Externally Assisted Projects

1

• Externally Assisted Projects
• For
• Poverty Alleviation
• In
• Rajasthan
• By
• Principal Secretary RD PR
• Government of Rajasthan

2
Rural Poverty Scenario in Rajasthan

• Slow rate of decline in poverty
• (From 50 in 1970 to 23.8 in 2008BPL
  Census- 15 in 2000 Planning Commission).
• In absolute terms the No. of BPL household have
  increased
• from 19.49 lac( 1997) to 20.94 lac(2002).
• Poverty Puzzle- Rajasthan ranks 5th from bottom
  among 14 major states in per capita income but
  only 4 states have lower poverty than Rajasthan.
• Clustering of large number of poor just above the
  poverty line.

3
Livelihood Status

• 5 Countrys population but only 1 of water
  resources.
• 70 area in single crop and rainfed but 66
  population depend on Agricuture Allied.
• Primary Sector has 66 share in livelihood but
  contribution to GDP is only 25.
• Secondary Sector contribution 27 Service
  Sector 35.

4

• About 3 lac appeals pending.

5
Key issues Challenges

• Low productivity and growth of Agriculture and
  Livestock Sector which employs 66 of rural
  labour force but contributes only 25 of GDP.
• Growth rate of Agriculture only 1.37.
• Recurrent droughts precarious ground water
  situation (Out of 237 blocks, 207 are in dark
  zone).
• Low skill levels of working population and their
  inability to get good prices.
• Growth of employment in organized sector
  declining
• ( 1995- 12.64 lac, 2000- 11.78 lac).

6
Key issues Challenges

• Increasing automation, price competition, high
  capital labour cost and sluggish growth of
  organized sector does not offer good scope for
  livelihood generation.
• About 7 lac additional persons enter in
  livelihood market every year.
• Lagging State in infrastructure index.
• Globalization.

7
An Overview of WB Assisted DPIP-I

• Implemented in 7 poorest districts of Rajasthan
  Project.
• Commenced in July, 2000 ended in Dec. 2007
• (2 years extension).
• Project Portfolio 643 Crore
• Loan Component 515 Crore
• Government Contribution 96 Crore
• Beneficiaries Contribution 32 Crore.
• No. of Beneficiaries
• Households 1.0 lac
• Members 1.70 lac

8
Project Strategy

• Selection of the Poor by Gram Sabhas.
• Formation of beneficiaries into CIGs.
• Capacity Building of CIGs, Handholding, Project
  formulation and implementation etc. by NGOs
• 80- 90 sub project funding as subsidy.
• Funding on the Basis of Sub Projects formulation
  as per choice of CIGs.
• Beneficiary Contribution 10- 20.
• Funds directly transferred into the accounts of
  CIGs.
• Initially Livestock Project not allowed later
  relaxed.
• Funds for Backward and Forward Linkages.
• Q S Activities and Cluster Level Federations.
  

9
Progress At a Glance
10
Major Findings of Impact Evaluation Studies

• Two Impact Evaluation studies by independent
  agencies
• IDS for World Bank
• Evaluation Organization of Planning Department,
  GoR
• Major Findings
• Assets are intact with CIGs,82.14 CIGs Full
  utilization, 5.36 Partial.
• Around 20 CIGs acquired additional assets
  through Bank Linkage.
• An average income increased from Rs.18362 from
  the baseline year 2001 to Rs.32668 in year 2007.
  

11
Major Findings of Impact Evaluation Studies

• Income from Animal Husbandry increased by 267
  while overall including all activities by 48.3.
• Around 95 members of CIGs do get sufficient
  food daily around the year.
• Iirrigated area increased from 1 bigha to 4
  bighas for Land Baased Groups
• CIGs Sustainability
• 69.64 CIGs meeting regularly,
• 19.64 not regularly while
• 10.72 cases no meeting
• 18 CIGs could be linked to Banks
• Adequacy of fund for subproject 94.64 CIGs
  reported adequate.

