Archive for the 'World Bank' Category

PIB: CCEA NOD for Rs. 1156 crore Integrated Coastal Zone Management Project; 200+ crores for Odisha

Bhadrakh, Chilika, ENVIRONMENT, Ganjam, Jagatsinghpur, Kendrapada, Khordha, PIB - GOI, World Bank No Comments »

Following is from http://pib.nic.in/release/release.asp?relid=59882. The Odisha part and some other important parts are highlighted in red by me.

CCEA Decision

            The CCEA today approved a Rs.1156 crore World Bank assisted Integrated Coastal Zone Management (ICZM) Project.  This project is to be implemented over the next five years by the Ministry of Environment and Forests. The World Bank’s contribution as soft loan/IDA credit is around         Rs. 897 crore (78%).  This ICZM project assumes special significance in the context of climate change since one of the definitive findings of the IPCC relates to the increase in mean sea levels as a result of global warming.

            The ICZM project has four main components:

1.       National ICZM capacity-building at a total investment of about Rs.356 crore which will cover (i) mapping, delineation and demarcation of the hazard lines and delineation of the coastal sediment cells along the mainland coast of India; (ii) mapping, delineation and demarcation of environmentally-sensitive areas that require protection; (iii) establishment of a National Centre for Sustainable Coastal Management at Anna University, Chennai; and (iv) a nation-wide training programme for coastal zone management.

2.       ICZM activities along the Gulf of Kachchh and in Jamnagar District in Gujarat at a total investment of around Rs.298 crore.

3.       ICZM and wetland conservation activities in two stretches of the Orissa coast (i) Gopalpur-Chilika; and (ii) Paradip-Dhamra at a total investment of Rs.201 crore.

4.       ICZM activities in Sunderban, Haldia and Digha-Shankarpur regions of West Bengal at a total investment of Rs.300 crore.

 

The project would develop capacity and institutions to effectively implement the CRZ Notification 1991, to control pollution of coastal waters and to expand livelihood options for coastal communities. The elaborate and extensive exercise in hazard mapping along the 7500-km coastline, which is being done for the first time, by the Survey of India at cost of Rs.125 crore will greatly assist in protecting coastal communities and infrastructure located in coastal areas.

 

The total number of direct beneficiaries of the project is close to 15 lakhs, while the number of indirect but identifiable beneficiaries will be close to 6 crore. The initial set of three states have been selected on various grounds including pressure on coast, presence of critical ecosystems, risks of natural hazards, etc. The Asian Development Bank is supporting a less comprehensive shoreline management project in Karnataka, Maharashtra and Goa. It is envisaged that the second phase of ICZM would take up the other coastal states with project preparation in all remaining coastal states commencing immediately.

 

Of special focus in the project will be identification and demarcation of coastal fragile areas like mangroves, brackish water wetlands, coral reefs, etc based on which a new category of “Critically Vulnerable Coastal Areas”(CVCAs) would be designated and appropriate management plans implemented for their preservation and regeneration. These would include areas around Lakshadweep, Andaman and Nicobar Islands, Gulf of Khambat in Gujarat, Malvan, Vasasi-Manori,Achra-Ratnagiri in Maharashtra, Karwar and Coondapur in Karnataka, Vembanad in Kerala, Bhaitarkanika and Chilika in Orissa, Coringa, East Godavari and Krishna in Andhra Pradesh,Sunderban in West Bengal, Pichawaram and Gulf of Mannar in Tamil Nadu etc.

 

This is the second World Bank assisted project of the Ministry of Environment and Forests to be approved by the CCEA in the past two weeks. The first was a Rs. 350 crore project for initiating the process of remediation, rehabilitation and restoration of contaminated hazardous waste/municipal solid waste dumpsites in the country. There are over 120 such sites in different states and this project would be launched to clean-up 2 sites in Andhra Pradesh and 8 in West Bengal to begin with, apart from to prepare a national plan for remediation and restoration of all legacy contaminated sites which have become public health hazards.

 

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OSRP – Orissa State Road Project

Odisha govt. action, Orissa State Road Project, Roads, highways and Bus stands, State highways, World Bank No Comments »

The Orissa State Road Project web site is at http://osrp.gov.in/index.htm. It has a nice detailed map of roads in Orissa. The following details is from its "About Us" page.


The State Govt. during January 2005 had proposed to avail loan from World Bank and JBIC (Japan Bank for International Co-operation) for improvement of the state roads. The proposals were sent to the World Bank and JBIC through the Ministry of Road Transport and Highways and Department of Economic Affairs, Govt. of India.

The proposals were approved by the SLPMC on EAP (State Level Project Monitoring Committee on External Aided Project), chaired by the Chief Secretary, Orissa, on 20.01.05. The preliminary proposals included 27 nos. of road project under World Bank Scheme and 14 road projects under JBIC scheme. The project cost proposed under JBIC was Rs. 715.34 Crores for 805 Km of state road and that under World Bank Rs. 1642.44 Crores for 2197 Km of state road.

The Department of Expenditure, Ministry of Finance, Govt. of India gave clearance to the proposed World Bank project in their letter dated 07.04.2005 addressed to the State Govt. (Finance Department). However, the proposed JBIC road project has not yet been approved / cleared by the Govt. of India.

