Inclusive growth is the buzzword Guest Column - Nikhil Advani The budget presented by the finance minister today

clearly reflects the governments intention to foster a more inclusive growth oriented economic agenda, so that the masses also get a share of the development pie. Hence, various schemes to provide economic security to the common man have found pride of place in the budget such as increased allocation for NREGA, the proposed food subsidy bill etc. These measures may be termed populist but the fact of the matter is that these steps are essential for long term sustainable growth of the economy. The proposed food security law that envisages providing 25kg of rice and wheat each month at a subsidised rate of three rupees a kilo to each poor family is an important element of the social security net that the country is gradually putting into place, and deserves to be applauded. The initial reactions of the markets have been negative, largely because a great deal of the expectations that were built up over the past few weeks have not been realised. But that is not to say that there is no good news for the corporate sector, or overall economic growth in the budget. Infrastructure will get a boost through the 23 per cent increased allocation for highways and this will provide a critical boost to increased economic activity across various sectors. Roads connect the producer to the consumer, and having a strong network of roads gives a multiplier effect to economic growth. More importantly, as the lifeline of commerce connecting rural production centers to the urban centers of consumption, highways are essential for bridging the India-Bharat divide. As our rural centers become increasingly more important markets for industrial products, the increased allocation to the construction of highways will clearly have a positive cascading effect on the entire economy. The increased allocation for the construction of highways has been more than matched by a 59 per cent increase in the Pradhan Mantri Gram Sadak Yojana (PMGSY). This scheme provides funds the last mile connectivity to each and every village. So, with both the highways and rural road network expanding, ever-increasing parts of rural India are being integrated into the national commerce both as producers and consumers. Another important initiative in the budget has been the proposed long-distance gas highway, which will help meet the needs of the energy-deficient parts of the country. Admittedly, this is not the first time that a national gas grid is being talked about. But this initiative is important to link the gas starved areas with the newly discovered major gas fields. This move will have the impact of reducing considerably Indias energy import bill, and is an important feature of the budget. The increased spending on the various infrastructure schemes highways, rural roads, irrigation, urban and rural housing schemes will provide the necessary impetus to create additional jobs and get the economic cycles moving faster than they currently are. If the rate of our economic growth is to jump again from the 7 per cent to 9 per cent and higher, government spending will have to play an important role. The budget clearly seems to have this goal in mind. For those of us who live in Mumbai, the budget has good news in the form of the Rs 500 crore provided for the development of the city, with an emphasis on flood alleviation measures.

Overall, given the challenges that the country faces in these difficult times of global economic slowdown, the budgets focus on providing protection to the most vulnerable sections of society has to be appreciated. If that has meant that there is less available for the corporate sector, that is understandable. Once Corporate India reads the fine prints, it will be realised that there is enough stimulus provided for in the budget. In my mind this is a reasonably balanced budget which will benefit both the Aam Adami and the corporate India. Welfare of Minorities, specially of the underprivileged section of them, has been put high on the agenda of the UPA Government ever since it adopted inclusive growth as its guiding principle of governance. Otherwise too, in every meaningful democracy, its the duty of the state, and as a corollary, responsibility of the majority community to ensure the welfare of minorities so that all sections of the society feel proud to be part of the democratic setup and thus contribute their best to the development of the nation. Specially in our historical context: where all communities and sections of people had marched shoulder to shoulder and laid down their lives in the War of Independence, the concept of Inclusive Growth becomes sine qua non for the roadmap of development and progress. It was in this context that the Prime Minister, Dr. Manmohan Singh, had appointed in March 2005 a High Level Committee under the Chairmanship of Justice Rajindar Sachar to prepare a report on social, economic and educational status of the Muslim Community of India. This study was necessary because till then there was no authentic information on the social, economic and educational backwardness of this community, thereby hampering proper formulation and implementation of specific policies, interventions and programmes to address the issues relating to its socio-economic backwardness. This 7-member High Level Committee, popularly known as Sachar Committee, gave its report in November 2006 and it clearly found that the Muslim community was really seriously lagging behind in terms of most of the human development indicators. The Government immediately sensed the gravity of the problem and started working on the follow-up action in right earnest. Of the 76 recommendations of the Committee, 72 were accepted. Ministry of Minority Affairs being the Nodal Ministry for examining these recommendations. And in less than a year, i.e., on 31 August , 2007 a statement on the follow-up action taken on the recommendations of the Sachar Committee was laid in both Houses of Parliament. The progress of implementation is being reviewed regularly. Ever since the Government has been taking regular steps towards implementation of major recommendations of the Sachar Committee. Education being the most powerful means of socioeconomic transformation, a multi-pronged strategy to address the educational backwardness of the Muslim community, as brought out by the Sachar Committee, has been adopted. The madarsa modernization programme has been revised to make it more attractive by providing better salary to teachers, increased assistance for books, teaching aids and computers, and introduction of vocational subjects, etc. This scheme, now known as Quality Improvement in Madrasa Education, has been launched by the Ministry of Human Resource Development.

A new centrally sponsored scheme of financial assistance for Infrastructure Development of Privately Managed Elementary/Secondary/Senior Secondary schools set up for minorities has been launched. National Council of Educational Research and Training (NCERT) has prepared text books for all classes in the light of the National Curriculum Framework-2005.Thirteen universities have been provided Rs.40 lakh each for starting centers for studying social exclusion and inclusive policy for minorities and scheduled castes and scheduled tribes. Under the Kasturba Gandhi Balika Vidyalaya scheme (KGBV), criteria of educational backward blocks has been revised with effect from 1st April 2008 to cover blocks with less than 30% rural female literacy and in urban areas with less than national average of female literacy 53.67%(Census 2001). Universalization of access to quality education at secondary stage (SUCCESS), has been approved. Setting up of new Jan Shikshan Sansthans (JSSs) is being incorporated in the revised schemes by the Ministry of Human Resource Development. Provision of more girls hostels in colleges and universities in minority concentration districts/blocks is proposed under the existing University Grants Commission scheme of the Ministry of HRD. Three scholarship schemes for minority communities viz., Pre-Matric , Post-Matric and Meritcum-Means were launched and 6.89 lakh scholarships were awarded to students belonging to minority communities in 2008-09. The corpus of Maulana Azad Education Foundation, which stood at Rs. 100 crores, was doubled to Rs. 200 crores in December, 2006. The corpus was increased by Rs. 50 crores in 2007-08 and by Rs. 60 crore in 2008-09. A budget provision of Rs.115 crore has been made in 2009-10. A revised Coaching and Allied scheme was launched and 5522 candidates belonging to minority communities were provided assistance in 2008-09. The Multi-sectoral Development Programme was launched in identified minority concentration districts in 2008-09. Plans of 47 Minority Concentration Districts (MCDs) in Haryana, Uttar Pradesh, West Bengal, Assam, Manipur, Bihar, Meghalaya, Jharkhand, Andaman & Nicobar Islands and Orissa were approved and Rs.270.85 crores were released in 2008-09. In the current Financial Year, Plans of more than a dozen more MCDs have been approved till date. An interministerial Task Force constituted to devise an appropriate strategy and action plan for developing 338 identified towns, having substantial minority population, rapidly in a holistic manner submitted its report on 8th November, 2007. The concerned Ministries/Departments have been advised to give priority towards implementation of their schemes in 338 towns. Economic factor being an important tool in the upliftment of a community, all public sector banks have been directed to open more branches in districts having a substantial minority population. In 2007-08, 523 branches were opened in such districts. In 2008-09, 524 new branches were opened. Reserve Bank of India revised its Master Circular on 5th July, 2007 on priority sector lending for improving credit facilities to minority communities. Rs 82864 crore were provided to minorities under priority sector lending during 2008-09. District Consultative Committees (DCCs) of lead banks have been directed to regularly monitor disposal and rejection of loan applications from minorities. The Government has accorded in principle approval for restructuring of National Minorities Development and Finance Corporation.

A National Data Bank, to compile data on the various socio-economic and basic amenities parameters for socio-religious communities, has been set up in the Ministry of Statistics and Programme Implementation. An autonomous Assessment & Monitoring Authority (AMA), to analyse data collected for taking appropriate and corrective policy decisions, has been set up in the Planning Commission. A training module has been developed by the Indian Institute of Public Administration, for sensitization of government officials. The module has been sent to the Central/State Training Institutes for implementation. Lal Bahadur Shastri National Academy of Administration (LBSNAA) has prepared a module for sensitization of organized civil services and it has been incorporated in their training programmes. Under Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT), additional central assistance of Rs 1602.20 crore has been sanctioned for 69 towns having substantial minority population, out of which Rs.659.37 crore was released in 2008-09. A High Level Committee, set up to review the Delimitation Act, has considered the concerns expressed in the Sachar Committee report and submitted its report. Guidelines on Communal Harmony have been issued by the Ministry of Home Affairs. Dissemination of information regarding health and family welfare schemes is being undertaken in regional languages in minority concentration areas. State Governments and UTs have been advised by Department of Personnel & Training for posting of Muslim police personnel in thanas and Muslim health personnel and teachers in Muslim concentration areas. State Governments have been advised by Ministry of Panchayati Raj and Ministry of Urban Development, to improve representation of minorities in local bodies. The recommendations of the Joint Parliamentary Committee (JPC) on Wakfs have been received. These have been processed as per approved modalities. An expert group constituted to study and recommend the structure and functions of an Equal Opportunity Commission submitted its report on 13th March, 2008. This has been processed, along with the report of the expert group on diversity index, as per the approved modalities. To meet the ever growing need for ameliorating the condition of minorities, and Muslim community in particular, the Annual Plan allocation for the Ministry of Minority Affairs has been increased substantially to Rs 1,740 crore for the year 2009-10.

Pradhan Mantri Gram Sadak Yojna The Pradhan Mantri Gram Sadak Yojna (PMGSY)- was launched on 25 December 2000 as a fully funded Centrally Sponsored Scheme. The primary objective of the PMGSY is to provide connectivity to all the eligible unconnected habitations of more than 500 persons in the rural areas (250 persons in the hilly and desert areas) by good quality all-weather roads. Under Bharat Nirman, goal has been set to provide connectivity to all the habitations with population of more than 1000 in the plain areas and habitations with a population of 500 or more in hilly and tribal areas in a time-bound manner by 2009. The systematic upgradation of the existing rural road networks is also an integral component of the scheme. Accordingly, an Action Plan has been prepared for connecting 66,802 habitations with 1,46,185 km of all-weather roads.

This Action Plan also envisages upgradation/renewal of 1,94,130 km of the existing rural road network. Subsequently, based on ground verification by States, 62,985 habitations were found eligible to be connected under the programme, out of which 3421 habitations have been connected under other schemes. Thus, the revised target is to connect 59,564 habitations. It is estimated that an investment of about Rs.48,000 crore would be required for achieving the targets under Bharat Nirman. The implementation strategy focuses on quality, cost management and 'on time' delivery. Up to July, 2008, project proposals amounting to Rs.81,717 crore have been approved against which a sum of Rs.38,499 crore has been released for 86,146 roads covering a length of 3,31,736 km. Against these, 52,218 road works having road length of 1,75629 km have been completed with a cumulative expenditure of Rs.35,295 crore.

National Social Assistance Programme (NSAP) is a welfare programme being administered by the Ministry of Rural Development. This programme is being implemented in rural areas as well as urban areas. NSAP represents a significant step towards the fulfilment of the Directive Principles of State Policy enshrined in Article 41 of our Constitution which enjoin upon the State

to provide public assistance to its citizens in case of unemployment, old age, sickness and disablement and in other cases of undeserved want within its economic means. The Govt. of India launched NSAP as a Centrally Sponsored Scheme w.e.f 15th August 1995 towards fulfilment of these principles. 2. At inception, NSAP consisted of the following three schemes: i) National Old Age Pension Scheme (NOAPS): Under the scheme, destitutes aged 65 years or above were entitled to a monthly pension of Rs.75/-. ii) National Family Benefit Scheme (NFBS): The benefit under the scheme to a Below Poverty Line (BPL) household was lump sum amount of money on the death of primary breadwinner aged between 18 and 64 years. The ceiling of the benefit was Rs. 5,000/- for death due to natural causes, and Rs. 10,000/- for accidental deaths. iii) National Maternity Benefit Scheme (NMBS):Under the scheme, lump sum cash assistance of Rs. 300/- per pregnancy was provided as a maternity benefit to women of BPL households up to 2 live births. 3. Over the years changes have taken place in the composition as well as guidelines of NSAP in consonance with the demands of the changing times. The important modifications are listed below. a)1998 : The amount of benefit under NFBS was raised to Rs. 10,000/- in case of death due to natural causes also. The cash assistance under NMBS was also increased to Rs. 500/- per pregnancy. b)2000 : A new scheme known as "Annapurna" was launched w.e.f. 01/04/2000. Under the scheme, 10 kg of food grains per month are provided free of cost to those senior citizens who, though eligible, have remained uncovered under NOAPS. c)2001 : NMBS was transferred from Ministry of Rural Development to the Department of Family Welfare w.e.f 01/04/2001 and subsumed under Janasri Suraksha Yojana. Hence NMBS is no longer a part of NSAP. d)2002 : NSAP schemes were transferred to the State Plans from 2002-03. Ever since funds under the schemes are being released as Additional Central Assistance (ACA)to States by Ministry of Finance and to UTs by Ministry of Home Affairs.

e)2006 : The amount of pension under NOAPS was raised to Rs. 200/- per month per beneficiary, and State Governments were urged to contribute equally towards the pension amount. f)2007 : NOAPS was renamed as Indira Gandhi National Old Age Pension Scheme (IGNOAPS) and brought into effect from 19/11/2007. Eligibility criteria were revised to include all citizens aged 65 years or above who belong to BPL category. g)2009 : Two schemes named Indira Gandhi National Widow Pension Scheme (IGNWPS) and Indira Gandhi National Disability Pension Scheme (IGNDPS) were introduced in Feb 2009. While BPL widows aged 40-64 years are eligible for pension under IGNWPS, BPL persons aged 18-64 years with severe and multiple disabilities are eligible for pension under IGNDPS. In both the cases the amount of central assistance for pensioner is Rs. 200/- per month. 4. Thus, NSAP now comprises of the following five schemes:i)Indira Gandhi National Old Age Pension Scheme (IGNOAPS): Under the scheme, BPL persons aged 65 years or above are entitled to a monthly pension of Rs. 200/-. ii)Indira Gandhi National Widow Pension Scheme (IGNWPS): BPL widows aged 40-64 years are entitled to a monthly pension of Rs. 200/-. iii)Indira Gandhi National Disability Pension Scheme (IGNDPS): BPL persons aged 18-64 years with severe and multiple disabilities are entitled to a monthly pension of Rs. 200/-. iv)National Family Benefit Scheme (NFBS): Under the scheme a BPL household is entitled to lump sum amount of money on the death of primary breadwinner aged between 18 and 64 years. The amount of assistance is Rs. 10.000/-. v)Annapurna: Under the scheme, 10 kg of food grains per month are provided free of cost to those senior citizens who, though eligible, have remained uncovered under NOAPS. 5. States/UTs implement the schemes under NSAP and deliver the intended benefit to target groups. Ministry of Rural Development on its part monitors the effective implementation of the programme and ensures allocation of adequate funds by Planning Commission, timely release of ACA by Ministry of Finance and Ministry of Home Affairs. Besides, as a step towards egovernance to bring in more transparency and accountability in implementation of the programme, Ministry of Rural Development has rolled out the NSAP- MIS for use by all States/ UTs and has launched the NSAP website. Central Rural Sanitation Programme Rural Sanitation is a State subject. The efforts of the states are supplemented by the Central Government through technical and financial assistance under the CSRP. The Programme was launched in 1986 with the objectives of improving the quality of life of rural people and providing privacy and dignity to women. The concept of sanitation was

a. b. c. d. e.

expanded in 1993 to include personal hygiene, home sanitation, sage water and disposal of garbage, human excreta and wastewater. The components of the programme included construction of individual sanitary toilets for household below poverty-line (BPL), conversion of dry latrines to water-pour flush toilets, construction of village sanitary complexes for women, setting up of sanitary marts and production centres, intensive campaign for creating awareness and health education, etc. Keeping in view the experiences of the Central and state governments, NGOs and other implementing agencies and the recommendations of the Second National Seminar on Rural Sanitation, the strategy for the Ninth Five Year Plan was revised and the programme was restructured form 1 April 1999. The restructured programme moves away form the principle of state-wise allocation of funds, primarily based on poverty criteria, to a demand driven approach in a phased manner. Total Sanitation Campaign (TSC) was introduced and the Allocation Based Programme was phased out by 31 March 2002. TSC is community-led and people-centred. There was a shift from a high subsidy to a low subsidy regime. The TSC approach emphasized awareness-building component and meets the demand through alternate delivery mechanism. School Sanitation has been introduced as a major component to encourage wider acceptance of sanitation among rural masses. The States/UTs are required to formulate project proposals under the TSC in order to claim Central government assistance. Under the TSC, so far 559 projects in 30 States/UTs have been sanctioned with the total project outlay of about Rs.6240.27 crore. The Central, State and Beneficiary/Panchayat contributions are about Rs.3675.38 crore, Rs.1424.09 crore and Rs.1140.80 crore respectively. The components sanctioned in the 559 projects are Construction of 499 lakh individual household latrines 656690 toilets for Schools 36098 Community Sanitary Complexes 199033 toilets for Balwadis/Anganwadis and 4030 Rural Sanitary Marts/Production Centres. Besides, funds have been earmarked for start-up activities, Information, Education and Communication (IEC) and Administrative charges. The total numbers of household toilets constructed up to 2005-06 are 14,48,1807. To add vigour to the implementation of TSC Government of India has separately launched an award scheme 'Nirmal Gram Puraskar'(NGP) for fully sanitised and open defecation free Gram Panchayats, block and districts. In the first year of its institution only 40 PRIs were awarded NGP on 24 February 2005. In the second year the number of awarded PRIs/Blocks and organisation have increased to 772. His Excellency, Dr. A.P.J. Abdul Kalam, President of India, distributed the Awards on 23 March 2006. Monitoring and Evaluation The Ministry of Rural Development lays great emphasis on monitoring and evaluation of all rural development programmes in general and poverty alleviation and employment generation schemes in particular, being implemented in various States/UTs.It is well recognised that the

success of the programmes largely depends on the effective delivery system and efficient implementation at the grass-roots level so that the programme benefits reach the rural poor in full measures. In order to ensure this, the Ministry has evolved a comprehensive multi-level and multi tool system of Monitoring and Evaluation for the implementation of its programmes. The Monitoring mechanism includes, inter-alia, the Performance Review Committee, Review meetings by the Minister of Rural Development and Ministers of State with the Chief Ministers/ Ministers of Rural development and Officers of the States, the Area Officer Scheme, periodic progress reports, audit and utilisation certificates, video conferencing and field visits. The Ministry conducts quick evaluation/concurrent evaluation of all major programmes. Impact assessment studies to asses the overall impact of programmes of village-level is also conducted in selected district. The Vigilance and Monitoring Committees at State and District Levels in all States/UTs monitor the implementation of Programmes and introduce greater transparency in the process. These Committees inter-alia include MPs/ MLAs representatives of Panchayti Raj Institutions and NGOs. The Members of Parliament both Lok Sabha and Rajya Sabha have been assigned a Central role in the reconstituted V&M Committees and they have been nominated Chairman/Co-Chairman of the district level V&M Committees. The Ministry has also taken initiatives to strengthen the monitoring mechanism and quality of implementation of programmes by introducing District Level Monitoring (DLM) System in 130 district of 27 States through external agencies which include monthly reporting of physical and financial performance, qualitative reporting about policy and implementation environments in the district and physical verification of the assets crated under various programmes of the Ministry. Similarly DLM of Total Sanitation Campaign (TSC) and Swajaldhara is implemented in 398 districts of the country w.e.f. 1 July 2005 This system aims at providing continuous, transparent and accountable monitoring inputs in reporting format with the objectives of reporting of the process and progress of the programmes covering different components of the programmes. It also aims at identification of gaps in the implementation at the village, block, district and state level. The monitoring system also elicits the stakeholders' views; assesses the institutional issues and document case studies and success stories on best practices, innovations and lesson learned. In order to strengthen the monitoring mechanism, the Ministry has a panel of about 300 National Level Monitors comprising retired servicemen and Retired Civil Servants to monitor and furnish periodic reports to the Ministry on the implementation of programmes in selected districts including verifying facts of the cases and complaints if any, which may be referred to them. The Union Government in recent years has given emphasis to e-governance in all possible areas. Accordingly, the Ministry of Rural Development has also initiated action with the state Governments and UTs to ensure that information and progress reports completed by Districts Rural Development Agencies (DRDAs) are sent through the electronic medium. About 400 (DRDAs) have started sending their reports through online. Efforts are being made in this direction to obtain online progress reports from all the remaining DRDAs.

