Document of

The World Bank

Report No: 19894-IN

PROJECT APPRAISAL DOCUMENT

ONA

PROPOSED IDA CREDIT

IN THE AMOUNT OF SDR i06.5 MILLION(US$142.6 MILLION EQUIVALENT)

TO

INDIA

FOR AN

IMMUNIZATION STRENGTHENING PROJECT

MARCH 30, 2000

Health, Nutrition and Population Sector UnitSouth Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective February 14, 2000)

Currency Unit = Rupees (Rs.)Rs. 43.6= US$ 1.0

US$ 0.02292 = 1 Rupee

FISCAL YEARApril 1 - March 31

ABBREVIATIONS AND ACRONYMS

ANM Auxiliary Nurse-MidwifeAWW Anganwadi WorkerAPL Adaptable Program LoanBIMAA Bihar Immunization Acceleration ActivityGAS Country Assistance StrategyCHC Community Health CentreCMO Chief Medical OfficerDALY Disability Adjusted Life YearDANIDA Danish International Development AgencyDflD Department for International Development (U.K.)ERR Estimated Rate of ReturnEPI Expanded Programme of InmmunizationFWD Family Welfare DepartmentGOI Government of IndiaICC Inter-Agency Coordinating CommitteeICDS Integrated Child Development ServicesIEC Information, Education and CommunicationINCLEN International Clinical Epidemiology NetworkJICA Japanese International Corporation AgencyKfW Kreditanstalt fur Wiederaufbau (Germany)LACI Loan Administration Change InitiativeMO Medical OfficerMOHFW Ministry of Health and Family WelfareNGO Non-Governmental OrganizationNID National Immunization DayPHC Primary Health CentrePIP Project Implementation PlanPPI Pulse Polio InmmunizationPMR Project Management ReportRCH Reproductive and Child HealthSIDA Swedish International Development AgencySCOVA State Comrmittee on Voluntary AgencyUNICEF United Nations Children's FundUSAID United States Agency for International DevelopmentVPD Vaccine Preventable Disease

WHO World Health Organization

Vice President: Mieko NishimizuCountry Director: Edwin R. Lim

Sector Director: Richard L. SkolnikTeam Leader: Tawhid NawazTask Leader: Indra Pathmanathan

INDIAIMMUNIZATION STRENGTHENING PROJECT

CONTENTS

A. Project Development Objective Page

1. Project development objective 22. Key performance indicators 2

B. Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 22. Main sector issues and Government strategy 33. Sector issues to be addressed by the project and strategic choices 4

C. Project Description Summary

1. Project components 62. Key policy and institutional reforms supported by the project 73. Benefits and target population 74. Institutional and implementation arrangements 8

D. Project Rationale

1. Project alternatives considered and reasons for rejection 92. Major related projects financed by the Bank and other development agencies 103. Lessons leamed and reflected in proposed project design 104. Indications of borrower commitment and ownership 115. Value added of Bank support in this project 12

E. Summary Project Analysis

1. Economic 122. Financial 133. Technical 144. Institutional 145. Social 176. Environment 187. Participatory Approach 18

F. Sustainability and Risks

1. Sustainability 192. Critical risks 193. Possible controversial aspects 20

G. Main Conditions

1. Effectiveness Condition 212. Other 21

H. Readiness for Implementation 21

I. Compliance with Bank Policies 22

Annexes

Annex 1: Project Design Summary 23Annex 2: Project Description 26Annex 3: Estimated Project Costs 29Annex 4: Economic and Financial Analysis Summary 30Annex 5: Financial Summary 34Annex 6: Procurement and Disbursement Arrangements 35Annex 7: Project Processing Schedule 49Annex 8: Documents in the Project File 50Annex 9: Statement of Loans and Credits 51Annex 10: Country at a Glance 55

MAP(S)

INDIA

Immunization Strengthening Project

Project Appraisal Document

South Asia Regional OfficeSASHP

Date: March 30, 2000 Team Leader: Indra PathmanathanCountry Manager/Director: Edwin R. Lim Sector Manager/Director: Richard L. SkolnikProject ID: P067330 Sector(s): HT - Targeted HealthLending Instrument: Specific Investment Loan (SIL) Theme(s): HEALTH/NUTRITION/POPULATION

Poverty Targeted Intervention: Y

Project Financing Data[l Loan N Credit O Grant El Guarantee O] Other (Specify)

For Loans/Credits/Others:Amount (US$m): 142.6 (SDR 106.5 mnillion)

Proposed Terms:Grace period (years): 10 Years to maturity: 35Commitment fee: 0.5% Service charge: 0.75%

FPinancig Plan: Source Local Foreign TotalGovernment 16.20 0.00 16.20IBRDIDA 10.70 131.90 142.60

Total: 26.90 131.90 158.80

Borrower: GOVERNMENT OF INDIAResponsible agency: DEPARTMENT OF FAMILY WELFAREMinistry of Health and Family Welfare, Government of IndiaAddress: Room No. 346, A Wing, Gate No. 5, Nirman Bhawan, New Delhi 110 001Contact Person: Mr. A.R. NandaTel: 91-11-301-8431 Fax: 91-11-301-8887 Email:

Estimated disburements ( Bank FY/US$M):FY u 2001 2002 2003 1 204

Annual 23.4 47.0 47.9 24.3Cumulative 23.4 70.4 118.3 142.6

Project implementation period: 3.5 yearsExpected effectiveness date: 07/31/2000 Expected closing date: 06/30/2004

OCS PAD -% Rk MaCS. 20

A. Project Development Objective

1. Project development objective: (see Annex 1)

To (a) eradicate poliomyelitis; and (b) reduce vaccine-preventable diseases by strengthening the routineimmunization program. The proposed three-year project would represent the first phase of support forimmunization, with a second project anticipated about two years after this project becomes effective,provided that performance is satisfactory.

2. Key performance indicators: (see Annex 1)

The Government of India and the World Bank will conduct an annual review of the performance of theproject, which will provide the basis for the following year's implementation plan and resource allocationdecisions. The key performance indicators used for the review will be the following:

* No new polio cases after 2001.* The proportion of districts (nationwide) in which 80% of children under one year of age complete their

primary immunization schedule (DPT3), would increase from 20% in 1999 to 25% in 2003.* 25% of districts (nationwide) would achieve a decline in the drop-out rate of at least 10 percentage

points by 2003 (the drop-out rate is the proportion of infants who receive at least one immunizationbut do not complete the immunization schedule for six vaccines [BCG, diphtheria, pertussis, tetanuspolio and measles] by age one year).

* Maintain the completeness and timeliness of surveillance reporting for polio, and establish measlessurveillance in at least five states including laboratory strengthening by 2003 (for polio surveillance,critical indicators of completeness would be non-polio Acute Flaccid Paralysis (AFP) reporting rateof more than 1 per 100,000 children under 15 years of age, and timeliness would be stool collectionwithin 14 days for at least 60% AFP cases).

* Proportion of children under one year of age who complete the primary imnmunization would increaseby 5% (state-wide) in Assam, Bihar, Gujarat, Madhya Pradesh, Orissa, Rajasthan, West Bengal, andUttar Pradesh by 2003; and percent dropout would reduce in 25% of districts in these states. Thepercent of PHCs having sterilizers and percent planned cold chain equipment installed would bemonitored each year.

* Annual progress reports on the development of the strategic framework for immunization, including:(a) guidelines to states for flexibility in implementation of immunization programs particularly forcampaigns, surveillance development and additional vaccine introduction; (b) studies; and (c)technology transfer. In addition, a Working Group on lmmunization would be established to beresponsible for formulating the immunization strategy in the 10th Five Year Plan.

B. Strategic Context1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)Document number: Date of latest CAS discussion:

Board Discussion of the last full CAS (Report No. 17241-IN) was on January 15, 1998 and BoardDiscussion of the CAS Progress Report (Report No. R99-12, IDA/R99-10) on February 18, 1999.

The proposed operation is fully consistent with the over-riding CAS objective of assisting India to reducepoverty. Poliomyelitis and the other vaccine-preventable diseases all affect disproportionately the poor,especially women and children, and imrnunization coverage is lowest among the lowest socio-economicstrata. These diseases cause premature death or lifelong disability that reduce capacity to benefit from

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education and employment opportunities and place a heavy burden on the health care system. Reducingillness and death from these diseases is completely consistent with the CAS objective of enhancing equityand accelerating human development of the poor. Moreover, by making available to disadvantagedfamilies, one of the most cost-effective health interventions, the project would address a key health issue, asproposed in the Comprehensive Development Framework. Finally, the proposed operation iscomplementary to India's Reproductive and Child Health (RCH) program, which includes immunization asa key component, and is partially financed by IDA.

India's strategic vision for its immunization program is as follows: (a) polio eradication by 2001; (b)strengthening the immunization program to achieve 80% coverage of all districts and urban areas with thesix basic vaccines within 7-10 years; (c) an effective vaccine-preventable surveillance system and rapidresponse capacity within 7-10 years; and (d) adding new vaccines to be decided during the furtherelaboration of its immunization strategy.

2. Main sector issues and Government strategy:

* poverty-related health problems, with maternal and child health indicators below average for thecountry's stage of development and income level.

* implementation capacity of the public health and family welfare system, including the immunizationprogram, varies widely among the states, many of which are confronting fiscal crises. There are threemain groups of states: those with strong implementation capacity, those in which this capacity isimproving, and those where implementation capacity is weak.

* lack of a coherent health system with well-defined public-private division of responsibility, andunder-funding of primary health care.

* poor quality of care in both the public and private sectors.

The Government of India is addressing these issues as follows:

* since the early 1990s, India has: (a) revamped its family welfare program by eliminatingmethod-specific contraceptive targets and adopting a reproductive and child health program approach;(b) strengthened its disease control programs to deal with a substantial proportion of the major diseaseburden, for example, tuberculosis; and (c) embarked upon major health system strengthening efforts ineight major states.

* increased investments in economic growth and human development that have doubled life expectancy,halved under-five mortality and reduced fertility by nearly half in the past 50 years, with acceleratingprogress since the mid-80s, especially in fertility reduction.

* the remaining problems are being tackled through efforts to: (a) bring about further reform at thecentral, state and district level; and (b) decentralize service delivery; rationalize the public-private mixof services; and target public sector services on the poor, with priority to primary level services.

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3. Sector issues to be addressed by the project and strategic choices:

Routine Immunization Program in India. Overall, India has made fairly good progress on immunization.The country reported that it had met the 1990 target of 80% coverage with the Expanded Programme ofImmunization (EPI) vaccines. Later, it became clear that reported coverage had been substantiallyover-reported. False optimism based on the over-reported coverage contributed to a plateauing in programperformance in the first half of the 1990s. The best recent estimates suggest overall coverage is now about55-60%. Nevertheless, the number of cases of vaccine-preventable diseases has continued to go down.Polio cases declined from 24,000 in 1988 to 3,854 in 1998, notwithstanding greatly improved reporting ofthe disease. The number of reported measles cases declined from 248,000 in 1987 to 34,000 in 1998, butthe actual number of cases is substantially higher at both points in time. India accounts for at leastone-quarter of all measles deaths globally.

Despite the progress achieved, India's immunization program has the potential to significantly enhance itsperformance. First, both human resources and the physical infrastructure have declined since the early1990s. Technical and program management competence have gradually eroded in the last several years.Similarly, the cold chain - the equipment necessary to refrigerate vaccines from procurement to client use -and the transport system have weakened, due to aging and inadequate financing. Monitoring of cold chainfunctioning and vaccine supply and logistics are inadequate. Second, state-level performance is highlyvaried, with low coverage in Bihar and Eastem Uttar Pradesh (U.P.) and six other states, and weakimplementation in some districts and cities of virtually all states. Third, in weaker performing states, theregularity and/or geographic access of immunization sessions is limited, and injection safety and clientcounseling is inadequate. And fourth, reporting of disease outbreaks is weak, with the exception of polio,and the capacity to respond rapidly to such outbreaks is almost universally inadequate.

Polio Eradication. Although the immunization program has included polio for more than a decade, Indiaaccounted for more than two-thirds of the cases reported worldwide for 1998. The remaining pockets ofpolio in India result from the large cohorts of children born every year, many of them in densely crowdedand unsanitary conditions conducive to the spread of disease. Achieving the global polio target oferadication by 2000 will depend crucially on progress in South Asia and Sub-Saharan Africa, andespecially in India. Unless all countries interrupt the transmission of the polio virus, polio immunizationwill continue to be required everywhere. Global interruption of the transmission of the polio virus, willpermit cessation of immunization five years later, generating large savings for all countries.

The reduction in polio cases in India has received a big boost since 1995, from the national immunizationdays (NIDs) when all children under five are immunized, accompanied by house-to-house "mopping-up"campaigns, and major publicity campaigns. In addition, since 1997 rapid progress has been made instrengthening polio surveillance capacity, with support from DANIDA, including the establishment of ninelaboratories judged by WHO to be functioning well. Reporting and investigation of acute flaccid paralysiscases is now judged to meet intemational standards. Surveillance data in 1998 indicated that massiveintensification of immunization would be required to achieve timely eradication. As a result four NIDs willbe carried out in consecutive months during the years 1999/2000, plus two additional sub-NIDs in eightweaker performing states. The number of NIDs required subsequently will depend on the results of theseefforts. The additional costs for vaccine alone are huge: each NID in India requires vaccine costing $ 14million. The cost of social mobilization for each NID is roughly the same amount. This is why India isseeking additional assistance from IDA and other partners. Furthermore, it is essential to ensure that veryhigh proportions of infants born each year are given polio vaccine through the routine immunizationprogram, so that polio transmission does not recur.

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Development of an updated strategic framework for immunization. The need for an updatedframework derives from many considerations. First, although the India immunization program hasaccomplished a good deal, overall program performance is sub-optimal and in several large pockets,performance is weak. Second, the rapidly evolving epidemiological situation, technological advances, andthe varied capacity for implementation among the states, suggests the need for a strategy for the nextdecade that would enable the program to deal with weaker components and states while facilitating strongerstates to take the next steps in program development. Third, despite the progress achieved, bettercoordination is needed among the departments managing the five major components of the program:vaccine production, vaccine quality assurance, service delivery, disease surveillance, and research. Fourth,donor support to EPI is somewhat fragmented and would have greater impact if it were grounded in anupdated and comprehensive strategic framework. And fifth, India has been unable, so far, to takeadvantage of global technological advances that have made available new vaccines, such as for Hepatitis B,which account for a substantial disease burden. In the absence of national guidelines, states haveresponded to vaccine-preventable disease with inefficient campaign approaches, for example, in the case ofneonatal tetanus, or by introducing new vaccines on a pilot basis, with insufficient consideration ofepidemiological factors, cost, institutional capacity, and sustainability.

Major guiding principles for a future immunization program strategy were agreed by GOI and IDA duringthe October 1999 preparation mission. First, the immediate priority would be polio eradication, andsupport for the National Polio Surveillance Project (NPSP) would be guaranteed until certification isachieved. Second, strengthening the routine immunization program would be a concurrent priority, so as toachieve and sustain acceptable immunization levels to prevent the re-introduction of polio transmission, aswell as reduce the other VPDs. Lessons learned from NPSP experience would be utilized to strengthen theroutine program. It was agreed, inter alia, that: states would have flexibility to develop their ownimmunization policies, based on their individual needs; states would have freedom to adopt objectivesdesigned to facilitate their upward graduation on an evolving scale of immunization program effectiveness;GOI would develop guidelines regarding campaign approaches and disease surveillance; and GOI wouldestablish principles to guide the addition of new vaccines and develop plans for technology transfer for theproduction of auto-destruct syringes.

Strategic Choices:

* India's successful drive towards polio eradication has resulted from a major national effort since 1995,with substantial assistance from many development partners. IDA was asked to finance, in part, theimplementation of the final, accelerated campaign, because of its increased resource requirements andthe resulting financing gap. Other development partners are financing with grant funds, about half ofthe estimated remaining vaccine and social mobilization costs of polio eradication.

* Careful consideration was given to a project design with the single, overarching objective of eradicatingpolio. This was rejected because maintaining polio eradication depends critically on strengthening theroutine program. Secondly, combining support for polio eradication with strengthening routineimmunization would give rise to synergies, as improving such elements as surveillance and servicequality would strengthen both elements of the program simultaneously.

* It was recognized that strengthening the routine immunization program in the better performing statesis feasible within three years, but would take longer in weaker states. Therefore, the project focusesmajor attention on eight large weaker states. However, only the most critical problems are included inthis component, comprising selected aspects of management, and outreach and social mobilization.Those areas in which the appropriate strategy for strengthening the program were not clear, areearmarked for consideration in the development of the strategic framework. Examples include (a)achieving acceptable immunization coverage in states where very weak infrastructure and intractable

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management problems undermine capacity to deliver the routine program effectively; (b) strengtheningsurveillance for VPDs other than polio; and (c) addition of new vaccines to the routine program.

* Polio eradication requires a nation-wide approach. In addition, some aspects of routine immunizationprogram strengthening, for example, overall policy and vaccine supply, call for a national approach.On the other hand, equity considerations require particular focus on weaker-performing states ininmmunization. These considerations are reflected in the project design.

* The immunization program in India requires mainly public sector delivery and financing. Although theprivate health sector predominates for curative care, the public sector provides 90% of immunizations.Public sector financing is justified by the large externalities and public goods aspects of immunization.

* The private sector and NGOs both have key roles to play in social mobilization for immunization, andin service delivery in areas where the public sector system is weak. The private sector is very active incities while NGOs could be mobilized to provide services in deprived rural areas.