After clearance from Govt. of India, a full identification mission from the World Bank comprising Dr.Binyam Reja (Task Team Leader), A.K. Swaminathan (Sr. Transport Specialist), Mohammad Hassan (Sr. Social Development Specialist), and Ernst Hunning (Institutional Development Consultant) visited the State from April 14-22, 2005 to initiate the preparation of the proposed Orissa State Roads Project (OSRP). The mission met with concerned officials of the Government of Orissa (GOO) and senior management of the Orissa Works Department (OWD), and carried out field visits to some of the proposed roads.

During the April 2005 World Bank Identification Mission, it was agreed that, detailed project preparation for the proposed road network shall commence in a phased manner in three phases i.e Phase-I, Phase-II & Phase-III ( Para -11 & Para-27 (b) , (e) : April 2005 Aide Memoir of World Bank).

The World Bank team had discussed with the Finance Department for Plan provisions and necessary counterpart funding. After a detail discussion, the World Bank had agreed to:

                a.         Fund a Project for improvement Road infrastructure amounting to Rs. 1200 Cr. Out of which state has to bear Rs. 200 Cr as counterpart funding. Total World Bank loan ceiling shall be US$ 225 Million.

                b.         High density road corridors having sufficient economic viability of about 1200  1400 Kms shall be included in the project.

                c.         Balance roads shall be identified after carrying out a network analysis and economic viability from the balance 3700 Kms of State Highways in other phases subsequently.

 

-     At the preliminary stage, identified about 825 Km of Road Stretches to be included in the

Phase-I of the Project. These roads were selected from the earlier dropped project for

which a full-scale techno-economic feasibility study was carried out.

1              Jagatpur  Salepur  Kendrapara  Chandbali  Bhadrak (SH9 & SH 9A) -152 Km

2              Bhadrak  Anandpur  Karanjia  Tongabilla (Jashipur) (SH 53 & SH 49) -142 Km

3              Khariar  Bhawanipatna  Muniguda  Rayagada  Kereda (SH 16, SH 6 & MDR 48b) -213 Km

4              Berhampur  Rayagada (SH 17 & SH 4)          -201 Km

5              Banarpal  Daspalla (MDR 18, MDR 18A & MDR 64)    -89 Km

6              Bhanjanagar -Aska (SH  7)               -38Km

 

-The World Bank however desired to check the viability of these roads by carrying out an updated techno-economic feasibility study.

-The project also includes identification of road stretches to be taken up in Phase  II of the project after carrying out network analysis for all State roads.

-Accordingly a domestic Consultant has been engaged from Govt of Orissa s own resources to carryout:

1              the Economic viability of Phase  I Roads;

2              the feasibility study & DPR of Phase  I Roads and

3              the network analysis of all State Highways of the State and identification of phase II roads.

 

   The World Bank Mission had:

-     Agreed for a Project for improvement of about 1200  1400 Km State Roads with a

Project size of Rs. 1480 Cr. (US$ 315 Million) with loan component of Rs. 1175 Cr. (US$

250 Million) and counterpart funding of Rs. 305 Cr. (US$ 65 Million);

The World Bank team again visited the state during September 2005 and inspected the roads proposed by the State Government to finalise roads for inclusion in Phase-I of the project (Para -12 & Para-14 : September 2005 Aide Memoir of World Bank) . During the said visit, some of the important roads proposed under JBIC assistance (Japan Bank for International Co-operation ) was included in the Phase-I list of World Bank roads after discussion with the World Bank, since the proposal submitted to JBIC was not cleared by the Dept. of Economic Affairs, Govt. of India.

1              Jagatpur  Salepur  Kendrapara  Chandbali  Bhadrak (SH9 & SH 9A) -152 Km

2              Bhadrak  Anandpur  Karanjia  Tongabilla (Jashipur) (SH 53 & SH 49) -138Km

3              Khariar  Bhawanipatna  Muniguda  Rayagada  Kereda (SH 16, SH 6 & MDR 48b) -223 Km

4              Berhampur  JK Pur _ Rayagada (SH 17 & SH 4)          -202 Km

5              Banarpal  Daspalla -Bhanjanagar -Aska (MDR 18, MDR 18A & MDR 64,SH  7)) -201Km

 

Approval from Hon ble Chief Minster to the roads proposed under Phase-I of World Bank scheme, covering a total length of 835 Km was obtained during October 2005, so as to proceed for detailed feasibility, economic analysis and other associated studies for Detailed Project Preparation and bidding. The major criteria used for selection of these roads were traffic volume, carriageway width, pavement conditions, economic activity in the influence area of the road, and connectivity of the roads.

Subsequently, after consideration of the Feasibility Study prepared by the DPR Consultant, the World

Bank Mission during their visit to the State in November 6-10, 2006 have decided to improve the

following roads in the Year  I of the Project.

1              Chandabali  Bhadrak  Anandapur

2              Khariar  Bhawanipatana

3              Berhampur  Taptapani

 

The World Bank had suggested to carryout detail economic viability and feasibility study for the 835 Km roads proposed under Phase-1 and Network Analysis of the entire State Highway Network ( covering about 3955 Km, leaving 835 Km Phase-1 roads ) for identification / prioritization of 1600 Km roads for improvement in Phase-II & Phase-III ( Para -11 & Para-27 (a), (e) : April 2005 Aide Memoir of World Bank). They had suggested to use the latest traffic and road condition survey data so as to assess which roads should fall under rehabilitation, and which roads should fall under upgrading in the detailed economic analysis.