National Food for Work Programme (NFFWP) is a scheme under the Ministry of Rural Development, Central Government of India. The scheme is formulated to provide the 150 most backward districts of the country with supplementary resources other than the resources provided under the Sampoorna Grameen Rozgar Yojana. The target group of the NFFWP scheme is the rural poor, requiring financial assistance by the means of wage employment. The scheme would provide wage employment to any individual willing to do manual unskilled labor. In general, the NFFWP scheme is self-targeting in nature. National Food for Work Programme-Objectives To provide supplementary resources along with other aids to the rural poor of the backward districts To provide supplementary wage employment to the poor rural populace of the backward districts To provide security pertaining to food to the rural poor of the backward districts To facilitate the creation of common economic and social assets for the rural areas NFFWP-Target areas The 150 backward districts where the project would be executed are acknowledged by the Planning Commission with the approval of the Ministry of Rural Development in India as the target areas under the scheme. Funding Structure-NFFWP The project would be executed as a 100% Centrally Sponsored Scheme Under the scheme food grains would be supplied to the State Government at free of cost The costs pertaining to the tax, duties, handling charges, transportation, would be incurred by the State Government National Food for Work Programmed-Strategies The Collector at the district level would be endowed with the power to plan, execute, organize, supervise and monitor the project The District Rural Development Agency and the District Panchayat would aid the Collector in the project The project would also focus on the areas of drought control, development of land, and water conservation by the mean of tree plantation and afforestation The project includes the provision of rural connectivity by setting up weatherproof roads The program would also formulate a five-year Perspective Plan pertaining to the districts, blocks, and gram panchayats. The scheme would automatically include the resources pertaining to the any other Central or State sponsored scheme mentioned in the Perspective Plan NFFWP-Distribution of food grains The food grains are provided as a part of the daily wages The distribution of the food grains is based on safe guarding the real wages and provides the rural poor with better, nutritional food

Food grains would be provided as part of wages at the rate of 5 Kg. per working day Food grains exceeding 5 kg can be provided to special cases, and in such cases 25% of the wages are paid in cash The State Government would incur the cost of the food grains at a flat BPL rate The remaining part of the wages would be paid in cash in accordance to the minimum wages mentioned in the scheme The food grains provided would be less than 5 kg per working day, when the availability of food grains is inadequate In such a situation the deficit amount of food grains would be paid in case National Food for Work Programmed- Distribution of Wages The wages in this scheme are paid in portions, in cash and kind, i.e. food grains The wages paid to the skilled and unskilled labor should be in accordance to the minimum wages predetermined by the State Government The wages paid should be equal for both men and women laborers The payment of wages are should be made on a predetermined day of the week The day of the payment of wages should be the day before the local market day INDIRA AWAAS YOJANA With a view to meeting the housing needs of the rural poor, Indira Awaas Yojana (IAY) was launched in May 1985 as a sub-scheme of Jawahar Rozgar Yojana. It is being implemented as an independent scheme since 1 January 1996. The Indira Awaas Yojana aims at helping rural people below the poverty-line belonging to SCs/STs, freed bonded labourers and non-SC/ST categories in construction of dwelling units and up gradation of existing unserviceable kutcha houses by providing grant-in-aid. From 1995-96, the IAY benefits have been extended to widows or next-of-kin of defence personnel killed in action. Benefits have also been extended to ex-servicemen and retired members of the paramilitary forces as long as they fulfill the normal eligibility conditions of Indira Awaas Yojana. Under the scheme allotment of the house is done in the name of the female member of the households or in the joint names of husband and wife. A minimum of 60 % of funds are to be utilized for construction of houses for the SC/ST people. Further, 60% of the IAY allocation is meant for benefiting SC/ST families, 3% for physically handicapped and 15% for minorities. 5% of the central allocation can be utilized for meeting exigencies arising out of natural calamities and other emergent situations like riot, arson, fire, rehabilitation etc. Assistance for construction of new house is provided at the rate of Rs. 45000/-and Rs. 48,500/- per unit in the plain and hilly/ difficult areas respectively. It has been decided that the focused 35 Left Wing Extremism (LWE) affected districts will be treated as difficult areas and the higher rate of unit assistance of Rs.48,500 for construction of IAY houses in these 35 districts will be provided. IAY houses have also been included under the differential rate of interest (DRI)

scheme for lending by Nationalized Banks upto Rs.20,000/- per unit at an interest rate of 4% in addition to financial assistance provided under IAY. Selection of beneficiaries under IAY is done from the permanent IAY waitlist prepared out of the BPL Lists and approved by the Gram Sabha. Selection of construction technology, materials and design is left entirely to the choice of beneficiaries. Sanitary latrine and smokeless chulha are integral to an IAY house. For construction of sanitary latrine, the beneficiary can avail of the existing assistance from the Total Sanitation Campaign (TSC) Funds, in addition to the financial assistance provided under Indira Awaas Yojana. Introduction To involve village communities in the implementation of watershed projects under all the area development programmes namely, Integrated Wastelands Development Programme (IWDP), Drought Prone Areas Programme (DPAP) and Desert Development Programme (DDP), the Guidelines for Watershed Development were adopted w.e.f.1.4.1995, and subsequently revised in August 2001. To further simplify procedures and involve the Panchayat Raj Institutions (PRIs) more meaningfully in planning, implementation and management of economic development activities in rural areas, these new Guidelines called Guidelines for Hariyali are being issued. Applicability New projects under the area development programmes shall be implemented in accordance with the Guidelines for Hariyali with effect from 1.4.2003. Projects under DPAP and DDP will be taken up in the blocks identified under the respective programme and projects under IWDP shall generally be taken up in the remaining blocks. Projects sanctioned prior to this date shall continue to be implemented as per the Guidelines of 2001. Objectives The objectives of projects under HARIYALI will be: i. Harvesting every drop of rainwater for purposes of irrigation, plantations including horticulture and floriculture, pasture development, fisheries etc. to create sustainable sources of income for the village community as well as for drinking water supplies. ii. Ensuring overall development of rural areas through the Gram Panchayats and creating regular sources of income for the Panchayats from rainwater harvesting and management. iii. Employment generation, poverty alleviation, community empowerment and development of human and other economic resources of the rural areas. iv. Mitigating the adverse effects of extreme climatic conditions such as drought and desertification on crops, human and livestock population for the overall improvement of rural areas. v. Restoring ecological balance by harnessing, conserving and developing natural resources i.e. land, water, vegetative cover especially plantations. vi. Encouraging village community towards sustained community action for the operation and maintenance of assets created and further development of the potential of the natural resources in the watershed.

Promoting use of simple, easy and affordable technological solutions and institutional arrangements that make use of, and build upon, local technical knowledge and available materials. Sanction of Projects The projects will be sanctioned by the Department of Land Resources in the Ministry of Rural Development, Government of India as per procedure in vogue. The Department may amend or relax this procedure from time to time. For interpretation of any of the provisions of these Guidelines, the Department of Land Resources will be the final authority. The Department may sanction special projects for treatment of wastelands in Special Problem Areas such as high altitude regions, land slide areas, slopes having more than 30 degree gradient or for any other specified technical reason. These projects need not necessarily be implemented through participatory mode and may be implemented on intensive treatment specific, departmental approach. Criteria for Selection of Watersheds The following criteria may broadly be used in selection of the watersheds: i. Watersheds where Peoples participation is assured through contribution of labour, cash, material etc. for its development as well as for the operation and maintenance of the assets created. ii. Watershed areas having acute shortage of drinking water. iii. Watersheds having large population of scheduled castes/scheduled tribes dependent on it. iv. Watershed having a preponderance of non-forest wastelands/degraded lands. v. Watersheds having preponderance of common lands. vi. Watersheds where actual wages are significantly lower than the minimum wages. vii. Watershed which is contiguous to another watershed that has already been developed/ treated. viii. Watershed area may be of an average size of 500 hectares, preferably covering an entire village. However, if on actual survey, a watershed is found to have less or more area, the total area may be taken up for development as a project. In case a watershed covers two or more villages, it should be divided into village-wise subwatersheds confined to the designated villages. Care should be taken to treat all the subwatersheds simultaneously. Development of Forest Lands in Watershed Areas Some watersheds may encompass, in addition to arable land under private ownership, forest lands under the ownership of State Forest Department. Since nature does not recognize artificial boundaries of forest and non-forest lands in any watershed, the entire watershed is to be treated in an integrated manner. Though the criterion for selection of watersheds primarily remains predominance of non-forest lands, forest lands forming part of such watersheds may also be treated simultaneously as detailed below: i. The Divisional Forest Officer concerned should give technical sanction for the treatment plans.

vii.

The treatment plans should as far as possible be implemented by Village Forest Committees in close coordination with the Village Panchayat. iii. The Micro-watershed Development Plan for the forest areas should be in conformity with the Forest Conservation Act and the approved working plan of the area. iv. Where a large portion of the watershed is covered by forestlands, Forest Department at the district level should be encouraged to take up the work of development as Project Implementation Agency. v. A forest official should invariably be included as a member of the Watershed Development Team wherever forestland falls within the watershed. Project Commencement The date of sanction of the project shall be date of project commencement for all purposes. The project shall be implemented over a period of five years from the date of its sanction. The projects under these Guidelines will be implemented, mainly, through the Zilla Parishads (ZPs)/District Rural Development Agencies (DRDAs). However, wherever it is expedient in the interest of the Programmes, the projects can be implemented through any Department of the State Government or an autonomous agency of the Central Government/State Government with the approval of the Department of Land Resources, Government of India. Project Implementation Agencies At the district level, ZP/DRDA shall be the nodal authority for implementation of all the area development programmes under the supervision and guidance of the State Government and the Government of India. It shall approve the selection of watersheds, the appointment of Project Implementation Agencies, approve the action plan/treatment plan of the projects etc. The CEO (ZP)/PD(DRDA) shall maintain the accounts of watershed projects and shall sign all statutory papers such as Utilization Certificates (UCs), Audited Statements of Accounts, Progress Reports, Bonds etc. The ZP/DRDA will be entitled to recover funds from any institution/ organization/ individual and take appropriate action under law if the project is not properly implemented or funds are misutilised or not spent as per these Guidelines. At the field level, the Gram Panchayats shall implement the projects under the overall supervision and guidance of Project Implementation Agencies (PIAs). An intermediate Panchayat may be the PIA for all the projects sanctioned to a particular Block/Taluka. In case, these Panchayats are not adequately empowered, then the ZP can either act as PIA itself or may appoint a suitable Line Department like Agriculture, Forestry/Social Forestry, Soil Conservation etc. or an Agency of the State Government/ University/ Institute as PIA. Failing these options, the ZP/DRDA may consider appointing a reputed Non-Government Organization (NGO) in the district with adequate experience and expertise in the implementation of watershed projects or related area development works as the PIA after thoroughly checking its credentials. Nonetheless, the State Governments should endeavor to empower the PRIs and build their capacities so that they may ultimately be in a position to take up the responsibility of independently implementing the watershed development projects as PIAs. An NGO-PIA shall

ii.

normally be assigned 10-12 watershed projects covering an area ranging from 5,000-6,000 hectares. However, in exceptional and deserving cases, an NGO-PIA may be assigned a maximum of 12,000 hectares at a time including ongoing projects in all the Programmes of similar nature in a district and a maximum of 25,000 hectares in the State. An NGO is eligible for selection as PIA only if it has been active in the field of watershed development or any similar area developmental activities in rural areas for some years. The quantum of funds handled by an agency in the last 3 years may be taken into account for their selection as PIA by the ZP/DRDA. The NGOs blacklisted by CAPART or other Departments of State Government and Government of India should not be appointed as PIA. The Project Implementation Agency (PIA) will provide necessary technical guidance to the Gram Panchayat for preparation of development plans for the watershed through Participatory Rural Appraisal (PRA) exercise, undertake community organization and training for the village communities, supervise watershed development activities, inspect and authenticate project accounts, encourage adoption of low cost technologies and build upon indigenous technical knowledge, monitor and review the overall project implementation and set up institutional arrangements for post-project operation and maintenance and further development of the assets created during the project period. The ZP/DRDA shall, normally, be the authority competent to decide on the suitability or otherwise of the Project Implementation Agency (PIA) for taking up projects under the watershed development programmes. However, the State Government may consider changing the PIA in any of the projects on specific grounds with prior concurrence of the Department of Land Resources, Govt. of India. Each PIA shall carry out its duties through a multi-disciplinary team designated as the Watershed Development Team (WDT). Each WDT should have at least four members one each from the disciplines of forestry/plant sciences, animal sciences, civil/agricultural engineering and social sciences. At least one member of the WDT should be a woman. Preferable qualification for a WDT member should be a professional degree. However, the qualification can be relaxed by the ZP/DRDA in deserving cases keeping in view the practical field experience of the candidate in the relevant discipline. One of the WDT members shall be designated as the Project Leader. The PIA will be at liberty to either earmark its own staff exclusively for this work, or engage fresh candidates including retired personnel, or take people on deputation from government or other organizations. The WDT shall be located at the PIA/Block headquarters/any other town nearest to the cluster of selected villages. Honorarium to the WDT members shall be paid out of the administrative costs as indicated in Annexure-I. In order to avoid the tendency for over-emphasis on certain activities related to the speciality of the PIA selected, particularly in the case of Line Departments like Agriculture, Soil Conservation, Forestry etc., the ZP/DRDA should ensure that subject matter specialists from various Line Departments at the district and block levels are involved in the preparation of the plans.

Gram Panchayats will execute the works under the guidance and control of the Gram Sabha. In States where there are Ward Sabhas (Palli Sabhas etc.) and the area to be treated is within that Ward, the Ward Sabha may perform the duties of the Gram Sabha. In 6th Schedule areas, where traditional Village Councils are functioning instead of Gram Panchayats, these Councils may be assigned the responsibilities of the Gram Panchayats/Gram Sabhas. In cases, where there is neither a Gram Panchayat nor the traditional Village Council, the existing provisions of Guidelines (2001) would apply. The Gram Panchayat shall carry out the day-to-day activities of the project and will be responsible for coordination and liaison with the Watershed Development Team and the ZP/DRDA to ensure smooth implementation of the project. It shall be responsible for undertaking watershed development works and to make payments for the same. The Gram Panchayat shall maintain a separate account for the watershed project and all receipts from ZP/DRDA will be credited to this account. This account shall be operated jointly by the Gram Panchayat Secretary and Gram Panchayat Chairman. The Gram Panchayat Secretary will be responsible for convening meetings of the Gram Panchayat and Gram Sabha and for carrying out all their decisions.He will maintain all the records and accounts of project activities. If required, the Gram Panchayat may appoint two or three volunteers to provide assistance to the Gram Panchayat Secretary in the implementation of activities as per the action plan/treatment plan of the watershed project. The volunteers will be paid honorarium as per Annexure-I Gram Sabha Meetings The Gram Sabha will meet, at least twice a year to approve/improve the watershed development plan, monitor and review its progress, approve the statement of accounts, form User Groups/SelfHelp Groups, resolve differences/disputes between different User Groups, Self-Help Groups or amongst members of these groups, approve arrangements for the collection of public/voluntary donations and contributions from the community and individual members, lay down procedures for the operation and maintenance of assets created and approve the activities that can be taken up with money available in the Watershed Development Fund. Self-Help Groups The Gram Panchayat shall constitute Self Help Groups (SHGs) in the watershed area with the help of WDT from amongst landless/assetless poor, agricultural labourers, women, shepherds, scheduled caste/scheduled tribe persons and the like. These Groups shall be homogenous groups having common identity and interest who are dependent on the watershed area for their livelihood. Separate Self-Help Groups should be organised for women, scheduled castes, scheduled tribes etc. User Groups The Gram Panchayat shall also constitute User Groups (UGs) in the watershed area with the help of WDT. These Groups shall be homogenous groups of persons most affected by each work/activity and shall include those having land holdings within the watershed areas. Each UG shall consist of landholders who are likely to derive direct benefits from a particular watershed

i. ii. iii. iv.

work or activity. The UGs shall be responsible for the operation and maintenance of all the assets created under the project through which they derive direct or indirect individual benefits. Van Rakshaks To take care of plantations on public/ community/ Panchayat lands, the Gram Panchayats may engage local unemployed youth from BPL families as Van Rakshaks on honorarium, which will be paid out of the administrative costs prescribed in Annexure-I. The Van Rakshaks and volunteers shall not be treated as employees of the Gram Panchayat/ PIA/ ZP/ State Government/ Government of India. The honorarium of Van Rakshaks may be increased or decreased by the Gram Panchayat keeping in view the survival rate of plantations. The Gram Panchayat shall also ensure usufructs for these Van Rakshaks Community Mobilization and Training Community Mobilization and Training are pre-requisites for initiating development work in watershed projects. Prior sensitization and orientation training on Watershed Project Management should be imparted to all concerned functionaries and elected representatives at the district, block and village levels before they assume their responsibilities. In case ZP/ DRDA/ Line department is the PIA, it may involve NGOs for community mobilization and training. For this, approval of ZP/DRDA should be taken. Activities for Watershed Development A meeting of the Gram Sabha/ Ward Sabha shall be convened for preparation of the Action Plan/ Watershed Treatment Plan, on the basis of the information generated from the benchmark survey of the watershed areas and detailed PRA exercises. After general discussion, the Gram Panchayat will prepare a detailed Action Plan/ Treatment Plan for integrated development of the watershed area under the guidance of the WDT and submit the same to the PIA. The WDT should utilize various thematic maps relating to land and water resources development in the preparation and finalization of the Action Plan/ Watershed Treatment Plan. This Action Plan shall necessarily mention the clear demarcation of the watershed with specific details of survey numbers, ownership details and a map depicting the location of proposed work/activities. The PIA, after careful scrutiny, shall submit the Action Plan for Watershed Development for approval of the ZP/DRDA. The approved plan shall be the basis for release of funds, monitoring, review, evaluation etc. by the ZP/DRDA, State Government and Central Government. The Action Plan/Watershed Treatment Plan should be prepared for all the arable and non-arable land including degraded forestlands, government and community lands and private lands. The items, inter-alia, that can be included in the Action Plan/Watershed Treatment Plan are: Development of small water harvesting structures such as low-cost farm ponds, nalla bunds, check-dams, percolation tanks and other ground water recharge measures. Renovation and augmentation of water sources, desiltation of village tanks for drinking water/irrigation/fisheries development. Fisheries development in village ponds/tanks, farm ponds etc. Afforestation including block plantations, agro-forestry and horticultural development, shelterbelt plantations, sand dune stabilization, etc.

v. vi.

vii. viii. ix. x.

i. ii. iii. iv. v.

Pasture development either by itself or in conjunction with plantations. Land Development including in-situ soil and moisture conservation measures like contour and graded bunds fortified by plantation, bench terracing in hilly terrain, nursery raising for fodder, timber, fuel wood, horticulture and non-timber forest product species. Drainage line treatment with a combination of vegetative and engineering structures. Repair, restoration and up-gradation of existing common property assets and structures in the watershed to obtain optimum & sustained benefits from previous public investments. Crop demonstrations for popularizing new crops/varieties or innovative management practices. Promotion and propagation of non-conventional energy saving devices, energy conservation measures, bio fuel plantations etc. The WDT, while drawing up the Action Plan/ Watershed Treatment Plan should ensure that project works involve only low-cost, locally available technologies and materials, are simple, easy to operate and maintain. Emphasis should be on vegetative measures. Costly masonry/ cement works, use of machinery should be discouraged. While preparing the watershed treatment plan, the Gram Panchayats should give emphasis to rain water-harvesting activities and undertake massive plantation works on community as well as private lands. Where private lands are involved, these should belong, predominantly, to SC/ST and small/marginal farmers. Focus should be on employment and income generation activities that benefit the rural poor in the watershed project area. Impounded rainwater could also be used for income generating activities like fisheries. While preparing the detailed action plan, technical requirements and feasibility of appropriate biophysical measures are to be carefully worked out by the WDT for long-term sustainable interventions for the entire area of the watershed. The Action Plan should specify, among others, the following: Physical targets to be achieved (year wise) under the project and the road map for achieving these targets; Definite time frame for each major activity; Technological interventions for the proposed activities; Specific success criteria for each activity; and a Clear Exit Protocol. After the detailed action plan is approved by the ZP/DRDA, it would be the responsibility of the PIA to get the same implemented through the Gram Panchayat with active support and supervision of the WDT members. PURA Background: 1.1 Lack of livelihood opportunities, modern amenities and services for decent living in rural areas lead to migration of people to urban areas. There are wide gaps in the availability of physical and social infrastructure between rural and urban areas. To address these issues, the President of India Dr. A.P.J. Abdul Kalam highlighted a vision

of transformation of rural India through launching a mega mission for Provision of Urban Amenities in Rural Areas (PURA). During his address to the nation on eve of Republic Day 2003, Dr. Kalam visualized providing four connectivities: physical connectivity, electronic connectivity, knowledge connectivity leading to economic connectivity of rural areas. PURA was envisaged as a self-sustainable and viable model of service delivery to be managed through an implementation framework between local people, public authorities and the private sector. The Government support would be in the form of finding the right type of management structure to develop and maintain rural infrastructure, empowering such management structure and providing initial economic support. Subsequently, Prime Minister of India also announced implementation of PURA scheme in his Independence Day speech on 15th August 2003. 1.2 Seven pilot projects were implemented during the 10th Five Year Plan in Basmath (Maharashtra), Bharthana (Uttar Pradesh), Gohpur (Assam), Kujanga (Orissa), Motipur (Bihar), Rayadurg (Andhra Pradesh) and Shahpura (Rajasthan). An evaluation study of these pilot projects by National Institute of Rural Development (NIRD) identified the necessity of community and private sector participation, need for factoring infrastructure development with lead economic activities and livelihoods creation, requirement of project site selection on the basis of growth potential and need for convergence with other schemes of rural development or other Departments. Based on the findings of the evaluation study by NIRD, comments of various Ministries / Departments, feedback received during consultations with private sector representatives and officials of State Governments, and the recommendations of the consulting team of Asian Development Bank (ADB), the scheme of PURA has been restructured for implementation on pilot basis during 11th Five Year Plan as a Central Sector scheme. 2. Mission and Objectives of the PURA Scheme: 2.1 Mission: Holistic and accelerated development of compact areas around a potential growth centre in a Gram Panchayat (or a group of Gram Panchayats) through Public Private Partnership (PPP) framework for providing livelihood opportunities and urban amenities to improve the quality of life in rural areas. 2.2 Objectives: The primary objectives of the scheme are the provision of livelihood opportunities and urban amenities in rural areas to bridge the rural urban divide. 3. Strategy: 3.1 Public Private Partnership (PPP) the Distinguishing Feature: The objectives of PURA are proposed to be achieved under the framework of PPP between Gram Panchayats and private sector partner. Core funding shall be sourced from the Central Sector scheme of PURA and complemented by additional support through convergence of different Central Government schemes. The private sector shall also bring on board its share of investment besides operational expertise. The scheme would be implemented and managed by the private sector on considerations of economic viability but designed in a manner whereby it is fully aligned with the overall objective of rural development. To

attract the private sector, there is a need to design the scheme that would be project based with well defined risks, identified measures for risk mitigation and risks sharing among the sponsoring authority (Gram Panchayat), Government of India, State Government and the Private Partner. 3.2 Pilot-testing and Upscaling: Through the implementation of proposed pilot projects, the unique features of this scheme would be tested on the ground that will provide lessons for upscaling in the future. Besides, the entire process shall help strengthen the institutional ability of a Gram Panchayat to undertake PPP and help pilottest the viability of PPPs in rural infrastructure development. Based on the experience of the pilots, the scheme would be suitably modified for scaling up in future. Part II Planning and Implementation 4. Planning: The Private Partner selected to undertake PURA projects shall identify a Gram Panchayat / a cluster of geographically contiguous Gram Panchayats for a population of about 25,000 40,000. Whereas, the cluster would be the project area, there may be sub-projects to cover each of the Panchayats within the cluster. Alternatively, a large single Panchayat could individually provide critical mass to make the project viable. In the pilot phase, the Private Partner is given the flexibility to identify and select the Gram Panchayat(s) for undertaking PURA projects based on their familiarity with the area or past experience of working at the grassroots level. In this identified PURA area, the Private Partner shall plan for the development / re-development of selected infrastructure services along with economic activities, after undertaking baseline studies. 5. Identified Infrastructure and Urban Amenities: (a) Amenities under MoRD Schemes: The Private Partner shall be responsible for delivering amenities and services such as water and sewerage, construction and maintenance of village streets, drainage, solid waste management, skill development and development of economic activities under the following ongoing schemes of MoRD: Swarnjayanti Gram Swarozgar Yojana (SGSY), National Rural Drinking Water Programme (NRDWP), Total Sanitation Campaign (TSC), etc. The convergence of these schemes shall be at the level of the District Rural Development Agency (DRDA) through which the funding under these schemes will be made available to the Private Partner. (b) Amenities under non-MoRD Schemes: The PURA may include schemes of other Ministries that are available on tap as some areas of critical infrastructure (urban amenities) necessary for the project are not within the purview of MoRD such as Ministry of New and Renewable Energy (for village street lighting and electricity generation) and Ministry of Communications and Information Technology (for telecom services) etc. The Private Developer shall access the support under such schemes of relevant non-MoRD Ministries and dovetail into PURA for delivering the identified urban amenities. Although the list in paragraph 5.1 is illustrative, the private partner would be encouraged to include as many of such schemes as the local conditions permit. (c) Add-on Projects: It is necessary that the Private Developer create a pipeline of

commercially viable and people centric projects in the nature of add-ons to the list of urban amenities to be provided. To ensure delivery of all elements of the project, add-ons submitted as part of the Detailed Project Report (DPR) shall become essential / mandatory for the purpose of performance guarantee. Such add-ons will generate economic and livelihoods opportunities and are preferably developed in partnership with the Gram Panchayat and may inter-alia include: (i) Village tourism projects that provide direct employment to locals and opportunities for incomes to local artisans, performing artists, etc (ii) Setting up good skill development institution this would link up with the economic activity initiated in the project (iii) Integrated rural business centres that will help the local economy to upgrade to commercial scale It is expected that at least one such activity would be included in the project. 6. Business Model: The leveraging of public funds with private capital and management expertise for creation and maintenance of rural infrastructure is the essence of the PURA scheme. 6.1. Funding: Funding for projects under PURA scheme may come from four sources: MoRD schemes, non-MoRD schemes, private financing and Capital Grant under PURA. (a) MoRD Schemes: As PURA scheme envisages convergence of various schemes and a sustainable framework for long term maintenance of assets, most of the capital expenditure (CAPEX) will have to come from Government schemes. To manage effective coordination in the delivery of schemes that are administered by different ministries and departments, mainly the schemes administered by the Ministry of Rural Development such as SGSY, NRDWP, TSC, etc. will be converged in CAPEX provision of PURA projects. Only community development schemes would ordinarily be included as the Private Partners would find it difficult to manage individual beneficiary schemes. An omnibus provision will be made in all such schemes to allow the execution through the Private Partner in addition to Panchayats or Government Departments. As a concessionaire for the Panchayat or the Government Department, the Developer shall source funding through the identified schemes. The implementation will be done within the guidelines of the respective scheme. However, the service standards would be kept as close as possible to the service standards prescribed for the urban areas. In the specific instance of convergence with National Rural Employment Guarantee Scheme (NREGS), only those works can be taken under NREGS which are permitted as per the provisions of Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) 2005. An effort shall be made to do manual and unskilled work components under NREGS for those activities which will be common to PURA projects and the permitted list of activities in MNREGA 2005. Gram Panchayat(s) will be asked to complete such works from NREGS funds through the prescribed mechanism of MNREGA job card holders. Such works carried through NREGS will not form part of project costs under PURA.

