project appraisal document on a proposed credit in...

Document of

The World Bank

Report No. 16571-IN

PROJECT APPRAISAL DOCUMENT

ON A PROPOSED CREDIT

IN THE AMOUNT OF SDR 119.2 MILLION

TO

INDIA

FOR A

MALARIA CONTROL PROJECT

May 15, 1997

Population and Human Resources Operations DivisionCountry Department IISouth Asia Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

Currency Unit = Indian Rupee (Rs.)US$1.00 =Rs. 35.0

(Projected average for 1996)

GOVERNMENT FISCAL YEARApril I to March 30

ABBREVIATIONS AND ACROYMNS

ABER Annual Blood Examination RateAPDR Annual Program Development ReviewBA Beneficiary AssessmentBHC bi-hennal-chloricarbidateCAS Country Assistance StrategyDALY Disability Adjusted Life YearDDC Drug Distribution CenterDDT dichloro-diphenyl-trichloroethaneEA Environmental AssessmentFTD Fever Treatment DepotFY Fiscal YearGOI Government of IndiaIEC Information, Education and CommunicationIDA International Development AssociationMLF Malaria Link FunctionsMMN Medicated Mosquito NetsMOHFW Ministry of Health and Family WelfareMPW Multipurpose WorkerMRC Malaria Research CenterNGO Non-Governmental OrganizationNMP Directorate of the National Malaria Eradication ProgramPIP Project Implementation PlanPHCF Primary Health Care FacilitiesSDR Special Drawing RightsSPR Slide Positivity RateWHO World Health Organization

Vice President Mieko NishimizuCountry Director Robert S. DrysdaleDivision Chief Richard SkolnikTask Manager Prabhat Jha

INDIA

MALARIA CONTROL PROJECT

Contents

Page No.

BLOCK 1: PROJECT DESCRIPTION ................................................ 2

1. Project development objectives ................................................ 22. Project components ................................................ 33. Benefits and target population ................................................ 44. Institutional and implementation arrangements ................................................ 5

BLOCK 2: PROJECT RATIONALE ................................................ 6

5. CAS objectives supported by the project ............................... ................. 66. Main sector issues and Government strategy ................................................ 67. Sector issues to be addressed by the project and strategic choices ........................... 78. Project alternatives considered and reasons for rejection ...................................... 89. Major related projects financed by the Bank, lessons learned

and reflected in the project design ...................................... 1010. Indications of borrower commitment and ownership ...................................... 1111. Value added of Bank support ...................................... 11

BLOCK 3: SUMMARY PROJECT ASSESSMENT ...................................... 12

12. Economic Assessment ...................................... 1213. Financial Assessment ...................................... 1314. Technical Assessment ...................................... 1415. Institutional Assessment ...................................... 1516. Social Assessment ...................................... 1717. Environmental Assessment ...................................... 1718. Participatory Approach ...................................... 1919. Sustainability ...................................... 2020. Critical Risks ...................................... 2021. Possible Controversial Aspects ...................................... 21

BLOCK 4: MAIN CREDIT CONDITIONS ...................................... 21

22 Effectiveness Conditions ...................................... 2123. Other ...................................... 21

BLOCK 5: COMPLIANCE WITH BANK POLICIES .................. .................... 24

Page No.

TABLES

1 Estimates of costs by component .................................................... 32 Demographic indicators in districts with severe malaria .................................................... 43 Stakeholder analysis of the enhanced program ..................... .............................. 194 Level of participation in the enhanced program by various groups ......................... ............. 195 Summary of risks, ratings and minimization measures ................................................... 22

FIGURES

1 Possible scenarios for average annual costs of NMP activities .............................................. 92 Annual expenditures by the NMP under the Eighth

five year plan ................................................... 133 Epidemiological profile of malaria in India, 1961-1994 ................................................... 16

ANNEXES

i IDA Credit Design Summary2A Detailed Project Description2B National Policy Letter and Revised Insecticide Guidelines3 Estimated Project Costs4 Economic Assessment5 Financial Summary6 Procurement Arrangements7 Project Processing Budget and Schedule8 Documents in the Project File9 Statement of Loans and Credits10 India at a Glance

INTERNATIONAL DEVELOPMENT ASSOCIATION

Country Department IISouth Asia Region

Project Appraisal Document

IndiaMalaria Control Project

Date: May 15, 1997 a Draft s FinalTask Manager: Prabhat Jha Country Manager: Robert S. DrysdaleProjectiD: IN-PA-10511 Sector: HealthLending Instrument: Credit PTI: 0 Yes Q No

Project Financing Data O Loan 0 Credit Q Guarantee O Other [Specifyl

For Loans/Credits/Others:

Amount (US$M): 164.8Proposed Terms: C To be defined Q Single currencyGrace period (years): 10 ED Standard Variable a Fixed C] LIBOR-based

Years to maturity: 35Commitment fee: 0.50%

Service charge: 0.75%

................~~~............................................................................................................................................................................................................Financing plan (US$m):

Source Local Foreign Taxes TotalGOI 28.7 0 10.3 39.0IDA 114.6 50.2 0.0 164.8

Boffower: India, acting by its PresidentGuarantor: N/AResponsible agencies: MOHFW and NMPEstimated disbursements (Bank 1998 1999 2000 2001 2002 2003FY/US$M):

Annual 12.6 28.1 41.9 38.7 31.3 12.2Cumulative 12.6 40.7 82.6 121.3 152.6 164.8

For Guarantees: z Partial Credit z Partial risk

Proposed coverage:Project sponsor:Nature of underlying financing:

.................... ............................................................................................................................ _Terms of financing:

Principal amount (US$)Final maturity

Amortization profile....................................................................................... _.................................................................................................................I.........

Financing available without guarantee?: C Yes Q NoIf yes, estimated cost or maturity:Estimated financing cost or maturity with guarantee:

Expected effectiveness date: September 30, 1997 Closing date: September 30, 2002

Project Appraisal Document Page 2Country: India Project Title: Malaria Control

BLOCK 1: PROJECT DESCRIPTION

1. Project development goals and objectives (see Annex I for key performance indicators):Malaria, a parasitic disease transmitted by certain mosquitoes, causes substantial death, morbidity andsocial and economic losses in India, especially among the rural poor. The Directorate of the NationalMalaria Eradication Program (NMP) estimates that there were nearly three million reported cases ofmalaria and more than one thousand related deaths in 1995. These estimates are likely to understateactual figures.' Malaria is mobile and localized: it varies with temperature and precipitation, the level ofimmunity in the human population, the degree of in-migration from other communities, vector density,and social, economic and cultural factors. Malaria is a disease most common to the rural poor, especiallytribal and indigenous peoples.

The medium-term objective of the International Development Association (IDA) credit is to help Indiacreate an enhanced and more effective malaria control program (hereafter "enhanced program") that usesa better mix of effective malaria control interventions responsive to local needs; and strengthens NMPand modifies its orientation. The long-term objective is to reduce death, morbidity and social andeconomic losses from malaria.

First, the enhanced program would represent a better mix of effective malaria control interventionsby: (a) adopting a malaria control strategy currently recognized as optimal2; (b) shifting the focus fromvector control of the mosquito to prevention and treatment of human cases; (c) reducing reliance onindoor residual spraying, the success of which has diminished recently; and (d) using multipleinterventions at local levels. Key benchmarks would be total spending on the mix of interventions,coverage with infonnation, education and communication (IEC) messages, and degree of adherence toup-front policy commitments from Government of India (GOI) to IDA (the National Policy Letter andthe Revised Insecticide Guidelines; attached in Annex 2B).

Second, the NMP will be strengthened and its orientation modified at all levels. Nationally, technicalleadership, supervision, evaluation and financing of malaria control will be strengthened. Districts willassume more responsibility for local malaria control by using newly developed guidelines for districtimplementation plans. States will strengthen supervision and training functions. In the past, NMP usedmilitary-command approaches to eradicate mosquitoes and dealt only minimally with the humanenvironment of malaria. The enhanced program will emphasize community involvement and ownershipof malaria control. The key benchmark will be the success of the district implementation plans.

Third, the enhanced program should help to reduce death, morbidity and social and economic losses frommalaria in the long term. Key benchmarks will be the reduction in malaria cases and the stabilization offatal malaria.

To enable a flexible enhanced program that can deliver effective malaria control, the IDA Credit relieson: (a) the up-front policy commitments; (b) a detailed project implementation plan (PIP); and (c) afocus on structured and regular evaluation (the annual program development reviews).

IThe Global Burden of Disease estimates for India (Murray and Lopez, 1996) report about 26,000 deaths in 1990 from malaria(i.e., 0.3% of all deaths and 1.0% of deaths due to infectious and parasitic diseases). Malaria was responsible for the loss ofabout 1.2 million disability adjusted life years (DALYs) in 1990 (i.e., 0.4% of all DALYs lost and 1.4 % of DALYs lost due toinfectious and parasitic diseases). These estimates are indirect, and may under- or over-estimate the true burden.

The World Declaration on the Control of Malaria (1992); Indian Prime Minister's Expert Committee on Malaria (1995); andWHO Revised Malaria Control Strategy (1995).


2. Project components (see Annex 2for a detailed description and Annex 3for a detailed costbreakdown):IDA will finance eighty-five percent, net of taxes, of the incremental requirement of the enhancedprogram of the NMP over five years. The NMP will oversee investments throughout the country, basedupon local needs and the guidelines for district implementation plans, starting in certain rural districtswith high malaria burdens. The project will include five components (Table 1):

Table 1. Estimates of costs by componentComponent Cost including Percent of total

contingencies (USSA':)Integrated Early Detection and Prompt Treatment 44.7 22Selective Vector Control 81.2 40Medicated Mosquito Net Program 23.4 11Epidemic Response and Intersectoral Collaboration 19.5 1 0Institutional Strengthening 35.1 17TOTAL 203.9 100

(a) The integrated early detection and prompt treatment of clinical cases component willimprove the quality and accessibility of malaria treatment at primary health units, and in the privatesector improve the speed and accuracy of diagnosis of malaria cases, and the treatment of severe malaria.IDA will finance drugs, laboratory supplies and equipment, training and incremental salaries.

(b) The selective vector control component will replace widespread indoor residual spraying withmore targeted spraying of insecticides determined by epidemiological stratification by village, increasethe use of non-insecticide vector control methods, such as larvivorous fish and biolarvicides, and shiftthe selection of insecticides towards more environmentally neutral options. IDA will finance selectedinsecticides, vehicles, equipment, training, consultant services, and operational research.

(c) The medicated mosquito net program component will carefully increase the use of medicatedmosquito nets through grassroots organizations, social marketing groups, and public distribution, includinglocal production and distribution. IDA will finance medicated mosquito nets, insecticides, Non-Governmental Organization (NGO) services, and operational research.

(d) The epidemic response and intersectoral collaboration component will strengthen regionaloffices to identify and control outbreaks and epidemics, monitor resistance, build intersectoralcollaboration among national ministries, identify malaria sources from industrial construction orprojects, conduct health assessment studies and provide training and malaria control guidelines toindustries. IDA will finance insecticides, vehicles, equipment, surveillance, research, and training.

(e) The institutional strengthening component will improve management and planning skills ofstate and district level staff, provide training in new skills such as social assessment, create anddisseminate an information, education and communication (IEC) program, support high-qualityoperational research, prepare future project components and improve management and informationsystems. IDA will finance civil works, vehicles, a management information system (MIS), and ageographic information system, IEC, training, research studies, and incremental salaries.


3. Benefits and target population.The direct target population is the more than two-hundred million people living in areas endemic formalaria, especially sixty-two million people living in rural areas with severe malaria. The enhancedprogram will directly benefit tribal and indigenous peoples. However, the human, economic,environmental and institutional benefits will accrue to India's entire population of nine-hundred andthirty million.3 Specific benefits include the following:

First, in the long term, the enhanced program will reduce deaths and morbidity caused by malaria.Early in the enhanced program better surveillance and increased public attention may lead to a rise inreported malaria cases, but death and morbidity rates and the percentage of severe cases of malariashould decline by the fifth year. Because malaria is expected to remain a major burden, and the successof the enhanced program depends on many variables, the enhanced program does not set specific targets.In India and elsewhere, eradication of malaria is no longer technically possible; emphasis has thusshifted to control. In recognition of this, the NMP will remove eradication from its directorate name.

Second, the enhanced program will increase equity, especially for the rural poor. Malaria is mostprevalent in rural areas where most tribal peoples reside, and occurs during seasons in which demand foragricultural work is at its peak. Malaria imposes an especially heavy burden on women who providemost of the household care and also contribute to agricultural work. Pregnant and lactating women areespecially susceptible to malaria due to lower immunity.4 Districts with the severe form of malaria aremore likely to be rural, have lower literacy rates, and a higher proportion of scheduled tribe populationsand women (Table 2). The enhanced program should lead to higher absolute benefits for the rural poor,even if relative benefits are equal for poor and non-poor populations.

Table 2. Demographic indicators (in percent) in districts with severe malaria5 and other districtsDistricts with severe Other districts Significance test

malariaScheduled tribe 25 4 <0.001Rural 77 74 <0.001 Female 49 48 <0.001Literate 39 44 <0.05

Third, the enhanced program will save money for households, especially poor households. Out-of-pocket spending on malaria treatment is common in India and imposes a heavier burden on the poor thanthe rich: a recent survey comparing the proportion of household income spent on each episode ofcommunicable disease, including malaria, by poor (annual household income below $500) and rich(annual household income above $1500) households found that poor households spent twice as much asrich households.

Fourth, the enhanced program will provide some opportunities for grassroots enterprises bysupporting women's cooperatives and NGOs that engage in the production, sale, and distribution ofmedicated mosquito nets. Local production and distribution will increase awareness and use of these

3There are two major types of malaria in India, P. falciparum which may cause severe cerebral malaria and death and is moreprevalent in rural areas, and P. Vivax, which causes uncomplicated malaria.

In endemic districts in Orissa, six percent of pregnant women and eight percent of pre-school children suffer from malaria at

any one point in time.

5Based upon the 1991 census data. Although the enhanced program has identified 97 districts dominated by severe P.falciparum, the above table refers to only 72 districts. The remainder have other names in the census, but similar malariapatterns. The statistical significance test is based upon a t-test comparison.


nets, and provide economic opportunity for the poor. Mass use of medicated mosquito nets is new toIndia, and the NMP will carefully monitor their use, acceptability, and success during implementation,and ensure cost recovery from those able to pay.

Fifth, the enhanced program will reduce unnecessary environmental contamination by reducingindoor residual spraying and shifting to more environmentally neutral insecticides. Although insecticideuse for malaria control constitutes only about nine percent of insecticides used in agriculture, theenhanced program will help to eliminate some harmful insecticides and increase the export potential ofagricultural goods (see Environmental and Economic Assessments). The enhanced program will alsoimprove satisfaction of households, that are increasingly averse to indoor residual spraying.

Sixth, the enhanced program will prepare the NMP for the future. A stronger NMP, a better mix ofeffective malaria control interventions, and better information systems will allow GOI to respond moreeffectively to malaria both now and in the future. Better insecticide and drug policies and monitoring ofresistance should help avoid the widespread transition to the severe resistant form of malaria common inSoutheast Asia. If the resistant form of malaria does develop, however, a stronger NMP will be in placeto respond. A strengthened NMP will more effectively deliver promising interventions, such as newmalaria control drugs and vaccines currently in development.

4. Institutional and implementation arrangements:The IDA Credit builds on the existing institutional arrangements of the NMP, which has substantialexperience in malaria control, but has less experience with use of multiple interventions and community-based approaches. The implementation period for the project will be from 1997 to 2002. The NMPwill be the key executing agency and will: (a) provide several inputs, such as insecticides, vehicles, anddrugs to all levels engaged in malaria control; (b) strengthen state-level functions in training andmonitoring; (c) modify the NMP's regional offices into epidemic response units which will provideadditional monitoring; and (d) work directly with districts in creating district implementation plans. TheNMP will provide revolving funds to districts with completed district implementation plans andsatisfactory accounting, financial, and audit arrangements. The NMP and the Ministry of Health andFamily Welfare (MOHFW) will be responsible for project coordination. The management of theenhanced program will be integrated into the overall management structure at the NMP, and will provideIDA with technical, financial and performance data needed for review. Project oversight will by doneby NMP and MOHFW and the annual program development review, described below.

Accounting, financial reporting and auditing arrangements: The GOI and NMP will follow IDAguidelines on financial control and reporting. The NMP will ensure that all accounts, financialstatements, and audits meet IDA guidelines, and will provide IDA with these documents every sixmonths. The NMP will also ensure that each state or district that receives funds from the IDA Credit hasaccounting and audit arrangements satisfactory to IDA.

Monitoring and evaluation arrangements and annual program development review: The NMP andIDA have agreed on a set of key performance and monitoring indicators (Annex 1):(a) Routine data will be collected by the NMP from all districts every month.

(b) State malaria control officers will submit every quarter key monitoring and performanceindicators in their regions to NMP, and one staff at NMP will be assigned responsibility for each of theagreed set of key indicators.


(c) An independent external agency will review NMP management administrative functions in thesecond or third year of implementation.

(d) The NMP will also receive qualitative feedback from local malaria societies and from informalconsultations with Panchayat Raj Institutions (or village councils).

The annual program development review permits regular, partial, third-party expert review of theenhanced program; Annex I provides its detailed terms of reference. The committee will comprise sixmembers plus a chairperson. Members will include two experts from outside India, one member drawnfrom the community, and three members will represent the Malaria Research Center (MRC), theNational Institute for Communicable Diseases and NMP. All members will be experts in malaria controland community-based disease control. The annual program development review will evaluate the overallperformance of the enhanced program and advise on performance and monitoring goals. The annualprogram development review will issue a report that will be available to the public, but therecommendations of the report will not be binding on the GOI or IDA.

IDA will also monitor the enhanced program by conducting: (a) a separate review of adherence to theNational Policy Letter and Revised Insecticide Guidelines; (b) an evaluation of the revised operationalguidelines that will be published in the second year of the Credit; the revised operational proceduresdrawn upon the PIP, guidelines for district implementation plans, and key inputs, such as social andenvironmental assessments; (c) a desk review of the status of malaria control activities in two to fivepercent of all districts; and (d) spot visits to certain districts implementing the enhanced program.

