Externally Assisted Projects For Poverty Alleviation In Rajasthan By Principal Secretary RD& PR Government of Rajasthan Rural Poverty Scenario in Rajasthan Slow rate of decline in poverty (From 50% in 1970 to 23.8% in 2008[BPL 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. Livelihood Status 5% Country’s 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%. BPL Families & Coverage under Credit/ subsidy Program BPL Census No. of BPL % BPL of Covered Families Household under IRDP/ (In lac) SGSY ( In lac) 1992 19.49 31% 2.05 1997 21.97 30.98% 3.20 including DPIP 2002 20.94* 22.72% 1.20 * About 3 lac appeals pending. 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). 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. 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 Project Strategy Selection of the Poor by Gram Sabhas. Formation of beneficiaries into CIG’s. Capacity Building of CIG’s, Handholding, Project formulation and implementation etc. by NGO’s 80%- 90% sub project funding as subsidy. Funding on the Basis of Sub Projects formulation as per choice of CIG’s. Beneficiary Contribution 10%- 20%. Funds directly transferred into the accounts of CIG’s. Initially Livestock Project not allowed later relaxed. Funds for Backward and Forward Linkages. Q & S Activities and Cluster Level Federations. Progress At a Glance Task Target Achievement (As per revised results End of Project framework) (EOP) 1 CIGs to be financed by 170,000 members 181,874 members End of Project ( 1.0 Lacs families) (19307 Subprojects) 2 Adjustment of Completion 19307 Sub Projects 19129 Sub Projects Certificates (99.08 %) 2 Quality & Sustainability 4207 (At least 33% of 5699 CIGs evaluated (Q&S) CIGs funded) (as ‘A’ or ‘B’) 3 CIGs are members of 3500 CIGs 2910 CIGs cluster association 4 Loan disbursed 495.93 Crore 464.85 Crore 5 Community contribution 32 Crore 41.31 Crore 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 CIG’s,82.14% CIG’s Full utilization, 5.36% Partial. • Around 20% CIG’s acquired additional assets through Bank Linkage. • An average income increased from Rs.18362 from the baseline year 2001 to Rs.32668 in year 2007. 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 ; • CIG’s Sustainability: 69.64% CIGs meeting regularly, 19.64% not regularly while 10.72% cases no meeting 18 % CIG’s could be linked to Banks • Adequacy of fund for subproject: 94.64% CIGs reported adequate. Lessons Learned from DPIP • High subsidy unsustainable. • Question mark on NGO’s capacity to scale up. • Non availability of competent NGO’s. • Bank Linkage Poor (Only 3600 CIG’s 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. Lessons Learned from DPIP • Lack of Strategic vision and Planning. • Lack of Team sprit between NGO’s, DPMUs & PMU – More Policing mindset of Government Official. • Continuity of Project Leadership. . • Top down approach to federations unsustainable; • Need for institutional mechanism to support CIG’s 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. 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 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 SHG’s( Poor and non poor ) tends to be against the interest of the poor. • Bypasses the PRI’s. • Focus not on asset Building. 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 Special Features: • Project Implementation Structure from District to Village Level. • Involvement of NGO’s on long term basis for Project period. • Outcome based remuneration to NGO’s. • Convergence for other needs of poor namely: Health Education Food & Nutrition Housing Economic ( NREGA, Watershed, SC/ST Schemes) 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. 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.