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Document of The World Bank Public Disclosure Authorized Report No. 15106-IN STAFF APPRAISAL REPORT INDIA Public Disclosure Authorized STATE HEALTH SYSTEMS DEVELOPMENTPROJECT II FEBRUARY 20, 1996 Public Disclosure Authorized Public Disclosure Authorized South Asia Country Department TI (Bhutan, India,Nepal) Population and Human Resoureces Operations Division CURRENCY EQUIVALENTS (As of October 1995) Currency Unit = Rupee Rupee 34.6 = US$1.00 METRIC EQUIVALENTS 1 Meter (m) 3.28 Feet (ft) 1 Kilometer = 0.62 Miles GOVERNMENT FISCAL YEAR April 1 - March 31 i ABBREVIATIONS AND ACRONYMS AIDS Acquired Immunodeficiency Syndrome AP Andhra Pradesh ASCI Administrative Staff College of India BOD Board of Directors (PHSC) CHC Community Health Center CSSM Child Survival & Safe Motherhood Project DALY Disability Adjusted Life Years EMTC Equipment Maintenance and Training Center FW Family Welfare GDP Gross Domestic Product GOI Government of India GOK Government of Karnataka GOP Govermnent of Punjab GOWB Govermment of West Bengal HV Human Immunodeficiency Virus HMIS Health Management Information System ICB International Competitive Bidding ICDS I First Integrated Child Development Services Project IDA International Development Association IEC Information, Education and Conmunication IPP 7 Seventh India Population Project IPP 8 Eighth India Population Project IPP 9 Ninth India Population Project ISHA Indian Society of Health Administrators NCB National Competitive Bidding MCH Maternal and Child Health MIS Management Information Systems MOHFW Ministry of Health and Family Welfare NGO Non-Governmental Organization NHP National Health Policy NSS National Sample Survey PAR Performance Audit Report PCR Project Completion Report PGB Project Governing Board PHC Primary Health Center PHN Population, Health and Nutrition PHR Population & Human Resources PHSC Punjab Health Systems Corporation PWD Public Works Department SA Social Assessment SC Scheduled Castes SOE Statement of Expenditures ST Scheduled Tribes STD Sexually Transmitted Disease SUBC Subcenter TB Tuberculosis UIP Universal Immunization Program WDR World Development Report WHO World Health Organization ii INDIA STATE HEALTH SYSTEMS DEVELOPMENT PROJECT II Table of Contents PageNo. CREDIT & PROJECTSUMMARY ........................... v I. STATE/SECTOR BACKGROUND A. Health Sector in India.1 B. The States of Karnataka,Punjab and West Bngal .2 C. Health Sector Issuesin Karnataka,Punjab and West Bengal .6 D. Lessonsfrom Experience .8 E. Linkageswith otherPHN Projects.11 F. IDA Strategy and Rationalefor Involvement.13 II. THE PROJECT A. ProjectApproach .14 B. Project Objectives.14 C. Project Content.15 i. Reform Program.15 ii. Project Investments.19 mn. PROJECT COST, FINANCING, IMPLEMENTATION AND DISBURSEMENTS A. ProjectCosts .26 B. FinancingPlan .28 C. ProcurementArrangements .29 D. DisbursementProfile .32 E. Project Implementation.33 F. Status of Project Development.35 G. Social Assessment.36 H. Fiscal Analysis.37 I. IndigenousPopulation .39 J. EnvironmentalAspects .40 K. Land Acquisition.40 L. Accountingand Auditing.40 This report is based on an appraisel mission that visited India in October, 1995. The mission comprised Tawhid Nawaz (Senior Economist and Mision Leader), Shreelata Rao-Seshadri (Sociologist),Paramita Sudharto (Public Health Specialist), David Porter (Equipment and Support Services Specialist), Eid Dib (Procurement Specialist and Architect), Keith Hinchliffe (Senior Economist), Rani Tudor (Poverty Analyst), Kirti Baneijee (Public Health Specialist) and Nisar Sharif (MIS Specialist, WHO-SEARO). They were assisted by Main Chand (Procurent Specialist) and Sanjay Vani (Disbursanent Specialist) of the New Delhi Office. Salim Habayeb (Senior Public Healh Physician) provided subsantial contribution and advice during project development Kevin Casey (Senior Implementation Specialist) and Sajitha Bashir (Economist) contributed during project preparstion. Mark Schlagel and Jane Mukira assisted in the preparation of this document The Peer Reviewers were Jagadish Upadhyay (EA2HR), Marie-Odile Waty (AF3PH), Xavier Coll (HDD) and Qaiser Khan (MN2HR). The report is endorsed by Richard Skolnik, Chief, Population and Human Resources Operations Division and Heinz Vergin, Director, South Asia Country Department 11 (Bhutan, India, Nepal). iii Page No. IV. PROJECT BENEFITS A. Benefits.......................... , , , , .. 41 B. ProgramObjective Categories . 42 C. Risks............................................................................................................................43 V. AGREEMENTS REACHED AND RECOMMENDATION . .44 iv PageNo. TABLES 1.1 LessonsApplied From IDA Experiencein PHN Lending to the ProposedProject .................................................... 