(b) Non-MoRD Schemes: The Private Partner shall also be responsible for delivering certain services under schemes of other Ministries, as per the guidelines of those schemes. Alternatively, the concerned Ministry may make funding available under those schemes through DRDA. (c) Private Funding: It is possible that the essential infrastructure may not get fully funded by Government schemes wherein the Developer shall invest some capital of its own to fund the CAPEX of such infrastructure and to meet the operations and maintenance (O&M) costs. O&M of infrastructure assets and provision of services will be for a project period of 10 years. Financing of commercially viable add-on projects will be done fully through private funding. (d) Capital Grant under PURA: The Private Developer is given flexibility to choose suitable revenue generating / self-sustainable projects as add-ons, in consultation with the Panchayat and it is expected that this would part subsidise the maintenance cost of infrastructure. Since the returns for the Developer will be only from the revenues that can be generated within the overall framework of the rural economy and the revenue base will continue to be thin, there is a provision of Capital Grant under PURA scheme. The viability gap that may exist in a PURA project will be met from the Capital Grant under which upto 35% of project cost can be given as a grant to the pilot projects. 6.2 Project Cost: The project cost for the purpose of determining Capital Grant shall be reckoned by total of (i) CAPEX, (ii) Operating expenditure (OPEX) of essential infrastructure (Urban amenities) and Add-on infrastructure for a period of ten years, and (iii) deficits on the Return on Investment (ROI) for the private sector. The total cost of each PURA project shall not exceed Rs. 120 crore. 7. Land: A necessary element for PURA projects is the availability of land. For the public amenities, land will be made available free of cost by Gram Panchayat / State Government. For add-on facilities, if land is provided by Gram Panchayat / State Government, the revenue will be appropriately shared between Gram Panchayat and private partner through mutual agreement and such add-on facilities shall revert back to Gram Panchayat / State Government at the end of the concession period. If land is not provided by Gram Panchayat / State Government, it will be purchased by the Private Developer from the open market, but its cost will not be included in the project costing. As PURA envisages creation of livelihood opportunities, while approving the DPRs it will be ensured that the transfer of common lands for PURA projects from Gram Panchayat / State Government does not affect livelihoods security of local poor. Furthermore, PURA is an attempt to kickstart a process of creation of livelihoods and urban amenities in a potential growth centre in rural areas. Hence, PURA project will not be allowed to become an instrumentality for undertaking Rehabilitation & Resettlement (R&R) of Project Affected Persons (PAPs) in and around an ongoing / proposed economic project.

8. Selection of Private Developers: 8.1 Bidding Process: (a) The selection of Private Developers would be done through an open competitive bidding process. An Expression of Interest (EoI) would be called from reputed infrastructure development companies through an open advertisement (salient features of EoI placed at Annexure I). The interested bidders shall submit their response on the basis of which short-listing shall be done. (b) The draft Request for Proposal (RfP) document would be issued to the short-listed bidders who will be invited to a pre-bid conference for consultations. Thereafter, the final RfP document (salient features of RfP document placed at Annexure II) shall be issued. The short-listed bidders shall submit their detailed proposals which will include Concept Plans (salient features of a Concept Plan placed at Annexure III) along with the consent from the participating Gram Panchayat (s) and the concerned State Governments. A format for the consent letter shall be provided as part of the bidding documents. 8.2 Evaluation of Proposals: Response to EoIs shall be evaluated vis--vis the prequalification criteria as laid out in the EoI. At the stage of submission of bids in response to the RfP, there would be no financial bidding. The bidders would be evaluated on their technical capability and assigned scores as per the pre-approved evaluation methodology. The proposals / Concept Plans received from various bidders will be evaluated by a Project Screening and Monitoring Committee and scored and ranked as per the criteria set out in the RfP document. The top ranked bidders would be selected and mandated to prepare DPRs (salient features of a DPR placed at Annexure IV). The DPRs shall be appraised by Project Screening and Monitoring Committee. Thereafter, the DPRs and Capital Grant shall be sanctioned by an inter-Ministerial Empowered Committee and the different agreements executed. In the pilot phase, while there will be an emphasis upon rural development priorities, there shall also be an effort to dovetail the Developers perspective on an economically viable project. Each proposal shall also be examined from the point of view of inclusiveness and balanced geographic spread. 8.3. Agreements between Stakeholders: Following agreements will be executed delineating the roles, responsibilities, liabilities and obligations of different stakeholders: (a) Concession Agreement: There shall be a Concession Agreement (salient features of Concession Agreement placed at Annexure V) between the Gram Panchayat as the sponsoring authority (grantor) and the Private Developer (concessionaire). The Concession Agreement shall include details of minimum service level standards, performance guarantees, etc. The Concession Agreement will also enable the Private Developer to collect reasonable user charges for the services and amenities provided. Although user charge for the urban amenities to be provided under Government schemes is not compulsory in nature, it is desirable that some fees to the extent that it can be reasonably borne by the beneficiaries be charged. (b) State Support Agreement: There shall be a State Support Agreement (salient

features of State Support Agreement placed at Annexure V) between the Central Government, State Government and the Private Developer. The commitment of State Government for delivering the core facilities like roads, bulk water and power to the PURA area within defined time-lines shall be made as part of this agreement. 8.4. Project Committees: (a) A Project Screening and Monitoring Committee (PSMC) is constituted under the chairpersonship of Joint Secretary, Department of Rural Development (DoRD) which shall examine and evaluate the responses to EoI, proposals including Concept Plans submitted in response to RFPs and the DPRs prepared by Private Developers. The PSMC shall also be responsible for monitoring of progress of sanctioned projects. The members of the PSMC shall be as follows: (i) Joint Secretary, DoRD Chairperson (ii) Representative of Department of Economic Affairs - Member (iii) Representative of Planning Commission - Member (iv) Representative of Department of Drinking Water Supply - Member (v) Representative of Ministry of New and Renewable Energy - Member (vi) Representative of Ministry of Power - Member (vii) Representative of the concerned State Government - Member (viii) Director (PURA) Member Convener The Committee may associate any other officer / person to assist it. (b) An inter-Ministerial Empowered Committee (EC) under the chairpersonship of Secretary, MoRD comprising the following is constituted for approving the project proposals. The EC shall give approval to different stages of project transaction and take all decisions incidental to the project. (i) Secretary, Rural Development - Chairperson (ii) Secretary, Department of Economic Affairs / or representative not below the rank of Joint Secretary - Member (iii) Secretary, Planning Commission / or representative not below the rank of Joint Secretary - Member (iv) Secretary, Drinking Water Supply / or representative not below the rank of Joint Secretary - Member (v) Secretary, Ministry of New and Renewable Energy / or representative not below the rank of Joint Secretary - Member (vi) Secretary, Power / or representative not below the rank of Joint Secretary Member (vii) Additional Secretary and Financial Advisor, MoRD - Member (viii) Principal Secretary / Secretary, Rural Development of the concerned State Government - Member (ix) Joint Secretary (PURA), Department of Rural Development - Member Convener

The Empowered Committee may invite any other officer or expert according to need. 9. Implementation: The rollout of the implementation action plan over the concession period shall be outlined in the DPR. The Private Developer shall put in place an implementation action plan for the different sub-projects of PURA over a construction period of maximum three years and an operations and maintenance (O&M) period of ten years from the commercial operation date or the date of completion of construction. In order to ensure proper monitoring and supervision of performance by the Private Developer, an Independent Engineer will be provided to the PURA cluster of Gram Panchayat(s) to supervise and monitor performance during the project life cycle.

10. Flowchart of PURA Project C

ycle:

11. Project Management and Control: 11.1 A dedicated project management team in the PURA Division of MoRD shall oversee and coordinate all activities pertaining to the implementation of the scheme under the overall guidance of Project Screening and Monitoring Committee. Asian Development Bank (ADB) is supporting MoRD through a Technical Assistance (T.A.) programme for policy framework development, institutionalisation of PPP unit within MoRD, capacity building of MoRD and identified Gram Panchayats and rollout of pilot projects. 11.2 Appropriate management control, reporting and quality assurance mechanisms shall be put in place to enable timely evaluation and impact assessment of the PURA scheme. 11.3 To enhance the generic acceptability of the PURA scheme and to improve the quality of projects therein, appropriate capacity building of Gram Panchayat(s), officials of DRDAs and State Governments shall be undertaken along with an outreach and communication plan, as part of the ADB T.A. programme. Execution of Concession Agreements between the Private Developers and participating Gram Panchayats and State Support Agreement Project Execution by Private Developer O&M of project facilities by Private Developer

Handover of project facilities to the Gram Panchayats at the end of the concession period Monitoring and impact assessment of PURA projects by Project Screening and Monitoring Committee Part III Release of Funds 12. Estimation of Capital Grant and Release: Though Capital Grant will be limited to a maximum of 35% of project cost, the actual Capital Grant admissible will vary from project-to-project. The total Capital Grant approved for the pilot projects during the 11th Five Year Plan shall be borne from the Plan outlay of Rs. 248 crore. During this pilot phase, the cost of each PURA project shall be limited to a maximum of Rs. 120 crore, for the purposes of determining Capital Grant. The Detailed Project Report (DPR) would form the basis for determining the exact amount of Capital Grant required for each pilot project. The final cost composition and Capital Grant would be approved by an interMinisterial Empowered Committee constituted for the purpose. The grant will be released in four installments (linked with completion of milestones) as follows, assuming that the concession will be for ten years and the construction phase will be of three years: a) 1st installment (25%) - on signing of the concession agreement b) 2nd installment (25%) - on completion of one year from date of signing of concession agreement c) 3rd installment (25%) - on completion of two years from date of signing of concession agreement d) 4th installment (25%) - on completion of construction of those sub-projects as approved in the DPR However, in cases where milestones are achieved before the afore-mentioned time projections, the release of installments may be accordingly re-scheduled. 13. Funds Flow: 13.1 The sanctioned installment of Capital Grant shall be released by MoRD to the District Rural Development Agency (DRDA) which will be kept in an escrow account. It shall be released to the Private Developer upon completion of approved milestones linked to time-lines after certification by the Independent Engineer and concurrence of the concerning Gram Panchayat(s). 16 13.2 The funds under other schemes of MoRD shall also be released to the Private Developer through placement of funds in the same escrow account managed by DRDA upon certification by the Independent Engineer and concurrence of the concerning Gram Panchayat(s). Similarly, other Ministries for non-MoRD schemes in a PURA project may make funding available under those schemes through DRDAs. 13.3 The Gram Panchayat(s) shall give their concurrence within one week of certification by Independent Engineer, failing which they have to assign reasons thereof. The matter shall then be referred to the District Magistrate / Deputy Commissioner /

Collector who will examine the same and decide within one weeks time. 13.4 The Project Director, DRDA is responsible for timely release of funds by DRDA as per guidelines. 13.5 The Private Developer shall maintain a project escrow account for all receipts and payments on account of PURA project. 14. Cost of Independent Engineer: The fees of the Independent Engineer will be released through DRDA, but not included in the project cost estimation for determination of Capital Grant. 17 Part IV Miscellaneous 15. Audit: The auditing process and criteria for audit shall follow the guidelines issued by Government of India from time to time. 16. Grievance Redressal and Dispute Resolution: An appropriate grievance redressal mechanism shall be constituted under the chairpersonship of the concerned District Magistrate / Deputy Commissioner / Collector of the district wherein the PURA project is being implemented for handling local level grievances. Similarly, a mechanism for grievance redressal shall also be institutionalized under the chairpersonship of Joint Secretary, MoRD for handling grievances wherein intervention of MoRD is required. 17. Arbitration: Secretary, MoRD is the authority to arbitrate grievances and disputes, wherever required. 18. Risk Management: The key risks associated with the implementation of PURA pilot projects may involve Central Government, State Government, Gram Panchayat or the Private Developer. The risk mitigation in this regard will be guided by legally vetted Concession as well as State Support Agreement. In case of default by any of the stakeholders, the affected stakeholder will be appropriately compensated as per provisions in the relevant agreement.

INCLUSIVE GROWTH THROUGH THE PROMOTION OF ENTREPRENEURSHIPINITIATIVES OF KUDUMBASREE IN KERALA (INDIA) - A CASE STUDY Abstract Kudumbasree is a multi-faceted women-based participatory poverty eradication programme initiated by the government of Kerala and implemented by community Based organizations (CBOs) of poor women in co-operation with the local self government institutions. The Kudumbarsee process starts with a simple participative spotting of poor families using a 9 point risk index. A family having at least four of these factors qualifies to become a member of the basic unit in Kudumbarsee movement. Once the poor are identified, small groups of them consisting of one woman each from 15-40 families at risk are organized in to Neighborhood

groups (NHS). 10-15 NHS are federated in to Area Development Societies (ADS) at world level. ADS are federated in to Community Development Societies (CDS) at the local self government level. In a period spanning over a decade, 1, 50,210 groups have been formed at various levels in the state of Kerala. It has been visualized as a strategy for social development and social change, directed through an accelerated economic development of the poor, particularly women and children. The entire strategy is targeted at those unreached on one side, and towards their empowerment with in the rights paradigm on the other. A formal process instrument to the Convergent Community Action (CCA) strategy is the Participatory Learning and Actions (PLA) methodology. In the present system of decentralized governance in Kerala it has been effective in articulating the felt needs in a priority manner. To facilitate the poor in saving and to create saving habit in the community, Kudumbarsee organize thrift and credit societies and create saving habits in the society at NHS level. This society which acts an informal banks of the poor, has established linkages with other financial institutions to facilitate adequate and easy credit to the poor. The ultimate aim is the promotion of entrepreneurial skills to enable them to initiate micro enterprises. Kudumbersee targets 100% employment even to the illiterate poor folk. The stage has been set for social take-off for women from low development paths to an accelerated phase in achieving higher levels of self sustaining economic growth. With the amount of loan sanctioned to the members they have started micro enterprises which help them in raising the standard of living and contributing to an all inclusive growth. With the inception of Kudumbersee since 1992 there is a remarkable improvement in the status of poor women in Kerala. Weekly meetings, thrift and credit operations micro enterprises, and participatory governance have enhanced their economic activity which intern has reproduced the economy of the state to a great extent. THE CASE OF KUDUMBASHREE PROJECTS IN KERALA* Poverty alleviation schemes based on micro- credit system have been implemented in many of the developing countries in recent years. The Government of Kerala State in India has introduced a novel scheme of poverty alleviation based on micro-credit and self help grouping. Paraphrased as Kudumbashree ( Prosperity of the Family), the scheme aims at improving the living levels of the poor women in rural and urban areas. It seeks to bring the poor women folks together to form the grass root organizations to help enhance their economic security. The project aimsat removing poverty among rural women households through setting up of micro-credit and productive enterprises. The activities such as micro-credit and micro-enterprises under the scheme were undertaken by the locally formed Community Development Societies consisting of poor women. The State Poverty Eradication Mission-Kudumbashree- launched by the Government of Kerala in India is a massive poverty eradication programme in contemporary history. It has proved without

doubt that women empowerment is the best strategy for poverty eradication. Women, who were regarded as voiceless and powerless started identifying their inner strength, opportunities for growth , and their role in reshaping their own destiny. The process of empowerment becomes the beacon light to their children, their families and the society at large. It opens a new vistas in development history. A new paradigm of participatory economics has been found emerging in Gods Own Country. Kudumbashree presents a unique model of participatory development , which can very well , be emulated other developing countries. I. INTRODUCTION Poverty is a crucial problem in all developing countries in the present day world. It is felt that the problem of poverty can be solved through a concerted effort by the State. Sustainable livelihood opportunities can be provided to the deprived and the destitute by means of lending asset creating facilities. Women households are the cruelest victims of deprivation and destitution. Therefore, any programme for poverty alleviation must aim at improving the living environment of the women folks. It is through creating livelihood opportunities for the women that they can be empowered ,and the micro credit and self help groupings are a better means through which their living conditions can be improved. Poverty alleviation schemes based on micro credit system have been implemented in many of the developing countries in recent years[1]. In all developing countries state actions are being reinforced in streamlining poverty alleviation programmes.( Buckley,1996; Hulme and Mosley, 1996; Hussain, 1998)The Institutional formations of various means are also invigorated for initiating schemes of poverty alleviation successfully. ( Hulme,et al,1996; Yaron, 1992; Yunus, 1999). The Government of Kerala State in India has introduced a novel scheme of poverty alleviation based on micro credit and self-help grouping . Paraphrased as Kudumbashree ( Prosperity of the Family), the scheme aims at improving the living levels of the poor women in rural and urban areas. It seeks to bring the poor women folks together to form the grass root organizations to help enhance their economic security. The projects aim at removing poverty among rural women households through setting up of micro credit and productive enterprises. The activities such as micro credit and micro enterprises under the scheme were undertaken by the locally formed Community Development Societies consisting of rural house holds. This Paper aims at examining the socio-economic impact of the Kudumbashree projects on the rural and urban poor in salvaging from deprivation and creating gender equity . The organization of the Paper is as follows. Section II overviews the projects under implementation , Section III analyses the Paricipatory Mechanism of community involvement in the anti poverty programmes by highlighting the cases of the Alappuzha and Malappuram Models being the geneses of the multifaceted Kudumbashree mission.

In Section IV we present the extended Kudumbashree programmes under operations along with some new programmes being launched most recently ,and Section V contains the conclusions. II. ANTI POVERTY PROGRAMMES UNDER KUDUMBASHREE - AN OVERVIEW. II.1.It is the State Poverty Eradication Mission, that has been paraphrased as Kudumbashree in local language, meaning prosperity of the family,which helps enjoy the economic opportunities by a good number of the poor women folks in rural and urban Kerala. The anti-poverty programme under Kudumbashree has been launched by the State Government of Kerala with the active support of the Central Government of India and the National Bank for Agriculture and Rural Development (NABARD) aiming at removing absolute poverty within ten years with the full co operation of the Local self governments. Poverty is a multi faceted state of deprivation. Hence a multi- pronged strategy alone can help eradicate poverty. The Mission of the Kudumbashree ,therefore, states : To eradicate absolute poverty in ten years through concerted community action under the leadership of local governments, by facilitating organization of the poor for combining self-help with demand led convergence of available services and resources to tackle the multiple dimensions and manifestations of poverty , holistically II.2. Identifying the Poor Identification of the poor is one of the prime requisites for the implementation of the projects. The following risk factors are considered for identifying the poor. No land/Less than 5 cents of Land No House/ Dilapidated House No Sanitary latrine No access to safe drinking water within 150 metres. Women headed household/Presence of a widow, divorce/abandoned lady/unwed mother No regularly employed person in the family, Socially disadvantaged groups(SC/ST) Presence of mentally or Physically challenged person/chronically ill member in the family Families without colour T V II.3. The Modes Operandi : The Community Based Organisation The formation of the grass root level Community Based Organisation (CBO) is the fulcrum of the Kudumbashree mission. The grass root level poor women are organized through Neighbourhood Groups(NHGs) consisting of 20-40 women with 5 functional volunteers, viz., Community Health Volunteer Income Generation Volunteer Infrastructure Volunteer

 Secretary, and President, The Neighbourhood Groups (NHGs) are coordinated at ward level through Area Development Society( ADS) by federating 8 to 10 NHGs. To coordinate the activities at the Panchayat level there is the apex body called Community Development Society (CDS), which is heading the Area Development Societies.(ADSs) The CBOs are the lifeblood of Kudumbashree. The NHG members used to meet once in a week in one of the members house. The members , who meet together , discuss their problems and make joint effort to find solutions to their grievances with the support of the functional volunteers. This would bring up an interpersonal feelings among the members and would generate supportive attitude to build confidence among them. Apart from this , they practice small savings through thrift which should be used to create productive assets . The micro-plans are prepared at the NHG meetings and the formulated plans would be sent to ADS for scrutiny and finalization to form the miniplan. After consolidating the mini-plans by judicious prioritization at the CDS meeting a sub-plan is formed to become the anti-poverty programme of the Local Self Government. The formulation of micro, mini and sub-plans help facilitate the poor women house holds to participate in planning process as a major stake holder. The local self governing body monitors the implementation of the plans and thereby proper linkage , coupled with automony is ensured in the participatory system of planning for poverty alleviation. III. THE PARTICIPATORY MODELLING : THE CASES OF ALAPPUZHZA AND MALAPPURAM. III.1. Alappuzha Model :The Prelude The first spark of a women based participatory approach for poverty eradication came out in Alappuzha Municipality in Alappuzha District in Kerala in 1993 when the Community Development Society of the poor women came into being as part of the implementation of the Community Based Nutrition Programme (CBNP) and the Urban Basic Service Programme (UBSP) with the assistance of UNICEF . The seven wards were selected for the implementation of the programme. The programme began with the organization of the poor women folks to form the Neighbourhood groups . The poor high risk families were identified to form the Neighbourhood groups on the basis of nine non economic indicators such as: occupation in temporary houses, no access to safe drinking water, no access to sanitary latrines, illiterate adult member in the family, not more than one earning member in the family, family getting barely 2 meals a day or less, children below 5 years in the family, sc/st family , and alcoholic or drug addict in the family. 88 neighbourhood groups were formed of women from such high risk families and 7 ward level Area Development societies (ADS) were formed from the grass root level NHGs. The ADSs were federated to the town level Community Development Society(CDS).

