IDA STRATEGY AND RATIONALE FOR INVOLVEMENT

1.50 Promoting economic reform for broad-based, efficient economic growth, accelerating poverty alleviation and developing human resources are the focus of IDA's country assistance strategy. Education development is central to strengthening human resources, and primary education is a necessary foundation. Low educational achievement, especially among the poor, Scheduled Tribes, Scheduled Castes and women is a major constraint to their social and economic improvement. IDA's strategy for education is to focus medium-term assistance exclusively on primary education, given its underdeveloped status in India, its high returns, and its importance to the poor. IDA assistance for this project would provide the financing and technical experience needed to establish DPEP program management and technical support capacities, as well as to initiate sub-projects in a substantial number of districts and states. Previous support for basic education in India, consistent with the objectives of this program, has been provided by IDA through the Social Safety Net Adjustment Program (Credit 2448-IN), and through the Uttar Pradesh Basic Education Project (Credit 2509-IN). Without continued IDA involvement, the proposed DPEP mechanisms for management, super-vision and evaluation would be less well developed, and the quality of sub-project implementation reduced. IDA has advanced the analytical underpinnings of is work through studies of student learning achievement and primary school effectiveness in Uttar Pradesh and Tamil Nadu and a public expenditure review for education. The analytical basis for the project is further strengthened by studies of education for girls, scheduled caste and tribal students completed by Indian scholars, as well as the 1986/87 national survey of education. Additional project studies have been carried out in collaboration with UNICEF, NCERT and NIEPA during project preparation, including: baseline beneficiary assessments in the six IDA DPEP states; textbook production, distribution, and costs; girls' education; tribal education; teacher training, education and motivation; and state education finance.

- 13 -

EXTERNAL FINANCING

1.51 The first substantial external assistance for primary education was provided by ODA for a project in Andhra Pradesh; approximately US$35 million was provided through 1992. UNICEF has disbursed around US$5 million from agency funds for the Bihar Education Project, and has pledged to raise up to US$92 million more from other donors. In Rajasthan, the Swedish International Development Authority has provided or pledged approximately US$100 million for basic education projects. The Netherlands have provided and pledged approximately US$30 million for Mahila Samakhya, the women's empowerment program managed by the GOI DOE. IDA approved a credit of US$165 million for the Uttar Pradesh Basic Education Project in 1993 (Credit 2509-IN). Under the agreements of the Program to Strengthen the Social Safety Net (Credit 2448- IN), the European Community (EC) has agreed to provide ECU 150 million as program support to DPEP; this is the first program of external financing for DPEP. EC funds would be released through two mechanisms. First, an annual fixed grant would be made contingent on adequate budget provision for elementary education by the GOI; tranche releases would be tied to issuance of annual budget documents. Second, grants of approximately US$1.7 million would be made on the initiation of DPEP assisted district sub-projects. 8/ In addition, the EC program earmarks US$5 million for external technical assistance and training. ODA and UNICEF have agreed to place future financial assistance through the DPEP program. GOI would keep separate all donor funds by earmarking them to different districts.

LESSONS OF EXPERIENCE

1.52 While India has long employed central grant programs as a mechanism for GOI investment in state-managed development activities, the DPEP would incorporate a number of structural innovations. The DOE has gained four years of satisfactory experience with the use of registered societies for project implementation (Bihar, Rajasthan, and Uttar Pradesh), and lessons learned have been incorporated into the model Memorandum of Association and By-Laws that are to be used by each participating DPEP state. For other innovations, including decentralized planning, formal appraisal and supervision mechanisms, and performance management, there are few lessons of experience, other than implementation difficulties associated with their absence. The presence of these structural innovations underlines the need for phased start of the program and effective monitoring and management.

1.53 From experience with previous vertical schemes such as OBB, the GOI has learned the importance of integrated education development programs that address inter- related constraints through coordinated efforts to improve basic services. Experience with state projects in Bihar, Rajasthan and Uttar Pradesh has demonstrated the importance of formal annual reviews and work program proposals, and the importance

8/ These funds would not be used in districts assisted by other donors.

- 14 -

of focusing on improving the quality of ECE, textbooks and learning materials, and strengthening teacher in-service training.

1.54 Experience with IDA-assisted Population and Human Resources Projects in India has demonstrated the importance of strong project management arrangements, annual budget financing sufficient to cover anticipated project expenditures, clear mechanisms for the advance of funds and for timely completion of disbursement requests, and supportive supervision from IDA, especially in start-up phases of projects. The development of effective supervision activities by project agencies also emerges as significant given the geographic scope of highly decentralized social service delivery programs.

1.55 The program would also draw on wider international experience in primary education development." This experience substantially validates the DPEP emphasis on ECE, improved textbooks and learning materials, intensified in-service teacher training, and enhanced community participation in the operation of schools.

2/ These lessons have been summarized by the World Bank in Marlaine E. Lockheed and Adriaan Verspoor. Improving Primary Education in Developing Countries, New York: Oxford University Press, 1991. Additional lessons of experience from World Bank Project Completion Reports and Audits, and ongoing lending experience for primary education, have been discussed with the GOI and taken into account in program design. Finally, India has played a leading role in follow-up international activities to the Jomtien Conference on Education for All, including hosting of the regional EFA Forum in September, 1993 and the Large Country Initiative Conference in December of the same year. Through these consultations the GOI has been able to systematically review lessons being learned by other countries.

- 15 -