Document of

The World Bank

Report No: 20298-IN

PROJEC T APPRAISAL DOCUMENT

ONA

PROPOSED CREDIT

IN THE AMOUNT OF SDR 48.9 Million (US$ 64.9 million equivalent)

TO

INDIA

FOR A

THIRD TECIHNICIAN EDUCATION PROJECT

July 25, 2000

Education Sector UnitSouth Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective June 26, 2000)

Currency Unit = Indian Rupees (INR)INR 44.635 = US$ 1.00US$ 0.0224 = INR 1.00

FISCAL YEARApril l - March 31

ABBREVIATIONS AND ACRONYMS

AICTE - All India Council for Technical EducationA & N Islands - Andaman and Nicobar IslandsDEA - Department of Economic Affairs, Ministry of FinanceDGS&D - Directorate General of Supplies and DisposalsDTE - Directorate of Technical EducationEdCIL - Educational Consultants India Ltd.FMS - Financial Management SystemGOI - Government of IndiaIBRD - International Bank for Reconstruction and DevelopmentICIIC - Industry/Community - Institute Interaction CellIDA - International Development AssociationIRG - Internal Revenue GenerationJKPCC - Jammu and Kashmir Project Construction CorporationLACI - Loan Administration Change InitiativeLRUC - Leaming Resource Utilization CenterMHHRD - Miristry of lhuman Resource Development.MIS - Management Information SystemTNCB - National Competitive Bidding-NPD - National Project Directorate:NPIU - National Project Implementation UnitPFMS - Project Financial Management SystemPIP - Project Implementation PlanPMR - Project Management ReportPWD - Public Works DepartmentSDR - Special Drawing RightsSOE - Statement of ExpenditureSPIU - State Project Implementation UnitTTTI - Tec:hnical Teachers' Training InstitutelUT - Union Territory

Vice President: Mieko NishimizuCountry Director: Edwin R. Lim

Sector Director: Emmnanuel Y. JimenezTask Team Leader: Shashi Kant Shrivastava

INDIATHIRD TECHNICIAN EDUCATION PROJECT

CONTENTS

A. Plroject Development Objective Page

1. Project development objective 22. Key performance indicators 2

B. Strategic Context

]L. Sector-related Country Assistance Strategy (CAS) goal supported by the project 22. Main sector issues and Govermment strategy 33. Sector issues to be addressed by the project and strategic choices 5

C. P'roject Description Summary

1. Project components 62. Key policy and institutional reforms supported by the project 63. Benefits and target population 741. Institutional and implementation arrangements 8

D. Froject Rationale

1. Project alternatives considered and reasons for rejection 102. Major related projects financed by the Bank and other development agencies 113. Lessons learned and reflected in proposed project design 124. Indications of borrower commitment and ownership 135. Value added of Bank support in this project 13

E. Summary Project Analysis

1. Economic 142. Financial 153. Technical 154. Institutional 165. Environmental 186. Social 197. Safeguard Policies 21

F. Sustainability and Risks

1. Sustainability 222. Critical risks 223. Possible controversial aspects 24

G. Main Credit Conditions

1. Effectiveness Condition 242. Other 24

H. Readiness for Implementation 25

I. Compliance with Bank Policies 25

Annexes

Annex 1: Project Design Summary 27Annex 2: Project Description 31Annex 3: Estimated Project Costs 43Annex 4: Economic/ Cost Benefit Analysis Summary 44Annex 5: Financial Summary 51Annex 6: Procurement and Disbursement Arrangements 52Annex 7: Project Processing Schedule 66Annex 8: Documents in the Project File 67Annex 9: Statement of Loans and Credits 68Annex 10: Country at a Glance 72Annex 11: Tribal Development 74

MAP(S)0

INDIA

Third Technician Education Project

Project Appraisal Document

South Asia Regional OfficeSASED

Date: July 25, 2000 Team Leader: Shashi K. ShrivastavaCountry Mtanager/Director: Edwin Lim Sector Manager/Director: Emmanuel Y. JimenezProject ID: P050658 Sector(s): EV - Vocational Education & TrainingLending Instrument: Specific Investment Loan (SIL) Theme(s):

Poverty Targeted Intervention: N

Project Financing DataEl Loan i C'redit C Granl. [ Guarantee L Other (Specify)

For LoanslCredits/Others:Amount (LJS$m): 64.9

Proposed Terms: Standard CreditGrace period (years): 10 Years to maturity: 35Commitment fee: 0.5% Service charge: 0.75%Financin Plan: Source Loc;al F__or__ ____

GOVERNMENT 0.00 0.00 0.00IDA 57.90 7.00 64.90GOVERNMENT OF INDIA 15.20 0.00 15.20

Total: 73.10 7.00 80.10

Borrower: GOVERNMENT OF [NDIAResponsible agency: MINISTRY OF HUMAN RESOURCE DEVELOPMENT & PROJECT STATESDepartment of Secondaiy Education and Higher EducationAddress: Shastri Bhawan, New Delhi 110001, IndiaContact Pe:rson: Prof. Ashoka Chandra, Special SecretaryTel: 91-11-3381097 Fax: 91-11-3386659 Email: achandra@sb.nic.in

Other Agency(ies):NATIONAL PROJECT IMPLEMENTATION UNITAddress: C-91, South Extension II, New Delhi 110 049, IndiaContact Pe:rson: Prof R.K. Mani, Central Project AdvisorTel: 91-11-6257646/6252347 Fax: 91-11-6257023 Email: npiu@yahoo.comEstimated disbursements ( Bank FYYUS$M):

FY 2001 2002 2003 2004 2005 2006Annual 4.9 11.4 _ 17.0 18.1 12.2 1.3

Curnulative 4.9 16.3 33.3 51.4 63.6 64.9

Project imiplementation period: 2000-2006Expected effectiveness date: 12/01/2000 Expected closing date: 06/30/2006

XS PAD - on, - ea Ma-., 200

A. Project Development Objective

1. Project development objective: (see Annex 1)

The project will assist the industrially and economically underdeveloped, and geographically remote statesof the northeastern region (Arunachal Pradesh, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura), Jammu& Kashmir, and the Union Territory (UT) of Andaman & Nicobar Islands to expand capacity and improvethe quality and efficiency of technician (polytechnic) education to meet the specific economic needs of eachstate. The project will also aim at increasing access of some disadvantaged sections of society (women,scheduled tribes and rural youth) to technician education and training.

2. Key performance indicators: (see Annex 1)

At impact/outcome level

* Effectiveness and stage of implementation of proposed systemic reforms in technician (polytechnic)education in each state

* Percentage of polytechnic graduates employed/self-employed in their field of training within one year ofgraduation

* Average time taken for completing polytechnic diploma* Percentage of cost recovery through internal revenue generation* Nature and level of interaction with local community and industry

At output level

* Increase in number of student places and demand for the same* Reorganization/reorientation of programs according to market needs (including development and

revision of curricula)- Percentage of women and tribal students enrolled in polytechnics* Percentage of teachers and staff trained? Level of modernization of libraries, laboratories and workshops* Number of beneficiaries of continuing education programs and community services organized by the

polytechnics

B. Strategic Context1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)Document number: 17241 Date of latest CAS discussion: 01/15/98

Liberalization of the Indian economy, its gradual integration with the world economy and rapidtransformation into a knowledge-based society are increasing the demand for a well-trained workforce -- aworkforce that is not only literate and has mastered specific skills, but is also able to acquire new skills andknowledge independently. The pace of change and the intensity of competition are both likely to increase asthe economy continues to reform.

The northeastern states, Sikkim and Andaman & Nicobar Islands, with comparatively small populations,have already achieved rates of primary and secondary school enrollments and literacy that are much higherthan the national average. However, despite the existence of a better educated labor force and considerablenatural resources, these states/UT have not been able to benefit much from the ongoing economic reforms

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in India due to their location disadvantage, difficult terrain, extremely low population densities, and lack ofcompetent technical manpower. A significant proportion of the population continues to live below thepoverty line. Jammu & Kashmir too has not been able to exploit its full economic potential due toinadequacy of technical manpower and the prevailing disturbed conditions. Most of these states have avery high percentage of people belonging to varibus tribal communities and the minorities. Lack ofopportunities for proper training and employment is resulting in frustration amongst the youth. TheGovernment of India has recently announced major schemes for economic and industrial development ofthese states. The success of these investments will depend on, amongst other things, the availability ofquality technical manpower in adequate numbers.

The project will assist the state governments of Arunachal Pradesh, Jammu & Kashmir, Meghalaya,Mizoram, Nagaland, Sikkim and Tripura, and union territory (UT) administration of Andaman & NicobarIslands in developing quality technicians to meet their emerging manpower requirements of upcomingindustry, infrastructure and growing service sectors. In addition, the 18 project polytechnics will developclose linkages with local community to train rural artisans, educated unemployed and school dropouts andto help transfer appropriate technologies to villages. Such community interaction will enhanceemployability and income generation capacity of urban and rural poor in the locality.

The project will help to introduce several basic policy reforms in the existing technician education systemin the states. The reforms will focus on program quality and relevance, flexibility, institutional autonomy,cost recovery, close interaction with local industry and community, increased participation of women andtribal communities, provision of formal and non-formal continuing education programs, and efficiency ofsystem management. Such reforms, introduced successfully in other states during the earlier twoTechnician Education Projects, are expected to serve as models for the entire higher education sector in duecourse.

More specifically, the project is in accordance with the following elements of the Bank's current CountryAssistance Strategy (CAS) for India: (a) increase the efficiency and responsiveness of technical traininginstitutions to the changing labor market - this will be the primary focus of the project; (b) support tokey areas of policy reforms - the program aims at systemic reforms to improve effectiveness and efficiencyof the technical education subsector in the project states; (c) focus on poverty alleviation activities - theproject will promote greater participation of women, tribal communities and other disadvantaged groups intechnician education; all project polytechnics will also work for the local community with effective formaland non-formal programs for technical training of the rural and urban poor; and (d) Bank support forbetter infrastructure - the project aims at significant improvement in the quality of training of technicalmanpower which will be required for establishment, operation and maintenance of infrastructure facilitiesin the states.

2. Main sector issues and Government strategy:

The main sector issues identified in a Bank's sector study (nearing publication) on Scientific and TechnicalManpower Development in India are: (a) over-centralization and lack of autonomy and accountability ofinstitutions; (b) resource constraint and wastage; (c) poor quality and relevance; (d) poor technology/infrastructure support; and (e) limited access and regional disparity (equity). With specific reference to thetechnician education system in the project states, the related sector issues are:

Over- centralization, and lack of autonomy and accountability of institutions: Over-centralization indecision making has resulted in increased bureaucracy, inadequacy of resources, the system's inability torespond to changing labor market needs, disinterested faculty and very slow decision-making processes.

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Polytechnic principals have little authority or funds for even minor repairs or maintenance of buildings andequipment. In the absence of a systematic performance evaluation mechanism, there is lack of properaccountability in the institutions.

Resource constraints and wastage (low efficiency): Existing polytechnics have very limited financial,physical and human resources. Even the lirnited resources are not put to full use. A large number of seatsremain unutilized due to delays in admission and examinations, and high dropout and failure rates. Asignificant percentage of graduates do not find employment within a year of graduation. There is littleinteraction with industry or community for resource sharing and utilization. The cost recovery fromstudents and other possible users is negligible. State regulations do not provide any incentive to theinstitutions to mobilize additional resources, and any revenue earned by them gets adjusted against theirapproved allocation from the government.

Poor quality and relevance of technician manpower: Inadequate training of polytechnic teachers with littleindustrial exposure, lack of learning resources, absence of self-learning facilities, outdated curricula andrigidity in program design, and obsolete equipment and instructional facilities have led to poor qualityoutput from the existing polytechnics. There is also a growing mismatch between labor market needs andthe competencies being developed in polytechnic graduates.

Poor technology! infrastructure support: In most polytechnics, physical facilities are obsolete, inadequate,or nonexistent. Library facilities are outdated. Many polytechnics do not have minimal comnmunicationlinks or computers. Some do not have even basic facilities like assured water and power supply. Somepolytechnics are functioning from rented buildings.

Inadequate access to technician education: Access to technician education is very limited in the projectstates; two of the states (Sikkim and Arunachal Pradesh) do not have any facilities for technician education,while others, except Jammu & Kashmir, have just one or two polytechnics. Most of the polytechnics offerprograms in traditional disciplines of civil, mechanical, and electrical engineering and provide lirmitedtraining facilities by way of continuing education programs and other services.

Government strategy: In 1986, the Government of India (GOI) formulated a National Policy onEducation (NPE) which resulted in a Ten-year Technician Education Program for improving the technicianeducation and training system. To achieve this, GOI formulated and implemented the First and SecondTechnician Education Projects (1990-99) covering over 500 polytechnics in 17 major states and 2 unionterritories with the assistance of IDA. A National Policy Initiative for Technician Education, which hasrecently been approved by the Ministry of Human Resource Development, includes the following newinitiatives: (a) building partnership between institutions and industry; (b) delegating certaindecision-making powers and responsibility from state governments to institutions and thereby bringingabout a relaxation in the rather severe control and centralization that exists in the current context; (c)awarding a high degree of autonomy to deserving institutions; (d) introducing a high degree of flexibility ininstitutional program offerings and management; (e) attempting a market-driven approach in curriculumdesign; (f) utilizing institutional resources for a larger spectrum of academic services beyond formalacademic programs; (g) encouraging institutions to engage in income generation and resources mobilizationactivities; and (h) involving institutions in the development process of the community.

For development of technical manpower in the project states, the Central Government has established theNorth East Regional Institute of Science & Technology (NERIST) in Arunachal Pradesh, a RegionalCollege of Engineering in Jammu & Kashmir and two polytechnics in Andaman & Nicobar Islands. Seatsare also reserved in professional colleges for training of students from the project states in other parts of

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the country. Tribal students undertaking technical courses also receive scholarship from the CentralGovernment. Seats are reserved for employment of scheduled tribes in all government and public sectorjotis.

All project states have formulated plans for developing technical manpower and have indicated theirwillingness to accept systemic reforms suggested by the Govermnent of India and by the Bank's sectorstudy.

The Central Govermment has recently announced major investment programs for the northeastern states,Jarnmu & Kashmir, and the Andaman & Nicobar Islands, which have all lagged behind in economic andindustrial development due to various reasons.

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

Some of the sector issues will be addressed using the following strategies.

(i) Strategies for enhancing access to technician education in remote regions include establishing newinstitutions, increasing present intakes, introducing new programs, and introducing continuing educationprograms for industry and community.

(ii) Strategies for enhancing quality and relevance include restructuring/developing curricula to suit labormarket needs, imparting faculty and staff training, increasing availability of learning resources to students,providing computing and Internet facilities and access to net courseware, enhancing use of media inteaching-learning process, introducing program flexibility, developing partnership with industry, expandingcormmunity services and networking with other institutions/organizations.

(iii) Strategies for decentralizing decision making and improving institutional accountability includeproviding functional autonomy to all project polytechnics, experimenting with new models of institutionalgovernance and financing (e.g., through a Board of Governors) and introducing a system of performanceaudit.

(iv) Strategies for adequate provision of infrastructures include strengthening of existing polytechnics,modernizing laboratories and workshops, constructing hostels, faculty and staff residences, providingmodem communication facilities, and instituting a system of maintenance of buildings and equipment toincrease their useful life.

(v) Strategies for increasing internal efficiency include establishing/strengthening stateboards/councils/directorates with well-trained manpower and computer-based data management systems,better training and counseling of students, increasing employment opportunities through linkages with localindlustry and developing entrepreneurial competence in students, increasing use of institutional resources forcommunity services, sharing and optimizing resources through networking with otherinstitutions/organizations. Measures for enhancing cost recovery include increasing fees charged tostudents, enhancing institutional income through internal revenue generation activities like consultancy,testing and calibration, etc., and instituting a wide range of policy reforms to encourage mobilization ofadditional resources by polytechnics.

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C. Project Description Summary

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

The project covering a total of 12 existing and 6 new polytechnics in the eight project states will havethree components: (i) Developing/ expanding capacity to provide increased access to technicianeducation; (ii) Enhancing quality of education to produce better trained technicians; and (iii) Improvingefficiency through better planning, administration and utilization of the system and increasing itsresponsiveness to emerging labor market needs.

Capacity Development/Expansion will be achieved by: (a) establishing six new co-educationalpolytechnics and a skill development center, (b) strengthening twelve existing polytechnics and introducingnew programs, (c) introducing continuing education and non-formal training programs for industry andcommunity, and (d) providing student and faculty housing facilities.

Quality Enhancement will be achieved by: (a) modemizing existing laboratories and workshops, (b)developing/revising curricula to meet labor market needs as well as imparting entrepreneurial skills, (c)improving staffing and imparting staff training, (d) increasing utilization of learning resources and media,and (e) promoting interaction with industry and community.

Efficiency Improvement will be achieved by: (a) establishing/strengthening stateboards/councils/directorates and other support units dealing with technician education to provide betterplanning, monitoring and guidance, (b) conducting research studies for systemic reforms, (c) institutingcomputer-based project and financial management systems, (d) providing substantial academic, financialand administrative autonomy with accountability to project polytechnics, (e) networking of polytechnicswith other institutions/organizations, and (f) enhancing state-level policy support for technician education.

Capacity Development/ Expansion Vocational 48.18 60.2 40.52 62.5Education &Training

Quality Enhancement Vocational 22.85 28.5 17.99 27.7Education &Training

Efficiency Improvement Vocational 9.05 11.3 6.37 9.8Education &Training

Total Project Costs 80.08 100.0 64.88 100.0Total Financing Required 80.08 100.0 64.88 100.0

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

* Creating opportunities for technical training of women and tribal communities to increase theireaming capacity;

* Introducing structural and academic flexibility into all programs offered by polytechnics to makethem responsive to market demands, and to offer services as needed by industry and community;

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* Promoting self-employment by developing entrepreneurial and communication skills in studentsthrough curricular interventions;

* Developing manpower for key areas of economic growth (e.g., information technology);* Granting greater autonomy with accountability to polytechnics;* Promoting industry and community participation in planning and management of polytechnics;

* Promoting cost recovery and internal revenue generation by polytechnics;* Establishing afaculty development system to attract and retain good quality teachers;* Networking o] institutions for sharing of expertise, educational resources and innovative ideas;* Encouraging participation of faculty in consultancy, continuing education and community service

programs;* Developing a suitable industry attachment/community services program for students and

counseling them for choice of courses and employment opportunities; and* Strengthening State Departments/Directorates and Boards of Technical Education/polytechnics to

include computer-based planning, management and administration of the system for improved

efficiency.

3. Benefits and target population:

Target population

* Students completing 10/12 grade, who wish to develop specialized skills for employment; about8000 regular students will be enrolled in project polytechnics and over 2500 students will graduateevery year after all new programs are introduced;

* Tribals and women from low and middle-income families will constitute majority of students;* The continuing education and non-formal training programs will primarily cater to the needs of

youth (largely from rural and urban poor families); about 10,000 persons are expected to undergosuch training during the project period;

* The polytechnics will serve the needs of small and medium-scale industries and various governmentdepartments through training of quality manpower, continuing education programs, andconsultancy services; and

* Community service activities of the project polytechnics will be targeted to cover 8-10 villages orabout 500 poor households near each polytechnic during the project.

Benefits

* The most important benefit is expected to be proper engagement of secondary school leavers in theproject states, whose talents are otherwise wasted in non-productive activities, often leading to lawand order problems in some of these states;

* Based on tracer study data available from the Technician Education I and II Projects, theincremental earnings of polytechnic graduates (over earnings of secondary school leavers) is likelyto be in the range of INR 2000-6000 per month; about 1500 additional students will graduate everyyear from more market oriented programs;

* It is expected that the rural youth and educated unemployed trained through non-formal programswould obtain incremental monthly earnings of INR 1500;

* The skills created in new and emerging technologies will contribute to economic and industrialdevelopment of the project states, in particular, by attracting the private sector to invest in theregion and by enabling polytechnic graduates to start enterprises with high growth potential;

* Women would enter technical workforce in significantly larger numbers;* Tribal youths trained in project polytechnics could seek employment in technical jobs in the central

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government, large industries and the public sector across the country, especially against positionsstatutorily reserved for scheduled tribes; and

* The general administration in project states could also benefit from the experience gained duringthe project through institutional networking, computerization of admninistrative and financialrecords, performance-based financing, transparent methods of procurement of civilworks/goods/services, and systematic project monitoring and evaluation.

4. Institutional and implementation arrangements:

Project Management/lmplementation

This will be a multi-state project in the state sector with coordination and guidance provided by theDepartment of Secondary Education and Higher Education in the Ministry of Human ResourceDevelopment of Govermnent of India. The existing National Project Directorate (NPD), established in theMinistry for the implementation of the recently completed Technician Education Projects will have theoverall responsibility for coordinating the implementation of the project through the project states. TheNPD will be assisted by the National Project Implementation Unit (NPIU) established in the EducationalConsultants India Ltd (EdCIL). The NPIU will work closely with the State Project Implementation Units(SPIUs) established in each of the project states. At the state level, the state secretaries of education,assisted by the state directors of technicallhigher education will be responsible for facilitating projectimplementation. The polytechnic principals will be responsible for project implementation at institutionallevel. The project will be implemented in accordance with the Project Implementation Plan (PIP)preparedby the NPIU with inputs from the states and cleared with the GOI and IDA. The PIP will be reviewed bythe GOI and IDA and updated from time to time.

Project Monitoring

The primary responsibility for monitoring the project will lie with the SPIUs, NPIU and on a broader basiswith the Government of India and IDA. To enable effective monitoring, each of the institutions will prepareprogress reports on a project Management Information System (MIS) to be developed by the NPIU andtransfer this data through e-mail to the SPIU once in three months. The SPIU will collect informationinstitution-wise and send reports in the formats included in the MIS to the NPIU. The NPIU will, incollaboration with the SPIUs, organize bi-annual, mid-term and need- based review exercises for IDA andthe Government of India.

The project MIS will include elements like indicators on academic and physical progress, a listing ofinnovative activities undertaken by the institutions, key performance indicators, and the progress made bythe institutions in civil works, procurement of equipment, books and furniture, internal revenue generation,staff development, continuing education, community/industry-institution interaction, staff positions, andexpenditure on various items. Progress towards the achievement of the project development objectives willbe measured through key performance indicators agreed between the Government of India, the projectStates/UT and IDA.

The proposed monitoring and evaluation mechanisms improve upon the successful models developed duringthe two technician education projects. These include periodic reviews by the state secretaries, the NPIUand the NPD. The bi-annual joint reviews of GOI and IDA will generally cover all aspects the project withspecial focus on achievements in quality components. These reviews will include visits to projectpolytechnics and interaction with the students, teachers, employers and community representatives. Themid-term review will provide an opportunity for mid-course evaluation and corrections, as needed. The

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project will also support related research studies on various project components. Towards the closing stageof the project, studies on the project impact will be supported by the project.

Project Financial Management System

Financial management arrangements for the project are detailed in Annex 6. The project will be budgetedunder a single identifiable line item in the budget of the Ministry of Human Resource Development(MI-[RD), GOI for the expenditure that has to be made at the central level, in the budget of the Ministry ofHome Affairs for expenditure relating to the UT of Andaman and Nicobar Islands, and in the budgets ofthe respective state governments for all the participating states. In the case of the Center, on approval ofbudget by the Parliament, MHRD will release the funds requirement in installments every year to the bankaccount of the Educational Consultants India Limited (EdCIL). EdCIL, which will make major paymentson behalf of the National Project Implementation Unit (NPIU), will advance a part of the funds to the NPIUfor the expenditure that has to be incurred by the NPIU. For the UT, the Ministry of Home Affairs willallocate and release required project funds to the Project Implemenation Unit of the UT. At the state level,on approval of the budget by the Legislature, the State Government will release these funds to theirrespective SPIUs. The SPIU will incur expenditure through the Government treasury system and pass on apart of the allocation to the institutions in the state that it oversees for the institutional level activities.

