India’s North East Region(NER) which comprises of the eight north eastern states has been blessed with abundant natural resources that have largely remained untapped. The NER is known for its rich diversity in terms of heritage and ethnicity making up about 12 percent of the total tribal population of India. The states that make up the NER are quite different from each other despite having similar economic and geographical characteristics. Despite relatively good human development indicators such as a relatively high literacy rate the region has not been able to capture its potential and continues to lag behind. A majority of the population still lives in rural areas and depend upon agriculture. High school drop-out rate and lack of skills has been a major reason for youth unemployment that can potentially destabilize society and fuel discontent. The region is witnessing a series of insurgencies. Ethnic and cultural diversity influenced by geo-political isolation from the remaining nation coupled by the unemployed youth has given risen to a chase for identity, both ethnic and regional. The region has not been able to reap the benefits of economic development that seem to have had potential impact in other parts of the country. A key constraint to the growth has been poor infrastructure and limited connectivity, both within the region as well as with the rest of the country. Others being difficult investment climate and low level of business confidence. The Northeast Region (NER) of India is the most financially excluded region in the country. The banking and finance infrastructure in the region is very weak which has hindered development.
Since early 2000 the GoI has attempted to provide support to the region for infrastructural development. The Ministry of Development for the Northern Region (DoNER) was created to strengthen the institutional framework for development. However the expected impacts on the ground were not developed, especially in the far flung rural areas of the hilly sub-regions for various reasons. As a result the Government developed the North Eastern Region (NER) Vision 2020 consolidating development vision for the region. The north eastern stated adopted the North East Region Vision 2020 in 2008 which aims at improving livelihood opportunities and sustainable management of the natural resources by putting communities and the needs of the poor at the forefront. It seeks to bring to light a grassroots-led development process as well as enhance the role of the northeastern region in the national economy with a focus in the need of the people.
In line with the Vision 2020 Government of India has approached the World Bank to support scaling-up of its livelihood program in the Region, while at the same time, strengthening the access of the poor to financial services and markets by forming sustainable institutions of poor.
The World Bank Group launched the Indian Development Marketplace (DM), a grant program that supports organisations that work for the low-income groups. The Indian Development Marketplace awarded grants worth $1.4 million to twelve social enterprises and $150,000 each to nine organizations for project implementation and $25,000 to three organizations each in capacity building funding to provide innovative service delivery solutions in the Northeastern states of Assam, Mizoram, and Meghalaya. Through its India Development Marketplace initiative, the World Bank Group has identified scalable and financially sustainable projects that offer solutions to the most pressing social, environmental, and economic problems. IDM 2014 has been able to bring to light some of the most innovative solutions for delivering crucial services – in healthcare, finance, education, water and sanitation – to the poor living in Assam, Mizoram and Meghalaya. Development Marketplace provides a platform to scale social innovations and are now now being successfully replicated around the world. By linking early-stage enterprises to next-stage financing through grant support and advisory services it is possible to refine and strengthen their business models and ensure their sustainable impact over long-term. The focus of 2014 India Development Marketplace in northeast India will help support inclusive growth in this priority region.
North East Rural Livelihood Project
To address the issues of rural poverty and creation of sustainable livelihood for the rural poor, the Government of India (GoI) through the Ministry of Development of North Eastern Region (DONER) and the North Eastern Council (NEC) with support from the World Bank has proposed to implement the North East Rural Livelihood Project (NERLP). Given the complex nature of poverty in the region the North East Rural Livelihood Project (NERLP), signed in 2012 is aiming at the livelihood promotion by reducing the rural poverty over a span of five years.
The World Bank through its engagement in rural livelihood in India has been enabling access to credit and financial services through social inclusion as well as focus on nutrition, access to health services and gender. The Bank’s programs in the past have increased access to growth opportunities for the people. The bank has identified some foundational challenges to reaching the rural poor and helping them rise out of poverty. The rural poor are not organized which makes it difficult for state and market institutions to deliver services in a targeted and cost effective manner. For instance, in the North East states, only about 29 percent of the rural poor are organized into self-help groups, compared to 90 percent in Andhra Pradesh.