* A multi-sectoral approach is required to achieve high coverage. The Integrated Child DevelopmentServices (ICDS) program of the Department of Women and Child Development, Ministry of HumanResource Development, complements the health and family welfare system by its village coverage,having one nutrition worker per 1,000 population. In addition, the education sector, rural extensiondepartments, the armed services, and the postal system, among other agencies, all play a key role inconducting the NIDs.

* Uncertainties regarding the likely course of polio eradication call for a flexible approach, so that, iffewer NIDs are required, for example, resources could be shifted earlier than anticipated to strengthenthe routine program.

* The rapidly changing epidemiological, technical, and program picture calls for development of astrategic framework for immunization for the next decade, which is included in the project design.

C. Project Description Summary

1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed costbreakdown):

The project would support acceleration of polio eradication and strengthen the routine immunizationprogram, which is an integral component of the nation-wide Reproductive and Child Health program. Itwould have three components: (a) polio eradication; (b) strengthening routine immunization; and (c)strategic framework development. The polio eradication component would finance about 50% of poliovaccine and social mobilization activities for NIDs, including information, education, and communication(IEC), training, transport, and house-to-house mop-up campaigns. The type and extent of activities andquantum of financing required would be determnined each year by the summer surveillance data on poliotransmission and the support mobilized from other sources.

The strengthening routine immunization component would address, selectively, critical managementconstraints and finance replacement of cold chain and injection safety equipment nation-wide. Managementcapacity strengthening would focus on filling critical vacancies, rebuilding training in imrnunization, andimproving program monitoring and vaccine logistics. Lessons in micro-planning from the highly successfulmobilization efforts for polio eradication would be captured at national, state, district, block, and villagelevel to strengthen the routine immunization program. In eight weaker performing states, activities wouldbe implemented under the Reproductive and Child Health Program to improve regularity of, and physicalaccess to, community clinic sessions, that would provide immunization within a package of reproductiveand child health services, improve information to local communities and mobilize communities to utilize theavailable services, and subsidize private and NGO hospitals or clinics to provide services to urban slumcommunities.

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The strategic framework would articulate medium-term goals and strategies for dealing withvaccine-preventable diseases. Certain guiding principles were agreed, as described in Section B. Thiscomponent would support studies and demonstration projects to inform further development of policies andguiding principles, and workshops and conferences to develop national consensus on those policies andguiding principles. It was agreed that the framework would be further elaborated during the 10th Five YearPlan preparation process.

: .Indicative . : Bank- %ofComponent Sector Costs % of financing Bank-

. ~~~~~~~(US$M) Tol lUtitfaZnPolio Eradication Targeted Health 110.80 69.8 100.20 70.3Strengthening Routine Immunization Institutional 43.20 27.2 38.00 26.6

DevelopmentStrategic Framework Dev. for VPDs Targeted Health 4.80 3.0 4.40 3.1

Total Project Costs 158.80 100.0 142.60 100.0

Total Financing Required 158.80 100.0 142.60 100.0

2. Key policy and institutional reforms supported by the project:

The major policy decisions would relate to the following:

* establishment of guiding principles for adding new vaccines to the program at state or national level.* formulation by the GOI of a policy regarding support for state immunization programs. This policy

would consider issues such as additional support to weaker states to improve routine immunizationprogram performance, and facilitation of efforts by better-performing states to expand diseasesurveillance in accordance with agreed guiding principles.

The major institutional reform would relate to state commitment to filling critical immunization and RCHposts at state and district level.

3. Benefits and target population:

The project would target all children up to the age of five, in order to eradicate polio and increase thecoverage of the other five vaccines, and all pregnant women, for tetanus vaccine to prevent neonatal andmaternal tetanus. Since vaccine-preventable disease in general, and polio in particular, disproportionatelyaffect poor families, and coverage is lowest in poorer and socially disadvantaged groups, the project wouldbe largely self-targeted to the poor in terms of incremental benefits.

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4. Institutional and implementation arrangements:

The project would be an integral component of the Reproductive and Child Health (RCH) program of theMinistry of Health and Farmily Welfare, which is partially financed by the Bank-financed RCH project.The Immunization Strengthening project would be managed through the structures and processes that havebeen established to manage the RCH program at national, state, and district level. No separate projectimplementation unit would be employed, since the experience with RCH and other projects demonstratesthat working within the bureaucratic system gradually builds ownership and commitment to the programobjectives, and, most importantly, helps to create enduring institutional capacity. The key implementationstructures include the Family Welfare departments at national and state levels, the District Family WelfareBureaus. The Child Health Division at national MOHFW level would be strengthened by additionalconsultancy support for cold chain and vaccine logistics monitoring, including analysis of vaccine wastage,and computerized management systems for cold chain and vaccine logistics will be established at nationaland state levels. Autonomous societies known as SCOVAs, established at state level for managing fundsflow for the RCH project, have been effective in ensuring timely flow of funds from the center to thedistrict level. Use of the SCOVA mechanism will be a condition of disbursement to each state for thisproject.

The central government finances the State and District Family Welfare Bureaus and about 70% of theclinic-based and outreach staff who deliver immunization services, while State governments finance theremaining 30% of staff as well as travel allowances of all staff and logistics. During campaigns, such asthe polio eradication NIDs, staff efforts are augmented by a large number of volunteers and grassrootsworkers of related government departments and NGOs. The project would support honoraria for suchefforts. Phased decentralization is in progress to panchayati raj institutions (PRIs), for staffing, budgetaryoversight, and program monitoring functions. The extent of decentralization varies in different states, andis influenced by the capacity of the PRIs.

The polio eradication effort has led the Government of India (GOI) to establish an interdepartmentalNational Steering Committee for Polio headed by the Cabinet Secretary with representation from all relatedgovernment departments such as, Women and Child Department, Ministry of Rural Development andPostal Department, which have extensive networks at the field level. Similar steering committees also existat the State level headed by the Chief Secretary. These national and state level committees are responsiblefor coordinating the polio eradication effort. The committees regularly review needs and strategies of thenational polio eradication program, assess performance and provide leadership for social mobilization.

The National Steering Committee is supported by the Interagency Co-ordination Committee (ICC). TheICC is coordinated by WHO and has representation from UNICEF, the Bank, bilateral agencies whoprovide support for polio eradication, and NGOs such as Rotary International. WHO monitors poliosurveillance activities, convenes an intemational expert group which advises on strategies, coordinatesfunding requirements and mobilization of international support. UNICEF coordinates vaccine procurementand supply, and provides technical advice on cold chain renewal and rnaintenance. Rotary mobilizesopinion leaders and communities through its extensive nationwide network. All of these partners arecomnmitted to supporting the effort until polio is eradicated.

The national and state level steering conmmittees have been very effective as evidenced by the massivemobilization efforts that have enabled irnmunization of more than 90% of children below age five (about123 million children) on each National Immunization Day. GOI has also utilized the ICC mechanism withoutstanding success to mobilize international coordinated support for polio eradication from more thaneight international multilateral and bilateral agencies as well as Rotary International. The ICC is now

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paying increasing attention to other vaccine-preventable diseases, in addition to polio.

For polio eradication, an extensive monitoring system has been established. The system includes on-siteobservation of NID booths and house-to-house mopping up by independent monitors, post-NID surveys ofcoverage, and special efforts to seek out zero-dose children with the assistance of grassroots NGOs such asChristian Children's Fund, particularly in districts that had polio cases. Routine immunization is monitoredthrough two large scale surveys: (a) UNICEF cluster surveys that provide annual state coverage and clustersurveys focusing on zero-dose children in high-risk districts that had polio cases during the previoussummer; and (b) bi-annual RCH household surveys that provide district coverage data. The RCHhousehold survey data as well as occurrence of polio cases are being used for district level micro-planning.The RCH surveys also will monitor differentials in coverage levels for poverty versus non-poverty groups.

D. Project Rationale

1. Project alternatives considered and reasons for rejection:

A. Provide financing only for polio eradication for a period of two years.* Routine immunization strengthening is necessary for polio eradication, since polio is an integral part of

the routine program. Program strengthening is urgently needed in general, and needs to be done at thesame time as polio eradication for maximum effect.

* Opportune moment to capitalize on Borrower interest and commitment to do more than just polio.* Would miss the opportunity to advance the dialogue on development of the primary health care system,

and to link with other HNP investments such as RCH and the State Health projects.

B. Immediate nationwide scale up measures for elimination of neonatal tetanus, and nationwideintroduction of Hepatitis B.

* Institutional and financial risks of launching into a full-scale program immediately too great.* Too complex to handle in a single three-year project.

C. Address all aspects of immunization as in (B) with full decentralization of financial, policy, andinstitutional responsibility to states.* HNP experience in India shows that where program arrangements and center-state division of

responsibilities are working well, such as in the immunization and leprosy programs, there is generalacceptance of the respective roles of center, states and districts. International experience also lendssupport for gradual phasing in of decentralization.

* The further transfer of responsibilities would be better implemented in a phased manmer because: (i)Immunization involves complex technical issues for which national policy is required; (ii) the centralgovernment is better equipped to coordinate and channel international experience to the states; (iii)Economies of scale and quality control for procurement of vaccines and cold chain equipment requireinvolvement of GOI; and (iv) uneven financial and management capacity of states justifies continuednational financing with varying degrees of oversight and implementation.

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2. Major related projects financed by the Bank and/or other development agencies (completed,ongoing and planned).

_ _ _ _ _ _ _ _ _ _ _ _ _ ___ _______ __ __ __ __ __ anklCfinancd proe cts Gnly)fImplementation Development

Bank-financed Progress (IP) Objective (DO)

Health AP First Referral Health HS SSystem

Health Second State Health Systems S SHealth Orissa Health Systems S S

DevelopmentHealth Maharashtra Health Systems S S

DevelopmentHealth 2nd National HIV/AIDS S SHealth Tuberculosis Control S SMatemai and Child Health India Population Project VIII S SMatemal and Child Health India Population Project IX U SMatemal and Child Health Reproductive and Child Health S SMatemal and Child Health Woman and Child Development S SMatemal and Child Health Child Survival and Safe S S

MotherhoodOther development agenciesWHO, UNICEF, USAID, DflD, KfW,DANIDA, SIDA, JICA, RotaryIntemational

IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

3. Lessons learned and reflected in the project design:

A huge body of experience and literature attests to the major impact and high cost-effectiveness ofimmunization programs. Since polio eradication is feasible, the savings in health costs from eliminating theneed for treatment and vaccination are enormous. Even when eradication of a disease is not possible,inmmunization ranks among the most cost-effective health interventions (WDR, 1993). Global experiencewith strengthening immunization programs demonstrates that:* building capacity enhances the ability of the delivery system to deliver new vaccines.* strengthening the inununization program can result in better implementation and greater equity of

access to the full range of essential primary health care services.

India has a good track record with targeted and campaign approaches. The NIDs carried out since 1995are the largest such activities ever carried out worldwide and their success has been acknowledged byWHO, UNICEF and the development community. The January 1999 NID resulted in 123 million childrenunder five being immunized, the largest number of children ever provided with any health service in such ashort time-frame. Moreover, India has successfully carried out targeted disease-control programs with IDAsupport, e.g., for Leprosy Elimination Project (Cr. 2528-IN).

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Important lessons from smallpox eradication are being applied to polio. First, program focus is on diseasesurveillance rather than immunization coverage. Second, flexible control strategies are being driven bysurveillance data. For example, based on 1998 surveillance data, India adopted an accelerated eradicationstrategy for 1999/2000, during which NIDs have been increased from two to four nation-wide, and twostate-wide days added in states with high transmission rates. Also, surveillance data would be used todetermiine areas where intensive mopping-up campaigns will be implemented as eradication nears. Anotherlesson is that routine programs need to capture the benefits of capacity-building resulting from polioeradication, which did not occur with the smallpox campaign. Examples include mapping of hard-to-reachvillages, use of altemate service delivery modes to reach such communities, and social mobilization usinglocally available resources. Intemational experience also suggests that decentralization of immunizationprogram functions should be selective, and should proceed in tandem with progressive build-up of localcapacity. Several program functions have already been decentralized in the Indian program. GOI'sReproductive and Child Health Program is building capacity at state and district levels with assistancefrom the IDA financed RCH project as well as projects supported by UNICEF and UNFPA. Since projectimplementation is fully integrated within the functioning of district FW Bureaus, decentralization of projectimplementation would proceed as local capacity grows.

The project design also reflects the lessons from more than 20 IDA-supported HNP projects over the last20 years including:

* the primacy of good training, especially in-service training.* the need to assure the flow of essential supplies, e.g., drugs and vaccines.* the importance of good monitoring and evaluation, especially, in the case of EPI, of disease

surveillance and timely local response to outbreaks.* the need for mechanisms to assure timely start-up.* assured timely flow of funds to the project.* most important of all, borrower comrnitment.

4. Indications of borrower commitment and ownership:

GOI has a long-standing, strong commitment to immunization, dating from 1985 when the Prime Ministerstrongly endorsed the WHO/UNICEF goals in this area. Subsequently, the Prime Minister signaledimmunization as top priority by launching it as a technical mission out of his own office. This commitmenthas not diminished over time and the current administration, in general, and the Ministry of Health andFamily Welfare in particular, have reiterated their strong commitment to eradicating polio andstrengthening the overall immunization effort. Immunization remains on the 20-point list for regularCabinet monitoring. Experience with the RCH program and with polio eradication efforts furtherdemonstrate this commitment, and assure timely project start-up.

GOI has invested very heavily in EPI and since 1997 has provided most of the additional support requiredfor the program, especially for its vaccine requirements. In May 1999, GOI representatives played anactive role in the WHO/SEARO regional meeting to accelerate polio eradication and review the EPIprogram. They enthusiastically committed GOI to the activities to be undertaken with partial support fromthis proposed project. In addition, an Inter-agency Coordinating Committee (ICC) was established forpolio eradication in 1999, chaired by the Secretary of Family Welfare. The ICC meets regularly, and acore sub-group meets on a weekly basis. Finally, the fact that India is prepared to borrow for polioeradication and immunization strengthening is further indication of its commitment to the developmentobjectives of this project.

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5. Value added of Bank support in this project:

* IDA is the largest health sector financier in India and globally, with substantial cross-countryexperience, and therefore well-situated to assist in improving the quality of the EPI program, linkingthe program to other health investments, including others financed by IDA, and in developing a refinedstrategic plan.

* the Bank Group is the largest source of external assistance to India, convenes the annual developmentforum, and plays a major coordinating role in many sectors, including the health sector.

* without IDA involvement, GOI and its development partners would not be able to marshall the massiveadditional resources needed for polio, in time for the target date for eradication.

* IDA involvement has contributed to GOI recognition of the need for a long-termn strategic frameworkfor immunization.

* Of the external partners on health, IDA is uniquely suited to link sectoral work with macro-econonicfactors.

E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)

1. Economic (see Annex 4):

o Cost benefit NPV=US$ million; ERR= % (see Annex 4)O Cost effectiveness* Other (specify)Project preparation and design were influenced by economic analysis which included an assessment of theeconomic rationale, cost effectiveness, benefit incidence, and demand analysis.

Justjif cation: Using standard public finance criteria, it is not difficult to justify public involvement in, andfinancing of, strengthening the capacity to deliver and monitor immunizations and for the campaign toeradicate polio. Hammer (Economic Analysis for Health Projects, May 1996) finds that infectious diseasesprovide a prima facie case for government intervention on three grounds: (a) externalities (spread andincomplete course of treatment); (b) some options are pure public goods (vector control, information); and(c) they disproportionately affect the poor. While most non-information services involved are private innature (rival and exclusionary), there are substantial social associated externalities. The case of poliovaccination is unique, however, in that it exhibits both characteristics of a public good. When the vaccineis administered orally to many children in a community, the virus multiplies in their intestines and isreleased in much larger quantities in excreta. The attenuated virus competes in the environment with thecirculating wild virus which is responsible for polio. As a result, the benefits are non-rival andnon-exclusionary and therefore public goods. Furthermore, all the elements of the Behavior ChangeCommunication activities to be supported by the project are pure public goods.

Equity: With the burden of vaccine-preventable disease falling heavily on the poorest and most vulnerablehouseholds, investments in immunization programs should benefit the poor. Benefit and outcome-incidenceanalysis using nationally representative household surveys, however, show limited use of immunizationservices by the poorest families in India. Children in 44 percent of the poorest households had not receivedany immunization in 1993 as compared to only 11 percent in the richest households. This strongrelationship between income and immunization coverage was also found in more recent household surveys(1996 and 1998). Econometric analysis demonstrates that income continues to play an important role inimmunization coverage even after controlling for other socio-economic factors.

Analysis of household surveys also indicates that female literacy, caste, and the number of same sex oldersiblings, affect coverage. The most recent available household survey (1998) also sheds some light on the

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reasons for low coverage among some socio-economic groups. A sizable proportion of households with noimmunization coverage was not aware of the need for imnmunization or the time and place it was available.Social assessments helped explain further the demand factors influencing lower use by the poor. Thefindings from benefit-incidence analysis, demand analysis, and the social assessments directly influencedthe design of the project by directing more resources and attention to the demand aspects of immunizationand strengthening the Behavior Change Communications component. Findings from the 1998 survey alsoallowed project design to address some of the weaknesses in the supply of immunization services byidentifying the level of care provision most likely to reach the poor - village outreach - allowing moreprecise targeting of limited resources.