(i). Neighbourhood Groups (NHGs) Neighbourhood group is the association of 20 to 40 women members , belonging to high risk families. The elect a a women from among themselves as Resident Community Volunteer, another on is selected as President of the NHG and the three others are selected as Community Volunteers , each of whom has specific responsibilities viz., Health, Infrastructure and income Generation. They are , therefore , designated as Community Health Volunteer, Community Infrastructure Volunteer and Community Income Generating Volunteer. The Community Health Volunteer is responsible for all the health related activities of the NHG like immunization, maternal care, child care, nutrition and propogation of ideas like cleanliness , hygiene, etc. The Community Infrastructure Volunteer is in charge of the basic infrastructure needs of the NHG such as housing, sanitation, drinking water, drainage, etc. The Community Income Generation Activity Volunteer looks after the income generating activities of the NHG. She has to identify all potential agencies , departments and organizations to be engaged in promotion of self employment activities . She also liaises with the National Bank for agriculture and Rural Development and commercial banks on behalf of the NHG. Proper training and orientation are given to the above volunteers in their respective areas. Each NHG prepares an action plan on the basis of the needs of the member households of the NHG and such plans are called Micro Plan of the NHG. (ii). Area Development Societies (ADSs) Area Development Societies at the ward level are formed of 10 -15 NHGs and the five member committee of the all the NHGs constitutes the governing body of the ADS. The ADS has a Chairperson , a Vice chairperson and 7 other members. The Community Organisor of the Municipality acts as the Member Secretary of the ADS. The ADS integrates the micro plans of the NHGs and after discussion and scrutiny a consolidated action plan is prepared and is known as Mini Plan. (iii).Community Development Society (CDS) Community Development Society is the apex body at the town level and is the cocoordinating agency for programme implementation. Chairpersons, Vice chairpersond and Members of all the ADSs form the General body of the Community Development Society. A Project officer of the Municipality acts as the member Secretary of the Community Development Society. The Community Development Society has a President, Vice President and seven other members elected from the General body of the CDS to form the committee of the CDS. The Committee and the Member Secretary constitutes the Govrning Body of the CDS. The Community Development Society monitors the programmes undertaken by the ADSs on monthly basis and takes steps to improve the implementation of the programmes.

Various developmental programmes initiated under Community Development Society and the Area Development Societies include training programme for women to start income generating units , water supply, conduct of health education camps , construction of dual pit latrines undertaking micro enterprises, raising of pathways and, cultural programmes, etc. The Paricipatory modelling under Community Development System brought the poor women in Alappuzha to the mainstream of the social life . They began to participate in the development process with greater enthusiasm. The NHGs were encouraged to meet as many time as possible. It provided them an opportunity to sit together and discuss their common problems to find out solutions. The poor women belonging to the high risk families become empowered and seldom accept poverty as their destiny. They proved beyond any doubt that they could identify their own problems. They learned the meanings of self-help and self respect. The united and empowered women fought against poverty quite valiantly and effectively Poverty alleviation programmes began to deliver the goods through participation for the first time in history . III.2. The Malappuram Model the Continuum The amazing success of the participatory system of poverty alleviation in Alappuzha Municipality prompted the Government of Kerala in 1994 to extend the scheme to the entire district of Malappuram, one of the most backward districts in India. The district of Malappuram has the highest fertility and infant mortality rates in Kerala. The Government of Kerala , with the assistance of the UNICEF , chose the district of Malappuram to experiment with poverty alleviation programme called Community Based Nutrition Project and Poverty Alleviation Programme (CBNP &PAP) aiming at helping to reach out the unreached through community action. The strategy formsd the Convergent Community Action and Self Help to enhance the capacity of the family to help meet their basic needs such as drinking water, primary health care, basic education , safe environment and food security. Like in Alappuzha Model, CBNP was implemented through Community Development Societies of women , who belonged to high risk families. The risk index adopted in Alappuzha model was slightly modified to suit the regional peculiarities of Malappuram district. The non economic risk indicators adopted for Malappuram model are: Families with substandard houses and huts Family with no sanitary latrines Families having no safe drinking water supply within atleast 300 mteres Families having more than 6 members Families with only one earning member Families belonging to SC/ST Families having illiterate members Families having only 2 meals or less a day

 Families having alcoholic, widows and divorces The Schemata At the bottom level of the community structure of Malappuram, there are 4763 Neighbourhood Groups, each of which consists of 15 to 40 women members belonging to the risk families of a neighbourhood. NHG prepares Micro plan based on the needs and requirements of the constituting families. In each Village Panchayat , there are Area Development Societies at the Ward level. Each Area Development Society is formed by the representatives of the NHGs in each ward. Functionaries are elected as we have seen in the Alappuzha Model. Area Development Societies prepare Mini Plans , integrating all NHG plans. There are 853 ADSs are working in Malappuram district. Panchayat / Municipal Community Development Society functions as an apex body of all ADSs at Panchayat / Municipality level. The Society has an elected President, Vice President and seven Governing Body members.There are 91 panchayat CDSs and 5 Municipal CDSs in Malappuram district. At Block level there is the Block CDS , which acts as a co-ordinating body of all CDSs in a Block. Block CDS prepares Block level plans , integrating all Panchayayt CDSs plans. There are 14 Block CDSs in the district. The District CDS is the apex body. All the Block CDS Presidents and Town CDSpresidents are members of the District CDS. The District CBNP Co-ordinator acts as the member Secretary of the CDS. The District CDS prepares the Plans at the district level integrating all micro and mini plans. The activities of the Malappuram CDS include Training and Orientation Programme for Women , Imparting Education for Children, Regular Meetings to share experiences and holding cultural programmes, Community Health Care , Environmental Sanitationand Inormal Banking through Thrift and Credit Societies and Self Help Groupings. The Philosophy The philosophy of CBNP is convergent community action. With this end in view, attempts have been made from the very beginning to establish linkages with other government departments and agencies such as Education, Health, Social welfare, Local Administration and Rural Development. UNICEF and NABARD also rendered their whole hearted support for training and in financing. The Achievements A.Training More than 1,00,000 CBNP/CDS functionaries were given training on various aspects with the assistance of UNICEF More than 2000 CDS/CBNP functionaries were trained by NABARD in community financial management More than 4300 community volunteers were given training in community health care.

 More than 12000 CBNP functionaries were trained and deployed for the conduct of the baseline survey. 40 CBNP functionaries were trained and deployed as Tribal Volunteers About 13,000 CBNP/Literary workers trained and deployed for the conduct of the Poverty Index Survey. B.Awareness Programme 1700 community immunization camps ere organized 99 Awareness Programmes against alcohol were conducted 3418 Awareness programmes were organized for popularization for iodized salt. C.Water and Sanitation 5600 sanitary latrines were provided.to the poor families 20 borewells were provided 10 open wells were provided D.Thrift and Credit Operations Mobilised Rs.150 lakhs through thrift savings Provided Rs. 135 lakhs to CDS members as loan for income generation as well as for consumption purposes. Created 12322 self employment were created through loans/revolving funds . E.Employment Established one Coir Training Centre to train 150 SC women in coir making Set up one Coir Defibreing Production unit with an investment of Rs. 35 lakhs . The Epilogue The coordinated effort and the convergence of resources of various agencies for the uplift of the poor women are the resultant of the CBNP in Alappuzha Municipality and Malappuram District in Kerala. An integrated approach with the coordination and convergence of inputs and services of the various ongoing programmes of the government and and other sectors helped improve the health and nutrition status of the poor women and their children. A new limelight in the participatory approach has been emerging to open up the social and economic opportunities for the poor and the downtrodden and a new horizon has been visible to realize their dreams of betterment into realities. IV. KUDUMBASHREE : TOWARDS A NEW PARADIGM OF PARTICIPATORY DEVELOPMENT. IV.1. The Mission for Poverty Eradication : A New Beginning Enthused by the phenomenal success of the Alappuzha and Malappuram models of participatory development with the active involvement of the stake holders, the State Government of Kerala resolved to extend the participatory women based programme to the entire State of Kerala in 1998. The Project has been envisaged as a mission for eradication of poverty , which has been christened as Kudumbashree ( Prosperity of the Family) and becomes the Magna Carta of the poor.

Kudumbashree , the State Poverty Eradication Mission of Kerala, proved a revolutionary initiative that has changed the lives of thousands of poor people in the state through its various progrmmes since its inception in 1998. The unique experimentation is being implemented through the Community Based Organisations (CBOs) of the poor aiming at a multi pronged attack on poverty. It is the Community Development Societies that work for the removal of risk factors, which are the basic causes as well as effect of poverty. With this end in view , the NHGs are identifying the most critical needs of the members. The micro plans or the NHG plans thus become the basis of delivery of services and resources through the CDS system. Each group is involved in the process of identifying their needs and problems, and accordingly preparing plans and implementing the programmes. IV.2. The Focus Kudumbashree Mission focuses on: 1. Training for Change It is stated that empowerment of women is the prime motto of Kudumbashree. Therefore, the decision making power must rest solely in the hands of the poor women. In order to exercise this power , they need proper orientation and training. To achieve this objective a number of specially designed training programmes are being conducted with focus on community structures, leadership, roles and responsibilities, thrift and credit operation, community financial management and accounting. These training programmes are organized with the support of UNICEF, NABARD and other institutions. More than one lakh women have been trained so far. 2. Education The massive training programmes have helped further strengthen the already existing awareness among women on the need for educating their children and acquiring literary skills for themselves. Resultantly, the apathy in sending the children to schools has disappeared to a greater extent. The poor women are getting realized that their children do need education and that education alone can enhance their status and provide them gainful employment. 3. Share and Care The NHGs are encouraged to meet as frequently as possible and most of them do meet once in a week. The are able to discuss every problem in the meeting and suitable solutions are come up . The NHGs provide the poor women to share their grieves and joys. 4. Community Health Care The trained women Community Health Volunteers are now able to provide basic medical care to the poor rural and urban women folks. With the emergence of the Community Health Volunteers the health scenario in the less cared groups are under going revolutionary changes. The incidence of cholera, malaria, typhoid and diarrhea has come down considerably. 5. Environmental Sanitation

Environmental sanitation becomes the matter of greater concern of women today. Lack of sanitary latrines and safe drinking water are the twin basic problems faced by the poor people. Concerted efforts are made to address these problems. 5600 latrines have already been constructed in Vettom Panchayat in Malappuram district with the help of various Government. Departments. 6. The Poor Womens Bank The Thrift and Credit Societies are formed with the objective of encouraging the poor women to save their meager means to widen the resource base of the NHGs. Women bring their little bit of savings when they come to attend the group meetings. This money is entrusted to the Community Volunteer , who in turn deposits it in the nearest bank . Each member is given an individual pass book. The Thrift and Credit Societies are considered as poor womens bank. The poor women , who were hitherto dependent on their men folk for every need and did not know the meaning of economic independence , has managed the impossible under Kudumbashree Members can avail loans to meet their urgent needs like medical treatment, purchase of school books and uniforms for children, to pay off their old debts, etc. It is interesting to note that more than 90% of the savings in the thrift societies are given away as loans. The selection of beneficiaries, the rate of interest, the quqntum of loans and the period of repayment ,etc are all decided and implemented by the women themselves. Since the decisions regarding the repayment of loans with the rate of interest are taken by the NHGs, the monitoring mechanisms are inbuilt and defaulting is rare. For the same reason the NHGs are also very considerate to genuine reasons of non repayment and extensions are given . It is observed that 100% repayments are ensured which are rare in banking history. The Thrift and Credit Societies become the largest informal bank in Asia. 7. Community Financial Management Formation of thrift societies and conduct of income generating activities have led to a large financial flow at NHG and ADS levels. This has necessitated proper maintenance of accounts and keeping records in a systematic way. So poor women activists were given proper training in Community Financial Management IV.3. The Strategies Kudumbashree aims at empowerment of women to become the active leaders rather than passive receipients . The strategies thus form of : a. Formation of women collectives b. Information and training c. Skill upgradation d. Thrift-Credit operations e. Infrastructure development f. Micro enterprises development g. Power to the people, and

h. Leadership The ultimate objective, therefore, sets as reaching out family through women , and reaching out community through family.. IV.4. The Programmes under Operations The programmes conceived as a part of the strategy to reduce poverty are: Microfinance operations/Thrift and Credit Societies Micro Enterprises Micro Housing/ Bhavanashree Destitute Identification , Rehabilitation and Monitoring Programme/Ashraya Lease Land Farming/ Haritashree The S3 programme Childrens Neighbourhoods/Balasabha Solid Waste Management /Clean Keral Business Special Employment Programme for the Educated Youth Special School for the Disabled Children/Buds Self Employment Programme under SJSRY GRQ Project * Microfinance Operations Thrift and Credit Societies are set up at Neighbourhood (NHG) level to facilitate the poor and to avail easy credits, which have now grown up to Informal Banks of the poor women at their doorsteps. Now , 10,687 Thrift and Credit Societies are in operation in the 58 urban areas enveloping the major 58 towns. In the rural segment, 1,45,674 Thrift and Credit societies are in operation covering all the 991 Village Panchayats in the State. Most of the Thrift and Credit Societies are capable of providing financial assistance to income generating activities. Through microfinance operations , Rs.651.42 lakhs of thrift are raised and internal lending to the extent of Rs.1473.12 lakhs are provided. The NHGs , which are able to avail loans are linked with banks under linkage banking programme of NABARD. Till date, 99,356 NHGs were upgraded and 71,702 of NHGs were linked with banks. Rs.258.78 Crore is distributed as loan to NHGs for internal banking and credit of Rs 32281/lakhs flow through linkage banking.. Linkage banking programme becomes an effective tool to augument resources of NHGs. ( A few examples of microfinance models are given in Table.I ) * Micro Enterprises Micro Enterprises foster the economic status of women as an effective means to eradicate poverty. The income generating activities under individual and group initiatives to meet the livelihoods of the poor women are massively promoted . Canteens/ Catering units, IT units , Group farming units, Fruit Processing units, Foot ware units, Condiments units, Umbrella units, Building materials units ,Horticulture units, Electronics units ,Ready made garments units, Soap powder units, Toys units , Grocery shops, are some of the examples of Micro Enterprises that are undertaken by poor women under Kudumbashree.

Mission. Women entrepreneurs are given training in entrepreneurship development, skill development, project management, performance improvement by the Entrepreneurship Development Institute of India, Ahemmedabad. It is drawn that , as of date, there are 15,382 individual enterprises and 1345 group enterprises in urban areas an d 14,662 individual enterprises and 20,017 group enterprises in the rural areas are on the run with the involvement of 2,42,,482 women across the state. * Micro Housing/ Bhavanashree Under this programme poor families ,who are in dire need of constructing new houses are able to avail loans from banks and the repayment of which is ensured by tri-party agreement between the beneficiaries, the Community Development Societies and the Financial institutions/Banks.19,922 houses were constructed by using credit amounting to Rs.6765.91 lakhs. * The Destitute Identification , Rehabilitation and Monitoring Programme/Ashraya This programme , named as Ashraya in local language ( meaning depending) aims at uplifting the poorest of the poor from their destitution. Poorest of the poor families ,which lack adequate food, drinking water, shelter , educational facilities for children , sanitation facilities, employment opportunities, land for shelter , and worst sufferers of illness and chronic diseases are identified and rehabilitated under various schemes . The programme launched in 391 Village Panchayats and 6 Municipalities. * Lease Land Farming/Haritashree Lease Land Farming Programme , named Harithashree in local language, lend helping hands to those cultivators who are having no land at all . So Kudumbashree pools uncultivated lands on rent and provide the willing cultivators for agricultural operations. Last year , lease land farming was done in 18,489 hectares benefiting 3,15,613 families hailing from 31,980 NHGs in the state. * The S3 Programme Kudumbashree addresses the multifaceted deprivations of the poor families , which lack food, health care, education, basic amenities such as shelter, drinking water, safe latrines and employment. It is felt that poverty reduction would foster economic development if it sustains the secured gains. So, sustainability economic development assumes greater importance in the process of attacking poverty. So much so, Kudumbashree has evolved a project to build a model in select panchayats on the concept of comprehensive development . The projects focuses on self sufficiency, self reliance and sustainability (S3) of the village panchayats. The project envisages to address the problems of Child Development, Geriatric care, Mentally and Physically Challenged, Education, Adolescent care, women Empowerment, Enterprise development, Unemployment of the educated youth, Agriculture/Animal husbandry/ Dairy development, Revamping the traditional sectors Basic minimum Needs and Destitute Identification and Rehabilitation. Initially the programme was piloted in three panchayats viz., Venganoor in Trivandrum district, Kodakara in Trichur district and Munniyoor in Malappuram district. Later on ,

the programme extended to 14 panchayats and the extension of the programme to another 70 panchayats is done. *. Childrens Neighbourhoods/Balasabha The children from poor families are organized to develop their intellectual faculties by performing cultural activities from time to time. Termed as Balasabhas in local language it functions as a platform of the children to help develop their overall capabilities that combines education, entertainment and empowerment. 27463 Balasabhas comprising 504979 children ere organized in different places in Kerala. * . Solid Waste Management./Clean Kerala Business Solid waste is serious menace for all the urban and semi urban areas of Kerala Now Kudumbashree mission tries to tackle this problem by setting up Clean Kerala Business units in an organized and planned manner entrusting to women entrepreneur groups to segregate, collect and transport solid waste from the households, commercial establishments , hotels , etc..75 Clean Kerala Business units are formed in the state so far. * Special Employment Programme for Educated Youth A special employment programme for the educated youth has been initiated and 50,000 educated youth were assigned with the task of Kudumbashree such as identification process, setting up of innovative micro enterprises , etc.211 group and 170 individual enterprises have been formed under this programme , thus benefiting 1307 people. * Special School for the disabled children /Buds Special Schools, called Buds, are set up aiming at providing for the developmental, social , and emotional needs of the disabled children. These children are being provided with the necessary medical attention, physical and mental therapy, mobility equipments, hearing aids, and vocational and educational training. * Self Employment Programmes under SJSRY Swarna Jayanthi Sahari Rozgar Yojana (SJSRY) is an anti poverty programme launched by the Government of India ad is meant for the urban areas of the state . It covers the 53 Municipalities and 5 Corporations. Individual enterprises and Group enterprises with a minimum number of 10 persons can be set up. 1365 group and 15382 enterprises are undertaken under this programme. * GRQ ( Goat-Rabbit-Quail) Project The Goat-Rabbit-Quail Project is a unique micro enterprises project for rearing the three species together to earn a steady income to the family entrepreneurs. The predominantly non-vegetarian population of Kerala necessarily ensures the potential market for the produce. The GRQ project aims at utilizing the inherent advantage of the homesteadfarming practiced by number of families. Quail rearing as an activity can ensure a weekly cash flow and that combined with the quarterly and half yearly cash flow of rabbit and goat would ensure a source of steady income to the family. * Nutrimix- The Babyfood Products Production Project

The Nutrimix Babyfood Production Project is an ambitious project recently launched by the Kudumbashree mission. The Project envisaged to start 500 babyfood production units in different parts of Kerala. 21 Nutrimix production units have already been started .It is estimated that 2500 women can find gainful employment through the programme, which targets the massive baby food market dominated by big brands. The expected turn over is Rs,200 crore per annum. V. CONLUSION. Kudumbashree became the lifeline to many of the poor women in the state of Kerala. It assumed the status of helpline to many. It is a massive anti poverty programme of the Government of Kerala aiming at eradicating poverty and salvage the destitutes from the wretches of extreme deprivation. The formation of 1,65,840 NHGs of the women from 33, 45, 509 risk families , covering urban, rural and tribal areas of the state helps develop 2, 42, 489 poor women into vibrant micro entrepreneurs. . Resultantly, the poor women of the state have become active participants in the planning and implementation process of various ant poverty programmes. By participating in various income generating cumdevelopmental activities , the morale and confidence of women become very high. Capacity of the poor women of the state in several areas has gone up considerably , status of women in families and community has also improved. Kudumbashree has gained national and international acclaim as an ideal and workable model of participatory development for eradicating poverty. The State Poverty Eradication Mission-Kudumbashree- launched by the Government of Kerala State in India is a massive poverty eradication programme in contemporary history. It has proved without any doubt that women empowerment is the best strategy for poverty eradication Women who were regarded as voiceless and powerless started identifying their inner power, their strength, opportunities for growth , and their role in reshaping their own destiny. The process of empowerment becomes the beacon light to their children, their families and to the society at large. It opens a new vistas in development history. A new paradigm of participatory economics has been found emerging in Gods Own Country. Kudumbashree presents a unique model of participatory development ,which can very well be emulated by other developing countries. The strategy of participation and empowerment adopted in Kudumbashree mission ensures sustainable livelihoods to a many number of poor women- the positive outcome ,which a policy planner can always be enthused with. SWAJALDHARA 1. BACKGROUND 1.1 Water is today perceived by the public as a social right, to be provided free by the Government, rather than as a scare resource which

must be managed locally as a socio-economic good. This perception has grown out of the fact that the present rural water supply systems are designed and executed by the Government Department/Board for the end-users. Demand preferences of the people are generally not taken into account while planning and executing the schemes. In other words, rural water supply programme has been adopting a supply driven approach. Experience has shown that the present approach has led to the failure of a number of water supply systems / schemes due to poor operation and maintenance. 1.2 Since substantial investment had been made in the sector and huge infrastructure and large number of systems built up, it was felt in 1999, that the water supply systems and programmes call for re- examination to achieve sustainability. There was a general recognition that a transformation from a target based, supply-driven approach which pays little attention to the actual practices and/or preferences of the end users, to a demand-based approach, where users get the service they want and are willing to pay for, was urgently required. Implementation of a participatory, demand driven approach was expected to ensure that the public obtained the level of service they desired and could afford to pay part of the capital cost and full operation and maintenance cost. Further, full cost recovery of operations and maintenance and replacement costs is expected to generate a sense of ownership and ensure the financial viability and sustainability of the schemes. The conditions under which people would be willing to pay capital cost partially and operate and maintain water supply schemes are (a) if they own the assets, (b) if they have themselves planned and installed the systems and been actively involved throughout in the process, (c) if they have been trained to do simple repairs, (d) if they know the Government will not maintain the asset, (e) if they have sufficient funds for maintenance, and (f) if they have to pay for operation and maintenance of the systems. Hence, it was considered necessary to institutionalise community based rural drinking water supply programme with the Panchayati Raj Institutions and local communities to generate resources and equip them to plan, implement, use, maintain and replace water supply schemes themselves. 1.3 Hence the Sector Reforms Project was launched on a pilot basis in the year 1999-2000 and is presently being implemented in 67 Districts of 26 States. This was to be scaled up for the whole country from the Tenth Plan. The experience gathered during the past three years, have vindicated the reform principles. There have been demands to scale up the reform initiatives in the sector. The requests revolved round the

fact that it was Gram Panchayats where the reforms are to be implemented. Thus, if the Village / Block level Panchayati Raj Institutions or User Groups come forward and agree to adhere to the reform principles, water supply schemes can be taken up by them in those areas. According to the expectations and the needs to scale up reforms in the water sector through out the country, the Sector Reforms Project has been slightly improved and is launched as Swajaldhara on 25th December 2002. 3. PRINCIPLES 3.1 Swajaldhara has certain fundamental reform principles, which need to be adhered to by the State Governments and the Implementing Agencies. The principles are as follows:(i) adoption of a demand-responsive, adaptable approach along with community participation based on empowerment of villagers to ensure their full participation in the project through a decision making role in the choice of the drinking water scheme, planning, design, implementation, control of finances and management arrangements; (ii) full ownership of drinking water assets with appropriate levels of Panchayats, (iii) panchayats / communities to have the powers to plan, implement, operate, maintain and manage all Water Supply and Sanitation schemes, (iv) partial capital cost sharing either in cash or kind including labour or both, 100% responsibility of operation and maintenance (O&M) by the users ; (v) an integrated service delivery mechanism ; (vi) taking up of conservation measures through rain water harvesting and ground water recharge systems for sustained drinking water supply; and (vii) shifting the role of Government from direct service delivery to that of planning, policy formulation, monitoring and evaluation, and partial financial support. 3.2 Swajaldhara will have two Dharas (streams). First Dhara (Swajaldhara I) will be for a Gram Panchayat (GP) or a group of GPs or an intermediate Panchayat (at Block / Tehsil level) and the Second Dhara (Swajaldhara II) will have a District as the Project area. Swajaldhara - I 3.3 States can implement Swajaldhara in Blocks / Gram Panchayats in the districts outside the Swajaldhara II project districts. In such cases all the fundamental reform principles are to be followed in those areas. Thus, the lowest unit for implementing the reform initiative under