An integrated computerized financial management system will be developed for the project. The key tasksthat will be carried out to implement the integrated financial management system are: (a) appointment of aFinance Professional at the NPIUand accounts personnel at the SPIUs to be completed by August 31,2000; (b) procurement of hardware expected to be completed by January 31, 2001; (c) design, developmentand installation of a Project Financial Management System (PFMS) software, expected to be completed byFebruary 28, 2001; and (d) training of the staff in the implementation of the PFMS, expected to becompleted by March 31, 2001. The PFMS is expected to be fully operational by April 1, 2001.

Disbursements: Disbursements from IDA credit would initially be made in the traditional system(reimbursement with full documentation and against statement of expenditure) and would be converted tothe Project Management Report (PMR) based disbursements after the successful implementation of thecomlputerized PFMS. The target date for this conversion is April 1, 2002.

Retroactive Financing: Retroactive financing up to an amount of US$1.06 million equivalent (SDR 0.80million) would cover eligible expenditure for implementing activities after October 1, 1999 based on aStatement of Expenditure. Retroactive financing would support: (a) staff appointed at NPIU, SPIUs; (b)key additional staff at the project polytechnics appointed against posts created for the new courses/newpolytechnics; (c) consultant services for procurement of goods, works, training and curriculumdevelopment; (d) provision of housing, office equipment, furniture, computers and communication links andoperating costs of NPIU, SPIUs; (e) expenses related to organization of workshops, meetings, study visitsand travel of officials and faculty for preparation of the project; and (f) any other project-relatedexpenditure incurred following the Bank guidelines.

A udit: NPIU accounts in EdCIL will be audited by a firm of Chartered Accountants acceptable to theCormptroller and Auditor General of India. The SPIU accounts, which will include the accounts of theinstitutions participating in that state, will be audited by the Accountant General (Audit) of that state. Allthese nine audit certificates for NPIU, the seven Project States and the UT would be sent to IDA within sixmonths of the close of GOI's fiscal year. All nine audit certificates and the special account audit reportwill be monitored in ARCS.

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Special Account: A Special Account will be maintained in the Reserve Bank of India; and will beoperated by the Department of Economic Affairs (DEA) of Government of India (GOI). The authorizedallocation of the Special Account would be 5 million that represent about 6 months of initial estimateddisbursements from IDA Credit. The Special Account will be operated in accordance with the Bank'soperational policies.

Procurement

Procurement arrangements according to the Bank's Procurement Guidelines are detailed in Annex 6.

Implementation Period

The project is expected to be implemented in five years. The expected implementation period is December1, 2000 to December 31, 2005. The Project is expected to close on June 30, 2006.

D. Project Rationale

1. Project alternatives considered and reasons for rejection:

Investment in technician education is required to produce the pool of skilled manpower that wouldencourage private firms to modemize their technology and invest in industries with high growth potential.Information provided by the state project planning teams indicate that there are no private training facilitiesoffering the programs that are being proposed in the project. Some local entrepreneurs currently offershort-term training programs of variable quality in specific areas such as use of software packages, butthese do not meet the broader skill needs associated with economic development and growth. Private sectorinvolvement in the provision of technician training is unlikely to be forthcoming in the project states forvarious reasons. The modem manufacturing sector and the average size of firms is small in the projectstates. Private entrepreneurs lack the know-how, especially in new technologies, and the capital requiredfor establishing modem training institutions. Due to the small size of the population and limitedenrollments, unit costs in the polytechnics in these states are higher than in other Indian states.

The absence of training capacity in the private sector is one justification for government intervention in theprovision of technician training. However, the strongest argument for government involvement is topromote equity and enable secondary school pass-outs in these economically underdeveloped states toenhance their earnings and improve their chances of getting employment in industries or sectors with highgrowth potential. Per capita income in all the project states is below the all-India average; in Tripura,Jammu & Kashmir and Meghalaya, the per capita income is between 50-80% lower than the all-Indiaaverage. About 35% of the population of these states lives below the poverty line (Annex 4 - Table 4.1).The project states have achieved relatively high enrollment ratios at the primary and secondary levels, aswell as high female literacy rates. The absence of high quality training facilities in the states preventssecondary school pass-outs from acquiring the skills required for productive employment in modernindustries.

One alternative to establishing new polytechnics and introducing new programs in existing polytechnics isto expand an existing Central government program, under which eligible students from these states aregranted admission in polytechnics located in other states, if the course is not offered in their home state.However, the high cost of transportation, boarding and lodging as well as other cultural factors dissuademany students from studying in other states, leading to under utilization of the quotas and high drop outrates. In particular, women students and those youths from poor tribal families are unlikely to study in

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othe r states. Thus, although annual unit recurrent (institutional) costs are lower in the other states (due tolarger enrollment size), the total cost of training under this scheme is much higher due to the high level ofdropouts as well as the additional private costs. Expansion of this scheme to allow higher quotas for theproject states is considered un-viable due to these reasons, as well as reluctance on the part of the otherstates to accept these students. By providing training facilities in these states, the project will enablewomen and poor tribal students who have been deterred in the past from enrolling in polytechnic programsto acquire higher-order technical skills.

Another possible alternative for developing technical manpower in the states is to develop and utilize thedistance learning mode of education. This requires the presence of good quality resource institutions andstudy centers at various places with adequate support facilities and tutors, and an effective delivery as wellas monitoring system. In addition, technical education needs work-places where students can acquirepractice-based knowledge. None of the project states has institutions or work-places to act as resourcecenters or study/practice centers and there are no effective means of communication to enable programdelivery and effective monitoring. Under the circumstances, this alternative is not considered feasible.

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

- T Latest SupervisionSector Issue Project (PSR) Ratings

- . . . . . . (Bank-financed projects onty)Implementation Development

Barik-financed Progress (IP) Objective (DO)

To assist in upgrading the training of Electronics Industry S Smedium and high level technical and Development - HRDprofessional manpower needed for the Component (Ln. 3093-IN)rapiid and efficient growth of the (closed FY96)electronic industry. (Co-financed by the Swiss

Agency for Development andCooperation)

To improve the quality and efficiency Vocational Education Project S Sof craftsman and apprenticeship (Cr. 2008-IN) (closed FY99)training; and to improve and diversifyadvanced training programs.

To support national policy initiatives to Technician Education Project HS HSmodernize and expand technician (Cr. 2130-IN) (closed FY99)education and improve its quality andefficiency (in nine states).

To support national policy initiatives to Second Technician Education HS HSmodernize and expand technician Project (Cr. 2223-IN) (closededucation and improve its quality and FY00)efficiency (in eight states and two unionterritories).

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To support major sector reforms in Sub-sector Program fortechnical education Technical Education (proposed)

Other development agenciesStrengthening of Regional Engineering UK-British Council- REC TColleges in selected disciplines. Project (closed FY99)

Strengthening of industry - institute Canada-India Projectinteraction and continuing education (on-going)programs in selected polytechnics.

Skills development programs in GTZ- Madhya Pradesh Govt.advanced technologies. CRISP Project (on-going)

1P/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

3. Lessons learned and reflected in the project design:

The project design is based primarily on the experience gained from the two recently completed TechnicianEducation Projects, which have been rated highly satisfactory in project outcomes. The policy reformsidentified and agreed to by the project states are based on the successful interventions made in someprogressive states and include institutional autonomy, program flexibility, greater female participation,industry-institute interaction, intemal revenue generation, etc. It also incorporates the recommendationsmade for major reforms in technical education in the Bank's sector study on Scientific and TechnicalManpower Development in India. Some of the recommendations of a recent Performance Audit Report ofthe Bank's Operations Evaluation Department (OED) on Investment in Technical and Vocational Educationin India are also taken note of in the project design.

The experience of the Technician Education Projects in India indicates that an early consensus on projectscope and components through micro-planning at polytechnic level would accelerate project progress. Thedesign of the Third Technician Education Project is based on detailed consultations with and inputs fromprincipals and faculty of all existing project polytechnics and the Technical Teachers Training Institutes.The states have definite plans to involve students, employers and community in the implementation of theproject from the very beginning.

Key to the success of the two Technician Education Projects was full ownership by the states along withthe policy support and critical technical assistance from the Center. This has been ensured in the design ofthe present project. Effective central coordination, recognition of good performance of states throughallocation of additional funds, monitoring and evaluation studies, sharing the problems and possiblesolutions through workshops, promoting healthy competition and cooperation between states, andfacilitating responsive management had helped the earlier projects. These strategies have been consideredand incorporated in the project design.

Guidance and coordination from the National Project Implementation Unit (NPIU) and professionalsupport from Technical Teachers' Training Institutes (TTTIs) played a crucial facilitating role in projectimplementation of the earlier projects. TTTIs are being involved in this project also as resource institutionsfor training polytechnic teachers, curriculum development, student assessment reforms, leaming resourcesdevelopment, designing systems for autonomy and flexibility, research studies, helping institutions in theirdevelopment planning, etc.

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Release of project counterpart funds as a line allocation to the project account, which is not lumped withoverall departmental allocation in the State budgets, will avoid delays in implementation of the project. Allthe project states have agreed to make such a provision.

The over-centralization of procurement built into the design of the earlier two Technician EducationProjects caused major delays. In consultation with the project states, appropriate decentralization isincorporated in the project design.

Timely creation and filling of key staff positions with qualified and trained staff are most critical to thesuccess of an education project. Progress in the earlier two projects was hampered due to delays in properstaffing of institutions. The project states have been advised that progress in staffing will be monitoredregularly by the Government of India and IDA, andfundingfor works and goods could be suspended ifthere were delays in creation andfilling of key staffposts.

4. Indications of borrower commitment and ownership:

To tackle the enormous educational challenges faced by GOI, a National Policy on Education (NPE) wasapproved in 1986. The Policy was amended in 1992. During the Ten-Year Investment in TechnicianEducation Program (1990-99), 17 major states and 2 union territories were supported with IDA assistance.After the successful completion of the two Technician Education Projects, the GOI sought the Bank'sassistance after a very detailed consultation and planning with the project states.

The National Policy Initiatives for Technician Education, prepared by a panel of experts with activeparticipation from industry, has been approved by the Ministry of Human Resource Development in 1999.The project is based on these initiatives, which are crucial for its success.

Despite their limited capacity, all the project states have completed extensive preparations anddocumentation required for project appraisal in a very short period. They have also initiated actions toimplement major reforms in the system. All the state governments have expressed their support for theproject and have already provided/acquired land for construction of polytechnics.

In the design of the Project, very senior state officials, and principals and faculty of all existingpolytechnics have been involved so that their ownership of project components and achievement of projecttargets is established from the very beginning. They have participated in the planning workshops,pre-appraisal and appraisal missions and their views have been accommodated in the project design. Inmany states, students, employers and local community have also been consulted.

There is already an agency, National Project Implementation Unit (NPIU), at the center with a well-provencapacity to complete preparation and supervise implementation. The NPIU has played a major role in theformulation of the states' project proposals and Project Implementation Plans according to the Bankguidelines. In addition, the four Technical Teacher Training Institutes (TTTIs) have expressed theircommitment to the project by being involved as resource institutions.

5. Value added of Bank support in this project:

Development of the polytechnics in the States which were not included in the earlier projects is animperative in India today for equity reasons and a necessity for balanced development of the technologicalinfrastructure. While the sums of money involved are relatively small and well within the capacity of GOIto finance without recourse to extemal assistance, there is a certain discipline attending to implementation

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of an investment project assisted by the World Bank which is highly valued by both the central and Stategovernments and the institutions themselves; in the case of the comparatively deprived and isolated Statesthis may be even more important than it was for the States covered earlier. The project will also provide anopportunity for continuation of the Bank's international efforts in this sector, with special attention to theeconomic needs of women and tribal communities.

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)

Employment and earnings of graduates: In the absence of data on age-earnings profiles, unemploymentrates and the labor market for polytechnic graduates, a thorough cost-benefit analysis could not be done forthe project. On the basis of the indicative project costs provided at appraisal, and using costs incurred onacademic activities alone (i.e., excluding costs incurred on residential accommodation and the DTE/SPIU),the average increase in earnings of graduates (over the earnings of secondary school pass-outs) required toyield a 10% return on investment is in the range of INR 2,800 - 7400 per month. Tracer studies, conductedin other states as part of the earlier two Bank-assisted projects, indicate the average initial earnings ofpolytechnic graduates to be about INR 3,500-8,000 per month, although there are substantial variationsacross disciplines. In principle, over their working life, polytechnic graduates should be able to secure anaverage earnings differential over secondary school graduates through wage/self employment that justifiesthe projected expenditures on academic activities.

However, in order to ensure adequate economic returns on project investments, it is necessary that themajority of polytechnic graduates obtain appropriate employment. Employment prospects are difficult inthe project states because of the small size of the modem sector; especially of the industrial sector, the lowlevel of urbanization, the constraints on public sector expansion and limited investment in the privatesector. The project has tried to address these concerns by introducing programs in areas whereemployment is likely to grow in the context of state-specific initiatives undertaken by the respectivegovernments and in strategic high-technology areas. Of the new programs being offered, 16 are incomputer engineering/applications, information technology and telecommunications and graduates can beexpected to obtain employment fairly quickly, especially as there is no training capacity in the privatesector. In general, however, progress in employment outcomes will depend to a large extent on theenvironment that is created to promote overall economic growth in these industrially under-developedstates.

Project states/UT have agreed that appropriate employment of graduates within a reasonable time framewill be promoted by Industry/Community-Institute Interaction Cell (ICIIC), student advisory services,on-the-job training, interaction with industry and community and frequent revision of curricula to respondto changing labor market needs. It has been agreed with project states/UT and NPIU that the employmentrate and earnings of graduates will be one of the key performance indicators. Baseline data on theseindicators will be collected immediately after project launch using tracer studies and these indicators will bemonitored during project implementation.

Internal efficiency: The above calculation on required earnings differentials assumes that projectpolytechnics will improve internal efficiency. Currently, actual enrollment is between 60-70% ofsanctioned capacity and pass rates are between 50-70%. It has been assumed that enrollments will be at

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least 75% of sanctioned capacity and that about 80% students will successfully complete within three yearsall the requirements for award of diploma. Should internal efficiency be lower than that assumed, the unitcost of producing a graduate would be higher, and would lower the returns to the project. The projectstates/UT have agreed that a high level of internal efficiency will be maintained and monitored throughappropriate indicators (admissions as a percent of intake capacity, dropout rates and pass rates). This willrequire a major change in the functioning of existing polytechnics where actual enrollment is currentlybelow sanctioned capacity. All polytechnics have planned to fill the sanctioned student places with talentedand motivated students by (a) ensuring that programs cater to student demand, and (b) better marketing ofprograms.

2. Financial (see Annex 5):NPV=US$ million; FRR = % (see Annex 4)

Fiscal Impact:

The budget of the Andaman & Nicobar Islands is part of the Central government budget. All the otherproject states are special category states, which are almost entirely dependent on Central transfers to meettheir non-plan and plan expenditures. In these states, combined Central transfers (Central taxes plusgrants) account for nearly 90% of total revenue receipts. Consequently, total expenditures, and especiallythe annual plan allocations, are determined by the size of Central assistance in each year.

On average, each state will have to contribute between INR 5-18 million each year towards the project.The expected annual counterpart funding for this project will entail an increase of 1-5% over the1999/2000 level of Plan expenditure on total education for each state. Hence, the provision of counterpartfunding should not be a problem; however, given the near total dependence on Central assistance, the state'sshare of annual project expenditures should be taken into account when the Central government determinesthe total volume of Central assistance for each state's Annual Plan. Necessary approvals of the Centralgovernment's Planning Commission and the state Finance Departments have been, or are in the process ofbeing, obtained.

Annual recurrent costs arising at the end of the project period will be borne by the state governments. Theinc:remental recurrent costs of the project will represent between 1-3% of projected non-plan expenditureson total education (assuming that non-plan expenditures grow at 4% per annum from 1999/2000 levels).Maintenance of past trends in education expenditure should be sufficient to ensure that incrementalexpenditures are met. However, the sub-sectoral allocation to technical education will need to besignificantly enhanced by the end of the project period in order to sustain recurrent liabilities, since atpresent, the expenditure on technical education in these states is minimal or non-existent.

Although the absolute amounts involved are relatively small and should not pose a problem for projectsustainability, much depends on the continuation of Central assistance to these states on the same scale asuntil now. The ability of the state governments to sustain recurrent costs will be adversely affected ifCentral assistance should decline. The policies that will be introduced as part of this project to increaseinternal revenue generation (enhanced cost-recovery through student fees, continuing education,consultancies to industry, etc.) will contribute to ensuring financial sustainability of the project.

3. Technical:

Prcject design is based on the two highly successful Bank-assisted Technician Education Projects

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implemented in 19 other states/Union Territories in India. Basic elements of the earlier projects and thisproject remain the same, viz., capacity expansion, quality enhancement, and efficiency improvement.However, the emphasis in this project is on sustainable policy reforms (especially, institutional autonomy,program flexibility, close interaction with community and industry, intemal revenue generation) that willhelp address the issues in an effective manner. The project will utilize strategies successfully tested in moreprogressive states earlier to develop the technician education system. The project design also incorporatesmany recommendations of recent Bank studies of the subsector in India.

Most states have based their proposals on the industrial and economic surveys done by some governmentdepartments. In many states, local employers and community representatives have also been consulted. Alarge number of courses relate to information technology, computer science, communications and thegrowing service sector. The course on costume design and garment technology will focus on adoption ofthe special designs of the colorful traditional tribal dresses of the region for possible export promotion.Similarly, the course on herbal remedies and cosmetology will promote scientific use of local herbalresources and traditional methods. Keeping in view the information revolution, computer education will begiven a prominent place in the curricula; and libraries will be provided with Internet access.The location of all new institutions has been carefully planned. All project polytechnics and programs willcomply with the norms, quality standards and guidelines set by the All India Council for TechnicalEducation (AICTE). The states will adapt with improvement and local needs the best curricula developedin similar programs in other states during the two technician education projects.

The programs chosen are expected to attract women students to technician education in much largernumbers than the conventional engineering programs, which are facing manpower saturation and limiteddemand in many states. In addition, provision of hostel facilities, scholarships, etc., are also expected toincrease access of the students from rural areas (particularly women).

The project focuses on establishing strong linkages of the polytechnics with the local industry andcommunity. Models developed with good results and high social acceptance in earlier projects will be usedwith further refinement. All polytechnics will conduct continuing education programs, which will bedesigned based on detailed planning with the local industry. The community interaction programs will bedeveloped in close consultation with the community according to their specific needs and matching with thecapability of the polytechnics. Such programs are already being conducted successfully, though on alimited scale, in Jammu & Kashmir and Tripura as well as other parts of the country under a GOI schemeof Community Polytechnics.

Project states' investment proposals including requirements of faculty and staff, equipment, academic/administrative/residential spaces, and other resources are based on the AICTE guidelines and state norms.An attempt has been made to optimize space utilization to minimize the requirement of additional civilworks. Adequate allowances for physical and price contingencies have been kept as per Bank guidelines.

4. Institutional:

4.1 Executing agencies:

At the national level, the overall coordination and guidance for the project will be provided by theDepartment of Secondary Education and Higher Education in the Ministry of Human ResourceDevelopment of the Government of India. The National Project Directorate (NPD), established in theDepartment, will be responsible for implementation of the project through the project states. The NPD will

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be assisted by the National Project Implementation Unit (NPIU).

At the state level, the state departmnent dealing with education/technical education will be responsible forproject implementation. The concerned department will be assisted by the Directorate of TechnicalEducation and/or the State Project Implementation Unit (SPIU). The SPIUs will work closely with theNPiU.

4.2 Project management:

The NPD and the NPIU have the experience of implementing two Bank-assisted technician educationprojects. One of the factors contributing to success of the projects was the effective coordination, guidanceand monitoring provided by the National Project Implementation Unit (NPIU). On the other hand, manyproject states have no prior experience of implementing any Bank-assisted project. Also, most states aregeographically remote, economically and industrially underdeveloped, and have limited communication andtransportation links. This situation will pose problems for effective coordination, monitoring, training andprocurement of goods and services. To overcome these problems, the NPIU will conduct a series oftraining workshops to train SPIU staff on Bank procedures and project planning. It is also developingguide documents and project monitoring instruments. Internet access to SPIUs and polytechnics planned inthe project will overcome the problems of communication to some extent. Adequate financial provision hasbeen kept for engaging consultants to assist the project states in civil works, procurement of goods, andimplementation of academic aspects such as curriculum revision/development,industry/community-institute interaction, autonomy, program flexibility, etc. The Technical TeachersTraining Institutes, which played a major role in the earlier two projects, will act as resource institutionsfor academic aspects in this project as well.

The proposed monitoring and evaluation mechanisms improve upon the successful models developed duringthe two technician education projects. These include development of a project monitoring informationsystem at the state and national level backed up by periodic reviews by the state secretaries, the NPIU andthe NPD. The bi-annual joint reviews of GOI and IDA will generally cover all aspects of the project withspecial focus achievements in quality components. The Mid-term review will provide an opportunity formid-course evaluation and corrections, as needed. Towards the closing stage of the project, studies on theproject impact will be supported by the project.

4.3 Procurement issues:

The Country Procurement Assessment Review (CPAR) was last done in 1985. A new review has beeninitiated and a draft report would be available by September 2000. India has been borrowing for nearlyfive decades. The National Project Implementation Unit (NPIU), having guided, coordinated and monitoredboth centralized procurement at the national level and procurements at the state level in two Bank-assistedtechnician education projects, is well conversant with the Bank procedures. The NPIU will train theconcerned state officials in Bank procurement procedures before project effectiveness.

However, as most of the project states do not have the experience of procurement through IntemationalCompetitive Bidding (ICB) or National Competitive Bidding (NCB) methods for ensuring well-planned andefficient procurement of goods, these states will engage procurement agencies as per Bank guidelines.

The discussions with states have revealed the following risks which could delay civil works:* Sites at many locations are hilly making construction time consuming;* Limited fair weather days at many locations;* Unwillingness of large contractors to undertake civil works due to remoteness of locations and

inadequate resources of local contractors.

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States have been advised to incorporate the site-specific special working conditions in constructionschedules at the time of award of contract.

4.4 Financial management issues:

The NPD and the NPIU are fully familiar with the Bank's traditional system of disbursement against fulldocumentation and against statement of expenditure. However, they are not familiar with the ProjectManagement Report -based disbursements. Provisions have been made in the project for developing thiscompetence at the NPIU and SPIUs by April 1, 2001.

There are two other major issues: (a) the flow of funds from State Governments to the SPIUs may not betimely because of State Governments' constraints because of the fiscal situation of the State Governmentsexecuting the project. During negotiations, a commitment was obtained from all the participating statesthat the funds earmarked for the project will be made available to the respective SPIUs in time and withoutany delay; and (b) the audit reports from the eight SPIUs may not be submitted within six months of theclose of the GOI fiscal year. Again, during the negotiations, a commitment was obtained from the states,that they will submit to the Accountant General (Audit) of the state, reconciled financial statements withinfour months of the close of the fiscal year, to facilitate submission of the AG's audit report within sixmonths of the close of the fiscal year.

5. Environmental: Environmental Category: C (Not Required)5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (includingconsultation and disclosure) and the significant issues and their treatment emerging from this analysis.

The project states have confirmed that the proposed construction of 6 new polytechnics, extension of 12existing polytechnics and office spaces for the directorates/state units on identified institutional lands willnot raise any environmental concerns. During the design and construction of the buildings, environmentprotection and pollution control laws will be strictly adhered to. The revised/new curricula and trainingprovided by the polytechnics are expected to raise environmental awareness amongst students, localindustries and communities which will help reduce environmental degradation.

States have given assurances that land identified for construction and extension of polytechnics do notinvolve relocation and resettlement of people.

5.2 What are the main features of the EMP and are they adequate?

Not applicable

5.3 For Category A and B projects, timeline and status of EA:Date of receipt of final draft:

Not applicable5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EAreport on the environmental impacts and proposed environment management plan? Describe mechanismsof consultation that were used and which groups were consulted?