10 1.2 Linkageswith OtherPHN Projectsin Kamataka,West Bengaland Punjab................ 12 3.1 Cost By Component.................................................... 26 3.2 Cost By Categoriesof Expenditures.................................................... 27 3.3 ProcurementArrangements .................................................... 30 3.4 EstimatedExpenditures and Disbursements.................................................... 32 ANNEXES Annex 1 Health Status and Epidemiology.................................................... 46 Annex 2 Health SectorDevelopment Program ..................................... ,.,.. 51 Annex 3 Public Expenditureson the Health Sector.................................... 68 Annex 4 Costs and EfficiencyComparisons of First Referral vs. Tertiary LevelHospital Care ........................... 80 Annex5 User Chargesand Cost Recovery........................... 85 Annex 6 Project Management........................... 91 Annex 7 Training............................ 111 Annex 8 ReferralSystem ........................... 125 Annex 9 QualityAssurance Program in Hospitals........................... 130 Annex 10 MedicalWaste Management........................... 133 Annex 11 EpidemiologicalSurveillance of CommunicableDiseases and Health ManagementInformation System .................................... 139 Annex 12 Information,Education and CommunicationStrategy .................................... 147 Annex 13 Tribal and UnderdevelopedAreas Strategy.................................... 150 Annex 14 SocialAssessment .................................... 155 Annex 15 ProjectCosts .................................... 169 Annex 16 Summaryof ConstructionProgram .................................... 193 Annex 17 ProcurementArrangements .................................... 223 Annex 18 ImplementationPlan ............... 224 Annex 19 PerformanceIndicators ............... 237 Annex 20 SupervisionPlan ............... 247 Annex 21 Forecastof Expendituresand Disbursements.............................. 251 Annex22 DocumentsAvailable in ProjectFile .............................. 252 v INDIA STATE HEALTH SYSTEMS DEVELOPMENT PROJECT II CREDIT AND PROJECT SUMMARY Borrower: India,acing by its President Beneficiaries: Statesof Kaatka, Punjab,West Bengaland PunjabHealth Systems Corporation (PHSC) Amount: IDA CreditSDR 235.5 million (US$350.0 million equivalent) Poverty: Programof TargetedInterventions (PTI). This projectis classifiedas a PTI because a large proportionof projectbeneficiaries will be from the poor and vulnerablesegments of the states' population.In Karnatakaand West Bengal,about two-thirdsof expected project beneficiarieswould belong to the lowest 40% of the populationin terms of income distribution. In Punjab, a relativelylarge share of the investmentunder the project would be targeted in the Upper Bari Doab and rural Southem Malwa regions where30% and 25% respectivelyof the overallpopulation live belowthe poverty line. Terms: IDA Standard,with 35 yearsmaturity On-LendingTenns: The Goverment of Indiawould make the proceedsof the Creditavailable to the Statesof Kamataka, Punjab and West Bengal under standard arrangementsfor development assistanceto the States of Idia; Punjabwould furthertransfer the funds to PHSC as a grant GOI wouldassume foreign exchange risk. Descridtion: The project would be implementedin Kamataka, Punjab and West Bengal. It would be an investmentloan with policy reformin areas of resourceallocation for the health sector, capacity developmentfor sector analysis and managementstrengthening, enhance participationof the private and voluntary sectors in the delivery of health services,and implementationof user charges for those who can afford to pay. The project wouldfinance investment related to three main activities: (i) Management Developmentand Institutional Strengthening:(a) improving the institutionalframework for policy development;(b) strengtheningthe managementand implementationcapacity of institutions;and (c) developinga surveillancecapacity for major communicablediseases and response capabilities; (ii) Improving Service Quality. Access and Effectivenessat the First Referral Level, through: (a) upgrading community, subdivisional and district hospitals;(b) upgradingthe effectiveness of clinical and support services through streamliningof norms and provision of training, managementinformation system, waste managementand support services; and (c) improvingthe referralmechanism and strengtheninglinkages with the primary and tertiary health care levels;and (iii) ImprovingAccess to Primary Health Care in Remote and Underdevelopedareas: (a) upgrading primary health centers in the Sunderbanarea of West Bengal; and (b) increasingaccess to primary care services amongthe SC/STpopulation
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