March 8, 2002

'15'

US $ 300 MILLION WORLD BANK CREDIT FOR WATER SUPPLY AND SANITATION PROJECTS IN KARNATAKA AND UTTAR PRADESH

    The World Bank is to provide a US $ 300 million credit to India for Water Supply and Sanitation Projects in Karnataka and Uttar Pradesh. The IDA Projects were signed by Dr. Adarsh Kishore, Additional Secretary, Ministry of Finance on behalf of the Government of India and Mr. Edwin R. Lim on behalf of the World Bank, today.

    Under the agreement, Karnataka will receive US $ 151.6 m (SDR 119 million) World Bank Credit for Rural Water Supply & Sanitation Project. The Project, during its six year life, will assist Government of Karnataka in (i) increasing rural communities’ access to improved and sustainable drinking water and sanitation services; and (ii) institutionalizing decentralization of Rural Water Supply and Sanitation Service delivery to Gram Panchayats and user groups.

    The second IDA Credit for US $ 149.2 million is meant for Uttar Pradesh Water Sector Restructuring Project. The Project will support the implementation of a major reform programme for the Uttar Pradesh water sector. The reforms aim at restructuring the sector and significantly improving performances in water resources planning and allocation and management for sustained use. The development objectives of the Project are as under:-

    1. Set up enabling, institutional and policy frameworks for water sector reform;
    2. Increase and sustain water and agricultural productivity thereby improving the living standards of the rural poor in the selected areas.

    These objectives would be achieved by (a) establishing new institutions required to carry out the water sector reform process; (b) adopting a river basin approach to identifying issues and constraints to development in the sector starting with the Ghagra-Gomti basin; (c) right sizing and capacity building of irrigation and drainage sub sector institutions; (d) promoting agriculture intensification and diversification through appropriate public and private sector institutional linkages; (e) piloting replicable management options for sustained irrigation and drainage operations by both public and private sector entities in about 3 lakhs hectors.