BLOCK 2: PROJECT RATIONALE

5. CAS objective (s) supported by the project:The World Bank Group's Country Assistance Strategy (CAS) for India (August 15, 1995 update ReportNo. R96-154/1) seeks to support the efforts of the Government of India in promoting economic growththrough strong private sector involvement and the development of human capital resources. Theprogress report on the CAS (discussed by the Board on September 5, 1996) reaffirms this approach andputs special emphasis on improving the cost-effectiveness of social programs. The Bank's assistancestrategy for the health sector in India is consistent with the CAS and is being implemented through atwo-pronged approach that aims to: (a) reduce the burden of disease of major diseases by supportingcost-effective priority programs; and (b) strengthen state health systems and promote state health sectorreform to provide more efficient and effective health care, particularly for the poor. The proposedproject is an integral part of the CAS and IDA's health strategy for India.

6. Main sector issues and Government strategy;Substantive, institutional and financial issues for the health sector and the GOI strategy are several.6

Substantive issues include the fact that human development indicators in India are low, a largepercentage of the rural poor are affected by communicable and maternal diseases, and access to qualityhealth services and primary education is poor. Despite being less than one fifth of the global population,

6 This section draws upon: (1) India: New Directions in Health Sector Development at the State Level: An OperationalPerspective Report 15753-IN, 1996; (2) India: Policy and Finance Strategies for Strengthening Primary Health Care Services;Report No 13042-IN; (3) Operational Issues in Malaria Control: Report of a Working Meeting of the WHO and World Bank,1995; (4) World Development Report 1993: Investing in Health; (5) VP Sharma. Community Participation in Malaria Control,MRC, 1991; (6) RS Sharma et al, Epidemiology and Control of Malaria in India, 1996; (7) Institute of Medicine, Malaria:Obstacles and Opportunities, National Academy Press, Washington, DC 1991


India accounts for twenty-one percent of global DALYs, a quarter of global maternal deaths, and aquarter of global deaths in children under age five. The under-five mortality rate in India is twenty-onepercent, and the probability of death between age fifteen and sixty is thirty-one percent. In contrast, theunder-five mortality rate is four percent in Sri Lanka and the probability of death between age fifteen andsixty is eighteen percent.

The GOI's substantive strategy involves continuing to focus on key endemic diseases, especially thosestrongly associated with poverty. The GOI has modernized paradigms for several disease controlprograms, such as adopting directly observed therapy for tuberculosis and dropping fertility targets.Much more technical and managerial improvement of programs is required, however.

Institutional issues include inefficient public sector delivery of social services; India has complexorganizational structures that impede reform, and public facilities often lack adequate management andtrained staff.

The GOI's institutional strategy largely involves strengthening specific centrally sponsored programsand upgrading primary health centers facilities (PHCF) and first-referral hospitals at the state level. TheGOI is experimenting with devolution of financial and administrative powers to local village councils asa means of increasing local ownership.

Financial issues include low levels of spending on public health, especially preventive care. Indiaspends six percent of its gross domestic product (GDP) on health care (equal to thirteen dollars per capitain 1990) more than that of Nepal, Bangladesh, China and Sri Lanka. The percentage of public healthspending on primary care (0.6 percent of GDP or approximately one dollar per capita) is lower than inany of these countries, however. States spend nearly three-quarters of all public funds, but spending inpoor states is low in absolute amounts. Eighty percent of all health spending is done by the private sectormainly as regressive and often cost-ineffective, out-of-pocket spending on curative services.

The GOI's financial strategy involves prioritizing public spending toward primary health care thatbenefits households by gradually decreasing spending on tertiary care services and increasing spendingon cost-effective priority programs. The GOI has begun limited work with the private sector bycontracting out certain hospital services and engaging private groups and NGOs in IEC and massmarketing campaigns (as in IDA-financed Cataract Blindness Control and Tuberculosis ControlProjects).

7. Sector issues to be addressed by the project and strategic choices:The enhanced program for malaria control addresses these sector issues in several ways. On asubstantive level, the enhanced program provides a cost-effective set of interventions to control malariawith the greatest benefit accruing to the rural poor. These interventions include preventive activitiessuch as IEC about household environmental management and reduction of water sources, vector controlto reduce malaria sources, and treatment with simple medications.

On an institutional level, the enhanced program improves malaria control at all levels by strengtheningthe NMP's technical leadership, policy direction, supervision, and evaluation functions. The enhancedprogram will encourage local ownership of some of the activities through village councils and byincreased involvement of NGOs. A strengthened NMP will supplement other central programssupported by IDA financing, such as the National AIDS Control Organization, the Leprosy EliminationProgram, the Tuberculosis Control Program, and the Family Welfare Program.


On a financial level the GOI has recently increased budgets to the NMP, but spending remains lowerthan in other countries. The enhanced program will increase total spending on malaria from about elevencents per capita in 1994 to fifteen cents per capita in 1998. Per capita public spending would remainlower than in other countries with comparable malaria risks, such as Sri Lanka (forty cents), Thailand(thirty-eight cents), Venezuela (twenty-five cents), and Cambodia (twenty cents). Although privateprovision of malaria services is limited by the large public goods nature of the service and by lowindividual willingness to pay, the enhanced program will involve private practitioners, engage NGOs andgrassroots organizations in small-scale local social marketing efforts, and inform private industries,especially large infrastructure projects, about source reduction and adequate treatment.

8. Project alternatives considered and reasons for rejection:The major alternatives to the enhanced program are to: (a) retain the current program; (b) expand thecurrent program; (b) provide no incremental resources but shift spending toward the mix of interventionsproposed under the enhanced program; (d) confine the IDA Credit to areas in which malaria is mostendemic; or (e) decentralize malaria control using 'horizontal' primary health care approaches.

The first alternative, retaining the current program, was rejected because program effectivenesswill continue to worsen in the absence of changes. Despite increased spending on malaria control, thenumber of malaria cases and malaria-related deaths reported to NMP has risen over the last decade (seeFigures 1 to 3). At present, the NMP focuses largely on indoor residual spraying and case detection andtreatment. The declining effectiveness of these two approaches is a result of vector resistance, pooroperational coverage and beneficiary compliance with indoor residual spraying, delays in laboratorydiagnosis of malaria cases, resistance to drug treatment, lack of an organized system for treatment ofsevere or complicated cases, and ineffective distribution of malaria control drugs. Further declines inprogram effectiveness can be expected unless changes in spending patterns are made. A diversifiedapproach makes sense because of diminishing returns from any one intervention. The cost of vectorcontrol activities, for example, will rise with expansion as a result of decreasing population and vectordensities. The costs of active case detection and treatment will also rise as the frequency of cases falls.

The second alternative, expanding the current program, was rejected because it would lead to anineffective and unsustainable program. Intensification of current activities, which are dominated byindoor residual spraying, is an undesirable alternative because of the rising cost and decliningeffectiveness of insecticides, the limited sustainability of such an approach, and the detrimentalenvironmental consequences. The NMP cites three factors limiting the effectiveness of indoor residualspraying: (a) poor operational coverage; (b) inability of states to increase the wages of spraying staff(resulting in reduced provider compliance and poor coverage); and (c) development of vector resistance.Effective insecticides are expensive and the operational costs of spraying are high. An intensification ofindoor residual spraying under IDA financing would thus be difficult for GOI to sustain beyond theperiod of financing. Even if the NMP shifted towards newer, more environmentally neutral insecticides,widespread use would be costly. Moreover, widespread use could induce mass resistance to which therewould be no adequate remedy. Finally, all insecticides affect non-target organisms to some extent,disturbing the ecosystem. It is thus desirable to use insecticides judiciously for vector control, and tolimit unnecessary release into the environment.


Figure 1. Average annual costs of NMP activities at present under the enhancedprogram if more of the same activities were carried out, and if current spending were

restructured as envisioned under the enhanced program.

3,000

2%5% 2%

2,500 6%

40/o 22%

2,0004-%

22%

l Epidemic Response & X

Intersectoral Collaboration1,500 l- 4% l Medicated Mosquito Nets

2% 5%2% 6

4% [QIEC|22% |7;0/o E

1,000 l5% | Institutional Strengthening69% ~~~~220%

% ;;4% E Integrated Early Detection &Treatment

500 i Larvicidal Activities I

* Indoor Residual Spraying

At Present Enhanced More of RestuctureProgram Same Current

Spending

Cost (millions of 1996 Rs.)

The third alternative, maintaining the current level of spending, but shifting spending toward themix of interventions proposed under the enhanced program, was rejected because politicalconcerns and institutional inertia prevent significant restructuring of current spending. A gradualshift of current NMP spending toward a better mix of cost-effective interventions would help improvemalaria control in India. However, political concerns and institutional inertia tend to preventdiversification from indoor residual spraying. Although decreasingly effective, indoor residual sprayingis a highly visible GOI activity demanded by many politicians at all levels. In addition, many malariaofficers were trained during the eradication era and believe that malaria control demands moreinsecticide and drug use. Despite growing dissatisfaction with household spraying, many Indians equatemalaria control with annual visits from spray teams. Finally, concern over loss of jobs at HindustanInsecticides, a GOI-owned enterprise and the sole domestic producer of DDT, contributes to GOI's


7reluctance to decrease insecticide use. In the absence of the IDA Credit, it is unlikely that currentspending would be restructured.

The fourth alternative, confining the IDA Credit to geographic areas in which malaria is mostendemic, was rejected because malaria is mobile. The enhanced set of interventions could be pilotedin certain geographic regions and then expanded to the rest of the country. Although malaria is moreendemic in certain geographic zones, outbreaks can occur in even the unlikeliest of areas. The incidenceand location of malaria cases depends on many dynamic factors, and problem areas can vary from onemalaria season to the next.

The fifth alternative, decentralizing "horizontal" primary health care, was rejected becausemalaria requires a categorical program with functions and capacities at the national level. As analternative to the enhanced program, the IDA Credit could be used to decentralize the management anddelivery of malaria control, putting responsibility in the hands of primary health care staff. Experiencefrom other countries warrants caution in decentralization, however. "Through decentralization, strongmalaria control programs have, in many countries, lost their key distinguishing features: their unity ofpurpose, dedicated staff, commitment to getting results in the field, and ability to adapt to changingepidemiological conditions on the ground. The key is not to decentralize everything, as some national-level functions and capacities are essential. These functions include (but are not limited to) suchimportant aspects as: (a) providing strategic direction; (b) policy-making and resource allocation at thenational level; (c) providing oversight over decentralized and devolved functions; (d) setting standards,norms and indicators for monitoring operational activities; (e) providing technical back-stopping ofoperational levels; and (f) evaluating and validating program activities including operational researchundertaken at or by the operational levels."g

9. Major related projects financed by the Bank, lessons learned and reflected in the project design:Global eradication of malaria will not be possible in the next few decades, but control through a bettermix of effective malaria control interventions is possible. The World Bank has financed and completedtwo malaria control projects in Brazil and a smaller project in Indonesia and is financing on-goingprojects and in Cambodia, Laos, Senegal, Sri Lanka, Venezuela and Vietnam. Other agencies havefinanced projects in El Salvador and Mexico (see Table 3 in Annex 4). The Bank's first project in Brazilfailed to reduce malaria because of strict reliance on DDT spraying and drug distribution, and inadequateplanning for the large number of migrants into the project area. In contrast, the Bank's second project inBrazil reduced deaths from malaria by fifty percent and saved nearly nine million DALYs between 1988and 1996. Conditions in Brazil before the second project began closely resemble conditions in Indiatoday. Projects in Indonesia and El Salvador reduced malaria burdens significantly.

The enhanced program incorporates several key elements from these projects including: (a) the use ofinformation-based planning of malaria control; (b) flexibility to respond to local conditions; (c) the useof complementary interventions, such as vector control, better treatment and medicated mosquito nets tominimize the risk of failure and diminishing returns associated with a single intervention; and(d) strengthening capacities of staff in planning and management, including administrative continuity.

Lessons from other World Bank projects in India: The IDA Credit will make use of two lessons fromthe Bank's experience in the social sectors in India by: (a) building efforts for high borrower

7Hindustan Insecticides created in response to the NMP's demand for insecticides, employs more than 2,500 people. In1992/93 the company earned Rs. 4 million; in 1993/94 profits were Rs. 20 million.8 Operational Issues in Malaria Control: Report of a Working Meeting of the WHO and World Bank (1995).


commitment and ownership of projects; and (b) using IDA financing to accelerate a shift of paradigmsaway from strict public sector-based activities and inefficient approaches. The Leprosy EliminationProject, for example, shifted control toward multiple-therapies and better access to care resulting inleprosy cases declining by two-thirds in four years.

Indicators of readiness to implement the IDA Credit: The NMP shows evidence of technical andmanagerial readiness to implement the IDA Credit. Indicators of technical readiness include the factthat NMP has already: (a) created expert committees to revise insecticide guidelines, examine theimplementation of medicated mosquito nets, and advise on new information systems; (b) createdguidelines for district implementation plans; (c) held detailed planning workshops in four districts in fourstates; (d) registered several district malaria societies; (e) spent funds on medicated mosquito nets inseveral states; (f) started diversifying methods of vector control; (g) created detailed plans for trainingand for IEC; and (h) joined a research project in Gujarat that evaluates various interventions and willtrain NMP staff in epidemiology and management. Indicators of managerial readiness include the factthat NMP has already: (a) created tender documents for major first year purchases; (b) created detailedprocurement plans, including requests for services of competent procurement specialists; (c) installed amanagement, budgeting and accounting system; and (d) identified staff for project management for thefirst two years of the enhanced program. In addition, the NMP's PIP outlines implementation barriersand uses realistic procurement schedules.

10. Indications of borrower commitment and ownership:Although political commitment to malaria control is high, political ownership of the enhanced programis weak. Major malaria outbreaks in Rajasthan and in some urban settings have created much concern inParliament and in the MOHFW. Parliamentary committees have called on several MOHFW and NMPofficials to appear before them, and both NGOs and the media have criticized GOI's malaria controlefforts.9 Politicians' appeals for more indoor residual spraying have increased spending on the NMP(Figure 2), but the rising cost of insecticides has consumed most of this increase. In contrast to the lowlevel of political support, the level of commitment to and ownership by the NMP is high, as shown by itstechnical and managerial readiness, and revised policies including phasing out of BHC.

11. Value added of Bank support:IDA investment in the enhanced program is justified on following grounds: (a) the enhanced programsupports IDA's objectives of improving access of the poor to essential health services; (b) the IDA Creditwill help convert the high level of political concern about malaria into support for an enhanced, cost-effective, and sustainable control program; (c) IDA financing would help shift the balance ofinterventions away from insecticide spraying; (d) IDA brings experiences from other countries, such asBrazil, to assist India in modernizing technical paradigms for malaria control; (e) IDA has providedsubstantial input to improve the community focus of the enhanced program, including sponsoring socialparticipation workshops in pilot districts; and (e) no other donor has the capacity to assist in these areason the scale needed to control malaria in India. Partially as a result of GOI-Bank dialogue, a harmfulinsecticide (BHC) was banned from use or production on April 1, 1997. On-going GOI-Bank dialogueshould help reduce further spraying of most other insecticides.

9Makodi, K. "Political and Economic Roots of Disease: Malaria in Rajasthan." Economic and Political Weekly, pp. 42-47,January 27, 1995; Kaul, S. "New Malaria Action Plan: Panic Response", Economic and Political Weekly, pp. 2172-2173,September 2, 1995.


BLOCK 3: SUMMARY PROJECT ASSESSMENTS (Detailed assessments are in the project file.See Annex 8)

12. Economic Assessment (see Annex 4).A projected rate of return for this project was not calculated, due both to a paucity of India specific cost-consequence data and to the fact that the cost per unit output of malaria interventions variestremendously with time and location (even within a country), making it difficult to quantify the impact ofcontrol activities. The major economic gains from malaria control are likely to be substantial, however.

Economic gains include the following:(a) Reductions in death and morbidity, which constitute the major cost of malaria. Most cases ofmalaria occur during the productive middle ages: over ninety percent of DALYs lost are among peopleaged forty-four years or less.

(b) Increases in production and household earnings by reducing the incidence of malaria,particularly during peak agricultural seasons and among poor agricultural workers. Estimates suggestthat the average episode of malaria causes seven days of lost work, and that families with malaria clearsixty percent less land than families without malaria.

(c) Reductions in household and community expenditures on malaria drugs and treatment, especiallyamong the poor. As noted in Section 3, out-of-pocket expenditures on malaria treatment represent ahigher percentage of annual household income among poorer households.

(d) Reduction in environmental pollution from spraying and improvement in India's ability to exportagricultural goods, which are banned in some countries because traces of DDT have been reported invegetables, fruits, and other agricultural products.

Public sector involvement in malaria control is justified because: (a' -iblicly financed investment inthe health of the poor can reduce poverty or alleviate its consequences; and (b) malaria control promotesmany public goods and has broad positive externalities, implying that private markets would not producethem at all or would produce very little.

The economic justification for the whole program and for particular interventions is based mostlyon their cost-effectiveness. Partly due to great variability with focal conditions, cost-consequence dataon malaria are limited. The IDA Credit is likely to be cost-effective, given that a similar Bank-financedmalaria control project in Brazil cost about $250 per DALY saved, and the fact that India and Brazil arecomparable in epidemiological and program features. Moreover, through diversification, the enhancedprogram avoids the diminishing cost-effectiveness of any one intervention, a trait of current NMPactivities. The individual interventions in the enhanced program are highly cost-effective and would beincluded in any essential package of publicly financed preventive and curative services.

Each component in the enhanced program provides potential economic gains. The early detection andprompt treatment component reduces death and morbidity. The selective vector control componentreduces environmental pollution and the risk of resistance that would be expensive to control. Themedicated mosquito nets should also decrease malaria cases and deaths. By preventing epidemics fromspreading, the epidemic response and intersectoral collaboration component lowers the costs of malariacontrol and reduces losses to industry from ill construction workers. The institutional strengtheningcomponent provides indirect economic gains by supporting other components.


13. Financial Assessment (see Annex 5):Because it is largely a public good, malaria control will continue to require significant financialcommitment by the GOI. Moreover, malaria control requirements will grow in the future because ofpopulation growth and likely increases in conditions that promote malaria, such as migration, climacticchanges, and development projects. The NMP, which controls the bulk of spending on malaria control inIndia, is sponsored and led centrally, yet receives fifty percent financial contribution from the states.State contributions cover salaries of staff often assigned to tasks other than malaria control. Currently,the NMP procures almost all insecticides and drugs used nationally, while states provide the operationalwages of staff and district-level seasonal spray workers. In wealthier states, such as Maharashtra, thissystem works well. In poorer states, such as Bihar, effective malaria control often relies upon cashtransfers from NMP, usually to hire seasonal spray workers. States, however, do contribute more intimes of epidemics.

