I F A D   i n   I n d i a

Operations and Current Strategy in India

Since 1979, IFAD has extended 16 loans to India totalling SDR 304 million (about USD 380 million or Rupees 2000 crores), all on highly concessional terms. India ranks second among the recipients, regionally as well as globally. Eight of the 16 loans are closed and eight are under implementation. Of the total, five were undertaken in the irrigation sector, five in tribal development, two in women’s development, one in rural development, two in rural credit, and one as emergency response to livelihood rehabilitation in earth-quake-hit areas. As at 31 December 2001, the total disbursement to the country was SDR 216 million (about USD 266 million or Rupees 1400 crores).

Since 1987 IFAD’s assistance to India has been directed towards the needs of vulnerable groups – women, tribals and ethnic minorities. In line with this approach, the Country Strategy Paper (COSOP) for India was approved in early 1999. An updated version with a revised rolling plan of action was presented to the Executive Board in its December 2001 Session. The COSOP emphasises that IFAD’s strategic niche in India would be the search for solutions to constraints faced by the poor. IFAD would work with its partners, both official and NGOs, in the development of innovative approaches that, if proven successful, can serve as replicable models to be taken up on a larger scale by the Government or other donors. In so doing, the proposed strategy builds on and deepens the experience gained in past projects, which focused on tribal development, women’s empowerment, access to common property resources, wage employment and non-farm enterprise development. Empowerment of the target communities will be further emphasised within the framework of the Panchayat Raj initiatives, especially in the scheduled tribal areas, and also building upon the statutory mandate for women’s representation in the local government bodies.

Within the above framework, the major strategic thrusts will be:

• increasing popular participation;

• strengthening grass-roots institutions;

• increasing access of the poor to resources, including land and common property resources;

• improving access of the poor to financial services; and

• generating sustainable incomes for the poor from non-farm enterprises.

To reflect these strategic thrusts, three broad areas for project interventions have been identified:

• Natural resource management in rainfed tribal and non-tribal areas;

• Microfinance initiatives and women’s empowerment; and

• Off-farm enterprise development.

• Emphasis would be placed on reducing the vulnerability of the poor and enhancing their ability to absorb shocks and cope with crises.

Given the enormity of the problem of rural poverty and the limited resources available at its disposal, IFAD can only play the role of a catalyst in promoting innovative models of poverty alleviation and ensuring food security in India. Against this backdrop and given IFAD’s corporate and regional strategic framework and the Millennium International Development Goals, such a catalytic role has to be played in the context of the increasing inequality and unchanging severity of the poverty situation. IFAD also keeps in view the rapidly degrading natural resource base, the adverse and selectively worsening sex ratio in some parts of the country, the high rates of child malnutrition as well as infant and maternal mortality and low female illiteracy rates IFAD’s focus, therefore, is on addressing the critical issues facing the most marginalised and vulnerable groups, particularly women, the tribals and ethnic minorities.

IFAD’s interventions in India also strive to reorient the mindset of development agents at all levels in government, financial institutions, NGOs and community based organisations (CBOs). There is an effort to sensitise key managers and stakeholders towards concern for gender issues, respect for indigenous knowledge and recognition of the capacities of the poor to participate in decision-making and the management of development. A conscious attempt is also made to bring a more sensitive and responsive approach to the design and implementation of development interventions and to build the capacities of the poor through establishing or strengthening their institutions – such as self-help groups, and community institutions like village development associations in tribal and non-tribal areas.

Cofinancing, as a way to augment resources and share experiences, is treated as a strategic means in IFAD’s operations in India. The strategy also lays stress on building effective partnerships between the NGOs and the government. To this end IFAD has on-going co-funding arrangements in its projects with the UN World Food Programme, which provides food assistance to several IFAD projects, as well the UK Dept. of International Development (DFID).

The first 5 projects approved by IFAD for India were for irrigation and command area development and all cofinanced with the World Bank. These projects are: Bhima Command Area Development, Rajasthan Command Area Development and Settlement, Sunderban Development, Madhya Pradesh Medium Irrigation, and Uttar Pradesh Public Tubewells.

Since 1987 IFAD changed its strategy in India in view of the need to tackle the issue of food security at the household level. A series of projects targeting specific communities groups were developed.

The first in this line was the Orissa Tribal Development Project, which identified the tribal population of Kashipur in Orissa as the primary target group and adopted broad-based interventions in natural resource management and rural infrastructure.