Swajaldhara I would be a Gram Panchayat. A group of Gram Panchayats or the Intermediate Panchayat could also come up with project proposals. Swajaldhara I being primarily for a Gram Panchayat should normally have small drinking water schemes. Multi-Gram Panchayat schemes, while not prohibited, would require specific and precise formulation of capital cost sharing, operation and maintenance arrangements and cost collection mechanisms. 3.4 Specific proposals under Swajaldhara - I will be sanctioned by the District Water and Sanitation Committee (DWSC) provided the projects conform to the Guidelines of Swajaldhara. 3.5 If more than 50% of Blocks/Gram Panchayats in any particular District opt for rural water supply schemes under Swajaldhara I, the State Government could consider posing / taking up the entire District under Swajaldhara II to the State Water and Sanitation Mission (SWSM). Swajaldhara II 3.6 The District is the unit for implementing the reform initiative under Swajaldhara II. The State Governments would identify districts where chances of success of Swajaldhara are high and prepare proposals for implementation of Swajaldhara II. Such requests should have project proposal along with Project Implementation Plan (PIP) and Detailed Project Report (DPR). The District selection under Swajaldhara II will be made by the State Water and Sanitation Mission (SWSM) in all States / Union Territories. 4. Enabling Environment 4.1 For the proper and effective implementation of Swajaldhara Projects the following enabling environment is essential: (i) Panchayati Raj Institutions (PRIs) are to be vested with functions and finances, and supported with functionaries to carry out the responsibilities of drinking water supply scheme planning, designing, implementation, operation, maintenance and management. (ii) Village Water and Sanitation Committee will have to be a committee of Gram Panchayat. (iii) States would need to enact and implement law on effective ground water extraction control, regulation and recharge. (iv) Institutional strengthening and capacity development of the State, District, Block, Gram Panchayats and the community level institutions is necessary. State Government should have an effective State Water and Sanitation Mission with a competent support organisation for implementation of Swajaldhara. (v) State Government should integrate water conservation and rain water harvesting schemes with the drinking water supply schemes. (vi) Rural drinking water, sanitation, health, and hygiene programmes need to be integrated at the State, District, Block and GP levels.

Memorandum of Understanding 4.2 In order to avail of funds under Swajaldhara I and II, the State Governments would enter into Memorandum of Understanding (MOU) with the Department of Drinking Water Supply, Ministry of Rural Development, Government of India. There would be commitment of the State Government to the reform principles in the Water and Sanitation Sector and to promote through out the State the Swajaldhara principles. Each State Government would be required to clearly indicate State vision, identified road map and milestones. Each State Government would be required to prepare a comprehensive Vision Statement, Action plan and agreed time frame for initiating and scaling up reforms in the sector. It should address issues like institutional reforms, integration of Water, Sanitation, and Hygiene, Capital cost sharing principles, water tariff/charges, operation and maintenance of systems, and institutional mechanism for implementation, role of Panchayati Raj Institutions, NGOs, and CBOs; water quality; water conservation measures including legislative action. Further, performance indicators will be laid down in the Memorandum of Understanding which would be periodically reviewed by both Central and State Governments. The MOU will take into account State specific factors and incorporate milestones which are in consonance with the reform principles. Flow of funds under the Swajaldhara and Total Sanitation Campaign would depend upon the performance of the State Governments in relation to the agreed programmes, which would be evaluated by independent monitors / supervisory missions. 4.3 In the MOU, stress would be on adherence to the reform principles by all the stakeholders, viz. State Government, Panchayati Raj Institutions, Non Government Organisations, and User Groups. It would incorporate action points, which address the issues of quantity, quality, conservation and sustainability of drinking water sources and improved sanitation and hygiene in the community. Towards this end, action points for all stake holders will be identified, strategy agreed upon and implementation time-frame laid down in the MOU. Government of India, in turn, will also specify the system of incentives and disincentives for the State Governments. 5. Community Contribution 5.1 The minimum share of community contribution for 40 litres per capita per day (lpcd ) service level will be 10 percent of the estimated capital cost of the project and funding by Government of India would be restricted to 90% of the capital cost.

5.2 In case of all habitations fully covered in the States, with 40 lpcd drinking water facility, the service level can be improved to 55 lpcd with 20 per cent of the capital cost to be borne by the community. In such States, in case of water supply schemes providing more than 55 lpcd, the additional incremental cost would have to be borne by the community / Panchayati Raj Institutions/ State Government. Funding by Government of India would be restricted to 80 per cent of the capital cost of 55 lpcd schemes only. 5.3 The community contribution towards the capital cost of schemes could be in the form of cash / kind/ labour / land or combination of these. However, at least 50% of the community contribution will have to be in cash. In case community contribution is more than 10% of the scheme cost, the excess amount shall be taken into operation and maintenance fund. 5.4 Contribution from the community based institutions / organisations like Youth Club, SelfHelp Groups, local Institutions and Gram Panchayats may also supplement the community contribution. However, such contribution will be over and above the community contribution and will not be included as part of the community contribution. Further, contribution from Member of Parliament Local Area Development Scheme (MPLADS) or Member of Legislative Assembly Constituency Development Scheme (MLACDS), which are Government Programmes, is specifically prohibited. 6. Operation, Maintenance and Management (O&M) 6.1 Operation, maintenance and management cost of the water supply schemes will have to be fully borne by the concerned Community / User Group / Village Water and Sanitation Committee / Panchayati Raj Institution. This would include recurring costs like salary of operators, electricity charges as well as cost of periodic repair and renewal. It would be imperative on the part of the Panchayati Raj Institution / community to have a full understanding and appreciation of the likely O&M costs of various technology options before they select the technology for their water supply scheme. 6.2 The Gram Panchayat which has opted for a new scheme and / augmenting the existing scheme, should take over the O&M of the existing schemes in the respective area. Towards this end, the Gram Panchayat / User group will contribute to an Operation & Maintenance (O&M) Fund. The size of the corpus should be sufficient to meet the O&M cost of the scheme for at least six months. This corpus should remain intact and may be made use of to meet renewal / replacement / major repairs cost .

6.3 Gram Panchayats would require to mobilise funds through levy and collection of user charges for the operation and maintenance of the schemes taken over. Further, upon completion of Swajaldhara schemes under both the streams and their successful operation for at least 12 months from the date of completion, Government of India may provide up to 10% of the capital cost as a one-time incentive to the O&M Fund created by the Panchayati Raj Institution / User Group and the State Government should also make an equal matching contribution to the O&M Fund. 6.4 The District Panchayat / DWSC shall take steps to provide training to persons selected by the Gram Panchayat / community to operate and maintain the drinking water schemes. Funding for the capacity development of Panchayat and Users Group functionaries will be met from the Swajaladhara. 6.5 It is difficult to have all Gram Panchayats in a District under Swajaldhara simultaneously. They are taken up batch by batch. Under Swajaldhara-I, ARWSP funds for O&M will be available for non-Swajaldhara Gram Panchayats. 6.6 Since funding for operation and maintenance will not be available under ARWSP for all the villages in a Swajaldhara project district under Swajaldhara -II, the State Governments may continue to provide funds, if necessary, for O&M for non-Swajaldhara Project Gram Panchayats from their own funds to the Gram Panchayat till the Gram Panchayat is covered under the Project. However, the State Governments should take positive steps to hand over existing rural water supply schemes to GP / VWSC, after undertaking requisite rejuvenation / repair works under the guidance / supervision of GP/ VWSC, for operation and maintenance after a specified date (to be decided by the State Government) so that there is one uniform rural water supply system in the District where GP / VWSC meets full operation and maintenance expenditure. Towards this end, communication and capacity development activities must commence in the district at the earliest 7. INSTITUTIONAL SETUP 7.1 The State Government would be the coordinating agency for the project. Panchayati Raj Institutions should be the Implementing Agencies. It is necessary to have a State Water and Sanitation Mission (SWSM) under the chairmanship of the Chief Secretary/ Officer of Chief Secretary rank. The SWSM may be a registered society. The State Governments would provide necessary operational flexibility to the SWSM for integrated implementation of Swajaldhara and Total Sanitation Campaign (TSC). At the District level, the District Panchayat / Zilla

Parishad shall perform all the functions hitherto performed by the DWSM. At the village level Gram Panchayat / VWSC will be the Implementing Agency. 7.2 State level 7.2.1 The State Water and Sanitation Mission (SWSM) would have the following functions: (i) Provide policy guidance on Swajaldhara Projects; (ii) Periodic review of implementation of the MOU signed with the Department of Drinking Water Supply ; (iii) Consideration and approval of all schemes pertaining to water supply and sanitation sector programmes funded wholly or partially by the Government of India or the External Funding Agencies (including ARWSP, Sub-Mission, TSC); (iv) convergence of water supply and sanitation activities including Special Projects; (v) coordination with various State Government Departments and other partners in relevant activities; (vi) monitoring and evaluation of physical and financial performance and management of the water supply and sanitation projects; (vii) arranging independent certification of the quality of construction of Swajaldhara projects; (viii) integrating and operating communication and capacity development programmes for both water supply and sanitation. 7.2.2 The SWSM would have (i) Apex Committee and (ii) Executive Committee. 7.2.3 The Apex Committee would be headed by the Chief Secretary/ Officer of Chief Secretary rank with Secretaries in-charge of Rural Drinking Water Supply, Rural Development (RD), Panchayati Raj (PR), Education, Health, Finance, Planning, Information and Public Relations and a Government of India representative as members. In addition, three experts in the field of rural water supply and sanitation could also be made members of the Apex Committee. Secretary of the Department concerned with rural water supply and sanitation shall be the Member Secretary of the Apex Committee. This Committee shall meet at least once in every quarter and not less than 4 times in a year. 7.2.4 An Executive Committee with about 15 members shall be constituted to aid and advise the Apex Committee and shall be headed by the Secretary of the Department concerned with Rural Drinking Water Supply and Sanitation, and, an officer not below the rank of a Joint Secretary of the same Department shall be its Member Secretary. Chief Engineer in charge of Rural Drinking Water Supply, officers from the Departments of Rural Development, Panchayati Raj, Health, Education, Social Welfare, Planning, Finance and Information and Public Relations shall be ex-officio members. Experts, not exceeding six, in the field of drinking water; communication and rural development;

community health and hygiene; community mobilisation; Media; and NGOs may be co-opted as members. 7.3 District level: 7.3.1 At the District level, the District Panchayat/ Zilla Parishad shall perform all the functions which hitherto were being performed by the District Water and Sanitation Mission (DWSM). However, in States where elected District Panchayats are not in place, the DWSM as a society under the chairmanship of the District Collector could perform the functions. The District Water and Sanitation Committee (DWSC) will be a Committee of the District Panchayat/DWSM. 7.3.2 The Drawing and Disbursing Officer (DDO) of the District Panchayat / DWSM shall also act as the DDO for all funds received under Swajaldhara. 7.3.3 The District Panchayat / DWSM shall meet as often as possible but not less than four times a year. It will consider and take note of all schemes under Swajaldhara which have been technically scrutinised and approved by the DWSC. It would review the implementation, progress of Swajaldhara and the Total Sanitation Campaign (where it has been launched) in the district. 7.3.4 The District Water and Sanitation Committee (DWSC) will be headed by the CEO of the District Panchayat where District Panchayat is performing functions of DWSM. In other cases, DWSC will be headed by the District Collector / District Magistrate. DWSC will have District level officers such as the Executive Engineers of Drinking Water, and District Panchayat; District Education Officer, District Health Officer, Project Director DRDA, District Panchayati Raj Officer, District Social Welfare Officer, and District Information & Public Relations Officer. In addition 3 members who shall be experts and/ from reputed NGOs, may be co-opted into the Committee as members with the prior approval of the SWSM. The Executive Engineer of Drinking Water or District Panchayat or an Officer chosen by the DWSM and concurred to by the Executive Committee of SWSM shall be the Member Secretary of the DWSC. 7.3.5. The functions of the District Water & Sanitation Committee (DWSC) are as follows: (a) formulation, management and monitoring of Swajaldhara projects; (b) scrutiny and approval of the schemes submitted by the Block Panchayat/ Gram Panchayat, (c) selection of agencies and/ NGOs and enter into agreements for social mobilisation, capacity development, communication, project management and supervision, (d) sensitising the public representatives, officials and the general public about the Swajaldhara principles;

(e) engaging Institutions for imparting training for capacity development of all stakeholders, and undertaking communication campaign; and (f) interaction with SWSM, State Government and the Government of India. 7.3.6 The DWSC will utilise the official premises, equipments, vehicles, telephone etc. of the Zilla Parishad / line Department for the official activities. Recurring costs like propulsion charges of vehicles, transport hiring charges, telephone bills etc. can be met form the project fund. No separate vehicle shall be purchased under the project. If absolutely necessary, vehicles may be hired as and when needed for the project purpose. 7.3.7 The Core Group may be positioned to assist the District Water & Sanitation Committee in implementing the project activities. The Core Group will have professionals in the field of community development, drinking water supply, engineering, rural management, sociology/social sciences, communication, human resource development, etc. The Core Group will meet at least once a month and review the progress made under Swajaldhara. It would give its inputs on communication and development strategy, technology options, sustainable exploitation of drinking water resources, community health, financial viability of schemes, etc. to the DWSC. In order to make the Core Group fully functional and effective, State Governments and District Panchayats may have to be supported in this regard, both financially and technically, by the Government of India from within the project fund. 7.4 Gram Panchayat (GP) / Village Water and Sanitation Committee(VWSC) 7.4.1 VWSC under the Gram Panchayat will implement Swajaldhara schemes in the Gram Panchayat. Each Gram Panchayat taking up Swajaldhara schemes shall have a Village Water and Sanitation Committee (VWSC) under the chairmanship of the Gram Panchayat Pradhan / President / a Panchayat Member elected by the members of the VWSC for implementation of drinking water supply schemes of their own choice with active participation of the villagers. 7.4.2 In case the scheme covers more than one Gram Panchayat, a Joint Committee may be constituted at the Intermediate Panchayat level by involving concerned Gram Panchayat representatives and the Intermediate Panchayat Chairman. 7.4.3 The composition of the VWSCs and Joint Committees can be decided by the State Government under the Panchayat Act. However, women, SC, ST and poorer sections, subject matter specialists, NGOs, CBOs should be given due representation and at least one third members of the VWSC shall be women.

7.4.4 VWSC will be responsible for (i) ensuring GPs to take up Swajaldhara implementation in each Gram Sabha meeting; (ii) ensuring community participation and decision making in all phases of scheme activities; (iii) organising community contributions towards capital costs, both in cash and kind (land, labour or materials); (iv) opening and managing bank account for depositing community cash contributions, O&M funds and management of project funds; (v) signing of various agreements with the DWSC; (vi) planning, designing, and implementing all drinking water and sanitation activities; (vii) procuring construction materials/goods and selection of contractors (where necessary) and supervision of construction activities; (viii) commissioning and takeover of completed water supply and sanitation works through a joint inspection with DWSC; (ix) collection of funds through a tariff, charges and deposit system for O&M of water supply and sanitation works for proper managing and financing of O&M of the services on a sustainable basis; and empowering of women for day to day operation and repairs of the scheme; (x) creating and promoting integration of drinking water, sanitation and hygiene in the Panchayat; and (xi) participation in communication and development activities in other villages. 8. PROJECT ACTIVITIES 8.1. Scheme Cycle 8.1.1 During project preparation, a detailed project implementation schedule would be developed. The projects under Swajaldhara would follow a scheme cycle of about 36 months consisting of four distinct phases and a post project completion phase. Since mostly small schemes are likely to be taken up in a single Gram Panchayat under Swajaldhara I, the duration of scheme cycle could be between 12-18 months. It may, however, be clarified that the period indicated is indicative and in some cases the projects may take a longer period. 8.1.2 Start up Phase This phase should not take more than 3 months. This comprises of .. Creation of the Institutional set-up at State, District, and Gram Panchayat levels. .. Opening of bank account for receipt of funds from the Government of India at the district level by the District Panchayat. .. Generation of bench mark data through Base line survey. .. Identification of NGOs and Training Institutes, Resource Center etc. for activities like communication, Information, Education and Communication ( IEC), Human Resource Development (HRD), capacity development, social mobilisation etc.

.. Monitorining mechanism to be put in place (familiarising the proforma, questionnaire for obtaining information from the field and submitting information to the State Government, SWSM, and Government of India) 8.2 Sensitisation and Identification phase This would involve .. sensitizing and awareness creation among implementers (Government functionaries/ political representatives / PRIs / NGOs etc.) at all levels through various communication channels about the programme assessment and analysis of the existing water supply and sanitation systems (habitation-wise) through primary data collection. .. analysis and identification of the Gram Panchayats/habitations to be taken up in the various phases depending on the demand from them and the available resources. (a) for water supply each phase may comprise of construction of new schemes, augmentation and/ rejuvenation of the existing system and taking over of the complete (acceptable) system by Panchayats. (b) for sanitation the phase may comprise of setting up of RSM/Production Centre (PC) as an alternate delivery mechanism, and habitations where implementation is to commence immediately should be identified (preferably NC/PC and quality affected habitations and those where the success rate is likely to be fast, higher and sure). agencies for communication campaign should be identified and action taken to develop and execute the capacity development and communication strategy .. communication campaign for awareness creation and demand generation should clearly give the following messages:(1)The beneficiaries will own the assets created; (2)The government will not maintain the assets created; (3) This is the one time investment in the District/ Gram Panchayat ; (4) On completion of the project, the District/Gram Panchayat will be considered fully covered; (5) Two or more alternative technologies suitable to a particular area along with information regarding its capital cost, the beneficiary share, the O&M cost, the replacement cost etc. in respect of each technology; (6) Full O&M and replacement cost; and part capital cost are to be borne by the beneficiaries; (7) Importance of water quality monitoring and surveillance; (8) Importance and benefits of water recharging activities and possible technologies for water recharging activities in the area; and (9) Any other local issues pertaining to the area. various communication modules should be prepared in the local language giving the above information.

