PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB7045 Project Name Bihar Rural Livelihoods Project Additional Financing Region SOUTH ASIA Country: INDIA Sectors General agriculture, fishing and forestry sector (70%); Other social services (20%); Agricultural marketing and trade (10%) Lending Instrument: Specific Investment Loan Project ID P130546 Borrower(s) GOVERNMENT OF INDIA Implementing Agency Bihar Rural Livelihoods Promotion Society, Department of Finance, Government of Bihar Environment Category [ ] A [X] B [ ] C [ ] FI [ ] Date PID Prepared April 17, 2012 Date of Appraisal Authorization April 2-6, 2012 Estimated Date of Board Approval May 31, 2012 Concept Review Decision March 26, 2012

A. Country and Sector Background

1. Bihar is the third largest state in terms of population with population density of three times the national average. About 89.5% of its population is rural and the rural poverty ratio of 55.7% as against the national average of 41.8%. In spite of the various poverty reduction efforts undertaken by the Government of Bihar (GoB) and a growth rate of 11.36 % over the last six years, the average annual per capita income for Bihar is one third the national average. The situation in rural Bihar is characterized by poor social service delivery, caste ridden political and social fabric, elite capture of most institutions and economic opportunities, and limited development infrastructure. The Government of Bihar has initiated a series of reform measures to facilitate favorable investment climate and efficient delivery of public services in the State to reduce poverty. 2. Since 2007, the Bihar Rural Livelihoods Project (BRLP – Project ID P090764) has been supporting the rural poverty reduction program of the Government of Bihar (Approved for an original IDA Credit of US$63 million, BRLP became effective on October 1, 2007. The Project Development Objective (PDO) of the project is to enhance social and economic empowerment of the rural poor in Bihar. The project has mobilized 515,000 poor women, into 46,000 self help groups (SHGs) and 3,500 village organizations (VOs). Of these women, more than 90% belong to vulnerable groups such as Scheduled Caste, Scheduled Tribes and Backward Castes. These community organizations are managed by a human resource pool of nearly 90,000 trained grassroots women leaders and 8,000 para-professionals, resource persons and functionaries trained in the areas of institutional capacity building, bookkeeping, bank linkage and livelihood support services. These SHGs of the poor have cumulatively saved over $5.5 million, undertaken inter-loaning to each other of $15.1 million to create their credit history with the commercial banks. A strong partnership with the mainstream financial institutions has been built through the signing of MOUs with four commercial Banks and three Regional Rural Banks (RRBs). The project has made systematic efforts to make the poor households who form the membership of SHGs as bankable clients, worked with the banking sector to change their risk perception of the poor borrowers and has managed to successfully facilitate bank linkage to the tune of $22 million of credit for the rural poor SHG members. As a result of the agriculture intervention nearly 150,000 farmers have been part of the agriculture productivity enhancement intervention. There has been an 87% increase in productivity in paddy and 97% increase in productivity in wheat (as per an external impact assessment). A recent independent evaluation of the impact of JEEVIKA on socio-economic outcomes based on a survey of 4,000 randomly selected households shows that the project has positively impacted the savings of the project households, reduced high cost indebtedness, has led to increased food security and assetisation and has increased women’s empowerment significantly. In addition, building on the women based community institutional platform created, the project has initiated a number of interventions on pilot basis through inter-departmental collaboration and convergence with other government programs and enabled access to public entitlements like the Pensions, wages under NREGA, PDS entitlements, Health Insurance etc for the poor

B. Objectives

3. The project objective of the original project is to enhance social and economic empowerment of the rural poor in Bihar. No change is envisaged in the Project Objective and the components of the project in the proposed Additional financing of the project. The proposed additional financing will support the geographical expansion of the project to cover all the blocks in the existing six districts of Bihar (Gaya, Khagaria, Madhubani, Muzzafarpur, Nalanda, and Purnia) of the parent project and support consolidation of the activities undertaken. It will also scale up the activities that promote greater impact of last mile service delivery approaches using the institutional platform of community based organizations already formed. This will be done through inter-sectoral convergence with various other GOI/GOB programs and other Bank supported programs in Bihar.

4. Furthermore, the additional financing of BRLP is fully consistent with the Country Strategy (FY2009-2012, CAS) for India which focuses on inclusive growth, sustainable development and increasing the effectiveness of public financed service delivery and is in consonance with the proposed BRLPs strategy on achieving inclusive pro-poor development by building the institutional capacity of the poor.