Cost-effectiveness: In addition to a clear economic rationale for public involvement in immunization,cost-effective interventions are necessary. An assessment of the cost-effectiveness of the immunizationprogram in India confirns international finding that immunization services are among the best buys inhealth. Routine inmunization in India is highly cost-effective with the cost per Disability Adjusted LifeYear gained (DALY) ranging from $5 to $37, while the cost per death averted ranged between $514 and$1,233. Simulations for improvements of efficacy and program coverage demonstrated a higher return toincreases in coverage.

Public/Private Roles: The private sector plays a major role in health service delivery in India, but mainlyfor curative rather than preventive care. Analysis of demand for immunization shows that in 1997-98, lessthan 10 percent of immunizations were delivered by the private sector, and most of those were in urbansettings. The public sector remains the main provider of routine immunization services, especially throughthe lowest levels of the health system (PHC/CHC, sub-center, and village sessions). The private sector,however, plays a larger role in social mobilization for campaign modes of delivery such as Pulse PolioImmunization Days.

2. Financial (see Annex 5):NPV=US$ million; FRR = % (seeAnnex4)

Project-specific budgetary implications were analyzed with an eye to financial sustainability, budgetaryimpact, and absorptive capacity. Time-trend analysis of immunization expenditures was conducted toprovide baseline information for ensuring the incrementality of IDA funds.

Polio Eradication is the largest component of the project, representing 69.8 percent of the total project cost.Within the Polio component, 91 percent of the resources are earmarked for the procurement of vaccines andthe remainder is for social mobilization. Financial sustainability is not an issue since the campaigns willend with eradication of the disease. In fact, the total earmark for Polio may not be used. Project designtook into account that the fact that the number of NIDs in years 1, 2 and 3 of the project will depend on thepolio surveillance findings. If; as expected, remaining pockets of wild polio virus are localized, the numberof NIDs would be reduced, producing budgetary savings that could be applied to strengthening routineimmunization. There remains the risk, however, that eradication will be delayed, requiring additional fundsin the future. But the effective surveillance system and the targeted mop-up strategy should minimize thatrisk-

Absorptive capacity considerations for the Polio component were not found to be substantial. The recentexperience with NIDs produced no serious signs of system fatigue and provided proof of the ability of thesystem to manage these activities on a continual basis. Several other development partners are supportingPolio eradication with funds and technical assistance, including CDC, DfLD, EC, JICA, KfW, UNF,UNICEF, USAID, and WHO.

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The Immunization Strengthening component includes funds for training, monitoring and maintenancedesigned to address weak elements of routine immunization. The strategy design component of the projectwill attempt to address the sustainability issue by considering the development of equalization funds orother budgetary mechanisms to better target resource allocation.

Fiscal Impact:

Detailed analysis of current spending on polio and EPI, including sources of funds, examined the possiblefiscal impact of the project on GOI budgets. At issue are the complex financing arrangements between thecenter and states since immunization services are centrally funded but rely on state-level activities such asstaffing and supervision. The variable performnance by states was analyzed from a financial perspective toensure adequate funding for critical inputs at all levels. Moreover, the long-term sustainability wasanalyzed. The recurrent cost implications of the project (less than 5 percent of total project cost) will nothave any medium or long term budgetary impact.

3. Technical:The proposed project is technically justified by the size and importance of the problem addressed, the statusof vaccine quality, progress on the cold chain, injection safety, reporting, training, and surveillance, and thelevel of public demand and social support.

a Importance of the problem: vaccine-preventable diseases are responsible for a large proportion of theburden of disease in India, and India accounts for a large share of the world burden from poliomyelitis,measles, and tetanus.V Vaccine quality and quality monitoring: these are satisfactory.C Cold chain: gaps in equipment availability and maintenance have been identified and partly addressed;remaining gaps would be addressed by the project.

- Injection safety: problems have been identified and would be addressed by the project.. Over-reporting of immunization coverage: household surveys are correcting this problem.e Training: technical and program management skills gaps have been identified and would be addressed

by the project.- Disease surveillance: the need has been recognized, a good start has been made with polio, and the

lessons will be applied in the elaboration of the strategic framework.- Public demand: immunization services are now strongly demanded by all sections of society, including

those most deprived, and enjoys support from village-level to the highest levels of government.

A comprehensive technical assessment was carried out by WHO as part of project preparation, and the34-page report is available in the project files. The project design was based on this report as well asanalysis from GOI and others (see list of project documents) which will also provide input for elaborationof the strategic framework.

4. Institutional:

a. Executing agencies:The main strengths of India's Family Welfare program are the development of an extensive service deliverystructure with effective outreach to most rural areas, established management structures at center, state,district, and block level, and linkages to related outreach programs such as that of the Integrated ChildDevelopment Services (ICDS) program. Family planning and immunization are the longest-running andstrongest components of the Family Welfare program. During the past decade, these two components havebeen absorbed into an increasingly effective integrated Reproductive and Child Health program.

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b. Project management:The institutional assessment of the proposed project was based on knowledge gleaned from thelong-standing relationship between IDA and MOHFW, especially in relation to implementation of the RCHproject; two missions, which included detailed discussions at central, state, and district level, with a widerange of key stakeholders, including managerial and technical personnel, field staff, beneficiaries, andcommunity representatives; and the findings of a large number of reviews and studies by MOHFW, WHO,UNICEF, and other agencies. A comprehensive institutional assessment report is available in the projectfiles. It has informed project design, and will provide guidance in designing complementary activities in theRCH program.

Findings: The major findings of the assessment were:

* decline of the technical leadership, vision and management of the EPI program at central, state anddistrict during the past seven years due to:a. transition of immunization from a stand alone activity to a Child Survival and Safe Motherhood

program, and subsequently to a RCH program.b. resultant management and communications problems.c. failure to take optimum advantage of the opportunities within the broader RCH program to

improve routine immunization.d. failure to capitalize on the deep commitment to immunization that exists in state administrations.

* system stress on the human and physical infrastructure of the program arising from:a. in most states:

- cessation of specialized in-service training in immunization program management.- aging and maintenance problems in cold chain and injection safety equipment.- dis-continuation of earlier program monitoring and supervision procedures, for example,

the regular review meetings.- lack the micro-planning capacity.

b. in addition, in weaker performing states:- heavy workloads arising from high birth rates coupled with field staff vacancies.- insufficient financial resources, particularly for transport and per diem allowances, and

staff and supervisor mobility.- particularly heavy demands imposed by the polio eradication program.

The project response. The project would address critical gaps in management capacity and processes andgaps in selected aspects of the immunization hardware infrastructure nation-wide. Lessons inmicro-planning from the highly successful polio eradication efforts would be applied at national, state,district, and block, and village level to strengthen the routine immunization program. (See Annex 2: ProjectComponent 2: Strengthening Routine Immunization).

In weaker performing states, a project covenant would require states to fill critical posts as a condition ofdisbursement. In addition, another project covenant would monitor that the eight weaker performing states,implement as agreed, additional community clinics and community mobilization activities under the RCHprogram, to increase access to regular irmmunization services within a larger package of RCH services.Recognizing the district-specific nature of service delivery and demand generation requirements, and theweak capacity in these states, it is necessary to view these activities as initial learning processes within alonger-term process, that will not be comnpleted during the three-year project period. Someweaker-performing states (such as West Bengal, Orissa, Uttar Pradesh and potentially, Rajasthan) are

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embarking on health sector or economic re-structuring projects that are expected to eventually ensureadequate funding for primary care including staff mobility and logistics. For other states (such as Bihar),alternate strategies will be outlined as part of the exercise for the development of the long term strategicframework for VPDs.

c. Procurement issues:The "Guidelines for Procurement under IBRD Loans and IDA Credits" (January 1995, Revised in Januaryand August 1996, September 1997 and January 1999) shall apply to all Goods and Works financed underthe project. The "Guidelines for Selection and Employment of Consultants by World Bank Borrowers"(January 1997, Revised in September 1997 and January 1999) shall apply to all consultants' servicesfinanced under the project.

Key features of this project would be (a) procurement of oral polio vaccines by UNICEF; and (b) use of aprocurement agent experienced in Bank guidelines and procedures for procurement of non-polio vaccinesitems. It is estimated that items to be procured by the procurement agent will be immunization equipmentsuch as cold chain equipment, stoves and sterilizers, printing of registers and cards, some pharmaceuticalsand other vaccines. Services to be procured will be institutional and those of individual consultants. Allother procurement of small items, including hiring of local folk media groups, hiring of publicity services,and hiring of vehicles, etc., will be carried out at State/District level.

To ensure that disbursements can start immediately upon project effectiveness, the MOHFW/procurementagent has submitted to the Bank, a procurement plan (firm for the first year and tentative for the secondyear), draft bidding documents of prior review packages for the first year of the project and draft contractfor procurement of polio oral vaccines from UNICEF. Similarly, a list of consultants to be appointed atnational level as well as a list specifying services requiring individual and institutional consultants will alsobe forwarded to the Bank for review.

There are no civil works under the Project. Detailed procurement arrangements are indicated in Annex 6.

d. Financial management issues:Financial management arrangements for the project are detailed in Annex 6. The funding to MOHFWwould be through the annual budget. Flow of funds from MOHFW to SCOVAs will be on a quarterlybasis through banking channels. The initial allocation will be based on the cash flow forecasts of SCOVAs(which in turn would be based on their work programs and budgets). Subsequent funding will be based onperformance of key indicators and the projected funds requirement of SCOVAs. The flow of funds fromSCOVAs to districts and from districts to Community Health Centres (CHCs)/Primary Health Centres(PHCs) will also be through banking channels.

An integrated computerized financial management system will be implemented for the project. The keytasks that will be carried out to implement the integrated financial management system are: (a) design,development and installation of PFMS software - expected to be completed by November 30, 2000; (b)procurement of necessary hardware at MOHFW and the participating states - expected to be completed byOctober 31, 2000; (c) recruitment of staff both at MOHFW and the states - expected to be completed byDecember 31, 2000; and (d) training of the staff in the implementation of the PFMS expected to becompleted by February 28, 2001.

Disbursements: Disbursements from the IDA credit would initially be made in the traditional system(reimbursement with full documentation and against statement of expenditure) and would be converted tothe LACI procedures (i.e. based on Project Management Reports, PMR's) after the successful

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implementation of the computerized PFMS.

Retroactive Financing: Retroactive financing up to an amount of US$14.1 million equivalent would covereligible expenditure for implementing activities after March 15, 2000. Retroactive financing wouldsupport: preparation activities including preparation of procurement documents and model plans, studies,vaccines and operational expenditures.

Audit: MOHFW Accounts will be audited by the Controller and Auditor General of India (C&AG). TheSCOVAs will be audited by Chartered Accountant firmns. A consolidated annual project financialstatement will be submitted by MOHFW within 6 months of the close of GOI's fiscal year (as requiredunder the Bank's Operational Policies) supported by audit reports of MOHFW and SCOVAs. These auditreports will be monitored in ARCS. The terms of reference and qualifications of the firm of CharteredAccountants will be reviewed by the Bank. The firm of Chartered Accountants will be appointed beforethe start of the project.

The audit report on special account maintained by DEA would include a summary of SA transactions andthe closing balance held by RBI. The audit report on SA would also be submitted to the Bank not laterthan six months after the close of each fiscal year. This report will also be monitored under ARCS.

5. Social:

Data sources and methodology. The social assessment is based on data from several recent surveys,studies, reports prepared by DflD, INCLEN and UNICEF, and consultative meetings held by the Bankteam with govenmuent and non-govemment stakeholders at national level and in five states. (For details seeParticipation and Social Data Sheet in the Project File).

Findings.Routine immunization:

3 Although about 73% of infants receive at least one immunization dose, only about 55% complete theirfull immunization schedule by age one year.

* State performance is varied, three large states achieve above 80% coverage, but eight large states havelow routine immunization coverage ranging from 16% to 55%.

- Only about 50% of children had immunization cards, and evidence suggest that this contributes todropouts.

* Children with lower imrnmunization rates are: lowest wealth quintile, scheduled castes; scheduled tribes,many of whom live in areas with poor infrastructure, urban slum dwellers.

* There is no gender differential.* During household interviews, reasons given for zero or partial immunization included: (a) lack of

awareness about the need (30%); (b) lack of awareness of place and time of vaccination (322%); (c)child or mother sick, or no one to fetch the child, or vaccine/vaccinator not present (22%).

Polio eradication:* coverage is much higher - reaching 96% of children under five years old.* Contributory factors include: very broad participation, use of surveillance information to identify

pockets of population with zero dose children, meticulous micro-planning and social mobilization toreach unreached communities, and house-to-house visits following the NID.

* The unreached groups had essentially similar characteristics as those who did not receive routineimrnunization.

* Reasons for non-immunization included: (a) unaware of need, time or place (49%); (b) obstacles such

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as no one to take the child, date/time was inconvenient, or doctor advised against it (35%); and (c)apathy, no faith in vaccine, doubt efficacy because child fell ill after vaccination (2 1%).

Project design: The findings of the social assessment are reflected in strategies for the improvement ofservice delivery, training, information, education and communications (IEC) and community participation.See Annex 2 for details. Strengthening routine immunization will focus on (a) ensuring that childrenwho receive at least one immunization complete the full schedule before their first birthday; and (b)reaching out to the unreached. For polio eradication, the focus would be on: (a) sustaining the high levelof commitment required for four (or in the weaker states, six) NIDs; and (b) reaching the remaining poolsof unreached communities.

Tribal Strategy: MOHFW is implementing a Tribal Reproductive and Child Health strategy and actionplan (Annex 8) to promote health in tribal areas, covering approximately 518 distinct groups located in fivemajor tribal belts across the country. The strategy recognizes the special characteristics and reproductivehealth care needs of the tribal communities and constraints in meeting these needs, reflecting the uniqueproblems of physical and social access to tribal groups. The action plan includes measures to improvehealth infrastructure in tribal areas, increase the numbers of grass-roots health staff from tribalcommunities, and utilize tribal youth as community mobilizers and communicators. This project willmonitor immunization coverage in tribal areas and the implementation of planned community clinics andmobilization efforts in tribal districts.

The process of social assessment would continue during the life of the project and beyond by putting inplace mechanisms for community assessment and feedback. The annual RCH district-level surveys wouldprovide data for baseline as well as ongoing monitoring. Qualitative studies would be conducted inconjunction with other partners such as UNICEF, DfID, USAID and WHO.

6. Environmental assessment: Environment Category: C

The project does not involve any significant environmental risks. Support for the immunization programwould improve the safe disposal of syringes and needles. A review of injection safety during projectpreparation led to the decision not to use disposable syringes in the project, but to continue with re-usablesyringes and needles until auto-destruct needles are adopted in the program. GOI is fully committed to thereplacement of cold chain equipment with CFC-free equipment in accordance with the Montreal protocol,by the required date.

7. Participatory Approach (key stakeholders, how involved, and what they have influenced or mayinfluence; if participatory approach not used, describe why not applicable):

a. Primnary beneficiaries and other affected groups:

MOHFW and the Bank consulted and actively collaborated with numerous key stakeholders. Primarybeneficiaries consulted included the parents of children 0-5 years of age. Other key stakeholders included:

* functionaries of Family Welfare and other govemment departments such as Health, Women and ChildDevelopment (WCD), Rural Development.

* professional and technical agencies.* Panchayati Raj Institutions (PRIs/local govermment).* NGOs (national and international), community groups, and private sector groups.* UN agencies and bilateral donors.

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b. Other key stakeholders:

Stakeholders collaborated in project preparation as follows: through (a) national-level workshops withcenter and state representatives of various government departments (Planning, Family Welfare, Health,WCD), technical and research institutes (NIN, NIHFW, IIMR, NICD); (b) state-level workshops withnational, state and district-level staff (Health and Family Welfare, WCD, Rural Development), NGOs andcommunity groups, U.N. agencies and bilateral donors; (c) Bank and other donors joining MOHFW indeveloping the preliminary draft of the Strategic Framework; (d) over 60 NGOs attending a workshopaimed at expanding government!NGO partnerships for polio eradication and improving routineinmmunization; and (e) village-level consultations with beneficiaries, polio booth keepers, PRI members,NGOs, and community groups.

Important mechanisms for on-going consultation are the National and state level Steering Committees forPolio and the Inter-Agency Co-ordination Committee (ICC) described in Section C 4.

F. Sustainability and Risks

1. Sustainability:

* The Government of India and the states are strongly commnitted to the project.o The fiscal implications of the project are relatively small.* GOI has provided major support to the inmmunization program for fifteen years, and has assumed a

greater proportion of the financial burden over time.- The project enjoys support from all key stakeholders.

2. Critical Risks (reflecting assumptions in the fourth column of Annex 1):

Risk Ris _t Risk Minimization MeasureFrom Outputs to ObjectivePolio eradication. There is a risk that the H 1. An international partnership is assisting GOIaccelerated strategy of four NIDs plus 2 through the ICC mechanism to monitor coverageSNIDs will not raise polio inmmunization in each NID and rapidly address shortfalls.coverage in Bihar and Uttar Pradesh and 2. Special partnerships have been established inin all hard-to-reach pockets sufficiently to Bihar through the BIMAA mechanism tointerrupt polio transmission by the end of generate community pressures and upgrade statethe year 2000. This would delay global government commitment. Similar efforts arepolio eradication. being fostered in Uttar Pradesh.

3. The project design responds to the uncertaintyof when polio will be eradicated by building inflexibility to shift resources to routine systemstrengthening as progress on polio allows.

From Components to OutputsStrengthening Routine Immunization M 1. 1 All states would be required to utilize the1. Inadequate flow of funds to SCOVA mechanism which has proved effectiveimplementing districts and cities. in the RCH project.