.. agencies for preparation of the above modules and carrying out communication activities should be identified. .. Preparation of Manuals/modules for the above training including in the local languages. .. getting the schemes of their choice identified by the villagers (decision making process) Village Water and Sanitation Committee (VWSC), a Committee of Gram Panchayat, to be empowered and operationalised . 8.3 Training Training activities to equip the villagers in the Planning, designing, implementation, operation, maintenance and management of schemes of their choice. Training of members of the User Group especially women / community is an extremely important element of the reform principles. Towards this end, the State Water and Sanitation Mission (SWSM) could make use of the State Institute of Rural Development (SIRD) and its branches at Division/ District levels to provide regular training courses for members of the User Groups, Panchayati Raj Institutions, Implementing Agencies, line Departments, NGOs etc. covering all aspects of water supply and sanitation sectors. Training to be given at the following levels: 1. Departmental Level:- (a) Behavioural sciences interaction with the villagers. (b)Sociological aspects (c) Importance of traditional schemes and the needs to be propagated (d) Trainers training to train villagers for installation, O&M, water quality testing, water recharging and harvesting technologies. 2. District Level and NGOs:- (a) Management and supervision of project implementation; (b) Identification and selection of agencies for various activities of the project; (c) Recruitment (on contract basis) of experts as per the requirement; (d) Monitoring of physical and financial progress collection and use of data for the proper project implementation (e) Various communication campaigns to be carried out and related behavioural sciences interaction with people; and (f) Record keeping and documentation of project implementation both progress and process activities. 3. Gram Panchayat / VWSC Level:- (a) Record keeping financial management, transparency, maintenance of minutes of proceedings of VWSC meetings; (b) Communication with villagers Communication activities; (c)Technical matters like scheme planning, designing, installation, specification of various components, procurement and contracting procedure, etc.(d) Matters related to O&M, replacement of the schemes, water quality testing & monitoring, water harvesting systems & structures etc. (during and after implementation of the chosen

scheme); (e) Collection of community contribution capital cost share, O&M cost, monthly collection of water charges maintenance of records; and (f) Crisis and conflict management. 4. Villagers (selected / interested villagers):- (a) Technical matters like scheme designing, planning, installation, specification of various components, procurement procedures, contracting procedures, etc.; (b) Matters related to O&M, replacement of the schemes, water quality testing & monitoring, water harvesting systems & structures etc. (during and after implementation of the chosen scheme); (c) Collection of funds capital cost share, O&M cost, etc, and (d) Crisis and conflict management 8.4 Scheme / System Planning This comprises of .. Rough design and estimation of the water and sanitation schemes/units based on the community/user choice. .. Consensus on the most appropriate scheme based on affordability and technical feasibility. .. Further awareness and training campaign for collection of peoples contribution and deposit in VWSC account. .. Collection of part of the community contribution for starting detailed planning and design of the water supply schemes. In case of sanitation, it may be as per the TSC Guidelines. .. Detailed designing, planning, estimation and seeking approval of the competent authority as decided by the District Panchayat/DWSM. In case of household latrines, it should be as per the beneficiarys choice and affordability. .. Identification of the contractors (where local community through the VWSC cannot execute the work) and assigning the job for implementation. .. Release of Government share from District Panchayat/DWSM to Gram Panchayat /VWSC account. 8.5 Implementation and Commissioning:- This comprise of .. Collection of the balance beneficiary contribution in terms of cash / kind / labour / combination of these (contribution in terms of labour and kind should be quantified and treated as the cash contribution of such contributors and a proper record of the same must be maintained). .. Procurement of materials the Gram Panchayat /VWSC shall purchase the materials. No centralised purchasing should be done. However, in exceptional cases and as the situation demands with respect to certain items, centralised purchasing may be opted by the DWSC on behalf of GPs but only after receipt of due request from the Gram Panchayat / VWSCs. The DWSC shall guide and

assist VWSCs to ensure that materials of standard quality are purchased. .. Execution of work actual implementation of the scheme of choice . .. Supervision by Gram Panchayat/ VWSC and District Panchayat / DWSC for water supply and community based sanitation schemes. In case of household latrines, joint supervision by the NGO and the beneficiary is necessary. Completion, commissioning and taking over of completed schemes by the Gram Panchayats / VWSC for the continued O&M and replacement. .. Awareness and training on water quality testing, monitoring and surveillance .. Development of data base with updating mechanism .. Training to VWSC Chairman and members besides selected villagers for O&M, etc. as explained earlier at sensitizing stage .. Monitoring and evaluation of the scheme by the Gram Panchayat / VWSC .. Participation of the Gram Panchayat / VWSC whose schemes has been completed in awareness and training campaigns in other parts of the district 8.6 A continuous process of monitoring and evaluation, review and mid-course correction (if any required) will be carried out by the District Panchayat, SWSM/State Government, Department of Drinking Water Supply of Government of India , and Implementing Agencies. 8.7 All the above four stages may co-exist at the same time in various places within the same district. 9. NGO Participation 9.1 Services of Non-Government Organizations (NGOs) could be utilized for activities such as social mobilisation, Communication and Capacity Development, Participatory Rural Appraisal (PRA) / Participatory Learning and Action (PLA), Human Resource Development (HRD), Training and implementation of schemes. However, proper and transparent selection criteria should be adopted. NGOs may be properly oriented and trained in the drinking water and sanitation sector reform principles before their services are utilized. 10. Participation of Women 10.1 Since collection of drinking water in villages is primarily done by women they need to be actively involved in planning, choice of technologies, location of systems, implementation, operation and maintenance of water supply schemes. Towards this end, at least one third members of the VWSC shall be women and they should get preference in training for repair of handpumps, etc. Formation of User Groups exclusively of women in villages may be promoted. 11. Technology Options

11.1 The technology option for any village should be acceptable, adaptable and affordable for the community. The selection of water supply technology for a given locality could be determined by a number of factors, such as technical feasibility, users preferences and requirements combined with willingness to contribute towards capital cost and O&M. Site specific conditions such as availability and reliability of electricity supply, quality of ground water etc. must also be factored in by the community while making choice of technology. The service level shall be as per the users preference. Priority should be given to rehabilitation and / extension of existing schemes. 11.2 A Manual consisting of type-designs and indicative capital, O&M and replacement costs for each of the technology options may be prepared by the SWSM / DWSC and circulated to the Gram Panchayats willing to take up projects under the Swajaldhara. However, care should be taken that there is adequate room for local level innovations and greater community participation. Multi Panchayat / Village Schemes 11.3 Swajaldhara Project is ideally suited for small village based self-sufficient schemes. However, in some districts there may be need to go in for capital intensive regional / multi-Panchayat / village schemes on account of water quality problems like excess fluoride, arsenic, brackishness etc; and distant location of drinking water sources. The project may undertake the implementation of such schemes. Water could be supplied to the GP/ community at the village entry point with the Project bearing the cost of bringing water to the village entry point and the community bearing the cost of distribution system within the village/habitation, subject to the condition that community contribution is not less than 10 per cent of the scheme cost within the village/habitation. GP / VWSC / Communities can buy water in bulk and arrange for distribution within the village. The State Government, for the purpose of the Swajaldhara Project implementation within the State would indicate the Policy on multi Panchayat/village scheme relating to (i) capital cost sharing between GOI, State and community (ii) operation and maintenance and (iii) User fees, water charges and tariffs. The Multi Panchayat/Village Schemes under Swajaldhara- I & II within a district can be approved by the District Panchayat / DWSM. In case of such schemes covering two or more districts, the State Water and Sanitation Mission (SWSM) will consider and sanction. It may, however, be noted that financial viability of multi-village schemes and problems of

sustained operation and maintenance would require high degree of managerial capability by the community and these need to be carefully considered before multi-village schemes are approved by the District Panchayat / DWSM / SWSM. 12. Quality control 12.1 It is extremely important that the quality of construction is supervised at all times by the line Department providing technical support to the Gram Panchayat / User Groups. The responsibility for ensuring the quality of works would be of the line Department / Agency at the District level. 12.2 The DWSC should work out an arrangement under which a team of experts would visit once in a quarter, inspect the works quality and give their report to the District Panchayat / DWSC. In case defects are pointed out in the report, the same shall have to be rectified before further payments can be made to the project. 12.3 In addition, the State Water and Sanitation Mission (SWSM) would also put in place a system of random inspection of projects taken up under Swajaldhara in the State by a team of experts. The inspection should assess all aspects of the project including adherence to the reform process mentioned in the Guidelines, which is as important as the quality of civil works. Further, this assessment has to continue even after the project is completed although in such cases the frequency of inspection could be reduced since the sustainability of the water supply project is an integral part of the reform initiative. 12.4 Copies of inspection reports carried out by agencies independent of the Field Engineers will have to be attached along with the second and subsequent instalment claims. 13. Sustainability of sources 13.1 The communities will be encouraged to identify and take up water harvesting / recharge activities to benefit the relevant drinking water sources. Such activities will be essential component of project funding. 13.2 The State Government will come up with a detailed State Water Policy and Vision Statement, which shall lay down the policy parameters in respect of exploitation of ground water sources and protection of drinking water sources. District Panchayats, Intermediate Panchayats and Gram Panchayats shall also be encouraged to take suitable local initiatives for ensuring sustainability of safe water sources. 14. National SWAJALDHARA MONITORING Committee (NSMC) 14.1 A National Swajaldhara Monitoring Committee (NSMC) will be constituted by the Government of India under the chairmanship of

Secretary, Department of Drinking Water Supply. It would have Additional Secretary & Financial Adviser, Joint Secretary(TM), Ministry of Rural Development and at least three experts from the rural water and sanitation sector as the Members. 14.2 The NSMC will meet at least once every three months and would review the progress of the Swajaldhara implementation and provide guidance to the SWSM/ DP /DWSM on proper and effective implementation. 14.3 The NSMC shall also periodically review the progress made in the implementation of the reform initiative by the State Governments against the vision set, objectives, and milestones specified in the Memorandum of Understanding (MOU). 15. Funding of Swajaldhara Projects 15.1 Up to 20 percent of the Budget provision for Rural Water Supply Programme of Government of India has been earmarked for Swajaldhara Projects. If the need arises, this would be increased in subsequent years to ensure full coverage of the remaining districts under Swajaldhara by the end of the 10th Plan. 15.2 Swajaldhara Project funding, excluding community contribution, will be fully met by the Government of India. 15.3 Funds under Swajaldhara will be allocated to the States every year as per the inter state Accelerated Rural Water Supply Programme (ARWSP) allocation ratio fixed for the year. The releases will be demand responsive up to the maximum allocation for the year. The unspent amount under this will be distributed to States by the end of December with the concurrence of the Integrated Finance. In that, priority will be accorded to those States where Swajaldhara projects need additional funding. Remaining unspent funds will be pooled and distributed as per the ARWSP, to better performing States. 15.4 While indicating tentative allocation to Districts within the State, the following principles will be borne in mind by the State Governments: (i) ensure equitable spread of water supply schemes, (ii) district wise allocations may be made and communicated by 30th April, and (iii) the fresh proposals for the allocated amount are approved by the District Panchayat by 30th September of each year. 15.5 If progress under Swajaldhara is found to be unsatisfactory in a State by the Department of Drinking Water Supply, Government of India, it would be free to re-allocate the savings of a State in December among better performing States. 15.6 Procedure for release of Funds

15.6.1 For the implementation of schemes approved under Swajaldhara-I, the funds will be released in two equal instalments while it would be released in four instalments of 20, 40, 30 and 10% for projects taken under Swajaldhara -II. The State Governments / SWSM will indicate the extent to which allocated funds for a year will be utilized in the State under Swajaldhara I and II. 15.6.2 In case of Swajaldhara I, district wise allocation indicating number of Gram / Block Panchayats where from the proposals are expected and total funds required will be intimated by the State Governments and Union Territory Administration to the Department of Drinking Water Supply. On receipt of the said information, the first instalment (50% of the estimated amount) will be released directly to the SWSM/ DP / DWSM by Department of Drinking Water Supply. On receipt of the Swajaldhara I proposals from the Gram Panchayats / Block Panchayats, the District Panchayat / DWSM will examine technically and financially and take decision on the proposals. In case of sanction, 1st instalment (50% of the sanctioned scheme capital outlay) will be released to the Gram / Block Panchayats. Release of 2nd instalment by Government of India would depend upon the SWSM and the State Government satisfying and recommending release of the funds for each DP/ DWSM with proper Utilization Certificate and Audit Certificate. The State Government and SWSM will consider the following before sending their recommendation to Government of India: (i) utilization of the total available funds. The available funds means funds released by Government of India plus interest accrued thereon and community contribution (cash, kind, land, labour computed in terms of amount) received for the proposals; (ii) utilization certificates duly signed by Chairman and Secretary of DWSC, duly verified and countersigned by the CEO of the SWSM. The Utilization Certificate will be in the Form enclosed (Annex-I); (iii) Audit Report of the Chartered Accountant covering all the points indicated in the Guidelines and the Audit certificate and statements to be furnished in the prescribed Format A to E at Annex-II; and (iv) the latest Inspection Report of the schemes implemented in the respective districts by an agency (engaged by DWSC and approved by SWSM) independent of field engineers. The Inspection Report shall not be more than three months old at the time of seeking release of 2nd and subsequent instalments. The State Government will be fully responsible for the recommendation for 2nd instalment release. Audit Certificate and Utilisation Certificates and other records received from DWSC and Gram Panchayats/VWSCs shall be retained at the SWSM /

State Government level. 15.6.3 Under SwajaldharaII, funds would be released by the Department of Drinking Water Supply to the SWSM/ DP /DWSM in 4 instalments of 20, 40, 30 & 10 %. 20% of the project cost would be released once the project for the District has been approved by the SWSM. For the release of 2nd and further instalments the conditions specified in (i), (ii), (iii), and (iv) of Para 15.6.2 of the Guidelines will have to be met. District Panchayat / DWSM will be responsible to release funds to GPs / VWSCs and will ensure proper management of funds. 15.7. A separate Bank account in the State Bank of India or its associate bank may be maintained by the SWSM/ District Panchayat/ DWSM to receive funds from the State Government and Government of India. 15.8 Funds would be provided to the State Water and Sanitation Mission (SWSM) and the District Panchayat / DWSM to meet the expenditure on activities like Start up, Communication & Capacity development, Quality check, monitoring etc. This would be limited to 10% of the value of project proposals cleared during the year in the State under Swajaldhara I and II. 15.9 The administrative cost shall not exceed 5% of the Project Outlay with an upper ceiling of Rs. 5 lakh per annum and would be admissible to the District Panchayat / DWSM and Gram Panchayats executing the projects under Swajaldhara I & II. No centage charges would be admissible under Swajaldhara. Salaries of employees of the State Government / District Panchayat cannot be charged to the project. But the contracted consultants / professionals can be engaged for which payments will be funded under the administrative / IEC / HRD etc. components of the project as the case may be. 15.10 Interest accruing to the funds available at the District level will be added to the project funds and utilized as per Swajaldhara Guidelines. In case of Gram Panchayat / VWSC, interest accruing for the funds received under Swajaldhara and on community contribution will be taken into account for the schemes and utilised only as per the Guidelines. 16. INADMISSIBLE ITEMS OF EXPENDITURE 16.1 The following items of expenditure are inadmissible under Swajaldhara :a) Purchase of vehicles. b) Purchase of Land and Buildings. c) Construction of Official Buildings and rest houses (This excludes buildings needed for drinking water schemes). d) Expenses for any political party and religious organizations. e) Expenses for gifts and donations.

17. Project Accounts and Audit 17.1 The Swajaldhara project accounts will be properly maintained by the Project Authorities at the District, Block / Gram Panchayat and VWSC levels. These accounts will be audited by Chartered Accountants to be engaged by SWSM/ State Government. Annual audited project accounts shall be submitted to District Panchayat/ DWSM; SWSM / State Government and Department of Drinking Water Supply, Government of India. The Project Authorities would submit the audited accounts along with Project Progress Report while filing instalment claims. 17.2 The Audit Report should cover the following issues: .. Number of Bank Accounts being maintained by the Implementing Agency (a single and separate Bank Account should be maintained for the Scheme). .. Funds held in Fixed Deposits, if any (the programme funds are allowed to be kept only in Savings Account). .. Whether interest accrued in Savings Account has been taken as receipt and utilised for the Project. Delay, if any, in crediting the Accounts of the Implementing Agency by the receiving Bank - if so, the period of delay. .. Whether Bank reconciliation in respect of Cash Book balance and Pass Book balance is being done fortnightly. The Bank reconciliation should also cover interest accruals. The Bank reconciliation statement as on 31st March should be attached to the Audit Report. .. Proper maintenance of Cash Book by the Implementing Agency. .. Cheques issued but not encashed as on 31st March as per Bank reconciliation (this should be taken as a part of the opening balance). .. Actual expenditure village-wise out of advances to all the VWSCs and closing balances with VWSCs. Inadmissible items of expenditure, if any. Diversion of funds, if any. 17.3 In order to cover all the issues mentioned in the Guidelines the following check list shall be specifically addressed in the Chartered Accountants Audit Report:.. Whether a separate bank account for the Scheme is being maintained? .. Whether any programme funds are held in Fixed Deposits? .. Whether interests from Savings Bank accounts are being credited into the account and utilised for the Scheme?

.. Whether there is delay in crediting the Accounts of the Implementing Agency by the receiving bank. If so, the period of delay? .. Whether Bank reconciliation statement as on 31st March has been attached to the Audit Report? .. Whether cash book is being maintained properly? .. Whether amount of cheques issued and not encashed as on 31st March of a financial year as per Bank reconciliation statement have been indicated (the amount of uncashed cheque(s) has to be taken as a part of the opening balance in the next financial year)? .. Whether a schedule indicating actual expenditure village-wise out of advances to all the VWSCs and closing balances with all the VWSCs has been attached to the Audit Report? .. Are there any inadmissible items of expenditure? If so the details should be furnished. Is there any diversion of funds? If so the details should be furnished. 18. Monitoring, Review and Mid Project Revision. 18.1 The DWSC will submit Monthly Progress Reports within 10 days in the succeeding month; and for every financial year on or before 25th April of the succeeding financial year. Progress Report form is at Annex-III. 18.2 Government of India will field multi disciplinary Review Mission comprising officers of Government of India and the respective State / UT Government, subject Matter Specialists / Experts once in 6 months or as often as may be necessary to review the implementation and recommend remedial action. The Mission is to guide the Project Authorities for process implementation. It is not for preparing / recommending reports for release of funds, which shall be made based on procedure laid down in Para 15.6 foregoing. 18.3 Mid Project Review Mission will look into physical and financial progress of the project and indicate specifically mid course improvement, if any, to be carried out. In case additional funding is suggested the NSMC would consider the revised Project proposal. 19. Completion of Swajaldhara Projects 19.1 A Swajaldhara Project in a District/Block/Gram Panchayat, will be considered as completed on fulfillment of the following conditions: (i) all the schemes taken up under the project have been fully completed and taken over by the Panchayat / VWSC for operation and maintenance (ii) the audited project accounts for the entire expenditure has been received and taken on record in the Government of India, and (iii) the balance Government of India funds in the project have been fully refunded to Government of India.

19.2 A Report on completion of projects under Swajaldhara will be placed before National Swajaldhara Monitoring Committee for observation and comments, which would be duly communicated to the State Government for further action, if any. 20. POST- PROJECT ACTIVITIES 20.1 Since Swajaldhara is a process project designed to enable the community to have access to acceptable, adaptable, sustainable and affordable safe drinking water system, the reform process does not end with the physical completion of water supply schemes. In several ways, it marks the beginning of a new and more challenging phase in the process where the local community have to shoulder the responsibility of operation and maintenance of the system. This entails putting into operation the decisions taken by the community with regard to tariff structure, collection of monthly water charges from the users, ensuring proper maintenance of the system so as to ensure reliable and regular supply of safe drinking water. Towards this end, the community will have to arrange for periodic quality checks of water being supplied as well as ensure sustainability of sources. This may include taking decisions regulating exploitation of ground water sources and preventing contamination of water sources. All these activities would require high degree of community mobilisation and awareness. 20.2 The District Panchayat / DWSM and the State Water and Sanitation Mission (SWSM) should arrange for periodic monitoring and review of the functioning of completed water supply schemes by officers, experts, NGOs, Institutions etc. Suitable monitoring mechanism and systems may be put in place in this regard by the State Government. PROJECT SHAKTI A BUSINESS INITIATIVE WITH SOCIAL BENEFITS Shakti: Economic development through micro enterprise Shakti, meaning strength in Sanskrit, is a micro-enterprise programme that was established to create opportunities for women to sell Unilever products door-to-door in rural areas of India. Our products reach people through a diverse network of retailers. Our major retail customers include Walmart, Carrefour and Tesco. In developing and emerging markets, however, we rely not only on distributors, wholesalers, small independent outlets and kiosks to serve our consumers but we also create ways to reach people in remote parts of countries. These areas often have no retail distribution network, no advertising coverage and poor roads and transport links.

As the Indian economy opened up in the early 1990s and competition increased, Hindustan Lever (now Hindustan Unilever) realized that in order to grow its business it needed to gain market access to the thousands of villages in rural India with under 2 000 inhabitants. The company created a new business model called Project Shakti. Project Shakti started in 2000 as an innovative direct-to-consumer distribution channel using a network of women entrepreneurs to sell a range of affordable company products door-to-door, products in small sizes that met the needs and pockets of people with low incomes in remote rural populations. Piloted first in a few villages in Andhra Pradesh state, India, the pilot expanded to two states in 2002. By the end of 2004, Shakti had grown to over 13 000 Shakti women entrepreneurs covering 50 000 villages in 12 states, selling to 70 million consumers. 2010 figures show 45 000 entrepreneurs selling products to 3 million households in 100 000 villages. Unilever tapped into the growing number of womens self-help groups in India by making presentations at rural group gatherings. Disadvantaged women were identified mostly those from families living below the poverty line and invited to become Shakti entrepreneurs. The company then invested in training and coaching, including how to sell, and imparting commercial and book-keeping knowledge. The women who were trained could then choose to set up their own business or become a Shakti distributor. Each Shakti entrepreneur invests $220 in stock at the outset usually borrowing from self-help groups or micro-finance banks, and aims to have around 500 customers, mainly drawn from her village or nearby villages. Most Shakti women generate monthly sales of around $225, netting a monthly average income of between $16 23. After paying a few dollars monthly for the loan, the woman is left with about $150 annually. These are usually women from poor and disadvantaged backgrounds and this is often a significant increase to their household income. The company has had support from over 300 partners, including NGOs, banks and both state and local governments who recognise the potential for economic growth in India by encouraging women to become entrepreneurs. Shakti is a business initiative with social benefits. It has helped double rural reach for Hindustan Unilever and it provides a means for many women in India to rise out of poverty and provide a better life and future for themselves and their families. In fact, Hindustan Unilever is aiming to expand the programme in 2010 to include men. These shaktimaans, often the husbands of Shakti entrepreneurs, will be given bicycles to enable them to reach more remote villages.

Shakti Vani takes Shakti on to another stage. Shakti Vani (Voice) raises health and hygiene awareness in rural villages. Hindustan Unilever trains local women to give talks to villagers about basic health practices such as good hygiene, disease prevention and pre- and post-natal care, using visual aids to overcome widespread illiteracy. We have a similar micro-enterprise initiative running in Bangladesh. Project Joyeeta, a name derived from the Bengali word for win, started in 2003 with 25 women in villages across north Bangladesh. Joyeeta then became Project Aparajita a joint programme between Unilever and the aid agency CARE International. In 2009, 3 000 women sold Unilever products to 1.8 million households through sales hubs set up by CARE. In 2010, the aim is to increase this number to 10 000 women covering a total of 6 million households. Similar initiatives also run in Sri Lanka, the Philippines and Vietnam. Shakti is our initiative that combines social responsibility, sustainability, and business strategy. India has more than 6, 30,000 villages, most of these are 'hard to reach' and offer relatively lower business potential. Hence, reaching them through the conventional distribution system is a challenge. In 2000, we collaborated with Self-Help Groups (SHG) to extend our rural reach. We partnered with the SHGs by offering them opportunities for business. By promoting micro-enterprises, our initiative not only makes great business sense, but also has a deep social impact. The business objective is to extend our direct reach into untapped markets and to build brands through local influencers. The social objective is to provide sustainable livelihood opportunities for underprivileged rural women. On an average, a Shakti entrepreneur earns INR 700 - 1000 a month, and since most of them live below the poverty line, this earning is significant, often doubling the household income. Shakti started with 17 women in two states. Today, it provides livelihood enhancing opportunities to about 45,000 women in 15 Indian states and provides access to quality products across 100,000+ villages and over 3 million households every month. Project Shakti contributes to 10% of rural turnover nationally. In most Shakti markets, we are dominant and enjoy a market share which is qualitatively better as compared to non-Shakti markets. Shakti is not only a channel for increasing our reach, the Shakti entrepreneurs are also brand ambassadors for all HUL brands in rural India. Their relationship with consumers is forged by their home-to-home contacts, and goes a long way in building brand loyalty. Our Shakti initiative can be described in many ways as a sales and distribution initiative that delivers growth; a communication initiative that builds brands; a micro-enterprise initiative that creates livelihoods; and a social initiative that improves the standard of life in rural India by providing quality products. What makes Shakti scalable and sustainable is the fact that it contributes not only to our business, but also to the community it is a part of.