Detailed discussions held with state secretaries, directors of technical education and principals ofpolytechnics have resulted in minimization of additional construction in the existing polytechnics. The IDAarchitect will keep environmental issues in view, while reviewing the master plans and detailed designs fornew polytechnics and additions to existing polytechnics. Compliance with the suggestions made by theIDA architect will be closely monitored by the SPIUs and NPIU.

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5.5 What mechanisms have been established to monitor and evaluate the impact of the project on theenvironment? Do the indicators reflect the objectives and results of the EMP?

Mechanisms to monitor and evaluate the environmental impacts will include monitoring the performance ofcontractors for compliance with the prescribed construction management practices/codes, and including anenvironmental specialist in the project task team for occasional supervision of construction.

6. Social:6.1 Summarize key social issues relevant to the project objectives, and specify the project's socialdevelopment outcomes.

Along with the issues of poverty, geographic isolation and limited economic development, each project statepresents unique social characteristics and issues. Over 85% of the populations of Meghalaya, Mizoramand Nagaland consist of persons belonging to different tribes (Table 2. 1). In Arunachal Pradesh, tribalgroups constitute 63.6% of the population, in Tripura, 3 1 %, and in Sikkim, 22%. In the Andaman &Nicobar Islands, and Jammu & Kashmir, the tribal populations are close to the national average of about8%/O. Significant percentages of the populations of the project states belong to minority religious groups(Christians in the northeastern states, Muslims in Jammu & Kashmir, and Buddhists in Sikkim). Literacyrates are significantly higher than the national average in many project states. In fact, Mizoram currentlyhas the highest literacy rate in India (95%). In many states, there are high gross enrollment ratios atsecondary level also, and women participate in education in high proportions (Table 4. 1).

These high literacy rates coupled with limited economic activities in the states are leading to growingnumbers of educated unemployed and frustrated youth. Youth (largely scheduled tribes, women andminority communities from lower/lower-middle income groups) have very limited access to technicaleducation at present, hence they would be the primary beneficiaries of the project.

The major social development outcomes of the project would be: (a) enhanced participation of women,scheduled tribes, and rural youth in the technical workforce; (b) increased employability (in wage- andself-employment) and earning among youth from low- and middle-income families; (c) added value to localresources and increased marketability of traditional methods and knowledge; and (d) increased abilities oflocal communities to meet their needs.

They project aims to increase the employability of youth through formal and non-formal training programsand by promoting economic activities in the states. The introduction of new programs and availability ofhostel facilities are expected to increase women's enrollment to 40-50% in most states. Tribal studentswould be the majority of students in Meghalaya, Mizoram, Nagaland and Arunachal Pradesh. Rural andpoor urban communities are also expected to benefit from the short-term training programs and communityservices offered by the polytechnics. The availability of technical manpower is expected to promote privateinvestment, and result in increased employment/self-employment opportunities.

The formal programs to be provided under the project have been selected carefully to meet localsocio-economic needs. A large number of courses relate to information technology, computer science,communications and the growing service sector. Courses on garment technology would develop andpromote adaptations of the traditional tribal designs and dresses of the region to increase production andexport. Similarly, courses in herbal remedies and cosmetology would promote scientific use of local herbalresources and traditional methods. Food processing technology has been chosen to help local fanners. Inthe Andaman & Nicobar Islands, a course on marine engineering would be introduced to help improvetransportation of people and goods between the islands and improve access to the mainland.

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The project would also promote and expand non-formal training and community interaction programs.Some are already being conducted successfully on a limited scale in Jammu & Kashmir and Tripura, inaddition to other parts of the country, under a GOI scheme for Community Polytechnics. The programs inthe project would be developed in close consultation with local comnmunities to address their specific needsby matching these with the capabilities of the polytechnics.

6.2 Participatory Approach: How are key stakeholders participating in the project?

Stakeholder and beneficiary workshops were conducted in October 1999 as a part of the Intensive LearningICR of the Second Technician Education Project and the information obtained was used in the design ofthis project. The IDA team also met with groups of students and faculty during its visits to polytechnics.In the Andaman & Nicobar Islands, students were involved in the design of the project. As students are theproject's primary beneficiaries, they would continue to be consulted in the development of curricula andinstructional strategies.

The project has been conceived and prepared with the active participation of faculty and heads ofinstitutions, Technical Teachers' Training Institutes (TTTIs), state governments, and the National ProjectImplementation Unit. The All-India Council for Technical Education (AICTE) and the PlanningCommission at the national level have also been consulted by the project states. The Government of Indiasupports the project for equity reasons and for balanced development of technological infrastructure in theproject states. Most states have based their proposals on the industrial and economic surveys done by somegovernment departments. Local employers and community representatives have also been consulted.

Local communities would be involved in governing bodies of the institutions, program selection and design,continuing education and all community-oriented programs. In addition, the faculty, administration andstudents of the polytechnics would be involved in planning and implementing the community outreachprograms. The progress and impact of the linkages between the polytechnics and communities would beclosely monitored by GOI and IDA during project implementation. The NPIU and SPIUs would organizeperiodic workshops to facilitate and promote discussions with local communities. The monitoring systemwould include community assessments of the programs.

6.3 How does the project involve consultations or collaboration with NGOs or other civil societyorganizations?

As noted above, the polytechnics would develop significant community development programs. To developand implement these, they would consult and collaborate with community leaders and groups, localindustry, and service organizations including NGOs. NGOs may also be involved in the continuingeducation programs, help in technology transfer, and provide consultancy and problem-solving services.

6.4 What institutional arrangements have been provided to ensure the project achieves its socialdevelopment outcomes?

All states are formulating and finalizing state-level policies to promote the greater participation of women,tribal and other disadvantaged groups in technical education. The Government of India and the stategovernments are already financing the conduct of community development activities on a limited scale insome polytechnics, and are committed to expanding community services by the polytechnics under theproject. An Industry/Community-Institute Interaction Cell (ICIIC) would be established in each projectpolytechnic. These Cells would be responsible for (a) increasing the involvement of industry andcommunity in academic and management matters, and (b) facilitating the provision of training and technical

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services to local industry and community.

6.5 How will the project monitor performance in terms of social development outcomes?

Social development outcomes (such as the increased technical education of women and tribal students andtheir employment, benefits to communites as a result of continuing education and service programs) havebeen included among the key performance indicators of the project and would be monitored as past of theregular monitoring (and evaluation) activities. Community assessments would also be part of the regularmonitoring activities. Social development aspects may also be the object of special studies identifed as theproject progresses. The M&E activities would be reviewed by the bi-annual and mid-term review missions.

7. Safeguard Policies:7.1 Do any of the following safeuard policies apply to the project?

El Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) n Yes 0 NoE] Natural habitats (OP 4.04, BP 4.04, GP 4.04) L Yes 1X NoO] Forestry (OP 4.36. GP 4.36) L Yes 0 NoE] Pest Management (OP 4.09) C] Yes NoK] Cultural Property (OPN 11.03) [I Yes No21 Indigenous Peoples (OD 4.20) Yes NoEl] Involuntary Resettlement lOD 4.30 El Yes 1 NoEl Safety of Dams (OP 4.37, BP 4.37) U Yes 1 NoK] Projects in International Waters (OP 7.50. BP 7.50. GP 7.50) U Yes 1Z No

7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.

Indigenous Peoples

To, provide commensurate and culturally-compatible benefits to tribal people, the project would ensure (a)that the appropriate proportion of places and facilities in the polytechnics are given to indigenous students;(b) that the on-going and new academic programs/curricula fit the needs of the local tribal populations andare compatible with their cultures; and (c) that the industry/community outreach programs coverin(igenous populations and needs.

A large percentage of students (60-90%) in the project polytechnics in Arunachal Pradesh, Meghalaya,M:izoram and Nagaland would be from tribal communities, and about 30% in Tripura. In the otherstates/UT the proportion of tribal students would be commensurate with the proportion of tribals in theirtotal populations. Some diploma programs offered by the polytechnics in all states would focus on thedevelopment and promotion of skills and technologies related to indigenous activities such as handicrafts orthe use of traditional herbs.

Ea,ch polytechnic would carry out a detailed social assessment prior to designing and implementing itscommunity outreach programs. This would include the collection and analysis of relevant data on the localtribal communities and their institutions, and ascertaining their preferences through consultations. Theprograms designed as a result of these social and institutional anlayses would offer culturally-appropriatechoices and build in continuous assessments of relevance, community interest in them, and effectiveness.

In addition, the participatory measures planned in the project would enhance the involvement of tribal

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communities and benefits to them. For example, the project emphasizes community participation in themanagement and governance of polytechnics; and local community leaders and members would be involvedin decision-making throughout project planning, implementation and evaluation. The impact of the projecton Scheduled Tribes -- e.g., enrollment, completion, participation in community programs, skills, andemployment -- would be closely monitored by the SPIUs and NPIU and reported regularly to GOI and IDAduring reviews. Annex 11 provides further details on how the project would promote tribal development.

F. Sustainability and Risks

1. Sustainability:

Because of the small number of polytechnics in most states and complete absence of polytechnics intwo states at present, incremental operating costs due to project implementation will be substantial.The resulting financial strain on the state finances would be mitigated to some extent through internalrevenue generation through consultancy earnings and commercial use of facilities, cost recoverythough increased fees, keeping the operating costs as low as possible, and through participation ofindustry and community in financing some programs. Financial sustainability is also likely asrecurrent costs arising at the end of the project period are relatively small ( 1-3 % of projected nonplan expenditure on total education). The financial sustainability of the proposed project issummarized in section E2 (Summary Project Analysis, Financial) and is more fully documented inAnnex 4.

Sustainability of project gains is likely due to committed state support, autonomy to be granted topolytechnics, flexible and market driven programs, policy reforms, staff training and availability ofqualified staff, availability of modem facilities and involvement of industry and community. AnOperational Plan to sustain gains of the project will be prepared by each state towards the end of theProject. State Governments and the Boards of Governors of autonomous institutions will implementthe Operational Plans.

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

Risk Ris kRatig Risik Minimization MeasureFrom Outputs to ObjectiveExpected Policy reforms may be delayed. M Many states have proposed policy reforms in

their own proposals and have agreed to committo a time frame to implement reforms withintwo years of project effectiveness.

Limited opportunities for industrial M Some students and faculty will be sent forlinkages in the states. training in industrialized states; all states are

making financial provisions to support suchtraining.

From Components to Outputs

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There may not be sufficient demand for M The new programs and new institutions arethe new programs. decided based on labor market perceptions.

Moreover, intensive marketing of the newprograms would be carried out to attract goodstudents to seek technician education as a careeroption.

Faculty recruitment for new programs M Special measures will be taken by the states tomay pose difficulties due to develop faculty from the locally availablenon-availability of suitable local manpower and to engage guest faculty fromcandidates. other parts of the country.

Appropriate learning resources like M Help would be sought from the major states,cormputer-aided learning, video programs covered in earlier projects, and Technicalmay not be available in some programs. Teachers' Training Institutes (TTTIs) will be

consulted to overcome shortage of learningmaterials in new areas.

Establishment and strengthening of N All states are committed to provide autonomy toBoards/ Directorates/ Councils/ SPIUs institutions in a phased manner. Boards/may increase bureaucracy. Directorates/ Councils would function in a

supportive and advisory rather than controllingand prescriptive manner.

Weak implementation capacity of states M Provision of resident consultant and otherand UT in implementing academic consultants has been kept to assist states/UT inreforms. implementing academic reforms. Technical

Teachers' Training Institutes (TTTI) and otherresource institutions will also assist states indeveloping capacity to implement academicreforms through training and consultancies.

Management and implementation of the M The situation is improving as Government ofproject may be difficult as some the states India is taking special measures for fasterface law and order problems. economic development of the states.

Civil works at some sites may get delayed S States/UT have been advised to incorporate thedue to hilly terrain, limited fair weather site specific special working conditions bydays, remoteness of locations, and planning overlap of feasible activities etc., at theunwillingness of large contractors from time of award of the contract to ensure timelyneighboring states to work at these completion of works.locations.

Procurements may be delayed as M States/UT propose to appoint consultancy firmsStates/UT have limited procurement for procurement.experience.

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Fund flow to SPIUs may not be adequate M The flow of funds will be monitored closely byand timely. NPD and corrective actions taken as needed.

IDA will also monitor financial progress duringbi-annual reviews.

Overall Risk Rating M

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

3. Possible Controversial Aspects:

None.

G. Main Credit Conditions

1. Effectiveness Condition

None

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

During negotiations, the following assurances were provided by

(a) The GOI that it shall:

* withhold and cause the project states to withhold establishment of any new publicly fundedpolytechnic without the prior approval of the AICTE;

* by April 1, 2001, jointly with the project states, develop and institute and therafter maintainfellowship training program, including study tours, agreed to by the GOI and IDA;

- develop and establish a Management Information System (MIS) in the NPIU for monitoring andsupervision of the Project

o maintain adequate staff in the NPIU and the project polytechnics of the Union Territory accordingto a schedule of depolyment of key additional staff as agreed with IDA;

* in conjunction with the project states and IDA, undertake bi-annual reviews and a mid-tenn reviewby December 31, 2003, on the basis of monitorable benchmarks agreed to by the GOI and IDA;

X enable NPIU to get tracer studies of polytechnic, project impact analysis, social/commnunity needsassessment and other research studies conducted as required during project implementation;

* develop a LACI compliant Financial Management System (FMS) and make it operational in theNPIU and project states/UT by April 1, 2001;

* fumish to IDA, not later than September 30 each year, Audit Report from an independent auditoracceptable to IDA , for all project related expenditures for the preceding financial year, of suchscope and detail as IDA may reasonably request.

(b) The Project States and the UT of Andaman and Nicobar Islands that they shall:

* provide key additional staff to their respective SPIU/Board/ Directorate/Council and polytechnicsaccording to a schedule of depolyment of key additional staff as agreed with the GOI and IDA;

* award substantial academic, financial and administrative autonomy to their respectivepolytechnics according to a time-bound action plan, prepared during the first year of Projectimplementation, satisfactory to GOI and IDA.

* institute by April 1, 2001, a plan satisfactory to GOI and IDA, for training of state officialsdealing with technician education, and polytechnic teaching and non-teaching staff;

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*S prepare and furnish to IDA by December 31 of each year for the next fiscal year, draft annualplans including (i) the introduction of new programs, (ii) procurement of civil works, goods andconsultant services, (iii) training of teachers including local and foreign fellowships, and (iv)programs for interaction with industry and community;

a, provide adequate and timely funds, and physical and manpower resources to their respective SPIUsand polytechnics for implementation of the project;

a, provide adequate resources to their respective polytechnics for maintenance of buildings andequipment; and delegate appropriate financial powers by March 31, 2002 to polytechnic principalsto enable them to undertake annual maintenance programs at their respective polytechnics;

*S in conjunction with GOI and IDA, undertake bi-annual reviews, and a mid-term review byDecember 31, 2003 on the basis of monitorable bench marks agreed to by the GOI and IDA; and

ol furnish to IDA, not later than September 30 each year, Audit Report from the state AccountantGeneral (Audit) , for all project related expenditures for the preceding financial year, of such scopeand detail as IDA may reasonably request.

H. Readiness for Implementation

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

LI 1. b) Not applicable.

X 2. The procurement documents for the first year's activities are complete and ready for the start ofproject implementation.

1S 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality.

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

1. The requirements for the additional spaces to be construction have been appraised. The states haveagreed to follow the IDA guidelines and use the model NCB document. As per the Project ImplementationPlan, no major civil works are planned during the first year of the project. Only minor extensions/modifications of the existing buildings will be undertaken at eight locations in five states utilizing servicesof their state agencies. Engineering design for major civil works to be undertaken from the second year ofthe project have commenced in four states. The other four will utilize the services of consulting agencies fordesign and costruction. The agencies are expected to be appointed by September 2000. The biddingdocuments for all major works are expected to be presented to IDA for review and clearance by April2001.

2. Preliminary lists of equipment to be procured during the project have been prepared by all states. Theseare being reviewed, refined and finalized. The states have agreed to follow the IDA guidelines and use themodel NCB document. As per the Project Implementation Plan, during the first year, only some of theequipment to replenish the existing laboratories and workshops, and a limited number of computers are tobe procured following the national shopping procedure. Six states are also expected to appoint consultingagencies for procurement by September 2000. The first NCB documents from all states for equipmentprocurement during the second year are expected to be sent to IDA for review by April 2001.

1. Compliance with Bank Policies

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

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all other applicable Bank policies.

.- I.

Shashi K Shrivastava Y. Jimenez (E win Lim

Team Leader Sector'ManagerlDirector 4 Country Manager/Director

- 26 -

Annex 1: Project Design SummaryINDIA: Third Technician Education Project

Hierarchy of Objectives Indicaors i- ort W-109AXWO__1________Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission)To assist project states' pursuit of * Increased industrial and * Sector reports * Accelerated economic andaccelerated growth with equity by economic activities in the states * State Economic Surveys industrial growth will lead to(a) increa sing the efficiency and * Enhanced per capita income * Periodic reports of Centre for poverty reduction and greaterresponsiveness of technical * Enhanced participation of Monitoring Economy (CMIE) equity in project states/UT.training institutions to the women and tribals in technical * The state govemments arechanging labor market needs; (b) labor force willing to introduce reforms insupporting key policy reforms in the system.technical education; and (c) *The states will facilitate closecreating opportunities for training interaction between institutionsof some disadvantaged sections of and community/ industry.society to alleviate poverty.

Project Development Outcome / Impact Project reports: (from Objective to Goal)Objective: Indicators:The propDsed project will assist *Effectiveness and stage of *Project monitoring reports *Availability of higher qualitythe industrially and economically implementation of proposed * GOIV IDA Review missions technical manpower will spurunderdeveloped, and systemic reforms in technician * Tracer studies industrial and economic growth.geographically remote states of education in each statethe northeastern region * Percent of polytechnic graduates * Management and(Arunachal Pradesh, Meghalaya, employed/self-employed in their implementation of multi-stateMizoram, Nagaland, Sikkim, field of training within one year project in relatively lessTripura), Jammu & Kashmir, of graduation developed and remote states canand the union territory (UT) of * Average time taken for be effectively managed.Andamarn & Nicobar Islands to completing polytechnic diplomaexpand capacity and improve the *Nature and level of interactionquality and efficiency of with local community andtechnician (polytechnic) industryeducation to meet the specificeconomic needs of each state.The project will also aim at *Percentage increase of women/ *Project monitoring reports *Programs offered byincreasing access of women, tribal/ rural students in * GOI/ IDA Review mission polytechnics will be appropriatescheduled tribes, minorities and enrollment in formal and and attractive, and will help therural youth to technician non-formal programs trainees increase their eamingeducation and training. capacity

-27 -

XHi0 weh tO tis I t or ~ &E ptlo G(t ic AssmptioAOutput from each Output Indicators: Project reports: (from Outputs to Objective)component:1. Developing/ expandingcapacity of technicianeducation system

* Increased number of * Number of new institutions * State and NPIU progress * Technical manpower ispolytechnics reports. inadequate in project states,

* Increased number of programs * Number of new programs * GOV IDA Review missions especially in new and emerging*Increased enrollment capacity *Percentage increase in student *Specific studies technologies, and service sector

intake*Increased number of hostel eNumber of residences and *Provision of hostels will

places and staff residences hostel places created, increase participation of*Increased number of programs *Number of persons trained students (especially women)

for industry and community through continuing education from remote areas.and community services * Industry and community

oriented continuing educationprograms will enhance skillsand earning capacity ofbeneficiaries and will attractparticipation.

2. Enhancing quality oftechnician education:

* Upgraded laboratories and *Percentage of laboratories and * State and NPIU progress *Program flexibility, relevantworkshops workshops modemized reports. curricula, trained teachers,

*Establishment of new *Number of new modem * GOV IDA Review missions modemized labs andlaboratories and workshops laboratories established *Feedback from students, workshops, increased use of

*Labor market relevant curricula *Percentage of existing curricula teachers, and industry through computers and leamingrevised / Number of new workshops/meetings resources, and intensecurricula developed interaction with industry and

* Flexibility in program offerings * Increase in number of programs community will lead to betterwith Multi-Point Entry and quality of polytechnic graduates.Credit System (MPE&CS)

* Improved staffing * percentage of teaching postsfilled *With improved facilities,

* More competent teachers and *number of faculty trained polytechnics will attract qualitynon-teaching staff *number of other staff trained students and teachers.

* Increased use of computers by *Use of computers averagestudents and staff hours/week /students

* Enhanced use of leaming * Average number of Leamingresources including multimedia Resources issued/student/yearand Intemet

*Increased and effective *Number of collaborative effortsinteraction between industry (short term training programs,and polytechnics consultancy, intemships,

placement, transfer oftechnology programs,community services, etc.)

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3. Improving efficiency oftechnician education system

* Reduction in student dropouts * Dropout rate in percentage * State and NPIU progress * Policy reforms are essential for* Increase in student pass rate * Average time taken to complete reports. improving efficiency of the

diploma program * GOI/ IDA Review missions system.* Improved management of *Number of institutions awarded e Formative evaluation * States and all stake-holders are

polytechnics autonomy willing to participate in system*Improved management of *Reduction in time taken to reforms.

technician education systems perform key functions (e.g.announcement of results)

* Computerized management at * Operationalization of MIS andstate ancd individual polytechnic financial management systemslevels

* Improved cost recovery * Increase in revenue generatedthrough tuition fees and othermeans

Project Components Inputs: (budget for each Project reports: (from Components toSub-comiponents: component) Outputs)(a) Capacity Expansion USS 48.18 Million

*New Programs * State progress reports *New programs will be able to(Quarterly) attract better students.

*New Co-ed Polytechnics * State disbursement reports *New and existing institutions* Strengthening of Existing (Quarterly) would meet increased demand

Polytechnics * GOI/ IDA Review mission for technicians* Continu-ing Education facilities reports (Half yearly) *Working technicians and

* Audit reports (Annually) engineers and community wouldbe willing to take up continuingeducation programs offered by

* Hostels and Residences polytechnics*Provision of faculty housing will

help attract and retain talentedfaculty.

* Provision of hostels wouldencourage women students andstudents from far off areas totake up technician education

* There will be no delay in civilworks and procurement ofgoods.

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(b) Quality Enhancement US$ 22.85 Million

*Creation and filling of posts. *State progress reports *Faculty recruitment will not(Quarterly) pose major problems.

* Faculty Development * State disbursement reports * Training of teachers and staff,* Supporting Staff Training (Quarterly) updated/ new curricula,* Equipment for labs and * GOI! IDA Review mission availability of modem

workshops reports (Half yearly) equipment and books andeLeaming Resource User Centers *Audit reports (Annually) leaming resources (LRs) will

(LRUCs) improve quality of academic*Curriculum Revision/ services provided by the

Development institute.* Industry/ Community * There will be no delay in

-Institution Interaction Cells procurement of equipment,* Maintenance Cells books and leaming resources

and completion of otheracademic activities.

*Adequate funds will be madeavailable to implementingagencies.

(c) Efficiency Improvement US$ 9.05 Million

* Establishment/ Strengthening of * State progress reports * Establishment/ strengthening ofState Directorate & Boards (Quarterly) Boards/ Directorates/ Councils/

* Research Studies for system * State disbursement reports State Project Implementationreforms (Quarterly) Units (SPIUs) will lead to better

* Computer-based Project and * GOI/ IDA Review mission planning and management ofFinancial Management systems reports (Half yearly) the system.

*Autonomy with accountability * Audit reports (Annually) *Autonomy to polytechnicswould lead to responsiveness tomarket demands.

*Networking of institutions *Networking will lead to costsharing and enhanced access tofacilities between networkedinstitutions.

* Support for Policy reforms *Policy reforms would beimplemented within the agreedtime ftame.

