69.7 532.0 424.2 72.9 55.5 459.9 71.3Andame Nloebar Island. 0.3 0.1 33.3 3.S 0.3 53.3 1.5 0.9 60.0 1.4 0.5 54.1

IT. 53xJMAL R6CIOb 1,653.2 356.4 51.3 2,239.0 1,093.3 45 .9 2,741.9 1,402.5 51.2 3,4".7 1.718.3 49.1Huiihys Pradesh 564.6 351.0 62.2 709.0 404.1 57.0 395.5 409.5 56.9 1,061.1 591.0 55.7Vttar Pradeh 3,083.6 505.4 4.4 1,530.0 659.7 45.1 1,346.4 393.0 43.4 2,438.7 3,327.4 45.2

v. s1111 URCIO 2,230.3 1,264.9 55.5 2,317.9 1,439.0 51.1 3,204.3 1,552.7 51.5 3.577.3 1,967.0Giij.rt 313.0 413.4 51.4 979.7 470.3 48.0 1,203.8 564.0 46.9 1.420.9 673.3 41.4Nabereehtre 1,434.5 S33.2 53.1 1,793.3 945.9 52.7 1.921.9 1,043.7 54.3 2,319.S 1,241.6 57.2Cos. Den" a Dgi 32.0 13.3 41.6 44.1 22.6 51.2 78.1 45.2 55.0 31.7 51.9 59.9Dadra S Negar savelt - - - 0.3 0.2 65.7 0.5 0.2 40.0 0.7 0.3 37.0

n1. snunuts S C101 5,432.0 2,497.4 U.0 6,330.4 2,799.0 44.2 7,408.3 3,305.5 44.6 9,545.7 4.2314.9 44.2Amudhre Pradesh 2,447.5 1,125.7 46.0 2,253.3 1.053.9 46.8 2,730.5 1,245.4 45.6 3,510.6 12 54.7 446.Karustake 1,321.4 550.1 49.2 1,583.0 781.7 49.2 1,97.6 971.5 48.9 2,314.1 1,127.3 4*.7lerale 440.2 144.3 32.3 686.5 212.2 30.9 750.5 257.4 34.3 992.7 343.0 34.5T1-1l Nadu 1,173.2 559.0 47.6 1,732.3 724.3 41.3 1,399.9 309.2 42.6 2,630.3 1,143.8 43.5Poedihelrry 49.7 13.3 36.8 70.3 26.9 33.3 39.9 21.9 54.9 97.5 34.0 34.8 3 Lehehadveep - _ - - - - ..... fld .......Ad0.3 0.1 ILl 0.4. ... 2

All India Total et..6.7 5I628.3 Au 15 A40.3 7.270.2 47.1 1.116.k L595.7 Aid 22L814.2 1A. L .1 ML9

- 79 -

ANNEX1 I IPas* I


INDIA



Pilot Project Studies for Quality Control of Agric"lecural Pumpsets

Studies carried out by the National Bank's consultants, state govern-

ments and other organizations have indicated a very low efficiency of exist-

ing agricultural pumpsets operated both with electric motor and oil engine.

A need was therefore felt to study the problem of low efficiency of a few

selected pumpset installations not earlier covered under such studies and to

evolve a matrix for proper selection of pumpsets fcr these areas/states in

the future.

Under the first phase of studies the six state governments namely

Andhra Pradesh, Bihar, Maharashtra, Punjab, Rajasthan and Uttar Pradesh

completed such studies in their respective states and the results along with

matrices for proper selection of pumpsets were published by NABARD (ARDC) in

December 1980 in the publication entitled "Pilot Project Studies for Quality

Control of Agricultural Pumpsets".

Under Phase II of the program and in compliance of Section 3.04 of

Fourth ARDC Credit Proiect, these studies were oxtended to the states of

Assam, Gujarat, Haryana, Karnaaka, Kerala, Madhya Pradesh, Orissa, Tamil Nadu

- so -

ANNEX IIPage 2

and West Bengal. The objectives of the second phase were similar to that of

the Phase I and are given below:

(1) To study the efficiency of a few existing pumpset installations.

(2) To prepare a block/areawise matrix for proper selection of

agricultural pumpsets.

The finding of these studies are summarized below.

Study of Existing Installations

An analysis of the field data for a few existing installations

revealed the following main defects:

1. Improper pumpset installation resulting in high suction lift.

2. Improper selection of suction and delivery pipes.

3. Installation of oversized diesel engines/electric motors.

4. Improper maintenance.

The statewise salient findings are given below.

1. ASSAM

The study covered 65 samples in the four districts of Dibrugarh,

Goalpara, Kamrup and Nowgang. The suminarized results are given in Table 1.

- 81 -

ANNEX IIPage 3

Table 1: RESULT OF STUDIES OF EXISTING INSTALLATIONS IN ASSAM

Sr.No. Item Z Cases

1. Pumpsets with high suction lift 342. Undersize suction and delivery pipes 573. Average Overall Efficiency (X)

a. Electric Pumpsets 22b. Diesel Pumpsets 5

4. Oversize Oil Engines 70

2. GUJARAT

The performance of 854 pumpset installations was studied by the

Cujarat Water Resources Development Corporation in six districts of

Banaskantha, Kaira, Sabarkantha, Baroda, Junagadh and Bhavnagar of the state.

Out of these pumpset installations 567 were electrical (67%) and 286 diesel

pumpsets (33%). The summarized results are given in Table 2.

- 82 -

ANEX IIPage 4

Table 2: RESULT OF STUDIES OF EXISTING INSTALLATIONS IN CUJARAT

Sr.No. Item Z Cases1 *2 3

1. Pumpsets with high suction lift 28

2. Undersize suction and delivery pipes 78

3. Average Overall Efficiency (Z)


4. Oversize Prime Movers

a. Electric Motors 7.5b. Diesel Engines 18

3. HARYANA

The study included 82 pumpset installation in the four districts of

Sind, Hissar, Karnal and Sirsa representing the north-western and north-

eastern parts of the state. The summarized results are given in Table 3.

- 83 -

ANNEX IIP85t 5

Table 3: RESULTS OF STUDY OF EXISTING INSTALLATIONS IN HARYANA

Sr.No. Item Z Cases1 2 3


2. Undersize Pipes

a. Suction 58b. Delivery 66

3. Average Overall Efficiency (%)



a. Electric Motors 61b. Diesel Engines 80

4. HARYANA

The working of 72 samples was studied in the five districts of

Belgaum, Bijapur, Chikmagalur, Tumkur and Uttar Annada comprising the north-

western, central and the western coastal regions of the state. The study

results are given in Table 4.

- 84 -

ANNEX IIPage 6

Table 4: RESULTS OF STUDY OF EXISTING INSTALLATIONS IN KARNATAKA

Sr.No. Item Z Cases-1 2 3


2. Undersize suction and delivery pipes 70

3. Average Overall Efficiency (X)


4. Oversize Electric Pumpsets 70

5. KERALA

The working of 70 pumpset installations was examined in five dis-

tricts of Cannanore, Palghat, Trivandrum, Trichur representing the coastal,

midland and upland regions of the state. In view of rapid rural electrifica-

tion in the state, majority of the samples (65) were electrical installations

and only 5 were diesel operated. The results are given in Table 5.