With the urban market saturated, FMCG companies are now targeting the rural markets. In spite of the income imbalance between urban and rural India, rural holds great potential since 70% of Indias population lives there. Due to the recent government measures like waiver of loans, national rural employment guarantee scheme and increasing minimum support price, disposable income in rural India has been rapidly increasing. However, rural markets present their own sets of problems. These include poor infrastructure, dispersed settlements, lack of education and a virtually nonexistent medium for communication. Furthermore, retailers cannot be present in all the centres as many of them are so small that it makes them economically unfeasible. Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti. This project was started in 2001 with the aim of increasing the companys rural distribution reach as well as providing rural women with income-generating opportunities. This is a case where the social goals are helping achieve business goals. The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village. The representative of the company meets the panchayat and the village head and identify the woman who they believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through petty shops at home. On an average a Shakti Amma makes a 10% margin on the products she sells. An initiative which helps support Project Shakti is the Shakti Vani programme. Under this programme, trained communicators visit schools and village congregations to drive messages on sanitation, good hygiene practices and women empowerment. This serves as a rural communication vehicle and helps the SA in their sales. The main advantage of the Shakti programme for HUL is having more feet on the ground. Shakti Ammas are able to reach far flung areas, which were economically unviable for the company to tap on its own, besides being a brand ambassador for the company. Moreover, the company has ready consumers in the SAs who become users of the products besides selling them. Although the company has been successful in the initiative and has been scaling up, it faces problems from time to time for which it comes up with innovative solutions. For example, a problem faced by HUL was that the SAs were more inclined to stay at home and sell rather than going from door to door since there is a stigma attached to direct selling. Moreover, men were not liable to go to a womans house and buy products. The company countered this problem by hosting Shakti Days. Here an artificial market place was created with music and promotion and the ladies were able to sell their products in a few hours without encountering any stigma or bias. This model has been the growth driver for HUL and presently about half of HULs FMCG sales come from rural markets. The Shakti network at the end of 2008 was 45,000 Ammas covering 100,000+ villages across 15 states reaching 3 m homes. The long term aim of the company is to have 100,000 Ammas covering 500,000 villages and reaching 600 m people. We feel that with this initiative, HUL has been successful in maintaining its distribution reach advantage over its competitors. This programme will help provide HUL with a growing customer base which will benefit the company for years to come.

HOW IT WORKS Villages with a population of about 20003000 are selected Personnel from HUL approach SHGs Selection of the Shakti Amma HUL vouches for Shakti Ammas with banks for credit one Shakti entrepreneur is appointed for one village & Villages that are about 2 kilometres apart from her village (satellite villages ). The Shakti dealer places initial orders worth Rs. 15,000/(principal customer of HUL) Finance : Self+SHG+micro credit Training by the Rural sales promoter. The Shakti dealer organizes, a Shakti Day in the village (display of products & free gifts ) Core Brands: Lifebuoy, Wheel, Pepsodent, Annapurna salt, Clinic Plus, Lux, Ponds, Nihar and 3 Roses tea.

PRICING AND PACKAGING Rural consumers are price sensitive Sachets and small packs of premium products. Price doesnt exceed Rs.5 per sachet. Lux at Rs.5, Lifebuoy at Rs.2, Surf Excel sachet at Rs.1.50, Pond's Talc at Rs.5, Pepsodent toothpaste at Rs. 5, Fair & Lovely Skin Cream at Rs.5, Pond's Cold Cream at Rs.5, Brooke Bond Taaza tea at Rs.5. Distribution It is the combination of the 3 ways: Door to door selling (11% margin on sales)

Sells from own home (11% margin on sales) Retailers (3% margin) averages sales : Rs. 10,000 - Rs. 15,000/month, profit - Rs.1,000 per month Creating rural entrepreneurs A Shakti Entrepreneur in Action 45 000 Shakti entrepreneurs reach 100 000 villages. Rojamma is a single parent living in Kurumurthy, a small village in the Indian state of Andhra Pradesh. When her husband left her, she earned a few rupees working in her mother's field but found it difficult to support her two daughters. Then she joined a women's self-help group and found out about Project Shakti. "From that moment my life changed", recalls Rojamma. . As Rojamma says: "When my husband left me I had nothing except my daughters. Today everyone knows me. I am someone now". It has meant she has been able to send her daughters to school, giving them the chance in life she didn't have Before joining Shakti in 2006, Sakammas husband was the sole bread earner for the family of five. The meager income of 10,000 rupees per year was worsened by the husbands alcoholism. The needs of Sakammas growing children posed a daunting task. When the concept selling meeting was organized by Hindustan Unilever, she decided to become a Shakti entrepreneur. Today, Sakamma earns an additional yearly income of 10,000 rupees through Shakti. I want my daughter to become an engineer, she proudly says. She believes that this career path will make her daughter financially independent. Sakamma today has independent access to a bank and decides what investments to make. She recently invested in gold jewelry as has started preparing for her daughters marriage. Sakamma was recently also chosen to work with the government to help educate rural populations on health issues.

Increasing income After an initial investment in stock - usually borrowing from self-help groups or micro-finance banks facilitated by Hindustan Lever - most Shakti entrepreneurs net a monthly profit of 700 1 000 rupees (US$15 - 22). This is a far cry from the few rupees single mothers like Rojamma had earned before, and for those with husbands who work in the fields, this typically doubles the household income. By the end of 2009, 45 000 Shakti entrepreneurs were selling products to three million consumers in 100 000 villages. Shakti has brought them self-esteem, a sense of empowerment and a place in society.

To expand its markets, the challenge for Hindustan Lever (Unilever's business in India) was how to reach millions of potential consumers in small remote villages where there is no retail distribution network, no advertising coverage, and poor roads and transport. The solution was Project Shakti, launched in 2000 in partnership with non governmental organisations, banks and government. Women in self-help groups across India are invited to become direct-to-consumer sales distributors for Hindustan Levers soaps and shampoos. The company provides training in selling, commercial knowledge and bookkeeping to help them become micro-entrepreneurs. By the end of 2009 there were more than 45 000 Shakti entrepreneurs covering 3 million homes in 100 000 villages in 15 states in India. We are rolling out similar initiatives in Sri Lanka and Bangladesh. For more information, please see the Supporting micro-enterprise section of our online Sustainable Development Report 2009. Promoting Womens Economic Empowerment: The Learning Journey of Hindustan Unilever

The companys work has been guided by the belief that the private sector can help create Solutions to social challenges through innovative strategies that meet both business and social Objectives. It is this belief that led the company to develop Shakti (meaning empowerment or Strength), a direct-to-consumer sales distribution network that relies on over 45,000 female Micro-entrepreneurs from 15 Indian states to tap into remote, rural markets in India. The initiative Has proved a resounding success. Using an innovative distribution channel, Shakti has helped Further rural development and has brought new business by opening previously unexplored Markets. Main Lessons

Such as Shakti requires commitment and patience, where financial rewards may not be immediate but long-term business benefits could be large. -sector partnerships can strengthen the distribution Model, especially when reaching Previously untapped markets.

emotional connect is important for ensuring staff commitment to a difficult but important cause. Focus on Empowering Women A Differentiating Strategy As Hindustan Unilever was contemplating how to increase its reach, self-help groups based on the Grameen model of microfinance were springing up and flourishing across India. Shakti started out by tapping into these groups in one rural part of Andra Pradesh in 2000. The idea was to create low-risk, profitable micro-enterprise opportunities for women who become direct-to-home distributors of Hindustan Unilevers products. By selling directly to consumers, the women take on a role of influencers, strengthening their position in the local community. The company wanted to focus on women from the beginning. This was not only because women tended to be its main consumers, but also because of the belief that giving additional income to women would result in grater benefits for the household as a whole. Hindustan Unilever has always believed in an approach to doing business which weve called doing well by doing good, Nitin Paranjpe, the companys CEO and Managing Director has said. In the Shakti initiative we actually went to the most remote villages and identified underprivileged families whose household income was as low as $15 to $20 a month. But the idea of tapping into self-help groups was still a departure for Hindustan Unilever. For a company like ours, the challenge was to think completely out of the box. To think of working with these rural women who had no apparent business skills at the time was a stretch, explains Krishnendu Dasgupta, the companys Regional Brand Manager whose portfolio includes Shakti. Shakti is not the first project that has used womens self-help groups. For years, nongovernmental organizations, donors, and government have been establishing such groups across India. Today, eight million Indians, 95 percent of whom are women, benefit from microfinance, but there is still huge unmet need. Companies like Avon or Tupperware have used a similar distribution model in more affluent markets. What makes this program particularly interesting is its focus on the countrys poorest regions to deliver products to consumers that would otherwise remain outside its reach. Shakti entrepreneurs quickly became central to the firms distribution network in rural India. Over the years, the basic premise of the program has remained the same, but the initiative is constantly evolving to address emerging challenges and changing circumstances. Today, a distributor

delivers stock at the womans doorstep. She then distributes it directly to consumers and to retail outlets in her host and satellite villages. Margins are usually higher with the direct to consumer option than in the retail outlet option, where maximum margins are limited to 3%. The products are packaged in quantities small enough to be affordable to rural buyers and often cost as little as half a rupee each. A rural sales promoter is responsible for several villages at a time and provides a helping hand to the women as they grow their businesses. To recruit entrepreneurs, Hindustan Unilever makes presentations at womens self-help group gatherings. Skakti is not a one-company effort. The program involves a variety of other non-state and state actors and has worked with over 400 organizations to date to recruit the women, provide associated training, and roll out related initiatives. While the women may be excited about this income earning opportunity, turning them into businesspeople can be challenging. Building the capabilities and skills of these ladies is one of our biggest challenges. They come from underprivileged homes and are not very educated, explains Hemant Bakshi, the Executive Director of Customer Development at Hindustan Unilever. To address this skills gap, intensive training is required to help the women distributors become confident and independent. Due to this intense level of required effort, a team of about 1,200 people at Hindustan Unilever is involved in the initiative. To increase the credentials of Shakti entrepreneurs and enhance the standard of life of the rural community, social activities like medical camps and education programs are run. Hindustan Unilever has also created iShakti and Shahti Vani, which provide rural India with access to information and social communication. The iShakti community portal, piloted in Andhra Pradesh, empowers communities by creating access to relevant information. Desktop computers are set up in the homes of Shakti entrepreneurs, and users can access content on categories such as education, employment, agriculture, health, grooming and entertainment. These educational initiatives are so important because lack of awareness of basic hygiene practices is estimated to kill over 500,000 children in rural India every year. Shakti Vani seeks to spread awareness of best practices in health and hygiene, while also benefiting the business. Under this scheme, a local woman is appointed as Vani (voice) for a cluster of villages. She receives training on personal and community health, and communication materials, such as pictorial literature that can be understood by illiterate people. She attends meetings, organizes school contact programs, and uses other social occasions to clarify issues of community hygiene. The Vani project operates in over 20,000 villages. While the programs have been costly to set up, increased awareness about hygiene is expected to increase sales in the long term while benefiting community well-being. Shakti is Hindustan Unilevers most visible initiative on gender, but it is not the only one. The company is committed to creating equal opportunities for their staff. In 2003 they started the Fair & Lovely Foundation, which provides information, resources, and scholarships in the areas of education, career and womens enterprise. Hindustan Unilever has also worked with the Dhan Foundation to enhance the livelihoods of 75,000 women

by providing them with business training and access to loans. The companys next frontier has been to provide safe drinking water. Poor quality water is a source of major disease in India. Hindustan Unilever has worked to develop Pureit, a relatively affordable home water purifier. Following pilots in the south of India, the company is now using its Shakti network to distribute Pureit across the country.

Global Impact By opening untapped markets through an innovative distribution channel, Shakti has helped further rural development while generating business for Hindustan Unilever. The company has rolled out similar initiatives in Sri Lanka, Bangladesh and the Philippines. Shakti has resulted in significant new business for Hindustan Unilever. It contributes to 15% of the companys rural business in India and 40% of its growth in rural markets. In Shakti areas, the companys market share is about 10% better than in non-Shakti markets. In addition to the immediate financial benefits, the work of Shakti entrepreneurs as brand ambassadors has been crucial for building long-term brand loyalty for Hindustan Unilever. The initiative has led to increased income for women and improved community wellbeing. A typical entrepreneur earns about $15 to$20 per month, often doubling household income. In 2010, the initiative is expected to generate an annual combined income of over $25 million for Shakti entrepreneurs. This additional money in the hands of women is significant, since they have limited other income generating opportunities and are more likely to invest their income towards the overall benefit of their family. Through the program, women acquire education, improved standing in their communities, and greater self-esteem. They are often treated with more respect by their family, since they provide additional income. One study found that the project made a number of women aware that girls need sufficient education to be able to generate their own income. Shakti entrepreneurs tend to be more confident about socializing, more likely to take lead roles in public activities, and they enjoy higher recognition and social status among local people. Until I met one of the Shakti women, I underestimated the potential of what multinational corporations could do to improve the quality of life of the underserved. By offering women opportunities to earn income, Unilever is transforming the lives of these women, their families and their neighbors while also meeting the growth aspirations of their shareholders, said Tess Mateo of PricewaterHouseCoopers after a Recent field visit to a Shakti village.

Infrastructure Development in India

1. INTRODUCTION Indiafs rise in recent years is a most prominent development in the world economy. India has re-emerged as one of the fastest growing economies in the world. Indiafs growth, particularly in manufacturing and services, has boosted the sentiments, both within country and abroad. With an upsurge in investment and robust macroeconomic fundamentals, the future outlook for India is distinctly upbeat. According to many commentators, India could unleash its full potentials, provided it improves the infrastructure facilities, which are at present not sufficient to meet the growing demand of the economy. Failing to improve the countryfs infrastructure will slow down Indiafs growth process. Therefore, Indian governmentfs first priority is rising to the challenge of maintaining and managing high growth through investment in infrastructure sector, among others. The provision of quality and efficient infrastructure services is essential to realize the full potential of the growth impulses surging through the economy. India, while stepping up public investment in infrastructure, has been actively engaged in involving private sector to meet the growing demand. The demand for infrastructure investment during the 11th Five Year Plan (2007-2011) has been estimated to be US$ 492.5 billion (Planning Commission, 2007). To meet this growing demand, Government of India has planned to raise the investment in infrastructure from the present 4.7 percent of GDP to around 7.5 to 8 percent of GDP in the 11th Five Year Plan. In general, efforts towards infrastructure development is continued to focus on the key areas of physical and social infrastructure.

2. PROFILE OF INDIAS PHYSICAL INFRASTRUCTURE Performance of physical infrastructure in Indian economy in last one and half decades has been mixed and uneven. Over years, Indias soft infrastructure grew much faster than the hard infrastructure. For example, Indias rising trade has been reflected in growing container port traffic, which increased from less than a million in 1991 to about 5 million in 2005 with an annual growth rate of about 266 percent since 1991. In contrast, hardware components, like railways, roadways and airways, witnessed little expansion in last one and half decades. In general, performances of these sectors (hardware) are nevertheless poor, when counted their densities in terms of countrys surface area or population. Densities in terms of access or spread of rail and road length clearly indicate that road sector has been successful, compared to railways, in spreading the network as well as providing an access in the economy. What follows is that software part of Indias physical infrastructure (like telecom, air and port services) performed well, thus not only helped the country to maintain a faster

growth but also integrated the economy with the world market at a faster pace. At the same time, the hardware component of the countrys physical infrastructure (e.g. road, rail, power) comparatively grew slowly, thus negated the countryfs development process. Therefore, in order to unleash Indiafs full potentials, development of hardware component of Indiafs physical infrastructure perhaps deserves utmost attention. This also indirectly indicates high investment potentials in roadways, railways, power and the associated components in India.

2.1. Roads The most distinct part of Indiafs physical infrastructure development in recent years is the development of road network across the country; per sq. km. of surface area in India is now endowed with one km of roadways. India has one of the largest road networks in the world, aggregating to 3.34 million km. The countryfs road network consists of Expressways, National Highways, State Highways, Major District Roads, Other District Roads and Village Roads. The road network, as on December 2007, comprises 66,590 km of National Highways, 128,000 km of State Highways, 470,000 km of Major District Roads and about 2.65 million km of other District and Rural Roads. National Highways comprise only about 2 percent of the total length of roads and carry about 40 percent of the total traffic across the length and breadth of the country. Out of the total length of National Highways, 32 percent is single lane/intermediate lane, 56 percent is 2-lane standard and the balance of 12 percent is 4-lane standard or more. The National Highways Development Project (NHDP), the largest highway project ever undertaken by the country, is being implemented by the National Highway Authority of India (NHAI). NHDP Phase I & II envisage 4/6 laning of about 14,279 km of National Highways, at a total estimated cost of Rs.650 million (at 2004 prices). These two phases comprise of Golden Quadrilateral (GQ), North-South and East-West Corridors, Port Connectivity and other projects. The Golden Quadrilateral (GQ-5,846 km) connects the four major cities of Delhi, Mumbai, Chennai and Kolkata. The North-South and East-West Corridors (NS-EW-7,300 km) connect Srinagar in the North to Kanyakumari in the South, including spur from Salem to Kochi and Silchar in the East to Porbandar in the West. By November 30, 2006, 6,776 km of national highways pertaining to NHDP had been completed, the bulk of which (5,475 km) lie on the GQ. Constraints faced in the timely completion of NHDP include delays in land acquisition, removal of structures and shifting of utilities, law and order problem in some States, and poor performance of some contractors. Nearly 93 percent works on GQ have been completed by November 2006, and the NS and EW corridors are expected to be completed by December 2009. With the completion of about 93 percent of the GQ, a substantial impact upon the

economy is already visible. At this stage there is a need to focus attention on corridor management and road safety, and NHAI has already put in place a corridor management policy. Financing of NHDP For implementation of NHDP Phases I and II, the main source of finance of NHAI is the fuel cess. The present rate of cess is Rs. 2 per litre on both petrol and diesel. A part of this cess is allocated to NHAI to fund the NHDP. This cess is leveraged to borrow additional funds from the domestic market. Besides, the Government of India has also negotiated various loans from World Bank (US$ 1,965 million), Asian Development Bank (US$ 1,605 million) and Japan Bank for International Cooperation (Jap. Yen 32,060 million) for financing various projects under NHDP. These loans from the multilateral institutions are passed on to NHAI by the Government partly in the form of grant and partly as loan. NHAI also negotiated a direct loan of US$ 165 million from ADB for one of its projects. The funds provided to NHAI, including its borrowings from the market, are utilized for meeting project expenditure as well as debt servicing. Future plans Government has set ambitious plans for upgradation of National Highways in a phased manner in the years to come. As a policy, Government has decided to take up future phases of NHDP proposals mainly on a PPP basis. Implementation of projects through construction contracts will be only in exceptional cases where private sector participation is not possible at all. 2.2. Ports Ports have been playing a crucial role in facilitating Indiafs international trade and also in generating economic activity in their surroundings and hinterland. Indiafs coastline of 7,517 km. is added with 12 major ports and 187 non-major ports. Of the non-major ports, around 60 are handling traffic. The total traffic carried by both the major and minor ports during 2005-06 was estimated at around 570 million tonnes. The 12 major ports carry about 3/4th of the total traffic, whereas Vishakhapatnam (on the eastern coast) is the largest port in India. Despite having adequate capacity and modern handling facilities, average turnaround time is 3.5 days as compared with 10 hours in Hong Kong, which undermines the competitiveness of Indian ports. Congestion is due primarily to the slow evacuation of cargo rather than a lack of handling capacity, since ports are not adequately linked to the hinterland. To this end, all port trusts have set up groups with representatives from NHAI, the Railways, and State governments to prepare comprehensive plans aimed at improving road-rail connectivity of ports. An efficient multimodal system, which uses the most efficient mode of transport from origin to destination, is a prerequisite for the smooth functioning of any port. It involves coordinating rail and road networks to ensure good connectivity between port and hinterland.

In 2006-07, up to October 2006, cargo handled by major ports registered growth of 6.6 per cent, down from 10.4 per cent observed in the corresponding seven months of 2005-06. About 80 per cent of total volume of portsf traffic handled was in the form of dry and liquid bulk, with the residual consisting of general cargo, including containerised cargo. There was an impressive growth of 13.6 per cent per annum in container traffic during the five years ending in 2005-06. Half of the worldfs traded goods are containerzied, and this proportion is expected to increase further. The largest container port in the world in 2005, Singapore, processed 23.19 million TEUs (twenty foot equivalent units). The 10th largest port, Los Angeles in the USA processed 7.49 million TEUs. In contrast, Jawaharlal Nehru Port (JNP), Indiafs largest container port, handled roughly 2.67 million TEUs in 2005-06. The annual aggregate cargo handling capacity of major ports increased from 397.5 million tonnes per annum (MTPA) in 2004-05 to 456.20 MTPA in 2005-06, with the average turnaround time increasing marginally from 3.4 days to 3.5 days in 2005-06. The average output per ship berth-day improved from 9,240 in 2004- 05 to 9,267 tonnes in 2005-06. The pre-berthing waiting time at major ports on port account, however, increased from 6.03 hours in 2004-05 to 8.77 hours in 2005-06. Significant inter-port variations in pre-berthing waiting time is continued to persist. National Maritime Development Programme (NMDP) Following the success of NHDP that is expected to vastly improve connectivity in India, the Government of India has undertaken the NMDP with an investment of Rs. 610 billion to boost infrastructure at major ports in the next ten years. Under the NMDP, 228 projects have been identified for implementation in two phases through public-private partnership. By identifying specific projects and other measures, the NMDP will over the next 10 years give a concrete shape to the vision and strategy of the National Maritime Policy. The envisaged investment for these projects is estimated at Rs 610 billion. Of this, Rs 392.38 billion will be coming from the private sector, Rs 114.45 billion through budgetary support and Rs 50.78 billion from port trusts' internal resources. 2.3. Civil Aviation

2.3.1. Airports The operations, management and development of the airports at Delhi and Mumbai were handed over to the joint venture companies namely Delhi International Airport (P) Ltd. (DIAL) and Mumbai International Airport (P) Ltd. (MIAL). The strategic joint venture partners in DIAL are a consortium led by GMR Group along with Fraport as the Airport Operator, and Malaysian Airports and India Development Fund as the other

members. The joint venture partners together hold 74 per cent equity with the balance 26 per cent being held by Airports Authority of India (AAI). Similarly, in case of MIAL, the strategic joint venture partners are a consortium comprising of GVK Group along with Airport Company South Africa as the Airport Operator, and Bidest, South Africa as the other member. Various agreements/contracts for handing over the control of the two airports to DIAL and MIAL were executed in April 2006; and with effect from May 3, 2006, the transactions have become effective. The companies have since finalized their master plans for a 20 year period. Construction work at greenfield airports of international standards at Hyderabad and Bangalore is in progress.2 The two airports are likely to be fully operational by the middle of 2008. Proposals to set up greenfield airports in Navi Mumbai, Kannur in Kerala, Goa and Pakyong near Gangtok in Sikkim are in the pipeline. A Greenfield international airport is already operational in Kochi, Kerala. Airports Authority of India (AAI) has decided to develop and modernize 35 non-metro airports in the country, namely, Agati, Agartala, Agra, Ahmedabad, Amritsar, Aurangabad, Bhopal, Bhubaneshwar, Chandigarh, Coimbatore, Dehradun, Dimapur, Goa, Guwahati, Imphal, Indore, Jaipur, Jammu Khajurao, Lucknow, Madurai, Mangalore, Nagpur, Patna, Port Blair, Pune, Raipur, Rajkot, Ranchi, Trichy, Thiruvananthapuram, Udaipur, Vadodara, Varanasi, and Vishakapatnam. The Committee on Infrastructure has approved the report of the task force for the development of 35 non-metro airports. Development of airports in Indiafs North Eastern Region (NER) will be taken up by AAI on a priority basis.