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Annex 2: Project DescriptionINDIA: Third Technician Education Project

The states and union territory (UT) covered by this project are characterized by small populations and lowpopulation density, relatively weak infrastructure, and limited industrial development due to theirlocational disadvantage and difficult terrain. Some of the economic and demographic indicators aresummarized in Table 2.1. The educational profile of the states/UT is shown in Table 2.2.

Table 2.1Economic and Demographic Indicators of the Project States/UT

State/ A & N Arunachal Jammu & Meghalaya Mizoram Nagaland Sikkim Tripura IndiaIndicator Islands Pradesh Kashmir

Area ('000 8 84 222 22 21 17 7 10 3287Sq. Km.)

Population 0.28 0.86 7.7 1.8 0.69 1.2 0.4 2.8 846(Millions),1991

% Schedule - 0.47 NA 0.51 0.10 - 5.93 16.36 16.48Castes, 1991

% Schedule 9.54 63.66 NA 85.53 94.75 87.70 22.36 30.95 8.08Tribes, 1991

Literacy Rate 97 60 59 77 95 84 79 73 621997(%)

Net State NA 13.650 58.120 17.630 11.270 17.270 4.460 18.630 16123.830Domestic (97-98) (96-97) (96-97) (95-96) (96-97) (95-96) (98-99) (98-99)Product (SI)Pat currentprices, INRBillions)

Per Capita 126530 13424 6658 8474 13360 11174 9472 5432 14682SDP/NNP at (96-97) (97-98) (96-97) (96-97) (95-96) (96-97) (95-96) (98-99) (98-99)current prices(INR)

(Source: Centre for Monitoring Indian Economy (CM IE), Bombay & Manpower Profile, India, Yearbook 1999, Institute of Applied Manpower Research)

Table 2.2Educational Profile of the Project States/UT

State/ A & N Arunachal J & K Meghalaya Mizoram Nagaland Sikidm Tripura IndiaIndicator Islands Pradesh

Secondary 12/5.8 19/7.4 165/ 31/15 24/12 27/12 6.8/ 3.3 60/25 17947/6717School 60EnrollmentTotal/ Girls(1997,'0010)

- 31 -

Senior 4/1.8 7.3/2.7 63/ 14/6.4 4.8/ 2.0 12/ 5 3.3 /1.4 23/8.7 9294/3387Secondary 23SchoolEnrollmentTotal/ Girls(1997, 000)

Graduate and 1.8/ 0.9 3.7/ 0.9 4.5/ 12.0/ 5.6 8.3/ 3.6 5.9/ 2.4 1.6/ 0.6 15.0/ 5.9 5654/ 2129above 0.7EnrollmentTotal/ Girls(1997, 000)

Industrial 1/198 2/374 37/ 9/606 1/300 3/404 1/140 3/508 3665/Training 4172 573467Institutes/Enrollmentcapacity(1997)

Polyteclhics/ 2/180 0/0 4/570 1/ 150 2/170 2/75 0/0 1/125 1135/Annual 186155Intake(1997)

{Source: Manpower Profile, India, Yearbook 1999, Institute of Applied Manpower Research)

The project, envisaged on the lines of the Technician Education I & II Projects in India, will provideassistance to eighteen polytechnics in the industrially and economically underdeveloped, and geographicallyremote states of Arunachal Pradesh, Jammu & Kashmir, Meghalaya, Mizoram, Nagaland, Sikkim, andTripura and UT of Andaman & Nicobar Islands for expanding capacity and improving quality andefficiency of technician education to meet the specific economic needs of each state/UT. The project willalso aim at increasing access of some disadvantaged sections of society (women, scheduled tribes, and ruralyouths) to technician education. The project will promote active interaction of all the polytechnics with thelocal industry/services and the community through their involvement in continuing education andnon-formal training of industry personnel, rural artisans, educated unemployed and the school dropouts andthrough participation in local developmental activities.

The project will have three components: (i) Developing/expanding capacity to provide increased accessto technician education; (ii) Enhancing quality of education to produce better trained technicians; and(iii) Improving efficiency through better planning, administration and utilization of the system andincreasing its responsiveness to emerging labor market needs.

Capacity development/expansion will be achieved by: (a) establishing six new co-educational polytechnicsand a skill development center, (b) strengthening twelve existing polytechnics and introducing newprograms, (c) introducing continuing education and non-formal training programs for industry andcommunity, and (d) providing student and faculty housing facilities.

Quality enhancement will be achieved by: (a) modemizing existing laboratories and workshops, (b)developing/revising curricula to meet labor market needs as well as imparting entrepreneurial skills, (c)improving staffing and imparting staff training, (d) increasing utilization of learning resources and media,and (e) promoting interaction with industry and community.

Efficiency improvement will be achieved by: (a) establishing/strengthening state boards/-councils/directorates and other support units dealing with technician education to provide better planning,monitoring and guidance, (b) conducting research studies for systemic refornms, (c) instituting

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computer-based project and financial management systems, (d) providing substantial academic, financialand administrative autonomy with accountability to polytechnics, (e) networking of polytechnics with otherinstitutions/organizations, and (f) enhancing state-level policy support for technician education.

By Component:

Project Component I - US$48.18 million

Capacity development/expansion

(a) Establishment of six new co-educational polytechnics and a skills development center

Under the project, six new AICTE-approved co-educational polytechnics (Arunachal Pradesh-l,Meghalaya-2, Nagaland- 1 and Sikkim-2) will be established. The state of Tripura will establish a SkillsDevelopment Center in its existing polytechnic. Three of the new polytechnics will be in two states (Sikkimand Arunachal Pradesh) where there are no polytechnics at present. These new polytechnics will have adistinctive character and will offer programs with high employment potential in the service sector as well ashi-tech areas such as Information Technology, Mechatronics, Advanced Manufacturing Technology, etc.,to meet the emerging labor market needs. Twenty-six diploma programs and six post diploma programs,creating an annual intake capacity of 900 in the six new polytechnics and skills development center will besupported by the project (Table 2.3). The states propose to adopt best practices in the country in thedevelopment of these polytechnics. The polytechnics will be granted adequate functional autonomy.Mudti-Point Entry & Credit System (MPE&CS) will be introduced in these polytechnics from the verybeginning. Industry and community would be effectively involved in polytechnic management, programdesign and implementation, as well as faculty development. Sikkim proposes to recover a significantproportion of the operating cost through student tuition fees.

Table 2.3Proposed Programs in New Coeducational Polytechnics

State Institution Proposed Programs (Annual Intake, Duration in Years)

Armnachal New Polytechnic, Itanagar -Electrical & Electronic Engineering (30,3)Praidesh Automobile Engineering (20,3)

Information Technology (30,3)Costume Design & Garment Technology (20,3)Travel, Tourism & Hotel Management (20,3)

*Herbal Remedies & Cosmetology (20,3)

Meghalaya Government Polytechnic, -Computer Applications (30,3)Tura -Food Processing Technology & Preservation (30,3)

-Medical Electronics (30,3)

Government Polytechnic, Architectural Assistant (30,3)Jowai Automobile Engineering. (30,3)

Costume Design & Garment Technology (30,3)

Nagaland ICIT, Mokokchung *Information Technology (30,2)Electronics & Computer Maintenance Engineering (30,2)Telecommunications Engineering (30,2)

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Sikkim 'Electronics & Hardware Engineering (45,3)Centre For Computers and Computer Science & Technology (45,3)Communications Telecommunications Technology (45,3)Technology Electronics & Hardware Engineering (Post Diploma) (20, 1.5)

Computer Science & Technology (Post Diploma) (20, 1.5)Telecommunications Technology (Post Diploma) (20, 1.5)

Advanced Technical *Mechatronics & Industrial Automation (45,3)Training Centre 'Tool, Die & Mould Making (45,3)

'Advanced Manufacturing Technology (45,3)'Mechatronics & Industrial Automation (Post Diploma) (20,1.5)'Tool, Die & Mould Making (Post Diploma) (20,1.5)'Advanced Manufacturing Technology (Post Diploma) (20,1.5)

Tripura Skills Development Centre 'Modem Office Management (30,3)at 'Interior Decoration, Handicrafts & Furniture Design (20,2)Polytechnic Institute, 'Food Processing Technology (15,3)Narsingarh 'Computer Science (20, 3)

'Catering Technology & Applied Nutrition (15,3)

Note: The list of programs and intake is indicative and subject to approval by the All India Council for Technical Education.

(b) Strengthening of twelve existing polytechnics and introduction of new programs

There are twelve existing polytechnics in the project states/UT (Andaman & Nicobar-2, Jammu &Kashmir-4, Meghalaya-1, Mizoram-2, Nagaland-2, Tripura-1). Seven of these were established between15 - 40 years ago and have not received much support for over a decade for any modernization. The otherfive have been established more recently but four of these are still operating from temporary sites. Most ofthe polytechnics offer programs in three traditional engineering disciplines with very limited workshop andlaboratory facilities. The project will help upgrade the basic infrastructure to enable these polytechnics tooffer high quality training in the traditional as well as new disciplines. The states and UT have preparedplans with cost estimates for strengthening academic, administrative and residential facilities. The annualintake in some programs with high demand in the state is proposed to be increased to make the programscost-effective. This will increase the annual intake capacity in existing programs by 140 student places(Table 2.4).

Table 2.4Increase in Intake in Present Programs in Existing Polytechnics

State Institution Programs (Duration in years) Present Intake Proposed Intake

Nagaland Khelhoshe Polytechnic, Civil Engineering (3) 30 40Atoizu Electrical Engineering (3) 15 30

Mechanical Engineering (3) 15 30

Women Polytechnic, Kohima Modem Office Management (3) 15 30

Jammu & Govemment Women Computer Engineering (3) 10 30Kashmir Polytechnic, Jammu

Government Women Computer Engineering (3) 20 30Polytechnic, Srinagar

Government Polytechnic, Computer Engineering (3) 10 30Jammu

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Kashmir Govemment Computer Applications (Post Diploma) 30 45Polytechnic, Srinagar *(1.5)

Mizoram Women Polytechnic, Aizwal Electronics & Telecommunications (3) 20 30Modem Office Practice (3)

20 30

* Post-diploma will be restructured as a three-year diploma program.

New Programs: To meet the current and emerging manpower needs in the project states/UT, nineteenDiploma programs and one Post-diploma program (Table 2.5) will be introduced in the existingpolytechnics, creating an additional annual intake capacity of 545 student places over the project period.

Table 2.5New Programs in Existing Polytechnics

State Institution Proposed Programs (Annual Intake, Duration in Years)Andlaman & Nicobar Islands Dr. B. R Ambedkar Polytechnic * Marine Engineering (20, 3)

* Refrigeration & Airconditioning (20,3)* Infomtiation Technology (20, 3)

2nd Govemment Polytechnic * Hotel Management & Catering Technology (20, 3)

Janmnu & Kashmir Govemment Women's Polytechnic, Jammu * Medical Laboratory Technology (30, 3)* Textile Design (30, 3)

Govemment Women's Polytechnic, * Medical Laboratory Technology (30, 3)Srinagar * Food Technology (30, 3)

Govemment Polytechnic, Jammu * Instrumentation & Control (30, 3)* Travel & Tourism (45, 3)

Kashmir Govemment Polytechnic, * Leather Technology (30, 3)Srinagar * Wood Technology (30,3)

Meghalaya Shillong Polytechnic * Infomnation Technology (Post-diploma) (20, 2)* Computer Science & Engineering (30, 3)

Mizoram Mizoram Polytechnic, Lunglei * Computer Applications (30, 3)

Women's Polytechnic, Aizwal * Garment Technology (20, 3)* Beauty Culture & Cosmetology (20, 3)

Nagaland Khelhoshe Polytechnic, Atoizu * Automobile Engineering (30, 3)

Women's Polytechnic, Kohima * Computer Applications (30, 3)* Fashion Technology (30, 2)

Note: The list of new programs and intake is indicative, subject to approval by the All India Council for Technical Education.

(c) Introduction of continuing education and non-formal programs for industry and community

Expansion/introduction of continuing education programs (CEPs), including non-formal training forinclustry and community, will be an important component of this project. It is expected that about 10,000persons will benefit through continuing education programs during the project period. The programs willalso help strengthen linkages of polytechnics with industry and community and will spread the impact oftechnician education system beyond the organized sector. Tripura will establish a Distance EducationCenter to offer courses in Construction Management and Computer Applications with intake capacity of 30

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each to cater to the needs of educated youth in remote locations in the state. Andaman & Nicobar willestablish six extension centers for imparting training through distance mode to islanders through V-SATconnectivity.

(d) Provision of student and faculty housing facilities

On campus hostel facilities are needed to enable poor students (especially women) from rural areas anddistant locations undertake studies in polytechnics. Some housing facilities are also needed to attract andretain quality faculty and staff. At the 18 project polytechnics, hostels will be constructed for 1273 menand 1257 women students, and residences for about 300 faculty and staff.

In summary, the activities which will be supported under the project will increase the total enrollmentcapacity of the 18 project polytechnics in the project states and UT by 125% from a present total capacityof 3595 to about 8100 by the year 2005-2006. In addition, over 2500 persons will be trained every yearthrough continuing education programs offered by the polytechnics. No increase in enrollment is proposedin the conventional areas of civil, mechanical and electrical engineering except in Nagaland where thepresent intake is very low in these disciplines.

Project Component 2 - US$22.85 million

Quality enhancement

(a) Modernization of existing laboratories and workshops

At present, the existing polytechnics are poorly equipped to deliver even traditional programs. Under thiscomponent, training facilities in all the existing polytechnics will be modernized. New equipment will beprovided, while obsolete equipment will be replaced and/or modernized. Introduction of computers andInternet for instructional and managerial functions will be another dimension of modernization. As a result,about 110 existing workshops and laboratories will be updated and re-equipped, and 12 computer centersestablished/strengthened.

(b) Development/revision of curricula to meet labor market needs

To meet the needs of curriculum development and revision, the project states will adopt differentstrategies. Some states have proposed the establishment of Curriculum Development Cells in polytechnicsto revise curricula with the help of faculty, outside experts and industry. Others have proposed to developand revise curricula with the help of Technical Teachers' Training Institutes (TTTIs)/other resourceinstitutions/consulting agencies. Many states have laid emphasis on development of competency-basedcurricula. All curricula will be updated before the academic year 2001-2002 and will provide Multi-PointEntry & Credit System facilities. Computer education (general and profession specific) will be acompulsory component of all updated and new curricula. The curricula design will also give due attentionto environmental concerns and development of entrepreneurial and communication skills. Attempts will bemade by all project states to develop a continuing system of curricula updating to meet the changing marketneeds, which will be done in close collaboration with the state Boards, the All India Council for TechnicalEducation and local industry.

(c) Staffing of polytechnics and provision of staff training

A total of 284 additional teachers will be appointed for the new diploma and post-diploma programs

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according to a schedule acceptable to IDA (Table 2.6). The project will also support about 272non-teaching staff to be appointed against positions created for new polytechnics, new programs and stateunits. The States will take action to reduce existing faculty vacancies.

The project will support training of all (550) faculty during the project period (at an average of 4 weeksper year) through local and foreign training/fellowships. Teacher training in the areas of curriculumdevelopment, education technology, instructional resources design and technological content updating willbe carried out with the assistance of TTTIs and other agencies selected by the states. Some 90 teachersand officials will be trained abroad to increase their competence in planning, organizing and managing thesystem. About 250 teachers will be trained in Indian industries in new technology areas for makinginstructional processes more relevant and increasing industry-institution interaction. The project will alsosupport training of about 500 laboratory and workshop staff.

Table 2.6Key Additional staff to be appointed during the project (Year-wise)

State/UT Type of Staff I _ 1 III IV V Total

Ancdaman & Teaching Staff - 2 3 3 4 12Nicobar Islands

Key Staff for state units* 4 4

Arunachal Pradesh Teaching Staff 19 7 4 - 30

Key Staff for state units* 4 - - 4

Jarnmu & Kashmir Teaching Staff 2 13 27 37 79

Key Staff for state units* 13 - - - 13

Meghalaya Teaching Staff 10 13 10 8 41

Key Staff for state units* 4 - - - 4

Mizoram Teaching Staff 7 3 8 18

Key Staff for state units* 5 - - 5

Nagaland Teaching Staff 6 13 11 30

Key Staff for state units* 4 - - 4

Sikkim Teaching Staff 11 12 8 20 10 61

Key Staff for state units* 4 - - - - 4

Tripura Teaching Staff 4 9 13

Key Staff for state units* 4 4

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NPIU Key Staff 7 = 7

Total Teaching Staff 59 72 71 68 14 284

Key Staff for state units/NPIU 49 - - - - 49

* Key staff for state units includes key additional staff at SPIU, DTE, BTE and Council.All figures for teaching staff relate to key additional staff at project polytechnics.Figures for first year also include appointments to be made in the preparatory period.

(d) Increased utilization of learning resources and media

Modernized curricula will also be supported through establishment of a Learning Resource UtilizationCenter (LRUC) or modernization of existing libraries to serve as LRUCs in each of the 18 polytechnics.Under this sub-component of the project, books and learning resources (LRs) will be procured by LRUCsin polytechnics to increase effectiveness of teaching-learning process. Special emphasis will be oncomputer-aided self learning and learning through Internet access to be provided to each LRUC/ library.Other LRs like video programs, transparencies, slides, models, etc., will also be procured by polytechnics.In due course, the LRUCs may also undertake development of LRs.

(e) Promoting interaction with industry and community

A close interaction with industry and community is essential for enhancing quality of training andincreasing effectiveness of the project. Project polytechnics will conduct non-formal training of educatedunemployed, school dropouts, women and urban and rural youth to help them obtain gainful wage/selfemployment. Endowed with variety of technologies, each polytechnic will put them to use in non-formaltraining and community services. Some of these are automobile maintenance, welding and fabrication,electrical and electronic equipment maintenance, construction and building maintenance, computing anddata processing, water conservation and harvesting, plumbing, carpentry, furniture repairs and fitting, foodprocessing, agricultural equipment repairs, etc. After a detailed study, programs suitable for enhancingtraditional skills of tribal community will be offered by the polytechnics. Polytechnics will also helptransfer appropriate technologies to villages. Industry and community will also be involved in planning,management and development of project polytechnics.

To promote closer interaction with industry and community, each polytechnic will establish anIndustry/Community-Institute-Interaction Cell. The major functions of the Cell will be to: (a) organizesystematic industrial training for students and teachers of polytechnics; (b) facilitate consultations withindustry and community in the areas of curriculum development, instructional material development,training of students and teachers; (c) facilitate polytechnic's consultancy and community services to assistindustries and community in problem-solving; (d) organize formal and non-formnal training programs forworking technicians, artisans, educated youth, etc.; (e) conduct or organize research studies for gatheringdata useful for technician education planning and curriculum planning; (f) provide counseling andplacement services to students for employment/self-employment; and (g) involve industry and community inthe governance and financing of polytechnic education.

The training and upgrading of teaching staff, modernization of curricula, equipment and facilities,increased use of learning resources and media, and intense interaction with industry and community wouldimprove the quality of trainees graduating from the polytechnics. It is expected that by the end of theproject, about 550 teachers and 500 other staff would be trained, the curricula for all the existing programs

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upclated and those for new programs developed and implemented, and about 110 outdatedworkshops/laboratories modernized. In addition, networking and Internet facilities will be provided in allpolytechnics.

Project Component 3 - US$ 9.05 million

Efficiency improvement

(a) Establishment/strengthening of state boards/councils/directorates and other support unitsdealing with technician education

Under this project sub-component, state Boards/Councils/Directorates of Technical Education (DTEs) willbe established or strengthened to increase effectiveness and better management of the technical educationsystem. For the purpose of project implementation, State Project Implementation Unit (SPIU) will beestablished in each state. The SPIUs will be provided with duly trained staff, equipment and facilities foreffiicient implementation of the project. They will be assisted by essential support staff andconsultants/consulting agencies as needed. The project will also support the National ProjectImplementation Unit (NPIU), which will be responsible for guidance, coordination and monitoring of thepreject. The NPIU will facilitate periodic reviews and monitoring by the Government of India (GOI) andIDA. About 41 key additional staff will be appointed in the state level units and the NPIU. The project willalso support training of the staff of Bureau of Technical Education/National Project Directorate in theDepartment of Secondary Education and Higher Education, state Boards/Councils/DTEs, SPIUs, TTTIsancl NPIU in India and abroad. Such training would focus on education system reforms, project design andimplementation, evaluation and monitoring, economic analysis, systems management, MIS, and otherrelated areas.

(b) Research studies for systemic reforms

Under this project sub-component, a number of research studies including impact studies, tracer studies,formative evaluation studies, equipment and space utilization studies, training needs analyses, actionresearch, etc., will be conducted by the states and the NPIU. TTTIs and other resource institutions, asneeded, will assist NPIU and states in carrying out these studies. The main objectives of these researchstudies would be to: (a) identify systems and processes for effective administration/ management oftechnician education system, (b) evaluate effectiveness of systemic reforms undertaken in the project, (c)collect and analyze data on employment profile of polytechnic graduates, (d) identify and suggestmid-course corrections through formative evaluation of the project; and (e) need analysis/ impact studiesunder industry/community - institute interaction.

(c) Development and institution of computer-based project and financial management systems

Under this project sub-component, a LACI-compliant computer-based project and financial managementsystem will be instituted at SPIUs/ DTEs, as well as at polytechnics. State and polytechnic staff will betrained to effectively manage the computer-based systems. Polytechnics with the help of SPIUs areexpected to institute and regularly use the MIS developed by NPIU. Investment in this sub-component isexpected to inculcate a culture of data-based decision making and make polytechnics more efficient inplanning and management. The system of on-line data transfer will make it possible for NPIU to monitorand coordinate implementation of the project in these remote locations

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(d) Provision of substantial academic, financial and administrative autonomy with accountabilityto project polytechnics

Provision of significant academic, financial and administrative autonomy with full accountability to allproject polytechnics is a key policy element of the project. The extent of autonomy and methods ofachieving it will vary from state to state and will be achieved in a phased manner during the project period.A significant achievement of this goal is expected by March 2003. This will be monitored continuouslyand in-depth at the mid-term and final reviews. The main purposes of restructuring the internalmanagement of polytechnics are to: (a) secure the academic autonomy to introduce Multi-Point Entry &Credit System, introduce new need-based programs, introduce assessment reforms and award their owndiploma; (b) secure the administrative autonomy to appoint faculty and staff and manage internal affairs ofpolytechnic; and (c) secure the financial autonomy to mange their finances within the overall approvedallocation. Increased autonomy will go hand-in-hand with increased accountability of the polytechnics andteachers.

In specific terms, Arunachal Pradesh and Sikkim will grant full autonomy to their polytechnics. Thepolytechnics of Andaman & Nicobar Islands will also receive a high degree of empowerment. Nagalandwill grant substantial degree of academic and administrative freedom to its polytechnics with a modest levelof financial autonomy. Jammu & Kashmir, Meghalaya and Mizoram will introduce autonomy in stagesreaching a significant level by the third year of the project. In Tripura, the existing polytechnic will begranted a modest degree of autonomy. All states will define the precise nature, level and a time-frame forgranting of autonomy in their Detailed Project Reports.

(e) Networking of project polytechnics with other institutions/organizations

In the increasingly interconnected world, networking of the project institutions is a necessity. Under thissub-component of the project, the project polytechnics will be networked with extension centers (as in thecase of Andaman & Nicobar Islands), state headquarters, SPIU, NPIU, resource institutions like the TTTIsand Regional Engineering Colleges (RECs), institutes of higher learning in neighborhood like the IndianInstitutes of Technology (IlTs) and North Eastern Regional Institute of Science & Technology (NERIST),and Government of India (GOI). The process of networking will be through Internet and e-mailconnectivity.

The main objectives of networking are: (a) sharing of expertise, educational resources and innovative ideas,(b) benefiting from distance education programs of networked resource institutions, (c) providing trainingthrough networked extension centers, (d) facilitating on-line data transfer to SPIU, NPIU and GOI, and (e)facilitating student self-learning.