- 85 -

ANNEX II

Page 7

Table 5: RESULTS OF STUDY OF EXISTING INSTALLATIONS IN KERALA

Sr.No. Item % Cases1 2 3


2. Undersize Piping System

a. Suction Pipe 64b. Delivery Pipe 68





6. MADHYA PRADESH

The working of 88 pumpsets was examined in five districts of

Bilaspur, Chhatarpur, Mandsaur, Narsimhapur and Shahdol. The results of the

study are given in Table 6.

- 86 -

ANNEX IIPage 8

Table 6: RESULTS OF STUDY OF EXISTING INSTALLATIONS IN mADHYA PRADESH

Sr.No. Item X Cases1 2 3








7. TAMIL NADU

The study covered 100 sample units distributed in four districts of

North Arcot, Pudukkottai, Coimbatore and Madurai. The summarized results of

the studies are given below.

- 87 -

ANNEX IIPage 9

Table 7: RESULTS OF STUDY OF EXISTING INSTALLATIONS IN TAMIL NADU

Sr.No. Item Z Cases

1 2 3








8. WEST BENGAL

In the state of West Bengal 53 pumpset installations were examined

in the districts of Burdwan, Malda, Midnapore and Murshidabad. The pumpsets

were mainly diesel operated. The results of the study are given in Table 8.

- 88 -

ANNEX IIPage 10

Table 8: RESULTS OF STUDY OF EXISTING INSTALLATIONS IN WEST BENGAL

Sr.No. Item x Cases1 2 3

1. Pumpsets with high suction lift

2. Undersize Pipes 65

3. Average Overall Efficiency of Diesel Engines 5.5

4. Oversize Diesel Engines 80

Suggestions

For an efficient pumping system it would be necessary to adopt cer-

tain remedial measures to bring the unit within optimum operatiot. conditions.

The following low cost rectification measures are suggested.

1. The electric pumpsets should be installed at correct levels. In the

case of dugwells these can be mounted on steel girders fixed in the

well staining to suit water level conditions during the cropping

season. Diesel driven pumpsets can be placed in pits constructed

adjacent to the wells. For shallow tubewells the electric pumpset

may be installed in suitably designed lined pits at desired levels

to act as dry wells merely to house the unit. Diesel engines could

be operated by belt drive after suitable placement in shallow pits.

2. The high friction losses in undersize pipes and fittings could be

reduced by replacement of proper size of suction and delivery pipes

to carry the discharge. Use of low cost PVC pipes that have

- 89 -

ANNEX IIPage I 1

advattazges of less weight, easier installation and comparable cost

can be increasingly made. The pipe selection should he such that

validity of flow on suction side do not exceed 1.5 m/sec and on the

delivery side 2 m/sec.

Matrix for Selection of Agricultural Pumpsets

As a result of the pilot project studies matrices have been evolved

for selection of pumpsets in the eight states of Assam, Cujarat, Haryana,

Karnataka, Kerala, Madhya Pradesh, Tamil Nadu and West Bengal. These give

the correct h.p. range, size of suction and delivery pipes, wll diameter,

well depth and expected discharge for the blocks studied. These results have

been extended to cover adjacent blocks/districts with similar hydrogeological

conditions. The method of arriving at the required h.p. has also been given

in the relevant chapter for each state.

These matrices take into account the average conditions of head and

discharge including drawdown and friction losses in the piping system. These

should serve as a guide only for future selection of pumpsets on new wells

situated in hydrogeological and agronomical conditions similar to the blocks

under study. However, each case of proper pumpset selection should be

examined and worked out on actual field data for a particular well location.

If due to some constraints such an exercise is not possible the matrix given

in this pilot project study report could be made use of for selection of

proper pumpset in that area.

- 90 -

ANNEX IIPage 12

The pilot project studies in the selected blocks/districts of the

respeccive states can also be extended to cover districts where similar

conditions exist.

These studies indicate that at present higher horse power pumpsets

are being used in majority of cases. The horse power of existing installa-

tions and the correct horse power is given below for each district/state both

for electric and diesel ,nits.

l

- 91 -

ANNEX IIPage 13

Table 9 CONPAIATIVE HP VALUES OF EXISTINC AND REQUIRED PUhPSET INSTALLATIONS

Sr.* SHP of Prime MoverNo. State District Dlectric motor Diesel Engines

3equired ExIsting Required Existing1 2 3 4 567

1. Haryana Hissar 4 3 to 10 5 to & 5Jind 5 to 7.5 3 to 7.5 6 to 8 3 to 7Karnal 3 to 5 3 to 5 5 to 8 3 to SSirsa 3 to 7.5 3 to 10 3 to 7 8 to 10

2. Karnataka Belgaum 3 3 to 7.5 - -Bijapur 3 3 to 5 - -Chikmagalur 3 2 to 5 - -Tumkur 3 2 to 3 - -Uttar Kannada 3 2 to 5 - -

3. Kerala Cannanore 1 to 2 1 to 5 6 to 10 3Palghat 1 to 2.5 5 to 7.5 - 3Trichur 1 to 2 3 to l0 3Trivandrum 1 to 3 2 to 2.75 - 3Uynad 1 to 1.5 5 5 3

4. Tamil Nadu Coimbatore 3 to 4 5 to 10 3 to 5 5Madurai 3 3 3 5North Arcot 3 to 4 5 3 to 5 5 to 6Pudukkotta; 3 to 6 3 6 to 7/8 5

5. Assam Dibrugarh 0.5 to 3 3 2 to 3 5Goalpara 0.5 to 3 3 2 to 3 5Kamrup 0.5 to 3 3 2 to 3 5

6. West Bengal Burdwan 3 ro 5 5 3 to 5 5Malda 3 to 5 5 3to 5 5Midnapore 3 5 3 5Murshidabad 3 to 4 5 3 to 5 5Purulla 3 5 3 5

7. Gujarat Barods 4 to 7.5 3 to 12.5 5 to 6 5 to 12Banaskantha 3 to 7.5 3 to 10 3 to 6 5 to 12Bhavnagar 3 to 5 3 to 7.5 3 to 6 5 to 10Dunagadh 3 to 4 5 to 5 3 to 5 5 to 8Kaira 2 to 7.5 3 to 15 3 to 7 5 to 15Sabarkantha 2.5 to 7.5 3 to 15 3 to 8 5 to 10

8. Madhya Bilaspur 3 3 to 5 3 -Pradesh Chhatarpur 3 3 to 5 3 5

Mandsaur 3 3 3 5Marsiuhapur 3 to 5 5 3 to 5 5Shahdol 3 3 3 to 5 5

- 92 -

ANNEX IIPage 14

Follow-up Action

It would be desirable that future punpset selection is based on

areawise agronomical and hydrogeological conditions. This would result in

low operational cost resulting in savings in fuel and energy cost to the

farmer and to the economy. It is suggested:

1. The State Groundwater Organization extend these studies to other

districts and prepare similar matrices detailing well design and

size of pump and their accessories which can serve as ready

reckoners.