2.3.2. Airport Economic Regulatory Authority (AERA) 2 The first phase of international airport at Hyderabad was completed and opened to public in the 2nd week of February 2008. Through an Act of Parliament, Airport Economic Regulatory Authority (AERA) is proposed to be set up to fix, review and approve tariff structure for the aeronautical services and monitor pre-set performance standards at Indian airports. The Authority will ensure a level playing field for all categories of airport operators and also oversee and deal with natural monopoly and common user/ carrier segments of airports. Government has adopted an overall liberal approach in the matter of grant of traffic rights under bilateral agreements with various foreign countries. A revised air services agreement was signed with USA that led to increased co-operation in the aviation sector. Under this agreement, both sides can designate any number of services to any point in the territory of the other country with full intermediate and beyond traffic rights. Similarly, traffic rights were enhanced with 19 other countries . Australia, Belgium,

Canada, China, Egypt, France, Germany, Italy, Japan, Kuwait, Mauritius, the Netherlands, New Zealand, Oman, Scandinavian countries, Singapore, Spain, UAE (Sharjah), UK . to provide for more flights and better connectivity with these countries and also more commercial opportunity to all operating carriers. The signing of a new Air Services Agreement is the first milestone for the purpose of establishing air connectivity with new destinations. During the recent past, a number of new Air Services Agreements were initialled (signed) based on modern practices in the civil aviation sector. Air Services Agreement with some countries were signed a long time ago and needed updating in view of the changed circumstances and developments in the international civil aviation scenario, and with respect to newer standards and recommended practices. Some of these countries are Australia, Brazil, Finland, Iceland, New Zealand, Qatar, Tunisia, UK and USA. The tourist charter guidelines were significantly liberalized in 2004. All airports in the country were opened for international tourist charters flights and Indian passport holders were also allowed to travel on the tourist charter flights. Recently, Government has decided to liberalise the tourist charter guidelines further.

2.3.3. Airlines A major fleet acquisition is underway by the national carriers, namely Indian Airlines, Air India and Air India Chartersf Limited. The project of Indian Airlines for acquisition of 43 Airbus aircraft has been approved by the Government. The first A-319 from this batch of new aircraft joined the fleet of Indian Airlines Limited in October, 2006 and the remaining 42 aircraft will arrive in batches by March, 2010. After receiving Government approval, Air India signed an agreement with Boeing Company on December 30, 2005 for the acquisition of 8 B777-200 LR, 15 B777-300 ER, 27 B787 Dreamliner aircraft for itself, and 18 B737-800 aircraft for its subsidiary company Air India Charters Limited, which operates a low cost airline under the brand name Air India Express. These aircraft would be delivered to Air India between end of November, 2006 and December, 2011. Up to December, 2006, Ministry of Civil Aviation has issued no objection certificate for import/acquisition of 42 aircraft for scheduled operators, 62 aircraft for non-scheduled operators and 31 aircraft for private operators. Besides this, in principle approval for 135 aircraft was also granted to scheduled operators.

2.3.4. Air traffic Policy initiatives have had a marked impact upon airline traffic. Air traffic has grown up substantially since 2004-05. During the period April-September, 2006, international and domestic passengers recorded growth of 15.8 percent and 44.6 percent, respectively, leading to an overall growth of 35.5 percent. During the same period, international and

domestic cargo recorded growth of 13.8 percent and 8.7 percent, respectively, resulting in an overall growth of 12.0 percent.

2.4. Railways Indian Railways, worldfs second largest rail network under a single management, has been contributing to the development of the countryfs industrial and economic landscape for over 150 years. Of the two main segments of the Indian Railways, freight and passenger, the freight segment accounts for roughly two-thirds of revenues. Within the freight segment, bulk traffic accounts for nearly 95 percent, of which more than 44 percent is coal. Improved resource management, inter alia, through increased wagon load, faster turnaround time and a more rational pricing policy has led to an improvement in the performance of the railways during the last two years. Rationalization of classification is aimed at securing eventual elimination of cross-subsidies in fares and freight, and evolving a more transparent and cost-based tariff regime. This process necessarily requires increase in freight rates for commodities being transported below cost and lowering the freight charges for commodities being moved at abnormally high rates. In the freight segment, the number of commodities in goods tariff has been reduced from 4,000 commodities to 80 main commodity groups in 2005-06, and further to 27 groups in 2006-07. The total number of classes for charging freight has been reduced from 59 to 17. The high-density network connecting the four metropolitan cities of Chennai, Delhi, Kolkata and Mumbai, including its diagonals, popularly called the Golden Quadrilateral has got saturated at most of the locations. Given the present growth scenario, the Railways expect to carry 95 million tonnes incremental traffic per year and about 1,100 million tonnes revenue earning freight traffic by the end of the Eleventh Five Year Plan. This entails large investment for capacity augmentation. Dedicated Freight Corridors (DFCs) Development of dedicated freight corridors (DFCs) for carrying additional traffic is essential in view of the high growth in demand. Therefore, the Railways have proposed a 2700-kilometer long railway line project (Eastern Corridor from Ludhiana to Sonnagar as Phase-I . 1,279 Km. and Western Corridor from Jawaharlal Nehru Port near Mumbai to Dadri / Tughlakabad . 1,483 Kms). Both the Eastern and Western Corridors will be made suitable for running of longer and heavier trains of 25 tonne axle load. While the Eastern Corridor will be electrified, the Western Corridor will operate on diesel traction in order to permit Double Stack Container operation. Logistics parks are proposed to be developed on DFC. An SPV called Dedicated Freight Corridor Corporation of India Limited (DFC-CIL) has been formed to implement the project.

2.5. Urban Infrastructure Urban infrastructure consists of drinking water, sanitation, sewage systems, electricity and gas distribution, urban transport, primary health services and environmental regulation. The process of urbanization has gathered considerable momentum in recent years and this has put urban infrastructure and services under severe strain. Urban transport Urban transport is one of the key elements of urban infrastructure. The major objective of urban transport initiative is to provide efficient and affordable public transport. A National Urban Transport Policy (NUTP) has been formulated with the objective of ensuring easily accessible, safe, affordable, quick, comfortable, reliable and sustainable mobility for all. Revised guidelines for preparation of comprehensive city transport plans and DPRs have been prepared and circulated to all State Governments/UTs for availing of financial assistance to the extent of 40 per cent of cost as Central assistance under the present scheme of Urban Transport Planning. Detailed guidelines have also been formulated for the guidance of the States and cities and preparation of DPRs for both rail-based and road-based public transport. Delhi and Kolkata have introduced Metro Rail system in their cities. Delhi Mass Rapid Transit System (MRTS), a joint venture between the Government of India and the Govt. of National Capital Territory of Delhi, is being implemented by the Delhi Metro Rail Corporation (DMRC). The Bangalore Mass Rapid Transit System (MRTS) contemplates construction of metro corridors along East-West (18.1 km.) and North-South (14.9 km.) in Bangalore. The Government of Karnataka has got financial appraisal of the project conducted recently. The estimated completion cost of the project is Rs.56.05 billion. Bangalore Metro Rail Corporation (BMRC), a joint venture company, is executing the project, which is scheduled to be completed by 2011. The first section of 7 km. will be completed in 2009. The Government of Maharashtra has proposed a MRTS for Versova-AndheriGhatkopar on the basis of Mumbai Metro Master Plan. The project . Mumabi Metro Rail Project . consists of two corridors. First corridor is of a total length of 11.07 kms. .Versova-Andheri-Ghatkopar. Completion cost is estimated at Rs. 23.56 billion and it is proposed to be funded through Viability Gap Funding (VGF). The second corridor is Colaba-Bandra-Charkop line of 38.23 km. length. Estimated cost is Rs. 88.25 billion (at June 2005 prices). While giving in-principle approval for the project, the Government of Maharashtra has been asked to exhaust the VGF route first.

2.6. Special Economic Zones (SEZ)

SEZs are designated duty-free enclaves with developed industrial infrastructure. These zones are regarded as foreign territory for the purpose of duties and taxes, and are excluded from the domain of the custom authorities to enjoy full freedom for the in and outflow of goods. SEZ units enjoy a tax exemption for seven years: 100 percent exemption in first 5 years, and 50 percent in the remaining 2 years. They have the facility to retain 100 percent foreign exchange earnings in Export Earners Foreign Currency Exchange accounts. All SEZ units are free to sell goods in the domestic tariff area (DTA) on payment of applicable duties. During 2005-06, exports from functioning SEZs, which are mainly the former EPZs were around US$ 5 billion. At present 1,016 units are in operation in these SEZs providing direct employment to over 179,000 persons (about 40 per cent of whom are women). Private investment by entrepreneurs for establishing units in these SEZs is of the order of about Rs. 31.63 billion. After the SEZ Act and SEZ Rules came into effect on February 10, 2006, formal approval has so far been granted to 237 SEZ proposals and in-principle approval has been granted to 164 SEZ proposals. Out of the 237 formal approvals, notifications have already been issued in respect of 63 SEZs. In these 63 new generation SEZs which have come up after February 10, 2006, investment of the order of Rs.111. 94 million has already been made in less than one year. These SEZs have so far provided direct employment to 15,097 persons. It is expected that total investment in these SEZs would be around Rs. 584.59 million and 890,700 additional jobs will be created by December 2009. It is also expected that if all the 237 SEZs become operational, investment of the order of Rs. 3000 billion may take place and 4 million additional jobs may be created. 3. INFRASTRUCTURE INVESTMENTS REQUIREMENT IN INDIA India is expected to grow at an average 9 percent per annum in next few years.3 Accompanying this growth will be an increase in demand for infrastructure services. Economic and population growth prospects are expected to place additional pressure on existing infrastructure facilities. Therefore, addressing these challenges will be essential is the infrastructure sector is to continue fostering economic growth rather than becoming a constraint. In other words, a failure to respond to this demand will cause bottlenecks to growth and hamper poverty alleviation efforts. The infrastructure investment has increased in the past few years, driven by government initiatives and private participation, but that need to be escalated in coming years. The Government of India expects that 22-25 percent of the investment (of US$ 384 billion) required is to come from private sector (Government of India, 2007). According to the Committee on Infrastructure, headed by the Indian Prime Minister, these investments are to be achieved through a combination of public investment, public-private-partnerships (PPPs) and exclusive private investments, wherever feasible. To sum up, the Indian

infrastructure space has gained much importance in the past few years, and provides immense opportunities for growth and development. Therefore, it is clear that there is substantial infrastructure needs in infrastructure sector in India, which, in other words, also offers large investment opportunities. Many of the new investments (such as gas pipelines) seem to be viable on commercial terms and should be suitable for partnership with private investors. For many other infrastructure investments also Public-Private.Partnership (PPP) is emerging as the preferred instrument, where the private sector gets its normal financial rates of return while the public sector partner provides concessional funding based on the long-term direct and indirect benefits to the economy. New instruments such as Viability Gap Funding (VGF) through a special purpose vehicle (SPV) set up recently by the Government of India to fund mega infrastructure projects may be relevant for other Asian countries as well.

4. GOVERNMENT POLICY ON INFRASTRUCTURE DEVELOPMENT: PUBLIC . PRIVATE PARTNERSHIP India has created specialized institutions for long-term infrastructure financing and there are certainly many arguments for establishing a regional investment bank, similar to the line of Indiafs IIFC. Viability Gap Financing (VGF) is likely to be successful instrument in managing much needed gaps in road development in developing Asia and LDCs where domestic resources are limited and suffer from capacity constraints. While this institution could certainly play an important role by tapping into global financial markets and channelling funds to infrastructure projects, their mere existence will not increase investment if the underlying obstacles precluding investor confidence are not addressed.as the shortage of viable projects for funding by the IDFC or IIFC illustrates. 4.1.Public Private Partnership (PPPs) in Infrastructure Government is actively pursuing PPPs to bridge the infrastructure deficit in the country. Several initiatives have been taken during the last three years to promote PPPs in sectors like power, ports, highways, airports, tourism and urban infrastructure. Under the overall guidance of the Committee of Infrastructure headed by the Prime Minister, the PPP programme has been finalized and the implementation of the various schemes is being closely monitored by the constituent Ministries/Departments under this programme. Indian experience shows that competition and PPPs can help in improving infrastructure. The opening of the telecoms sector is a case in point. Opening up the sector has led to massive investments and expansion in supply coupled with improvement in quality. The target of 15 percent tele-density set for the year 2010 was realized in 2007. Further, the cost of service today is lower than that in any other country in the world. Similarly,

competition in the aviation sector has resulted in the creation of new capacities and much greater choice for travelers. The annual growth in air traffic has been in excess of 20 percent and fares have dropped significantly. Even in the road sector, PPPs have demonstrated their efficacy wherever they have been used such as on the Jaipur-Kishengarh highway. 4.2.Viability Gap Funding in Infrastructure Projects in India An investment of about US$ 493 billion would be required in the infrastructure sector during the Eleventh Five Year Plan (2007-2011). These investments are to be achieved through a combination of public investment, PPPs and exclusive private investments, wherever feasible. According to the Government of India (2005), the Viability Gap Funding (VGF) or Grant means a grant one-time or deferred, provided under this Scheme with the objective of making a project commercially viable. The total VGF under the PPP scheme of the Government of India shall not exceed 20 percent of the total project cost; provided that the Government or statutory entity that owns the project may, if it so decides, provide additional grants out of its budget, but not exceeding a further 20 percent of the total project cost. The VGF is normally in the form of a capital grant at the stage of project construction. Proposals for any other form of assistance may be considered by the Empowered Committee and sanctioned with the approval of Finance Minister on a case-by-case basis. The VGF up to Rs. 1 billion (about US$ 25 million) for each project is sanctioned by the Empowered Institution (here through IIFC), subject to the budgetary ceilings indicated by the Finance Ministry. The Empowered Committee is also entitled to sanction VGF up to Rs. 2 billion, depending upon the project feasibility, and amounts exceeding Rs. 2 billion may be sanctioned by the Empowered Committee with the approval of Finance Minister.

5. INDIAS OVERLAND CONNECTIVITY WITH EAST ASIA: SOME CROSS-BORDER INFRASTRUCTURE INITIATIVES India attaches utmost importance towards development of connectivity with Southeast and East Asian countries. The importance of overland connectivity through cross-border transport corridors is not only for the trade, but it would also facilitate investments in infrastructure sector. It will also bring many rich rewards for bordering areas. Some of the recent initiatives linking India with ASEAN are as follows. 5.1.India . Myanmar-Thailand Trilateral Highway India . Myanmar . Thailand Trilateral Highway (IMTTH) from Moreh (in India) to Mae Sot (in Thailand) through Bagan (in Myanmar) links India with Southeast Asia. The IMTTH is divided into three phases; the first phase includes 78 km of new roads, upgradation of about 400 km of roads, construction of all-weather approach lanes, rehabilitation/reconstruction of weak or distressed bridges and a detailed examination of a project on the Ayeyarwaddy river as well as a causeway. The entire project is being

funded through government resources. Phase-I of the IMTTA has already taken up in early 2005. India assumes responsibility of 78 km of missing links and 58 Km of upgradation as part of Phase-I. India may also take up additional 132 Km of upgradation. Thailand would take up upgradation of 136 km and 62 km sectors of Phase-I and another 100 km as part of Phase-II. Myanmar indicated willingness to take up intermediary approach roads, reconstruction/ rehabilitation of weak bridges. India has agreed to offer credit at concessional terms to Myanmar for financing new constructions from Chaungma-Yinmabin (30 km.) and Lingadaw-Letsegan-Pakokku (48 km.). India has also agreed to consider similar financing of the upgradation to two-lane standard of the Yinmabin-Pale-Lingadaw (50 km.) inside Myanmar. Further, India has agreed to consider, subject to internal approvals, financing of the upgradation of the Bagan-Meiktila (132 km.) segment in Myanmar. Indian has also agreed to undertake the preparation of a Detailed Project Report (DPR) for construction of a bridge on the Ayeyarwaddy river and for the causeways near Kyadet. Thailand has also agreed to extend concessional loans for financing the upgradation to two-lane standard of the Thaton-Hpa-an-Kawkareik section (136 km.) and Kawkareik-Myawaddy section (62 km.). The Thailand side also agreed to assist Myanmar in financing of the route Thaton-Mawlamyine-Mudon-Kawkareik as a second phase of the project. Myanmar has agreed to finance construction of all weather intermediate lane approach roads at both ends from Pakokku to Bagan up to the existing ferry crossing and the rehabilitation/reconstruction of only distressed and weak bridges. Myanmar has decided to explore the possibility of important commercial segments of the highway being constructed, operated and maintained by operators on a commercial basis. 5.2.India . Myanmar . Thailand . Vietnam Railway Cooperation: Delhi . Hanoi Railway Link Railways can play a very positive role in integrating India with her eastern neighbours. Needs are two folds . (a) to link Indiafs Manipur with Indiafs main railway corridor, and (b) to re-establish and renovate railway networks in Myanmar. Harmonisation of railway track in the region is very much essential.5 Without having a compatible and strong railway system inside Myanmar and Bangladesh, closer communication between NER and its immediate neighbours will be unfulfilled. Indian government has come forward and extended US$ 56 million credit line to the Myanmar government for upgradation of 640 km railway system between Mandalay and Yangon section.6 Similar initiative should be taken up for up-gradation of railway network system in southern (Yangon to Dawei) and northern (Mandalay to Kalay) Myanmar. A possible connection between Myanmar and Thailand could be via Thanbyuzayat and Three Pagoda Pass, and between India and Myanmar could be by constructing new railway line between Tamu and Kalay. On completion of these projects there could be possibilities for India . Myanmar . Thailand . Malaysia - Singapore rail link. On completion of these projects, there could be possibilities for India . Myanmar . Thailand . Malaysia - Singapore rail

link, and finally a railway system that will connect Delhi with Hanoi. 5 Indian Railways is actively engaged in harmonization and construction of railway tracks in NER. Considering the projects already sanctioned and under construction, Diphu . Karong . Imphal Moreh rail link (in Indian side) is identified for development which will link India with ASEAN. Although at present construction work is being carried out in Diphu . Karong section, linking Karong with Morea via Imphal would link India with Thailand provided railway system in other side (Myanmar) is also developed simultaneously.

6. CONCLUDING REMARKS Provision of quality and efficient infrastructure services is essential to realize the full potential of the emerging Indian economy. Indian governmentfs first priority is therefore rising to the challenge of maintaining and managing high growth through investment in infrastructure sector, among others. To sustain 9 percent growth, the Government of India has estimated that an investment of over US$ 492.5 billion during the 11th Five Year Plan (2007-2012) is required. Therefore, there is substantial infrastructure needs in infrastructure sector in India, which, in other words, also offers large investment opportunities. Public-Private.Partnership (PPP) is emerging as the preferred instrument, where the private sector gets its normal financial rates of return while the public sector partner provides concessional funding based on the long-term direct and indirect benefits to the economy. New instruments such as Viability Gap Funding (VGF) through a special purpose vehicle (SPV) set up recently by the Government of India to fund mega infrastructure projects may be relevant for other Asian countries as well. The cross-border infrastructure component is an important determinant of regional integration. If countries are not inter-linked each other through improved transportation network, regional integration process will not move ahead at a desired pace. In India, development of cross-border infrastructure, especially transportation linkages and energy pipelines with neighbouring countries is underway and expected to contribute to the regional integration in Asia by reducing transportation costs and facilitating intra-regional trade and services. Nevertheless, there are many challenges. It is important for India to enhance its overland connectivity with East Asia in order to effectively facilitate the Asian regional integration. The UPA government is now planning to hitch another programme to the NREGS. It is revamping the Swarnajayanti Swarozgar Yojana into the National Rural Livelihood Mission

(NRLM). The NRLM hopes for convergence with NREGS by forming self-help groups (SHGs) of NREGS workers at their worksites and giving them skill training for shifting them from unskilled to skilled labour and involving them in various processes of NREGS, a source at the rural development ministry told Forbes India. The mission hopes to reduce poverty through promotion of diversified and gainful selfemployment and skilled wage employment opportunities resulting in appreciable increase in incomes of the rural poor on sustainable basis. The core agenda of NRLM will be promotion of livelihood security for the rural poor through universal social mobilisation and financial inclusion, training and capacity building for self and skilled wage employment and facilitating the rural poor in setting up micro enterprises. The mission hopes to achieve this through SHGs with active participation of women. It hopes to form 25 lakh below-poverty-line SHGs in addition to the existing 20 lakh SHGs. The SHGs will be supported by a combination of bank credit and government subsidies. Even the NRLM is likely to run into execution issues as it depends heavily on banks. For instance, it proposes that banks will help in training and capacity building in villages. It also puts the financial burden of running dedicated training institutes for rural poor (one in every district) on banks. While in theory it may sound good, it is not wise to use financial institutions for training and running institutes. Also, the banking system does not have enough reach and the existing branches are overstretched by other government schemes such as NREGS. Whatever be the inefficiencies in the system, when the government spends such massive amounts of money on welfare, it does raise incomes and consumption, pushing farmers and factories to produce more. A January report by equity researchers at broking firm India Infoline estimates that government spending on rural areas will rise to nearly $50 billion by 2013. They also see rural consumption, powered by rising farm and non-farm incomes, rising to $200 billion in 2010. The researchers, who visited 18 districts across seven states, have identified 30 listed companies in various sectors, including auto, telecom, farm equipment and banks that will likely benefit from the rural consumption story. Abheek Barua, chief economist at HDFC Bank says that the progress should be more uniform. NREGS has played a role in protecting the farmer from the drought. That way, it is getting to be a little better. The government must make its progress more uniform if it has to actually become a successful social support programme. It would not require more money. In fact, Indias spending on social sectors has stagnated by

some measures. Head of the Centre for Study of Regional Development at Delhis Jawaharlal Nehru University, Ravi Srivastava says that taken together, central and state expenditure as a percentage of GDP has not increased from the 1990s. In the last few years, Centres expenditure alone has increased in some social sectors but very often it has been offset by lack of corresponding increase by the states.