Accordingly, economic viability and detailed feasibility study for the 835 Km roads proposed under Phase-1 and Network Analysis of the entire State Highway Network ( covering about 3955 Km, leaving 835 Km Phase-1 roads ) for identification / prioritization of 1600 Km roads for Phase-II & Phase-III were carriedout with help of a domestic consultants. M/S CEG Ltd from Rajasthan. The economic justifications of proposed road improvements under Phase-1 have been analyzed by using the life cycle costing economic tool ! Highway Development and Management Model (HDM-4) version 1.3" of World Bank. The economic evaluation has been carried out on the basis of incremental costs and benefits comparing the total net benefits with various alternatives. The economic indicators like NPV (Net Present Value) and EIRR ( Economic Internal Rate of Return) are then calculated. The final list of roads included in Phase-I alongwith summary of their techno-economic analysis with NPV, EIRR and ratio of NPV and cost etc. is shown at Annexure-I: The EIRR of each of the five corridors under Phase-1 varies from 30.53% to 17.28% with NPV of Rs 13172.8 million. It may be noted that the roads with EIRR more than 12% are considered financially viable under the World Bank loan.

The World Bank had further intimated that the Project shall include

-

Institutional Reform of the Works Department, as per the Institutional Strengthening Action Plan (ISAP) prepared by the Task Force constituted by Government;

-

Identification of Roads to be improved under Public Private Partnership (PPP) mode with Viability Gap Funding from Govt. of India and World Bank along with preparation of necessary legal frameworks and documents;

-

Establishment of a Road Asset Management System for Works Department

 

 


Following is an excerpt from a report in Business Standard about some recent approvals with respect to this project.

 

These districts are Malkangiri, Raygada, Ganjam, Koraput and Sambalpur and the road projects would involve an estimated expenditure of Rs 400 crore.

The Union government has agreed to provide the funds for five to six road projects in those affected areas and out of it, it has sanctioned three. The roads which have been sanctioned are Samasinga (Sinduraparua)-Sambalpur, Parlakhemundi-Mohana via R Udayagiri and Gunupur-Andhra border via Kashipur, sources said. The state works department has sent the detailed project report (DPR) for these roads to the Centre.

“The basic work for these roads have started and the work is likely to start after 3-4 months after the tender process is over”, a senior official of the state works department said.

Meanwhile, a team of the World Bank visited the new road sites being taken up under Orissa State Road Project (OSRP). …

These patches are construction of the 68-km Bhawanipatna-Khariar road, 95 km long Chandbali-Bhadrakh-Anandapur road and 41 km Berhampur-Taptapani road. After some delay in those projects, the work have finally taken off, sources added.

Construction of 204 kms of roaddsare proposed to be constructed in the first phase under the Orissa State Road Project (OSRP).Similarly, the construction of 257 kms of road will be taken up in the second phase of OSRP. This includes Taptapani-Raipanka road (68 km), Raipanka-JK Pur (83km) and Jagatpur-Chandabali (106 km).

 

Self Help Groups (SHGs), Mission Shakti and TRIPTI

Odisha govt. action, World Bank 1 Comment »

Following is an excerpt from a report in Expressbuzz.com.

The State Government has decided to extend the targeted rural initiative for poverty termination and infrastructure (TRIPTI) scheme to all the 314 blocks.

… TRIPTI is being implemented under the Mission Shakti through the self-help groups (SHGs).

The Chief Minister directed the officials to create the required infrastructure for implementation of the scheme across the State. The scheme is being implemented in 8,369 villages of 38 blocks of the State covering 12,54,607 rural families.

The World Bank-assisted scheme aims at capacity building and employment generation for the women with the help of women SHGs.

It has agreed to provide a loan assistance for the implementation of the scheme for five years.

Naveen also reviewed the progress of Mission Shakti. So far, 46.5 lakh women have become members of 3.87 lakh SHGs. According to a release from the Chief Minister’s Office, so far a loan assistance of Rs 1,367 crore has been provided to the SHGs in the State.

Official sources maintained that during 2008-09, one lakh SHGs from all the 30 districts were provided assistance of Rs 50 crore for creation of livelihood. Similarly, 1,614 SHGs in the KBK region (undivided Kalahandi, Balangir and Koraput districts) were provided Rs 80.7 lakh for creation of job opportunities. SHGs in the urban areas were provided a loan assistance of Rs 2 crore during the year.

Besides, the SHGs have also dug 7,000 water bodies under the livelihood support programme for pisci-culture. The release claimed that 63 SHGs distributed LPGs under the Shakti Gaon Programme. The SHGs also implemented mid-day meal scheme in 34,000 schools and members of 7,000 SHGs worked as public distribution system (PDS) agents.

The State Government has signed an agreement with Reliance Fresh and ITC for marketing products from the SHGs. …

558 Kms of single lane highways in Orissa to be two laned funded by a world bank loan

Overall Odisha, Road maps, Roads, highways and Bus stands, World Bank 1 Comment »

Following is an excerpt from a report in Times of India.