2. The technical officers in the banks should ersure that the

beneficiary gets the right type of pumpset and its accessories.

- 93 -

ANN3S IIIPage 1


INDIA

1OURTH AGRICULTURAL REFINANCE AND DEVELOPMINTCORPORATION CREDIT PROJECT (ARDC IV)


Train'

1. The National Bank continued to accord high priority to the training

needs of officials of banks. other concerned institutions and its own staff

to upgrade their capabilities. The training programs envisaged under the

Project were to organize (i) training for senior/middle-level staff of

concerned institutions, (ii) short courses on technical disciplines, and

(iii) training of junior LDR staff at the LDB training centers.

Training of Senior/Middle Level Staff

2. The details of various courses planned and actually conducted for

senior/middle level staff during the project period are as follows:

- 94 -

AMO=1 IIIPage 2

Tenets AchievemntsType of Course No.of Parti- No. of Parti-

Course pH!t Course pants

1. APC/RDPC 60 1.000 53 1,333

2. Regional APC 12 420 27 705

3. Technical Courses 15 450 37 1,333

4. Technical Courses at CAB - - 28 699

5. Condensed A%PC 8 200 2 34

6. Refresher Courses (APC) 5 150 13 292

7. Workshop for SeniorOfficers of NABARD 2 30 3 71

8. RPDG (at BIRD) for 998 Officers - - 15 404

9. Seminars - - 1 50

10. Workshop - - 3 142

11. Others * - 11 307

12. In-service Orientation Program - - 2 48

13. In-house Induction fornewly promoted ADOs - - 13 374

14. In-house Induction for ADOs/DOstransferred fro RBI - - 4 119

Total 5.911

w Other programs include Trainers Development Program in collaboration withGOI, EDI. DOM studies. orientation program for RRB/SCB/OCCB officials andprograms on non-farm disciplines as also various seminars.

3. It may be observed from the table that there had been shortfall n

the conduct of APC, whereas, the targets were more than achieved in respect

- 95 -

ANNEX IIIP ge 3

of soot of the other courses. In addition, seminars. workshcp in-house

induction courses, wore organized. As against a plan for conducting 102

courses for 3050 senior/middle level staff. 163 courses with 4471 staff were

conducted.

4. Technical programs on financ.us of (i) Animal Husbandry, (ii) Planta-

tions, (iii) Horticulture, (iv) Forestry, and (v) Fisheries which used to be

formerly conducted by RBI. were conducted by the National Bank during the

project period. The details about number of such courses conducted and the

number of trainees who participated are given below:

Program No. of Courses No. of Trainees

(1) Animal Husbandry 9 248(2) Fishery 4 103(3) Forestry 5 113(4) Plantation 5 111(5) Horticulture 5 124

Total 28 699

5. Training programs/semi3ars/workshops on schematic lending for the

officers of the SCBs/RRBs/State Governments were also conducted in collabora-

tion with training institutions of repute. Two programs on project lending

were conducted at BIRD, Hyderabad. Three workshops were conducted by IIM,

Ahmedabad in collaboration with NABARD in which senior officers of the

National Bank participated. Two programs relating to non-farm sector were

conducted at SIET, Hyderabad. Orientation programs were also conducted for

Senior Executives of SCBs and DCCBs.

- 96 -

Page 4

TrainimA of Al C/iN&UD' Own Staff

6. The National Bank conductod 17 in-house progrms exclusively for its

officers. Io in-service orientation progrms were organised for familiariz-

ing thc officers, who come to NABARD frou vaLous departments of Reserve Bank

of India, with the working of various departments of the National Bank.

Thirteen in-hous induction programs of 4 weeks duration were conducted at

different centers for newly promoted ADOs and 374 officers were trained by

the end of June 1984. For A and B Grade Officers transferredfroe RBI. 4

Orientation Programs were conducted and 119 Officers have been trained.

Training progr_ms had also been organized for newly recruited Group B staff,

i.e.. clerks, typists and stenographers.

Junior Level Training Program

7. The progress under basic training programs conducted by i4 SLDB is

given in ancloed statment. During this project period 154 courses were

conducted and 3548 trainees (894 from RRBs) were imparted basic training at

the SLDB training centers. Besides, 280 refresher course have been conducted

by these SLDBs in which 6,394 trainees participate. Considering the involve-

ment nf RRBs, SCBQ and DCCBs in farm lending, the National Bank allowed

participation of junior level staff of these institutions in the SLDB train-

ing courses.

- 97 -

Pap

. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~?g 5

S. Due to limitation of resourtes, the SLD1 in Assa, J i_u and KaXbir,

Himachal Pradesh end Tripura have not been able to set-up Junior Level Train-

ing Centers (JLTCs) and heve also not taken any steps to train their junior

staff either by deputing to the narest training center of another SLDJ or by

organizing training progrms at their own level. This aatter in being pur-

sued by the National Bank through its regional office. The aain thrust of

the training programs has been on conducting functional and technical courses

supplemented by refresher courses. As against, the target of 15 such cour-

ses, 133 courses have been conducted and 3,257 personnel have been trained.

9. The zDS lission during its visit in October 1983 emphasized the need

for paying in t-.ased attention to training of field staff. 44 reorientation

programs yere conducted by 9 SLDBs covering 1,110 trainees. In its recent

visit, the World Bank has suggested that T&V type of on-the-job training may

be introduced in RRB branches and LDB's primary units. After discussions

with SBI and SLDB and concerned sponsor banks a model scheme of T&V type of

on-the-job training has been designed vhich will be implemented as soon a& it

is finalized. A similar scheme has also been drawn for staff of LDBs.

Workshops for Trainers

10. With an enlargement of the National Bank's responsibilities in the

area of junior level training of the staff of RRBs, SLDBs. and DCC need for

workshops for trainers vas felt. Six such trainer's workshop were conducted

during the project period covering 76 trainers from SLDBs Junior Level Train-

ing Centers.

- 98 -

Page 6

Vika Volunteer Vabini

11. The constitution of Vikas Volunteer Vahiti (VVV) is another landmark

after the foz.ation of WARD. The basic ides behind VVV was to launch a

campaign mainly for providing non-formal education to farmers, artisans and

others engaged in rural economic activities and secure their willing coopera-

tion in better utilization of credit and timely repaymant of loans. The

first phase of the program was launched in Tamil Nadu in hay 1983 and covered

25 villages each in Madurai and Tiruchirapalli districts. During the first

phase of the program, a small but significant modification was "ade in it to

increase its effectiveness. Despite our emphasis on re)ayment ethnic, some

of the defaulting borrowers who started repaying their dues were also given

loans. An overwhelming response was received from Government official

bankers and villagers and chronic defaulters were motivated to repay bank

dues. The program was also launched in Gujarat and Orissa during the project

period. Besides emphasis on repayment and disbursement a now concept of

comprehensive 'Village Devel o.ant Plan' was evolved. The real success was

not so much in the mounts that were recovered but the attitudinal change

which it brought in some defaulters.

Evaluation of TraininR

12. The results of the training program have to be evaluated in order to

enable the National Bank to improve its future programs so as to ensure that

the investment in human resources leads to improvement in qualitative aspects

- 99 -

AmS= I1Page 7

of lndins. lkaluati( n sedsions held at the end of each training progrenc

were conducted to receive feed-back from participation and steps were takea

for bringing about 'L provements in training programs.