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2. Weak implementation due to delay in M 2.1 Vaccine for polio eradication will beprocurement of goods. procured through UNICEF, and procurement of

other goods will be done through a procurementagent which has demonstrated adequate capacityin the RCH project.

3. GOI provided assurances at H 3.1 A specific covenant requires that, in theseNegotiations that community clinics and states "at least 60% of planned communityassociated community mobilization clinic sessions providing immunization andactivities would be undertaken in states reproductive health services are held in districtswith low inmmunization coverage, under to,be agreed from time to time between thethe RCH program. These activities have Borrower, the respective project states and thenot yet been specified. There is a high risk Association." During Negotiations it wasthat such activities will not be agreed that "the Borrower would promptlyimplemented effectively within the project design (such) activities and share with theperiod, considering the three year project Association the implementation details and timeduration, history of start-up delays in lines for such activities". This is noted in theother projects, and weak management Minutes of Negotiations, which further note thecapacity. importance of achieving benchmarks agreed

with IDA missions on this covenant.4. Shortfall in field service delivery staff S The RCH project provides financing to addressand funds for staff mobility is likely to the staff shortfalls, and this project providesreduce implementation capacity in funds for staff mobility. Madhya Pradesh andMadhya Pradesh, Rajasthan, Uttar Rajasthan have started training programs thatPradesh, and Bihar. are expected to produce sufficient numbers

within two years. In Uttar Pradesh, the issuehas been partially addressed through the RCHproject, and will be dealt with further throughthe proposed State Health Systems project. InBihar, continued exploration of viable strategiesis planned through the annual review ofprogress in the Strategic Framework.

5. Frequent transfers of key program staff S In Uttar Pradesh, the proposed State Healthis likely to affect implementation Systems project is expected to address thisprogress, particularly in Uttar Pradesh issue. In Bihar, it is expected that the BIMAAand Bihar. mechanism would provide some leverage for

civil society, GOI and donors to work with thestate government to address this issue within thecontext of polio eradication.

Overall Risk Rating 5

Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)

3. Possible Controversial Aspects:

None

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G. Main Credit Conditions

1. Effectiveness Condition

None

2. Other [classify according to covenant types used in the Legal Agreements.]

Implementation(a) GOI would allocate each year, sufficient resources for GOI's childhood immunization program;(b) GOI would implement the project in accordance with the Project Implementation Plan;(c) GOI and the eight weaker performing project focus states of Assam, Bihar, Gujarat, Madhya

Pradesh, Orissa, Rajasthan, West Bengal and Uttar Pradesh would implement at least 60% ofplanned conmmunity clinics providing routine immunization and reproductive and child healthservices in districts to be agreed from time to time with the Association;

(d) GOI would implement a tribal strategy as specified in the Project Implementation Plan;(e) GOI would provide each year, an Annual Action Plan acceptable to the Association;(f) GOI would provide a statement articulating the guiding principles for adding new vaccines to the

program at state or national level by June 2002.

Management aspects of the project executing agencies(a) GOI would engage, and cause each project state to engage, a financial manager assisted by

adequate staff with skills, qualifications and experience agreed with the Association;(b) GOI would obtain commitments from each participating State to: (i) fill at least 80% of

sanctioned posts of technical officers for the Family Welfare Program at State and district level,and designate a specific officer for every district to be responsible for immunization by no laterthan December 31, 2000; and (ii) fill at least 80 percent of sanctioned ANM positions byDecember 31, 2002 and in the event that insufficient candidates are available to fill suchpositions, recruit into government training institutions by March 31, 2001, sufficient candidatesto fill the desired percent of positions.

Project Covenants that would be conditions of disbursement for each state.

Flow of funds (flow and utilization of project funds)(a) Receipt of the signed Letter of Undertaking acceptable to IDA between each participating

state and GOI, would be a condition for GOI to frnance activities or supply equipment ordrugs to any particular state;

(b) The Letters of Undertaking between GOI and project States would include provisions that thestate would establish a mechanism acceptable to IDA, for the transfer of funds from the GOI tothe project implementing agencies at district or institutional levels;

(c) Notification to the Association from GOI that the project state is in full compliance with theaudit covenants under the Reproductive and Child Health project.

H. Readiness for Implementation

El 1. a) The engineering design documents for the first year's activities are complete and ready for the startof project implementation.

5Z 1. b) Not applicable.

1 2. The procurement documents for the first year's activities are complete and ready for the start of

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project implementation.I 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory

quality.1 4. The following items are lacking and are discussed under loan conditions (Section G):

Submission of overdue audit certificates from some project states in the Reproductive and Child Healthproject that is being implemented by the Department of Family Welfare.

1. Compliance with Bank Policies

0 1. This project complies with all applicable Bank policies.1 2. The following exceptions to Bank policies are recommended for approval. The project complies with

all other applicable Bank policies.

Exception to compliance with OP/BP 10.02 "Financial Management", paragraph 8 isrecommended for approval. Audit certificates are overdue from 12 of the 35 project states andinstitutions that are implementing the India: Reproductive and Child Health (RCH) project(Cr. NO 18-IN) and the India: Family Welfare (Assam, Rajasthan and Kamataka) project(Population IX) (Cr. 2630). However, 20 of the 25 states and institutions with significantexpenditure under these two projects have submitted audit certificates and the Borrower hasprovided evidence that a process has been put in place to develop remedial action plans to addressthe audit qualifications. The DCA includes a project covenant to the effect that when currentlynon-complying states have achieved full compliance with the audit covenants under theReproductive and Child Health Project they would become eligible to participate in this project.

Indra Pathmanathan Richard L. Skolnik R. LimTeam Leader Sector Manager/Director | Country Manager/Director

TawhM Kawaz L'India IINP Team Leader

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Annex 1: Project Design Summary

INDIA. Immunization Strengthening Project

; . .. ' :: ~Key pe#forman |y e Hierarphy of 9Q,jeptives In#Wators Monitoring 4& Evaluation -:.Cti pgl M4A mptions

Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission)Poverty reduction andaccelerated humandevelopment throughimproved health of poorchildren and women ofreproductive age.

Project Development Outcome / Impact Project reports: (from Objective to Goal)Objective: Indicators:1. Eradication of 1.1 No new polio cases after Polio surveillance reports with Continued success ofpoliomyelitis and reduction of 2001. comments from WHO. multisectoral socialvaccine preventable diseases mobilization efforts, especially(VPDs) through strengthening 1.2 Percent of infants fully Routine reporting and RCH NIDs.of the routine irnmunization immunized by age one with district household sampleprogram.* six basic vaccines would surveys. GOI and its partners able to

increase from 55.3% in 1999 strengthen the overallto 60% in 2003. implementation of the EPI

program.*Currently, VPDs areunder-reported. Strengthening ofthe routine inmmunizationprogram will includestrengthening the surveillancesystem for vaccine preventablediseases. As a result of suchstrengthening, reporting of VPDsis expected to increase.Therefore, the percent of childrenprotected against VPDs byimmunization by age one wouldbe used as a proxy indicator forthis development objective.

Output from each Output Indicators: Project reports: (from Outputs to Objective)component:Component 1: Polio 1.1 No new cases of polio Polio surveillance. Timely flow of funds anderadication reported after 2001. supplies, effective1. Polio transmission halted implementation of NIDs andas evidenced by good quality 1.2 Reporting of non-polio successful mopping-upsurveillance data. acute flaccid paralysis case at campaigns.

the rate of at least 1 per100,000 children below 15years of age.

1.3 Stool collection from atleast 60% of acute flaccidparalysis cases within 14 days.

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Component 2: Strengthening 2.1 Percent of districts Routine reporting and RCH Continued strong commitmentroutine immunization. nationwide with 80% coverage district household surveys. of GOI to the EPI program,(2a) Improved coverage of of fully immunized children and continued technicalroutine immunization services under one year increased from assistance from WHO,and reduction in program 20 % in 2000 to 25 % in 2003. UNICEF and otherdropouts. development partners.(Dropouts are infants who 2.2 Increase by 5% of fullyreceive at least one immunized children under age - do - Availability of the vaccine andimmunization but do not one by 2003 in each of the demand from clients.complete the schedule for six project focus states of Assam,vaccines [BCG, diphtheria, Bihar, Gujarat, Madhyatetanus, pertussis and Pradesh, Orissa, Rajasthan,measles] by age one year). West Bengal and Uttar

Pradesh.

2.3 At least 25% of districts in UNICEF coverage evaluationthe eight project focus states survey.achieve 10 percent decline indropout rates by 2003.

(2b) Improved cold chain and RCH Facility surveys.injection safety equipment. 2.4 Improved percent PHCs

having sterilizers.

MOHFW reports.2.5 Acceptable percentplanned cold chain equipmentinstalled.

3. Strategic framework in 3.1 Establishment of a Annual Reports Immunization will remain aplace by 2003. Working Group on key GOI priority.

Immnunization for formulatingthe immunization strategy forthe 1 0th Five Year Plan.

3.2 Annual reports onprogress with developmentand implementation of policyguidelines, strategies andstudies.

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Key PezforrnanceHierarchy of Objetivos Indipators Monito#ing-& Eyaj jon C- W E - a sumptiOPs:

Project Components I Inputs: (budget for each Project reports: (from Components toSub-components: component) Outputs)1. Polio eradication 1. I Polio vaccine Polio surveillance reports, Ministry of Health and Familynationwide. 1.2 Social mobilization evaluation reports from the Welfare and multisectoral

including IEC, training, ICC including coverage capacity.transport. evaluations, social

assessments includingqualitative studies, mini-surveys in communitieswhere AFP cases are reported.

2. Strengthening routine 2.1 (a) Strengthened program Project statistics Central and state MOHFWImmunization. management capacity.2.1 Institutional (b) human resourcestrengthening nationwide. development

(c) strengthened program2.2 Outreach and social monitoringmobilization in eight weaker (d) strengthened cold chainperforming states. and injection safety equipment

and its maintenance.

3. Strategic framework Pilot projects, studies, Project reports Central and state MOHFWevaluation, workshops. capacity.

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Annex 2: Project DescriptionINDIA: Immunization Strengthening Project

The project objective is to eradicate poliomyelitis and reduce vaccine preventable diseases by strengtheningthe routine immunization program.

A concise description of the routine immunization program and of polio eradication activities is available inthe Project files as well as in the Project Implementation Plan.

By Component:

Project Component 1 - US$100.20 millionPolio Eradication

The project would provide support for about 50% of polio vaccine and social mobilization required to carryout the NIDs and sub-NIDS in states where polio transmission is significant. Social mobilization activitieswould include orientation and training, transport, IEC, surveys and evaluations, managing polio booths andother activities necessary to assure coverage of the target population. The number of NIDs and sub-NIDsin states with significant transmission would be deternined annually, based on surveillance data of poliocases that occur during the Summer transmission season. At about the end of each Summer, WHO, withassistance from the International Certification Commnittee, would review the surveillance data and provideadvice to GOI and the Bank regarding activities required for the next 12-month period. Project activitiesand the required budget would be reviewed and adjusted accordingly.

Project Component 2 - US$38.00 millionStrengthening Routine Immunization

This component would support a number of activities to improve the quality of routine immnunization. Theactivities would address critical weaknesses in program management (such as monitoring, micro-planning,and training) and selectively upgrade equipment for the cold chain and injection safety, and upgrade diseasesurveillance capacity in selected laboratories. Specific activities would include:(a) strengthening program management by: (i) strengthening capacity by appointment of a cold chainofficer in the MOHFW; (ii) management review and facilitation at MOHFW and state FWD levels forimproved role clarification and team approaches for inmmunization within the integrated RCH Program,including other aspects of child health, matemal health and family planning and with other relevant unitssuch as those responsible for monitoring, training, IEC, NGOs, procurement and financial management.Revised Program Management guidelines would be produced for irnmunization at all levels in the system,within the RCH framework and for augmented service delivery in some states. The project would financeconsultants and technical assistance, study tours, and vehicle hire to increase supervisory staff mobility.(b) human resource development in immunization management for staff at MOHFW, state and districtlevel, including training in micro-planning, vaccine forecasting and logistics, program monitoring andevaluation, safe injection techniques, adverse event monitoring, response to disease outbreaks, socialmobilization, and community involvement. In addition, specialized training will be provided on cold chainmaintenance and for cold chain users. Training under this project will complement the training providedunder the RCH program, which would strengthen and integrate immunization issues in on-going trainingfor all relevant categories of staff. The project would support workshops, consultants and technicalassistance, training materials and equipment.

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(c) strengthening program monitoring including: (i) computerized monitoring systems for the cold chainand for vaccine logistics, including necessary hardware for computing and communications, and softwaredevelopment and training; (ii) planning and review meetings at national and state levels; (iii) computerizedmanagement information system; and (iv) additional local surveys and studies.(d) strengthening cold chain and injection safety equipment and its maintenance including support for:(i) needed replacement and expansion of cold chain and injection safety equipment; (ii) cold chainmaintenance; (iii) equipment and materials for surveillance laboratories; and (iv) essential pharmaceuticals.

Related activities in the RCH program.

In addition, GOI has provided assurances that in the eight largest weaker performing states, additionalactivities would be implemented under the RCH program to respond to local needs, in order to improveaccess and thereby increase the percent of eligible children who receive timely routine imrnunization.Initially such activities would be in the eight weaker performing states that are the project focus states,namely Assam, Bihar, Gujarat, Orissa, Madhya Pradesh, Uttar Pradesh, and West Bengal. Focus wouldbe on: (a) ensuring that children who receive at least one immunization complete the full schedule beforetheir first birthday; and (b) reaching out to the un-reached. Micro-planning based on recent experiencefrom polio eradication, would be used to identify villages that have limited access to regular services. GOIhas provided assurances that, under the RCH program, additional community clinics together withappropriate community mobilization and information dissemination efforts would be implemented on aregular basis for villages and urban slums that do not have a fixed health facility. Such clinics wouldprovide routine immunization as a component in a package of RCH services. This project would monitorclosely, the implementation of such clinic sessions.

Based on findings of program evaluations (see document in project files), activities to address programweaknesses would include improvement of staff mobility, thereby reducing time spent on travel andincreasing time for client counseling and information. IEC through local media and local leaders wouldsupport and augment information from staff, and provide information about time and place ofimmunization sessions. Particular emphasis in IEC and counseling would be on timely completion of theschedule. Convergence with the ICDS outreach program will be strengthened in administrative blockswhere it is weak. In tribal areas, efforts would be made to mobilize communities and strengthen linkageswith health staff. Mapping and social mobilization strategies developed for the polio campaigns wouldidentify harder-to-reach communities and provide services through altemate mechanisms. Suchmechanisms would include periodic "catch-up" camps, partnerships with NGOs and private sectorproviders, and, for urban slums, mobilization and partnerships with public and private sector hospitals aswell as with the wide range of available public, corporate, and private sector medical providers.

In remote, inaccessible villages, alternate strategies could include periodic camps, or "catch-up rounds" forvillages with high dropout rates, or mini-campaigns in communities that have high proportions ofnever-immunized children. The urban slums activities would support the integration of RCH (includingimmunization) in existing hospitals and clinics in the public, private and NGO sectors that are accessible tourban slum communities, and support social mobilization in the urban slum communities to facilitateutilization of such services. Community mobilization would include support for activities such assensitization workshops for local leaders, traditional practitioners, school-teachers and school children andworkers from other public sector outreach programs, community volunteers, and improved informationusing locally-relevant IEC based on local socio-anthropological studies. To the extent feasible, theactivities would be designed to be responsive to local needs, and provide flexibility in implementation.

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Project Component 3 - US$ 4.40 millionStrategic Framework Development for Vaccine Preventable Diseases (VPDs).

This component would support the activities required to develop a strategic framework to deal withVaccine-Preventable Diseases (VPDs) during the next 7-10 years. The framework would articulate themedium-term goal, and enunciate guiding principles regarding key issues such as (a) future development ofVPD surveillance, ensuring that lessons leamed from polio are not lost after polio is eradicated; (b)flexibility for states to implement their own strategies based on individual needs and designed to facilitatetheir graduation on an evolving scale of immunization program effectiveness; (c) addition of vaccines to theprogram at state or national level; and (d) plans for technology transfer to support program developmentsuch as production of auto-destruct syringes or local production of some vaccines. In addition, thestrategic framework would provide the vehicle for further development of special strategies needed in UttarPradesh and Bihar, for providing continued operational flexibility in use of budgets after the end of theproject, and for enhancing the role of Panchayats and communities in increasing the accountability of theprogram. Support would be provided for demonstration projects and evaluations, preparation of reports,workshops, seminars, and consensus-building meetings, and for activities related to disease surveillance.