(f) Enhancing state-level policy support for technician education

Under this sub-component of the project, the main objective will be to enhance state-level policy supportfor innovations like institutional autonomy, program flexibility, industry and community involvement ingovernance of institutions, internal revenue generation (IRG) reforms and student assessment reforms.

In summary, the internal and external efficiency of the technician education system is expected to beimproved considerably by the proposed investments. It is expected that student pass rate and employmentrate would go up, decision-making in the states would be information-based, the system would be moreresponsive and effective, industry/community- institution linkages would improve, and the polytechnicswould function more efficiently.

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Summary of the project targets by state is shown in Table 2.7.

Table 2.7Project Targets by State

Component A & N Arunachal J & K Meghalaya Mizoram Nagaland Sikkim TripuraIslands Pradesh

Capiacity Expansion/Development

Number. of new - I - 2 - 1 2 -

Polytechnics

Number of new Programs 4 6 8 7 + l(PD) 3 6 6 + 56(PD)

Additional Student Places 240 420 990 670 270 585 1050 280

% of Women Students 45 45 56 29 68 47 40 40

% of Scheduled Tribe (& 11 70 7 95 95 98 50 47Scheduled Caste)Studients

AdcLitional Hostel Places 42 100 81 300 120 90 540 0(Men)

Additional Hostel Places 24 60 448 120 150 195 260 0(Women)

Nurnber of Faculty 8 17 33 31 25 26 38 0Residences

Numnber of Staff 4 10 18 45 24 18 32 0Residences

Continuing Education 150 300 285 300 100 640 380 300Beneficiaries

Comnmunity Program 1050 570 1810 900 600 1160 600 450Beneficiaries

Quality Enhancement

% of Teaching Posts 90 90 90 90 90 90 90 90Filled

Numnber of Teachers 45 30 190 74 48 53 61 48Trained

Number of Technical 61 21 265 45 25 38 37 31Support Staff Trained

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Number of Labs & 13 0 55 13 18 19 0 9Workshops Modernized

% of Curricula Updated 100 100 100 100 100 100 100 100within last 5 years

No. of Programs with 10 6 28 12 8 10 12 6MPE&CS

Efficiency Improvement

Average time for 3.4 3.4 3.4 3.4 3.4 3.4* 3.4 3.4completing diploma(years)

% of student seats filled 95 95 95 95 95 95 95 95

Dropout Rate, % 3 5 5 3 1 5 5 2

% Students Employed/ 65 65 65 65 65 65 65 65Self employed withinOne Year

Time taken to Publish 4 4 4 4 3.5 4 4 4Results (weeks)

No. of Polys with 2 1 4 3 2 3 2 1Autonomy

Intemal Revenue 2.81 1.68 14.98 2.84 3.13 3.95 56.13 1.81Generated (INR Million)

PD: Post Diploma* For two year duration programs, it will be 2.25 years.INS: Information not supplied

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Annex 3: Estimated Project Costs

INDIA: Third Technician Education Project

L,FaI P.OM1n T.taProiect Cost By C.ompomnt US $million :fln US "$nilin

Capacity Expansion 40.49 3.11 43.60Quality Enhancement 18.61 2.47 21.08Efficiency Improvement 7.65 0.67 8.32

Total Baseline Cost 66.75 6.25 73.00Physical Contingencies 4.42 0.37 4.79Price Contingencies 1.91 0.38 2.29

Total Project Costs 73.08 7.00 80.08Total Financing Required 73.08 7.00 80.08

l_ TOWlProject Cost By ctegpry - US$miiIon -US $m ln U $miion

Goods 22.04 3.74 25.78Works 24.40 1.36 25.76Training & Consultants 7.06 1.90 8.96Miscellaneous 19.58 0.00 19.58

Total Project Costs 73.08 7.00 80.08Total Financing Required 73.08 7.00 80.08

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Annex 4INDIA: Third Technician Education Project

The Rationale for Public Investment in Technician Training

Investment in technician education is required to produce the pool of skilled manpower that wouldencourage private firms to modernize their technology and invest in industries with high growth potential.Information provided by state project planning teams indicate that there are no private training facilitiesoffering the programs that are being proposed in the project. Some local entrepreneurs currently offershort-term training programs of variable quality in specific areas such as use of software packages, butthese do not meet the broader skill needs associated with economic development and growth. Private sectorinvolvement in the provision of technician training is unlikely to be forthcoming in the project states forvarious reasons. The modem manufacturing sector and the average size of firms is small in the projectstates. Private entrepreneurs lack the know-how, especially in new technologies, and the capital requiredfor establishing modem training institutions. Due to the small size of the population and limitedenrollments, unit costs in the polytechnics in these states are higher than in other Indian states.

The absence of training capacity in the private sector is one justification for government intervention in theprovision of technician training. However, the strongest argument for government involvement is topromote equity and enable secondary school leavers in these economically underdeveloped states to enhancetheir earnings and improve their chances of getting employment in industries or sectors with high growthpotential. Per capita income in all the project states is below the all-India average; in Tripura, Jammu &Kashmir and Meghalaya, the per capita income is between 50-80% lower than the all-India average.About 35% of the population of these states lives below the poverty line (Table 4.1). The project stateshave achieved relatively high enrollment ratios at the primary and secondary levels, as well as high femaleliteracy rates. The absence of high quality training facilities in the states prevents secondary school leaversfrom acquiring the skills required for productive employment in modern industries.

One alternative to establishing new polytechnics and introducing new programs in existing polytechnics isto expand an existing Central Government program, under which eligible students from these states aregranted admission in polytechnics located in other states, if the program is not offered in their home state.However, the high cost of transportation, boarding and lodging as well as other cultural factors dissuademany students from studying in other states, leading to under utilization of the quotas and high drop outrates. In particular, women students and those youths from poor tribal families are unlikely to train inother states. Thus, although annual unit recurrent (institutional) costs are lower in the other states (due tolarger enrollment size), the total cost of training under this scheme is much higher due to the high level ofdropouts as well as the additional private costs. Expansion of this scheme to allow higher quotas for theproject states in the north-east is considered unviable due to these reasons, as well as reluctance on the partof the other states to accept these students. By providing training facilities in these states, the project willenable women and poor tribal students who have been deterred in the past from enrolling in polytechnicprograms to acquire higher-order technical skills.

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Table 4.1Project States/UT Poverty and Literacy Rates

States/UT Poverty Ratio Literacy Rate (1995-96)(%) (1993-94) (1997) % Gross Enrollment Ratio (GER)

Female 11-14 years 6-11 years*

Arunachal Pradesh 39.3 48 53.3 110.0

Meghalaya 37.9 74 48.6 114.4

Mizoram 25.7 95 67.5 118.1

Nagaland 37.9 77 51.9 127.3

Tripura 39.0 67 62.0 123.5

Sikkim 41.4 72 50.7 110.6

Jamnmu & Kashmir 25.2 48 NA NA

Andaman & Nicobar 34.5 94 NA NA

* GER over 100 are due to over-age and under-age children enrolled. NA- data not available

Cost-benefit analysis

There is insufficient information regarding labor market outcomes (age-earnings profiles, unemploymentrates, etc. for each of the project states to do a comprehensive cost-benefit analysis. The reversecost-benefit method has been used to identify the earnings differential that would be required to yield a 10%rate of return on project investments. These earnings differentials have been compared with actual earningsof polytechnic graduates in various disciplines in other states, using data from tracer studies.

On the basis of the indicative project costs provided at appraisal, and using costs incurred on academicactivities alone (i.e. excluding costs incurred on residential accommodation and the DTE/SPIU), theaverage increase in earnings of graduates (over the earnings of secondary school leavers) required to yield a10%/;a return on investment is in the range of INR 2,800-7,400 per month (Table 4.2). According to projectpreparation teams, the average earnings of school leavers is INR 1,500 per month. Tracer studies,condiucted in other states as part of the earlier two Bank-assisted projects, indicate that the average initialearnings of polytechnic graduates is about INR 3,500-8000 per month, with substantial variations acrossdisciplines. In principle, over their working life, graduates of project polytechnics, if employed, couldsecure an average earnings differential over secondary school graduates that justifies the projectedexpenditures on academic activities.

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Table 4.2Training Costs and Required Earnings Differentials

Polytechnic Per Student per year (INR) Required MonthlyEarnings

Differential (INR)

Recurrent Cost Capital Cost Forgone Earnings Total CostA & N IslandsAmbedkar Poly 47,089 64,404 6,000 117,493 3,740

2nd Govt. Poly 81,920 146,805 6,000 234,726 7,472

Arunachal PradeshNew Poly Itanagar 48,063 55,556 6,000 109,620 3,490

Jammu & KashmirGovt. Women's Poly, 60,283 62,695 6,000 128,978 4,106JammuGovt. Women's Poly, 67,398 44,341 6,000 117,740 3,748Srinagar

Govt. Poly, Jammu 56,855 36,578 6,000 99,433 3,165

Govt. Poly, Srinagar 57,871 38,556 6,000 102,428 3,261

MeghalayaShillong Polytechnic 42,278 55,785 6,000 104,064 3,313

Govt. Poly, Tura 73,185 71,395 6,000 150,580 4,793

Govt. Poly, Jowai 73,185 58,708 6,000 137,893 4,390

MizoramWomen's Poly, 53,464 86,612 6,000 146,076 4,650AizwalMizoram Polytechnic, 33,836 83,304 6,000 123,140 3,920Lunglei

SikkimAdvanced Technical 33,104 61,198 6,000 100,302 3,193Training CentreCentre for Computersand Communications 36,067 48,293 6,000 90,361 2,876Technology

TripuraPolytechnic Institute, 42,411 40,622 6,000 89,033 2,834Narsingarh

Note: It is assumed that Secondary school leavers who are eligible for entering polytechnics could have eamed on average INR 500 per month, if theyhad not joined the polytechnic program.

While this analysis shows that the proposed investments are likely to produce sufficient returns if graduatesreceive earnings comparable to those in other states, actual economic returns will clearly depend on theemployment rate of graduates. The success of the project, judged in terms of economic returns thereforedepends to a great extent on the availability of relevant jobs and thus on the overall economic environmentand policies to stimulate growth.

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Internal Efficiency

The above calculation on required earnings differentials assumes that project polytechnics will improveinternal efficiency. Currently, actual enrollment is between 60-70% of sanctioned capacity and pass ratesare between 50-70%. It has been assumed that enrollments will be at least 75% of sanctioned capacity andpass rate will be 80%. Should internal efficiency be lower than these figures, the unit cost of producing agraduate would be higher, and would lower the returns to the project. The project states/UT have agreedthat a high level of internal efficiency will be maintained and monitored through appropriate indicators(admnissions as a percent of intake capacity, dropout rates and pass rates). This will require a major changein the functioning of existing polytechnics where actual enrollment is below sanctioned capacity. Allpolytechnics have undertaken that sanctioned student places will be filled with talented and motivatedstudents by ensuring that programs cater to student demand and through better marketing of programs.

Employment Prospects for Polytechnic Graduates

Analysis of recent demographic and economic trends suggest that employment prospects for polytechnicgraduates are difficult within the project states because the modem sector of the economy is small andgrowing slowly. The extremely small size of firms also inhibits the rapid diffusion of new productiontechnology. However, recent Central Government initiatives in some of the project states are likely toimprove the economic environment and promote more rapid industrial growth.

Labor market data collected by the National Technical Manpower Information System (NTMIS) revealthat a fairly long period is required for absorption of a cohort of polytechnic graduates. In Meghalaya,Mizoram, Nagaland and Tripura, it took three years or more for all polytechnic graduates in the threetraditional engineering disciplines (civil, mechanical and electrical engineering) to get employment. InJamnmu & Kashmir, it took four years or more for all graduates in architecture, electronics andcomrnunication, and the three traditional engineering disciplines to get jobs. These data relate to studentswho graduated in 1994.

Nation-wide data collected through tracer studies which tracked graduates from a sample of polytechnicsfrom 1993/94 onwards have shown that, averaging across all disciplines, less than 40% of studentsobtained employment in the first year after graduation in 1997/98. These studies were conducted as part ofthe Bank-financed Technician Education I and II Projects. Moreover, in Assam, one of the states in theNordt-East which is relatively less industrialized and faces several constraints on economic growth similarto the project states, only 29% of graduates obtained employment within one year in 1997/98; thecomparable figure in 1994/95 was 23% (Table 4.3). This low employment rate is apparent not only in thetraditional engineering disciplines, but also in the newer programs.

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Table 4.3Percentage of Polytechnic Graduates Obtaining Employment within One Year

Disciplines National Average Assam Assam

1998 1994-95 1997-98

Civil Engineering 32 20 30

Electrical Engineering 31 25 29

Mechanical Engineering 49 25 25

Electronics Communication 24 25 30

Computer Science 30 27 28

Automobile Engineering 48 n.a. n.a.

Office Management 43 25 29

All programs 39 24 29

Source: Technical Teachers' Training Institute (1999) National Report on Employment Status of Polytechnic Pass outs in India and TTTI Calcutta(1999) Report on Tracer Study on Employment Status of Polytechnic Pass outs in the Eastern Region

Labor market data for polytechnic graduates in the project states are not available. Over the last decade,formal sector employment in these states has grown slowly or stagnated. Between two-thirds to threequarters of the total workforce in each of the project states is engaged in agriculture. Less than 5% of theworkforce is employed in manufacturing, while about 20% is employed in services other than trade andtransport. A significant feature of the north-eastern states is that even in the urban workforce, less than10% is engaged in manufacture while over 50% is in services

Formal sector employment accounts for a small proportion of the total workers, especially ofnon-agricultural workers. The overwhelming share of formal sector employment is accounted for by thepublic sector. In absolute terms, the number of private sector employees in the formal sector is exceedinglysmall; the range lies between 2000 in Mizoram to 14,000 in Jammu & Kashmir. On the other hand,employment in the public sector ranged from 33,000 in Andaman & Nicobar Islands to 204,000 in Jammu& Kashmir.

The project states have a narrow industrial base and there has been no significant large scale developmentby the private sector in the last five decades. Agriculture contributes between 24-35% of state NetDomestic Product in all the project states/UT, except Sikkim where its share was 51%. The share ofmanufacturing is less than 5% in all the states. The other main sectors of the economy are construction,public administration and "other services" (mainly education and health services). Output has increased inall states at over 5% per annum during the nineties, but much of this growth is due to the growth of publicadministration and other services. The growth rate of per capita state domestic product (SDP) in thenineties was between 3-5% per annum in Arunachal Pradesh, Nagaland and Tripura, and less than 2% perannum in Meghalaya and Jammu and Kashmir.

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While the past trends in output and employment suggest that the employment prospects for polytechnicgraduates in the proposed states are limited, several initiatives of the Central and state governments, ifimplemented, are expected to spur economic growth and employment in the medium term. These include:

* encouragement to the tourist industry in the north-eastern states is likely to lead to demand for morehotels and consequently for specialized skills in the hotel and catering industry, and related personalservices.

* a Central Government investment package of INR 10 billion mainly in infrastructure, which is intendedto foster private sector development to exploit rich natural resources of the states.

* office automation of state government offices.* introduction of Internet services.

The above discussion indicates that the broad strategy of the project is consistent with the existingeconomic structure and anticipated patterns of economic change in the medium term. This includes:

* upgrading the quality of existing traditional programs (civil, mechanical and electrical engineering)without expanding enrollment capacity in these disciplines. The demand for these graduates are in coreoccupations. Expected benefits will accrue by increasing the employability and earnings of graduates.

* introducing programs in new disciplines for service sector occupations that are in demand throughoutthe economy - examples are computerized office management, personal services.

* introducing programs in strategic growth areas such as information technology, mechatronics, etc.where skills may take time to develop and where labor mobility will increase graduate earnings. Of thenew programs being offered, 16 are in computer engineering/applications, information technology andtelecommunications and graduates can be expected to obtain employment fairly quickly, especially asthere is no training capacity in the private sector.

* introducing programs in state-specific potential growth areas (tourist industry in the north-easternstates, handicrafts in Tripura, marine engineering in Andaman & Nicobar Islands, etc.)

In general, however, progress in employment outcomes will depend to a large extent on the environmentthat is created to promote overall economic growth in these industrially under-developed states. Projectstates/UT have agreed that appropriate employment of graduates within a reasonable time frame will bepromoted by Industry/Community- Institute Interaction Cell, student advisory services, on-the-job training,interaction with industry and community and frequent revision of curricula to respond to changing labormarket needs. It has been agreed with project states/UT and NPIU that the employment rate and earnings ofgraduates will be one of the key performance indicators. Baseline data on these indicators will be collectedimrnediately after project launch using tracer studies which are expected to be completed by August 31,20CI 1, and data on these indicators will be collected regularly during implementation and at the end of theproject to monitor project outcomes.

State Finances and Fiscal Impact of the Project

All the project states (with the exception of the Union Territory of Andaman and Nicobar Islands) arespecial category states, which are almost entirely dependent on Central transfers to meet both plan andnon-plan expenditures. (The budget of the Union Territory of A&N Islands is part of the CentralGovernment budget). For these states, combined Central transfers (Central taxes plus grants) account fornearly 90% of total revenue receipts. Consequently, the total volume of expenditures, and especially theannrual plan allocations, are determined by the size of Central assistance in each year. While the stategovernment has, in principle, the right to determine the inter-sectoral non-plan allocations, in practice thereis little room for maneuver, given the preponderance of salaries in the non-plan expenditures.

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Counterpart funding. In effect, this means that each government's annual counterpart funding for theproject, which has to be obtained from the State Plan funds, will depend on the volume of Centralassistance for the state's Annual Plan. On average, each state will have to contribute between INR 5-18million each year towards the project. The expected annual counterpart funding for this project will entailan increase of 1-5% over the 1999/2000 level of Plan expenditure on total education for each state. Hence,the provision of counterpart funding should not be a problem; however, given the near total dependence onCentral assistance, the state's share of annual project expenditures should be taken into account when theCentral Government determines the total volume of Central assistance for each state's Annual Plan.Necessary approvals of the Central Government's Planning Commission and the state Finance Departmentshave been, or are in the process of being obtained. The required state government budgetary allocation fornext year has been provided in the Annual Plan for 2000/01 in each state. The state government's owncontribution, and the transfer of IDA funds from the Central Government for this project, will be shown asseparate line items in the states' annual budget for Technical Education in each of the project years.

There will be some additional financial obligations as students from Scheduled Tribes studying inpolytechnic are eligible for scholarships (the annual value of scholarships is about INR 5000 per year).Over 90% of students in Meghalaya, Mizoram and Nagaland, 70% of students in Arunachal Pradesh areexpected to be from scheduled tribes. The additional annual expenditure is expected to be in the range ofINR 2-15 million depending on the state. The Central Government's Ministry of Social Welfare providesfunds to state govemrnments under a Centrally Sponsored Scheme for scholarships for Scheduled Tribestudents.

Financial sustainability. Annual recurrent costs arising at the end of the project period will be bome by thestate governments. The incremental recurrent costs of the project will represent between 1-3% of projectednon-plan expenditures on total education (assuming that non-plan expenditures grow at 4% p.a. from1999/2000 levels). Maintenance of past trends in education expenditure should be sufficient to ensure thatincremental expenditures are met. However, the sub-sectoral allocation to technical education which iscurrently low will need to be significantly enhanced by the end of the project period in order to sustainrecurrent liabilities. Currently, the expenditure on technical education in these states is minimal ornon-existent (except for Jammu and Kashmir which has two engineering colleges and four govenmmentpolytechnics). In the last year of the project (2004/5), the incremental recurrent costs are estimated to bebetween INR 10 million (Tripura) to INR 40 million (Meghalaya). In Meghalaya, Mizoram and Nagaland,the incremental recurrent costs will represent a three- to four-fold increase over the expenditure on technicaleducation in 1999/2000. In Jammu & Kashmir, the incremental recurrent costs will represent about a 20%increase in over the expenditure on technical education in 1999/2000. (In Arunachal Pradesh and Sikkim,there is currently no allocation for technical education).

Although the absolute amounts involved are relatively small and should not pose a problem for projectsustainability, much depends on the continuation of Central assistance to these states on the same scale asuntil now. It is not certain how the Centre's attempts at fiscal adjustment will change total financialallocations to project states. The ability of the state governments to sustain recurrent costs will be adverselyaffected if Central assistance should decline. Several measures have been taken by the project authorities toensure internal revenue generation and reduce dependence on state government funds and ensure financialsustainability. These include enhanced cost-recovery through student fees and undertakingconsultancies/providing services to industry and community.

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Annex 5: Financial SummaryINDIA: Third Technician Education Project

Operational Period (Calender year of expense)Year 1 Year 2 Year 3 Year 4 Year 5

2000-2001 2002 2003 2004 2005-2006Project Costs(US$million, including contingencies)

Investment Costs 8.79 15.64 18.78 13.19 4.10Recuirrent Costs 2.58 2.98 3.99 4.70 5.34

Total 11.37 18.62 22.76 17.89 9.44

Financing Sources(% of total costs)IDA 86% 88% 84% 82% 53%Govenments 14% 12% 16% 18% 47%

Total 100% 100% 100% 100% 100%

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Annex 6: Procurement and Disbursement ArrangementsINDIA: Third Technician Education Project

Procurement

Procurement arrangements. The procurement arrangements to be undertaken for the project will be theresponsibility of each project state and the union territory (UT) for their respective components and of theGovernment of India (GOI) for the central components. The states, UT and the GOI will be responsible fortheir respective procurement activities either directly or through the hiring of procurement agents orconsultants to assist them.

Civil Works (US$25.76 million). The civil works program encompasses extensions to 12 existingpolytechnics and construction of 6 new polytechnics, 6 Directorates of Technical Education, 151 staffquarters, 178 faculty houses, and hostels to create 1123 seats for men and 1197 seats for women students.In addition, renovations and alterations would be carried out in several existing buildings. The approximateunit construction cost in most states is estimated at US$200-210 per square meter (about 20% higher thanthat in most states of India). In the UT of Andaman & Nicobar Islands, the construction cost is expected tobe still higher by about 20%. Construction costs are high due to remote locations and difficult terrain ofthe states, need to transport most construction materials from distant places and the limited number of fairweather days for construction.

Due to a statutory requirement, Jammu & Kashmir will utilize the services of JKPCC (a Government ofJ&K undertaking) as the construction agency in Srinagar on direct contract basis (as permitted under theBank financed India Population Project VII), and as a procurement agent in Jammu on sole source basis.Mizoram and Tripura will engage their Public Works Departments (PWDs) for procurement of civil works.In Sikkim, the engineering wing of its Department of Education will be responsible for construction underthe project. The other states and UT will appoint consulting firms as procurement agents. Centagecharges, if any, for services rendered by the state PWDs/State Departments for implementation ofconstruction will not be financed under the project. Similarly, JKPCC will not be paid any fee for itssupervision services at Srinagar; it will, however, be paid up to about 10% of the estimated cost of worksfor its services as a procurement agency in Janimu.

The majority of civil works contracts are expected to be in the range of US$300,000-1,000,000.Procurement through International Competitive Bidding (ICB) will not be feasible due to the scatteredlocation of works in remote and hilly areas of the country. There are also entry restrictions in some statesfor foreigners due to security reasons. Most of the civil works would be procured through the NationalCompetitive Bidding (NCB) method. Contracts for repairs, etc., each not exceeding US$50,000 equivalentvalue (up to an aggregate of US$2.58 million) will be executed soliciting three quotations or Unit/PieceRate System or Force Account procedure.

Goods (US$25.78 million). This procurement category includes equipment & vehicles; furniture; andbooks, software, learning resources & educational materials. Procurement of equipment and furniture (forlaboratories, workshops, libraries, computer centers, maintenance cells, community programs, MIS andnetworking, offices, hostels and residences, and campus facilities) will be phased on an annual basis inaccordance with the requirement of the project activities, and will be closely sequenced with the civil worksprogram. Vehicles are required by polytechnics for institutional activities and by DTEs/SPIUs for projectmanagement purpose. The cost for equipment and vehicles is estimated at US$19.77 million; for furnitureat US$2.55 million and for books, software, learning resources and educational materials at US$3.46

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million.