13. In purwsuAnce of the recomendations of the CRAYICARD. the National

Bank had met up in October 1982 a committee on Training in Rural Development

through Credit (TRUDEC) under the chairnmahip of Dr. S.K. Rau, to review the

training facilities available for participating banks and suggest steps to

reinforce the same. Apart from providing estimates of traiuables the commit-

tee has made important recomendations, vhich include the following:

(i) National Bank should expedite setting up '.ts own training institute,

i.e. Bankers Institute for Rural Development (BIRD) at Lucknow.

(ii) BIRD should arrange training of trainer. and have ties vith existing

training institutes.

(iii) BIRD should train National Bank's ovn staff and officers of Central

and State Governments as vell as those of participating ban1s and

volunteers of VVV.

(iv) Consultancy vill be BIRD's important activity.

(v) It sbould set up 6 satellite centers of its own in different zones

and adopt and develop some model training centers.

14. "BIRD" was established in September 1983 on the basis of TRUDEC

recomendations. It has conducted 10 Rural Project Development Cours

- 100 -ANM= IIIPage 8

(RPOC.) and trained 285 RRBs staff. Four short duration courses on In-house

and Inspqction Oriented Course for NABARD officers. Trainers Development

Progrms for faculty *mbers/SLDB training centers and prograa on horticul-

ture development for officials of state ovwerent were also conducted.

New Courses Introduced

Senior end Middle Level Trainig

15. Of the five course modules recomoended by TRUDEC. RPDC module has

been adopted by BIRD. RPDC has been tested at CAB and feed-back received is

being exanined. Feedback regarding Induction Course for Officers of RRBs

(ICORD) is awaited from sponsor banks. Improving Recovery Perfozrance (IRP)

module vhich is of importance to banking institutions and the National Bank

is proposed to be tested shortly at BIRD. Lucknow.

Junior Level Training

16* AA per the recommendations of COTELOORP special training programs

have been devised for officers of six weak SLDBs, viz., Tamil Nadu, Bihar,

Maharashtra, Gujarat, Karnataka and Madhya Pradesh. Bihar SLDB organized 3

programs on "Effective Comunication Techniques and General Management

(ECTGM) during January/February 1983 for 70 of its senior executives. This

program was extended to five other states from March 1983. Seven courses on

"Recovery Management for 193 Branch Managers in Bihar and 2 courses on

General Management-cum-Development Banking Program in Tamil Nadu were con-

ducted by the concerned LDBs. Executive Development Program for its 61

- 101 -

ANNEX IIIPage 9

officials was conducted by Maharashtra SLDB. Similar courses have been

conducted by the SLDBs in the States of Gujarat. Karnataka and Madhya

Pradesh.

17. The IDA aissions during their visits have emphasized the need for

paying greater attention to training of field staff. Keeping this in view. a

short re-orientation course for SLDB supervisors and field staff with focus

on appraisal of individual loans, maintaining contact with the borrowers,

taking follow-up action, etc. has been designed. Besides, the course

provided inputs relating to the strategy to be adopted to recover the

cooperative dues. This course has been organized on all-India basis. A few

seats are reserved for RRBs staff in each of the junior level training

program after it was decided that the junior staff of RRBs, SCBs and DCCBs

will be imparted training at the Junior Training Centers.

Improvements in Teaching Aids

18. As there is growing emphasis on audio-visual techniques and aids in

training management area, a beginning was made in this regard in 1981.

Educative films are being supplied to the various training centers. Further,

the training centers have been advised to have at least one audio-visual

session in the courses conducted by them. A large number of slides (b/w and

color) on minor irrigation, animal husbandry, plantation and horticulture and

soil conservation have also been supplied to the training centers. Madras

regional office of the National Bank has produced 130 color slides and a

- 102 -

ftge 10

cc_n tary casitte for covering the program on VVV. Reading ateriel kits

have also been prepared for various programs.

- 103 -

ANNE1 1IIIPage 11

TrainingTable 1

Statement

ARDC CP - Review of Training Programs under Junior Level

SLDBs Junior staff trained up to 30.6.1984 under basic courses

Sr. Name of Total No.No. SLDBs of Staff

estimated Trained Under ARDC CP Totalas per ARDC I II III IV (3+4+5+6)1976 Report

1 2 3 4 5 6 7

1. Andhra Pradesh 2231 710 2144 291 - 31452. Bihar 1367 361 596 - 40 9973. Gujarat 1526 172 977 272 15 14364. Haryana 538 69 477 143 17 7065. Karnataka 1326 146 954 476 190 17666. Kerala 323 123 224 32 99 4787. Madhya Pradesh 1543 326 952 682 525 24858. Maharashtra 2916 - 1635 1843 393 24869. Orissa 391 83 368 118 189 67810. Punjab 810 170 517 320 - 248511. Rajasthan 827 132 397 139 281 86012, T=ail Nadu 1709 397 895 257 277 1q2613. Uttar Pradesh 1286 256 1194 463 258 217114. West Bengal 494 89 243 86 30 44815. Assam 54 - - - -

16. J & K 60 - - - -

17. Himachal Pradesb 119 - - - -

18. Pondicherry 10 -

19. Tripura 21 - - - -

17551 3634 11078 5113k 2654w 22374 *

* Excluding 110 and 894 trainees from RRBs trained during ARDC CP III and IVrespectively. The total number trained up to 30.6.1984 are therefore 23378.

- 105 -

ANNEX IVPage 1


INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVESOPMENTCORPORATION CREDIT PROJECT (ARDC IV)


Important Policy Decisions during the Project Period

Some of the major policy decisions taken were as follows:

(i) Increase in the level of ARDC contribution tospecial development debentures located by SLDBs

The level of the contribution by National Bank to the special

development debentures floated by SLDBs from September 1, 1981 (1981-82) up

to the end of the Sixth Plan Period (1984-85) was increased as follows:

- 106 -WKx r v

Page 2

Refinance contribution as apercentage of financial assistance

Erstwhile Revised

(A) (i) Minor Irrigation

(ii) Special schemes for diversified )under capital subsidy schemes ) 90 percent 95 percentfor identified small farmers )

(iii) All purposes in Eastern andNortheastern Region

(B) Diversified purposes other thanfarm mechanization

(i) Small farmers other than thosecovered under special schemes 75 percent 90 percentreferred to at (A)

(ii) Other farmers 75 percent 85 percent

(ii) Redemption of special developmentdebentures floated by SLDBs

At the request of SLDBs, ARDC agreed to allow them the option to

redeem the special development debentures floated from January 1, 1982

onwards either in equal annual instalments or in equated annual instalments.

