When I arrived in Nepal in 2002 to take up my assignment as ambassador, I found that a sum of Rs 80 crore had been sanctioned by the Indian government for small development projects but no criteria had been laid down for the selection of the projects. So we drew up a template for the use of these funds. For each project, we put a budgetary limit of Rs 3 crore, but also stipulated that at least 10 per cent of the total cost must come as contribution from the local community, which could be in the form of funds, labour or materials. This was necessary in order to ensure that the community took ownership of the project. Our experience had shown that a project without some contribution from the community was rarely valued and its subsequent maintenance was left in doubt. We selected projects which could be completed in six months to a year. The SDP was demand driven, reflecting the priorities of the local community itself. The SDP proposals had to include the scope of the project, the benefits it would bring to the community, the local entity which would supervise project execution and details on how the project would be maintained after completion. Typically, the village or cluster of villages would set up a local committee for the purpose. The village leader or the local political representative would assist in this regard.
At the very outset, we decided that we would take the Nepali government along in the implementation of the scheme, even if it was community driven. Here our approach was different from donor agencies or international financial institutions who typically worked through international or local non-governmental organisations, without the active participation of the host government. India signed a bilateral memorandum of understanding (MoU) with Nepal, setting out the main features of the SDP and respective responsibilities. Additionally, a trilateral MoU at the local level was envisaged, among the Embassy of India, the Local Development Officer (LDO) as the representative of the Nepal government and the local community organisation which had posed the project. The LDO would be involved in project formulation and execution and the prescribed audit and performance guidelines of the Nepal government, applicable to its own local development projects, would be followed.
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The SDP programme has become extremely popular in Nepal and within one decade (2003-2013) the number of such projects rose from 16 to over 400.
The SDP covers an impressive range of projects. For example, in several villages in the Terai, constructing a separate toilet for girls in local schools, or constructing a protective wall around them, dramatically increased the enrolment of girls. In other areas, the SDP undertook clean drinking water projects which led to significant health benefits. In remote areas, solar lighting projects were popular.
The success of SDPs in Nepal and the template followed for their implementation led the scheme to be extended first to Sri Lanka and then to Afghanistan. It may be noted that in each case, these projects were successfully pursued despite operating in conflict-zones. The Embassy in Nepal did not hesitate to finance projects even in areas affected by the Maoist insurgency. These projects, enjoying local support, were never targeted. Several SDPs were located in northern and eastern Sri Lanka and Afghanistan, in zones affected by violence and conflict.
The amounts spent under the SDP programme may be modest but the outcomes are significant in promoting local development and community welfare. A lot of goodwill is generated for India and this also promotes people-to-people relations.
Indian development assistance, as a rule, does not carry any load on account of administrative and consultancy expenses. In the case of the SDPs in Nepal, the scheme was managed out of the Economic Wing of the Embassy. The monitoring of the projects was carried out through personal visits by Embassy officials. If consultancy was necessary, this was arranged at the expense of the Indian side and not imposed on the host government or the local community. Thus the Rs 3 crore budget for individual projects may be regarded as pure grant.
Once I had gone to a village in the Nepal Terai to inaugurate a clean drinking water project. This also served a cluster of adjacent villages. The project cost was kept within the Rs 3-crore limit. In an area within the same general locality, an international aid agency was executing a similar project. When I exchanged notes with the local head of the agency, it transpired that the total cost of his project was multiples of our project cost. My interlocutor could not believe there could be such a huge gap in expenses. We did a detailed comparing of notes on various components of our respective schemes. The items missing from our list were: (i) cost of international consultant who not only had to be paid professional fees of nearly $300 per day, but also a "hazard" allowance since he may be exposed to risk from Maoist insurgents; (ii) purchase and running of two SUVs, one for the Nepal government ministry concerned and one for the field staff; (iii) expenses on setting up and running a project office with four staff. So while the costs on account of the project itself were not significantly different, all the other components, which India does not include under development cooperation, added up to a very substantial amount.
The SDPs are only one dimension of India's development cooperation experience. The priority given to capacity building, the alignment with the priorities of the development partner, the active partnership with the host government, these are all important features of India's development cooperation policy which should be given much greater domestic and international exposure than has been the case so far.
The writer is a former foreign secretary. He is currently chairman of RIS and senior fellow at CPR