This was followed by the Tamil Nadu Women’s Development Project, which targeted women on an exclusive basis and introduced micro-finance as the principal instrument for empowering women.

It was followed by the Andhra Pradesh Tribal Development Project which aimed at fostering household food security by increasing food production and raising the incomes of tribal households. These 3 projects have since ben completed.

Currently there are 8 IFAD-assisted projects in India. The details are as under:

Project Cost USD 48.35 million. The project aimed at streamlining micro credit and poverty alleviation and rural development through:

• Improvement in the provision of financial services to the rural poor by commercial banks;

• Facilitating the bankability of the rural poor as clients;

• Promoting savings mobilization as the basis for lending to rural poor.

Project Cost USD 50.3 million. The project objectives are:

• To raise income levels, ensure food security and improve the quality of life of tribals within the context of the traditional tribal environment, culture and values.

• Promote greater self-reliance amongst communities on a sustainable basis.

• Reduce and reverse environmental degradation.

Project Cost: USD 22.38 million. The project aimed at the welfare of the minority meo community in the backward areas of Haryana with the following goals:

• Improve the economic and social well-being of the Mewati community

• Promote greater self-reliance on a sustainable basis.

• Broaden the range of economic opportunities available to the community.

Project cost USD 33.22 million. The overall objective is to improve the livelihood of vulnerable groups in a sustainable manner through:

• Improved management of resource base in a way that contributes to protecting and restoring the environment.

• Incremental production from forestry and agro-forestry systems and a relative shift in the crop composition in shifting cultivation areas.

Project is USD 41.66 million. The objective of the programme is to develop and implement a replicable model that ensures household food security and improves livelihood opportunities and overall quality of life for the tribal population based on the sustainable and equitable use of natural resources.

• Empower grassroots tribal associations and user groups, including women and other marginal groups and to negotiate with the relevant authorities to harness the necessary resources.

• Promote activities which generate sustainable increases in production and in productivity of land and water resources.

• Generate alternate sources of income outside agriculture, particularly for the landless.

Also see IEC inputs for project implementation - Some lessons from Chattisgarh (Knowledge Station)

National Micro-finance Support Programme  Read More

This project is in partnership with SIDBI and DfID. Total project cost is USD 132 million. The objective of the programme is to expand the horizontal and vertical reach of microfinance institutions (MFIs) and to mainstream them in terms of their access to resources in the financial sector so as to enhance the access of the poor to microfinance services, through:

• Flexible and demand driven approach through which the MFIs and FFIs determine their priorities.

• With some external assistance, the MFIs acquire the financial resources for the effective implementation of their economic activities.

Total project cost is USD 24 million. The objective is to secure the livelihoods of economically vulnerable households living in disaster-prone and fragile natural environment, while enhancing their preparedness and capacity to contend with future crises.

• Build the capacity of the existing community organizations and promote similar institutions.

• Empower marginalised groups (landless, marginal farmers, etc) by organising them.

• Better prepare communities and households for future disasters.

• Improve livelihood initiatives for the poorest by including both natural resource and non-land based activities.

• Augment the productivity of natural resources.

• Encourage the rural poor to diversify their livelihood so as to mitigate risks.

In addition, IFAD, in partnership with the World Bank, is implementing the Rural Women’s Development and Empowerment Programme with the following objectives:

• Establish women’s SHGs and provide them greater access to and control over resources

• Sensitise and strengthen the institutional capacity of government, NGOs and financial institutions to proactively address women’s needs

• Increase income of poor women through involvement in income generating activities

• Develop linkages between SHGs and lending institutions in order to ensure women’s continued access to credit

• Improve access to healthcare, education and drudgery-reduction activities.

IFAD Board has recently approved the USD 90 million for Orissa Tribal Empowerment and Livelihood Project. The loan agreement is likely to be signed in the month of December 2002. The project will be made effective in early 2003. This project seeks to provide assistance to vulnerable tribal communities in the uplands of Orissa.

Significant food assistance is being provided in the Jharkhand-Chattisgarh, Gujarat and Orissa Projects by World Food Programme, IFAD’s partner in India.

A new livelihood improvement project for the Himalayan States of Uttaranchal and Meghalaya is currently in the design stage with an expected project cost of USD 40 million. This project is likely to go onstream by late 2003.