C. Rationale for Bank Involvement

5. The additional financing will support the geographical expansion of the project to cover all the blocks in the existing six districts of Bihar of the parent project and support consolidation of the activities undertaken. It will also scale up the activities that promote greater impact of last mile service delivery approaches using the institutional platform of community based organizations already formed. This will be done through inter-sectoral convergence with various other GOI/GOB programs and other Bank supported programs in Bihar. The proposed Additional Financing (AF) will scale up the project’s impact and effectiveness through (i) scaling up through federating and building the capacity of the women managed community based organizations at village and block level; (ii) building synergies and convergence with various ongoing schemes and programs of the GOI/GOB in the areas of health and nutrition, social protection, rural employment, agriculture through demand side interventions and strengthening the last mile service delivery mechanisms; (iii) enhance financial and economic inclusion and capitalization of the poor through collaborative frameworks with a variety of private, civil society, and social enterprise partner organizations; and (iv) strengthen the M&E system to capture changes in social and economic empowerment in household economy and behavior.

D. Description

6. The proposed Additional Financing is intended to be utilized for: (a) Scaling up of the successful investments and core project design to cover all the blocks in the six project districts to ensure a saturation approach at the district level, (b) Consolidation of the activities initiated in the BRLP in the 2 first phase. This includes deepening the interventions made in different livelihood sectors such as agriculture, dairying, job creation for migrant youth and nonfarm sector employment, cross-sectoral delivery of services using the empowered women based community federations formed and enabling convergence with various development programs, (c) strengthening of partnerships for technical assistance with civil society, social entrepreneurs and private sector for embedding innovative practices for social, financial and economic inclusion, and (d) strengthening M&E systems to capture change along all dimensions of project outcomes and functional MIS for project decision making. Lessons learnt during additional financing will be used to inform investments to be made for scaling up the program through National Rural Livelihood Mission in all the districts of Bihar.

7. Scaling up of Successful Investments: This additional financing is requested to expand the project horizontally into an additional 60 new Blocks spread across the existing six districts of the project. This will allow the project to saturate all the villages in the existing districts and thereby provide a comprehensive district wide model for poverty alleviation.

8. Consolidation and Deepening of Interventions: The additional financing would help BRLP to consolidate and deepen some of the key activities initiated in the parent project so that the learning’s from these interventions would be internalized and scaled up across the state. These are as follows:

a) Scaling up access to safety nets through convergence and partnerships: One of the core investments of the BRLP has been to build strong institutional platforms of the poor such as women Self Help Groups (SHGs) and their federations like the Village Organizations (federation of SHGs) and Cluster Level Federations (federation of Village Organizations). These platforms, apart from offering a variety of livelihood services to their members, also facilitate their access to entitlements like social security pensions, health and food entitlements, wage employment, agriculture support services etc. BRLP aims to further build the capacities of these institutions of the poor, to enable member households to access their entitlements through creating demand side linkages to the supply side service provisions made under different programs of the government. Collaborative frameworks with different departments of the GOB are already being piloted and these will be further formalized and scaled up. In addition in some of the sectors formalized coordination mechanisms with the PRI system, which is being revamped in Bihar, will be scaled up as the PRI system is strengthened through participation in the Gram Sabha of the women members of BRLP.

b) Piloting of scalable models across different livelihood sub sectors: A core strategy of BRLP is establishing a system of sustainable livelihoods in different economic sectors such as agriculture, animal husbandry and dairying, and different nonfarm sectors for income and employment enhancement of the poor. This is done through investments in end to end solutions from technology extension to market linkages associated with specific livelihoods. The parent project has achieved significant success in this regard in the agriculture sector with the introduction of System of Rice Intensification (SRI). The proposed additional financing will enable scaling up in other sectors, particularly animal husbandry, nonfarm livelihoods, and skill development for access to skills and urban jobs ensuring strong rural-urban linkages. These activities will be undertaken in partnerships with several NGOs, cooperative institutions, social entrepreneurs and private organizations.

c) Piloting alternate models of financial access: Greater stress has to be given for ensuring financial literacy and counseling for the poor households, greater access to alternative channels of finance; including banking correspondents, micro finance institutions and innovations in rural banking; and enabling increased access to financial services. Several pilots have been initiated in this area

3 in BRLP and investments are required to scale them up through the project so that they become an integral part of the core approach of financial inclusion supported by the project.

9. Strengthening Partnerships: The project has developed partnerships with government departments and with appropriate civil society/cooperative/private sector agencies for technical assistance in key livelihood sectors like agriculture, dairy, fishery, bee keeping, and health service delivery. Additional financing will help the project to develop new partnerships with NGOs across different areas like institutions building, financial inclusion and livelihood promotion. Partnerships will also be developed with Banking Correspondent, Banking facilitators and MFIs to pilot alternate models of financial access.