The total project cost has been estimated at around US$144.4 million, out of which the Government financing would be around US$14.4 million. The financing share of the Bank is 90 percent of the total project cost. The NERPL has been built on World Bank’s experiences from past livelihood projects in India and across the globe. It has also taken lead from the GoI programmes. NERPL will cover four states of the NE Region, Mizoram, Nagaland, Sikkim, and Tripura with the aim to empower the rural poor and improve their livelihoods for which a US$130 million credit has been approved to finance the Government of India’s (GOI) efforts to empower rural communities in the growth-deficient North East (NE) region to improve their livelihood opportunities. NERPL focuses on developing an institutional platform for the communities to provide them the institutional, technical, and financial capacity needed for improving their livelihoods; creating community institutions of the poor and for the poor, thus providing them a voice in the decision-making process that addresses their economic and social needs. Over the past Global development experience have show that absolute poverty can be overcome by equipping a member of the household (especially the youth) with employable skills and job creation. The project also seeks to impart skills to the young that will allow them to seek better employment opportunities. The primary goal of NERLP being to increase the income and well-being of the poor households in the project areas by improving food security, increased access to livelihood opportunities and improved management of the natural resource base, through participatory and demand driven investment choices.
The problem of food security at the household level, low productivity at the production level, poor infrastructure and services at the community level, lack of access to markets including financial services at the supply chain level are all interrelated leading to a vicious cycle of poverty. This can only be done away with a holistic approach that would deal with the interrelated problems. By empowering the poor to directly deal with the activity and better position them to capture opportunities for livelihoods improvement, the Government of India (GoI) with financing from the World Bank seeks to address the issues of rural poverty and create of sustainable livelihoods for the rural poor.
In line with the strategy for achieving inclusive growth the Bank intends to focus on improving agricultural productivity, natural resources management and rural livelihoods as well as keeping account of the region’s socio-economic culture. The NERPL also supports the Millennium Development Goals – reducing poverty and promoting gender equality.
The main components of the project are-
• social empowerment- creating sustainable institutions to empower the rural communities
• economic empowerment – develop the capacity of rural communities to plan and manage funds for various economic initiatives and public-good activities.
• partnership development- partner with various service providers, resource institutions and public and private sector organizations to bring resources to allow rural communities to access technical and marketing support.
• project management- facilitate various governance, implementation, coordination, learning and quality enhancement efforts in the project.
The proposed NERLP will target approximately 300,000 households in 1,624 villages under 58 blocks across 8 districts in the four states with special focus on women and unemployed youth. Within these districts, target villages will be identified based on poverty data, including below poverty line (BPL) figures. Villages that have worse human development, food security and health vulnerability indicators will be prioritized. The project will be directly linked to the existing village level institutions through an intensive village level planning process. The project lays emphasis on building strong grassroots institutions of the poor by making available sufficient funds for the poor.
From the state-level livelihood projects promoted by the World Bank between 2000 and 2010 it has been demonstrated that community-driven development approaches that are based on building robust, self-managed and sustainable institutions are viable and effective options for bringing about socio-economic change at the grassroots level, providing pathways to poverty reduction and stimulating the rural economy. Based on these, the NERPL will
(i) build institutions for the poor, empower them and enable them to scale-up their livelihood activities and have better access to market and services.
(ii) build the capacity of the government at all levels to strengthen the project implementation structure through provision of technical assistance.
(iii)build linkages between the community institutions and various private sector, public sector, and civil society stakeholders to ensure
institutional sustainability beyond the proposed project.
Talking about the youth skill development, the project seeks to enhance the employability of about 20000 rural unemployed youth in the project villages. Village level community led management institutions have created more jobs and self employment opportunities in similar bank funded projects in India, Sri Lanka and Bangladesh. Based on experiences it has been expected that at least 50% of the trained youth in the NERLP villages will get employed. Also by the end of the project at least 25% of the unemployed youth in the project villages will have employment, which will surely be a positive impact on the society.