The road, transport and highways ministry (MoRTH), which has sought a $3 billion loan from the World Bank for this project, has already finalized 3,769 km to be taken up for double laning. The ministry has also identified another 2,600 km for this purpose.

Seven stretches covering 807 km of single-lane highways would be doubled in Bihar while nearly 638 km of single-lane NH falling in Himachal Pradesh would be upgraded. Orissa and Uttarakhand will see 558 km and 448 km of similar stretches being upgraded.

Sources said the preliminary report prepared by the ministry for other stretches shows that HP would get a good share in the list of states to be covered under the plan. Similarly, Uttarakhand, Bihar and Orissa will see large stretches being double-laned.

I could not find out which highways in Orissa are part of this. Some of the sites to watch for are:

Following is a map of the National Highways in Orissa obtained from the Ministry of Road and Transport’s website.

Bhubaneswar at number 3 (among 17 cities in India) in ease of doing Business: World Bank

Bhubaneswar- Cuttack- Puri, INDUSTRY and INFRASTRUCTURE, INVESTMENTS and INVESTMENT PLANS, Khordha, World Bank 6 Comments »

Following is from a web site of world bank about doing business in various cities of India. This site has the main findings. The full report is at http://www.doingbusiness.org/Documents/Subnational/DB09_Subnational_Report_India.pdf.

Ease of…

Bhubaneswar’s

Rank among 17 cities in India

Top city in India
Doing Business 3 Ludhiana
Starting a Business 5 New Delhi
Dealing with Construction Permits 8 Bengaluru
Registering Property 17 Gurgaon
Paying Taxes 9 Ludhiana
Trading Across Borders 1 Bhubaneshwar
Enforcing Contracts 5 Hyderabad
5 Hyderabad

The overall ranking of the 17 cities are:

  1. Ludhiana
  2. Hyderabad
  3. Bhubaneswar
  4. Gurgaon
  5. Ahmedabad
  6. New Delhi
  7. Jaipur
  8. Guwahati
  9. Ranchi
  10. Mumbai
  11. Indore
  12. Noida
  13. Bangalore
  14. Patna
  15. Chennai
  16. Kochi
  17. Kolkata

Why is Pune not in the list?

World bank to give a loan of Rs 2200 crores to Orissa for roads and irrigation

Business Standard, Roads, highways and Bus stands, World Bank No Comments »

Following is from a report in Business Standard.

In order to bring about a more inclusive growth in Orissa through improved transport and irrigation facilities, the World Bank has earmarked $444 million (around Rs 2,200 crore) assistance package for the state.

The package comprises three projects that will aim to improve the state’s road network (with an allocation of $250 million or Rs 1,225 crore), its agricultural tank systems ($112 or Rs 548 crore) and increase livelihood opportunities for its rural poor ($ 82.4 million or Rs 404 crore).

“The emphasis is not only to build on what has been achieved so far, but also target inclusion of the poorest of the poor,” said Roberto Zagha, World Bank country director for India, in a statement.

“These projects will bring in lessons learned from roads, tanks and livelihood projects across India and help Orissa provide its poor better access to finance, improve the efficiency of the transport systems and increase the availability of water for its farmers,” he added.

Despite doing well on economic front, especially in the mining, agriculture and services sectors, Orissa remains one of India’s poorest states with nearly half of its 38 million people living under the official poverty line, most of them in rural areas.

Under the $250 million Orissa state road project, efforts would be made to remove bottlenecks in transport corridors. The project will also increase the role of private sector in road infrastructure, and assist the state government in establishing an institutional framework in the sector.

Only 22 per cent of the state’s roads are paved, even as most village and district roads remain unconnected to the national highway system. “An efficient road transport system is critical for improving the state’s investment climate and promoting a private-sector-led economic growth,” said Binyam Reja, World Bank senior transport economist and task leader for this project.

The Orissa community tanks management project, which is worth $112 million will rehabilitate about 900 tanks covering a cultivable area of about 120,000 hectares spread across 29 districts of the state. This is expected to increase productivity in agriculture, livestock and fisheries, and promote more effective and sustainable management of tank systems.

The project will support improvements in production technologies and management practices, and better market linkages. It will also strengthen community-based institutions, enabling them to assume greater responsibility for tank management.

The Orissa rural livelihoods project aims to empower the rural poor, especially women and disadvantaged groups, through their inclusion in self-help groups (SHGs). These groups are the primary mechanism for channeling microfinance to the poor in the state. The project will also support creating new SHGs and strengthening existing groups.

Orissa in Transition: From Fiscal Turnaround to Rapid and Inclusive Growth (Forthcoming World Bank Study)

Best practices, CENTER & ODISHA, INDUSTRY and INFRASTRUCTURE, INVESTMENTS and INVESTMENT PLANS, Odisha govt. action, World Bank 1 Comment »

The following is from http://go.worldbank.org/F6WBERON80. See  also this Telegraph report.