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Annex 3: Estimated Project Costs

INDIA: Immunization Strengthening Project

! ; ... ~~~~~~~Lcai F~. Fign - TotalEProiect Cost 'By Component - US $milrion lS $mWlkion US $mitlion

Polio Eradication 0.00Vaccine 9.90 89.00 98.90Social Mobilization 8.60 1.00 9.60

Strengthening Routine Immunization 7.70 31.90 39.60Strategic Framework Development for VPDs 1.20 3.30 4.50

Total Baseline Cost 27.40 125.20 152.60Physical Contingencies 0.90 2.00 2.90Price Contingencies -1.40 4.70 3.30

Total Project Costs 26.90 131.90 158.80

Total Financing Required 26.90 131.90 158.80

r- D - -o -Forgn TotalProject Cost -y se-ojy US US $mtion US $milion

Polio Vaccines 10.10 90.90 101.00Mobility Support 1.70 0.00 1.70Consultants 0.90 1.20 2.10Training 2.50 0.00 2.50Workshops 1.60 0.00 1.60IEC 0.60 1.00 1.60Honorarium for Volunteer Work 4.20 0.00 4.20Medical Equipment and Vaccine Vehicle 5.10 32.10 37.20Recurrent Costs 0.70 0.00 0.70Unallocated -0.50 6.70 6.20

Total Project Costs 26.90 131.90 158.80

Total Financing Required 26.90 131.90 158.80

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Annex 4

INDIA: Immunization Strengthening ProjectEconomic and Financial Analysis Summary

Economic Justification and the Role of the Public Sector. Public finance economnics provides aframework for analyzing the justification for public intervention. Typically, a role for the public sector isjustified if the goods and services in question exhibit characteristics of a public good or produce substantialsocial externality. Additional justifications for public interventions include distributional aspects andmarket failures resulting from limited insurance markets. Analysis of public sector justification not onlyinclude identification of market failures, but should also reflect on the most effective form of publicintervention (policy, financing, provision, regulation, or advocacy).

Most of the interventions financed in this project, with three exceptions, are not public goods. Informationcampaigns for pulse polio camnpaign days and the IEC elements of routine immunization are pure publicgoods. This market failure is a critical element of the relatively low demand for these life saving medicalinterventions. Benefits from the polio vaccine exhibit characteristics of a public good. When the vaccineis admninistered orally to many children in a community, the virus multiplies in their intestines and isreleased in much larger quantities in excreta. Such inactivated virus would compete in the openenvironment with the circulating wild virus which is responsible for polio.

An argument for public involvement are societal externalities resulting from immunizing children. Whileimmunization is a private good, the benefit to society is larger than the sum of private benefits. Anotherstrong argument is that the poor suffer disproportionately from vaccine-preventable illnesses (DavidsonGwatkin, 1999). Investing in eliminating Polio and strengthening routine immunization will, therefore,produce more equitable health outcomes (more on equity below).

While there is clear justification for public intervention, the exact role for the public sector dependsprimarily on market conditions and the effectiveness of different tools. The role of the state in developingthe policies governing immunization is central. Domestic and external partners (especially WHO andUNICEF) can provide technical inputs and global experience. Infinancing, a global partnership has beenled by the Government of India where grant funds from external development partners have been used topurchase vaccines and needed equipment to augment the GOI investments in labor and social mobilization.The funds in this project will augrnent those grant funds provided by the other external partners (see table 4below).

The GOI has also taken an important role in provision of both the Polio campaign as well as routineimnmunization. While more than 70 percent of total health spending for curative care in India is used topurchase private health services, the picture is different for the provision of immunization services. Arecent household survey (1998) shows the private sector to play a very small role in the provision ofimmunization, especially in rural India. State-level data show private sector delivery of immunizationservices ranging from a high of about 23 percent in AP, Kerala and Tamil Nadu to less than 5 percent inOrissa, MP and West Bengal. Moreover, most private sector delivery is focused in the urban sector.Market analysis provides some answers for the reluctance of private providers to provide immunizationservices. Providers identified the cost of buying and maintaining cold storage equipment and the lowreturns from limited demand as important factors in the decisions not to provide the service.

Cost-Effectiveness. The justification for the role of the public sector is a necessary but not sufficientcondition for public spending. It is also important to ensure that cost-effective interventions are available.

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Using the most recent Burden of Disease data (1998), an assessment of immunization services foundroutine immunization to be highly cost-effective. The cost per disability adjusted years was found to rangebetween 15 and 37 US dollars, and the cost per death averted between 514 and 1,233 US dollars. Theranges reflected the assessment of cost-effectiveness under different program condition. Two variables -Vaccine efficacy (75-90%) and program coverage (50-100%) - were used to build different scenarios forcosts per DALY gain and deaths averted (Tables I and 2).

Ta les I & 2: Cost per DALY Gained (US L) & per Death Averted Gained (US $)Program Vacc ine Effic v (DALYO Vac ine Effica (death averted)Coverage 0.75 0.8 0.85 0.9 0.75 0. 0.85 0.9

0.5 37 34 32 30 1.233 1.156 1.088 1.0270.6 30 29 27 25 1 A027 963 906 8560.7 26 24 23 22 881 825 777 730.8 23 21 20 19 770 722 680 6420.9 20 919 18 II7 685 642 60571 1 8 1Z7 16 15 616 578 544 514

Simulations were also used to identify the most effective ways of improving cost-effectiveness. Programcoverage had more impact on cost effectiveness than improving the vaccine efficacy from 75 to 90 percent.Findings substantiate arguments for fast cold chain which emphasizes on reaching all children by takingvaccines out of fixed cold chain and ensuring reasonable potency through use of Vaccine Vial Monitors.Finally, simulations for increasing coverage by distance from immunization sites found aggregate coveragegains to be much stronger for increasing coverage in the areas closest to the site.

Equity. Project design was influenced by analysis of the distributional impact of improved immunizationand the elimination of Polio. Data from three nationally representative household surveys were used toidentify some of the weaknesses in the system and provided inputs into policies to address them. Table 3summarizes findings from the 1992/93 Demographic and Health Survey. The relationship between wealthand immunization coverage holds when the data is stratified by rural and urban settings and by sex.

Table 3: Demographic and Health Survev 1992/93. Wealth and Imnmunization Cov razeFIImmiuni ation I Poorest 20% Next 20% Next 20% Next 20% Richest 20%

[ Measles 27.0 31.0 40.9 54.9 66.1DPT 3 33.7 41.1 51.8 64.6 76.7Al vaccinations 20.2 25.1 34.1 46.9 59.8No vaccinations 44.7 38.9 28.8 18.8 11.5

Econometric analysis using the rural component of the National Family Health Survey show a statisticallysignificant relationship between immunization and household income even when other socio-economicfactors are controlled. Moreover, immunization rates were related to female literacy, gender of the child,cast affiliation, and the number of same sex older siblings (Rohini Pande, 1999). Analysis of the 1996National Sample Survey show that the relation between household income continues to hold but with somesigns of improved equity. The story is similar when the 1998 Reproductive and Child Health householdsurvey (RCH) is analyzed. While the RCH survey does not have consumption or income variables, proxiesof wealth are used to analyze equity. The RCH survey, however, does more than identify coverage gaps byregion and socio-economic characteristics. The survey contains questions that shed some light on how thesystem can be improved in order to address these disparities.

Families with un-immunized children are asked for the main reason for not seeking these life-saving health

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interventions. While the answers varied across the different regions and states, two specific answers, withstrong policy implications, accounted for more than 62 percent. Thirty percent of the respondents were notaware of the need for immunization and 32.6 percent were not aware of the time and place theimmunizations were to be provided. The RCH survey also provided valuable information on the modes ofservice delivery most used by the poor and socially vulnerable. In the poorer states, the private sector playsa very small role in delivering immunization services. Within the public sector, government hospitals arethe primary source in urban areas and Auxiliary Nurse Midwives (through village sessions) are the primarysource for rural areas. The role of ANMs becomes especially critical for vulnerable groups when the datais stratified by socio-economic characteristics.

Analysis of equity through household surveys, augmented by social assessments and the diagnosis of thesupply-side factors in service delivery, point to ways for improving the equity performance inimmunization. The approach can be described as clusters of improved targeting. First, attention, financialand otherwise, will be paid to the performance of states, with weaker-performing states receiving moreinputs. Within states, district level data and performance will allow the public sector to further strengthenweak systems by ensuring that critical inputs (staffing, cold chain equipment, etc.) are available. Finally,learning from the successful efforts of Polio immunization campaigns, local level outreach and socialmobilization can be strengthened to address the demand for and knowledge about immunizations.

Financial Commitment and Fiscal Impact. The returns to eradication of polio in India can only be seenin the context of the global effort since eradication can only take place when the polio virus disappearsfrom all countries of the world. The financial commnitment for eradicating Polio has therefore been a globaleffort. Looking at the investments to date in India, we see a global consortium assisting India in achievingthis important objective. Table 4 summarizes the financial commitments from India's external partners.

Table 4: Financial commitments for External PartnersYear External Partner US $

1995-96 Rotary 500,0001996-97 (CDC, Danida, Jica, Unicef, Dfid) TOTAL 96/97 34,950,0001997-98 (Rotary, Danida, Jica, Unicef, Dfid) TOTAL 97/98 37,870,0001998-99 UNICEF 2,500,000

DANIDA 5,800,000JICA 2,800,000DflD 20,740,000KfW 14,000,000TOTAL 98/99 51,870,000

Domestic inputs into Polio campaigns are estimated at US$30 million for expenditures relating to boothmanagement, transportation, anganwadi workers, school teachers and other NGO activities. An additionalUS$26.5 million is estimated for indirect GOI inputs including staff and management. Given the limitedtime nature of the Polio immunization campaigns and the global financial comrnmitment to it, this project willnot create any fiscal imbalance due to recurrent cost implications.

With respect to the Immunization Strengthening component, minimal fiscal impact is anticipated due to therelative size of the investment and the recurrent cost implications. Table 5 provides a breakdown of GOIexpenditures on EPI (other than Polio Campaigns) for the last two fiscal years. Since EPI shares a numberof expenditure heads, such as salaries and maintenance, with other programs at the Ministry, the relativeshares spent on immnunization were estimated. Estimated project recurrent costs for the three year lifetime

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total Rs. 428 million. Of that, IDA's share of the recurrent costs will total Rs. 336 million. This representsless than one half of one percent of the estimated recurrent cost associated with Immunization for fiscalyear 1999/2000.

Table 5: Recurrent EP] Expenditures by GOI (in million of Rupees)Expenditure Head 1998/99 1999/2000

Vaccines 752 978Salaries 603 634Maintenance (including Cold Chain) 307 308SuDDlies and Consumables 60 65Transportation Costs 30 60IEC 22 25Total 1774 2070

Given the variable performance by states, analysis of the state versus Union financial responsibility wasconducted to attempt to isolate performance factors. Most of the financial burden for immunizations inIndia is federal with the states providing a few, though critical, inputs. The design of the immunizationstrengthening component took into account state-center responsibility index and will target resources toaddressing the weak links in the system.

Sustainability. Polio Eradication is the largest component of the project. Within the Polio component, thebulk of the resources are earmarked for the procurement of vaccines and the remaining are for socialmobilization and for the campaigns. Given the nature of the Polio Elimination approach, financialsustainability is not an issue since the campaigns will end with elimination. In fact, the total earmark forpolio may not be all used. Project design took into account that the need for more campaigns in years 2 and3 of the project will depend of the findings of the surveillance system. If, as expected, pockets of remainingwild polio virus are localized, campaigns will be scaled back producing budgetary savings that can beapplied to strengthening routine inununizations. There is always a risk that complete elimination will nottake place requiring additional funds in the future. The strong surveillance system, however, and thetargeted mob-up strategy should minimize that risk.

The Immunization Strengthening component includes funds for training, monitoring and maintenancedesigned to address weak elements of routine immunization. The strategy design component of the projectwill attempt to address the sustainability issue by considering the development of equalization funds orother budgetary mechanisms to better target resource allocation.

Absorptive Capacity. Absorptive capacity considerations for the Polio component were not found to besubstantial. The recent experience of Polio campaigns shows no serious signs of system fatigue andprovides proof of the ability of the system to manage the activities. A number of other developmentpartners are also supporting Polio eradication and have committed funds and are providing technicalassistance. They include CDC, DflD, EC, JICA, KFW, UNF, UNICEF, USAID, and WHO. The fundsallocated to the immunization strengthening component are small relative to the total cost of the system andare targeted at historically under-funded inputs.

Financial Risks. In any eradication effort, the long-term economic retums are measured primarily throughsaving from future expenditures on prevention and curative care. If, however, the elimination effort is notsuccessful then in addition to the need for even more resources to complete the effort, expected savingoverstate the return. In the case of Polio, this risk is minimized through a strengthened surveillance systemleading to targeted mob-up activities.

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Annex 5: Financial SummaryINDIA: Immunization Strengthening Project

Years Ending

Year1 Year2 | Year3 Year4 Year5 | Year6 | Year7Total Financing RequiredProject CostsInvestment Costs 51.5 52.5 54.2 0.0 0.0 0.0 0.0Recurrent Costs 0.2 0.2 0.2 0.0 0.0 0.0 0.0

Total Project Costs 51.7 52.7 54.4 0.0 0.0 0.0 0.0

Total Financing 51.7 52.7 54.4 0.0 0.0 0.0 0.0

FinancingIBRDIIDA 46.9 47.2 48.5 0.0 0.0 0.0 0.0Govemment 4.8 5.5 5.9 0.0 0.0 0.0 0.0

Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0User Fees/Beneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Project Financing 51.7 52.7 54.4 0.0 0.0 0.0 0.0

i . I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~IMain assumptions:

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Annex 6: Procurement and Disbursement ArrangementsINDIA: Immunization Strengthening Project

Procurement

The procurement arrangements to be undertaken in the project will be the responsibility of theimplementing agency, Department of Family Welfare, Ministry of Health and Family Welfare(MOHFW), Government of India and the States in accordance with the Bank Procurement Guidelinesand procedures. Procurement under the project will be through three mechanisms: (a) procurement oforal polio vaccines (estimated to cost about US$101.40 million) would be by UNICEF; (b)procurement of the more expensive non-vaccine items and services as well as a limited list of items thatneed to be supplied to a large number of scattered health facilities across the country (estimated costabout US$40.50 million) would be by M/s. Hospital Services Consultancy Corporation (India) Ltd.(HSCC) who would be used as a procurement agent by Ministry of Health & Family Welfare; and (c)State/Districts would procure all other items including hiring of local folk media groups and NGOs,hiring of services, and hiring of vehicles etc. MOHFW, Government of India, New Delhi haveproposed not to utilize the project funds for the payment of consultancy fee to M/S HSCC. ShouldMOBIFW at a later date determine that MIS HSCC is not perforning well and they wish instead to hireanother agent (with the Bank's consent), there would be no funds earmarked in the project for suchconsultancy.

1. Civil Works: There are no civil works under this project.

2. Goods:

(a) Cold Chain and injection safety equipment: Procurement of equipment will be phased with thebulk of equipment procurement to be done in Years 1 and 2. Large and expensive equipment would bebulked together and purchased through Intemational Competitive Bidding (ICB) procedures. Thiswould include items such as walk in freezers and coolers, ice-lined refrigerators, cold boxes, vaccinecarriers, voltage stabilizers, thernometers, etc. About 70% of the required injection safety equipmentsuch as stoves, cookers, autoclaves, drums, needles and syringes would be procured through HSCC.Details of the scope and quantity of cold chain and injection safety equipment are provided in the PIP;

(b) Other equipment: Other items which include a limited number of computers, fax machines andother office equipment required to upgrade financial management and monitoring facilities would beprocured following International Competitive.Bidding (ICB), National Competitive Bidding (NCB) orNational Shopping Procedures (NSB), as the case may be by mechanism (b) and (c) described above;

(c) Vehicles: The only vehicles to be procured under this project would be vaccine transport vans(about 200 vehicles). Procurement would be done by HSCC through ICB;

(d) MIS/IEC materials & Supplies: Materials would include inmmunization cards, registers, and IECmaterials. Items such as nationwide or regional IEC materials would be procured by HSCC, whilelocally specific items such as local EEC materials would be procured at district level. Trainingmaterials might be procured directly from printers/publishers for contracts estimated to costUS$10,000 or less. Printing in different languages can be treated as separate contracts, possiblyrequiring direct contracting in order to maintain quality;

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(e) Polio Eradication Activities: Polio Eradication Activities include procurement of vaccines, trainingof volunteers and community leaders who would mobilize communities or man the polio booths,mobility support (vehicle hire etc.), honorarium for volunteers who make house-to-house visits, IECmaterials/services and consultant services. Procurement of Polio Oral Vaccines is a major activityunder the project. Total procurement cost of polio vaccine alone will be US$101.40 millionapproximately. With the ultimate goal of global polio eradication within reach, the six firms worldwidewho presently hold WHO certification to produce the polio vaccine will shortly have no markets fortheir product. At the same time, during these final years of the eradication program, there is a hugedemand for the vaccines to fuel the program needs and a corresponding need for centralized controlover the continued supply and efficient distribution of the vaccines. Accordingly, UNICEF, inconjunction with WHO, has already secured agreements with each of the manufacturers involved topurchase virtually their entire production capacity over the next two years for distribution to thecountries targeted in the eradication program. Consequently, there is, in effect, no source of finishedvaccine of assured quality for the participating countries other than through the UNICEF suppliers.Therefore, in consideration of the unique circumstances presented in this situation, procurement of theneeded polio vaccines would be by direct contracting with UNICEF who would, in turn, provide thevaccines through their existing supply agreements with the vaccine producers. Given the present worldmarket situation for polio vaccines, there really is no altemative to the arrangement being proposed forprocurement of polio vaccines, i.e., through UNICEF; and

(f Pharmaceuticals: Pharmaceuticals would include medical drugs from a standard drug list to besupplied to a large number of sub-centers, primary health centers and small rural hospitals. Otheritems would be considered for inclusion during Years 2 and 3, provided Polio Eradication activitiesdemonstrate good progress. Procurement of such items would be through ICB/NCB/ NationalShopping by HSCC and National Shopping by States/Districts, as the case may be.