The project will see a substantial investment in financial literacy and financial counseling prior to starting livelihood activities. The project will also support the linkage of SHGs with commercial banks for accessing loans as well as support formal financial institutions. The project will address the gap in access to financial services by way of improving the quality of new and existing SHGs by ensuring that non-performing assets are kept to a minimum and facilitating greater access to formal credit.
Tribal people will be the main beneficiaries in Nagaland and Mizoram, and targeted beneficiaries in Sikkim and Tripura; they are significant stakeholders of NERLP. The tribal people in project villages will be empowered through social mobilization in community institutions which in turn will improve their access to credit and banking services, agriculture, forest, livestock and other nonfarm livelihoods, and essential government services and programmes.
In states such as Nagaland and Mizoram which have high proportion of tribal population at 89% and 94% respectively, the overall project will act like a tribal development plan, and the tribal people will be among the main beneficiaries of the project interventions. While in Sikkim and Tripura, with around 20% and 30% of tribal population respectively, the project will implement state-specific tribal actions, and tribal people will be the targeted beneficiaries of the project. Implementation of the tribal development frameworks will ensure targeted outreach, informed consultations, sustained community mobilization and handholding assistance in planning and implementation of livelihood and community infrastructure subprojects, and prioritized livelihood assistance in the tribal villages.
Major benefits to the targeted households will come from:
(i) diversified and increased livelihood income generated by revolving the livelihood investment funds by 10,000 SHGs, benefitting approximately 300,000 poor households.
(ii) improved access to credit for expanding or diversifying livelihood investment supported by 1,849 SHG village federations.
(iii) improved integration with markets and institutions for SHGs facilitated by 250 producer organizations to scale-up livelihood activities.
(iv) inclusive and participatory management of investment funds by the communities.
(v) enhanced skills linked with gainful employment opportunities for unemployed youths.
Regular consultation would need to be held with existing institutions in the tribal areas, including councils of elders, headmen, tribal leaders, village council, village development board and gram panchayats. Sustained mobilisation and empowerment of the tribal people would be required, specially in remote uphill communities engaged in shifting cultivation, to participate in the project processes and benefit significantly from project interventions. NERPL has a Monitoring and Evaluation system that is based on participatory monitoring and evaluation by community institutions to ensure the involvement of local communities. Use of technology for sharing information would enable on-time project monitoring, undertake evidence-based decision-making and mid-term corrections as needed.
North Eastern Region Power System Improvement Project
The North Eastern Region Power System Improvement Project for India was initiated in 2014 with the objective to ensure availability and reliability of electricity states in six states of the North Eastern Region through expansion of power systems for which the World Bank would provide the major share of the project cost to develop and expand infrastructure in the power sector.
Despite being endowed with rich energy resources the NER suffers from electricity shortage. The per capita power consumption in NER is one-third of the national average. The region has a shortfall of about 500MW installed capacity against peak demand of about 1950 MW. States also suffer from to inadequate intra/interstate transmission and distribution network. No significant generation capacity has been added in the recent past. Therefore, inadequate power supply continues to be a critical constraint to sustainable growth and economic development in the NER. The transmission and distribution losses are also quite high (up to 50%) across most of the States as a large number of remote hilly areas are connected through long low tension lines, resulting in low voltages and poor quality of power at consumer end.
Under The North Eastern Region Power System Improvement Project state-owned Power Grid Corporation of India Limited (PGCIL) would be roped in to execute the projects. The project would be implemented in Assam, Meghalaya, Mizoram, Manipur, Nagaland and Tripura and of the Rs.5,111 crore, 50 percent would be provided by World Bank while the remaining amount would be shared by the central government and the concerned states. Besides modernising the existing transmission system the project would look at setting up high power transmission lines. The key objectives include strengthening of the intra-state and interstate transmission and distribution schemes and capacity building initiatives across the six states.
Assam State Roads Project
The project (2012-2018) seeks to enhance the road connectivity of Assam. The project will assist the public works road department to improve and manage the road network. The main area of focus would be road improvement with the aim of improving state connectivity and facilitating regional integration.