The implementing agencies in the project states and UT do not have the experience of procurement throughICB or NCB methods. For ensuring well-planned and efficient procurement of goods, the states and UTwill appoint procurement agencies by September 2000 to carry out procurement planning, detailing oftechnical specifications, packaging, developing laboratory and workshop layouts as required, ensuringtimely installation and commissioning of equipment, and for arranging/securing training of teachers andstaff on the use and maintenance of equipment as needed.

Because of the limited number of common programs, and state-wise decentralized procurement, there is noscope for bulking to form ICB packages. Procurement of equipment will thus mainly be through NCB(US$16.23 million). Equipment, not exceeding in aggregate US$1.80 million, may also be procuredthrough National Shopping method in packages costing less than US$50,000 each. Equipment ofproprietary nature, up to an aggregate of US$0.86 million, may be procured under contracts (notexceeding value of US$10,000 each) placed directly with the suppliers of such equipment. Small items inpac]kages of US$500 or less, up to an aggregate of US$0.2 million, may also be procured by directcontracting.

Vehicles, up to an aggregate of US$0.67 million, will be procured through National Shopping undercontracts, each costing US$100,000 or less. Since the value of most of the items to be procured underfurniture at any one time by individual states and UT is expected to be below US$50,000, these will beprocured under National Shopping, up to an aggregate of US$2.55 million.

Because of the low volumes of different books, proprietary software, learning resources and educationalmaterials to be procured under a very wide variety of subjects, preparation of attractive packages to solicitquotations/bids would not be possible; direct contracting with the authorized dealers/suppliers would be themost appropriate method for procurement to the extent of US$3.46 million with each contract notexceeding US$50,000 equivalent.

Services (US$8.96 million). The project will fund services required for project preparation andimplementation such as training and fellowship programs, workshops and seminars, and for conduct ofresearch studies. In addition, services of consultants, both individuals and firms (engaged as per Guidelines for Selection and Employment of Consultants by World Bank Borrowers) for procurement ofcivil works and goods including procurement planning and development of technical specifications, and fordevelopment and implementation of academic aspects of the project will also be funded under the project.

Miscellaneous Costs (US$19.58 million). These will be financed on a declining basis (80% ofexpenditure until November 30, 2002; 65% of expenditure until November 30, 2004 and 25% thereafter)and! will cover salaries of agreed additional faculty and staff, stipends/scholarships, expenses incurred onoperation and maintenance (operation and maintenance of equipment and vehicles, hiring cost of vehiclesand offices, maintenance of buildings, travel expenses and office expenses) and consumables such aslaboratory and workshop supplies, telephone, stationary, electricity, water, etc.

Procurement methods (Table A)

Bank-financed works and goods will be procured using the Guidelines for Procurement under IBRDLoans and IDA Credits of January 1995, revised January, August 1996, September 1997 and January1999. Services will be procured using the Guidelines for Selection and Employment of Consultants byWorld Bank Borrowers of January 1997, revised September 1997 and January 1999. The procurement

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methods applicable to the various expenditure categories are summarized in Table A below. For allprocurement under the project, the Bank's standard bid documents (developed by the New Delhi Office)shall be used.

Contracts for civil works estimated to cost over US$50,000 equivalent will be carried out followingNational Competitive Bidding (NCB) procedures acceptable to the Bank. Each contract estimated to costUS$50,000 equivalent or less will be procured following procedures acceptable to the Bank: (a) underquotations solicited from at least three qualified contractors; (b) unit/piece rate system through qualifiedcontractors, or (c) through Force Account, as last resort.

Contract for the purchase of goods valued more than US$50,000 but less than US$200,000 may beawarded on the basis of NCB procedures acceptable to the Bank. Items or groups of items valued at US$50,000 equivalent or less per contract may be procured on the basis of national shopping procedures.Propriety equipment of US$ 10,000 or less per contract may be procured through direct shopping. Books,propriety software, learning resources and educational materials of value US$50,000 or less per contractmay be procured through direct contracting. Other items or small groups of items valued at less thanUS$500 equivalent per contract may be procured through direct contracting.

For procurement of equipment, vehicles and furniture, DGS&D rate contracts will be treated "equar' toNational Shopping.

Contracts for procurement of consumables, maintenance of equipment and vehicles will be awardedthrough: (a) direct contracting; or (b) National Shopping procedures.

All NCB contracts to be financed from the Credit under the project would follow procedures satisfactory tothe Bank/Association, which are:

I. Only the model bidding documents for NCB agreed with the Government of India Task Force (asamended from time to time) shall be used for bidding.

2. Invitations to bid shall be advertised in at least one widely circulated national daily newspaper, at least30 days prior to the deadline for submission of bids.

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

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

5. Except in cases of force majeure and/or situations beyond the control of the state/UT, extension of bidvalidity shall not be allowed without the prior concurrence of the Bank/Association: (a) for the firstrequest for extension if it is longer than eight weeks; and (b) for all subsequent requests for extensionirrespective of the period.

6. Re-bidding shall not be carried out without the prior concurrence of the Bank/Association. The systemof rejecting bids outside a pre-determined margin or "bracket" of prices shall not 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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Table A: Procurement Arrangements /a

(Total Costs in US$ Millions)National

Competitive Other

Bidding Methods /b N.B.F. Total

Civil Works 23.18 2.58 - 25.76(20.87) (2.32) (23.18)

Furniture - 2.55 - 2.55

(2.04) (2.04)

Equipment 16.23 2.86 - 19.10

(12.99) (2.29) (15.28)

Vehicles - 0.67 0.67

(0.54) (0.54)

Books & LRs - 3.46 - 3.46

(3.46) (3.46)

Total (Goods) 16.23 9.55 25.78

(12.99) (8.33) (21.32)

Local Consultancy Services - 4.91 - 4.91

(4.91) (4.91)

Lccal Fellowships/Training - 2.15 - 2.15

(2.15) (2.15)

Foreign Fellowships/Training 1.90 1.90(1.90) (1.90)

Total (Services) 8.96 8.96

(8.96) (8.96)

Salaries of Additional Staff - 9.28 - 9.28

(5.31) (5.31)

Stipends - 0.95 - 0.95(0.48) (0.48)

Consumables - 2.89 - 2.89

(1.70) (1.70)

Olperation & Maintenance - 6.46 - 6.46

(3.93) (3.93)

Total (Miscellaneous) - ^ 19.58 19.58

(11.43) (11.43)

TOTAL 39.42 40.67 - 80.08

(33.85) (31.03) (64.88)

Notes: /a Figures in parenthesis are the respective amounts financed by IDA/b Include civil works to be procured through National Shopping, Unit/Piece Rate system and Force

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Account; goods to be procured through National Shopping and Direct Contracting; services of faculty & staff;stipends; training & fellowship programs; technical assistance services; consumables and operation &maintenance.

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

ConsuliftaServces

Expedid OtC Rs 08 i; SF i:: -CQ Other WN,F,. rotalCotC ate ory _ _ _ _ _ _ _ _ _ _

A. Firms 2.00 0.00 0.15 0.00 2.10 0.00 0.00 4.25(2.00) (0.00) (0.15) (0.00) (2.10) (0.00) (0.00) (4.25)

B. Individuals 0.00 0.00 0.00 0.00 0.00 0.66 0.00 0.66(0.00) (0.00) (0.00) (0.00) (0.00) (0.66) (0.00) (0.66)

Total 2.00 0.00 0.15 0.00 2.10 0.66 0.00 4.91(2.00) (0.00) (0.15) (0.00) (2.10) (0.66) (0.00) (4.91)

1\ Including contingencies

Note: QCBS = Quality- and Cost-Based SelectionQBS = Quality-based SelectionSFB Selection under a Fixed BudgetLCS = Least-Cost SelectionCQ = Selection Based on Consultants' QualificationsOther = Selection of individual consultants (per Section V of Consultants Guidelines),Commercial Practices, etc.

N.B.F. = Not Bank-financedFigures in parenthesis are the amounts to be financed by the Bank Credit.

Prior review thresholds (Table B)Prior review will be required for: (a) all contracts for works with an estimated value of more thanUS$300,000 equivalent as well as the first NCB contract each for goods and works regardless of the value;(b) consultants' contracts with an estimated value of US$100,000 or more for firms and US$50,000 ormore for individuals; and (c) the Terms of Reference for all consultant contracts estimated to cost theequivalent of US$12,000 or more per contract in the case of firms, and the equivalent of US$5,000 or moreper contract in the case of individuals.

Table B: Thresholds for Procurement Methods and Prior ReviewExpenditure Category Contract Value (Threshold) Procurement Method Contracts Subject to Prior

Review/Estimated TotalValue Subject to Prior

ReviewCivil Works (a) Civil works estimated to

cost the equivalent ofUS$50,000 or less per contract,up-to an aggregate notexceeding US$2.58 millionequivalent may be executed by:

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(i) Comparison of bids National Shopping Post Review onlysoliciated from at least 3 proceduresqualified contractors

(ii) Unit/Piece Rate System Rate Contract Post Review onlythrough qualified contractors

(iii) By Force Account as a Force Account Post Review onlylast resort in a mannersatisfactory to the Association(b) Civil works estimated to National Competitive First works contract undercost more than the equivalent of Bidding (NCB) NCB regardless of value andUS$50,000 per contract. all contracts above

US$300,000 by prior review inaccordance with paragraphs 2and 3 of Appendix I to theGuidelines. All others by postreview.

Goods(a) ]Equipment (i) US$50,000 equivalent or National Shopping

less per contract, up to an procedures (includes Post Review onlyaggregate not exceeding DGS&D rateUS$1.80 million equivalent. contracts).(ii) Proprietary equipment of Direct Contracting Post Review onlyUS$10,000 equivalent or lessper contract, up to an aggregatenot exceeding US$0.86 millionequivalent.(iii) Contracts of more than National Competitive First bidding document byUS$50,000 equivalent but less Bidding (NCB) Prior Review.than US$200,000 equivalent.

(b) Furniture US$50,000 equivalent or less National Shopping Post Review onlyper contract up to an aggregate proceduresof US$2.55 million equivalent.

(c) Books, Proprietary US$50,000 equivalent or less Direct contracting Post Review onlySoftware, Learning per contract up to an aggregateResources and of US$3.46 million equivalent.Educational Materials(d) 'Vehicles US$100,000 equivalent or less National Shopping Post Review only

per contract, up to an aggregate procedures (includesnot exceeding US$0.67 million DGS&D rateequivalent. contracts).

(e) Small Items US$500 equivalent or less per Direct Contracting Post Review onlycontract, not exceeding anaggregate of US$ 200,000equivalent

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ServicesProcurement agent, Consultant services may be Prior Review of all consultantresearch contracts, procured by: contracts shall be governed byprofessional services, the provisions of paragraphstraining, workshops (a) More than US$200,000 Quality- and (i), (ii), (iii) and (iv) below:and fellowships. equivalent per contract. Cost-Based Selection

(QCBS) (i) With respect to eachcontract for the employment ofconsulting firns estimated tocost the equivalent ofUS$200,000 or more, theprocedures set forth in

(b) Between the equivalent of Quality- and paragraphs 1, 2 [other than theUS$200,000 and US$100,000 Cost-Based Selection third sub-paragraph ofper contract. (QCBS) with short list paragraph 2(a)] and 5 of

(would comprise Appendix 1 to the Guidelinesentirely of national for Selection and Employmentconsultants) of Consultants by World Bank

Borrowers shall apply.

Note: ProcurementConsultants for civil workswould comprise entirely ofnational consultants as clearedby the Bank's RegionalProcurement Advisor on April5, 2000.

(ii) With respect to eachcontract for the employment ofconsulting firms estimated tocost the equivalent ofUS$100,000 or more but lessthan the equivalent ofUS$200,000, the proceduresset forth in paragraphs 1, 2[other than the secondsub-paragraph of paragraph2(a)] and 5 of Appendix I tothe Guidelines for Selectionand Employment ofConsultants by World BankBorrowers shall apply.

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(c) US$100,000 equivalent or Quality- and (iii) With respect to eachless per contract. Cost-Based Selection contract for the employment of

(QCBS) with short list individual consultants(would comprise estimated to cost the equivalententirely of national of US$50,000 or more, theconsultants) qualifications, experience,

terms of reference and terms ofSelection based on employment of the consultantsConsultant's shall be furnished to theQualification (CQ) Association for its prior review

and approval. The contractSelection based on a shall be awarded only after theFixed Budget (SFB) said approval has been given.

(iv) Terms of Reference for allconsultant contracts estimatedto cost the equivalent ofUS$12,000 or more percontract in the case of firms,and the equivalent ofUS$5,000 or more per contractin the case of individuals shallbe furnished to the Associationfor its prior review andapproval. The contract shallbe awarded only after the saidapproval has been given.

All other cases Post ReviewMiscellaneousIncremental operating Expenses incurred oncosts. maintenance of equipment,

vehicles and buildings, hiringcost of vehicles and offices, andconsumables up to anaggregate of US$9.35 millionequivalent may be executed by:(i) Each package not exceedingUS$5000 equivalent up to an Direct Contracting Post Review onlyaggregate of US$ 1,000,000equivalent; or

(ii) On the basis of National National Shopping Post Review onlyShopping Procedures

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Disbursement

Allocation of credit proceeds (Table C)

Table C: Allocation of Credit Proceeds

.Expenditure :: := Ca Ambnt0 in >0$mn FiaCivil Works 20.90 90%Equipment, Furniture and Vehicles 16.83 100% of foreign expenditures, 100% of

local expenditures (ex-factory cost) and80% of local expenditures for other items

procured locally.Books, learning materials & software 3.30 100%Training, fellowships & consultant 8.52 100%servicesIncremental operating & maintenance 10.54 80% of local expenditures incurred untilcosts (recurring expenditure) November 30, 2002, 65% of

expenditures incurred until November30, 2004 and 25% of expenditures

incurred thereafter.Unallocated (summation of 4.79contingencies)

Total Project Costs 64.88

Total 64.88

Use of statements of expenditures (SOEs):

Disbursement

The proposed allocation of credit proceeds is given in Table C. A Special Account will be maintained inthe Reserve Bank of India; and will be operated by the Department of Economic Affairs (DEA) ofGovernment of India (GOI). The authorized allocation of the Special Account would be US$5 million thatrepresent about 6 months of initial estimated disbursements from IDA Credit. The Special Account will beoperated in accordance with the Bank's operational policies.

The disbursement will initially be made in the traditional system (reimbursement with full documentationand against statement of expenditure) and will be converted to Project Management Report (PMR) baseddisbursement after the financial management system has been demonstrated to be operating satisfactorily.The target date for this conversion is April 1, 2002.

The withdrawals from the credit account will be made on the basis of statement of expenditure for: (a)works and goods contracts costing less than $300,000 equivalent each; (b) consultants' services undercontracts costing less than $100,000 equivalent each, in case of firms, and $50,000 equivalent each, in thecase of individuals (b) books and instructional material, (d) training, fellowships and workshops, and (e)incremental operating and maintenance costs.In the interim period, before conversion to PMR based disbursement, the NPIU will also be required to

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submit a report on sources and uses of funds by disbursement category and procurement reports oncontracts over US$100,000 to IDA on a quarterly basis. The form and contents of these reports have beenagreed between IDA and NPIU and the reports formats are included in the Project Implementation Plan(PIP) of NPIJU.

Curr ent Financial Management System

The implementing agencies for the Project are: (a) National Project Directorate (NPD) situated in Ministryof Human Resource Development (MHRD) assisted by NPIU and (b) State project Implementation Units(SPIUJs) in the eight participating states/UT. The NPIU, the executive implementing entity for the project,has the following strengths in the area of financial management: (i) a good budgeting, accounting andmonitoring system has been established and is operational; (ii) staff are trained to carry out basicaccounting functions; and (iii) a system of periodic financial reporting from the states to NPIU isoperational.

However, since the government accounting system is followed in NPIU and the states, its main focus is onbook keeping and transactional control over expenditures. There is limited use of financial managementinformation for decision making and hence relatively little focus on meeting project managementinformation needs. Project financial statements indicating sources and uses of funds (including informationon project expenditure by components, types of expenditure, etc.) are not prepared. The focus of the auditis on authentication of individual transactions, verification of compliance with Government procedures, andcertification of reimbursement claims made to the Bank.

Specific areas to be strengthened:

The ifollowing 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: Financial functions should be staffed by suitably qualifiedaccounts professionals. NPIU should be supported by a full-time finance professional who can actively aidin setting up the financial management system in the project. The SPIUs also need to be suitably staffedwith accounting professionals. At the institution level, there is a need to identify accounts personnel whowill be working exclusively on the project. The entire financial staff needs to be trained in the operation ofthe computerized FMS. Project managers and financial staff need to be sensitized to the importance offinancial management for effective project management.

(b) the need to analyze financial information and use it as a decision making tool: Financial reportswhich provide timely and quality information on the financial performance of the project should beprepared.

(c) ensuring satisfactory audit arrangements including timely submission of audit report.

(d) ensuring linking of physical progress with the financial progress.

The NPIU has agreed to develop a comprehensive computerized financial management system which willaddress these issues.

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Proposed Financial Management System

The proposed project financial management system will address the following aspects of financialmanagement:

(a) budgeting and flow of fuids;(b) accounting system (including chart of accounts, formats of books, accounting and financialprocedures);(c) financial reporting (including formats of reports, and linkages with Chart of Accounts);(d) staffing and training aspects including job responsibilities;(e) auditing arrangements;(f) procurement and contract administration monitoring system;(g) financial and accounting policies

Budftetinm and Flow of Funds

The project would be budgeted under a single identifiable budget line item in the budget of the Ministry ofHuman Resource Development (MHRD), Government of India (GOI), for the expenditure that has to bemade at the central level, in the budget of the Ministry of the Home Affairs for expenditure relating to theUT of Andaman and Nicobar Islands and in the budgets of the respective state governments for all theparticipating states. In the case of the Centre, on approval of budget by the parliament, MHRD will releasethe annual funds requirement in installments to the bank account of the Education Consultants IndiaLimited (EdCIL). EdCIL, which will make all major payments on behalf of NPIiU, will advance a part ofthe funds to NPIU for the expenditure that has to be incurred by NPIU. Actual identifiable expensesincurred by EdCIL for rendering this service will be eligible for reimbursement under the project.However, any kind of an overhead charge or notional apportioning of the expenses by EdCIL will not beeligible for reimbursement. For the UT, the Ministry of Home Affairs will allocate and release requiredproject funds to the Project Implementing Unit of the UT. At the state level, on approval of the budget bythe legislature, the State Governments will allocate and release project funds to their respective SPIUs. TheSPIU will incur expenditure through the Govemment treasury system. The SPIU will pass on a part of theallocation to the institutions in that state for the expenses that are to be incurred at the institutions level.

Accountin2 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.

* The financial management system is being computerized. The computerized system will be installedand operated at the NPIU and the eight participating SPIUs. The participating institutions in the stateswill be expected to feed the SPIUs with the financial information on a manual basis. However, it isproposed that one year from the start of the project, the computerization will be extended to theinstitutions level. Accounts of NPIU, the SPIUs and all the institutions will be consolidated for projectfinancial reports at NPIU level.

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* Standard books/records of accounts (cash and bank-books, journals, ledgers, trial balance, etc.) will bemaintained at the NPIU, SPIUs and the institutions using an integrated computerized accountingsystem. A register of fixed assets, indicating assets created through the project or acquired under theproject, will also be maintained using the computerized system.

Transaction Information Flow and Accounting

All the accounting entities viz. NPIU, EdCIL, SPIUs and all the participating institutions will generate andmaintain the transaction vouchers for their various receipts and expenditures made at their level. However,a monitoring system will be established at the NPIU level to monitor the usage of funds at states and at theSPrU level to monitor the usage of funds by the institutions.

Consolidation of project accounts will be done (i) at the SPIU level by consolidating the accounts of SPITUand the participating institutions; and (ii) at the NPIU level by consolidating the accounts of NPIU, EdCILand all the SPIUs. Data transfer would be handled through: (i) an integrated computer network; or (ii)periodic data transfer through Electronic Mail.

Internal Controls

Intemal control mechanisms would include the following:

* establishment of appropriate budgeting systems, and regular monitoring of actual financialperformnance 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 fnancial and accounting policies whichwould govern financial management of and accounting for the project;

- at the transaction level, the establishment of procedures and systems for ensuring standard internalcontrols such as checking of expenditures, appropriate documentation, levels of authorization,segregation of incompatible duties, periodic bank reconciliation, physical verification, etc.

Financial Reporting

Quarterly Financial Management Reports will include:

* comparison of budgeted and actual expenditure and analysis of major variances, including on aspectssuch as sources of funds (indicating separately funds from beneficiaries) and application of funds(classified by components, sub-components, sunmmarized 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; and* information on procurement management for major contracts.

Pro ject Financial Statements and Financial Management Reports would be generated from thecomputerized financial management system. NPIU would generate quarterly financial management reportsfrorn the integrated computerized financial management system for the whole project. The SPIUs and theinstitutions will also have the capability of generating these reports for their own monitoring needs. These

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reports 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

A Finance professional will be appointed to lead the Finance Unit at the NPIU. He/she will be anaccounting professional - preferably a Chartered Accountant - with about 8-10 years experience in asimilar position who will have overall responsibility for all financial and accounting aspects and willprovide leadership and strategic direction on financial aspects of the projects, including development offinancial capability at the SPIUs and at the institutions. He/she will be supported by an adequate numberof assistants to carry out the accounting and monitoring functions of the project.

The finance function at the SPIUs will be headed by an Accounts Officer. He will be assisted with anaccountant.

At the institution level, accountants will be identified out of the existing staff available to work on theproject.

An intensive training program will be developed to ensure that the staff at all the levels are adequatelytrained in the computerized financial management system. The initial training will be imparted by theconsultants developing the computerized financial management system.

Auditing Arrangements

NPIU accounts in EdCIL will be audited by a firm of Chartered Accountants acceptable to the Comptrollerand Auditor General of India. The SPIU accounts, which will include the accounts of the institutionsparticipating in that state will be audited by the Accountant General (Audit) of that state. All these nineaudit certificates for NPIU, the seven Project States and the UT would be subrnitted to the Bank within sixmonths of the close of the GOI's fiscal year.

Thus the following audit reports will be monitored in ARCS:

Inplementing A ency Audit Auditors

NPIU(with EdCIL) SOE/Project Audit A firm of Chartered Accountants.

SPIUs including institutions SOE/Project Audit Accountant General (Audit) of therespective state.

DEA/GOI Special Account Comptroller & Auditor General ofIndia

A quarterly review of the financial controls of the SPIUs will be conducted by appropriately qualifiedfinancial professionals appointed by NPIU. The SPIU will submit its accounts to the office of AG withinfour months of the close of the fiscal year. The AG office will send an audit report within six months of theclose of the fiscal year to GOI and IDA.

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Timetable for implementation of Project Financial Management System and next steRs

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 acomputerized PFMS in the project.

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 Finance Professional at NPIU August 31, 2000* Appointment of accounts personnel at SPIUs August 31, 2000* Appointment of consultants to design, develop and institute

a financial management system August 31, 2000* Procurement of computers January 31, 2001* Development and installation of the PFMS software February 28, 2001* Training on financial management system in the PFMS software March 31, 2001* Implementation of the computerized financial management system April 1, 2001* Conversion to PMR-based system of disbursement April 1, 2002

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Annex 7: Project Processing Schedule

INDIA: Third Technician Education Project

Time taken to prepare the project (months) 8 7

First Bank mission (identification) 10/04/99 10/25/99

Appraisal mission departure 04/24/2000 03/22/2000Negotiations 06/26/2000 07/17/2000Planned Date of Effectiveness 12/01/2000

Prepared by:

The Project Implementation Plan is prepared for the Department of Secondary Education and HigherEducation, Ministry of Human Resource Development, Government of India by the National ProjectImplementation Unit, based on the Detailed Project Reports received from the States of Arunachal Pradesh,Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Jammu & Kashmir, and the union territory (UT) ofAndaman & Nicobar with the assistance of Technical Teachers' Training Institues. The Project AppraisalDocument is prepared by an IDA Team indicated below.