3. Services:

(a) Professional services, training, workshops and studies include expenses related to: (i) training ofhealth staff; (ii) workshops for orientation and sensitization of workers from other public and privatesector organizations, elected Panchayat Raj members and local leaders and inter-sectoral coordination;(iii) surveys, studies and evaluations; (iv) consultant services for the development, installment andtraining in computerized management systems for financial management, program monitoring, vaccinelogistics and cold chain management; (v) contracts to NGOs and the private sector for providingservices to transport vaccines and supplies, or local JEC (such as street theaters, wall paintings, puppetshows) and counseling and irmmunization services; and (vi) individual consultants appointed atMOHFW and state level to strengthen programn management. Tenrs of reference irrespective of valuewould be subject to prior review. Mostly contracts for individuals and NGOs are expected to be under$50,000 each, selected on the basis of agreed terms of reference and procedures for selection would notbe subject to prior review except as provided in paragraph 3 - Services under Table B;

(b) Mass Media/IEC activities include contracts for the development, production, and implementationand evaluation of mass media activities on a state-wide, multi-state or nationwide basis. For thesuccessful implementation of project objectives it is of utmost importance to bring awareness amongthe public at large particularly regarding the day and place of imrnunization. Such publicity servicesfor the project shall be procured by the Borrower or project states under direct contracts with theBorrower's Ministry of Informnation and Broadcasting, or with the relevant department or agency of theState Government, or from local commercial supplier of such services, in accordance with proceduressatisfactory to the Association. For this purpose, standard Termns of Reference may be developed in

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consultation with the Association;

(c) Social Mobilization includes small scale activities carried out over a large number ofadministrative blocks including activities such as rallies, managing polio booths, house-to-house visitsby community volunteers, community information dissemination.

4. Miscellaneous:

This involves operational expenses for all the components and would include salaries of additional staffincluding contractual staff, honorarium for community volunteers, maintenance of equipment andmobility support (vehicle hire, petrol, travel allowance for service delivery and maintenance ofvehicles). Maintenance of equipment and vehicles and hire of vehicles would be procured on the basisof direct contracting or three quotations, depending upon the situation.

Procurement Methods (Table A)

IDA financed works and goods will be procured in accordance with Bank Guidelines - Procurementunder IBRD Loans and IDA Credits (January 1995, Revised January and August 1996, September1997 and January 1999). IDA financed services will be procured using Bank Guidelines - Selectionand Employment of Consultants by World Bank Borrowers, (January 1997, Revised September 1997and January 1999). For procurement under the project, the Bank's standard bidding documents shallbe used. Attachment I to Annex 6 summarizes procedures for undertaking procurement on thebasis of National Competitive Bidding (NCB). Specific Procurement arrangements summarized intable 'A' are as follows:* Contracts for the purchase of goods /equipment valued at more than US$300,000 equivalent each

would be procured through Intemational Competitive Bidding (ICB).* Contracts valued more than US$30,000 but less than US$300,000 may be awarded on the basis of

NCB procedures acceptable to IDA. Items or groups of items valued US$30,000 equivalent orless per contract may be procured on the basis of national shopping procedures. Other items orsmall groups of items such as supply of furniture, equipment, medicines, materials and othersupplies valued at less than US$10,000 equivalent per contract may be procured through directcontracting or national shopping procedures.

i Contracts estimated to cost the equivalent of US$10,000 or less per contract for maintenance ofequipment/vehicles and hiring of vehicles may be awarded through:

- Direct Contracting; or- National Shopping.

Prior Review Thresholds (See Table B)* All contracts for goods/equipment except vehicles with an estimated value of more than

US$300,000 equivalent.* All contracts of procurement for vehicles with an estimated value of more than US$100,000.* The first NCB contract for goods/pharmaceuticals regardless of the value.* Consultants' contracts with an estimated value of US$100,000 or more for firms and US$50,000

or more for individuals.

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Procurement methods (Table A)

Table A: Project Costs by Procurement Arrangements

US $ (IN MILION)

Civil Works . .2. GoodsCold Chain Equipment 11.52 3.48 15.0

(10.31) (2.59) (12.90)Injection Safety and Other Equipment 24.23 0.97 25.2

(20.13) (0.87) (21.00)MIS/IEC Materials & Supplies - 1.40 1.40

(1.40) (1.40)Vehicles 2.10 - 2.10

(1.80) (1.80)Polio Eradication Activities 107.5 107.5

(98.51) (98.51)Other Vaccines and Pharmaceuticals 0.80 0.80

(0.65) (0.65)3. ServicesConsultants and NGO Contracts 2.90 2.90

(2.90) (2.90)

Training, Workshops and Studies 2.90 2.90

(2.74) (2.74)4. MiscellaneousOperational Expenditures 0.50 (0.50)

(0.40) (0.40)Mobility support -. 0.50 0.50

(0.30) (0.30)

Total 38.65 4.45 115.70 158.80(32.89) (3.46) (106.25) (142.60)

Notes: Figures in Parenthesis are the respective amounts financed by IDAIBRD

"Other' method of procurement includes Direct Contracting, Comparison of Price Quotations (Shopping) and Consulting Services.

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Table Al: Consultant Selection Arrangements(in US$ million equivalent)

Consultant Total CostServices Selection Method (including

Expenditure contingencies)Category

QCBS QBS SFB LCS CQ Other N.B.F.A. Firms 0.60 4.40 5.00

(0.60) (4.24) (4.84)B. Individuals 0.80 0.80

_______________ ________ ________ _________ ________ _______ - (0.80) (0.80)Total 0.60 5.20 5.80

_ (0.60) (5.04) _ _ _ (5.64)

Note: QCBS = Quality and Cost-Based SelectionQBS = Quality-based SelectionSFB = Selection under a Fixed BudgetLCS - Least Cost SelectionCQ = Selection Based on Consultant's QualificationsOther = Selection of Individual Consultants (per Section V of Consultant's Guidelines), Commercial Practices, etc.NBF = Not Bank Financed

Figures in parenthesis are the amounts to be financed by the Bank Credit.

Prior review thresholds (Table B)

Expenditure Contract Value (Threshold) Procurement method Contracts Subject to PriorlPost ReviewCategory

Goods

(a) Cold Chain US$ 30,000 or less per contract, up to an National Shopping Procedures (includes Post review onlyEquipment, Injection aggregate amount not exceeding DGS& D Rate Contracts)Safety Equipment, US$1,250,000 equivalent. First goods & pharmaceuticals NCB contractMIS/IEC materials & estimated to cost more than US$ 30,000 but belowSupplies, other More than US$ 30,000 but less than USS National Competitive Bidding (NCB) US$300,000 equivalent [by HSCC] and eachVaccines and 300,000 per contract, up to an aggregate contract of goods estimated to cost more thanPharmaceuticals. amount not exceeding US$4,450,000 US$300,000 equivalent each by prior review in

equivalent. accordance with paragraphs 2 and 3 of Appendix Ito the Guidelines

Above US$300,000 equivalent per International Competitive Bidding Prior review.contract. (ICB)

Less than US$)10,000 per contract up to an Direct Contracting or National Post review only.aggregate amount not exceeding Shopping.US$150,000

(b) Vehicles. Above US$ 100,000 equivalent per International Competitive Bidding All ICB contracts by prior review in accordancecontract. (ICB). with paragraphs 2 and 3 of Appendix I to the

Guidelines,(c) Polio Eradication Oral Polio Vaccines estimated to cost Direct Contracting. Polio Vaccines direct contract to UNICEF by priorActivities. US$101,400,000 Equivalent review in accordance with paragraphs 2 & 3 of

approximately. Appendix I to the guidelines.

US$30,000 or less per contract, up to an Direct contracting or National Shopping Post review only.aggregate amount not exceeding Procedures.US$6,100,000 equivalent.

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Expenditure Contract Value (Threshold) Procurement method Contracts Subject to Prior/Post ReviewCategory

Services

(a) Consultants, Above US$200,000 equivalent per Quality and Cost Based Selection Prior review of all consultant contract shall beTraining, Workshops, contract. (QCBS) govemed by the provisions of paragraphs (i), (ii)Studies and and (iii) belowNGO contracts

(b) Consultants, US$200,000 or less per contract, up to an QCBS with Short List (could comprise (i) With respect to each contract for theTraining, Workshops, aggregate amount not exceeding entirely of national Consultants only employment of consulting firms estimated to costStudies and US$ 1,100,000 equivalent the equivalent of US$200,000 or more, proceduresNGO contracts set forth in paragraphs 1,2 [other than the third

sub-paragraph of paragraph 2 (a)] and 5 or(c) Consultants, US$100,000 equivalent or less per contract (i) QCBS with Short List (could Appendix I to the Consultant Guidelines shallTraining, Workshops, up to an aggregate amount not exceeding comprise entirely of national consultants applyStudies and US$7,000,000 equivalent only).NGO contracts.

(ii) Selection in accordance with para (ii) With respect to each contract for consulting3.14 of the Consultant Guidelines; firms estimated to cost the equivalent of

US$ 100,000 or more, but less than the equivalentof US$200,000 the procedure set forth inparagraph 1,2 [other than the secondsub-paragraph of the paragraph 2(a)] and 5 ofAppendix I to the Consultants Guidelines shallapply.

(iii) Single Source - Selection as per (iii) With respect to each contract for thepara 3.8 to 3.11 of the Consultant employment of individual consultants estimated toGuidelines: acceptable for tasks cost the equivalent of US$50,000 or more, therepresenting a natural continuation of qualifications, experience, terms of reference andassignment, when rapid selection terms of employment of the consultants shall beessential, for very small assignments furnished to the Association for its prior review and

approval. The contracts shall be awarded onlyafter the said approval shall have been given.

All other cases: Post Review(iv) Selection of Individual Consultantsin accordance with para 5.1 to 5.3 ofConsultant Guidelines

v) Selection in accordance with para Job description, minimum qualifications, terms of3.19 of Consultant Guidelines, employment and selection procedures shall be

agreed with IDA.

3. Miscellaneous

Incremental Incremental operating costs and mobilityOperational Costs and support (vehicle hire, maintenance ofmobility support equipment and vehicles) estimated to cost

the equivalent of US$ 10,000 or less percontract, up to an aggregate not exceedingUS$500,000 may be executed by

(i) direct contracting up to an aggregate notexceeding US$300,000 or Direct contracting Post review only

(ii) on the basis of comparison of pricequotations obtained from at least threequalified supplies eligible under the Solicitation of three bids Post review onlyguidelines

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Disbursement

Allocation of credit proceeds (Table C)

1. Polio eradication activities 94.80 90%

Includes:Polio vaccineSocial mobilization (training,honorarium, IEC materials andservices, mobilitv support)2. Goods 32.46 90%

Includes:Other vaccines andpharmaceuticals & equipmentIEC, MIS & training materialsVehicles3. Training and services 5.64 100%

Includes:Training and workshopsConsultant and NGO servicesStudies and evaluations4. Incremental, operating and 0.70 80% of expendituresmaintenance through August 31, 2001

70% of expenditures fromIncludes: September 1, 2001 toSalaries August 31, 2002, and 50%Mobility support other than of expenditures thereafterpolio eradicationEquipment maintenance5. Unallocated 9.00Total 142.60

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Disbursement

The proposed allocation of loan proceeds is given in Table C.

A Special Account would be maintained in the Reserve Bank of India; and would be operated by theDepartment of Economic Affairs (DEA) of Government of India (GOI). The authorized allocation of theSpecial Account would be US$4 million that represent about 6 months of initial estimated disbursementsfrom the IDA Credit. The Special Account would be operated in accordance with the Bank's operationalpolicies.

The disbursement will initially be made in the traditional system (reimbursement with full documentationand against statement of expenditure) and will be converted to a Project Management Report (PMR) baseddisbursement after the financial management system has been demonstrated to be operating satisfactorily.

In the interim period, however, the Ministry of Health and Family Welfare (MOHFW) will be required tosubmit a report on sources and uses of funds by disbursement category, procurement reports on contractsover US$100,000 (Reports lA, 3A and 3B of the LACI handbook). Besides these, four basic financialmonitoring reports will be submitted to IDA on a quarterly basis. The form and contents of these reportshave been agreed between IDA and MOHFW.

Financial Management

Current Financial Management System

The project is an initiative in the ongoing family welfare lending program to the Government of India. Theimplementing agency for the Project is the Ministry of Health and Family Welfare (MOHFW), which iscurrently executing three other projects in the family welfare portfolio, viz., India Population Project VIII(IPP VIII), India Population Project IX (IPP IX) and Reproductive and Child Health Project (RCH). theMOHFW will be supported in the execution of the project by the participating state societies (SCOVAs).The MOHFW which runs the family welfare program in India has the following strengths: (i) a budgetingand accounting system has been established and is operational; and (ii) the executing agencies in the states,viz., SCOVAs are in existence and are engaged in the execution of the Bank assisted RCH project.

However, MOHFW follows the government accounting system, the mnain focus of which is onbook-keeping and transactional control over expenditures. There is no concept of financial managementinformation being used for decision making and hence there is very limited focus on meeting projectmanagement information needs. Project financial statements indicating sources and uses of funds(including information on project expenditure by components, types of expenditure, etc.) are not prepared.The financial system is largely operated manually.

Specific areas to be strengthened

The following aspects need to be addressed to ensure that a satisfactory financial management systemcommensurate with the size and scope of the project is established:

(a) satisfactory staffing and training: The Finance functions should be staffed by suitably qualifiedaccounts professionals both at MOHFW and SCOVAs. The finance departmnent at MOHFW should beheaded by a full time qualified accounts professional who can actively aid in setting up the financialmanagement system in the project. The SCOVAs also need to be suitably strengthened with accounting

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professionals. The entire financial staff need to be trained in the operation of the computerized FMS.Project managers and financial staff need to be sensitized on the importance of financial management foreffective project management;

(b) the need to analyze financial information and use it as a decision making tool. Financial reports whichprovide timely and quality information on the financial performnance of the project should be prepared. Theaccounting system should ensure classification and compilation/analysis of accounting data in such amanner as to provide useful and timely information for project monitoring;

(c) transparency of project operations and establishment of clear financial policies and procedures: allstakeholders need to be provided with clear, simple, user-friendly and consistent financial infornationabout the project's performance and financial status;

(d) ensuring satisfactory audit arrangements: including timely submission of audit report and certificationof project financial statements adopting acceptable auditing standards. This has been a major problem andhas resulted in SOE suspensions in other projects implemented by MOHFW. In fact, four states in theRCH project are currently under SOE suspension for non submission of audit certificates for the year1997-98 and only 20 out of 35 audit reports due have been received for the year 1998-99;

(e) ensuring linking of physical progress with the financial progress;

(f) the need to have a simple and effective monitoring mechanism to ensure effective monitoring of a largenumber of widely dispersed entities. Currently, the financial monitoring at MOHFW is very weak;

(g) use of computers in the area of financial management. Currently a largely manual system operateswhich is antiquated and tedious; and

(h) the need for developing a regular financial reporting from districts to SCOVAs and from SCOVAs toMOHFW. Currently, the financial reporting from SCOVAs to MOHFW is irregular and erratic.

The Ministry of Health and Family welfare (MOHFW) will develop and imnplement a comprehensivecomputerized financial management system which will address these issues.

Proposed Financial Management System

The proposed project financial management system will be documented in a Financial ManagementManual. The Financial Management Manual would also serve as a reference document for all projectstaff. The Financial Management Manual would be periodically updated based on implementationexperience. The Manual includes the following aspects of financial management:* budgeting and flow of funds.* accounting system (including chart of accounts, formats of books, accounting and financial

procedures).* financial reporting (including formats of reports, and linkages with Chart of Accounts).* staffing and training aspects including job responsibilities.* auditing arrangements including Terms of Reference.* procurement and contract administration monitoring system.* financial and accounting policies.

The computerized financial management system will initially be adopted only for the project. The next step

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will be to extend it to the entire RCH program of MOHFW.

Budgeting and Flow of Funds

The funding to MOHFW would be through the Ministry of Health and Family Welfare.

Flow of funds from MOHFW to SCOVAs will be on a quarterly basis through banking channels. Theinitial allocation will be based on the cash flow forecasts of SCOVAs' (which in turn would be based ontheir work programs and budgets). Subsequent funding will be based on performance of key indicators andthe projected funds requirement of the SCOVAs.

The flow of funds from SCOVAs to districts and from districts to Community Health Centres(CHCs)/Primary Health Centres (PHCs) will also be through banking channels.

Flow of funds to UNICEF for purchase of vaccines

The purchase of vaccines which constitutes a major part of the project is to be handled through UNICEF.On a request from GOI, the Bank would make a direct payment to UNICEF for a part of the total cost. Onsupply of vaccines, MOHFW will submit a statement reconciling the payment made for vaccine with thequantities supplied by UNICEF. There are certain unresolved issues like the quantum of handling charges,the amount of money that is paid in advance, audit of the UNICEF contract etc., which are currently beinglooked into by a joint UNICEF - World Bank team. It is important that these issues are resolved before thesupply of vaccines begins under this project.

Accounting and Internal Controls

The overall framework of the system is given below:

• The financial management system would cover all project-related transactions, i.e., all sources of fundswould be accounted for and reflected in the project financial statements; and similarly all projectexpenditures would be reflected in the project financial statements.

* A Chart of Accounts will be developed. The Chart of Accounts will enable the expenditure data to becaptured and classified by project components and expenditure categories. The Chart of Accounts willhave linkages to: (i) government budget heads/categories; and (ii) disbursement categories. Similarly,the Chart of Accounts enables data on sources of funds to be captured.