Orissa in Transition

From Fiscal Turnaround to Rapid and Inclusive Growth 

Forthcoming World Bank Study

 

Overview: Orissa has transformed from a seriously lagging state to a state on the move

 

From being the poorest state of India in the mid 1990s, Orissa has become a state on the move.  The state’s economy has shifted gear and is on a higher growth trajectory.  Gross state domestic product (GSDP) has grown at 8.5 percent on average during the Tenth Plan period (2002-07), compared to 5.5 percent during the previous plan (1997-2002) and even slower in the past. 

 

Public investments in infrastructure have begun to rise, and private industrial investment is booming. The finances of the state have improved remarkably, creating fiscal space for expanding public investments. 

 

Private investment is booming: Indian and foreign mega investments in the steel and power sectors and aluminum and chrome products are dominating the private investment boom. Industry has grown at 20 percent annually in 2002-07, compared to only 6 percent in 1997-2002.  This is fuelled, in part, by the rise in world metal prices. Since 2004, Orissa has ranked as the country’s premier investment destination, according to the Center for Monitoring the Indian Economy (CMIE).

 

Private investments under implementation in Orissa now total about US$125 billion – which is about seven times the state’s annual gross domestic product (GSDP).  Many of these investments are at an advanced stage and expected to start production before 2012/13. This makes it likely that Orissa will enjoy high double digit growth, faster than the rest of India, for several years to come.

 

Early signs of economic diversification: There are also some, albeit early signs of economic diversification. In the services sector for instance, Indian IT companies are entering Orissa as traditionally favored destinations become increasingly saturated. The services sector is now growing at a rapid clip, almost touching 10 percent. Even agriculture, traditionally beset by drought and floods, grew at 3 percent per year during 2002-07, which is better than the rest of India.

 

As a result, Orissa’s per-capita income, which progressively fell behind the rest of the country during the past five decades, has begun to catch up. Inequalities within Orissa have also narrowed.   The latest National Sample Survey data show that rural families in the southern region of the state – one of the poorest parts of the country without the mineral deposits of the north – are now spending up to 25 percent more on basic necessities like food, clothing, and schooling for their children, compared to just five years ago.  Although average spending in rural Orissa is still low, it is moving up more rapidly than ever before.

 

A great deal still remains to be done

 

Second poorest state in the country: Despite recent progress, however, Orissa is still the second poorest state in the country with one of the lowest levels of urbanization. Over 45 percent of its people live in poverty with the scheduled tribes (STs) – who make up a sizeable 22 percent of the state’s population – lagging far behind the rest of the population. Most STs live in tiny villages or remote habitations in the hills where their geographical isolation underlies much of their poverty. Rural electrification is among the lowest in the country; some 18,000 villages and 5 million households have yet to get electricity. Learning levels in schools are low, and the burden of ill health too high.

 

Capacity constraints in infrastructure: Capacity constraints in rail are increasing congestion on roads, and limited port capacity is diverting cargo from Paradip in Orissa to Haldia in West Bengal, and Vishakhapatnam in Andhra Pradesh. The state has yet to capitalize on its large coastline facing South East Asia.

 

Undoubtedly, much remains to be done. Given the state’s recent growth, the time is now ripe to consolidate the gains of the past and devote public resources to building infrastructure, and reducing the gaps between the people – between rural and urban, between the interior and the coast, and between the scheduled tribes and the rest of the population.



Policies will need to unleash the full potential of agriculture, fisheries and forestry on which an overwhelming 85 percent of the state’s people depend. Education and health will need urgent attention if the people are to benefit from the growing opportunities provided by the new economy. Roads, railways and ports will need major upgrades if the benefits of growth are to be spread more equitably and the state’s natural resources effectively utilized. And, for all this to happen, the accountability of the government in the delivery of basic services must be increased.

 

While Orissa seeks to industrialize on the strength of its rich mineral wealth, it is important to ensure that those who live on mineral-rich land benefit adequately from the advent of large mineral-based industries. While the Orissa government has adopted a progressive rehabilitation and resettlement policy for the displaced, and legislated to ensure that a share of company profits are earmarked for development, the challenge ahead lies in   the effective implementation of these promising policies.

 

As Orissa strives to build for the future and surpass average Indian living standards by 2020, it can take productive lessons from its recent successes. The open and consultative process that has served it well in the past will be necessary to deal effectively with the complex issues that lie ahead on the road to modernization.

 

Reforms Spur Faster Economic Growth

 

Since 2001,Orissa has achieved a remarkable fiscal turnaround. The ratio of the state’s debt burden to annual GDP has fallen significantly, helping it transform from being one of the most fiscally-stressed states of the country in the late 1990s, with a primary (non-interest) fiscal deficit of 6 percent of GSDP, to a surplus of 3.4 percent.

 

The turnaround has been triggered by a number of factors. Policy reforms at the central and state level have spurred the arrival of industry, the state government’s strong resolve has helped to complete long pending infrastructure projects despite a resource crunch, and its consultative approach has enabled it to reduce expenditures:

National level reforms: The central government’s elimination of the freight equalization subsidy – that prevented Orissa from becoming an attractive location for mineral based manufacturing in the past – paved the way for arrival of the metal industry in the state.

State government efforts to improve the investment climate: This was followed by a wave of well-sequenced state level reforms. In the first instance, from 2000 to 2003, the government mainly concentrated on raising its revenues through tax reforms and improving the investment climate by simplifying the regulations.