The NMP program is already large, but without the enhanced program its effectiveness is likely todecline. Under the GOI's Eighth Five Year Plan (1992 to 1997), about Rs. 5 billion (approximatelyeleven percent of all outlays by MOHFW) went to malaria control. Over this five-year period, inflation-adjusted annual expenditures by NMP increased from Rs. 1. I billion in 1996 prices to Rs. 1.4 billion(Figure 2). The planned expenditures in FY1996/97 represent eleven percent of MOHFW outlays.

Figure 2. Annual Expenditures by the NMP Under the EighthFive Year Plan

-' 1,500

~-1,000-

500 j

92-93 93-94 94-95 95-96 96-97

Fiscal Year

The increase in budget by the NMP under the enhanced program is comparable to increases in otherBank-assisted projects, such as Leprosy Elimination and Cataract Blindness Control. IDA will helpfinance the incremental salaries of malaria link functions and seasonal spray workers in areas in whichmalaria is endemic. The malaria link functions are not permanent posts, implying that local districts willbe permitted to hire anyone, including existing workers to execute these core functions. States, villagecouncils or community sources of financing will be required at the end of the project to sustain localmalaria control efforts.

The flow of funds will be as follows:(a) NMP will procure all major goods and equipment nationally and distribute them as resources inkind to districts, states and regional offices.

(b) In most states, districts will establish a revolving fund, administered by a society or anempowered committee, to procure small purchases, pay for malaria link functions, and meet operational


costs. The NMP will fund these and review their technical, managerial and financial performance.Districts will contract an accountant to monitor spending, and state coordinators will be responsible fortimely collection of financial information.

(c) Parts of certain components, such as IEC activities, medicated mosquito net distribution, andsocial marketing, will be contracted to NGOs or private groups on a competitive basis.

Disbursement on the basis of statements of expenditure will include: (a) incremental operating costs;(b) consultants' services under contracts not exceeding $200,000 equivalent in the case of firms and$50,000 equivalent in the case of individuals; (c) contracts for goods and works not exceeding $300,000equivalent each; (d) contracts for medicated mosquito nets not exceeding $300,000 equivalent each; and(e) contracts for vehicles and insecticides not exceeding $100,000 equivalent each. Given the large sizeof the Credit and the disbursement period (66 months), a special account of US$8 million equivalent willbe used.

Retroactive financing: In order to facilitate a timely project start and to meet several costs associatedwith adoption of the enhanced program, retroactive financing up to US$5 million equivalent (or threepercent of the credit) would be provided to cover eligible expenditures incurred after September 30,1996. Expenditures would be for eligible insecticides, mosquito net program, malaria link functions,publicity, consultant services, training and workshops, and incremental operating costs.

Financial sustainability: The project is likely to be sustainable for several reasons:(a) There is tremendous political support for controlling malaria, given much publicized outbreaksand the fact that malaria occurs nearly everywhere in India.

(b) Even in the worst case scenario, the recurrent cost liability at the national level would be about$20 million per year, or about five percent of all MOHFW expenditures, or about 0.03 percent of totalGOI expenditures; at the state level the recurrent cost liability would total about $6 million. A morefavorable scenario is a recurrent cost liability at the national level of about $6.7 million in the final yearof the IDA Credit, of which IDA will finance about a fifth. This liability represents about seventeenpercent of the NMP's budget in 1996. However, future outlays to the NMP should increase.

(c) Health expenditure by GOI is expected to be sustained. In the proposed Ninth Five-year Plan(1997 to 2002), health expenditure is expected to be slightly under three percent of GOI spending,comparable to the Eighth-Five year Plan.

(d) The enhanced program will improve the efficiency of the NMP. Improved logistics anddistribution will ensure that drugs and insecticides are not wasted, for example. Better informationsystems will help to reduce the use of insecticides.

(e) The enhanced program favors interventions with lower recurrent costs: the ratio of recurrentcosts to total costs is lower for early detection and prompt treatment, or medicated mosquito nets, than itis for indoor residual spraying (see Annex 4). Savings from the reduced insecticide purchases will beavailable for other interventions.

14. Technical Assessment:IDA made detailed technical assessments for each component and their potential economic gains (seeproject file). IDA shared these assessments with GOI who incorporated these into its National PolicyLetter (Annex 2B). The enhanced program has already been recommended by the Expert Committee


reporting to the Prime Minister (1995) and reflects the WHO Revised Malaria Control Strategy (1995).The WHO, the Malaria Consortium, and other agencies have reviewed the IDA Credit and agree that theenhanced program is well designed.

Widespread malaria control in India, based largely on indoor residual spraying, began in the 1950s. Thenumber of malaria cases fell dramatically from seventy-five million annually in the early 1950s to onehundred thousand in the mid-1960s, when a resurgence of the disease occurred. That resurgence, whichpeaked in 1976 with six and one-half million cases, was caused by multiple factors, including inadequatefunding and management of the NMP, and insecticide and drug resistance. Since the early 1980s,continued reliance on indoor residual spraying, and inadequate use of other interventions have led toincreasing cases, despite higher spending (Figure 3). India currently suffers from endemic malaria andoccasional epidemics, especially of severe malaria. The percentage of severe cases of malaria has risenover time, partly reflecting resistance to DDT spraying and chloroquine drugs. Malaria shows greatregional variation in India, with the ten states of Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh,Maharashtra, Orissa, Rajasthan, Uttar Pradesh, Punjab and Assam accounting for eighty-five percent ofmalaria-related deaths and two-thirds of all malaria cases in India.

Recognizing the local nature of malaria, the NMP in 1986 adopted an epidemiological risk stratificationapproach, which allows stratification of regional malaria burdens based on selected technicalinformation. This stratification does not yet incorporate ecological and occupational factors orcommunity-based factors. In the enhanced program, epidemiological stratification will be done at thevillage level. With further developments of information systems, including the geographic informationsystem, more complex stratification may enable even more focal control activities.

15. Institutional Assessment:The enhanced program will build upon the strengths of NMP and address its weaknesses.

The NMP strengths include: (a) more than forty years of malaria expertise in entomology, treatment,and monitoring; (b) strong leadership and a committed core staff of forty professionals with more thanone thousand years of experience in malaria control; (c) considerable experience in two of the enhancedprogram's components, vector control and drug distribution; and (d) experience in procurement ofinsecticides, drugs, microscopes, and ether items.

The enhanced program will build on NMP's strengths by: (a) using its existing administrativeprocedures to pay seasonal spray workers to distribute drugs; (b) enhancing its expertise inentomological and drug monitoring; (c) drawing upon procurement experience to purchase items such asinsecticides, drugs and microscopes, using IDA guidelines; and (d) strengthening operational researchlinks with the MRC and other groups.

The NMP's weaknesses include: (a) the lack of appropriate skills mix among professional staff, most ofwhom are narrowly trained in entomology and few of whom have exposure to epidemiology,management, IEC, or social assessment; (b) limited experience working with community-based "ground-up" malaria control programs run by district societies, NGOs and village councils; (c) an inefficientinformation system, including heavy paperwork requirements for districts; and (d) limited financial skillsamong staff.

Project Appraisal Document Plage 16Country: India Project Title: Malaria Control

Figure 3. Epidemiological profile of malaria in India, 1961-1994

7 70

CASES6 50

CD~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~l

3 ~~~~~~~~~~30~

(nw

1~~~~~~~~~~~~~1

61 6365 6769 71 737577 79 8183 8587 8991 94Abbreviations: ABER = Annual blood exarnination rate per 100 population. Pt/o = The percentage of severe malaria (P.falciparum) to total malaria. SPR = slide positivity rate or number of positive slides per 100 examined.

The enhanced program would systematically address these weaknesses in several ways:(a) NMP will add consultant staff in key areas such as epidemiology, financial management, IECand social assessment. All staff working on the project will be integrated into NMP's overallmanagement structure. Key skills will be institutionalized into NMP in the long term by creating alimited number of permanent positions.

(b) NMP will encourage micro-planning by districts to build community-based malaria control bymeans of district implementation plans. Such efforts in four pilot districts during project preparationsuggest that a better balance of malaria control interventions is achievable. In addition, during the earlypart of the enhanced program, the NMP will work carefully with the Cataract Blindness Program to learnlessons on effective and timely flow-of-funds to districts.

(c) NMP will update and computerize its information system. NMP will continue to use a paper-based information system during the first year of implementation while it conducts a detailed evaluationof a computerized system.

(d) National, state and district level staff will receive technical and management training. To ensuresuitably qualified personnel are hired, NMP will use market rates for training allowances, and dailyallowances and consultant services.


16. Social Assessment:The prevalence of malaria is affected by numerous social factors, including population shifts andchanges in social conditions. Malaria disproportionately causes suffering and economic loss among themost vulnerable groups of society, namely, children, pregnant women, migrant laborers, and scheduledcastes and tribes. An integral part of the enhanced program is inclusion of social factors in the planningof malaria control through institutionalizing social assessment, participatory workshops and stakeholderanalysis (see section 18).

Tribal strategy. The GOI conducted a beneficiary assessment (BA) to: (a) ensure that scheduled castesand tribal peoples benefit from the proposed project; (b) avoid or mitigate potential adverse effects onscheduled castes and tribal peoples; (c) identify their perceptions of the problem and of the proposedinterventions; and (d) enhance beneficiary ownership of local malaria control. The BA found thatknowledge of the cause and spread of malaria was low in tribal communities, even among healthworkers, and that past efforts by NMP to deliver early detection and prompt treatment had not beensuccessful in the districts studied because of poor coverage, inadequate inputs, and a lack of communityawareness and involvement. The BA supported the need to build capacity at the state and national levelsto provide linkages between the community and NMP in order to improve the district implementationplans and their impact.

The enhanced program will include appropriate measures to ensure that the social and economic benefitsreaped by such groups are in harmony with their cultural practices. These measures are consistent withthe World Bank's Operational Directive (OD) 4.20 on Indigenous Peoples and OD 4.30 on InvoluntaryResettlement and include the following:(a) use of local IEC and mass awareness programs for malaria control at weekly markets and othervenues in tribal areas and increased interaction between health workers and tribal populations;

(b) provision of on-going training for front-line health staff in the diagnosis, treatment, andprevention of malaria;

(c) selection of local NGOs and grassroots organizations in the production and distribution ofmedicated mosquito nets; and

(d) establishment of early detection and prompt treatment facilities after appropriate measures aretaken to involve the community in their selection. The location of the drug distribution centers and fevertreatment depots will be publicized, and community leaders, traditional healers, teachers, village councilsmembers, educated youth and forest guards will be trained to support these centers or depots.

Building capacity for on-going social assessment. The enhanced program will build capacity for socialand anthropological skills to incorporate social, occupational and anthropological factors into planningmalaria control and to improve assessment of the needs of less advantaged groups. An anthropologistwill be appointed to NMP to coordinate social assessment activities and to provide training to state anddistrict level officers. Operational research that has a strong social assessment component will beconducted with the help of village-level and district-level health functionaries, grassroots NGOs andindependent research organizations. Social assessment procedures will also be incorporated into therevised operational guidelines.

17. Environmental Assessment:IDA gave the proposed credit a "B" rating for environmental assessment because of its concern about thepotentially high level of indoor residual spraying. Insecticide spraying is part of malaria control


strategies worldwide and will continue to be part of the strategy in India and elsewhere. There is muchprecedent for the Bank financing insecticides as part of malaria control programs: insecticidesconstituted thirteen, six and three percent of spending in the Brazil, Sri Lanka, and Cambodia projects,respectively. These projects, like the enhanced project, follow WHO guidelines for insecticide use inpublic health programs. None of these previous projects conducted an environmental assessment.

GOI contracted the National Environmental Engineering Research Institute to conduct a detailedenvironmental assessment, in consultation with NMP, the MRC, the Ministry of Environment andForestry, and the WHO. Given the national scope of the credit, the environmental assessment adopted a"sectoral" approach that involves sector-wide environmental analysis and supports integration ofenvironmental issues into long-term planning. The sectoral approach obviates the need for anenvironmental assessment in any district in which the IDA Credit would spend resources, and createsguidelines that are incorporated into normal procedures. The environmental assessment fulfills OD 4.00on Environmental Assessment and Operational Procedure 4.09 on Pest Management.

Key results from the environmental assessment include the following:(a) All insecticides harm the environment to some extent. However, the risk of increased death andmorbidity from not using insecticides exceeds their negative environmental impact, especially among therural poor.

(b) The environmental risks from insecticides use in agriculture far outweigh those of spraying formalaria control.

(c) The proposed insecticide choices should be based upon efficacy, cost and safety. Syntheticpyrethroids are the most effective and safe but cost substantially more than DDT. Other olderinsecticides, such as BHC, are much more toxic and should be eliminated as quickly as possible.

(d) In addition to cutting back on routine spraying, improved training and logistics, betterenvironmental management, and diversifying to other biological agents may minimize environmentaldamage. The environmental assessment included guidelines on better environmental management.

As a result of the environmental assessment, the project design was modified in the following ways:(a) The project will help catalyze the phasing out of some insecticides commonly used in India, suchas DDT on both demand and supply sides. Demand for these insecticides will drop because of theRevised Insecticide Guidelines and the revised operational guidelines, better IEC, and alternativeinterventions. To address the supply side, the enhanced program will include feasibility studies forprivatizing and diversifying the manufacture of some insecticides.

(b) The project will finance another environmental assessment around the third year ofimplementation. The enhanced program will also finance the costs of an on-going operational committeecomprising NMP, MRC and other staff to discuss environmental issues. The results of these meetingswill be reported to the annual program development review.

(c) Key parts of the environmental assessment will become part of the revised operationalguidelines. The revised operational guidelines will include efforts to improve the quality of spraying,ensure the safety of spray workers, and reduce spillage and theft.

(d) The project will finance operational research studies, including studies related to environmentalimpact.


18. Participatory Approach:Stakeholder participation. The overall objective of the stakeholder analysis has been to consult andseek the active collaboration and participation of various beneficiaries in the enhanced program (Tables 3and 4). In addition to the BA, seven distinct sets of participation consultations have been conducted withstakeholders, all with IDA involvement: (a) GOI held a series of regional workshops with communityparticipation before the identification mission; (b) GOI and IDA held a joint review of GOI's proposalfor malaria control with various stakeholders and community groups during the identification mission(November 1995); (c) representatives from village councils held a planning workshop with GOI and IDAduring the pre-appraisal mission (March 1996); (d) NMP held two social participation and planningworkshops in each of the four districts identified to develop the guidelines for district implementationplans (May to July 1996); (e) GOI and IDA held state-level consultations with the Departments of TribalWelfare and Rural Development; (f) GOI and IDA held a joint intersectoral workshop with various lineministries (March 1996); and (g) an NGO consultation on insecticide policy was held in February 1997.These meetings have contributed to the stakeholder analysis at the secondary and primary levels.

Participatory efforts in the preparation of the IDA Credit have already had three impacts: (a) they helpedexpand the scope of the project to involve the entire malaria control program rather than choosing aparticular geographic area; (b) they sharpened the focus on community-based interventions andintersectoral collaboration; and (c) they increased the extent of district-level planning.

Table 3. Stakeholder analysis of the enhanced programParticipant Mechanism Output or Impact

Government health service providers Workshops, planning briefs from Project design that is developed bothnational and state programs from above and below

Government non-health sector service Intersectoral board Increased awareness of malaria and useproviders (e.g., other ministries) of methods to lower malaria sources

NGOs and private sector Workshops and competitive Enhanced NGO and private providercontracts activity in IEC campaigns, awareness,

and medicated mosquito net provision

Village councils, local community Social participation workshop; Enhanced awareness of malaria,leaders, and women's groups personal interview, focus groups, support of local IEC efforts, and

BA and district societies medicated mosquito net distribution

Local households, including Focus groups and personal Increased use of MMN programscheduled caste and tribal peoples interviews in the BA, IEC efforts, measures, heightened awareness of

community mobilization via and malaria and greater access to earlydistrict societies detection and treatment.

Table 4. Level of participation in the enhanced program by various groupsGroup Identification/Preparation Implementation Operation

Beneficiaries/community groups Close collaboration Close collaboration Close collaboration

Village councils (district, block Close collaboration Close collaboration Close collaborationand community level) and NGOs

Other donors (WHO and ODA) Collaboration Collaboration Collaboration

Medical associations Consultation Collaboration Collaboration


19. Sustainability:In addition to financial sustainability (Section 13), the technical and managerial sustainability of theenhanced program has been analyzed.

Technical sustainability is high because we expect:(a) The NMP would continue to be the effective leader of malaria control activities well into thefuture and would continue to promote the better mix of effective malaria control interventionsthroughout the country after the IDA Credit closes.

(b) The revised operational guidelines would help institutionalize successful interventions andapproaches such as social and environiental assessments.

(c) Investments in training, acquisition of new expertise, better information systems, and ongoingreview would all help NMP to implement the enhanced program.

(d) Improved capacity at the district level, including the training of district malaria officers andengagement of local societies, would help maintain community-based ownership.

(e) The GOI's efforts to increase autonomy of village councils would help ensure that local demandfor malaria control will continue into the future.

(f) Efforts at intersectoral collaboration would help heighten awareness by industries anddevelopment projects of simple environmental management and low-cost treatment options.

Managerial sustainability is high because we expect:(a) NMP staff would receive considerable management training and district-level staff wouldacquire micro-planning skills through the guidelines for district implementation plans and otherapproaches. Use of market rates for training will ensure participation in training.

(b) A better information system and a focus on monitoring and evaluation would help manageinterventions more effectively at all levels.

(c) Skills in accounting, financial review, procurement, management planning and information willbe integrated into NMP's overall management structure.

(d) Creation of district-based implementation plans would increase transparency and accountabilityof local malaria control activities.

20. Critical Risks (see fourth column of Annex I and Table 5):The overall risk of the project failing to meet its developmental objectives is rated as medium. Key risksand their safeguards include:(a) Unforeseen major epidemics or insecticide and drug resistance could push the entire programtoward short-term responses. The enhanced program will strengthen epidemic planning and response byestablishing regional response teams and a geographic information system.

