NEW DELHI, March 17, 2011: The Government of India and the World Bank today signed an agreement for an IDA credit of $7.98 million additional finance for the Uttarakhand Decentralized Watershed Development Project to finance ongoing activities to further boost rural incomes.
The agreement for the Uttarakhand Decentralized Watershed Development Project was signed by Mr. Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; Mr M. H. Khan, Secretary Watershed and Chief Project Director on behalf of the Government of Uttarakhand; and Mr. Roberto Zagha, Country Director India, on behalf of the World Bank.
The additional funding of $7.98 million for the Uttarakhand Decentralized Watershed Development Project will finance ongoing activities like helping farmers set up small agribusinesses. These are critical to achieving the planned 10% increase in rural incomes in project areas by the end of the implementation period. The need for additional funds was brought about largely by increases in prices of goods and services since the Project began in 2004.
According to a mid-term impact survey of 400 households in 40 villages conducted by TERI, real income in these households has grown by 7%, two percentage points higher than the mid-term target of 5%. This increase is driven by farm income growth which is twice the non-farm income growth during this period. Irrigated area under the project has increased by 10%, cropping intensity has gone up by 24%, and crop yields by 7%. The area under high-value horticulture has increased by 30% in the project villages.
The credit is provided by the World Banks fund for the poorest, the International Development Association (IDA), and has 35 years to maturity and a 10-year grace period.
Uttarakhand is currently implementing two state projects together amounting to $203 million. This constitutes around 1% of the total net commitments in India.