* The fmnancial management system is being computerized. The computerized system will be installedand operated at the MOHFW, the SCOVAs and all the participating districts. Accounts of theMOHFW, SCOVAs and all the districts will be consolidated for project fmancial reports. However theoperations at the PHC/CHC level will continue to be on a manual basis and their data will be capturedin the computerized system at the district level.

* Standard books/records of accounts (cash and bank-books, journals, ledgers, trial balance, etc.) wouldbe maintained at the MOHFW, SCOVAs and the districts using a manual system until an integratedcomputerized accounting system becomes operational.

Transaction Information Flow and Accounting

All the accounting entities, viz., MOHFW, SCOVAs, Districts and CHCs/PHCs will generate and maintainthe transaction vouchers for various receipts and expenditures made at the level where the expenditure isincurred. However, a monitoring system will be established at the MOHFW level to monitor the usage of

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funds by SCOVAs and at the SCOVAs to monitor the usage of funds at districts.

Consolidation of project accounts would be done first at the SCOVA level by consolidation of data of allthe districts and the SCOVA and then at MOHFW level by consolidation of accounts of MOHFW and theSCOVAs. The computerized financial management system will facilitate the consolidation. Data transferwould be handled through: (i) an integrated computer network; or (ii) a periodic data transfer throughElectronic Mail or floppy diskettes.

Internal Controls

Intemal control mechanisms would include the following:* establishment of appropriate budgeting systems, and regular monitoring of actual financial

performance with budgets and targets and monitoring of physical and financial progress. Physical dataon key items would be captured in the accounting system to enable monitoring of physical data.

* development and adoption of simple, clear and transparent financial and accounting policies whichwould govem financial management of and accounting for the project.

* at the transaction level, the establishment of procedures and systems for ensuring standard intemalcontrols such as checking of expenditures, appropriate documentation, levels of authorization,bifurcation of duties, periodic reconciliation, physical verification, etc.

* establishmnent and operation of a comprehensive audit mechanism.

Financial Reporting

Quarterly Financial Management Reports would include:* comparison of budgeted and actual expenditure and analysis of major variances, including on aspects

such as sources of funds (indicating separately funds from beneficiaries) and application of funds(classified by components, sub-components, summarized expenditure categories, etc.).

* comparison of budgeted and actual expenditure and analysis of major variances on key physicalparameters and unit rates for selected key items.

* forecasts for the next 2 quarters.* information on procurement management for major contracts.

Project Financial Statements and Financial Management Reports would be generated from thecomputerized financial management system. MOHFW would generate quarterly financial managementreports from the integrated computerized financial management system for the whole project. TheSCOVAs will also have the capability of generating these reports for their own monitoring needs. Thesereports and the Withdrawal Application (which would be based on the financial forecasts and actualexpenditures classified by disbursement category) would also be used by the Bank for quarterlydisbursements in accordance with the disbursement procedures under LACI.

Staffing

The finance and accounting department at MOHFW would be headed by a Financial Controller, who willbe an accounting professional with about 8/10 years experience in a similar position. His team will includetwo Accounts officers and a Systems Analyst. They will be supported by an adequate sized team ofaccountants.

The Finance and Accounting Department at SCOVAs will be headed by a Finance Officer who will be anaccounting professional with 5/6 years experience in a similar position. He will also be assisted by a team

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of accountants which will depend on the size of operations in the state.

At the districts, one accountant will be identified for working exclusively on the project. The districts willalso be supported by data processing firms at the district level for trouble shooting and timely generation ofPMRs.

At the CHC/PHC level, the simple accounting tasks required will be undertaken by the existingaccountants/accounts clerks who are currently performing these duties.

To promote efficiency and maintain a lean organization, all routine activities relating to generation of booksof accounts, compilation, preparation of financial reports, etc., would be handled through the computerizedfinancial management system to the maximum extent possible.

An intensive training program will be developed to ensure that the staff at all levels are adequately trainedin the computerized financial management system.

Auditing Arrangements

MOHFW Accounts will be audited by the Controller and Auditor General of India (C & AG). TheSCOVAs will be audited by Chartered Accountant firms. A consolidated annual project financialstatement will be submitted by MOHFW within 6 months of the close of GOI's fiscal year (as requiredunder the Bank's Operational Policies) supported by audit reports of MOHFW and SCOVAs.

The Terms of Reference for the firms of Chartered Accountants would include audit of the districts, CHCsand PHCs. The target date for finalization of the TOR and the target date for appointment of auditors willbe agreed during negotiations. The auditors would carry out such tests and controls as deemed necessaryby them. This may include visits to the districts, PHCs and CHCs to verify the bank accounts, carry outphysical inspection, etc. In accordance with the World Bank's Operational Policies, the Terms ofReference and qualifications of the firm of Chartered Accountants should be reviewed by the World Bank.The firms of Chartered Accountants would be appointed before the start of the project.

Under the RCH project there have been lapses in timely submission of audit reports to the Bank which hascaused suspension of SOE disbursements for MOHFW and some states. The creation of SCOVAs in thestates as implementing agencies should alleviate the problem to an extent as the SCOVA accounts will beaudited by Chartered Accountancy firms which should facilitate timely submission of audit reports fromSCOVAs. However, timely submission audit reports from MOHFW to IDA remains an issue which willneed to be addressed.

The audit report on special account maintained by DEA would include a summnary of SA transactions andthe closing balance held by RBI. The audit report on SA would also be submitted to the Bank not laterthan six months after the close of each fiscal year.

The following audit reports will be monitored under ARCS:Agency Form of AuditMOHFW Project/SOE auditDEA Special Account

The audit reports of all the SCOVAs will also be monitored.

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Time Table for implementation of Project Financial Management System and next steps

The proposed computerized Project Financial Management System (PFMS) will be developed with the helpof consultants to be specifically appointed for the purpose of designing, developing and instituting thecomputerized PFMS in the project. The form and contents of PMRs that will need to be generated by thecomputerized PFMS have been agreed between MOHFW and IDA.

The following key activities will need to be completed to successfully implement the computerized financialmanagement system in the project

Activity Target Date* Appointment of a Financial Management Consultant at MOHFW April 30, 2000* Procurement of computers October 31, 2000* Development of the software and testing November 30, 2000* Appointment of Director of Finance at MOHFW December 31, 2000* Training of the personnel on the software February 28, 2001* Implementation of the computerized financial management system April 1, 2001

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Attachment I

With reference to the procedures for undertaking procurement on the basis of National Competitive Bidding(NCB) referred to in Part C of Section I, Schedule 3 of the Development Credit Agreement, all NCBcontracts shall be awarded in accordance with the provisions of paragraphs 3.3 and 3.4 of the Guidelinesfor Procurement under IBRD Loans and IDA Credits published by the Bank in January 1995 and revised inJanuary and August 1996, September 1997 and January 1999 (the Guidelines). In this regard, all NCBcontracts to be financed from the proceeds of the Credit shall follow the following procedures:

[1] Only the model bidding documents for NCB agreed with the Government of India TaskForce [and as amended from time to time], shall be used for bidding.

[2] Invitations to bid shall be advertised in at least one widely circulated national dailynewspaper, at least 30 days prior to the deadline for the submission of bids.

[3] No special preference will be accorded to any bidder when competing with foreign bidders,state-owned enterprises, small-scale enterprises or enterprises from any given State.

[4] Except with the prior concurrence of the Bank/Association, there shall be no negotiation ofprice with the bidders, even with the lowest evaluated bidder.

[5] Except in cases of force majeure and/or situations beyond control of Ministry of Health &Family Welfare, Government of India and Hospital Services Consultancy Corporation(India) Ltd., extension of bid validity shall not be allowed without the prior concurrence ofthe Bank/Association [ i ] for the first request for extension if it is longer than eight weeks;and [ ii ] for all subsequent requests for extension irrespective of the period.

[6] Re-bidding shall not be carried out without the prior concurrence of the Bank/Association.The system of rejecting bids outside a pre-determined margin or "bracket" of prices shallnot be used.

[7] Rate contracts entered into by DGS&D will not be acceptable as a substitute for NCB procedures.Such contracts will be acceptable for any procurement under National Shopping procedures.

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Annex 7: Project Processing ScheduleINDIA: Immunization Strengthening Project

Time taken to prepare the project (months) 15 11First Bank mission (identification) 08/05/99 08/21/99Appraisal mission departure 12/01/99 01/10/2000Negotiations 03/01/2000 03/13/2000Planned Date of Effectiveness 07/31/2000

Prepared by:

Government of India, Ministry of Health and Family Welfare, Governments of Assam, Bihar, Gujarat, MadhyaPradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal.

Preparation assistance:

WHO: N. Ward (Consultant), J. Andrus (Regional Advisor), R. Tangermann (Medical Officer), J. Milstien(Medical Officer), B. Aylward (Medical Officer), Bjorn Melgaard (Director HTP) and J. Fitzsimmons(Administrative Officer).UNICEF: A.L. Bhuyan (Project Officer); State hmmunization Officers in Assamn, Bihar, Gujarat, Madhya Pradesh,Rajasthan, West Bengal and Uttar Pradesh; Evaluation surveys of routine immunization and studies of nonacceptors of polio immunization with support from Christian Children's Fund.DFID Social assessment, including studies by INCLEN supported by USAID.Bank consultants: J. Satia, P. Subramaniam.

Bank staff who worked on the project included:

Name SpecialityTawhid Nawaz Team LeaderIndra Pathmanathan Task LeaderAnthony Measham AdvisorAbdo S.Yazbeck EconomistG.N.V. Ramana Public Health SpecialistSadia Chowdhury Senior Public Health SpecialistMam Chand Senior Procurement SpecialistRashmi Sharma Social Development SpecialistSara Gonzalez Flavell Senior CounselRajat Narula Financial Management SpecialistAmie Batson Health SpecialistAlan Hinman Senior Consultant on ImununizationLaura Kiang Operations AnalystJose P. Correia Da Silva Senior CounselElfreda Vincent Program AssistantAgnelo Gomes Team AssistantChristopher Niesterowicz Information Assistant

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Annex 8: Documents in the Project File*INDIA: Immunization Strengthening Project

A. Project Implementation Plan

1. Project Implementation Plan, Department of Family Welfare, Ministry of Health and Family Welfare,Government of India, October 1999..2. Concept Paper: Project Proposal for Immunization Strengthening, Dept., of Family Welfare, Ministry of Healthand Family Welfare, Government of India, October 1999.3. National Tribal Reproductive and Child Health (RCH) Plan, Ministry of Health and Welfare, Government ofIndia, May 1998.

B. Bank Staff Assessments

India: Routine Immunization Program and Polio Eradiction. December, 1999. Program Description andsummary of Performance Evaluation.Ward, N.A., October 1999. Analysis of the Expanded Programme on Immunization in India.Satia, Jay, November 25, 1999. Institutional Assessment.Batson, Arnie, 1999. Review of Vaccine Procurement at the National Level.Tangermann, Rudi, 1999. Monitoring and Evaluation of the Immunization Programme in India. TechnicalAssessment, World Bank Immunization Project for India.WHO, 1999. Prospective Plan for the National Polio Surveillance Project 2000-05.Sharma, Rashmi, 1999. Social Data Sheet.Pathmanathan, Indra, 1999. India: Immunization present and future - developing a Strategic Approach.Pathmanathan, Indra, 1999. India: State Consultation on Strengthening Routing Immunization, Report onConsultation.Yazbeck, Abdo, 1999. Economic and Financial Analysis. Expanded Summary.

C. Other

AIIMS-IndiaClen, 1997-98. Pulse Polio Immunization Program Evaluation. India.BIMAA, 1999. Bihar Immunization Acceleration Activity.GOI, 1996-1997, 97-98, 98-99. Evaluation of Pulse Polio Immunization.UNICEF, 1998-99. Evaluation of Pulse Polio Immunization, Routine Immunization and Maternal Care,Preliminary Report.IIPS, 1998-1999. Household Surveys, Reproductive and Child Health Program.IIPS, 1992-93. National Family Health SurveyUNICEF, 1998. Action Research on PPI Non-Acceptors.UNICEF, 1999. India: Immunization Strengthening - Cold Chain.WHO, Report of Procurement of India-finished OPV, by Dr. Julie Milstein.WHO, Vaccine and other Biologicals Regional Overview, Draft, 1998.WHO, 1999. Surnmary of the Fifth Interagency Coordinating Conmnittee, Meeting for Polio Eradication and EPI,India.WHO, Sixth Meeting of SEARO/EPI Technical Consultative Group (TCG) on Vaccine Preventable Disease,Dhaka, Bangladesh.WHO, 1999. Documents for the Special Meeting of the SEAR/EPI Technical Consultative Group (TCG) onVaccine Preventable Diseases, Lucknow, India.WHO, India Country Report, Cold Chain, October, 1998.WHO, Strategies for Control of Measles in SEARO Countries (Report of an Inter-Agency Consultation).WHO, Papers on National Consultation on Measles Elimination Strategy.*including electronic files

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Annex 9: Statement of Loans and Credits

INDIA: Immunization Strengthening Project

Difference between expectedand actual

Original Amount in US$ Millions disbursements

Project ID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd

P045051 1999 India 2ND NATL HIV/AIDS CO 0.00 189.36 0.00 184.47 2.82 0.00

P049301 1997 India A.P. EMERG. CYCLONE 50.00 97.15 0.00 100.98 66.97 0.00

P010407 1993 India ADP - RAJASTHAN 0.00 98.50 0.00 19.86 22.81 0.00

P010503 1995 India AGRIC HUMAN RES DEVT 0.00 54.46 0.00 27.50 26.18 0.00

P010449 1994 India ANDHRAPRADESH FORESTRY 0.00 74.92 0.00 14.27 12.42 0.00

P010489 1995 India AP 1ST REF. HEALTH S 0.00 122.22 0.00 53.26 18.64 0.00

P049385 1998 India AP ECON RESTRUCTURIN 301.30 240.91 0.00 425.65 35.64 0.00

P035158 1997 India AP IRRIGATION IlIl 175.00 145.36 0.00 245.58 57.70 0.00

P049537 1999 India AP POWER APLI 210.00 0.00 0.00 172.86 26.53 0.00

P010522 1995 India ASSAM RURAL INFRA 0.00 108.92 0.00 91.66 49.20 0.00

P010480 1996 India BSEWAGEOISPOSAL 167.00 21.38 0.00 110.41 100.89 0.00

P010408 1993 India BIHAR PLATEAU 0.00 108.74 0.00 33.71 40.22 0.00

P010455 1994 India BLINDNESS CONTROL 0.00 114.70 0.00 79.55 49.51 0.00

P009979 1998 India COAL SECTOR REHAB 530.00 2.02 15.00 333.73 73.45 73.45

P009870 1994 India CONTAINER TRANSPORT 94.00 0.00 0.00 63.71 63.71 26.24

P035821 1996 India DISTRICT PRIM EDUC 2 0.00 392.24 0.00 254.53 12.09 0.00

P010464 1995 India DISTRICT PRIMARY ED 0.00 242.04 0.00 112.98 56.48 0.00

P038021 1998 India DPEP III (BIHAR) 0.00 150.33 0.00 132.65 44.11 0.00

P036062 1997 India ECODEVELOPMENT 0.00 26.22 0.00 21.05 7.65 0.00

P043728 1997 India ENV CAPACITY BLDG TA 0.00 46.66 0.00 42.05 18.94 0.00

P010563 1995 India FINANCIAL SECTOR DEV PROJ. (FSDP) 700.00 0.00 301.30 151.33 0.00 0.00

P010448 1994 India FORESTRY RESEARCH ED 0.00 45.55 0.00 17.44 35.81 9.76

P035160 1998 India HARYANA POWER APL-I 60.00 0.00 0.00 28.06 13.40 0.00

P010485 1996 India HYDROLOGY PROJECT 0.00 121.15 0.00 86.01 66.31 0.00

P009977 1993 India ICDSII (BIHAR&MP) 0.00 190.81 0.00 112.08 113.08 107.09

P039935 1996 India ILFS-INFRAS FINANCE 200.00 4.57 0.00 178.87 134.11 0.00

P043310 1996 India INDIA-Coal Env. & Social Mitigation 0.00 58.22 0.00 44.91 27.78 0.00

P044449 1997 India INDIA-RURAL WOMEN'S 0.00 18.15 0.00 16.51 9.46 0.00

P010463 1995 India DEVELOPMENT 143.00 23.80 1.64 142.99 112.68 110.96

P010418 1993 India INDUS POLLUTION PREV 0.00 89.15 0.00 14.33 14.91 0.00

P049477 1998 India KARNATAKA WS & ENV/S 0.00 38.73 0.00 32.54 0.54 0.00

P010461 1995 India KERALA FORESTRY 275.80 0.00 189.30 46.37 201.05 8.61

P050651 1999 India - MADRAS WATER SUP II 0.00 131.64 0.00 128.49 130.89 0.00

P010390 1992 India MAHARASH HEALTH SYS 0.00 119.79 16.77 26.09 41.97 25.29

P010511 1997 India MAHARASHTRA FORESTRY 0.00 160.28 0.00 148.83 54.14 0.00

P009946 1992 India MALARIA CONTROL 153.00 156.58 0.00 120.26 95.96 27.60

P009869 1989 India NAT. HIGHWAYS II 485.00 0.00 0.00 91.05 91.05 -6.16

P010561 1998 India NATHPAJHAKRI HYDRO 96.80 99.24 0.00 188.69 39.23 0.00

P010424 1993 India NATLAGRTECHNOLOGY 0.00 80.68 8.70 20.74 30.73 15.36

P009982 1990 India NATL LEPROSY EUMINA 485.00 0.00 35.00 125.32 160.32 0.00

P010496 1998 India NOR REG TRANSM 0.00 76.38 0.00 72.77 10.14 0.00

P035170 1996 India ORISSA HEALTH SYS 350.00 0.00 0.00 309.00 151.50 0.00

P010529 1996 India ORISSA POWER SECTOR 0.00 261.24 0.00 137.20 18.33 0.00

P010416 1993 India ORISSAWRCP 350.00 0.00 75.00 37.46 110.13 0.00

PGC POWER SYSTEM

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Difference between expectedand actual