(b) Political pressure may lead to adoption of a malaria control that is dominated by insecticidespraying. The enhanced program relies upon both supply and demand-side reduction to prevent thispotential problem. The IDA Credit will closely monitor adherence to the National Policy Letter and


Revised Insecticide Guidelines, including examination of any widespread spraying that may threaten theinvestment.

(c) Information may be inadequate to control malaria locally. To improve the quality and quantityof information available, the enhanced program will contain considerable efforts in training andinformation systems.

(d) Correction of ineffective activities may take place too slowly. Annual program developmentreviews will help to ensure that the progress continues.

21. Possible Controversial Aspects:The enhanced program includes several potentially controversial elements:(a) Epidemics will attract media and public attention. Criticisms may be directed at IDA, despitethe enhanced program, and demand for short-term responses may rise. Such controversy is unavoidable,but better planning will help the NMP respond to epidemics, and better IEC will inform the public aboutoptions for malaria control.

(b) Insecticide use may disturb environmentalists. The enhanced program will promote betteroperational quality, reduce insecticide demand (and possibly supply) and periodically reviewenvironmental issues.

(c) NGOs have not yet been very active in malaria control but have been critical of poor response bythe GOI to epidemics. Several NGOs were consulted at identification and in social participationworkshops to solicit inputs. Several other NGOs met in February 1997 to review insecticide issues.Finally, other NGOs will help deliver IEC and the medicated mosquito net program.

(d) Politicians may object to removing eradication from the NMP's full title. However this namechange is necessary to provide the public with a more realistic appreciation of malaria control.

BLOCK 4: MAIN CREDIT CONDITIONS

22. Effectiveness Conditions: None

23. Other. During negotiations, IDA obtained the following assurances from GOI representatives:(a) GOI shall implement the IDA Credit in accordance with the National Policy Letter, the RevisedInsecticide Guidelines, and the PIP agreed with IDA.

(b) GOI shall ensure that an independent review of the technical, administrative and operationalaspects of the enhanced program is completed by December 15, 2000.

(c) GOI shall make provision for three dedicated positions within the NMP for staff with skills infinance and administration, social assessment and IEC, and shall appoint staff to fill such positions byApril 1, 2000. By April 1, 1998, GOI shall change the name of the NMP Directorate to "Directorate ofNational Malaria Action Program" or such other name reflective of the policies and objectives of theenhanced program and not reflecting eradication.


Table 5: Summary of Risks, Ratings and Minimization Measures

Risk Risk Risk Minimization Measure

- - - ~iTi7nT&o7r~s RatingOver reliance on indoor residual High National Policy Letter, Revised Insecticide Guidelines, on-spraying, especially for political going review and limited IDA financing of insecticides willreasons, may continue. discourage inappropriate use. Reviews will carefully monitor

spending, coverage, and quality of indoor residual spraying.The NMP will inform Parliament about effective control. IECactivities will help inform public opinion about spraying andalternative methods.

Entrenched NMP staff may not Low The NMP helped to design the IDA Credit, including the PIP,accept and own the enhanced guidelines for district implementation plans, andprogram. insecticide policies. The IDA will share lessons from

successful control programs elsewhere in the world. Theenhanced program will emphasize management, training andcapacity building.

Major epidemics or increasing High NMP will strengthen regional epidemic offices and willresistance will alter NMP focus to carefully monitor resistance. The annual program developmentshort-term responses, including review will help guide major program changes and ensure thatmass indoor residual spraying. short-term responses are consistent with longer-term

objectives.

Medicated mosquito nets will fail High The focus of first-year activities will be careful studies, limiteddue to poor social marketing, or distribution, evaluation, and engagement of NGOs and socialpoor acceptance. marketing agencies to promote public, private, and voluntary

distribution. The annual program development review willevaluate medicated mosquito nets.

Involvement of the household and Medium The enhanced program will use the guidelines for districtthe community may vary among implementation plans. The NMP will evaluate lessons fromstates and communities. districts piloting the guidelines for district implementation

plans. District societies will facilitate local spending andcommunity participation. The NMP will have flexibility torespond to local conditions and implementation abilities.

Delays, driven largely by Medium The design of project includes up-front discussion andMOHFW, in procurement or clearances requested on major items, and no geographicclearances will hinder effective restriction in responding to emergencies (except for meetingmalaria response financial, accounting, and audit requirements). IDA

procedures and guidelines are familiar to NMP staff andprocurement arrangements are well advanced.

Some states or districts will have High The NMP will have the flexibility to spend funds based uponpoor start-up to malaria control, demonstrable need. State officers will help focus onand delays in filling posts management and resolution of obstacles.

Flow of cash or goods from the Medium The enhanced program will adopt a flow of funds procedureNMP to districts will not be timely similar to that used in the Cataract Blindness Project. Stateand adequate malaria coordinators will help collect financial data. Districts

will contract accounting and management expertise.


(d) GOI shall cause the enhanced program to be adequately staffed and funded, and shall maintainsuch staff and funding for the duration of the IDA Credit. By April 15, 1998, GOI shall provide to IDA alist of the enhanced program staff, such list to summarize the job descriptions of each staff member.GOI shall take appropriate measures to maintain continuity of key staff of the enhanced program.

(e) Proceeds of the Credit and goods and services purchased under the IDA Credit shall be providedto non-core participating states upon the NMP Directorate's determination of demonstrable need, suchdetermination to be based on: (i) appropriate public health practices; (ii) accordance with the objectivesof the IDA Credit; and (iii) adherence to the procurement, audit and all other applicable provisionsstipulated in the Credit Agreement.

(f) GOI shall, and shall cause the states to use insecticides for malaria control in accordance with theRevised Insecticide Guidelines, which Guidelines may be revised from time to time with the mutualagreement of GOI and IDA.

(g) GOI shall carry out annual program development reviews (APDRs) conducted in accordancewith Terms of Reference agreed with IDA. The APDR Committee shall meet not less than annually, andno later than October 31 of each year.

(h) GOI shall select, and shall cause states to select, non-governmental organizations, socialmarketing agencies, and specialized agencies and institutes of the GOI to produce, market and distributemedicated mosquito nets in accordance with the procedures specified in the PIP. In accordance with thePIP, the GOI shall pursue, where appropriate, recovery of the costs of the medicated mosquito netsdistributed under the enhanced program.

(i) The NMP shall take all necessary measures to cause district implementation plans developed inaccordance with the guidelines for district implementation plans noted in the PIP to be adopted andimplemented in all districts in the core participating states in accordance with the following schedule: 15percent of the total number of district implementation plans shall be completed and approved by theNMP by December 15, 1997; 50 percent by June 30, 1998 and 100 percent by June 30, 1999.

(j) The NMP shall liaise with concerned authorities in respect of major development projects whichmay have a propensity to create malariogenic conditions, with a view to contain their health hazards.

(k) GOI shall ensure that state Malaria Coordinators for the core participating states are appointedby December 15, 1997. GOI shall take appropriate measures to promote continuity of key staff at thestate and district levels, including malaria officers trained under the enhanced program.

(I) Operational research under the enhanced program shall be carried out in accordance with theprocedures specified in the PIP. The identification of research topics and the implementation agencies tocarry out such research shall be accomplished through a peer-review process. Selection ofimplementation agencies to carry out such research shall follow principles of transparency andcompetition. Relevant malaria research which receives international peer-reviewed funding shall beeligible for additional funding from GOI.

(m) GOI shall use its best efforts to encourage all states to adopt the model by-law for urban malariacontrol contained in the PIP, with the goal of adoption by at least 15 states by April 30, 2000.


(n) By July 31, 1999, the NMP shall review and update its existing Operational Guidelines to reflectthe strategies and norns of the enhanced program.

(o) By June 30 of each year, GOI shall provide to IDA summary results of the previous annualmeeting of its existing inter-ministerial Working Group on DDT Use in Public Health. In addition, theNMP shall supply program expenditure data on insecticides, biolarvicides and larvivorous fishes, and theannual budgets and expenditures of the NMP.

(p) GOI shall ensure that by April 30, 1998, at least two representatives from industry are membersof its interministerial National Task Force on Intersectoral Issues in Malaria, and shall further ensure thatsuch Task Force meets at least once a year.

(q) GOI shall, and shall cause each state to, implement the enhanced program in any tribal area inaccordance with the Tribal Strategy noted in the PIP, which Strategy was developed with theparticipation of the beneficiaries.

(r) GOI shall: (i) maintain policies and procedures adequate to enable it to monitor and evaluate onan ongoing basis, in accordance with indicators satisfactory to IDA; (ii) prepare, under terms of referencesatisfactory to IDA, and furnish to IDA, on or about November 30 of each year, a report integrating theresults of the monitoring and evaluation activities; and (iii) review with IDA, by December 15 of eachyear, and take all measures required to ensure the efficient completion of the IDA Credit and theachievement of the objectives thereof, based on the conclusions and recommendations of the said reportand IDA's views on the matter.

Condition of Disbursement

(s) Except as IDA shall otherwise agree, a Letter of Undertaking shall be required from each of thecore participating States of (Andhra Pradesh, Bihar, Gujarat, Madhya Pradesh, Maharashtra, Orissa, andRajasthan) in a format agreeable to IDA.

BLOCK 5: COMPLIANCE WITH BANK POLICIES

This IDA Credit complies with all applicable Bank policies.

Task Manager: P rabh Country Manager: Robert S. brysdal ,

Annex IPage I of 5

Project Design Summary

(Baseline and target values are given below. Qualitative indicators are indicated by an asterisk)

Narrative summary Key performance Monitoring and supervision Critical assumptionsindicators and risks

I. CAS objective

Improve national . Decline in malaria cases . Annual review of national . Malaria is ahealth (by year 5) health statistics significant cause of

. Stabilization of "fatal illness and death andmalaria" (i.e., P. inhibits socio-Falciparum) as a economicpercentage of total malariacases.

II. Project development objectives

U Use of the better mix . Percentage of total NMP . Biannual budget reports of . Political pressureof effective anti- budget (i.e., IDA + regular the IDA Credit may be exerted tomalarial interventions budget) spent on non-IRS . Annual program use indoor residual

activities over the development review sprayingprevious two fiscal years . NMP to provide details on

, Target population covered full range of activities everyby appropriate IEC six monthsmessages . IEC surveysD Degree of adherence toNational Policy Letter andRevised InsecticideGuidelines *

D Strengthened and . Number of districts action . Reports provided by district . NMP staff may resistreoriented NMP plans that have been malaria officers/district the enhanced

completed and have societies programresulted in more than two . Records kept at NMP . Households andcommunity meetings and . External evaluation of communities willthe spending of more than management skills in second take ownership ofat least 60% of allocated or third year the enhancedfunds program

. Reduced morbidity and . Decline in malaria cases . Routine information . Reported cases ofmortality due to (by year 5) collected by NMP malaria may rise ormalaria. . Stabilization of "fatal remain unchanged in

malaria" (i.e., P. the medium termFalciparum) as a . Drug and/orpercentage of total malaria insecticide resistancecases. may increase

Annex IPage 2 of 5


III. Project Outputs by ComponentIntegrated Early Detection and Prompt Treatment

Improved accessibility, . Average time gap between . Routine data recorded at . Delays in procurementspeed, and accuracy of collection of blood slide primary health centers . Failure to link trainingdiagnosis of malaria and recording of diagnosis of personnel tocases at malaria lab provision of laboratory

.Stabilization of "fatal equipmentmalaria" (i.e., P. . Drug and/or insecticideFalciparum) as a resistance may increasepercentage of total malariacases.

Selective Vector Control and Diversification

. Targeted spraying of . Availability of village-level . Routine reporting by district . Flow of cash or goodsinsecticides epidemiological malaria officers/district from NMP not timely

information * societies or adequate.Degree of adherence to . Political pressure to use

National Policy Letter and indoor residualRevised Insecticide spraying regardless ofGuidelines * monitored conditions

. Increased use of non- . Percentage of total NMP . Accounting records at NMP . Political pressure to useinsecticide vector budget (i.e. IDA + regular indoor residualcontrol methods budget) spent on non-IRS spraying

activities over the previoustwo fiscal years

Medicated Mosquito Net Program

. Increased use of . Number of medicated . Accounting records at NMP . Poor distribution andmedicated mosquito mosquito nets distributed . Special studies of marketing of medicatednets through public/voluntary effectiveness of medicated mosquito nets

social marketing mosquito nets . Political pressure to useapproaches indoor residual

. Acceptability of medicated sprayingmosquito nets *

Annex IPage 3 of 5


Epidemic Response and Intersectoral Collaboration

.Strengthening of . Extend of functioning of . Reports filed by offices . Delays in procurementregional offices regional offices *

.Intersectoral . Number of municipal . NMP data routinely . Poor cooperation bycollaboration with corporations that have collected, reports from states and by otherurban centers and adopted model anti- Ministry of Environment Ministriesdevelopment projects malaria bylaws and Forestry

.Number of malaria health-risk assessment studieslaunched by NMP

Institutional Strengthening

. Improved management . Percentage of key targeted . NMP training records . Resistance ofand planning skills at staff at states/districts that management staff toNMP, state and district have acquired changed roleslevels epidemiological and

management skills

. New skills at NMP . Number of multi- . NMP data(e.g., anthropology) disciplinary (non-

entomological) staff hiredat NMP

. Creation and . Target population covered . Reports from state, regional . Failure to producedissemination of IEC by appropriate IEC and district malaria officers, culturally appropriateprogram messages and village councils/ NGOs IEC messages

.Degree of involvement of . IEC studiesvillage councils/NGOs *

. Increased operational . Quality of research . Working committee records . Resistance toresearch projects advertised, . Minutes of APDR meetings operational research or

funded, initiated and to expert criticismcompleted *Utility of APDRrecommendations *

Baseline and target values for quantitative indicators

1. Number of malaria cases reported to NMP.Baseline: 2.85 million per annumYear 3: 5% increase over baseline (i.e., expected to rise due to publicity and better detection)Year 5: 10% decrease from year 3

2. "Fatal malaria" (i.e., P. Falciparum) as a percentage of total malaria cases.Baseline: approximately 40% (this value is rising; the enhanced program will minimize the increase)Year 3: less than 50%Year 5: stabilized at less than 50%

Annex 1Page 4 of 5

3. Percentage of total NMP budget (i.e., IDA Credit plus regular budget) spent on non-indoor residual sprayactivities over the previous two fiscal years.Baseline: 25%Year 3: 30%Year 5: 40%

4. Target population covered by appropriate IEC messages.Baseline: 1%Year 3: 20%Year 5: 50%

5. Number of districts action plans that have been completed and have resulted in more than two communitymeetings and the spending of more than at least 60 percent of allocated funds.Baseline: 0Year 3: 30Year 5: 70

6. Average time gap between collection of blood slide and recording of diagnosis at malaria laboratory.Baseline: more than 14 daysYear 3: 7 to 14 daysYear 5: less than 7 days

7. Number of MMNs distributed through public/voluntary social marketing approaches.Baseline: 100,000Year 3: 150,000Year 5: 300,000

8. Number of municipal corporations that have adopted model anti-malaria bylaws in their state legislature.Baseline: 3Year 3: 5Year 5: 10

9. Number of malaria health-risk assessment studies launched by NMP.Baseline: 0%Year 3: 10%Year 5: 50%

10. Percentage of key targeted staff at states/districts that have acquired epidemiological and management skills.Baseline: 5%Year 3: 40%Year 5: 100%

I 1. Number of multi-disciplinary staff hired at NMPBaseline: IYear 3: 3Year 4: 5

ANNUAL PROGRAM DEVELOPMENT REVIEWSNEED AND TERMS OF REFERENCE FOR ANNUAL PROGRAM DEVELOPMENT REVIEW

Need: The enhanced program envisages using a more diverse set of malaria control interventions. Annual review ofthe implementation process was considered necessary so that modifications could be incorporated as and when

Annex 1Page 5 of 5

required. Such reviews will give the Directorate of the National Malaria Eradication Program (NMP) flexibility inassigning appropriate resources and will allow the program to benefit from the global expertise on malaria.

Terms of Reference would be to:(a) review implementation of malaria control strategies in relation to annual national, state and district levels plans

with a focus on project areas;

(b) review epidemiological, operational, social, economic, entomological, and drug sensitivity data collected duringthe year;

(c) assess the effectiveness of the enhanced program on the basis of (a) and (b);

(d) identify gaps in information required to assess the effectiveness of surveillance and recommend ways of fillingthese gaps;

(e) review summary results of operational research and recommend their adoption, where relevant;

(f) monitor costs and trends, quality, and coverage of indoor residual spraying and insecticide activities, ensuringthat the overall project strategy adheres to the Revised Insecticide Guidelines;

(h) suggest long term strategies for strengthening and capacity building in malaria control; and

(i) advise the GOI and IDA if certain performance and monitoring indicators should be improved, added, ordropped.

Composition of Annual Program Development Review Committee: The committee will comprise six membersplus a Chairperson, including one member each from the MRC, the National Institute for Communicable Diseasesand NMP, one member drawn from the community, and two experts from outside India. All members will beexperts in malaria control and community-based disease control. The Chairperson will be Director NMP. Externalmembers will be selected by GOI, in consultation with IDA. The Committee would ordinarily function for aminimum of two years and the term may be extended by mutual agreement between GOI and IDA. Externalmembers would be financed by IDA or other agencies. Non-governmental members will be paid travel and dailyallowances as per the Central Government rates and a suitable honorarium commensurate with the volume of work.With input from NMP, WHO, and others, the GOI will nominate the six members plus the chairperson of the annualprogram development review by an agreed date.

Meetings: Reviews will be annual after project effectiveness, held at time mutually agreed upon by theGovernment of India (GOI) and IDA. Dates for future meetings will be fixed after the first meeting. Each reviewwill be of five to ten days duration and will include briefing at NMP, necessary field visits, and review of budgetsand implementation plans for the next year. At least three weeks before each meeting the annual programdevelopment review cell will compile a report for the review on key issues, including budget spending, etc.

Support Unit for Annual Program Development Review: A support unit responsible for preparing the materialrequired for the reviews will be integrated into the enhanced program. This unit will be responsible for preparingthe material required for the reviews. This team will report to the annual program development review committeedirectly, but will work on a day-to-day basis with the staff of the enhanced program. The staff will consist of anepidemiologist or health specialist and a typist or stenographer. Resources for computing, document processing,and other services will be provided under the Project. The support unit will collect the data and prepare the materialin time for the annual reviews. The Project contribution will include costs for support unit staff and all costs for theannual program development review process, with suitable counterpart funding from GOI (via the NMP budget).