10. Strengthening M & E: While a robust M&E system, including a process monitoring system by third party and a computerized MIS has been established in the BRLP, this was not comprehensive enough to capture all the outcomes at the household level, especially relating to social dimensions of behavior change and empowerment. BRLP will adopt a “Social Observatory” model for its M&E. This employs a comprehensive monitoring, evaluation and learning system to measure change, assess the effectiveness of the project, and pinpoint design and implementation challenges in a manner that is closely integrated with project implementation activities. Moreover, a system of learning will be developed to institutionalize the learning process and convert field experiences and field actions into knowledge and knowledge products, which can be disseminated to internal and external audiences for wider outreach and for increasing the effectiveness and efficiency of the implementation process. As part of AF, key information on existing interventions in the thematic area of livelihoods, microfinance and social development will be integrated with the core MIS; moreover, as new interventions are tested on a pilot basis, the results from the pilots would also be integrated with the core MIS, to study the impacts before the intervention itself is finalized.

11. The additional financing will continue to be grouped under the four existing components of the project. These are as follows:

Component I: Community Institution Development- This component will build new women’s SHGs and their federations in the new Blocks, strengthen and capacitate the existing SHG federations, select and train community resource persons, build different types of livelihood organizations and vertically federate the Village Organizations formed. It will also train and prepare the existing VOs to take on roles and management responsibilities in different program areas such as finance and insurance, health& nutrition, monitoring of education programs etc that converge other government programs.

Component II: Community Investment Fund- This component will continue to provide capitalizing grants to different community level organizations on both a demand driven basis and for specific purposes such as health risk, nutrition, food security and specific livelihood sector value chains that have emerged as priority needs during the implementation of the project till now.

Component III: Technical Assistance Fund- This component will be substantially enhanced to provide for partnerships and collaborations with a variety of public, private, civil society service providers who can contribute to making the project inter-sectoral and comprehensive for poverty alleviation. The fund will use such partnerships to continue improving the supply of key support services in the areas of financial inclusion and use of ICT technology, sectoral social services and entitlements, growth of livelihood sectors that employ the poor and innovations that strengthen the governance of the community institutions and PRIs.

4 Component IV: Project Management- This component will continue to finance the overall governance and management of the project, and invest specifically in strengthening the M&E, Social Accountability and HRD functions of the project to build a dynamic and learning institution for the state of Bihar.

E. Financing Source: BORROWER/RECIPIENT ($m.)40.0 INTERNATIONAL DEVELOPMENT ASSOCIATION 100.0 Total 140.0

F. Implementation

12. Implementation Arrangements under the proposed additional financing would remain the same as the parent project. The BRLP Society will continue to be the project implementing agency and will continue to implement, monitor and coordinate the project. Coordination will be enhanced with selected GOB departments through both the Executive Council (EC) and selected partnerships. Critical additional staff of a professional nature will be hired wherever necessary. BRLPS would extensively use collaborative partnerships following the same pattern as initiated in the parent project.

G. Sustainability

H. Lessons Learned from Past Operations in the Country/Sector

13. The original project incorporated extensive lessons that are available from Government of Bihar’s implementation of various poverty alleviation programs, such as Swarnajayanti Gram Swarojgar Yojna and Integrated Rural Development Program (IRDP). GoB recent experiences the CDD approach under the IDA funded projects, such as Andhra Pradesh District Poverty Initiatives Project (APDPIP), Andhra Pradesh Rural Poverty Reduction Project (APRPRP), and Poverty Alleviation Fund (PAF) in South Asia, as well as from other countries such as Philippines and Indonesia was also incorporated. The additional financing will continue to draw upon these lessons and also incorporate the lessons that have been gained during implementation. These are as follows:

Lessons from other Projects Incorporated into the design of Additional Financing Design The original project has used a combination of geographical targeting and participatory identification methods to ensure Effective targeting of poor households that the poor become participants in the project. The Mid Term Review of the parent project has shown that the targeting strategies used have been effective. Lessons from the review have been incorporated into future strategies Community Participation and ownership The project has used a demand driven micro planning in achieving efficiency methodology prior to introducing interventions. This practice will be continued in additional financing. To form effective partnerships and linkages with the market, Facilitating investment opportunities for livelihoods in addition to savings and formation of economic activity groups will continue to credit mobilization through a nuanced proceed formation of SHGs. strategy Federating institutions enables economies Federations will continue to be formed at the village and of scale, greater voice and sustainability block level of self-help groups. Economic activity groups will also be formed at clusters/ block level. 5 Instilling accountability mechanisms External and internal monitoring systems will be introduced, within the community including social accountability systems which will provide regular feedback on quality of services to project staff. Investment in skills and capacity building The focus on institution development at village and is key in achieving PDO and sustainability federation levels will be further strengthened. This will be treated as a core investment.

