World Bank Approves US$130 Million Credit to Improve Livelihoods for 300,000 Village Households in North Eastern States of India

December 20, 2011

December 20, 2011 -- The World Bank Board of Executive Directors today approved a US$130 million credit to finance the Government of India's (GOI) efforts to empower rural communities in the growth-deficient North East (NE) region to improve their livelihood opportunities.

The North East Rural Livelihoods Project (NERLP) seeks to support the rural poor, especially women, unemployed youth and the severely disadvantaged, in four North Eastern states to improve their standard of living by establishing sustainable community institutions and enhancing their livelihoods.

World Bank has invested more than US$1 billion in 7 states for rural poverty reduction providing about 30 million rural poor access to livelihood opportunities. A further US$1 billion is supporting the National Rural Livelihood Mission.

Rural Livelihood Projects funded by the Bank

Active Projects

· Bihar Rural Livelihoods "Jeevika" Project (2007-2012) US$63 million

· Orissa Rural Livelihoods Project (2008-2013) US$82 million

· Rajasthan Rural Livelihoods Project  (2011-2016) US$163 million

· Tamil Nadu Empowerment and Poverty Reduction "Vazhndhu Kattuvom" Project (2005-2014)  US$279 million

· Second Madhya Pradesh District Poverty Initiatives Project (2009-2014) US$110 million

· National Rural Livelihood Project (2011-2016) US$1 billion

Recently Closed Projects

· Andhra Pradesh Rural Poverty Reduction Project (2003-2011)  US$150

· Chhattisgarh District Rural Poverty Reduction Project (2003-2010) US$113 million
*Madhya Pradesh District Poverty Initiatives Project (2000-2008) US$110 million

Despite its rich natural resources and relatively good human development indicators, the NE region lags behind the rest of India in important parameters of growth.  Almost 35 percent of its predominantly rural population lives below the poverty line; agricultural productivity is low; and high school drop-out rates and lack of skills have led to high unemployment among the youth. This low-growth scenario is exacerbated by problems of geographical inaccessibility, protracted insurgency in some areas, and recurring natural disasters. Recognizing the urgent need to put economic growth on track in the NE, the Government of India developed the North Eastern Region (NER) Vision 2020, endorsed by all NE states.  The Vision envisages using a partnership-approach with all relevant stakeholders to make interventions responsive to people’s needs and aspirations for a better quality of life.

“Since 2000, the Government of India has provided substantive support to the NE region to reduce poverty through various interventions and the Government of India’s NER Vision 2020 provides the basis for future interventions to reduce poverty of the people in the region," said Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance. "The NERLP seeks to implement a key element of the NER Vision 2020 through its financial and technical support to rural communities in the states of Mizoram, Nagaland, Sikkim, and Tripura. The Project, which seeks to cover 300,000 households in 1,1624 villages, will adopt a saturation approach, endeavouring to reach 70 percent of the poorer households in each village.  It will especially target women, youth, and vulnerable sections such as women-headed households, the physically challenged as well as the poorest of the poor."

The NERLP will be implemented in eight districts of the four participating states- Aizawl and Lunglei in Mizoram; Peren and Tuensang in Nagaland; South, West and 15 Panchayat wards of East District in Sikkim; and West and North Districts in Tripura. 

“The Government of India is committed to address the development challenges facing the NE states and we hope that the World Bank’s experience in rural livelihood projects worldwide will help improve livelihood opportunities for the rural poor in the region,” said Roberto Zagha, Country Director, World Bank. “The Project will hinge on people’s participation, and village communities will be helped to design livelihood programs that can improve their lives."

The Project seeks to develop an institutional platform for the communities, which will help them link up with the private sector, public sector, and civil society and to acquire the institutional, technical, and financial capacity needed for improving their livelihoods. Global development experience shows that absolute poverty can be overcome by equipping a member of the household (especially a youth) with employable skills and job creation.  A separate activity for skills development and job placement has thus been included in the project to ensure that such opportunities are available to the rural poor.   Some livelihood opportunities envisaged under the Project include natural resource management activities such as forest management, non-timber forest produce storage and processing, horticulture, preservation of riverine fishes, water harvesting and recharging of ground/surface water in the villages; Community-based infrastructure activities like upgrading of small agricultural link roads, micro hydro-power schemes, wind-cum-solar mills, to name a few.

The Project comprises four main components (i) Social Empowerment; (ii) Economic Empowerment; (iii) Partnership Development and (iv) Project Management. The first component seeks to help rural communities to create sustainable institutions so that they can manage common activities around microfinance, livelihoods and natural resource management.  The second component will provide funds to the community institutions to undertake various livelihood activities, as well as provide self-entrepreneurship opportunities to unemployed youth.  To enable this, the Project with help develop partnerships with various formal financial intermediaries - such as microfinance institutions, commercial banks, development financial institutions such as National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI), and specialized funding agencies such as North East Development Finance Institution (NEDFI) – and with the private sector and civil society to allow rural communities to access technical and marketing support. The project management component facilitates the implementation, coordination, monitoring and evaluation, learning and quality enhancement efforts of the project.

“The NERLP is designed to create community institutions of the poor and for the poor, thus providing them a voice in the decision-making process that addresses their economic and social needs,” said Kevin Crockford Team Leader for the Project. "The Project is designed to allow rural communities better access to resources and markets and also seeks to impart the youth with skills that will allow them to seek better employment opportunities."

The credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, has a final maturity of 25 years, including 5 year grace period. 


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