Relation to the GOI and World Bank: The annual program development review will have no authority to bypassany of the rules, regulations, accounting requirements, or procurement and disbursement guidelines of either theGOI or the World Bank.

Annex 2APage I of 3

Detailed Project Description

The activities to be carried out under the enhanced program, and the total cost of each activity cluster orcomponent, are as follows:

I. Integrated Early Detection and Prompt Treatment - US$44.7 million1. Improve the quality and accessibility of selected first level health units through: ensuring thatexisting fever treatment depots (FTDs) and drug distribution centers (DDCs) are stocked with glassslides, guidelines for the diagnosis and treatment of malaria, and malaria medications; establishing atleast one FTD or DDC in villages where they do not already exist; establishing a system of malaria linkfunctions (MLFs) who will transfer supplies and information between primary health care facilities(PHCFs) and FTDs and DDCs. provide FTD and DDC workers, multipurpose workers (MPWs) andMLFs with training for the diagnosis, treatment and referral of malaria cases.

2. Improve the speed and accuracy with which malaria cases are diagnosed through: providing allPHCFs and district hospitals with a microscope, a trained laboratory technician and laboratory suppliesnecessary for the microscopic diagnosis of malaria; providing selected PHCFs and district hospitals withDipstick diagnostic materials for use in emergencies; making dipstick tests available on the market foruse in private clinics based on cost-recovery; providing training on blood slide collection for FTD andDDC workers, MPWs and MLFs.

3. Improve the treatment of severe and complicated malaria cases through: equipping selectedPHCFs and district hospitals to deal with severe and complicated malaria cases; providing private clinicswith guidelines on the management of severe and complicated malaria cases and the supplies necessaryto treat these cases based on cost-recovery; training medical officers and their technical assistants atprimary levels on the treatment of severe and complicated malaria.

4. Improve the system for collecting and relaying data on malaria cases diagnosed and treated.

II. Selective Vector Control - US$81.2 million1. Reduce the area in which household insecticide spraying is in use and improve the cost-effectiveness and acceptability of insecticide spraying through: using epidemiological methods to selecthigh incidence villages for spraying; improving the epidemiological record-keeping selecting the leastexpensive, effective insecticide for each village to be sprayed.

2. Strengthen non-insecticide vector control activities through: building larvivorous fishhatcheries and improving the system for distributing and monitoring these fish; selective use ofbiolarvicides, especially in urban areas; promoting legislative measures that prevent the creation ofmosquito breeding sites.

3. Provide technical assistance services, training, equipment and supplies to support the aboveactivities.

III. Medicated Mosquito Net Program - US$23.4 million1. In selected communities, assess the acceptability, sustainability, efficacy and cost-effectiveness of medicated mosquito nets for the prevention of malaria. Selected NGOs will be awardedconsultant contracts to aid in distribution and testing.

Annex 2APage 2 of 3

2. In areas where medicated mosquito nets are found to be effective, they will be distributedusing social marketing techniques. Public, private and voluntary community organizations will beinvolved in the distribution and re-treatment of these nets. Local cooperatives and grassroots groups willbe given small grants for pursuing medicated mosquito net manufacture and distribution. Widespreadpublic distribution will be avoided prior to review of the mosquito net program.

IV. lEpidemic Response and Intersectoral Collaboration - US$19.5 million1. Strengthening Regional Malaria Epidemic Offices to coordinate control efforts in the case ofan epidemic and assist states in carrying out suitable prevention activities.

2. Create, test and implement a Geographic Information System (GIS) at NMP including researchon ecologic, climatic and socioeconomic risk factors for malaria.

3. Implement district-level committees to mobilize resources in the case of an epidemic.

4. Develop and distribute guidelines for reporting and responding to early indicators of anepidemic.

5. Provide Guidelines to industries and development projects on preventing malaria, andtreatment of malaria cases.

6. Legislation efforts at municipal and state levels to ensure development projects do not causemalaria and treat it when it occurs., including introduction of model-by laws into state legislatures.

7. Work with Ministry of Environment and Forestry and other agencies to ensure that majordevelopmental projects have a review of vector-borne diseases approved by NMP.

V. Institutional Strengthening - US$35.] million1. Produce, distribute and disseminate an integrated IEC program, including training videos andaudiocassettes for promoting prevention and early detection and treatment of malaria. This will betargeted towards community leaders, local health-care workers and non-health personnel from privateand voluntary sectors.

2. Provide in-service training for all those who are involved in the implementation of revisedmalaria control activities. Local and district-level training will be sufficiently flexible as to allow forlocally relevant education. Training allowances and daily allowances will be near to market rates, so asto ensure participation of staff. Selected training will involve domestic and foreign study tours.

3. Develop, pilot and expand a Management Information System. This computer-based systemwill facilitate the collection and analysis of data at the local level and will allow for easy transfer ofinformation between local, district, state and central personnel.

4. Strengthen central-level administration by providing new NMP headquarters.

5. Strengthen the monitoring of malaria control activities by conducting annual programdevelopment reviews and review of enhanced program activities.

6. Improve relevant applied research by providing a new MRC research facility.

Annex 2APage 3 of 3

7. Identify a set of priority items for Operational Research, define their terms of reference andselect competent research agencies to execute these projects.

8. Institutionalizing a mechanism for periodic reviews of environmental issues.

9. Health-risk assessment studies, and preparation of future projects.

10. Selected consultant studies including review of management functions at NMP.

11. Create advocacy package for parliament and state politicians about malaria control.

12. Strengthen the capabilities of the NMP for supervising the implementation of the enhancedprogram, including the provision of technical assistance, training in logistics management andinformation systems, and necessary equipment and supplies. Consultant salaries will be near marketrates, so as to ensure suitably qualified personnel join the enhanced program.

13. Support a sub-unit which will be responsible for gathering and processing data for the annualprogram development review.

Annex 2BPage I of 7

91 rt 1 - 10ooi1GOVERNMENT OF INDIA

MINISTRY OF HEALTH & FAMILY WELFARE;;'A44G11TA NEW DELHI - 110011

SHAILAJA CHANDRAAdditional SecretaryTele 301-7451

April 24, 1997

Dear Mr. Drysdale

This is in connection with the assurance for implementation of the enhanced

Malaria Control Programme in India in accordance with the agreed policies, updated

guidelines and mix of interventions.

Based upon the Expert Committee on Malaria (1995), and on-going inter-agency

and inter-ministerial policy development, the Government of India has proposed to the

International Development Association (IDA) a project for the enhancement of the

National Malaria Eradication Programme (NMEP) to cover all regions of the country,

with a special focus on the highly endemic malaria control areas.

The Government of India undertakes that the enhanced program will be

implemented with a better mix of interventions, with the twin objectives of being more

responsive to local needs, and strengthening the NMEP. The list of proposed activities is

outlined as per the attached policy matrix.

With regards,

Yours sincerely,

(SHAILAJ CANDRA)

Mr. Robert Drvsdale,

Director

South Asia Country Department

WORLD BANK

1818 H Street NW

Washington. DC 20433

Annex 2BPage 2 of 7

Policy Matrix: The Current NMP and Proposed Changes with the Enhanced Program

Component Current NMP Enhanced Program

Selective vector Adulticidal activities Gradual reduction in spraying of adulticides throughcontrol Relies on indoor residual spraying with selected judicious, highly selective indoor residual spraying

insecticides of variable efficacy. Village will become unit for spray operationsSubcenter is unit for spray operations Use of newer insecticides (e.g., synthetic pyrethroids),

especially in areas of triple resistance and drugresistance

Larvicidal Activities Selective use of biolarvicides, based upon efficacy andMostly uses chemical larvicides operational research and selected distribution of

larvivorous fishIncreased focus on environmental managementthrough intersectoral collaboration

Early detection Laboratory diagnosis is by microscopy, with Goal of one microscopy laboratory per 30,000and treatment approximately one laboratory per 100,000 population

population Dipstick tests for diagnosis in emergency situationsInvolves private physicians and traditional healers withcost recoveryIncreases number of drug distribution centers and fever

Limited front-line detection and treatment by multi- treatment depotspurpose workers, drug distribution centers, and fever Establishes malaria link function and makes adequatetreatment depots drug supplies and artemesinine injectibles available at

various selected levels for treatmentMedicated Limited studies and use Larger studies of MMN and carefully evaluatedmosquito nets distribution through grassroots organizations, social(MMN) marketing agencies, and public agencies, while

avoiding widespread distribution prior to evaluation

Epidemic Preventive activities are planned based on Improved epidemiological monitoring andplanning and epidemiological data collected the previous year identification of risk factors for epidemics, includingrapid response geographic information systems (GIS)

Strengthening regional offices to address epidemics

Intersectoral Limited engagement of industries and development Involves National Malaria Task Forcecollaboration projects Improved use of IEC; treatment guidelines, and model-

by laws

Information, Limited communication materials are disseminated Mass media, plus local information, education and

education and to the state, district, and block level communication planning and implementation, with an

communication emphasis on locally appropriate messages

Institutionalstrengthening* Training and Routine training of all levels of staff Enhanced training material, training institutions, and

management trainers at all levels, adds management andepidemiological skills

* Managementinformation Paper-based information system, with many Selects most important indicators and developssystem (MIS) standard pro-formae computer-based MIS and GIS

* Level of Central planning, target based Enhanced district implementation plans, and regional

planning and state planning

Annex 2BPage 3 of 7

*4 It V; .41 1' I - I Cw1 q

ftE -- 110011GOVERNMENT OF INDIA

MINISTRY OF HEALTH & FAMILY WELFARE

SHAILAJA CHANDRA NEW'DELHI 110011Additional SecretaryTele 301-7451

D.O. No.!vt. vO1'9!96-%[AL.

27th M,ar,:ch. t997.

-- r IA~~ -

Kindlv rere: co rry lecters dared 8kh Jan. '97 and Itch Feb.'97 and theoutcome of [he visiE of the recent Appraisal Mlission f'or ;he Mvlalaria Conroui Project.

The revised pojic le-cer for insecricide us-,e for the enharnced malariacontrol prograrrmme icti Wor.d Bank suopor: is en.clse' n

Wich rezards.

Yours sinc-erelv,

(SHAILLAJA CHAYIDRA)

Mr. R.chard Skolni:.Chiet;.Population & Humar. R-scu-7e Division.South Asia Councr-.- De-a.-ent 11WORLD BANK.iSIS. F. Stree-t N.;.%% -SHI!NGTON DC 2¢'" 3

Annex 2BPage 4 of 7

REVISED POLICY LETTER FOR INSECTICIDE USAGE IN

THE ENHCED MALARIA PROGRAIME IN INDIA

1. Vector control is one of the important components of malaria control

programme. NMP has in the recent years shifted from its approach of indoor

residual spray in large areas to more selective areas for indoor residual spray.The following represents consensus from several inputs, including an Environmental

Assessment conducted by National Environmental Engineering Research Institute

(NEERI) in December, 1995, and two meetings of an Expert Group fromWHO/NICD/NMP/MRC in August 1996 and March 1997.

2. The Government of India has already banned DDT in agriculture sector andrestricted its use in public health to the tune of 10,000 metric tons of technicalproduct. The actual use of DDT is far below this ceiling. WHO Group in 1993studied the current situation regarding the use of DDT for controlling vector-borne diseases, in particular malaria and after carefully reviewing all documents

and intensive discussion, concluded that: (i) DDT exposure as a result of indoorresidual spray does not provide convincing evidence of adverse effects; and (ii)there was limited justification on toxicological or epidemiological grounds forchaning current policy towards indoor residual spray of DDT. Thus it recommendedthat DDT can be safely used for indoor spraying. Similar views were expressed bythe GOI Expert Committee (1995) on Malaria. Insecticides in the malaria controlprogramme constitute about only 8.5% of the total usage of pesticides in thecountry. Moreover the insecticides in malaria control programme are generallyapplied with trained personnel and suitable equipment resulting in minimalcontamination to food, fodder, water, soil etc., unlike many agricultural

pesticides.

3. However, recognizing that DDT has low vector mortality in many settings, hasadverse impact agricultural produce (due to theft and leakage into agriculture)and on the environment and also has falling acceptability by households, theCommittee of Secretaries has discussed DDT and other compounds in use in themalaria program in January, 1997, and concluded that:

(i) BHC will be banned from manufacture and use from April 1, 1997.

(ii) The use of DDT should be gradually phased out and the availablealternative utilized for public health programs. Limited use of DDT,however, to cater to need of specific epidemic prone areas and malaria

endemic regions and also Kala-azar control could be continued in atargeted manner for the immediate future.

(iii) A group, chaired by the Secretary (H) of the Ministry of Health andFamily Welfare, with representatives of the Planning Commission,

Department of Biotechnology and Department of Agriculture andCooperation, will review the parameters of DDT use on an annual basis.This will focus on pre-determined use of insecticides, and on use in

response to epidemics or demands.

4. As part of the enhanced malaria control program at NMP, aided withincremental financing from the World Bank, the NMP will develop specificguidelines by December 31, 1998 on the following, based upon expert review and

operational research:

Annex 2BPage 5 of 7

(i) criteria and complete data requirements needed to evaluate the efficacy

of insecticides (DDT and others) used for vector control, especially inlight of the considerable levels of insecticide resistance that are

known to occur in India. This will specifically include an objectiveassessment of where DDT works and where it does not taking intoconsideration the epidemiological impact. This may involve WHO testingcriteria, and the results should help determine the need to shift to

another insecticide in any given area (district, state, etc.).

(ii) criteria for stopping use of indoor-residual spraying in epidemic or

non-epidemic control activities.

5. The technical issues for usage of insecticides were discussed by a group of

experts having representative from WHO/SEARO, MRC and NICD which have considered

the various options available, the comments of World Bank Mission and the draftEnvironmental Assessment report of NEERI and gave the following recommendations:-

(i) The group understood fully the importance of district management system

for selection of appropriate insecticides. The enhanced program willdevelop a computerized system of information.

(ii) The group discussed geographical information system that is beingdeveloped by MRC & the model will be absorbed in the programme. Hence,

Geographical Information System(GIS) will form an important componentof operational research.

(iii) Insecticides to be used in the spraying have to qualify Bureau ofIndian Standards specification as a quality control (which conform tothe standards of WHO). Along with existing WHO guidelines theidentified laboratories in the country as well as in NMP will conductquality tests of insecticides periodically and this will remain acompulsory process in procurement policy.

(iv) The group also conveyed its satisfaction with the recommendations ofthe GOI Expert Committee on Malaria (1995) wherein they have identified

epidemic high risk problematic malarious areas and hard core areas formalaria residual spray as short term intervention measures.

6. The group felt that priority for insecticides usage may be considered as

under:

(i) Plasmodium falciparum (P.f.) transmission should be given top priority.

Indoor residual spray should be scheduled in such a way that it cuts

the peak of P.f. transmission. If this is taken care of, mortality

due to malaria will decrease. In the light of this, the spray schedulewill be rescheduled in accordance with the existing transmission periodin certain situations.

(ii) The existing entomological zones should be rearranged so as to covermost of the problematic areas and adjustable to continuing

environmental changes (deforestation, agricultural water and land use

patterns, etc). In addition, the state entomological cells will bestrengthened to monitor vector resistance.

Annex 2BPage 6 of 7

(iii) The experts considered the definition of an epidemic of malaria. They

felt that the increase in clinical malaria cases, along with SlidePositivity Rate(SPR), Slide Falciparum Rate(SFR) and Annual ParasiticIndex (API) of the proceeding year should be compared. They consideredthat the ecological conditions in an area like deforestation, DamConstructions and other development projects, unusual rainfall leadingto water logging, etc. should be taken into account in an epidemic orbefore an epidemic.

(iv) The group felt that clinical malaria reporting should be the part ofdistrict management system (DMS).

(v) The experts studied the various procedures being followed by NMP for

safe transportation, storage and utilization of insecticides. It wassatisfied with the procedure being followed.

(vi) The phasing out of BHC in the near future was welcomed by theexperts. The cost of newer and effective insecticide like syntheticpyrethroids for vector control was considered a major constraint. Inareas with triple vector resistance, drug resistance and in epidemicsituations, this costly insecticide should be used. NEERI reportendorses this view that in triple resistant areas (i.e. to DDT, BHC andmalathion) and drug resistance, synthetic pyrethroids will be theinsecticide of choice. It will be ensured that proper coverage in timeand dosages is carried out by trained personnel and strict supervision.

7. The procurement of insecticides is based on the requirement provided by theStates as per approved norms to NMP., DDT is procured by NMP and supplied to theconsignee i.e. district well in advance so that insecticide can be sprayed as perthe schedule i.e. transmission season for malaria. Other insecticides likemalathion are mainly procured by the states and also part of synthetic prethriods(recently introduced). Quality control of the insecticides is maintained bysample checks of the insecticides which are carried out at NMP and approvedinsecticide laboratories under the Insecticides Act/Rules. Before any insecticidecan either be procured from national manufacturers, or imported in India, thiscompound has to undergo a strict screening for efficacy and safety to human healthand environment after it is registered by the Central Insecticide Board. Thequality standards are as per the specifications of ISI which conforms to WHOspecifications of insecticides.

B. There will be bi-annual review by an independent Indian (non-NMP, non-MRCand non-industry) agency to review the quality control of insecticides used,including examination of testing facilities, equipment and analytical procedures.

9. There will be a repeat environmental assessment of the entire program byDecember 31, 1999, financed under the enhanced program with World Bank financing.

10. The insecticides are transported either by rail or road to the consignees.Detailed precautions during transport and storage have been provided by NMP as perthe recommendations of WHO. The precautions which have been mentioned in NEERIreport for transport, storage and handling are also undertaken by NMP.Guidelines on safe handling of products will be incorporated into the enhancedprogram, including the next revision of the Revised Operational Manual.