 

Between 2004 and 2006, it undertook significant measures to contain unproductive public expenditures. Through a consultative and transparent process, the state government took the people on board in its efforts to rightsize the civil service, retrench employees of loss making public enterprises, and rationalize grants to non-government high schools and colleges. The growing private sector presence that had already begun to open up new job opportunities for the people, helped gain their acceptance for the government’s efforts to downsize the public sector.

Improved connectivity: Strong resolve and a focus on outcomes rather than outlays helped the government to complete long-pending construction projects – roads, bridges and irrigation canals – despite constrained budgets. As a result, the number of bridges completed rose from 19 in 2004 to over 100 in 2006.

 

CHALLENGES AHEAD:

Over 45 percent of Orissa’s people still live in poverty with almost half of them belonging to the Scheduled Tribes, most of whom live in remote villages with little migration to the cities. There are large gaps in the delivery of basic services. The state still has large untapped potential for economic growth.

 

Improved transport and power connectivity: Almost half the villages in Orissa are small and isolated – with less than 500 residents. As geographical isolation poses a big challenge for connectivity, adequate road, rail, and port infrastructure is essential for inclusive growth as well as to benefit from the state’s mineral endowments.

 

Urban infrastructure: Although Orissa has one of India‘s lowest levels of urbanization – 15% – its urban centers are growing rapidly. With the growing advent of industry, tourism and IT services, the demand for urban housing, water and power services is likely to increase many times over. Massive upgrading of urban infrastructure is therefore needed to attract and retain the skilled labor force demanded by modern industry and services.

 

Agricultural and forestry growth: While some 85% of the state’s population remains dependent on agriculture, fisheries and forestry, these sectors are beset by low yields, excessive middlemen, poor connectivity, and lack of storage facilities. The ban on land leasing has resulted in informal and illegal share-cropping arrangements that are harmful to cultivators. To improve the rates of return from farming, the state has amended the agricultural products marketing act to permit privately run mandis and contract farming. The computerization of land records is ongoing. Yet, reforms in land tenure and land administration are needed so that small farmers can access bank credit and make productive investments in the land. For the mostly tribal populations that are dependent on forest produce, joint forest management practices can be a promising route to higher incomes.

 

Education: While school enrollment has risen, learning levels remain very low. While the state government has launched bold measures to improve teacher accountability, strong educational fundamentals from the earliest years, supplemented by some public and mostly private efforts in training and skill development are needed.

 

Health: Despite dramatic improvements in overall infant mortality rates in the past 5–10 years, the predominantly tribal districts lag behind. They have the poorest immunization rates and least access to antenatal care. While the state government’s health sector plan for 2005 envisages a decentralized and participatory approach to service delivery, innovative and flexible approaches will be required to reach geographically isolated villages. Importantly, systems of accountability will need to be strengthened before budget allocations to education, healthcare, and anti-poverty programs are increased.

 

Small and Medium Enterprises: With the arrival of new mega projects, the demand for a wide range of goods and services will rise, generating opportunities for small investors as well as new avenues for employment. To capitalize on these opportunities, an improved regulatory climate for SMEs is called for.  

Environmental considerations while tapping mineral rich areas: Given that mineral-based industries impact the environment, there is need to strengthen environmental institutions. Ongoing plans and current efforts of the government toward strengthening public consultation mechanisms will play a crucial role in determining the sustainability of mineral sector investments in Orissa.

 

QUESTIONS & ANSWERS

 

 

1. How many people have been brought out of poverty in recent years?

 

Between 1999/00 and 2004/05, based on NSS data estimates using ‘mixed reference period’, the proportion of people in poverty in rural Orissa declined by 8 percentage points compared to 5 percentage points in rural India as a whole. Despite this progress, however, the level of poverty in Orissa remains significantly higher than the rest of India.

 

According to the latest calculation based on official figures released recently by the Planning Commission, the number of poor in Orissa has come down by about 1.5 million between 1999/00 and 2004/05.  This figure will feature in the final Bank report.

 

 

2. By how much has Orissa’s economy grown in recent years?

 

The rate of economic growth depends on the period one considers. According to the latest data released by the Directorate of Economics and Statistics, Government of Orissa, the state GDP grew at 10.5 percent annually on average during the most recent five years, that is 2003/04 to 2007/08.  During the Tenth Five-Year Plan period, that is 2002/03 to 2006/07, the average growth rate was 8.5 percent.  Clearly, Orissa, which grew much slower than the rest of India during the 1990s, has now caught up.  From about 2004 onwards, it has begun to overtake the national average.

 

3. What is the state’s current debt burden?

 

How the debt burden has moved can be appreciated by comparing not rupee figures but the ratio of the debt burden to annual GDP or annual revenue. As a proportion of revenue, Orissa’s debt has fallen from 343 percent in 2001/02 to 201 percent in 2007/08. As a proportion of GSDP, it has declined from 63 percent to 50 percent.  This is a major correction, and reflects responsible fiscal management to lift the state out of a crisis situation.

 

 

4. Has the government achieved a revenue surplus by curtailing capital expenditure and squeezing development expenditure?