(iii) Overdues discipline for SLDBs/CBs

(a) Criteria for SLDBs

The revised norms for regulating the advances by PLDBs/SLDB branches

came into force from January 1982. As per these modifications:

- 107 -

ANNU IVPage 3

(i) The eligibility of a PLDB/branch of SLDB was to be determined with

reference to its overdues as on June 30, 1981 or the average of overdues for

the three years ending June 30, 1981, whichever is lower. In the subsequent

years, the eligibility was to be determined on the same criteria. Based on

this, the PLDB/branch of SLDB has the eligibility for lending as shown below:

Percentage ofoverdues to demand Eligibility

(I) 0-25 Unrestricted lending program

(II) 26-40 (a) highest lending level reached in any ofthe preceding 5 cooperative years;

or (b) amount of recoveries in the precedingcooperative years;

or (C) average amount of recoveries during thepreceding 3 cooperative years; whicheveris the highest.

(III) 41 and above Same as (b) and (c) of (II) above,whichever is higher

(ii) The PLDB/branch of SLDB with restricted eligibility should utilize

the eligible lending program first for meeting in full the commitments

towards disbursement of the second and/or subsequent instalments in respect

of loans where the first or subsequent instalment were disbursed during the

previous cooperative year. The residual eligibility may be used towards

granting fresh loans including those to small farmers and other weaker sec-

tions. The earlier concession of drawings funds to the full extent from SLDB

for giving loans to small farmers identified as such under special programs

- 108 -AMEX IvPage 4

was not available under the revised norms. In such cases where eligibility

is less than such comoitted expenditures, the concerned SLDB was to approach

RBI/Kational Bank for necessary approval to provide funds to such PLDB/branch

to enable the latter to meet the comnitments. No fresh loans, however, were

allowed to be issued by such a primary unit.

(iii) In the case of a PLDB/branch of SLDB whose recovery performance falls

below that of the preceding year by more than 10 percent of the demand, the

SLDB should review the operations of the concerned PLDB/branch and report to

ARDC/RBI the findings of the review tor,ther with the remedial measures

proposed to be taken so that the concerned PLDB/branch can take corrective

action before December 31 each year. Further, refinan'e in respect of loan-

ing done by such PLDB/branch was to be provided only if ARDC/RBI are satis-

fied about the action taken.

(iv) In the case of SLDBs under rehabilitation in the status of Bihar,

Gujarat, Karnataka, Madhya Pradesh, Maharashtra and Tamil Nadu, the

eligibility of primary units, determined on the above basis, will be subject

to SLDB's implementing the rehabilitation measures suggested by National

Bank.

(b) Overdues criteria for CBs

In consultation with CALCOB and GOI, the eligibility criteria

applicable to CBs and RRBs for availing of refinance from National Bank on or

after July 1, 1983 was finalized, salient features of which are as follows:

- 109 -

AMu= IV

Page S

Overdues as Z of demand Eligibility of the co mme rcialin respect of direct banks' branchesadvances for agricultureand allied activities

0-35 Unrestricted

36-50 Up to highest lending level in any of thepreceding 5 years for direct term loans foragriculture and allied activities or up tothe amount of recovery in respect of suchadvances in the preceding year or the averageof the amount of recovery during the precedingthree years whichever is higher.

51 and above Up to the amount of recovery in the precedingyear in respect of direct term loans foragriculture and allied activities or theaverage of the amount of recoveries inrespect of such advances during the precedingthree years whichever is higher.

As in the case of PLDBs/SLDBs' branches, the commercial banks'

branches with restricted eligibility were to first meet committed expenditure

under ongoing schemes and utilize the residual for granting fresh loans.

National Bank, however, agreed to provide additional funds in case committed

expenditure exceeded the eligibility. The restrictions were not applicable

to branches of commercial banks with overall recovery of 65Z of its demand

and also if a branch was lass than 5 years old or it had less than Rs 1 lakh

as overdues or up to 25 overdue accounts. In case the recovery rate of a

branch dropped by more than 10% in any year, the concerned bank was to review

the position and advice National Bank on the remedial measures to be under-

taken.

- 110 -

ANNEX IVPage 6

(iv) Increase in financial assistance for energizationof puapsets and extension of repsyment period

The scale of financial assistance to be provided by the financing

banks to the SEBs for energization of agricultural pumpsets was liberalized

with effect from January 1, 1982. The financing banks have now been per-

mitted to provide loans to SEBs at the rate of Rs 7,500 per pumpset up to

7.5 hp and Rs 10,000 up to 5 hp and Rs 6,500 up to 7.5 hp. The rate for

motors of higher hp required to be installed on technical grounds, was fur-

ther liberalized. Further, the repayment period of loan to SEBs was also

extended from 7 years to 9 years including a grace period of one year.

Effective April 1, 1983, SLDBs were also allowed to issue loans, within their

overall approved annual lending program to SEBs without reference to the

eligibility of the PLDB/SLDB branch. These loans are in addirion to the

existing ceiling of 25Z of the lending program of a bank for advancing loans

to cooperative bodies.

(v) Financial assistance for energizationof pumpsets under REC-SPA program

It was decided to participate in financing the program for energizing

8 lakh pumpsets during 1982-83 to 1984-85 under the second phase of REC-SPA

program involving aggregate financial assistance of Rs 8300 M financed

jointly by REC, National Bank and CBs on an equal basis and to implement

mainly in the unexploited but promising area in the six priority states,

viz., Assam, Bihar, Madhya Pradesh, Orissa, Uttar Pradesh and West Bengal.

- 111 -

ANNEX IVPage 7

(vi) Provision of refinance by way of loans to SCBs

With a view to helping SCBs step up their loaning within the existing

framevork, it was decided to allow them to taise from National Bank resources

by way of long-term loans against government guarantee and also provide 100l

refinance under both special and normal lending.

(vii) Commitment charges under schemes approved

To facilitate efficient maragement of funds for meeting its comit-

ments under approved schemes, National Bank laid down certain norms for the

levy of commitment charges at 1/3 of one percent from July 1, 1983 from the

banks in respect of the undrawn portion of the committed funds.

(viii) Maintenance of demand collection andbalance (DCB) register by bank branches

As recommended by the CALCOB, CBs and RRBs were advised to indicate

the position regarding the maintenance of DCB register by the branches while

submitting the schemes to National Bank. The drawal of refinance from the

bank, effective from January 1, 1983, was also subjected to the condition

that branches maintain the prescribed DCB register and furnish the required

data in that regard.

- 112 -

Awx rvPage 8

(iz) Revised interest rates

In conformity with the Reserve Bank's directives, National Bank

revised the rates of interest to be charged by the financing banks to the

beneficiaries under its refinanced schemes and advised all financing ban'..s

to adopt the following interest rates from April 1, 1983.

National BankrsRate of interest refinance rateto ultimate with effect from

Purpose borrowers April 1, 1983

1. Minor irrigation and landdevelopment 10.00% 6.5%

2. Diversified purposes

a) IRDP borrowers 10.00 6.5%b) Small farmers (as per

National Bank's definition) 10.00% 6.5%c) Others 12.50% 8.0%

(s) Simplified procedure for release of refinance under IRDP

To facilitate availment of r-finance by the financing institutions as

also to reduce the time-lag between the disbursement of loans to the ultimate

beneficiaries and the drawal of refinance by the banks from National Bank,

the banks were allowed to claim refinance by mere submission of prescribed

statements at monthly intervals.