11. The epidemiology of malaria has been changing over the years due to rapid

Annex 2BPage 7 of 7

changes in the eco-system. According to these changes, the interventionstrategies have been revised by NMP from time to time. The revisions in thestrategies are printed as guidelines, manuals and operational instructions to theimplementing agencies which are States and districts (including PHCs). Forexample, recently revised strategies were brought out as operational manual calledMalaria Action Plan 1995 wherein all the details of revised malaria controlstrategies have been given. Similarly, Drug Policy 1996 adopted by NMP has beenwidely circulated. Operational Guidelines (Malaria Action Plan 1995) was revisedto include the treatment schedule under the revised Drug Policy. Similarly,number of documents are printed, wherein the details of NMP are given for generalreading. It becomes necessary to update Operational Guidelines as and whenrequired so as to make the implementing agencies aware of the various technicalpolicies.

12. The strengthening of essential staff of NMP and the Regional Health Officeshas been envisaged and provided for. The need for Social Assessment andEnvironmental Assessment will be met by acquiring the services of the Consultantsat appropriate time. Inter-sectoral coordination and collaboration with otheragencies such as Tribal Development to carry out malaria control activities arealso being ensured.

Annex 3

Estimated Project Costs

Project Component Local Foreign Total-(US$ Million)---

Integrated Early Detection and Prompt Treatment 36.2 4.3 40.5

Selective Vector Control 43.2 28.8 72.1

Medicated Mosquito Net Program 20.4 0.7 21.1

Epidemic Response and Intersectoral Collaboration 10.5 6.8 17.3

Institutional Strengthening 29.6 2.6 32.2

TOTAL BASELIE COSTS 139.9 43.3 183.2

Physical Contingencies 13.6 4.3 18.0Price Contingencies 0.1 2.6 2.7

TOTAL PROJECT COSTS 153.6 50.2 203.9

*Numbers may not appear to add due to rounding.

Annex 4Page I of 13

Economic Assessment

A. Introduction1. The medium-term objective of the IDA Credit is to create an enhanced and more effectivemalaria control program (hereafter 'enhanced program'), characterized by a better balance of effectivemalaria control interventions, and a strengthened and reoriented NMP. The enhanced program willenable malaria control that is responsive to local needs. In the long-term it will reduce mortality andmorbidity from malaria, and alleviate its social and economic losses. The following economic analysisexamines the potential impact of the enhanced program to be made possible by the IDA Credit. Theanalysis draws on frameworks developed by several authors (Jha et al, 1996; Barnum, 1995; Preker,1996; and Hammer 1996), addressing the following issues: (i) the economic burden of malaria in India(Section B); (ii) rationale for public sector involvement in malaria control (Section C); (iii) semi-quantitative cost-effectiveness analysis of the enhanced program components (Section D); and (iv) therole of economic analysis in program design and monitoring (Section E). The analysis of alternatives tothe enhanced program is presented in the main document (section 9).

2. The major economic gains that are anticipated as a result of the enhanced program include:(i) reductions in morbidity and mortality with consequent improvements in production (e.g., agriculture)and household earnings and decreased household and community expenditures on anti-malarial drugsand treatment; and (ii) decreased pollution of the environment and reduced negative impact of insecticideuse. These and other potential economic gains will be discussed further below.

B. Economic Burden of Malaria in India3. Current burden of malaria in India. There has been an increase in the number of malariacases and malaria deaths reported to the NMP since 1987 (Figure 1). It is difficult to estimate the extentto which improvements in reporting have contributed to this increase. Provisional estimates for 1995indicate that there were 2.80 million cases and 1,062 deaths, but these may be grossly under-reported.The NMP estimates that approximately half of all cases are reported, and that there are now between 5million and 6 million cases per year. Vital statistics surveys carried out by the Registrar General of Indiaattribute between 50,000 and 100,000 deaths to malaria each year (Sharma, 1996).

4. Global Burden of Disease estimates. The latest Global Burden of Disease estimates for India(Murray and Lopez, 1996) report malaria to have caused approximately 26,000 deaths in 1990 (i.e.,0.28% of all deaths and 0.99% of deaths due to infectious and parasitic diseases). Males account for aslightly higher percentage of the malaria deaths than do females (53% vs. 47%). The largest number ofdeaths occur in the age group 5-14 years (26%) and approximately 84% of deaths due to malaria occurbefore the age of 44 years. Malaria was responsible for the loss of approximately 1.2 million disabilityadjusted life years (DALYs) in 1990 (i.e., 0.42% of all DALYs lost and 1.44 % of DALYs lost due toinfectious and parasitic diseases). Males account for a slightly higher percentage of DALYs lost due tomalaria. As with malaria deaths, the vast majority of DALYs lost (approximately 93%) were amongstthose aged 44 years or less. Thus, malaria has its greatest impact on young, potentially productivemembers of society.

Annex 4Page 2 of 13

Figure 1. Malaria Cases and Deaths in India Reported to NMP, 1985-95.

3 T T 2000

1500

0~~~~~~~~~~~~~~~10 c~~~~~~~~~~~~~ 2oo a rf lCases

I ~~ *Deaths

u ~~~~~~~~~~~~~~~500

0 0

85 86 87 88 89 90 91 92 93 94 95

Year

5. Estimates of economic burden in India. Given the tremendous variability in estimates ofmalaria morbidity and mortality, it is of no surprise that estimates of total economic loss in India arecorrespondingly divergent. A simple study by Verma (1975) estimated that in 1972 (1.2 million caseswere detected that year), the total cost of malaria was 158.6 million Rs. (0.03% of the GDP). Vermatook into consideration only the expenditures on malaria control by NMP (Rs. 145 million) and loss ofwages of working adults (Rs. 13.6 million); he made no attempt to quantify economic impact beyond theindividual wage losses. Ray and Sharma's estimates (1984) showed that by 1983 (over 2 million caseswere detected), both the cost of the malaria control operations and the economic losses due to malariawere a multiple of the figures mentioned by Verma. This is due, in part, to the advent of chloroquineresistance in P. falciparum. A 1995 study by Sharma suggested that malaria in India was responsible foreconomic losses between 0.5 and 1.0 billion USD annually (0.2 to 0.45% of GDP). It is not clear whatassumptions underlie this estimate.

6. Mechanism of malaria's economic impact. The major elements of economic damage causedby malaria are as follows:(a) Morbidity, loss of working capacity and wages during acute illness, reduction of workingcapacity following the attack. Researchers have estimated that each case of malaria causes between 5and 20 days of disability.

(b) Loss or reduction of production (e.g., agriculture, mining) due to workers' absence or reducedoutput. One study has found that farm families with malaria clear 60% less land than families who arefree of disease. Such an impact is likely to be important in India where agriculture accounts forapproximately 31 % of the GDP (World Bank, 1993).

(c) Reduced export potential: India is the world's second largest grower of fruits and vegetables butonly one percent of production is commercially processed and only a few products are exported.Agricultural exports are supposed to reach US$ 650 million by 2000 (Country Economic Memorandum,World Bank, 1996) but exports of fruits and vegetables may be hampered by concerns about DDT fromtheft and leakage into agriculture.

(d) Individual expenditure on anti-malarial drugs and private treatment (see paragraph 9).

Annex 4Page 3 of 13

(e) Cost of treatment and hospitalization borne by the community. Prior to large-scale control, 16%of all attendance and admissions at government hospitals and dispensaries in India were due to malaria(Wernsdorfer and Wernsdorfer, 1988). Although comparable current data are not available, the cost ofmalaria to the public health care system is presumably high.

(f) Limitation of land use in areas with a high malariogenic potential. Sinton (1935) documented anumber of cases in India where malaria prevented expansion into new areas, with substantial losses inforegone earnings. The anti-malarial approach proposed by Sinton on the basis of this work quickly ledto the reclamation of large stretches of very fertile, hitherto unusable land in India (Wernsdorfer andWernsdorfer, 1988).

(g) Premature mortality from malaria before or during reproductive age; and other repercussionssuch as school absenteeism, damage to the tourism industry, reduced capital flow and investment,detrimental mental and psychological effects of the disease.

C. Rationale for Public Sector Involvement in Malaria Control7. Justification of public versus private investment. Justification of increased GOI spending onmalaria control requires that there be a basis for believing that the government can achieve a betteroutcome than private markets can. Of the approximately 18 billion US$ spent on health in Indiaannually, public spending accounts for only 22%. This compares with over 50% public spending in thedeveloping countries of Africa and Latin America and 39% in Other Asia and Islands (1993 WorldDevelopment Report). Nevertheless, the GOI clearly plays an important role in public health spending.Two main economic rationales justify and guide a government role in malaria control:(a) The poor cannot always afford health care that would improve their productivity and well-being.Publicly-financed investment in the health of the poor can reduce poverty or alleviate its consequences.

(b) Some actions that promote health are pure public goods or create large positive externalities.Private markets would not produce them at all or would produce too little.

In Table 1, these rationale are summarized for each of the interventions to be offered under the enhancedprogram. Institutional and Capacity Strengthening is not considered here as it is not an intervention initself, but an activity fundamental to the success of all other enhanced program interventions.

8. Malaria is more common among the poor. Malaria disproportionately affects the poorestmembers of society. By far the worst affected are the people living in tribal areas, who suffer the bulk ofinfection with P. falciparum (a lethal form of malaria) and of mortality. As shown in the maindocument, Table 2, the P. falciparum endemic districts chosen for initial phasing of activities under theenhanced program are less urbanized (p<0.001), have significantly lower literacy rates (p<0.05), andscheduled tribal peoples make up a significantly greater percentage of their total population (p<0.001),and have slightly more females (p<0.001). Pregnant and lactating women and their children are at higherrisk of adverse consequences from malaria because of low immunity and co-existent anemia andmorbidity.

9. The poor face a heavier economic burden for malaria treatment. Malaria or fever is one ofthe most common reasons for visiting private practitioners, who are paid out-of-pocket. Data from theNational Sample Survey (NSS), collected in 1986-87, indicate that the burden of out-of-pocket spendingon health care falls disproportionately on the poor and that burden is mainly for primary illness care(National Sample Survey Organization, 1989). On average, 5.0% and 2.3% of total household consumerexpenditure in rural and urban areas, respectively, were for health expenditures. The percentage of

Annex 4Page 4 of 13

household spending on health was highest in the poorest income quintiles; 5.8% and 2.8% in rural andurban areas, respectively. A 1993 household survey conducted by the National Council of AppliedEconomic Research (NCAER) lends support to these findings (Sundar, 1995). The NCAER surveyfound that the lower the household income, the higher the prevalence of self-reported seriouscommunicable diseases (including malaria). Furthermore, poorer households reported spending a higherpercentage of their annual household income on each communicable disease episode (the poorest groupreported spending greater than 0.9% of annual household income per disease episode while the richestgroup reported spending less than 0.4%). This suggests that the burden of out-of-pocket spending onmalaria treatment is regressive and imposes a heavier burden on the poor.

Table 1. Justification of Public Versus Private Provision of Malaria Control Activities.Component Poverty Alleviation Public Good or Positive Justified Percentage of

Externalities Government Finance

Selective Vector - yes - improves health of - pure public good - highControl the poor

Integrated Early - partial - increased access to - positive externalities - - low to mediumDetection and Prompt basic health care for the poor curing malaria preventsTreatment transmission of disease to

others

Medicated Mosquito - partial - preferentially - positive externalities - - low to mediumNet Program improves health of the poor potential benefits for those

living in the same house orcommunity

Epidemic Response - not directly - pure public good - highand IntersectoralCollaboration

Information, education - partial - increased access to - public good - highand communication health education for the poor

10. The potential for poverty alleviation under the enhanced program. Because the poor suffera greater burden of disease and spend a greater percentage of their expendable wealth on primary carethan the non-poor, increased access to free or low-cost treatment for malaria stands to produce increasesin their consumption of health care. This, in turn, raises their ability to be educated and theirproductivity, assets that are necessary to rise from poverty.

11. Public goods and externalities. Most of the anti-malaria activities (vector control, epidemicplanning and response, IEC) are public goods, i.e., people cannot be excluded from the service even ifthey refuse to pay for it. Only the government can ensure provision of such services, which should bealmost entirely government subsidized. The other anti-malaria interventions (Early Detection andTreatment and MMN program), although private goods, have significant positive externalities. Forexample, curing a person of malaria also prevents transmission of the disease to others. In some cases,community-wide use of treated nets results in a local reduction in the rate of biting, even on peoplewithout nets (Lines, 1996b). In these situations, the person buying the good or service is unlikely torecognize and be willing to pay for the positive benefits that others will incur as a result of the purchase.

Annex 4Page 5 of 13

For this reason, governments are justified in financing these services, but not necessarily in deliveringthem.

12. A shift of GOI funding to areas of low priority is unlikely. Given the high degree oftransferability of resources within ministries of health, Bank assistance for malaria may result in a shiftof local resources to areas of lower priority ("fungability", Hammer, 1996). For example, GOI fundsmay be transferred to urban, tertiary services. The risk of such reallocation of resources is minimal giventhe recent spending patterns of MOHFW. As previously mentioned, the MOHFW has increased outlayson malaria over the last five years. Funding of other public health programs has increased as well.Under the Eighth Five Year Plan, the percentage of MOHFW expenditures allocated to public healthprograms (including tuberculosis, leprosy, malaria and AIDS control) has increased steadily from 40% to45%. Meanwhile, expenditures on allopathic hospitals and dispensaries have remained relativelyconstant at approximately 9%. Even if there is reallocation within the MOHFW as a result of theproposed IDA Credit, other public health programs are the most likely recipients.

D. Economic Analysis of the Enhanced Program13. The purpose of this section is to analyze the mix of interventions proposed under the enhancedprogram. Following a brief discussion of the difficulties involved in using standard economic techniquesfor analyzing this program is a semi-quantitative comparison of the costs and consequences of each ofthe proposed activities.

14. How can the most suitable mix of interventions be determined? Although the objectives ofthe enhanced program have been pre-specified, the activities to be undertaken in meeting theseobjectives have not. This is based on the recognition that the program will be most cost-effective ifactivities are designed to respond to local needs and conditions. Hence, activities will vary from onearea to another. A number of factors may be taken into consideration in determining the appropriate mixof publicly provided anti-malaria interventions for any one area. Ideally, the activities undertaken wouldbe determined by local needs, cultural acceptability, sustainability, environmental safety, and locallyderived cost-consequence data (which should theoretically take all of the aforementioned factors intoconsideration). Political concerns and history (usually in the form of outdated practices held over frompast eras) also play a significant role in the decision-making process.

15. Problems with available cost-consequence data. In reality, the cost-consequence datanecessary for informed decision making is rarely available. Data on the cost-effectiveness, cost-utility,and cost-benefit of anti-malaria interventions have been collected for many countries (Table 2), andseveral reviews of these data exist (Barlow and Grobar, 1986; Mills, 1991; Hammer, 1993; Najera andothers, 1993). "Indeed, the differences (in results) between the studies are so marked that it would behard to make any generalizations about them at all" (Najera and others, 1993). There are importantreasons for substantial variation in average cost per unit output between studies: (a) differences in theecological, epidemiological, and social characteristics between areas; (b) wide variations over timewithin areas of the incidence and severity of malaria; (c) variations in the organizational structure ofcontrol programs; and (d) differences in the intensity of application of the interventions being appraised.Additionally, differences in data quality, the assumption used in the analyses, the definition of relevantcosts, the length of the study period, and the discount rate applied all contribute to the variation. It isrecognized that in the case of malaria "local information is needed to judge which interventions shouldhave priority" (World Bank, 1993).

Annex 4Page 6 of 13

16. Support for a combination of anti-malaria interventions. Barlow and Grobar (1986) suggestthat the great uncertainty surrounding cost estimates argues that a combination of policies need to beused in parasitic-disease control programs. For malaria, at least, a combination of policies is desirableeven with accurate information, because of diminishing returns from any one instrument (Najera andothers, 1993). There is reason to expect diminishing marginal returns to most anti-malaria activities. Forexample, the cost of vector control activities will rise with expansion as a result of decreasing densitiesof vectors and of people. Costs of active case detection and treatment will rise with decreasingfrequency of cases and the eventual need for IEC campaigns, which are costly. Malaria control projectsfunded by The World Bank and other agencies support the use of multiple interventions. Successfulprojects have depended upon use of multiple interventions, both to offer complementary methods and tominimize the risk of failure of the overall program (Table 3).

17. Available cost-consequence data for India. Table 4 attempts to summarize and compare thecosts and consequences of malaria control activities currently being carried out by NMP. Wherequantitative data is lacking, qualitative information has been provided. The operating costs of anti-malaria activities within the health sector were compiled by the NMP (Sharma et al., 1996). Thebreakdown of component costs (or breakdown of costs for each activity), average annual costs, andrecurrent costs (as a percentage of the total cost of each activity) were derived from expenditure reportsfor the fiscal years 1991-92 to 1994-95. The consequences of anti-malaria activities are divided intoeffectiveness (or consequences incurred by the intended target population) and externalities. Theeffectiveness is a function of efficacy (i.e., how well it works at preventing malaria cases and deaths inan experimental setting), patient and provider compliance (including acceptability of the intervention tothe target population, or cultural acceptability) and coverage (i.e., the "institutional capacity" available todeliver the intervention to the target population). Losses include negative changes in physical, social andemotional functioning that result from the intervention. Very little empirically derived data onconsequences is available for India. The externalities of an intervention are the gains and losses that areincurred outside the intended target population. What follows is a discussion of the costs andconsequences for each activity. A more thorough assessment of cost-effectiveness needs not only morerobust costing, but also reliable data on effectiveness. It is hoped that concurrent evaluation of resourcesused and effectiveness achieved will make it possible to assess cost-effectiveness as the Progranimplements its revised strategies.

Indoor Residual Spraying18. Per capita costs of indoor residual spraying. As can be seen in Table 3, the cost per capita ofindoor residual spraying varies tremendously, depending upon the insecticide being used. BHC andDDT are the cheapest, at just under 10 Rs. per capita per annum. It costs almost twice as much to useLindane (Lindane has been introduced on a trial basis as a substitute for BHC which will be phased outfrom 1997), 4 times as much to use malathion, and 5 times as much to use deltamethrin or one of theother synthetic pyrethroids.