 

The revenue surplus has been achieved as a result of 3 factors:  improved performance of the state’s own taxes, enhanced central transfers and external donor support, and curtailing of expenditure.  The capital budget was constrained during 2002-05, but still outcomes improved due to emphasis on project completion. As explained in the report, there was undoubtedly a lot of flab in the administrative machinery, and Orissa was more over-staffed than other states. The government undertook major surgery to trim the fat, and in the process some muscle also got cut, which needs to be rebuilt now.   The Government of Orissa has been hiring a large number of para-teachers, and the teacher-pupil ratio is 40 on average, ranging from 31 in the best served district to 60 in the worst.  This is far better than the situation in Bihar, Jharkhand, Karnataka Madhya Pradesh, Uttar Pradesh and West Bengal.

 

 

5. Has the signing of MOUs been interpreted as industrial growth?

 

The reported industrial growth in recent years is based on actual and officially estimated GSDP figures, not on MOUs.  Assessment of future prospects has been informed by CMIE’s projections using detailed information on the status of each investment project under implementation, and its likely date of completion based on historical experience and informed judgment in exceptional cases.

 

 

6. What is the evidence of crop diversification?

 

The report cites some signs of crop diversification.   For instance, the output of maize and cotton has increased in some areas; this is reflected in official agricultural crop statistics. 

World bank loan for several projects

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Following is an excerpt from a report in Telegraph.

The $250 million World Bank loan will go a long way for the development of roads, said state works minister A.U. Singhdeo. The government would share 20 per cent of the total cost of the World Bank-funded Orissa state road project, added the minister.

With the loan amount, 461km of roads would be upgraded to two-lane. A damaged high-level bridge over the Banshadahra near Gumuda would be renovated, too.

Out of the 461km of the road, construction of 204km would be taken up in the phase-I package, while the rest of 257km would developed in phase-II of the project.

The phase-I package would include Bhawanipatna-Khariar road (68km), Chandbali-Bhadrak-Anandpur road (95km) and Berhampur-Taptapani road (41km).

Taptapani-Raipanka road (68km), Raipanka-JK Pur road (83km) and Jagatpur-Chandbali road (106km) would come under the second package.

Besides the above six roads, feasibility reports and bid documents for widening of Sambalpur-Rourkela road (165km), Joda-Bambry road (18km) and Koira-Tensa-Lahunipara road (46 km) under public-private participation mode is under preparation.

The World Bank is also financing the cost of consultancy services, revealed a senior official of the state works department.

World Bank lauds Orissa

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Following is from http://go.worldbank.org/ZZSH9LSD60.

Orissa has transformed itself from a seriously lagging state to a state in transition

A fiscal correction program based on a consultative approach has helped spur this change

Contacts:

In Delhi: Nandita Roy 91-11-24617241

[email protected]

New Delhi, May 20, 2008: From being the poorest and the most fiscally-stressed state of India in the mid 1990s, Orissa today has made remarkable progress, lifting some 3 million people out of poverty and marking the strongest fiscal turnaround of all Indian states over 2000-06. This recovery means that the state now has freed much more resources to invest in better healthcare, education and basic infrastructure and services for its people.

 

Significantly, over the past seven years, the state’s primary fiscal balance has been converted from a deficit of 5.9 percent of Gross State Domestic Product (GSDP) to a surplus of 2.8 percent – a correction by 8.7 percentage points.  

 

The forthcoming World Bank study, Orissa in Transition: From Fiscal Turnaround to Rapid and Inclusive Growth, whose main findings werereleased today, highlights that the poverty headcount ratio, after rising during 1993-99, has declined significantly during 2000-2005 by more than 8 percentage points in rural areas and 2.5 percentage points in urban Orissa, compared with 5 and 2 percentage points respectively in India as a whole.

 

“What is most heartening about Orissa’s economic transition is that growth has been most rapid in the southern region, which was one of the poorest parts of India,” says V. J. Ravishankar, Lead Economist and principal author of the study .  “Compared to just five years ago, rural families in these areas are now spending up to 25 percent more on basic necessities like adequate food, clothing, and schooling for their children. This turnaround carries important lessons for the rest of India as it seeks to ensure inclusive growth for all. We at the World Bank look forward to continuing our support to Orissa in facing its remaining challenges.”

 

Indeed, Orissa, with over 45 percent of its people still living in poverty, faces several challenges. It is the second poorest state in the country and its large population of scheduled tribes live in isolated areas, with minimal access to basic infrastructure and services. Although, according to latest available National Sample Survey data on household consumption expenditures, large portions of the state’s population, including scheduled castes, have improved their incomes since 2000, the poorest 40 percent of the population has gained much less than the better-off 60 percent. Most of the state’s scheduled tribes are part of this poorest 40 percent and continue to lag behind. However, according to the Study, if the state can consolidate the gains of its fiscal turnaround, and devote more public resources to development, it may be able to address these challenges effectively.

 

The World Bank study points out that the state’s accelerated growth since 2000 has been across sectors and can hence be potentially more robust and sustainable. According to official data on GSDP with 1999/00 as base year, most of Orissa’s economic sectors have grown faster than all-India since 2003-04, with industry (mining, manufacturing, electricity and construction) growing at around 20 percent annually and services at close to 10 percent. Even, agriculture, which was beset by recent drought, has now recovered and is keeping pace with the rest of India, growing at an average of 2 percent. 