- 113

A£313 IVPaso 9

(xi) Soil conservation and/or ravine reclamation schemes -finance to irieligible farmers and interim financefacility for such farmers

It vas agreed to provide refinance for schemes for the reclamtion of

ravine lands to be carried out on a watershed basis with the objectives of

arresting further growth of ravines, saving table lands and utilizing them

for productive purposes. However, since all the farmers to be covered under

the program might not be eligible for loans from the financing institutions

for one reason or the other, it was decided to provide special lo-n facility

for such farmers from a Special Loan Account (SLA) constituted for the pur-

pose. Contributions to SLA are made by the concerned State Government and

the National Bank on a matching basis. National Bank also issued model

guidelines detailing the procedure evolved for financing Lhe soil conversion

and ravine reclamation works on the lands of ineligible farmers. It was also

decided to extend the facility of inwerim finance to the corporations

implementing such schemes, on the lines provided under CAD projects. The

rate of interest on interim finance was fixed at 6.5 percent per annum.

(xii) Refinance facility to new areas/activities

(a) Farm forestry

It was decided to consider farm forestry development schemes on

private lands if tree planting is done on: (i) the bunds and boundaries of

cultivated lands; (ii) whole stretches of uncultivated lands; and (iii) lands

giving poor yields and income from ordinary field crops. Likewise, planting

- 114 -AM=E IVPage 10

of trees on degraded lands belonging to government and obtained on long lease

by farmrs or their groups werb also covered.

(b) Loan for effecting improvements in pumpset installations

With a view to improving the efficiency of the agricultural pumpsets,

decision was taken to extend refinance facilities for providing a supplemen-

tary loan to the farmers for replacement of undersized/defective pumping

system and foot valve and correcting installation/other defects in existing

pumpsets.

(c) Stand-by oil engines

In view of power shortage, it was decided to offer financial assis-

tance for purchase of stand-by oil engines of 5 hp or less to farmers who

have earlier installed electric pumpsets through bank loans.

(d) Export-oriented agricultural projects

It was decided to make available financial support to the extent of

Rs 500 M for agricultural projects covering export-linked production (and not

merely export performance).

(e) Portable charcoal metal kilns

- 115 -

ANNEX IVPa&ge 11

To help veaker sections, including SCs and STs, secure employment and

for providing an alternative source of energy, refinance assistance was

extended for financing purchase of portable metal kilns (a modern device for

production of charcoal).

(f) Refinance for dry land agriculture

National Bank agreed in principle to extend credit support through

member banks for schemes envisaging investments in land development, soil and

water conservation and other ancillary activities like fodder development,

etc. in areas under dry land farming.

(g) Refinance for wind mills

Keeping in view the importance of exploring renewable source of

energy as against conventional sources of energy like coal, oil, etc. laid in

Sixth Five Year Plan and considering that wind could be harnessed as one such

source, it was decided to refinance eligible institutions in respect of

viable schemes for setting up of wind mills for minor irrigation, viz.,

operation of punpsets, etc. and guidelines for formulation of such schemes

were issued.

II. Non-agricultural Term-lending (schematic)

(i) Refinance for loans for non-farm activities under IRDP

Refinance facilities were extended, effective from January 1, 1983,

in respect of the loans disbursed by a bank after October 1, 1982 for

- 11o -

ANE IVPage 12

Industries, Services and Business (ISB) components under IRDP. The aximum

amount of loan eligible for refinance under this facility was restricted to

Rs 10,000 per beneficiary.

III. Institutional Development

(i) Management, organization and financial improvement measures for SLDBs

Based on the deliberations of the Comuittee on Term Lending through

Cooperatives (COTELCORP) at its meeting held in June 1982 on the recomenda-

tions of the Expert Groups' Studies of Weak SLDBs, follow-up measures were

initiated for improving the organizational and management capabilities of the

SLDBs. Performance evaluation of primary units, classification of overdues,

recovery of dues out of salary in case of salary earners, introduction of

be2neficiary profile cards, staff incentive scheme to facilitate recovery,

communication of terms and conditions in local language and inclusion of

legal charges, stamp duty, etc., in unit cost of investment were some of the

improvement measures.

ii) Functional coordination

National Bank formulated a scheme, based on the recommendation of the

CRAFICARD, for providing refinance facilities for composite loans-short-term

loans along with long-term loans-through the LDBs. This scheme was to be

confined to the areas of weak PACS and to be in operation till such time the

PACS were reorganized and sufficiently strengthened to provide short-term

credit. It was not applicable to areas in which PACS were being financed by

- 1'7 -

ANNEX IVPage 13

C89. As a corollary to the provision of production credit, it was also

agreed to provide the facility of conversion of short-term loans given by

LDBs into medium-term loans in respect of borrowers affected by natural

calamities.

IV. Short-term Agricultural Loans

i) Financing of new and non-defaulting membersof PACS and defaulting smalllmarginal members

(a) New and non-defaulting members of PACS

For enabling the PACS to meet the credit needs of the new and

non-defaulting members even in cases where the CCBs are not eligible for

credit limits from National Bank, it was decided to sanction to SCBs, on

behalf of eligible CCBs, additional/supplementary short-term credit limits

for seasonal agricultural operations and other approved short-term purposes.

(b) Small/marginal farmers defaulting for small amoun;

PACS were allowed to provide fresh finance to small/marginal farmers

out of their own resources without refinance facility from the higher financ-

ing agencies if the defaulted amount did not exceed lOZ of the individual's

eligibility for short-term agricultural loans and if the defaults arose from

circumstances beyond the borrower's control. It was decided that CCBs and

SCBs could provide finance to PACS which do not have their own resources to

finance such defaulting members subject to the norms earlier stipulated by

RBI. National Bank is turn also agreed to treat the involvement of CCBs in

- 118 -

AJW IVPage 14

such financing as legitimate charge on their resources for the purpose of

sanction of short-term credit limits.

ii) Interest rates

The lending rates on advances to be charged by the cooperative

societies for agricultural Lendings with effect from April 1, 1983 were

revised as under:

- 119 -

ANNU IVPage 15

Existing RevisedRates Z Rates X

Short-term agricultural loans

A. Small farmers Not exceeding Not exceeding(Loans up to Rs 5,000) 12.50 12.50

B. Others Not exceeding 15.00 Not exceeding(not exceeding 12.50 14.00 (inin those states where all statesthe present rate to and unionfarmers other than territories)small ones is 11.85as per earlierinstructions).

Medium-term agricultural loans

A. Minor irrigation and land 10.50 10.25development purposes(all types of borrowers)

B. Other purposes

i) Small farmers 11.50 10.25(loans up to Rs 5,000)

ii) Others 11.50 - 12.50 12.50

V. Short-term - Non-agricultural Loans

i) Relaxation of norms for assessing working capitalrequirements of industrial cooperative societies

With a view to facilitating a larger flow of credit, it was decided

to relax the norms followed by the erstwhile ACD of RBI in assessing the

working capital requirements of industrial cooperative societies. Accord-

ingly, the norms for assessing working capital requirements at 252-50% of

anticipated reduction/sale were raised to 33-1/3% - 75%, depending on the

- 120 -

AM=N IVPage 16

nature of activity. Further, the per loom scale of finance for polyester

cloth on haadloom in the case of the newly organized or dormant weavers'

societies to be activated was raised from Rs 8,000 to Rs 10,000.

ii) Advances to individuals by CCBs againstgold/silver ornaments (jewel loans)

CCBs were allowed to give loans directly to individuals against the

pledge of gold or silver ornaments, for amounts not exceeding Rs 3,000 (ear-

lier limit Rs 2,000) per borrower. In aggregate, such outstanding loans

should not exceed 10% of a bank's total deposit liabilities as on the last

Friday of the previous month.