12
Lessons Learned from DPIP

• High subsidy unsustainable.
• Question mark on NGOs capacity to scale up.
• Non availability of competent NGOs.
• Bank Linkage Poor (Only 3600 CIGs Could be
  linked).
• Non BPL entering the group monopolized the CIG
  activities by and large.
• Except dairy, marketing remained a major issue
  for Non farm activities
• Delay in Capacity Building Lack of Clear Policy
  Action Plan.

13
Lessons Learned from DPIP

• Lack of Strategic vision and Planning.
• Lack of Team sprit between NGOs, DPMUs PMU
  More Policing mindset of Government Official.
• Continuity of Project Leadership.
• Top down approach to federations unsustainable
• Need for institutional mechanism to support
  CIGs after the end of Project Further doses of
  credit required.
• Too much focus on studies Recommendations not
  seriously taken.
• Poor ready to pay for quality services.

.
14
Proposed DPIP-II

• Aims to bring 4.0 lac BPL families above the
  poverty line (through a sustained increase in
  income).
• Facilitate Social Inclusion of the poor through
  Empowerment.
• Make the poor Creditworthy and eligible for Bank
  Linkage.
• Proposed Project Portfolio
• A. Loan from World Bank Rs. 600 Crore
• B. GoR Contribution Rs. 100
  Crore
• C. Funds from SGSY Rs. 125 Crore
• D. Bank Credit Leverage Rs. 600 Crore

15
Approach to DPIP-II

• Options considered
• AP Model Considered unsuitable to Rajasthan
  because of
• The poor would not be able to pay on weekly basis
  because of droughts.
• Internal Group lending rate very high (24)
  question of capacity to pay.
• Poor burdened with administrative charges of SHG,
  VLO, Block, District State Federation.
• Data on value added services of these
  organization not available.
• Common formation of SHGs( Poor and non poor )
  tends to be against the interest of the poor.
• Bypasses the PRIs.
• Focus not on asset Building.

16
Approach to DPIP-II

• Kudambashree Model
• In Rajasthan PRI institutions are week in
  comparison to Kerala
• Geographically Rajasthan have Vast area
  Jaisalmer district is larger than Kerala.
• In Rajasthan literacy rate is very low as
  compared to Kerala.
• SGSY approach is most suited to State
• Target only BPL families.
• Comprehensive 7 Components
• Affordable interest rates
• Convergence Gram Sarthi, NREGA

17
Special Features

• Project Implementation Structure from District to
  Village Level.
• Involvement of NGOs on long term basis for
  Project period.
• Outcome based remuneration to NGOs.
• Convergence for other needs of poor namely
• Health
• Education
• Food Nutrition
• Housing
• Economic ( NREGA, Watershed, SC/ST Schemes)

18
IFAD Assisted Poverty Alleviation Project

• Aims to cover 70000 BPL households in 6 poorest
  Blocks of Western Rajasthan Districts in 6 years.
• Project Portfolio Rs. 415 Crores ( IFAD Rs. 125
  Crore Rs.13 Crore SRTT Rs. 87 Crore
  Government of Rajasthan Rs.180 Crore Bank
  Credit ).
• Highly Innovative Project
• Participatory Village Development Plan based on
  convergence.
• To take care of all basic needs line health,
  education, nutrition livelihood through
  convergence.
• Project funds for gap funding.
• Focus on rural technology transfer
• Outcome based monitoring
• Saturation approach
• Project Activities started.

19
Need for Special Efforts to achieve MDG

• Total BPL Families as per BPL 2002 List 20.94
  lacs
• ( Nearly 3.0 lac applications are pending for
  decision).
• Target Extreme Poverty to be reduced by 50
  upto
• 2015 10.47 lacs Families
• BPL Families would be covered under SGSY upto
• 2015 2.50 lacs.
• BPL Families would be covered under World Bank
  funded DPIP-II upto 2015 4.0 lacs.
• BPL Families would be covered under IFAD funded
  Project upto 2015 0.7 lacs.
• For remaining 3.27 lac families SGSY funding by
  Government of India is required to be enhanced.