 

The State today has a US$ 125 billion portfolio of 470 ongoing investment projects that are projected to generate an additional GSDP of US$ 35 billion; this alone is twice the size of Orissa’s GSDP in 2006. This level of investments suggests that Orissa may experience a period of even more rapid growth in the future. 

 

Among the factors that have helped the turnaround, the Study highlights the importance of adopting a consultative approach to fiscal correction, and of a strong government resolve to accelerate project completion in the face of a resource crunch. These, coupled with policy reforms at the Centre have helped Orissa achieve accelerated economic growth. The Study points out that the state government’s Zero-Based Investment Review which focused on outcomes, the completion of long-pending infrastructure projects (especially roads and bridges) and the government’s focus on anticorruption and transparency have also had a positive impact on the program.

 

“The most important lesson from Orissa’s fiscal reform success is the need to take the public into confidence,” says V. J. Ravishankar. “Today, such an open and consultative approach is needed on the question of industrialization and modernization of Orissa,” he adds.    

 

The Challenges Ahead                                        

Orissa’s Challenges ahead

 

·        Forty percent of Orissa’s poor belong to the scheduled tribe;

 

·        Severe infrastructural gaps is hindering progress;

 

·        Needs to unleash the potential of agriculture, fishery and forestry to make growth more inclusive;

 

·        The health and education sectors are lagging behind 

Despite this phenomenal fiscal turnaround and economic acceleration, challenges remain. While some inequalities have narrowed, the scheduled tribes continue to lag behind. Geographical seclusion with negligible out-migration has limited their access to new income earning opportunities, the Study says.

 

Severe infrastructural gaps, unless addressed, will hinder Orissa’s progress. Capacity constraints in the railways have diverted goods traffic to roads and similarly constraints in port capacity have diverted cargo to ports in other states.

 

In order to sustain such rapid growth and to make it more inclusive, especially for the geographically secluded tribal communities, the study suggests unleashing the potential of agriculture, fishery and forestry, on which most of the poor depend. This requires policy reforms to address problems of excessive trade intermediaries in agriculture and forest produce, lack of connectivity, and a ban on land leasing that has resulted in informal and illegal share-cropping arrangements, which are harmful for the cultivators.

 

Much also needs to be done in education and health service delivery. At existing learning levels in elementary schools, a large section of youth will grow up without the skills necessary for employment or higher education. Recent studies show that students in Grade Nine have only mastered the learning skills required at Grade Four. Innovative and flexible approaches to healthcare delivery will be also required in order to deliver critical health services to geographically isolated villages.

 

Orissa has entered the second phase of reforms. Addressing infrastructure gaps should be its most urgent priority for sustaining rapid growth. Addressing human development needs require institutional changes as a prior condition for allocating additional public resources. An 11th Five-Year Plan focused on infrastructure, followed by one devoted to human development, could take Orissa to its ambitious vision of becoming a better-than-average Indian state by 2020 with poverty at or below 10%, the study points out.

 

The study, Orissa in Transition: From Fiscal Turnaround to Rapid and Inclusive Growth, was conducted over 2007.

 

The World Bank has been supporting the reforms and development program of the Government of Orissa since 2001, through technical assistance, policy based loans and credits (US$ 350m during 2004-08), and investment projects in energy, health, and water resources management (US$ 360m during 2002-07).  New projects under preparation include investments in state roads, tank irrigation and rural livelihood support through women’s self-help groups (totaling US$ 430m).

Various road projects to be taken up with the help of world bank

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Following is an excerpt from a news report in New Indian Express.

Three major roads will be taken up for development in the first year of the phase-1 programme under Orissa State Road Project (OSRP) with World Bank assistance.

The World Bank has agreed to provide funds for improvement of road infrastructure of about 1,400 km with an estimated cost of Rs 1,480 crore.

While the loan component is Rs 1,175 crore, matching fund from the State will be Rs 305 crore. The project will be implemented in five years.

In the first year, 204-km stretch of road will be taken up for improvement. The three road projects which will be developed include the 99-km Chandbali- Bhadrak-Anandpur road, 70-km stretch of Khariar-Bhawanipatna road and 41-km road from Berhampur to Taptapani.

The State has identified five major roads having a length of 835 km for development in the first phase. Detailed project report (DPR) and economic viability and feasibility study of the projects have been completed.

The 152-km road stretch of Jagatpur-Kendrapara- Chandbali-Bhadrak, 138-km Bhadrak-Anandpur- Karanjia-Tongabilla, 213-km Khariar-Bhawanipatna- Muniguda-Rayagada-Kereda, 202-km stretch Berhampur-JK Puri- Rayagada and 127-km Banarpal-Daspalla- Bhanjanagar-Aska road have been finalised for the first phase.

… The 204-km road stretch, that will be developed in the first year, is passing through 160 villages.

The Revenue Department informed the meeting that notification had been issued to the district collectors for land acquisition. Works Department, the nodal agency for the State Road Project, has planned to develop 294 km of roads in the second year.

The Department will submit the first three road projects to the World Bank for approval and sanction of loan, official sources said.

Pradeep-Dhamara and Gopalpur-Chilika beach project to start soon: Samaja

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