FOR OFFICIAL USE ONLY Report No
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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00004319 IMPLEMENTATION COMPLETION AND RESULTS REPORT ON A LOAN/CREDIT/GRANT IN THE AMOUNT OF SDR 128.1 MILLION Public Disclosure Authorized (US$ 200 MILLION EQUIVALENT) TO THE REPUBLIC OF INDIA FOR THE KERALA LOCAL GOVERNMENT AND SERVICE DELIVERY PROJECT Public Disclosure Authorized June 19, 2018 Social, Urban, Rural and Resilience Global Practice South Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective {June 15, 2018}) Currency Unit = Indian Rupee (INR ) INR 68.16 = US$1 US$ 1.41 = SDR 1 FISCAL YEAR July 1 - June 30 Regional Vice President: Ethel Sennhauser Country Director: Junaid Kamal Ahmad Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager: Catalina Marulanda Task Team Leader(s): Harsh Goyal ICR Main Contributor: Harsh Goyal ABBREVIATIONS AND ACRONYMS APA Annual Performance Assessment BTOR Back to Office Report CAA Constitutional Amendment Act CFC Central Finance Commission CPS Country Partnership Strategy DAC Decentralization Analysis Cell DPR Detailed Project Report EIRR Economic Internal Rate of Return ESMF Environment and Social Management Framework FFM Financial Management GBV Gender Based Violence GEWE Gender Equality and Women Empowerment GIFT Gulati Institute of Finance and Taxation GOI Government of India GOK Government of Kerala GP Gram Panchayat ICDS Integrated Child Development Service IDA International Development Association IFR Interim Financial Report IKM Information Kerala Mission INR Indian Rupees ISM Implementation Support Mission IT Information Technology IUFR Interim Unaudited Financial Report KILA Kerala Institute of Local Administration KLGSDP Kerala Local Government Service Delivery Project LESA Limited Environment and Social Assessment LFA Local Fund Audit LG/LSGIs Local Governments/Local Self Government Institutions LSGD Local Self Government Department MIS Management Information System MMC Minimum Mandatory Conditions MTR Mid-Term Review OP/BP Operational Policies/Business Procedures PAD Project Appraisal Document PDO Project Development Objective PFM Public Financial Management PG Performance Grant PMU Project Management Unit SCD Systematic Country Diagnostic SC/ST Scheduled Caste/Scheduled Tribe SDR Special Drawing Rights SFC State Finance Commission SIRD State Institute for Rural Development SPAO State Performance Audit Office TTL Task Team Leader VGDF Vulnerable Group Development Framework TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ................................................................8 II. OUTCOME ...................................................................................................................... 9 A. RELEVANCE OF PDOs ..............................................................................................................9 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 10 C. EFFICIENCY ........................................................................................................................... 17 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 19 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 19 N/A .......................................................................................................................................... 20 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 20 A. KEY FACTORS DURING PREPARATION ................................................................................... 20 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 21 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 23 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 23 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 24 C. BANK PERFORMANCE ........................................................................................................... 27 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 29 V. LESSONS AND RECOMMENDATIONS ............................................................................. 29 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 31 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 41 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 43 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 44 ANNEX 5. BORROWER’S COMMENTS ................................................................................... 54 ANNEX 6. SUMMARY OF BORROWER IMPLEMENTATION COMPLETION REPORT .................. 55 The World Bank Kerala Local Government and Service Delivery (P102624) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P102624 Kerala Local Government and Service Delivery Country Financing Instrument India Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Government of Kerala Local Self Government Department Project Development Objective (PDO) Original PDO To enhance and strengthen the institutional capacity of the local government system in Kerala to deliver services and undertake basic administrative and governance functions more effectively and in a sustainable manner. Page 1 of 70 The World Bank Kerala Local Government and Service Delivery (P102624) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 200,000,000 192,775,692 169,987,288 IDA-48720 Total 200,000,000 192,775,692 169,987,288 Non-World Bank Financing Borrower 60,000,000 78,800,000 78,800,000 Total 60,000,000 78,800,000 78,800,000 Total Project Cost 260,000,000 271,575,692 248,787,288 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 29-Mar-2011 16-Sep-2011 20-Jan-2014 31-Dec-2015 29-Dec-2017 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 24-May-2017 182.83 Change in Results Framework Change in Components and Cost 02-Jun-2017 182.83 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 03-Jan-2012 Satisfactory Satisfactory 29.02 Page 2 of 70 The World Bank Kerala Local Government and Service Delivery (P102624) 02 27-Nov-2012 Satisfactory Moderately Satisfactory 60.65 03 19-Jun-2013 Satisfactory Moderately Satisfactory 60.65 04 14-Dec-2013 Satisfactory Moderately Satisfactory 84.46 05 13-Apr-2014 Satisfactory Moderately Satisfactory 84.46 06 08-Nov-2014 Satisfactory Moderately Satisfactory 125.64 07 28-May-2015 Moderately Satisfactory Moderately Satisfactory 125.64 08 29-Dec-2015 Moderately Satisfactory Moderately Satisfactory 127.82 09 02-Jun-2016 Moderately Satisfactory Moderately Satisfactory 127.82 10 02-Nov-2016 Moderately Satisfactory Moderately Unsatisfactory 182.83 11 03-Mar-2017 Moderately Satisfactory Moderately Unsatisfactory 182.83 12 10-May-2017 Moderately Satisfactory Moderately Satisfactory 182.83 13 04-Dec-2017 Moderately Satisfactory Moderately Satisfactory 182.83 SECTORS AND THEMES Sectors Major Sector/Sector (%) Public Administration 90 Sub-National Government 90 Social Protection 10 Social Protection 10 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Finance 13 Finance for Development 13 Agriculture Finance 13 Page 3 of 70 The World Bank Kerala Local Government and Service Delivery (P102624) Public Sector Management 63 Public Finance Management 7 Public Expenditure Management 7 Public Administration 56 Administrative and Civil Service Reform 7 Transparency, Accountability and Good 7 Governance Municipal Institution Building 42 Social Development and Protection 13 Social Inclusion 13 Participation and Civic Engagement 13 Urban and Rural Development 13 Rural Development 13 Rural Markets 13 ADM STAFF Role At Approval At ICR Regional Vice President: Isabel M. Guerrero Ethel Sennhauser Country Director: N. Roberto Zagha Junaid Kamal Ahmad Senior Global Practice Director: John Henry Stein Ede Jorge Ijjasz-Vasquez Practice Manager: Ming Zhang Catalina Marulanda Task Team Leader(s): Roland White Harsh Goyal ICR Contributing Author: Harsh Goyal Page 4 of 70 The World Bank Kerala Local Government and Service Delivery (P102624) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL 1. At the time of appraisal, India was on a high economic growth trajectory owing to its consistency in pursuing economic reforms over the previous two decades. India’s high economic growth was accompanied by