19. Effectiveness of indoor residual spraying. The NMP cites three deterrents to the effectivenessof indoor residual spraying: poor operational coverage, inability of the states to increase the wages ofspraying staff (presumably resulting in reduced provider compliance and poor coverage), anddevelopment of vector resistance. An. culicifacies is the major rural vector of malaria. In a number areasin India, An. culicifacies is now resistant to DDT, BHC and Malathion (resistance refers to below 80%mortality). Adults of An. stephensi, mostly an urban vector, are found resistant to DDT and BHC.Studies performed in 1991 found mortality of An. culicifacies to be much higher with the syntheticpyrethroids cyfluthrin and deltamethrin (mortality varied from 73 to 100%) than DDT or Malathion(NMP Annual Report, 1991). Unfortunately, high efficacy of pyrethroids in an experimental setting may

Annex 4Page 7 of 13

not translate to high effectiveness in the field. In fact, if operational coverage and provider andbeneficiary compliance are no better for the synthetic pyrethroids than for other insecticides, then theincremental benefit resulting from their use may not warrant the significant incremental cost.

Table 2. Cost-Effectiveness and Benefit-Cost Ratios of Malaria Control.Country Author (year of Cost per case Cost per death Cost-utility Benefit-cost

publication) prevented (1987 averted (1987 (1987 ratio (1987US$) US$) US$/DALY or US$)

QALY)RESIDUAL INSECTICIDE SPRAYINGSri Lanka Barlow (1968) -- 78 3 146Paraguay Ortiz (1968) 60 -- 71 3.6India Cohn (1973) 2 -- 7 --

Indonesia Gandahusada and 83-102 -- 275-618 --

others (1984)BED NETSCameroon Carnevale and -- -- -- -1.4

Cossemans (1985)The Gambia Picard and others -28 -188 -7.90 --

(1993)Hypothetical WHO (1996) -- -- -7-14 --

developing countryCHEMOPROPHYLAXISHypothetical WHO (1996) -- -- -28 --

developing countryThailand Griffith and others -- -- -- 6.5

(1971)HYPOTHETICAL VACCINEHypothetical WHO (1996) -- -- -0.40-24 --

developing countryCOMBINED INTERVENTIONSPakistan Khan (1966) -- -- -- 4.9Greece Livandas and -- -- -- 17.3

Athanassatos (1963)Iraq Niazi (1969) - 6.0India Ramaiah (1980) -- -- -- 9.3Philippines San Pedro (1967/68) -- -- -- 2.4Sudan Democratic Republic -- -- -- 4.6

of Sudan (1975)Liberia Hedman and others 14 -- 143 --

(1979)Thailand Kaewsonthi (1989) 27-74 90-760 --

Nepal Mills (1987) 1-172 3-255 --

Nigeria Molineaux and 259 -- 1,500-2,650 --Gramiccia (1980)

Developing countries Walsh and Warren -- 990 34 --(1979)

The Gambia Picard and others -19 -257 -11 --(1993)

India Sharma (1996) -- -- -- -22India Indian Institute of -- -- -- 9

ManagementBrazil World Bank (1996) -- -- -258 --21.8-- Not availableSOURCE: Barlow and Grobar (1986); Mills (1987); Hammer (1993); Najera and others (1993); Carnevale andCossemans (1985); Picard and others (1993); WHO (1996); World Bank (1996); author's calculations.

Annex 4Page 8 of 13

Table 3. Malaria Control Projects financed by the World Bank and USAIDProject Amount in 1995 USSM for Interventions Impact

malaria control activities(and dates)

Brazil Northwest Region Integrated 20.3 Indoor residual spraying, case UnsuccessfulDevelopment Program--First Phase: (1982 to 1988) detection and treatment, operationalHealth Project (2061-BR) research

Indonesia Provincial Health Project 65.9 Indoor residual spraying, source Successful(2235-IND) (1983 to 1989) reduction, biological control

Brazil Amazon Basin Malaria Control 186.6 Early detection and prompt HighlyProject (3072-BR) (1989 to 1994) treatment, selective vector control, successful

source reduction, IEC

Cambodia Disease Control and Health -4.0 Early detection and prompt N/ADevelopment Project (4034-XX) (1997 to 2002) treatment, medicated mosquito nets,

management and supervision

Vietnam National Health Support -24.4 Early detection and prompt PendingProject (4838-XX) (1996 to 2002) treatment, medicated mosquito nets,

program management, training,communication, research

Lao PDR Health System Reform and 6.7 Early detection and prompt PendingMalaria Control Project (13107-LA) (1995 to 2000) treatment, selective vector control,

medicated mosquito nets, research

Senegal Endemic Disease Control -5 Case-containment, epidemiological PendingProject (SN-PE-41576) (1997 to 2002) surveillance, vector control,

training, chemoprophylaxis forpregnant women and migrants, IEC.

Sri Lanka Health Services Project (LK- -3.6 Early detection and prompt PendingPA-10526) (1997 to 2002) treatment, selective vector control,

medicated mosquito nets

El Salvador (Financed by USAID) N/A Early detection and prompt Highlytreatment, selective vector control, successfulsource reduction

Mexico (Financed by USAID) N/A Early detection and prompt Successfultreatment, selective vector control,IEC, research

20. Changes in future use of indoor residual spraying. According to the original enhancedprogram proposal, the choice of insecticide and its spraying will be based on new criteria: Selection ofinsecticide would take into consideration cost, acceptability by the communities, vector susceptibilityand transmission dynamics. Spraying would therefore be impact oriented, more targeted and saveresources. Nevertheless, it is important to closely monitor the effectiveness of indoor residual sprayingin field trials, which should express outcome in terms of malaria cases and deaths prevented.

Table 4. Costs and ConsequLences of Current NMP Activities.Component Costs Consequences

X ~ .................... I....................................................................... ........................... ......................................................................... .......................................... ......................................................................

Annual Operating Component Costs (%), Average Effectiveness Externalities(1996 Rs./capita) Annual Costs in 1996 Rs.) &

Recurrent Costs (% of Total)Selective V'ector ControlIndoor Residual SpravingDD I 9.91 63% - poor efficacy of DDT, BI IC & Malathion due - Negative DDT & lI IC accumiiulate inBHC 9.97 20% to resistance biological systemsLindane 17.98 0% - pyrethroids are highly efficacious - Malathion highly toxic in large dosesMalathion 36.12 7% - poor compliance as beneficiaries resistant to - pyrethroids safe for mammals but toxic to fishPyrethroids: having homes sprayed - hastening the development of resistance has

Deltamethirin 44.64 Averagel0% - poor operational coverage negative consequencesCylluthrini 44.48 Average annual costs R 1,050Lambdacylialothrin 42.85 million Rs. Recurrent costs 97%

Anliti-jary. ActiviticsMalaria larvicidal Oil 20.38 3% - eflicacy is not established Negativc: fenthion is hazardous to mammalsTemephos 7.62 14% - anecdotal evidence suggests that source while temephos is the safest chemicalFenthiion 8.24 34% reduction and biolarvicides are the most currently in useB. fltringiensis 23.68 49% effective, while larvivorous fish are the least - Bli and B. sphaericus thought to be very safeB. sphaericms 29.17 limited effective - larvivorous fish may have an adverse impactLarvivorous Fish NA limited - compliance with source reduction may be poor on other fish species as well as on otherSource reduction 7.10 limited mosquito predators

Average annual costs m 80 million - Posiive protects neighboring communitiesRs. Recurrent costs z 97%

Integrated Early Detection and Prompt TreatmentABER 10°/o, SPR 2.5% 3.18 - breakdown not available - microscopic diagnosis delayed to the point of - Negative potential for transmission of blood-ABER 200/o, SPR 5% 4.96 being useless bome diseasesABER 300/o, SPR 10% 8.24 Average annual costs z 340 million - "no organized referral system" - PoItivecuring malaria prevents transmissionABER 401/6, SPR 20%/ 15.12 Rs. Recufent costs -. 74% - efficacious drugs exist of disease to others

- coverage is poor due to ineffective distributionIMedicated Mosquito Net Program is treated with:

Deltamethrin 26.20 - efficacy against major Indian vectors has yet to - Negative pyrcthroids safe for mamimiials butCyfluthrin 32.65 - breakdown not available be experimentally tested very toxic to fishLambdacyhalothrin 23.70 - acceptability varies from one area to another - widespread use of pyrethroids iisay hasten the

Average annual costs z 0 Rs. - pyrethroids kill nuisance insects resulting in developnient of resistancebetter compliance - Positive: potential benefits for thiose living in

the same room, house or coimiuinitityIEC - not available Averase annual costs = 31 million

Rs. ecurrent costs 88%

>oor:go o0 =

_-x

Annex 4Page 10 of 13

21. Effectiveness of anti-larval activities. Studies performed in many districts in India in 1991found very high larval mortality rates (NMP Annual Report, 1991) with the chemical larvicidesTemephos and Fenthion. It is reported that the bacterial larvicides are just as effective and have theadded benefit of a long residual effect (2 to 4 weeks). Papers from different geographical and ecologicalareas report poor or no control of mosquito larvae (if not an increase in larval numbers) after the stockingof 'mosquito fish' (Gratz, 1996). The problem with studies of all anti-larval interventions is that theyhave not looked at important outcomes such as decreases in the adult mosquito population or decreasesin malaria cases and deaths. According to Najera and others (1993), anti-larval interventions are feasibleonly with easily identifiable breeding places and are thus of "limited use." "Source reduction techniquessuch as drainage and land management techniques can have significant effects in mainly urban areas,planned human settlements, or economic development projects, but they cannot be a significant part ofwidespread control operations."

22. Recommendations for future use of Anti-Larval Activities. The data presented here supportNMP's proposal to increase the use of source reduction and biolarvicides, especially in high-risk urbanareas. Serious consideration must be given to increasing expenditures for the breeding and distributionof larvivorous fish, which may have an adverse effect on other fish species as well as on other mosquitopredators.

Integrated Early Detection and Prompt Treatment23. Per capita costs of integrated early detection and prompt treatment. Data from Table 4 onthe cost per capita of early detection and prompt treatment is illuminating in several ways. The annualper capita cost of early detection and prompt treatment is around 3 Rs. for an area in which the annualblood examination rate (ABER) is 10% and the slide positivity rate (SPR) is 2.5% (suggesting aminimum annual parasite index of 2.5/1,000). In contrast, the annual cost per capita of spraying thissame area would be 10 Rs. for DDT and 45 Rs. for deltamethrin. This difference between the twoapproaches suggests that considerable intensification of case detection and treatment would be possiblebefore costs would exceed those of spraying. For example, doubling the frequency of case detectionwould cost an additional 3 Rs. per capita per annum compared to the cost per capita of introducingspraying of Rs. 10 for DDT and 45 for deltamethrin. Here, intensifying could be cost-effective if itreduces the need for spraying. On the other hand, the annual per capita cost of early detection andprompt treatment is around 15 Rs. for an area in which the ABER is 40% and the SPR is 20%(suggesting a minimum API of 80/1,000). Here, it could be cost-effective to spray if it reduces the needfor early detection and prompt treatment. Early detection and prompt treatment can similarly becompared to anti-larval interventions. The logical choice of intervention is dependent in part on theincidence of malaria in the area.

24. The data in Table I also suggest, as expected, that the cost per capita increases as the totalnumber of blood slides collected and examined increases and the total number of cases treated increases.What would be more illuminating, perhaps, is data on the cost per capita as the ABER is varied for apopulation with constant API. This would more clearly show the relative cost of different strategies ofcase detection (active vs. passive).

25. Effectiveness of case detection. NMP continues to use active case detection as the mainmechanism to diagnose and treat malaria. The consequence of collecting a thick blood film for everyfever case is that malaria microscopists are overwhelmed with negative slides, the examination of whichnot only takes most of their time but could also distract them and cause them to miss positives. Thediagnosis is, most often, late, so it cannot help in the diagnosis of the cause of fever, and the radical

Annex 4Page II of 13

treatment of positives, when offered, may no longer be needed. Perhaps one of the reasons for thecontinued emphasis on active case detection is the relatively weak network for passive case detection andreferral. "At present there is no organized referral system. Serious cases of malaria are not attended bythe PHC doctor and there are no guidelines at the PHC level." (NMP Project Proposal, 1995).

26. Effectiveness of treatment. A national drug policy for the treatment of malaria was recentlydeveloped (May 1995). Although the problem of P. falciparum resistance to the most commonly usedanti-malarial drug, Chloroquine, is increasing, resistance to drugs like mefloquine and halofantrine islimited. The Project Proposal cites the breakdown in the drug distribution network as one of the majorcauses of malaria outbreaks and epidemic situations; "Deaths due to malaria are mainly confined to areaswith shortage of drugs."

27. Recommendations for future use of integrated early detection and prompt treatment.Under the proposed Project, 85% of expenditures on early detection and prompt treatment would be toestablish a system of MLFs and provide microscopes to PHCFs (Rs. 789 of 918 million over five years).Because of the current inefficiencies in the system, this strategy should first be tested on a pilot basis.Perhaps NMP should consider redirecting funds towards early detection and prompt treatment activitiesthat may have higher yield: IEC of communities and peripheral personnel, integration of private health-care providers (including traditional healers), and development of guidelines for the selective use ofdiagnostic tests. Finally, it is important to establish routine monitoring of both diagnostic and drugpolicies to ensure both quality control and efficacy/effectiveness.

Medicated Mosquito Net Program28. Cost of medicated mosquito nets. Data from the NMP suggests that the annual per capita costof mosquito nets (Table 4) varies from Rs. 23.70 to Rs. 32.65, depending on the insecticide used toimpregnate the net (note that this estimate assumes 60% coverage, or 3 MMNs for a family of five; seeAnnex I for details). The annual cost per capita of medicated mosquito nets is slightly less expensivethan indoor residual spraying with malathion or any of the synthetic pyrethroids. It is however, morethan twice the cost of indoor residual spraying with DDT or BHC and at least 1.5 times the cost of earlydetection and prompt treatment at any of the ABERs and SPRs given.

29. Effectiveness of medicated mosquito nets. The efficacy of medicated mosquito nets againstAn. stephensi (the main vector in all urban areas and an important vector in some rural areas) and An.culicifacies (the main vector in most plain areas of India) has yet to be experimentally tested.Experience in other parts of the world gives cause for optimism. For example, a recent meta-analysis of10 bed-net trials comparing permethrin-impregnated bed-nets with non-bed-net controls, found asummary incidence rate ratio for acquiring malaria of 0.497 (95% Cl = 0.417-0.592, Choi and others,1995). Beneficiary compliance with this intervention is also an issue. A feasibility study on the use ofmedicated mosquito nets among 'Gond' tribal communities of Madhya Pradesh (Singh and others, 1994)found that, "in spite of continuing health education, not more than 20% could be motivated to use nets."Meanwhile, preliminary data from a trial in a high P. falciparum incidence area of rural Orissa showsthat 85% of families have purchased at least one mosquito net (at a subsidized price of Rs. 50) in the firsttwo years of the program (Ian Pett, British Council). Numerous studies of pyrethroid treated medicatedmosquito nets in other countries have shown high mortality of nuisance insects, such as bedbugs. Thissuppression of nuisance has led to a better acceptance (Curtis 1994). Evidence from other countriessuggests that community participation is necessary to make this intervention effective or sustainable.

30. Recommendations for future use of medicated mosquito nets. Initial medicated mosquito netactivities should focus on: field trials of efficacy in a variety of epidemiological contexts, exploring


channels of distribution, exploring the cost-effectiveness and distributive effects of partial and fullsubsidies. Further extension of medicated mosquito nets to other areas could be decided based on theoutcome of successful pilot studies.

Other Components of the Enhanced Program31. Economic issues related to epidemic planning and rapid response. The sooner an epidemiccan be detected, the cheaper it will be to prevent or stop. The cost of information collection is lowrelative to the cost of launching large-scale emergency action. For epidemic-prone areas, investments inpreparedness and a response mechanism are sound from an economic perspective.

32. Economic issues related to institutional strengthening. It is very difficult to quantify the costsper capita and the effectiveness of the components of institutional strengthening (training, civil works,and decision management system). However, investments in these components are crucial in order tooptimize the cost-effectiveness of the enhanced program interventions. Needs assessments are beingconducted to determine how investments in institutional strengthening can most effectively be targeted.

Other Economic Issues of Importance33. Sustainability. The IDA Credit aims to reduce malaria morbidity and mortality and to keepthese parameters at acceptably low levels. Hence, it is of great importance that the GOI be able tosustain enhanced program activities beyond the period of IDA financing. Table 4 shows the approximatepercentage of current NMP costs that are recurrent for each program activity. Under the enhancedprogram, spending on all components will increase to some degree (see Figure 3) with correspondingincreases in recurrent costs. Unless alternative sources of funding are found, GOI will be responsible foreither cutting back program activities or taking on these increased recurrent costs beyond the period ofIDA financing.

34. Recurrent costs are relatively low for the MMN program (the mosquito nets themselves are 68%of total component costs and are classified as capital costs), suggesting that this component will be easyto sustain, from a purely financial perspective. The recurrent costs of early detection and treatment arehigher, due primarily to the travel allowances paid to MLFs (60% of costs of this component). It isanticipated that these travel allowances will gradually be taken up by Village Panchayat, which wouldgreatly reduce the burden on GOI. Information, education and communication costs are largely recurrentdue to the expense of delivering messages by traditional and folk media, radio, newspaper and television.Selective Vector Control and Epidemic Planning and Response costs are almost purely recurrent, largelyattributable to insecticides and operational costs of spraying. Taking into consideration these activitiesand Institutional Strengthening, approximately 60% (Rs. 714 million per annum) of total program costsare recurrent.

35. Impact on the Private Sector. What exists in terms of a private sector for the provision of anti-malaria goods and services (e.g., medicated mosquito nets, diagnostic and treatment services)? Whatwill happen to the quantity and price of goods provided by the private sector with the enhancement ofProgram activities? It has been suggested that as many as 50% of malaria cases use non-governmentalsources of treatment (p. 5, Annex 6, ODA Report). Medicated mosquito nets appear to be available inmost large towns and in a few places they are also available in rural markets. If a social marketingproject sells a novel branded product at subsidized prices (in this case medicated mosquito nets), onemight expect this to have a negative effect on sales of existing un-subsidized brands - indeed, the publicsubsidy on price and on brand-specific advertising could be described as unfair competition. Socialmarketing organizations tend to admit that competing brands may suffer a loss of market share, but claimthat this is more than compensated by an increase in the overall market volume, so that on balance these


competing brands enjoy greater sales (Lines, 1996b). It is impossible to say what the impact of theenhanced program will be on private distributors of anti-malaria medications.