Preparation assistance:

None

Bank staff who worked on the project included:

Name nSpecialit

Shashi K. Shrivastava Senior Education Specialist, SASED, Task LeaderWard Heneveld Principal Education Specialist, SASED, Education Team LeaderC. S. Jha Consultant - Technical EducationY. Saran Consultant - Technical EducationR. K. Dixit Consultant - Technical EducationS. A. A. Alvi Consultant - ImplementationRajiv Aggarwal Consultant - ArchitectSajitha Bashir Education Economist, SASEDVandana Sipahimalani Education Economist, SASEDS. Krishnan Procurement Engineer, SACIFRajat Narula Financial Management Specialist, SACIFMeera Chatterjee Senior Social Development Specialist, SASSDJose P. Correia da Silva Senior Counsel, LEGSASara Gonzalez Flavell Senior Counsel, LEGSARenu Gupta Team Assistant, SASEDGertrude Cooper Program Assistant, SASED

Ralph W. Harbison Former Sector Director, SASED - External Peer ReviewerRichard Cambridge Lead Specialist, AFTQK- Peer ReviewerLauritz Holm-Nielsen Principal Education Specialist - Peer Reviewer

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Annex 8: Documents in the Project File*

INDIA: Third Technician Education Project

A. Project Implementation Plan

I . Third Technician Education Project: Project Concept Document, prepared by National ProjectImplementation Unit (NPIU), January 2000.

2. Third Technician Education Project: Project Details, prepared by National Project ImplementationUnit (NPIU), March 21, 2000.

3. Third Technician Education Project: Project Proposals ofAndaman & Nicobar Islands, ArunachalPradesh, Jammu & Kashmir, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura Prepared by theirrespective state goverments/ UT administration.

4. Third Technician Education Project: Project costs for the total project, each state, and each

polytechnic and SPIU/DTE/Board/Council., compiled by National Project Implementation Unit(NPIU) dated April 7, 2000.

5. Third Technician Education Project: Project Implementation Plan, prepared by National ProjectImplementation Unit (NPIU), March 18, 2000.

B. Bank Staff Assessments

1. Technician Education Project: Implementation Completion Report, 1999 (Report No. 19042)2. Electronics Industry Development Project: Implementation Completion Report, 1997 (Report No.

17054)3. Vocational Training Project: Implementation Completion Report, 1999 (Report No. 19367)4. Second Technician Education Project: Implementation Completion Report, 2000 (Report No. 20415)5. OED Performance Audit Report : A Review and Audit of Investments in Technical -Vocational

Education in India, 20006. Sector Study: Scientific and Technical Manpower Development in India, 2000 (draft) (Report No.

20416-IN), SASED7. World Bank, Aide Memoire : Reconnaissance Mission (Oct 25- Nov 5, 1999)8. India: Subsector Program for Technical Education, Concept Paper, December 1999.9. World Bank, Aide Memoire: Pre Appraisal Mission (Feb 8-23, 2000)

10. World Bank, Aide Memoire: Appraisal Mission ( March 22 - April 5, 2000)

C. Other

1. National Policy on Education (NPE) - 1986 (Amended in 1992): Government of India.2. National Policy Initiatives for Technician Education, 1999: Ministry of Human Resource

Development, Government of India.3. Manpower Profile, India, Yearbook - 1999 : Institute of Applied Manpower Research4. Labour Market for Engineers and Technicians (Study funded by the World Bank), 1998: Institute of

Applied Manpower Research.5. National Report on Employment Status of Polytechnic Passouts in India, 1999 : Technical Teachers'

Training Institutes.6. Report on Tracer Study on Employment Status of Polytechnic Passouts in the Eastern Region, 1999:

Technical Teachers' Training Institute, Calcutta

*rIcluding electronic files

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Annex 9: Statement of Loans and Credits

INDIA: Third Technician Education 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 2NDNATLHIVIAIDSCO 0.00 191.00 0.00 184.47 6.17 0.00PD49301 1997 India A.P. EMERG. CYCLONE 50.00 100.00 0.00 96.51 77.71 0.00P010407 1993 India ADP - RAJASTHAN 0.00 106.00 0.00 14.02 17.35 0.00

P010503 1995 India AGRIC HUMAN RES DEVT 0.00 59.50 0.00 21.43 21.78 0.00

P010489 1995 India AP 1ST REF. HEALTH S 0.00 133.00 0.00 47.72 15.79 0.00

P045049 2000 India AP OPIP 0.00 111.00 0.00 111.40 0.00 0.00

P049385 1998 India AP ECON RESTRUCTURIN 301.30 241.90 0.00 409.04 51.10 0.00

P010449 1994 India AP FORESTRY 0.00 77.40 0.00 9.02 8.77 0.00

P035158 1997 India AP IRRIGATION III 175.00 150.00 0.00 239.84 66.16 0.00

P049537 1999 India AP POWER APL I 210.00 0.00 0.00 154.60 28.27 0.00

P010522 1995 India ASSAM RURAL INFRA 0.00 126.00 0.00 85.46 48.42 0.00

P010408 1993 India BIHAR PLATEAU 0.00 117.00 0.00 30.28 36.88 0.00P010455 1994 India BLINDNESS CONTROL 0.00 117.80 0.00 71.52 45.95 0.00

P010480 1996 India BOMBAY SEW DISPOSAL 167.00 25.00 0.00 104.58 96.43 0.00

P043310 1996 India COAL ENV & SOCIAL MmGATION 0.00 63.00 0.00 39.21 25.34 0.00

P009979 1998 India COAL SECTOR REHAB 530.00 2.00 15.00 301.54 98.05 98.05P009870 1994 India CONTAINER TRANSPORT 94.00 0.00 0.00 61.54 61.54 41.33

P010484 1995 India DISTRICT PRIMARY ED 0.00 260.30 0.00 103.00 56.31 0.00

P035821 1996 India DPEP II 0.00 425.20 0.00 226.83 3.50 0.00

P038021 1998 India DPEP III (BIHAR) 0.00 152.00 0.00 129.52 50.72 0.00

P036062 1997 India ECODEVELOPMENT 0.00 28.00 0.00 20.04 8.73 0.00

P043728 1997 India ENVCAPACITYBLDGTA 0.00 50.00 0.00 41.13 21.17 0.00

P010563 1995 India FINANCIAL SECTOR DEV PROJ. (FSDP) 700.00 0.00 301.30 97.03 0.00 0.00

P010448 1994 India FORESTRY RESEARCH ED 0.00 47.00 0.00 16.41 35.24 13.14

P035160 1998 India HARYANA POWER APL-1 60.00 0.00 0.00 28.06 17.40 0.00

P010485 1996 India HYDROLOGY PROJECT 0.00 142.00 0.00 77.61 68.42 0.00

P009977 1993 India ICDS II (BIHAR & MP) 0.00 194.00 0.00 99.50 100.83 97.51

P039935 1996 India ILFS-INFRAS FINANCE 200.00 5.00 0.00 178.79 151.53 0.00

P067330 2000 India IMMUNIZATION STRENGTHENING PROJECT 0.00 142.60 0.00 142.17 0.00 0.00

P010463 1995 India INDUS POLLUTION PREV 143.00 25.00 1.64 141.63 121.04 2.00

P010418 1993 India KARNATAKA WS & ENVWS 0.00 92.00 0.00 1.54 2.17 0.00

P049477 1998 India KERALA FORESTRY 0.00 39.00 0.00 30.24 0.18 0.00

P010461 1995 India MADRAS WAT SUP II 275.80 0.00 189.30 36.71 206.91 2.95

P050651 1999 India MAHARASH HEALTH SYS 0.00 134.00 0.00 128.49 130.89 0.00

P010511 1997 India MALARIA CONTROL 0.00 164.80 0.00 139.42 55.07 0.00

P009946 1992 India NAT. HIGHWAYS 11 153.00 153.00 0.00 87.38 67.82 12.41

P009869 1989 India NATHPAJHAKRI HYDRO 485.00 0.00 0.00 83.89 83.89 1.68

P010561 1998 India NATLAGRTECHNOLOGY 96.80 100.00 0.00 187.19 49.17 0.00

P010424 1993 India NATL LEPROSY ELIMINA 0.00 85.00 8.70 16.72 26.78 16.33

P009982 1990 India NOR REG TRANSM 485.00 0.00 35.00 106.25 141.25 0.00

P010496 1998 India ORISSA HEALTH SYS 0.00 76.40 0.00 72.28 13.20 0.00

P035170 1996 India ORISSA POWER SECTOR 350.00 0.00 0.00 271.72 136.72 o.0o

P010529 1996 India ORISSAWRCP 0.00 290.90 0.00 131.41 25.64 0.00

P010416 1993 India PGC POWER SYSTEM 350.00 0.00 75.00 37.46 111.54 0.00

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Difference betweenexpected

Original Amount in US$ Millions and actual

disbursements

Project IID FY Borrower Purpose IBRD IDA Cancel. Undisb. Orig Frnm Rev'd

P010457 1994 India POPULATION IX 0.00 88.60 0.00 42.82 26.59 0.00

P009963 1992 India POPULATION Vill 0.00 79.00 0.00 44.03 45.87 0.00

P010505 2000 India RAJASTAN DPIP 0.00 100.48 0.00 100.12 0.00 0.00

P045050 1999 India RAJASTHAN DPEP 0.00 86.70 0.00 81.27 6.41 0.00

P010410 1993 India RENEWABLE RESOURCES 75.00 115.00 0.00 64.67 94.26 0.00

P010531 1997 India REPRODUCTIVE HEALTH1 0.00 248.30 0.00 192.18 80.26 38.19

P009959 1993 India RUBBER 0.00 92.00 36.61 13.79 S0.70 -1.33

P044449 1997 India RURAL WOMEN'S DEVELOPMENT 0.00 19.50 0.00 16.51 10.63 0.00

P009921 1992 India SHRIMP & FISH CULTUR 0.00 85.00 50.02 15.05 62.95 14.34

P035825 1996 India STATE HEALTH SYS 11 0.00 350.00 0.00 204.33 134.67 0.00

P009995 1997 India STATE HIGHWAYS l(AP) 350.00 0.00 0.00 287.13 65.47 0.00

P045600 1997 India TA STS RD INFRA DEV 51.50 0.00 0.00 21.64 13.81 15.14

P010476 1995 India TAMIL NADU WRCP 0.00 282.90 0.00 153.65 103.59 0.00

P050637 1999 India TN URBAN DEV II 105.00 0.00 0.00 90.50 11.50 0.00

P010473 1997 India TUBERCULOSIS CONTROL 0.0o 142.40 0.00 124.28 77.68 0.00

P050638 1998 India UP BASIC ED It 0.00 59.40 0.00 14.91 3.99 0.00

P009955 1993 India UP BASIC EDUCATION 0.00 165.00 0.00 9.83 -1.03 0.00

P035824 1998 India UP DIV AGRC SUPPORT 79.90 50.00 0.00 119.07 38.90 0.00

P050667 2000 India UP DPEP III 0.00 182.40 0.00 178.40 0.00 0.00

P065471 2000 India UP FISCAL REFORM & PUBLIC SECTOR RESTRCT 126.27 125.00 0.00 250.82 0.00 0.00

P035169 1998 India UP FORESTRY 0.00 52.94 0.00 37.21 7.90 0.00

P050657 2000 India UP Health Systems Development ProJect 0.00 110.00 0.00 109.60 0.00 0.00

P035172 2000 India UP POWER SECTOR RESTRUCTURING PROJECT 150.00 0.00 0.00 150.00 0.00 0.00

P010484 1996 India UP RURAL WATER 59.60 0.00 0.00 44.80 20.70 0.00

P050646 1999 India UP SODIC LANDS 11 0.00 194.10 0.00 178.46 21.93 0.00

P009961 1993 India UP SODIC LANDS RECLA 0.00 4.70 0.00 2.42 1.63 0.00

P009964 1994 India WATER RES CONSOLID H 0.00 258.00 0.00 113.96 83.40 0.00

P035827 1998 India WOMEN & CHILD DEVLPM 0.00 300.00 0.00 289.47 5.69 0.00

P041264 1999 India WTRSHD MGMT HILLS II 85.00 50.00 0.00 124.53 1.06 0.00

Total: 5908.17 7517.22 712.57 7690.05 3360.39 351.74

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INDIASTATEMENT OF IFC's

Held and Disbursed Portfolio

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic

1989 AEC 6.77 0.00 0.00 0.00 6.77 0.00 0.00 0.001992/93 Arvind Mills 0.00 10.55 0.00 0.00 0.00 10.55 0.00 0.001997 Asian Electronic 0.00 5.50 0.00 0.00 0.00 5.50 0.00 0.001984/91 Bihar Sponge 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.001997 CEAT 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.001990/92 CESC 22.50 0.00 0.00 50.25 22.50 0.00 0.00 50.251993/95/97 Centurion Bank 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.002017 Chinai 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001994 Chowgule 12.63 4.58 0.00 19.38 12.63 4.58 0.00 19.381994 DLF Cement 7.70 4.94 0.00 9.38 7.70 4.94 0.00 9.381997 Duncan Hospital 7.00 0.00 0.00 0.00 7.00 0.00 0.00 0.001997 EEPL 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.001986 EXB-City Mills 0.48 0.00 0.00 0.00 0.48 0.00 0.00 0.001986 EXB-STG 0.31 0.00 0.00 0.00 0.31 0.00 0.00 0.001995 EXIMBANK 13.64 0.00 0.00 0.00 13.64 0.00 0.00 0.001995 GE Capital 7.50 5.00 0.00 0.00 7.50 4.39 0.00 0.001986/92/93/94 GESCO 0.00 1.86 0.00 0.00 0.00 1.86 0.00 0.001988/94 GKN Invel 0.00 0.33 0.00 0.00 0.00 0.33 0.00 0.001994/97 GVK 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001994/98/20 Global Trust 0.00 5.00 0.00 0.00 0.00 2.78 0.00 0.00

Gujarat Ambuja 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001994 HDFC 0.00 0.73 0.00 0.00 0.00 0.73 0.00 0.001978/87/91/93 HOEL 0.00 0.28 0.00 0.00 0.00 0.28 0.00 0.001990 Hindustan 1.68 0.00 0.00 0.00 1.68 0.00 0.00 0.001987 IAAF 0.00 6.50 0.00 0.00 0.00 0.98 0.00 0.001998 ICICI-IFGL 0.00 0.14 0.00 0.00 0.00 0.14 0.00 0.001990/94 ICICI-SPIC Fine 0.00 2.79 0.00 0.00 0.00 2.79 0.00 0.001990/95/00 IDFC 0.00 15.46 0.00 0.00 0.00 15.46 0.00 0.001998 IL & FS 0.00 3.12 0.00 0.00 0.00 3.12 0.00 0.001990/93/94/98 IL&FS Venture 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.001992/95 ITW Signode 0.00 0.34 0.00 0.00 0.00 0.34 0.00 0.001981/86/91/93/96 India Direct Fnd 0.00 7.47 0.00 0.00 0.00 6.01 0.00 0.001996 India Equipment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001986/93/94/95 India Lease 0.00 0.30 0.00 0.00 0.00 0.30 0.00 0.001984/90/94 Indo Rama 0.00 2.14 0.00 0.00 0.00 2.14 0.00 0.001993/94/96 Indus II 0.00 5.00 0.00 0.00 0.00 4.00 0.00 0.001996 Indus Mauritius 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001996 Indus VC Mgt Co 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.001992 Indus VCF 0.00 0.93 0.00 0.00 0.00 0.93 0.00 0.001992 Info Tech Fund 0.00 0.64 0.00 0.00 0.00 0.64 0.00 0.001992 Ispat Industries 0.00 3.64 0.00 0.00 0.00 3.64 0.00 0.001992/94/97 JSB India 0.00 0.84 0.00 0.00 0.00 0.84 0.00 0.001989/95 M&M 0.00 0.59 0.00 0.00 0.00 0.59 0.00 0.001981/90/93 MUSCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001964/75/79/90

Total Portfolio: 214.93 141.08 0.00 88.01 199.40 124.82 0.00 88.01

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Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic

2000 APCL 7100.00 0.00 1900.00 0.001999 Carraro 10000.00 0.00 0.00 0.001999 Sarshatali Coal 30000.00 0.00 5000.00 0.00

2000 Tanflora 0.00 0.00 510.00 0.00

Total Pending Commitment: 47100.00 0.00 7410.00 0.00

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Annex 10: Country at a Glance

INDIA: Third Technician Education Project

POVERTY and SOCIAL South Low.SIndia Asia Income Development diamond*

1998Population. mid-year (millions) 979.7 1.305 3,536 Life expectancyGNP per capita (Atlas methodf, USS) 440 430 520GNP (Atlas method, US5 billions) 427.4 560 1.842

Average annual growth, 1992-98

Population (%) 1.7 1.9 1.7 GNLabor force (%) 2.0 2.3 1.9 GNP Gross

per primaryMost recent estimate (latest year available, 1992-98) capita enrollment

Poverty (% of population below narional poverty line) 35 . .aUrban population (%of total population) 28 28 30Life expectancy at birth (years) 63 62 63Infant mortality (per 1,000 live births) 70 75 68Child malnutrition (% of children under 5) 53 51 36 Access to safe waterAccess to safe water (% of population) 81 77 73Illiteracy (% of population age 15+) 44 47 31Gross primary enrollment (% of school-age population) too 100 107 -India Low-incomegroup

Male 109 110 112Female 90 90 102

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1978 1988 1997 1998Economic ratios'

GDP (US$ billions) 134.6 289.7 407.9 419.7

Gross domestic investmentlGOP 22.3 24.3 23.4 21.8 TradeExports of goods and services/GOP 6.2 6.3 11.1 11.3Gross domestic savings/GDP 21.1 21.4 19.9 19.1Gross national savings/GDP 21.9 21.2 21.9 20.7

Current account balanc/lGDP *0.1 2.4 -1.4 -1,0 Domestic Ie nInterest payments/GDP 0.3 07 0.8 11. InvestmentTotal debt/GDP 12.2 20.9 23.1 23.4 SavingsTotal debt service/exports 13.0 28.5 18.6 17.0Present value of debt/GDP .. .. 18.7 Present value of debtlexports .. .. 130,3

Indebtedness1978-88 1988-98 1997 1998 1998-02

(average annual growth)GDP 5.0 5.5 4.6 6.3 6.2 - India Low-income groupGNP per capita 2.6 3.7 2.9 4.3 4.4Exports of goods and services 4.2 11.9 6.2 4.5 7.0

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

(% of GDP) 3D

Agriculture 38.8 32.8 28.0 29.1Industry 24.2 26.8 27.1 25.7 2D- .

Manufacturing 16.5 16.4 16.6 15.6 1D

Services 37.0 40.4 44.9 45.2 D 1

Private consumption 69.3 66.4 68.8 69.9 ll 94 95 96 97 saGeneral government consumption 9.6 12.3 11.3 11.0 -GDI GDPImports of goods and services 7.4 9.3 14.5 14.0

1978-88 1988-98 1997 1998 Growth of exports and imports (%)(average annual growth)Agriculture 2.8 3.1 -1.9 7.2 40

Industry 5.9 6.4 5.9 3.9 30 AManufacturing 6.1 6.9 4.0 3.6 20

Services 6.2 7.3 9.0 8.3 20

ixPrivate consumption 5.1 5.6 1.6 10.3General government consumption 7.7 4.6 10.6 6.5 0Gross domestic investment 4.8 5.6 13.1 -0.1 93 94 95 96 97 99

Imports of goods and services 7.3 9.9 11.7 10.9 Eports ImportsGross national product 4.9 5.6 4.7 6.3

Note: 1998 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) 15Consumer prices 9.3 7.0 7.0 I_Implicit GDP deflator 2.5 8.1 6.4 9.4

5Government finance(% of GDP, includes current grants) oCurrent revenue .. 23.6 22.7 22.1 93 94 95 96 97 9

Current budget balance .. 1.0 -0.2 0.0 - GDP deflator O CPlOverall surplus/deficit .. -10.0 -8.0 -9.3

TRADE

(US$ millions) 1978 1988 1997 1998 Export and import levels (USS mill.)Total exports (fob) .. 13,970 35,013 34,298 50,00x

Tea .. 421 505 482 .Iron .. 465 476 359 40,500Manufactures .. 10,727 27,348 27,530 30,000

Total imports (ci) .. 19,497 41,484 47,544 20 W_

Food 1,203 1,845 2,647Fuel and energy .. 3,009 8,217 6,435 10 a0

Capital goods .. 4,803 9,796 9,497 o92 93 94 00 90 97 99

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

BAUtNCE of PAYMENTS1978 1988 1997 19981978 millions) 1997 1 Current account balance to GDP (%/)

(UIS$ millions)Exports of goods and services 8,380 18,213 45,109 47,484 °Imports of goods and services 9,900 26,843 59,297 58,565Reso frce balance -1,520 -8,630 -14,188 -11,081

Net iricome 223 -1,056 -3,166 -3,544Net current transfers 1,150 2,654 11,830 10,280 -I 'I I I 'Current account balance -147 -7,032 -5,524 4,345

Financing items (net) 147 5,600 9,120 8,721Changes in net reserves 0 1,432 -3,596 4,376 2

Memo:Reserves including gold (US$ millions) 7,299 5,467 30,314 33,206Conversion 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 (USS mill.)Total debt outstanding and disbursed 16,466 60,477 94,404 98,232

IBRD 646 5,590 8,138 7,993 G:4,329 A:7,993IDA 3,972 12,019 17,912 18,562

Total debt service 1,309 5,945 10,832 10,001 :18,562IBRD 126 777 1,411 1,627IDA 38 179 381 1,372

Composition of net resource flows F: 39,448 C:298Offlicial grants 449 406 379 307Oflicial creditors 603 2,645 -312 1,727 \:3,965Private creditors -10 5,741 2,840 -1,433Foreign direct investment 0 287 3,557 2,462Portfolio equity 0 0 1,828 -61 E: 23,647

Worli 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 multilateral F - PrivatePrincipal repayments 84 383 1,071 2,193 C-IMF G - Short-tenmNet flows 423 2,088 302 -772Interest payments 80 572 721 806Net transfers 342 1,516 -420 -1,578

Development Economics 3128100

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AdditionalAnnex No.: 11

INDIA: Third Technician Education ProjectHow the Project would Promote Tribal Development

Project Objectives and Components

This annex describes the project's approach to meeting the requirements of the Bank's O.D. 4.20, i.e. how itwould ensure (a) that indigenous people in the project areas receive culturally-compatible social andeconomic benefits, and (b) that there are no adverse effects on them, specifically on their culture, language,institutions, rights, natural resource base and productive activities.

The main project objective is to expand and improve technician education in the eight states/UnionTerritory in which it is located, many of whose populations are substantially tribal. Increasing the accessof disadvantaged groups such as tribal people, women and rural youth to technical education and training isalso a specific development objective of the project. The location of the project in the north-eastem, largelytribal, states itself is intended to redress the existing inadequacy of technical skills among these populations,and mitigate the related problems they face, such as unemployment (and the social unrest and economicstagnation this creates), and inadequate technology transfer.

The three project components subsume the following activities:

* Establishing six new polytechnics and strengthening 12 existing ones, including establishing a skillsdevelopment center and introducing new academic programs; quality enhancements includemodemization of laboratories and workshops, improved curricula, more and better trained staff, andenhanced learning resources;

a Introducing continuing education programs for industry and communities, including non-formaltraining and distance education, which would be managed by Industry/Community-Institute InteractionCells established in the polytechnics; and

* Enhancing the efficiency of technician education by establishing better management and supervisionsystems, research, networking and policy support.