The project would further work towards road sector modernization and performance enhancement as well as road safety management through developing and implementing a multi-sector road safety strategy.
Assam Agricultural Competitiveness Project
The objective of the Assam Agricultural Competitiveness Project (AACP) for India is to increase the productivity and market access of targeted farmers and community groups. With a focus on making ground water usage more sustainable and providing better agricultural services and improve the rural road network for better market connectivity. The project also looked at building synergies with ongoing schemes of the Government of Assam (GOA) and the Government of India (GOI). Extensions of the project enabled the bank to look at long-term sustainability.
Assam has been a focus state for Government of India’s poverty alleviation initiatives. Started in 2004 this project has played a major role in increasing the productivity and market access of targeted farmer groups of the state and has mobilized more than 300,000 beneficiaries across the fishery, agriculture, dairy, forestry, and livestock sectors.
The Project takes an integrated approach toward enabling farmers to take advantage of rapidly changing consumer demand and marketing channels. Investments will also focus on increased crop production through increased irrigation, crop diversification, and expanded use of micro-nutrients.
Assam Rural Infrastructure and Agricultural Services Project
The primary objectives of the Assam Rural Infrastructure and Agricultural Services Project has been to alleviate poverty by offering better opportunities for poor to contribute to agricultural growth and income generation, improve nutrition among poor, promote agricultural growth, facilitate investments, improve the Government’s long-term capacity for strategic agricultural planning among others.
Completed in 2004 the project’s impact was substantial, with improvement in bank performance, raising agricultural production and household incomes, increase in agricultural production leading to household and state level self-sufficiency in paddy, and increased employment opportunities for the landless wage laborers as well as marginal and small farm families.
The objective of improved nutrition of rural poor was satisfactorily achieved because of the positive impacts of the project in terms of increased production of rice, vegetables, milk and fish. The objective of accelerated agricultural growth was successfully achieved due to significant shift in cropping pattern and enhanced agricultural production. The project was successful in encouraging sustainable resource use and quality of environment in short terms. It was realized that clearly defined implementation design would help provide a clear strategy about the project activities and should be part of project design and preparation with a high priority to monitoring and evaluation to ensure quick evaluation and feedback.
US$ 500 million are in pipeline in Northeast India for projects under different sectors including healthcare, e-governance, infrastructure, water management and inland waterways. World Bank’s credit portfolio in the North East India in last five years stood at $ 640 million.
There is a healthcare delivery project in Nagaland worth $50 million. A project of agri-business is in the pipeline. E-governance project for Assam and Meghalaya is yet to be cleared by the Department of Economic Affairs, Government of India.
Also recently the World Bank Board of Executive Director’s have approved a $107 million credit for the Mizoram State Roads II – Regional Transport Connectivity Project to improve transport connectivity for the landlocked state of Mizoram and to help open up the potential for regional trade among neighboring countries. The project will enhance Mizoram and other northeastern states’ road links with Bangladesh, as well as with Nepal, Bhutan and Myanmar.
Given its large portfolio in livelihood projects in India the World Bank is well positioned to lend a hand in scaling up the government’s livelihoods program in the NE Region. There lies large hydro potential in the NER that could be used for exporting to the power deficit northern and western regions of the country that could also in turn help in establishing industries. Opening up trade with the neighbouring countries such as Bangladesh, Myanmar and through Myanmar to South East Asia will also help in realising the full potential of the region.
Given its strategic location, and proximity to South-East Asian markets, the north east region is important for the country’s foreign policy particularly the ‘Look East Policy’. By improving the natural resources management and vitalizing the economy in a holistic approach the resource-rich north east with its expanses of fertile farmland and a huge talent pool could turn into one of India’s most prosperous regions.
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World Bank Approves US$130 Million Credit to Improve Livelihoods for 300,000 Village Households in North Eastern States of India, World Bank Press Release, December 20, 2011, http://www.worldbank.org/en/news/press-release/2011/12/20/world-bank-approves-us130-million-credit-to-improve-livelihoods-for-300000-village-households-in-north-eastern-states-of-india
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