WB gives $60 mn for Himachal

The World Bank today approved credit of $60 million for the Himachal Pradesh Mid-Himalayan Watershed Development Project.

The project is designed to assist the Himachal government to reverse the degradation of its natural resource base, improve the productive potential of natural resources, and boost rural incomes.

"This operation will support policy and institutional development to improve the management of watersheds, while enhancing livelihood opportunities of the poor across the state," said Michael Carter, World Bank country director for India in a statement.

The credit from the International Development Association (IDA), the World Bank's concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 per cent.

Despite the growing importance of tourism and hydropower, the economy of Himachal Pradesh remains largely agrarian, said a press release. Nine out of 10 households are rural, and most of these live in small settlements, typically located in remote valleys.

Around 28 percent of the state's six million residents live below the poverty line. Constraints to rural development include rugged topography and poor access to social and economic services.

"Himachal Pradesh has shown a consistent commitment to increase productivity of rural areas while preserving its natural heritage," said Carter. "This operation will support policy and institutional development to improve management of watersheds, while enhancing livelihood opportunities of the poor across the state."

The project is designed around four components including institutional strengthening by building capacity of communities and local governments to effectively manage watershed development in a participatory, transparent, and demand-driven manner.

It also includes watershed development and management through financing of soil and water conservation, non-arable land treatments, crop and livestock production, and rural infrastructure besides enhancing mountain livelihoods through promotion of value-added in agriculture and income-generating activities, particularly for tribal and vulnerable groups.

It also includes project coordination which involved support to a decentralized project structure.

The project builds on the successful experience of the Integrated Watershed Development Project (IWDP) which closed on September 30, 2005, said the release.

"This project aims to scale up the experience of IWDP in higher elevations of Himachal Pradesh, using participatory methods that involve both communities and their local governments. Under this project, we expect improvements in the environment as well as increased incomes for the rural poor," said Daniel Sellen, Senior Agriculture Economist at the World Bank.

The multilateral lending agency claimed that IWDP showed that the project provided watershed protection and development to 152,161 hectares of arable lands and 119,867 hectares of non-arable lands.

Introduction of water harvesting structures provided supplementary irrigation coverage to 13,489 hectares in the project area.

In addition, watershed protection interventions protected 26,073 hectares of land from getting lost to erosion and put 7,265 hectares of land back into production.