To provide commensurate and culturally-compatible benefits to tribal people, the project would ensure (a)that the appropriate proportion of places and facilities in the polytechnics are given to indigenous students;(b) that the on-going and new academic programs/curricula fit the needs of the local tribal populations andare compatible with their cultures; and (c) that the industry/community outreach programs coverindigenous populations and needs.

Project Beneficiaries and Benefits

Project beneficiaries would consist of two main categories:

* Students in the main courses of the 18 polytechnics; these would be young people who have completed10 to 12 years of schooling, and who are selected for the formal training programs on the basis of entrycriteria established by the individual state governments and approved by the All-India Council forTechnical Education (AICTE). The enrollment capacity of the polytechnics would increase to about8,000, and about 2,500 students would graduate every year. Tribal youth and women from low- and

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middle-income groups would constitute the majority of students;* Members of local communities who would participate in the non-formal continuing education and

community outreach programs of the polytechnics. About 8,000 to 10,000 people are expected toreceive such t-raining during the project period.

Under the non-formal continuing education and conmmunity outreach programs, the project would undertakethe following activities:

* Non-formal training for employment generation, including self-employment;* Creation of extension centers for maintenance and repair services as well as transfer of improved

technologies in areas of relevance and community need (e.g., water and sanitation, housing, agriculturalimplements, electrical equipment);

* Community service projects by students who would receive credit for them in the curricula;* L-inkages with other government programs that provide inputs to village development;* Distance education of remote communities in Sikkim, Tripura, and the Andaman & Nicobar Islands,

who would be reached by V-sat communication and extension services.

Thus, the benefits of the project include:* the appropriate education and deployment of secondary school graduates in the project states; they

would be assisted to develop and utilize their talents, which may otherwise be wasted in non-productiveactivities;

* enhancement of knowledge and skills for productive activities among local communities, ofemployment, and of extension services to meet important needs.

The diversity of cultures and social structures in the project areas, and wide differences in occupationalpattems, systems of livelihood and production, call for the polytechnic programs to be tuned to localconditions, particularly in the case of the outreach programs. The formal programs which would beconducted under the project have been selected carefully to meet local socio-economic needs, based onon-site research. Economic and labor market conditions in these states have been taken into account inrevising existing courses and introducing new ones (see Annex 4). To address the problem of limitedemployment in the modem sector, the project proposes specifically to enable graduates to set upself-employment ventures and provides training for entrepreneurship development. The non-formalcontinuing education programs would assist in transferring technologies that are adapted to local needs andenvirornments. Both the formal and non-formal training programs would enhance the employability of localyouth and expand local production, and these outcomes would in tum contribute to the economicdevelopment of the project states, including their tribal areas.

Social Assessment. In order to ensure that the project attains its wide educational and developmentobjectives and is sustainable, each polytechnic would carry out a detailed social assessment prior todesigning and implementing its community outreach programs. This would include the collection andanalysis of relevant data on the local communities and their institutions, and ascertaining their preferencesthrough consultations. Local patterns of social organization and resource use would be taken into accountin program design. The programs designed as a result of these participatory social and institutionalanalyses would offer culturally-appropriate choices and build in continuous assessments of communityinterest in them and of their effectiveness, which would be part of the monitoring and evaluation of theproject. The need for and potential complexity of this process is demonstrated by the baseline data below,which describe aspects of tribal education, gender relations, language, occupation, settlements andmigration that are germane to the objectives of the project.

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Baseline Data

Population. In six project states, the share of Scheduled Tribes (ST) in the total population is significantlyhigher than the national average of about eight percent (see Annex 2, Table 2. 1). In four states, tribalpeople constitute the majority of the population: over 85 percent in Meghalaya, Mizoram and Nagaland,and over 60 percent in Arunachal Pradesh. In two other states, Sikkim and Tripura, the proportion isbetween 20 and 30 percent. In the Andaman & Nicobar Islands the proportion is below 10 percent.Although data are not available for Jammu & Kashmir, the proportion of tribal people in the population ofthis state is estimated to be negligible. Significant percentages of the populations of the project states alsobelong to religious groups which are in the minority in India as a whole, such as Christians in thenorth-eastem states, Muslims in Jammu & Kashmir, and Buddhists in Sikkim. These unusual demographicfeatures, as well as the strategic locations and underdevelopment of these states, have resulted in specialpolicies being formulated to protect their cultures and associated resources while providing themappropriate development opportunities. Some relevant measures are reviewed below in the sections onLegal Framework and Institutional Mechanisms.

Education. Except for Jammu & Kashmir, literacy rates and primary school enrollment rates in all theproject states are higher than the respective national average. However, progress beyond universalenrollment at the primary stage has been relatively modest. Even in the north-eastem states with relativelyhigh coverage at the primary level, the Gross Enrollment Ratio (GER) for the 11 to 14 year age-groupdrops sharply to between 50 and 60 percent, compared to 90 percent for the 6 to 11 year age-group. Thedrop-out rate for Classes 1 to 5 is 48 percent against the national average of 40 percent. In Jammu &Kashmir, only two-thirds of children are enrolled at the primary level. Census data for 1991 also revealdifferences between rural and urban areas: in the latter, over 80 percent of children in the 11 to 13 yearage-group were reportedly attending school, but in rural areas the proportion was only 70 percent (Table11.1).

Table 11.1Attendance Ratio (11 to 13 year age-group)

State/UT Rural Urban

Male Female Male Female

Arunachal Pradesh 66 50 84 75

Meghalaya 48 49 87 85

Mizoram 73 68 91 88

Nagaland 69 65 85 83

Tripura 77 67 91 86

Sikkim 79 71 86 82

Jammu & Kashmir n.a. n.a. n.a. n.a.

Andaman & Nicobar 89 84 88 86

Source: Census of India, 1991

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As only students who successfully complete secondary school are eligible for formal polytechnic courses,access to these among different social groups is determined by prior access to secondary schooling of goodquality. Throughout India, access is greater among middle-income groups and the populations of urbanareas or large villages in close proximity to urban centers. In most of the project states, unlike other partsof India, tribal communities have a relatively advantageous socio-political and economic position, and sostudents qualifying for entrance to the polytechnics include substantial numbers of tribal youth. Theiraccess is further enhanced by prevailing affirmative action measures (e.g., reservation quotas for educationand employment, scholarships, etc. - see Legal Framework below).

Gender. Gender disparities exist-in elementary and secondary school enrollment but are not substantial inany of the project states except Jammu & Kashmir, where relatively low GERs persist at the primary (66percent) and upper primary (50 percent) stages. The female literacy rate is lower than the national averagein Arunachal Pradesh and Jammu & Kashmir (J&K). In other states, a high proportion of women (between65 and 95 percent) are literate, though educational attainment is only primary level for the majority.

The project proposes special measures for women, such as the introduction of appropriate courses, hostelfacilities, and support for employment. About fifty percent of additional hostel places created under theproject would be for women. Consequently, the participation of women in technician education is expectedto rise significantly from 31% to 48% in the final year of the project. Women would also be importantparticipants in the community outreach programs. On account of the low female literacy in ArunachalPradLesh and J&K, community outreach programs in these states would aim to accommodate training needsof illiterate women. In the tribal communities, the programs would take account of the traditionally activerole played by women in production and activities outside the home. The social assessments which wouldbe carried out in each community prior to the design and implementation of the outreach programs wouldcollect and analyze data on women's roles, priorities and needs, in order to ensure that the programs benefitwoomen from lower income groups.

Linguistic and Cultural Aspects. Within the broad classification 'Scheduled Tribes', there are a largenumber of separate tribal groups derived from various 'families' including the Tibeto-Burman,Indo-Mongoloid and Mon-Khemar. One relevant result is the wide linguistic variation, even withinindividual states. Taking the project states together, there are 66 languages recorded as 'mother tongues'with more than 10,000 speakers each. In Mizoram, Tripura and Sikkim, there is greater linguistichomogeneity in the sense that between 63 and 75 percent of the population speak one language (see Table11.2). In Meghalaya, 49 percent and 31 percent of the population speak Khasi and Garo, respectively.Each of these states, however, has at least another five languages with more than 10,000 speakers, andadditional languages with smaller numbers of speakers. For instance, in Sikkim, 63 percent speak Nepali,but i,lve other languages are spoken by less than ten percent of the population each. Linguistic diversity ismost marked in Arunachal Pradesh and Nagaland. In the former area, 20 percent of the population speaksNissi/Dafla but there are 11 other languages each spoken by 10,000 to 20,000 speakers (less than tenpercent of the population). In the latter, there are at least 15 languages with more than 10,000 speakers ofeachi language, the majority of them spoken by less than five percent of the population.

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Table 11.2

Speakers of the Three Numerically Most Significant Languages(percent distribution in each state)

States/UT Language Speakers (as % of Language Speakers (as % Language Speakers (as %population) of population) of population)

Arunachal Pradesh Nissi/Daffla 19.9 Nepali 9.4 Bengali 8.2

Meghalaya Khasi 49.5 Garo 30.9 Bengali 8.1

Mizoram Lushai/Miz 75.1 Bengali 8.6 Lakher 3.3

Nagaland Ao 14.0 Sema 12.6 Konyak 11.4

Tripura Bengali 68.9 Tripuri 23.5 Hindi 1.7

Sikkim Nepali 63.1 Bhotia 8.0 Lepcha 7.3

Andaman & Nicobar Bengali 23.1 Tamil 19.1 Hindi 17.6

Source: Census of India, 1991

Such linguistic heterogeneity makes education, particularly higher education, complex. While technicaleducation is less dependent on language (compared with baccalaureate education), it is replete withtechnological terms which do not exist in most Indian languages. Thus, technician education is transactedlargely in English throughout India, including the project states.

In addition to linguistic diversity, other diverse aspects of culture are relevant to project transactions.These include a range of social customs and rules relating to the position of women (e.g., marriage andinheritance rules). Many (but not all) tribal communities are matrilineal, enabling daughters to inheritproperty and children to carry their mothers' clan names. The related, comparatively higher status ofwomen in the North-East has facilitated their greater access to education, but its impact on women's accessto and control over modem economic resources (e.g., technology) has been low.

Occupational Patterns. State-level data on occupations reveal that 65 to 75 percent of the labor force ineach state is engaged in agriculture; another 15 to 25 percent is engaged in services, and 3 to 7 percent intrade. The urban work force consists largely of people engaged in services and trade, but manufacturing,construction and transport occupy greater proportions of people in urban areas (Table 11.3). Theseoccupational pattems have a bearing on the nature of formal polytechnic courses to be offered under theproject, and on the skills and technologies promoted by the industry/community programs.

Table 11.3Structure of the Workforce, 1991 (percent distribution in each state)

Total Workforce Agricultur Manufacturin Construction Trade Transport Servicese 7

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Anmnachal Pradesh 67.2 2.7 6.0 3.3 1.1 19.5

Meghalaya 74.2 2.1 1.6 5.3 1.4 15.3

Mizoram 65.8 2.6 2.5 5.2 1.1 22.6

Nagaland 75.2 1.7 1.8 3.2 0.9 17.2

Tripura 63.8 4.9 1.5 7.7 2.8 19.1

Urban Workforce

Artnachal Pradesh 8.9 5.6 13.2 12.0 3.9 56.3

Meghalaya 8.6 8.0 5.7 19.1 6.1 51.7

Mizoram 40.7 5.3 4.0 10.9 2.4 54.9

Nagaland 14.3 4.8 5.5 16.0 4.3 54.9

Tripura 10.2 9.2 3.9 20.2 8.1 47.4

Source: Census of India, 1991

In most states, agriculture is characterized by subsistence production and low productivity. In Mizoram

and Meghalaya, the main pattern of agriculture isjhum (shifting) cultivation. Harvesting of forest produce

for subsistence use and, in some cases, for market is another important economic activity. Forests

comprise both reserved forests (where the state alone has the authority to collect forest resources), and

other forests where traditional uses by local communities are permitted. Among non-agricultural activities,

traditional crafts, such as basket- weaving, shawl-making, cane and bamboo work, occupy an important

position, with some marketed outside the state.

Apart from agriculture and handicrafts, trading is a major economic activity in the north-eastem states.

TradLe networks cover exchanges of produce within the state (specifically between hills and plains people),

inter-state trade within the region, trading with other states of the country, and regulated trading with

Bangladesh and Myanmar. Much of the internal and external trade is controlled by non-tribal people,

inchlding communities from other parts of India that have settled in the region over generations, sales

offices of industrial houses, and itinerant traders who visit intermittently to buy or sell specific products.

The project would promote the improvement of agricultural technologies and of extension services to

enhance productivity. It would also assist in developing skills and improving the quality and marketing of

handicrafts. As a result it is expected that local producers would be able to better control trade and ensure

fair prices for their products.

Settlements and Migration. The overall labor force distribution reflects the low level of urbanization in

the project states -- towns are few as well as small in size. In the North-East, they have grown either as

centers of administration or agricultural trade. Even rural settlements in the project states are small and

widely dispersed. Seventy-five percent of villages in Arunachal Pradesh and 50 percent in Meghalaya have

less than 200 people, and such villages account for about a quarter of the rural population. Furthermore, in

these villages, homes are spread out among hamlets, often located on individual hill tops. These settlement

patterns would be taken into account while devising pragmatic and effective community outreach strategies.

Another important aspect of the project states is the extent of migration. Their hill areas face extensive

out-migration, particularly of young men, due to poor economic conditions. This leaves women often

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fending economically and socially for themselves, making them an important target group for thecommunity outreach programs. In-migration of non-native communities is also occurring (e.g., in Tripuraand Sikkim) bringing in low-skilled and often impoverished people who also need access to better skills,technology and employment opportunities.

While focusing on improving technical education in the project states in order to create employment andspur economic development, the project is also concerned with the enhancement of productive skills thatmeet the needs and are suited to the environment of tribal people, and are sustainable. It also aims topreserve and enhance occupational activities which are a part of their special cultures.

Legal Framework

General. The Fifth and Sixth Schedules of the Indian Constitution provide protection to tribal populationson account of their disadvantages. The Fifth Schedule designates 'Scheduled Areas' in large parts ofcentral India in which the interests of 'Scheduled Tribes' are to be protected. The Sixth Schedule applies tothe administration of the states of Assam, Meghalaya, Tripura and Mizoram in the North-East. ThisSchedule provides for the creation of autonomous districts, and autonomous regions within districts if thereare different Scheduled Tribes within the district. The District/Regional Councils are elected by popularballot and are empowered to make laws on the use of land, management of forests, regulation ofjhumcultivation, regulation of money-lending and trading by non-tribals, property and inheritance, marriage andsocial customs.

In addition, Articles 371 A and 371 G of the Constitution specifically relate to the protection of customarylaws and practices in the states of Nagaland and Mizoram, respectively. These two Articles provide that noAct of Parliament in respect of religious and social practices, customary laws and procedure, and theadministration of civil and criminal justice involving decisions awarded according to the customary law andownership and transfer of land and its resources applies to these two states unless specifically agreed to byresolutions of their Legislative Assemblies.

Taken together, these Constitutional provisions and more direct access to political power have meant thattribal lands, interests, and identities have been protected with greater effectiveness in the North-East than inother areas of the country where tribal populations are in a minority and have come under economicpressure from surrounding, economically more advanced, populations.

Specific Measures Relating to Education. Article 46 of the Directive Principles of State Policy, anadjunct to the Constitution, provides that "the state shall promote with special care the educational andeconomic interests of the weaker sections of the people, and in particular the ... Scheduled Tribes, and shallprotect them from social injustice and exploitation." Article 15 enables the state to make special provisionsfor the advancement of socially/educationally backward classes or for the Scheduled Castes and Tribes(SC/ST). Accordingly, tribal people are provided statutory reservations in educational institutions andjobs, which often involve a relaxation of the eligibility criteria to enable them to qualify. These provisionswould apply to this project.

Individual state governments as well as the Central Government have several scholarship programs forSC/ST students at the secondary and post-secondary level, as well as hostels to ensure participation ofthese disadvantaged sections. The Central Government has set up the North Eastern Regional Institute ofScience and Technology (NERIST) at Itanagar in Arunachal Pradesh to promote science and technologyeducation in the area. Besides this, 612 degree-level seats and 307 diploma-level seats have been reservedin various engineering colleges and polytechnics throughout India for students from the North-East. Due to

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high private costs and difficulties in adjusting to new social conditions, these qaotas are often not utilizedfully.

The project would considerably enhance the availability of technician education (which has been limited inthe project states) to tribal students, thus furthering the goals of the Constitution while enabling thestudents to continue living in their own socio-cultural settings, and eventually to work there to assist in thedevelopment of their commnunities. The overall participation of tribal students in the formal programs ofproject polytechnics would increase from 36% to 49% (over 90% in Meghalaya, Mizoram and Nagaland)of those enrolled by the end of the project period. Of the additional student places created by the project,almost three-quarters would be in the six states of the North-East which have a high share of STpopulation. In these states, the majority of the beneficiaries of the non-formal programs would also befrom tribal communities. The community outreach programs would assist in the socio-economicdevelopment of tribal communities, while providing them opportunities to chose, own and manage theirspecific activities.

Land tenure. Community land tenure systems exist among many of the tribal communities, and are relatedto their traditional production systems. The social organization of jhum cultivation, for example, does notallow for individual ownership of land, and therefore control over land is exercised either by the clan or thevillage, which also organizes the labor. Household control is restricted to land that is allotted for residenceand cultivation after the common land is delineated. The traditional systems of land tenure apply to villageland. under the authority of a village council, clan land under the authority of a clan council, and domesticgroLp land under the authority of a domestic group. Land under the authority of civil administrations orcorporate bodies is governed by state or Central laws. Land is privately owned in urban areas and in ruralareas where commercial agriculture has begun.

Specific legislation exists to ensure that tribal people do not lose their lands, and there are also lawsproviding rights to forest and common property resources. In the north-eastern states, these rights areprotected by laws prohibiting non-tribal persons or persons from outside the state to purchase land.However, despite legal provisions ensuring that tribal lands are not alienated, control over land is one of themost sensitive issues in tribal areas, particularly in the North-East. Control over land has been a majorreason for conflict between the original inhabitants of the region and in-migrants, tribal and non-tribalpeople, and one tribe and another.

The project is not expected to exacerbate the situation, nor would it address issues of land tenure directly.However, in training local tribal youth for productive activity and raising their incomes, it would assistfamilies and communities to retain social and economic control over their lands.

Inslitutional Mechanisms

In the north-eastern states, the modern government machinery coexists with traditional institutions ofgovernance. The former system consists of two parts: the legislature, comprising the District Councils, theState Legislative Assembly, and membership of the upper and lower houses of the national Parliament, andthe executive -- administrative echelons from the state secretariat down to the block-level. In thenorth-eastern states where Scheduled Tribes constitute the majority of the population, elected leaders andadministrative personnel are drawn predominantly from these communities, and their involvement inprograms and projects of this nature can help to promote the interests of the communities. The projectwould establish an Advisory body for the outreach programs in each polytechnic, including localrepresentatives, experts and community members. Furthermore, most project administrators would bedrawn from state personnel.

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In the North-East, village councils are an important institutional mechanism for self-governance, and enjoystatutory rights under the Constitution. The village is essentially an extension of the clan or family.Villages have jurisdiction over a defined territory, comprising both residential and cultivable land. Thevillage council consists of adult male members and is represented by a headman or chief. Womentraditionally do not play a role in these councils although they have a more prominent social presence thanin other Indian communities. The village heads are assisted by a few selected members forming acommittee. The village council is a decision-making and implementing body. Cases of law and order,initiating governmental schemes for community development, settling of disputes, etc. are decided by thecouncils. In Nagaland, for example, tribal councils are empowered to try criminal as well as civil casesand can impose fines. Only those members belonging to the village enjoy the right of politicalparticipation. Even though a tribe may be spread over many villages, membership of a tribe does notenable participation in village councils other than the one in the village where a person resides. The villagecouncils in the areas likely to be covered by the community outreach programs would be consulted duringthe social assessment and would participate in decision-making, implementation and evaluation of theprograms.

Special Central Assistance. In order to accelerate the socio-economic development of the North-East, theNorth Eastern Council (NEC) was created in 1972 by an Act of Parliament to advise the Central and stategovernments and formulate regional plans and programs. The NEC provides financing for inter-statedevelopment projects in the area of infrastructure, and for the development of higher educationalinstitutions. These funds are obtained as Central assistance or loans from financial institutions. All theproject states (except the Andaman & Nicobar Islands) are also covered by a 'Hill Areas DevelopmentProgramme' which provides Central assistance for state plans under more favorable terms than for non-hillstates. Further, since the mid-'90s, all Central Ministries are expected to earmark ten percent of theirannual budgets for developmental activities in the North-East, including the Ministry of Human ResourceDevelopment which allocates funds for educational activities. This project would also be a purposivemechanism to enhance educational expenditures in these states.

Implementation and Strategy for Local Participation

The existing polytechnics would pay attention to their intake of tribal students from the inception of theproject, and to the availability of courses relevant to and desired by them during the revision of curricula,training of staff, enhancement of learning resources, and so on. Similarly, the new polytechnics would beconcerned about the intake of tribal students and the relevance of courses offered at appropriate times intheir establishment.

Under the project, the polytechnics would establish Industry/Community-Institute Interaction Cells (ICIIC)which would develop the capacities needed to design and implement programs that are sensitive to theculture and needs of tribal communities and responsive to their demands. To begin with, in order to ensurethat these programs are designed for the communities in which they would be implemented, socialassessments would be conducted in the communities likely to be reached by each polytechnic. These wouldbe followed by the development of detailed community development plans. The social assessments wouldprovide baseline data on the local communities, their living conditions, vocations, traditions, developmentneeds and desires. By matching these conditions and needs with the capacities and technology available inthe polytechnics, relevant development programs and goals would be developed. The SAs would be carriedout in the areas of the 12 existing polytechnics in the first year of the project, while the six newpolytechnics would conduct assessments after they are established, but before they begin communitydevelopment -- most likely in the third year of the project.

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The social assessments would identify local preferences through direct consultation with the communities,ancd establish a mechanism for continued informed participation by them. Consultations would be held withtraditional representatives and groups (including village/clan councils), elected bodies, and other groupsthat represent specific sections, such as women and youth. These groups would be identified during thestakceholder analyses for the social assessments. The outreach programs developed would take into accountindigenous knowledge, and build in mechanisms for communities to be involved in decision-making duringproject implementation, and in program evaluation. Program design would also aim to achievesustainability by encouraging management by local people, facilitating this through training, and reducingdependence on project entities in the long-term.

The faculty, administrative staff and students of the polytechnics would all be involved in the ICIICactivities, and thus would be actively oriented to and engaged with the communities. They would beinvolved in field operations, thus constituting a sizable field presence and providing an interface betweenindigenous organizations and local authorities to develop the linkages with government programs mentionedabove. Technical assistance would be obtained by the ICIICs whenever necessary to ensure that theydevelop the social and technical skills required to support the initiatives for or by tribal people. They couldalso mobilize other agencies such as NGOs to assist in the project in accordance with community needs.

Cost estimate and financing plan. No separate costing or financing plan has been prepared for tribaldevelopment as the project as a whole is addressed to meeting the needs of tribal people in the project areas.

Monitoring and Evaluation

The project's regular monitoring activities would collect information on and assess the enrollment,cornpletion and performance of tribal students, along with non-tribal students. Information would also begathered through tracer studies on the percent of polytechnic graduates employed/self-employed in theirfield of training within one year of graduation. The number and profile of beneficiaries of the continuingeducation and community outreach programs would also be measured.

Prcqject monitoring reports are expected to provide information on the nature and level of interactionbetween the polytechnics and the local communities and industry. Community assessments of the outreachprogram would be built into the monitoring of the program, permitting the examination of its relevance to,performance and success within tribal communities. M&E staff would be sensitized to tribal issues toensure that appropriate questions/formats are formulated for monitoring and evaluation, and that datacollection and analyses are relevant and useful. ICIIC processes would also be evaluated to ascertain thatthey are meeting community needs.

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