- 121 -

AM= VTable 1

PaOJECT CONPLEITION REPORT

INDIA

FOURTH AGR CULTURAL RtEINANCE AND DmVLOPPENTCORPORATION CREDIT PRDJECT (ARDC IV)

(CRTDIT 1209-IN/LOAN 2095-IN)

A Study of Minor Irrigation Scheme in Allahabad District of U.P.

Month/Year of the sanction of the scheme by ARDC - July 1975Month/Year of closure of the scheme - June 1979Reference year of the study - 1981-82

ShallowS.No. Item Tubewell Dugwells

1. Number of borrowers under the scheme 3,214 554

2. Size of the sample 97 18

3. Average size of holding (acres) 7.54 3.05

4. Average benefitted area (acres) 4.76 1.88

5. Cost of investment (per unit)(at historical prices) 11,577 4,100

6. Cost of investment per unit (at current prices) 16,800 6,000

7. Intensity of cropping (X)(i) With project conditions 192 190

(ii) Without project conditions (rainfed area) 132 135

8. Gross value of farm produce

9. "With Project" farm business income (Rs per acre) 1,636 1,320

10. Incremental income (Rs per acre) 754 881

11. Additional on-farm employment (mandays per acre) 29 66

12. Financial rate of return (FRR) (X) 25 24(without family labor)

13. Total Scheme Impact net addition to:(i) Irrigated Area (acres) 5,786

(ii) Sown Area 3,726(iii) Foodgrains Production (tons) 92.94

(iv) Incremental on-farm employment (person years) 1,899(v) Incremental income (Rs lakhs) -

14. Economic Rate of Return (ERR) (x) 39 37(without family labor)

122 - ~~~~AM=E V- 122 - Table 2

Page 1


INDIA

FOUR'7N AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (ARDC rv)


A Study on the Working of the Deep Tubewells inWest Bengal, Hooghly and West Dinajpur

Month/year of the sanction of the schemeby ARDC

Month/year of closing of the scheme -

Reference year of the study - 1980-81

1. No. of DTW units studied - 21

2. Size of the sample - 194 beneficiaries(including 2 cooperatives)

3. Average size of the holding - 1.20 hectares

4. Cost of investment - 1.204 lakhs for corporationowned 1.638 lakhs forcooperatives

5. Average benefitting area - 27.8 hectares

6. Intensity of cropping - 196%

7. Farm business income - Rs 2229 per acre

8. Without project income - Rs 469 per acre

9. Incremental income - Rs 1763 per acre

10. Additional on-farm employment(a) Mon-recurring - 2929 mandays(b) Recurring - 96 mandays

- 123 -

ANNEX VTable 2Page 2

11. Total Scheme lmpact(a) Employment - 8.79 lakh mandays(b) Gross produce - 3.46 lakh tons of foodgrains

and potatoes

12. F.R.R. - Above 50Z (with water charges)- Above 50 (without water

charges)

13. E.R.R. - Above SOX (with water charges)- Above 50X (without

water charges)

-125 - AjVu VTable 3


INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPIENTCORPORATION CREDIT PROJECT (ARDC IV)

(CREDIT 1209-IVILOAN 2095-IY)

Public Tubevells and River Lifts in Orissa

1. Reference year of study July 1980 - June 1987

TW9 RLIUs

2. No. of schemes selected for study 4 2

3. Irrigation units selected for study 12 5

4. Number of sample beneficiaries 72 30

5. Number of selected non-beneficiaries 36 15

6. Average cost of investment athistorical prices (Rs '000) 55.83 75.90

7. Irrigabie command area (acres)

(a) Anticipated 480 420(b) Actual 345 300

.8 Utilization of irrigation potentialper unit as x of the actual potential

Year TWs RLIUsKharif Rabi Kharif Rabi

(S) (x) (X) (x)

1978-79 14 41 - 311979-80 45 73 12 451980-81 25 53 2 36

9. Incremental income/acre (Rs) TW, RLIUs

(a) Without family labor 384 196(b) With family labor 275 215

10. Incremental income/beneficiary

(a) Without family labor 422 443(b) With family labor 303 422

11. Financial rate of return (2)

(a) With subsidy 10X 102(b) Without subsidy Negative Negative

12. Economic rate of return 4% Negative

- 126- ANNX VTable 4


INDIA

FOURTH AGU CULTURAL REFINANCE AND DEVELOPMENTcORPORATION CREDIT PROJECT (ARDC IV)


Public Tubewells and River Lifts in Orissa

Evaluation Study of Minor Irrigation Scheme inMuzaffarnapar District in Uttar Pradesh

1. Month/Year of the sanction ofthe scheme by ARDC May 1976

2. Month/Year of closing of the scheme June 1978

3. Reference year of study 1981-82

4. No. of sample beneficiaries 87

ETW DTW

5. Cost of Investment (Rs) 11283 7452

6. Average size of holding 9.26 acres

7. Average benefitting area 7.01 acres

8. Cropping intensity 276X 280Z

9. Gross income per net cropped area (Rs) 4420 4636

10. Net Incremental Income (Rs)

(a) Without Family Labor 10781 5364(b) With Family Labor 9332 4190

11. Financial Rate of Return (FRR)

(a) Without Family Labor …-----48Z----->(b) With Family Labor c-----40z----->

12. Economic Rate of Return (ERR)

(a) Without Family Labor <----above---->(b) With Family Labor …-----47 …----->

13. Total Scheme impact - net addition to:

(i) Irrigated area 3480 acres(ii) Irrigated area by tubewells 20400 acres

(iii) Gross irrigated area 6850 acres(iv) Gross value of incremental production 514.3

(Rs lakhs)

- 127 -ANNE= VTable 5


INDIA

FOURTH AGRICULTURAL REFINANCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (AMDC IV)


Minor Irrigation Scheme in Rohtas District of Bihar

Month/Year of sanction of the scheme by ARDC - October 1976

Month/Year of the closing of the scheme - 1978-79

Reference year of the study - 1981-82

Sr.No. Item Pumpsets

1, No. of borrowfrs under the scheme 67 beneficiaries

2. Size of the sample 33 beneficiaries

3. Average size of holding 7.62 acres

4. Cost of investment (Rs) 6,500

5. Average benefitting area 7.03 acres

6. Intensity of cropping 191%

7. Farm business income Rs 931 per acre

8. Farm business income (pre-investment) Ri 799 per acre

9. Incremental Income Rs 324 per acre

10. F.R.R. Above 50%

11. E.R.R. Above 50%

- 129 -

P3.OJRCT CONILTOv RVRTANNU V

INDIA Tabl*e

-3R2 AORIWL=R& RUIIANC AI DEVELOPENTCORORATIAON CRUITX? FJOC? (ARDC IT

(CREITf 1209-IR/LOAM 2095-rn)