Original Amount in US$ Millions disbursements

Project ID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd

P010457 1994 India POPULATION IX 0.00 84.31 0.00 47.01 27.22 0.00

P009963 1992 India POPULATION Vil 0.00 77.59 0.00 50.21 50.90 0.00

P045050 1999 India RAJASTHAN DPEP 0.00 84.71 0.00 81.78 2.44 0.00

P010410 1993 India RENEWABLE RESOURCES 75.00 109.73 0.00 66.00 95.48 0.00

P010531 1997 India REPRODUCTIVE HEALTH1 0.00 241.37 0.00 203.16 73.93 12.87

P009959 1993 India RUBBER 0.00 89.47 36.81 16.51 53.37 -2.81

P009921 1992 India SHRIMP & FISH CULTUR 0.00 84.76 50.02 15.78 63.65 15.04

P035825 1996 India STATE HEALTH SYS II 0.00 317.34 0.00 230.87 140.51 0.00

P009995 1997 India STATE HIGHWAYS l(AP) 350.00 0.00 0.00 299.64 56.31 0.00

P045600 1997 India TA s5s RD INFRA DEV 51.50 0.00 0.00 26.68 16.85 17.18

P010476 1995 India TAMIL NADU WRCP 0.00 244.60 0.00 168.32 106.13 0.00

P050637 1999 India TN URBAN DEV II 105.00 0.00 0.00 96.95 10.15 0.00

P010473 1997 India TUBERCULOSIS CONTROL 0.00 132.32 0.00 127.49 70.44 0.00

P035169 1998 India U.P. FORESTRY 0.00 52.44 0.00 43.07 9.27 0.00

P050638 1998 India UP BASIC ED II 0.00 58.89 0.00 23.26 6.02 0.00

P035824 1998 India UP DIVAGRC SUPPORT 79.90 50.13 0.00 123.55 34.83 0.00

P050667 2000 India UP DPEP III 0.00 177.90 0.00 177.90 0.00 0.00

P010484 1996 India UP RURAL WATER 59.60 0.00 0.00 47.67 18.84 0.00

P050646 1999 India UP SODIC LANDS II 0.00 190.54 0.00 185.52 17.33 0.00

P009961 1993 India UP SODIC LANDS RECLA 0.00 53.23 0.00 10.62 8.66 0.00

P009955 1993 India UTTAR PRADESH BASIC 0.00 156.44 0.00 14.68 -0.70 0.00

P009964 1994 India WATER RES CONSOLID H 0.00 252.39 0.00 121.81 83.18 0.00

P035827 1998 India WOMEN & CHILD DEVLPM 0.00 299.19 0.00 289.47 -2.32 0.00

P041264 1999 India WTRSHD MGMT HILLS 11 85.00 49.72 0.00 131.18 4.28 0.00

Total: 5631.90 6719.16 729.34 7396.93 3396.25 440.68

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INDIASTATEMENT OF IFC's

Held and Disbursed Portfolio3 1-Jul-1999

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic0 IAAF 0.00 0.00 6.50 0.00 0.00 0.00 0.11 0.00

1964/75/79/90 MUSCO 0.00 0.00 1.08 0.00 0.00 0.00 1.08 0.001978/87/91/93 HDFC 40.00 0.00 2.29 0.00 40.00 0.00 2.29 0.001981 Nagarjuna Steel 0.00 0.00 0.07 0.00 0.00 0.00 0.07 0.001981/86/81/91/93/96 ITW Signode 0.00 0.00 1.55 0.00 0.00 0.00 1.55 0.001981/86/89/94/92 TISCO 1.58 0.00 15.37 0.00 1.58 0.00 15.37 0.001981/90/93 M&M 0.17 0.00 6.49 0.67 0.17 0.00 6.49 0.671984/90/94 India Lease 0.44 0.00 0.86 0.00 0.44 0.00 0.86 0.001984/91 Bihar Sponge 12.21 0.00 0.68 0.00 12.21 0.00 0.68 0.001986 EXB-City Mills 0.48 0.00 0.00 0.00 0.48 0.00 0.00 0.001986 EXB-NB Footwear 0.19 0.00 0.00 0.00 0.19 0.00 0.00 0.001986 EXB-STG 0.34 0.00 0.00 0.00 0.34 0.00 0.00 0.001986 EXB-TAN 0.03 0.00 0.00 0.00 0.03 0.00 0.00 0.001986/92193/94 GESCO 0.00 0.00 11.80 0.00 0.00 0.00 11.80 0.001986/93/94/95 India Equipment 0.33 0.00 0.00 0.80 0.33 0.00 0.00 0.801987 Hindustan 2.87 0.00 0.00 0.00 2.87 0.00 0.00 0.001987/88/90/93 Titan Watches 0.34 0.00 1.03 0.00 0.34 0.00 1.03 0.001988/90/92 Tata Telecom 0.00 0.00 0.10 0.00 0.00 0.00 0.10 0.001988/94 GKN Invel 0.00 0.00 1.40 0.00 0.00 0.00 1.40 0.001989 AEC 9.28 0.00 0.00 0.00 9.28 0.00 0.00 0.001989 UCAL 0.00 0.00 0.63 0.00 0.00 0.00 0.63 0.001989/90/94 Tata Electric 24.87 0.00 0.00 0.00 24.87 0.00 0.00 0.001989/91 Gujarat State 2.17 0.00 0.00 0.00 2.17 0.00 0.00 0.001989/95 JSB India 0.00 0.00 1.21 0.00 0.00 0.00 1.21 0.001990 HOEL 0.00 0.00 0.28 0.00 0.00 0.00 0.28 0.001990 TDICI-VECAUS II 0.00 0.00 1.23 0.00 0.00 0.00 1.23 0.001990/92 CESC 39.49 0.00 0.00 53.60 39.49 0.00 0.00 53.601990/93/94/98 IL & FS 16.50 1.81 6.23 5.00 16.50 1.81 6.23 5.001990/94 ICICI-IFGL 0.00 0.00 0.30 0.00 0.00 0.00 0.30 0.001990/95 ICICI-SPIC Fine 0.00 0.00 1.88 0.00 0.00 0.00 1.88 0.001991/93 Triveni 0.00 0.00 1.11 0.00 0.00 0.00 1.11 0.001991/96 VARUN 0.00 0.00 1.35 0.00 0.00 0.00 1.35 0.001992 Indus VC Mgt Co 0.00 0.00 0.01 0.00 0.00 0.00 0.01 0.001992 IndusVCF 0.00 0.00 1.00 0.00 0.00 0.00 1.00 0.001992 Info Tech Fund 0.00 0.00 0.64 0.00 0.00 0.00 0.64 0.001992 SKF Bearings 1.90 0.00 0.00 0.00 1.90 0.00 0.00 0.001992/93 Arvind Mills 0.00 0.00 17.10 0.00 0.00 0.00 17.10 0.001992/94/97 Ispat Industries 30.35 0.00 15.41 0.00 30.35 0.00 15.41 0.001992/95 IL&FS Venture 0.00 0.00 1.05 0.00 0.00 0.00 1.05 0.001992/96/97 NICCO-UCO 6.13 0.00 0.50 0.00 2.13 0.00 0.50 0.001993/94/96 IndoRama 18.75 0.00 11.98 7.50 18.75 0.00 11.98 7.501993/97 20TH Century 11.66 0.00 0.80 0.44 11.66 0.00 0.80 0.441994 Centurion Growth 0.00 0.00 2.39 0.00 0.00 0.00 2.39 0.001994 Chowgule 12.63 0.00 4.58 19.38 12.63 0.00 4.58 19.381994 Crdcap Asset Mgt 0.00 0.00 0.32 0.00 0.00 0.00 0.32 0.001994 DLF Cement 7.70 0.00 4.94 10.63 7.70 0.00 4.94 10.631994 Gujarat Ambuja 0.00 0.00 8.23 0.00 0.00 0.00 8.23 0.00

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Committed Disbursed

IFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic1994 Taurus Starshare 0.00 0.00 7.17 0.00 0.00 0.00 7.17 0.001994/97 GVK 26.66 0.00 7.45 30.19 26.66 0.00 7.45 30.191994/98 Global Trust 5.00 5.00 3.19 0.00 5.00 5.00 3.19 0.001995 Centurion Bank 0.00 0.00 3.87 0.00 0.00 0.00 3.87 0.001995 EXIMBANK 15.91 0.00 0.00 0.00 15.91 0.00 0.00 0.001995 GE Capital 8.75 0.00 5.00 0.00 8.75 0.00 4.39 0.001995 Prism Cement 14.06 0.00 5.02 10.50 14.06 0.00 5.02 10.501995 Rain Calcining 19.25 0.00 5.46 0.00 19.25 0.00 5.46 0.001995 Sara Fund 0.00 0.00 6.06 0.00 0.00 0.00 2.60 0.001995/98 RPG Communicatns 0.00 0.00 11.25 0.00 0.00 0.00 11.25 0.001996 India Direct Fnd 0.00 0.00 7.47 0.00 0.00 0.00 4.52 0.001996 Indus II 0.00 0.00 5.00 0.00 0.00 0.00 3.00 0.001996 Indus Mauritius 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001996 United Riceland 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001996/99 Moser Baer 20.05 0.00 10.14 0.00 2.30 0.00 10.14 0.001997 Asian Electronic 0.00 0.00 5.50 0.00 . 0.00 0.00 5.50 0.001997 CEAT 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.001997 Duncan Hospital 7.00 0.00 0.00 0.00 7.00 0.00 0.00 0.001997 EEPL 0.00 0.00 0.03 0.00 0.00 0.00 0.03 0.001997 Owens Corning 25.00 0.00 0.00 0.00 25.00 0.00 0.00 0.001997 SAPL 0.00 0.00 0.07 0.00 0.00 0.00 0.07 0.001997 SREI 15.00 0.00 3.00 0.00 14.00 0.00 3.00 0.001997 Walden-Mgt India 0.00 0.00 0.01 0.00 0.00 0.00 0.01 0.001997 WIV 0.00 0.00 5.00 0.00 0.00 0.00 1.63 0.001998 IDFC 0.00 0.00 15.46 0.00 0.00 0.00 15.46 0.00

Total Portfolio: 427.09 6.81 238.54 138.71 394.34 6.81 219.76 138.71

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic

Total Pending Commitment:

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Annex 10: Country at a GlanceINDIA: Immunization Strengthening Project

POVERTY and SOCIAL South Low-India Asia income Development diamond'

1 998Population, mid year (nirl/ons) 979.7 1,305 3,515 Life expectancyGNP per capita (At'os methoc, US$S 430 430 520GNP (Atlas method, USS billions) 421.3 555 1,844

Average annual growth, 1992-08

Population %) 1-7 i 18 17Labor foroc (%) 2.0 2 3 1.9 GNP f Gross

Most recent ~~~~~~~~~~~~~~~~~~~~~prprimaryMost recent estimate (latest year available, 1992-98) capita enrollment

Povorty (lv of population below national poverty line) 35Urban population (% of total populafiorn) 27 27 31Life expectancy at birth (years) 63 62 63infant mortality (per ,000 live births) 63 77 69Child malnutrition (% of children under 5,, 53 ., Access to safe waterAcce"ss o safe water (% of poo/lation) 81 61 74Illiteracy`(% of population ago /5+) 43 49 32Gross primary enroilment (% of tichool-age population) 101 100 105 India Low-income group

Male 110 109 113Femnale 90 90 103 .

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1978 1988 1997 1998Economic ratios'

GDP (US$ olli/ons) 137.3 29S 7 420.8 430.2Gross domestic nvestment;GDP 21.7 23.8 23 4 23.6Exports of goods and sorvices/GDP 6.1 6.2 10.7 11.0 TradeGross domestc savings;GDP 20.6 20.9 20.0 21.1Gross national savings/GDP 21.5 20.8 21.9 22.6 {Current acCount batancelGDP -0.1 -2.4 -1.3 -1.0 DomesticInterest payments/GDP 0.3 0.7 0.8 1.1 .o InvestmentTotal debt/GDP 12.0 20.5 22.4 22.8 avingsTotal debt scrvicelexports 13 0 28,5 18.5 17.0Present value of debt/GDP .. , 18.1 .Present value of debtlexports .. . 130 3

Indebtedness1978-88 1988-98 1997 1998 1998-02

(avorageo annua/ growth)GDP 5.0 5.7 5,0 G.1 6.2 - iin gGNP per capita 2.6 3.9 3.3 4.2 4.4 ndia Low-icome groupExports of goods anc norvices 4.2 11.9 6.2 4.4 6.7

STRUCTURE of the ECONOMY1978 1988 1997 1998 Growth of Investment and GDP (%)

(% of GDP) 30

Agriculture 37.9 32.1 27.5 29.3Industry 23.7 26.3 26.1 24.7 20

Manufacturing 16.3 16.2 16.8 16.0 10-Services 38.4 41.6 46.4 45.9 o _ 9 9 9 9

Private consumption 70.1 67.3 68.9 68.4 10 9 94 95 56 97 98General government consumption 9.2 11.8 11.1 10.5 GD - DPImports of goods and services 7.2 9.1 14.1 13.6

(average annxa/ growth) 1978-88 1988-98 1997 1998 Growth of exports and imports (%)Agriculture 2.8 3.4 -1.0 7.6 40

Industry 5.9 6.4 5.9 4.0 30

Manufacturing 6.1 7.2 6.8 5.2 2/0

Services 6.0 7.3 8.2 6.3 2x

Private consumption 5.1 5.0 2.6 6.2General government consumption 7.7 7.6 19.4 4.4Gross domestic investment 4.8 6.4 7.7 7.6 93 94 95 9S 97 98

Imports of goods and services 7.3 9.7 11.7 5.6 Eports ImwportsGross national product 4.9 5.7 5.0 6.2

Note: 1998 denotes Indian fiscal year 1998-99, which runs from April 1 to March 31; data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

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India

PRICES and GOVERNMENT FINANCE1978 1988 1997 1998- Inflation (%)

Domestic prices(% change)Consumer prices .. 9.3 7.0 13.1Implicit GDP deflator 2.5 8.1 5.6 8.9

Government finance(% of GDP, includes current grants)Current revenue .. 23.2 21.5 21.6 93 94 95 93 97 98Current budget balance .. 0.9 -0.1 0.0 -G DP deflator CPIOverall surplus/deficit .. -9.8 -8.5 -9.4

TRADE

(US$ millions) 1978 1988 1997 1998 Export and import levels (USS mill-)

Total exports (fob) ,. 13,970 35,013 34,298 so,ooTea .. 421 505 481 4,0I ron .. 465 476 349 403T

Manufactures . 10,727 27,348 27,534 30.000 TTotal imports (cif) 19,497 41,484 47,544 20,000

Food .. 1,203 1,845 2,543Fuet and energy .. 3,009 8,217 6,435 1,0Capital goods .. 4,803 9.796 9,281 0 5 4

92 53 94 95 50 97 95

Export price index (1995=100) 111 100 96Import price index (1995=100) 88 94 90 uEspourts *ImportsTerms of trade (1995=100) 125 106 106

BALANCE of PAYMENTS1978 1988 1997 1998 Current account balance to GDP I%)

(US$ millions)Exports of goods and services 8,380 18,213 45,109 47,484Imports of goods and services 9.900 26,843 59.297 58,565Resourcebalance -1,520 -8,630 -14,188 -11,081

Net income 223 -1,056 -3,166 -3,544Net current transfers 1,150 2.654 11,830 10,280

Current account balance -147 -7,032 -5,524 -4,345

Financing items (net) 147 5,600 9,120 8,050Changes in net reserves 0 1,432 -3,596 -3,705 i-2

Memo:Reserves including gold (US$ millions) 7,299 5,467 30,314 32,535Conversion rate (DEC, locallUS$) 8.2 14.5 37.2 42.0

EXTERNAL DEBT and RESOURCE FLOWS1978 1988 1997 1998

(US$ millions) Composition of 1998 debt (US$ mill.)Total debt outstanding and disbursed 16,466 60,477 94,404 98,232

IBRD 646 5,590 8,138 7,993IDA 3,972 12,019 17,912 18,562 G: 4.329 A: 7.993

Total debt service 1,309 5,945 10,832 10,001IBRD 126 777 1,411 1,627 B: 16,562IDA 38 179 381 1,372

Composition of net resource flows F: 39,448 c 288Official grants 449 406 379 307 D: 3,965Official creditors 603 2,645 -312 1,727Private creditors -10 5,741 2,840 -1,433Foreign direct investment 0 287 3,557 2,462 E 23,847Portfolio equity 0 0 1,828 -61

World Bank programCommitments 1,829 2,645 1,755 2,055 A - IBRD E - BilateralDisbursements 507 2,472 1,372 1,421 B - IDA D - Other muIbateral F - PnvatePrincipal repayments 84 383 1,071 2,193 C-IMF G - Short-termNet flows 423 2,088 302 -772Interest payments 80 572 721 806Net transfers 342 1,516 -420 -1,578

Development Economics 1/31/00

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