Community resource persons/facilitators The cadre of trained community managed functionaries are effective social mobilizers, low cost who will then mobilize and provide support to the network and offer a sustainable option for scaling of institution will be significantly enhanced. up To ensure sustainability, linkages with PRIs and line departments will be developed not in terms of financing but Linkage with line departments and PRIs providing technical support to PRIs to develop capacities for livelihood related activities and for them to become inclusive service providers. Operational Bihar Rural Livelihoods Promotion Society is an independent registered society under the Department of Decentralized implementing agency with Finance in Bihar. BRLPS staff is based at the state and high quality staff to minimize political block levels to ensure effective delivery and availability of interference technical expertise at the local level. The recruitment procedure is competitive and recruits both from within the government and open market. BRLPS is developing incentive structures to attract and retain high quality staff. Efficient MIS, standardized financial Computerized MIS, quantitative and qualitative monitoring management procedures, regular auditing and learning will be part of the monitoring and learning system.

I. Safeguard Policies (including public consultation)

14. Environment: Based on a review of BRLP interventions, no significant and potentially adverse environmental impacts are anticipated. The nature and scale of the livelihood activities undertaken by individual households is considered environmentally benign and small-scale, and any potential negative impacts are going to be localized and manageable. However, the overall implementation of the Environmental Management Framework (EMF) is moderately satisfactory. Some of the key elements in the EMF have been mainstreamed into the strategies for promotion of livelihoods. BRLP has taken several initiatives to integrate environmental sustainability into livelihoods enhancement interventions. It has piloted and successfully scaled up the community managed extension system of village resource persons which have played a key role in implementation of sustainable livelihood interventions. It has successfully piloted and scaled up the System of Rice Intensification (SRI) in Paddy and subsequently, replicated in wheat to enhance productivity with nearly 100,000 SHG farmers. The project is currently piloting green opportunities like the solar power based lighting solutions in a context where electric power is not available. BRLP has also initiated land development pilots with the Rural Development Department on convergence with MGNREGA in pilot districts. Following a review of the environmental performance, a detailed action plan has been agreed for the AF to be implemented in conjunction with the existing EMF. This includes the (a) Initiating a limited environmental audit by external consultants to ensure compliance of the activities with the regulatory requirements and safeguards policies of the World Bank and to document the learning from the environmental friendly livelihood practices, (b) hiring a 6 consultant at the state level to support the promotion and monitoring of Environmental Management and Green Innovations, (c) deepening and scaling up the pilots on land development as Natural Resource Management Plans at the Village Organization (VO) level with MGNREGA convergence and (d) scaling up the environment-friendly interventions piloted/scaled up under BRLP and integration into livelihood interventions on agriculture, dairy, small ruminants and fisheries.

15. Social: Following on the recommendations of the BRLP social assessment, the project has been systematically targeting the habitations of SC, ST and extremely backward caste households, and mobilizing them in community institutions in the 42 project blocks. This social outreach and poverty targeting methodology has resulted in significant inclusion of the poorest and socially vulnerable households. Nearly 70% of the SC, ST and landless households in the project villages have been mobilized into SHGs. About 40% of the SHG members that received the ICF and utilized the food security funds are SCs and STs. Large numbers of SC, ST households have accessed the pensions and health insurance services. The project has a tribal development plan (TDP), specifically targeting the scheduled tribe population in Purnea, where 6% of the population is tribal. In Purnea, the project has reached out to tribal habitations and mobilized ST households through local community professionals and project facilitation teams, and implemented the financial inclusion, food and health security, livelihoods and entitlements interventions. The project is aiming for 100% inclusion of the tribal households in the tribal clusters

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [X] [ ] Natural Habitats (OP/BP 4.04) [ ] [X] Pest Management (OP 4.09) [ ] [X] Indigenous Peoples (OP/BP 4.10) [X] [ ] Physical Cultural Resources (OP/BP 4.11) [ ] [X] Involuntary Resettlement (OP/BP 4.12) [ ] [X] Forests (OP/BP 4.36) [ ] [X] Safety of Dams (OP/BP 4.37) [ ] [X] Projects on International Waterways (OP/BP 7.50) [ ] [X] Projects in Disputed Areas (OP/BP 7.60)* [ ] [X]

J. List of Factual Technical Documents 1.

IX. Contact point

16. Under the World Bank's Access to Information Policy, effective July 2010, a report on the status of implementation of projects is made publicly available. This report, generated by Bank staff, at the end of each implementation support mission to the project site, is posted on the relevant project page on the India website of the Bank (www.worldbank.org.in).

The World Bank Group:

Contact: Mr. Parmesh Shah Title: Lead Rural Development Specialist Tel: (202) 458-5918 Fax: (202) 522-1770

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas 7 Email: [email protected]

Implementing Agency:

Contact Person: Mr. Arvind Kumar Chaudhary, Chief Executive Officer, BRLPS Telephone No.: 0612- 22504980 Fax No.: 0612- 22504980 Email: [email protected]

K. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Email: [email protected] Web: http://www.worldbank.org/infoshop

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