*valustion Study of Dairy DeVeloPmnt in 'Nalerkotla Area of Sanorur District, Puniab

1mportant Survey Data

Month & Year of sanction of scb _ November 1973Month b Year of closure of sch _ June 1980Reference period of the study 1980/81Valuation of costs I benefits At constant 1980/81 Prices

1. Total number of beneficiaries financedunder the scheme _ 760

2. Total number of animals financedunder the schee 760

3. Size of sample of beneficiaries 76

4. Number of scheme animals held bythe sample beneficiaries 76

S. Investment cost at historicalprices per animal (Rs) 2,110

6. Average amount of capital subsidyreceived per animal (Rs) 628

7. Average inter-calving period (days) 430(a) In-milk period 280(b) Dry period 150

S. Kilk yield per in-milk day peranimal (litres) 6.5

9. Cross receipts per animal per year (Rs)(a) Only milk 2,456(b) Total 2,596

10. Annual net income per animal (Rs)(without family labor) 868

11. aUs(a) With capital subsidy Above 502(b) Without capital subsidy : Above 352

12. Anui4al employment generated peranimal (mandays) 102

13. E1 (without family labor)(a) With capital subsidy Above 502(b) Without capital subsidy Above 362

- 131 -

PROJICT COMM.ZTXON REPORT

INDI Table 7

IWRTS ACRZICUAL RUZNFMCI AND DVELOPWCORPPATION CZUZT PROJECT (ARDC IV)

(CZDIT 1209-ZN/LOAM 2095-IN)

Evaluation Study of Dairy Scheme inSurat District, Cujarat

Important Survey Data

Month/Year of sanction of schem (SFDA) July 1978Month/Year of closure of sch em December 1979Reference period of the study 1980/81Valuation of costs & benefits 1980/81

1. Total No. of animals finaLced 586

2. Total No. of beneficiaries 396

3. Size of sample of beneficiaries 67

4. Average historical cost/animal (Rs) 2,460

5. Average subsidy/animal (Rs) 1,355

6. Average lactation cycle

(a) Milk days 248(b) Dry days 151

Total 399

7. Milk yield/milk-day/animal (litres) 4.1

8. Annual Milk yield/animal (litres) 926

9. Gross receipts per annum (Rs)

(a) Milk alone 2,472(b) Total 2,654

10. Annual net income/animal (vithoutfamily labor) (Rs) 1,089

11. Pn (vithout family labor):

(a) Without subsidy 252(b) With subsidy Above 50%

12. Annual employment/animal (Kandays) 120

13. EUR (vithout family labor)

(a) Without subsidy 36%(b) With subsidy Above 50%

- 133 -

PROJECT COMNLZTION REOV

INDIA Table 8

1OURI AGRICULTUA RZIWNCI AND DKVLU.L.oCOBPOATION C____T FROJCT (ADC IV)

(CUI~T 1209-IN/LOAN 2095-IN)

Evaluation Study of Dairy Developwntin lbaratpur District, Raiasthan


Year of sanction of scheme 1979Year of closure of scheme : 1981Reference year of the study 1981/82

1. Number of animals financed underthe sche_ 400

2. Number of beneficiaries coveredunder the scheme 200

3. Size of sample(a) No. of beneficiaries 70(b) No. of animals 107

4. Investment cost per animal athistorical prices (Rs) 2,738

5. Average lactation cycle(a) Milk days 238(b) Dry days 153

6. Milk yield per animal (litres)(a) Per lactation 1,084(b) Per year 1,013

7. Cross receipts per animal per year (Rs) 2,760(a) Milk 2,578(b) Manure 182

8. Average operational costs peranimal per year (Rs) 1,659

9. Average net income per animal per year 1,101

10. FRU (without family labor):(a) Without Subsidy 20S(b) With subsidy Above 501

11. Annual additional employment 120

12. ER (without family labor):(a) Without subsidy 29S(b) With subsidy Above 501

- 135 -

PROJICT COKPLZTION RFPORTAM= V

INDIA Table 9

1UW M AGRICULTURAL RZIMN^NC AND DEVZLOMK NSCOR3POIATION CRUIT PROJICT (ARDC IV)

(CIDIT 1209-IN/LOAN 2095-IN)

Evaluation Study of Marine FisheryScheme for Iachanized Boats in

Bulsar District, Cuijarat

IrPortant Survey Data

Year of sanction of the scheme by NABARD 1975Year of closure of the scheme 1976Reference year of the study 1981/82

1. Number of mechanized boats financed 13

2. Number of beneficiaries under the scheme 13

3. Size of the boat 10 Metre

4. Average cost of investment (at historicalprices (Rs lakhs)) 1.66

5. Average catch per year (Quintals)

(a) Prawns 83.2(b) Other fish 624.9

6. Average value of fish catch (Rs lakhs)

(a) Prawns 1.58(b) Other fish 1.36

7. Average operating ezpences (Rs lakhs) 2.45

8. Average net income (Rs lakhs) 0.49

9. FRR 15Z

10. Annual employment generated in mandays 2,700

- 137 -

PROJUCT COMPLETION REPORTAME V

INDIA Table 10

FOURMI AGRICULTURAL REFII)WCE AND DEVELOPMENTCORPORATION CREDIT PROJECT (ARDC IV)


Evaluation Study of Inland Fishery Schemein KrishnA District of Andhra Pradesh


Scheme implementation period 1979-82Reference year of the study 1983/84

1. Number of units financed under the scheme 187

2. Average tank size (Ha) 2.5

3. Average investment cost at historicalprices (Rs) 55,737

4. Output of fish (Kgs) 4,277

5. Gross Value of output (Rs) 55,596

6. Average operating expenses (Rs) 25,448

7. Net income (Rs) 30,148

8. FRR:

(a) Without subsidy : 28Z(b) With subsidy : 42X

9. Annual employment generated (Kandays) : 334

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PAROHA D REFINANCE AND DEVELOPMENTGOA \ PQADESH CORPORATION CREDIT PROJECT

4 TA KAc - Generalized Occurrence of Groundwater,Rainfall, Evaporation, and ARDC Regional Offices

Larg to inodunate we4I y,u*:Ailuvium of moar rimer van and coastal mos

BANGALORE * MADRAS Moderate Wei: yiehdC;onalkldltd sedi*tsents (sandstoneetc.)

Smtall well yids:v> Pvkpwipb hord rocks (grorib, schist. etc.)

< > ~~~~~~~~~~~~~~Dccntsrap (b- eh ono nsbho vok-enies)Thin alwnium ond durne sand of desert areMountoinous acea

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:>, - / * ARDC Reoal Offices hebded by Director as of* ~~~~~~~~~~~~Jure98

*' ARDC Regional Offices heoded by Senior DirtdorsTRVADRM a s ofJune 1981TRIVANDRU - ARDC Heaqocrts

0 100 200 300 Md * Notional Capital------ , State ond Union Territory Bocndries

0 100 200 300 400 500 Kl SRI _ - Intrnotional 8Oundories

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70- 9. ,oo__________________ 80'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Q

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