E. How are the Findings of the Economic Assessment Reflected in Project Design and Monitoring?- In order to address diminishing returns from any one intervention, the enhanced program will make useof a combination of anti-malaria interventions.- Activities undertaken by NMP will be determined by local needs, cultural acceptability, sustainability,environmental safety, and, where available, locally derived cost-consequence data.- Evaluation of resources used and effectiveness will be conducted as part of the enhanced program.This will make it possible to assess cost-effectiveness as the Program implements its revised strategies.- Use of indoor residual spraying will gradually be reduced as a result of the increasing costs anddecreasing effectiveness of this intervention.- The extent of indoor residual spraying and the insecticide to be used will be decided for each localebased on careful consideration of available information.- Assuming a high benefit/cost ratio of source reduction and biolarvicides, NMP will increase theseactivities in high-risk urban areas.- Given the paucity of good data on the effectiveness of larvivorous fish, studies of this intervention willbe undertaken.- A number of methods will be employed to increase the cost-effectiveness of early detection and prompttreatment: IEC of communities and peripheral personnel, integration of private health-care providers(including traditional healers), and development of guidelines for the selective use of diagnostic tests.- In order to ensure efficacy/effectiveness, routine monitoring of both diagnostic and drug policies willbe undertaken.- Medicated mosquito net activities will be introduced gradually into the Program. During the first yearof the enhanced program, these activities will include: field trials of efficacy in a variety ofepidemiological contexts, exploring channels of distribution, exploring the cost-effectiveness anddistributive effects of partial and full subsidies. Further extension of medicated mosquito nets to otherareas will be decided based on the outcome of pilot studies.- In order to avoid costly full-blown epidemics, investments in preparedness and a response mechanismwill be made in epidemic-prone areas.- The legal agreement will draw upon the economic analysis in justifying certain assurances, such aslocal procurement for the mosquito net program and a separate disbursement category for different typesof adulticides and larvicides.

Annex 5

Financial Summary

Operational Period

1998 1999 2000 2001 2002

Project Costs (US$ Million, IncludingContingencies)

Investment Costs 16.6 48.2 47.2 43.4 30.0Recurrent Costs 1.4 5.0 5.2 3.7 3 1

Total 18.0 53.2 52.4 47.1 33.1

Financing Sources (% of TotalCosts)

IDA 83% 84% 81% 81% 74%Government of India 17% 160 19% l 9% 260%

Total 100% 100% 100% 100% 100%

Annex 6Page I of 8

Table A: Project Costs by Procurement Arrangements(In USS Million Equivalent)

Proaarapnt Methodlmtiiouai N ti.al 6imaltedComptid CnpetIVe IateluoaI Comiulting

Bidding Biddisa Biib7 Ot*er Service N.D.F. Total

CIVIL WORKSCivil Works - 4.1 - 1.8 - - 5.9

GOODS (3 7) (1.6) (5.3)Fumiture - 0.1 - 0.4 - - 0.5

(0.1) (0.3) (0.4)

PCR Equipment - - - - - 0.3 0.3

Equipment 8.1 2.3 - 1.2 - - 11.5(7.3) (2.1) (1.0) (10.4)

Vehicles 2.4 - - 0.6 - - 3.0(2.1) (0.5) (2.7)

Lab & Other Supplies - 1.7 0.6 3.5 - - 5.8(1.4) (0.5) (2.8) (4.6)

Drugs (inci D.E.C.) - 0.5 1.0 0.2 - - 1.6(0.5) (0.9) (0.2) (1.5)

Cloroquine - - - - 13.3 13.3

Medicated Mosquito Nets(MMNs) - 6.1 - 1.5 - 7.6

(.5.6) (1.4) (7.0)Pyrethroids 70.8 4.8 - - 75.6

(60.2) (4.1) (64.3)

Bti 1.3 2.9 - - - 4.2(1.2) (2.7) (3.9)

Larvivorous Fish - - - 0.7 - - 0.7

CONSULTANTS AND (0.6) (0.6)Project Preparation &Implementation (nci Training &Workshops) - - - 5.8 1.4 - 7.2

(5.8) (1.4) (7.2)

Publicity & IEC - - - 10.8 1.2 - 12.0(10.8) (1.2) (12.0)

Operational Research - - - 1.4 - 1.4(1.4) (1.4)

Institutional Development (inclConsultants & ProfessionalServices) - - - 4.1 14.2 18.4

(4.1) (14.2) (18.4)

Preparation and Health RiskAssessments - - - 0.7 0.3 - 1.0

(0.7) (0.3) (1.0)

NGO Services (inci MMNProgram) - - - 10.7 2.7 - 13.4

(10.7) (2.7) (13.4)

Laboratory Studies - - - - 2.2 2.2MISCELLANEOU

Incremental Operating Costs - - - 17.6 - - 17.6(I0.5) (10.5)

Maintenance - - 0.7 - 0.7(0.3) (0.3)

Total 32.5 22.5 1.5 61.7 19.8 15.7 203.9f70.8) (20.1) (1.4) (52.8) (19.8) (164.8)

Annex 6Page 2 of 8

Procurement and Disbursement Arrangements

Table B (Part I): Thresholds for Procurement Methods and Prior ReviewExpenditure Contract Value Procurement Contracts Subject to

Category (Threshold) Method Prior Review1. Works

Civil Works Civil works estimated to cost the equivalentof US$20,000 or less per contract, up to anaggregate not exceeding US$1,800,000 maybe executed by:(i) direct contracting upto US$500,000; or Direct Post review only

Contracting(ii) on the basis of comparison of price Solicitation of 3 Post review onlyquotations obtained from at least three Bidsqualified contractors eligible under theguidelines; or(iii) unit/piece rate systems to qualified Rate Contracts Post review only

contractors or Registered NGOs (or otherbeneficiary associations); or(iv) by Force Account as a last resort in a Force Account Post review onlymanner satisfactory to the Association uptoUS$500,000.

Civil works estimated to cost the equivalent of National First three works contractsover US$20,000 per contract, up to an Competitive above US$300,000 by prioraggregate not exceeding US$4, 100,000. Bidding review. All others by post

review.

2. Goods(a) Furniture, US$50,000 or less per contract, up to an National Shopping Post review onlyequipment, laboratory aggregate not exceeding US$6,000,000 Proceduresand other supplies, equivalent (includes DGS&Ddrugs, biocides, Rate Contracts)larivorous fish

US$300,000 or less per contract, up to an National First three goods contractsaggregate not exceeding US$7,500,000 Competitive regardless of value by priorequivalent Bidding review in accordance with

paragraphs 2 and 3 ofAppendix 1 to theGuidelines. All others bypost review.

Up to an aggregate not exceeding Limited For each of the first LIBUS$1,600,000 equivalent for dipsticks International contracts, prior review in(supplies) and artemisinine injections (drugs) Bidding accordance with paragraphs

2 and 3 of Appendix I to theGuidelines.

Over $300,000 equivalent per contract International For all ICB contracts, byCompetitive prior review in accordanceBidding with paragraphs 2 and 3 of

Appendix I to theGuidelines.

Annex 6Page 3 of 8

Table B (Part 1): Thresholds for Procurement Methods and Prior ReviewExpenditure Contract Value Procurement Contracts Subject to

Category (Threshold) Method Prior Review2. Goods (continued)(b) Vehicles US$100,000 or less per contract, up to an National Shopping Post review only

aggregate not exceeding US$600,000 Proceduresequivalent (includes DGS&D

Rate Contracts)Over $100,000 equivalent per contract International For all ICB contracts, by

Competitive prior review in accordanceBidding with paragraphs 2 and 3 or

Appendix I to theGuidelines.

(c) Medicated US$50,000 or less per contract, up to an National Shopping Post review only

Mosquito Nets (MMNs) aggregate not exceeding US$1,500,000 (includes DGS&Dequivalent Rate Contracts)

US$300,000 or less per contract National Post review onlyCompetitiveBidding

Over $300,000 equivalent per contract International For all ICB contracts, byCompetitive prior review in accordanceBidding with paragraphs 2 and 3 of

Appendix 1 to theGuidelines.

(d) Pyrethroids US$ 1 00,000 or less per contract, up to an National Shopping Post review only(Insecticide) aggregate not exceeding US$4,800,000 Procedures

equivalent

Over US$100,000 per contract, up to an International For all ICB contracts, byaggregate not exceeding US$70,800,000 Competitive prior review in accordanceequivalent Bidding with paragraphs 2 and 3 or

Appendix I to the Guidelines.

3. Services(a) All Procurement Quality and Cost Prior review of all consultantAgent Contracts, NGO based Selection contracts shall be governedContracts or (QCBS) by the provisions of

Professional Services paragraphs (i) and (ii) below:Contracts estimated toexceed $200,000(b) Professional US$200,000 or less per contract, up to an QCBS with Short (i) Contracts for individuals

Services Contracts, IEC aggregate not exceeding US$5,500,000 List Comprising or firms estimated to cost

Contracts, and NGO equivalent Domestic Firms US$50,000 or more, but less

contracts over only - (applies if than US$200,000, theUS$100,000 up to foreign consultants procedures set forth in

US$200,000 equivalent not likely to be paragraphs 1, 2 (other thaninterested.) the second subparagraph

2(a)) and 5 of Appendix 1 tothe Consultant Guidelines.

Annex 6Page 4 of 8

Table B (Part 1): Thresholds for Procurement Methods and Prior ReviewExpenditure Contract Value Procurement Contracts Subject to

Category (Threshold) Method Prior Review3. Services (continued)

(c) (i); Professional US$ 100,000 or less per contract, up to an QCBS with Short (ii) Contracts for individualsServices contracts less aggregate not exceeding US$1,400,000 List Comprising or firms estimated to costthan $100,000 equivalent Domestic Firms more than US$200,000

only equivalent, the proceduresset forth in paragraphs 1,2

(c) (ii), NGO Contracts US$100,000 or less per contract, up to an Selection in (other than the third& Operational Research aggregate not exceeding US$10,700,000 accordance with subparagraph 2(a)) and 5 ofActivities less than equivalent para 3.14 of the Appendix 1 to the$100,000 Consultant Consultant Guidelines shall

Guidelines, apply.including singlesource selection forrelevant tasks.Selection criteria forNGOs andOperationalResearch willfollow project-specific guidelinesagreed with IDAand will be noted inthe PIP

(d) Spray workers, US$10,000 or less per contract, up to an Hiring of Serviceindividual consultants aggregate not exceeding US$18,100,000 Deliveryand individual equivalent Contractors - (asresearchers noted in para 3.19

of the ConsultantGuidelines, and forspray workers andcontracts forindividualconsultants.)

(e) Publicity Services, Up to an aggregate not exceeding Single- Source Post review onlytraining and workshops US$14,200,000 equivalent Selection as there

are no alternativeproviders, underterms satisfactoryto IDA and notedin the PIP

Annex 6Page 5 of 8

Table B (Part I): Thresholds for Procurement Methods and Prior ReviewExpenditure Contract Value Procurement Contracts Subject to

Category (Threshold) Method Prior Review

4. MiscellaneousIncremental operating Incremental operating costs and maintenancecosts and maintenance estimated to cost the equivalent of

US$20,000 or less per contract, up to anaggregate not exceeding US$18,400,000may be executed by:

(i) direct contracting; or Direct Post review onlyContracting

(ii) on the basis of comparison of price Solicitation of 3 Post review onlyquotations obtained from at least three Bidsqualified contractors eligible under theguidelines; or

(iii) unit/piece rate systems to qualified Rate Contracts Post review onlycontractors or Registered NGOs (or otherbeneficiary associations) or

(iv) by Force Account as a last resort in a Force Account Post review onlymanner satisfactory to the Association.

Table B (Part II): Details of Procurement Methods and Links to Project Components

1. Works.Civil works over US$20,000 would be for the National Malaria Control Program (NMP) and

Malaria Research Centre (MRC) buildings, with detailed architectural design, and competitive selectionof design and construction firms.

Civil works belong to the Institution Strengthening (IS) component. Civil works underUS$20,000 would be for small extensions to enable computerization at district offices. Thespecifications for these would be made centrally, and the local district would procure these underprocedures specified in the table above.

2. Goods(a) Furniture, equipment and laboratory supplies belong to the IS and Early Detection and PromptTreatment (EDPT) components. These involve local purchase of desks, chairs and other furniture, officesupplies and related materials.

Drugs belong to the EDPT and Selective Vector Control (SVC) components and involve localpurchases of DEC, local biocides for use in water sources and larvivours fish procured from local fishhatcheries. Larger contracts for dipsticks and artemisinine are available only from a selected number ofinternational manufactures, and thus LIB would be used. Large purchases of any furniture, equipment,drugs and biological would be procured centrally by NMP using ICB.

Annex 6Page 6 of 8

Table B (Part LI): Details of Procurement Methods and Links to Project Components (continued)

2. Goods (continued)(b) Vehicles belong to the EDPT, SVC and Epidemic Planning and Rapid Response (ERIC)components. Smaller vehicle orders from state or district levels would be procured under nationalshopping, following specifications from the NMP by national shopping or DSG&D rate contracts. Thelatter provide cost savings comparable to that by national shopping. Large purchases of any goods (overUS$300,000) would be procured centrally by NMP using ICB.

(c) Nets for the Medicated Mosquito Nets Program (MMN) component would be procured by stateand district levels from local manufactures if they are small amounts. Local selection is important as itimproves the acceptability and use of these nets, and because different areas may have differentpreferences. The standards for these nets would be set by NMP, based upon operational research andquality evaluation of the entire net program after two years. Larger contracts would use NCB or ICB,and would be procured by NMP directly.

(d) Synthetic pyrethroids belongs to SVC and ERIC components and would be procured by NMP.Small start-up and interim needs would be procured by NMP in accordance with WHO-set standards.Larger contracts would be procured by NMP using ICB.

3. Services(a) Large services contracts (above US$200,000) would be for the design and construction of NMPand MRC buildings, for the management information and geographic information systems elementsunder the IS component. These would be procured by NMP using expert input on specifications. Suchlarge service contracts may also be used for an NGO to oversee net distribution, manufacturing andsocial marketing under the MMN program. These would be based upon competitive (QCBS) bidding,following project-specific guidelines and noted in the PIP.

(b) Intermediate service contracts (between US$100,000 and US$200,000) would be for similarefforts to 3 (a), and would also be procured by NMP using the same procedures, but targeted to nationalfirms on a competitive basis.

(c) NGO services and operational research belong to the MMN and IS components and would usethe following procurement procedures. Small NGO services would average around US$30,000, butcould range in some states up to a limit of US$100,000. These small NGO services would be procuredby NMP, states or districts based upon geographic location, quality of previous efforts and other project-specific procedures for selection agreed with IDA and noted in the PIP. Larger NGO contracts would beprocured in accordance with paragraphs 3 (a) and (b) above.

All NGO services in the MMN component would follow selection criteria, short-listing andmonitoring that emphasizes: (a) encouraging local capacity of NGOs; (b) agreed common evaluation ofthe projects at 2 years time; and (c) informing relevant NGOs of the program.

Most operational research services belong to the IS and ERIC components and would beprocured by NMP following guidelines from an expert working group composed of the NMP, MRC andother agencies. The research items would follow a list of agreed priority items, and would be evaluatedby the working group on an annual basis. The products from the operational research would be furtherevaluated by the annual program development reviews to ensure their quality and the relevance ofstudies to the enhanced program. Small professional services contracts, such as design of localinformation systems, belong to various components and would follow the Consultant Guidelines underQCBS.

Annex 6Page 7 of 8

Table B (Part II): Details of Procurement Methods and Links to Project Components (continued)

3. Services (continued)(d) Spray workers belong to the SVC and ERIC components. These would involve hiring seasonalworkers by districts using standard contract forms developed by NMP. Similar workers are already beenhired by local district malaria officers. Individual consultants belong to the IS component and would bethose who work in accounting, management and clerical functions in support of district societies, state ornational offices implementing the project.

(e) Publicity services for mass media for appropriate target groups would be procured by NMP andthe states directly from the Ministry of Information's radio and television stations. All publicity servicescontracts are estimated to cost less than US$200,000 each. The procurement of these would followstandard approaches used in other IDA-financed projects, such as National AIDS Control (Credit No.23500). The rates that would not exceed the standard rate of charges to other advertisers. Local folkmedia and community awareness and related IEC activities would be procured using sole-source, orusing QCBS by local district malaria societies or empowered committees, and following selectioncriteria described in the PIP. Training and workshops would be undertaken in accordance with GOIprocedures, and may include procurement, under sole-source selection, of selected extemal trainingexperts. Procurement would be against the costs for meetings, training materials, per diems (TA/DA),expert services and related fees. These would follow similar approaches used in other IDA-financedprojects, such as National AIDS Control (Credit No. 23500) and Cataract Blindness Control (Credit No.26110).

4. MiscellaneousThese involve operating expenses for all the components, including maintenance costs for civil

works and components, fuel costs for vehicles, salaries for incremental staff, and operational costs forspray workers. These would be procured on the basis of direct contracting, or three quotations,depending upon the situation.

Table B (Part III): Details of Disbursement and Retroactive Financing

Disbursements:The following will be the basis of disbursement on the basis of statements of expenditure: (a)

incremental operating costs; (b) consultants' services under contracts not exceeding $200,000 equivalentin the case of firms and $50,000 equivalent in the case of individuals; (c) contracts for goods and worksnot exceeding $300,000 equivalent each; (d) contracts for medicated mosquito nets not exceeding$300,000 equivalent each; and (e) contracts for vehicles and insecticides not exceeding $100,000equivalent each. Given the large size of the Credit and the disbursement period (66 months), a specialaccount of US$8 million equivalent will be used.

Retroactive financing:In order to facilitate a timely project start and to meet several costs associated with adoption of

the enhanced program, retroactive financing up to US$5 million equivalent (or three percent of thecredit) would be provided to cover eligible expenditures incurred after September 30, 1996.Expenditures would be for eligible insecticides, mosquito net program, malaria link functions, publicity,consultant services, training and workshops, and incremental operating costs.

Annex 6Page 8 of 8

Table C: Allocation of Loan Proceeds

Amount in IDA FinancingExpenditure Category US$ Million Percentage

Civil Works 5.3 90%

100% of foreignFurniture & Equipment 10.8 expenditures, 100% of localVehicles 2.7 expendituresDrugs (Injectables, D.E.C) & Supplies 6.1 (ex-factory cost) and 80% of

Biocides and L. fish 4.5 local expenditures for other

items procured locally

100% of foreignexpenditures, 100% of local

Medicated Mosquito Nets (MMNs) 7.0 expenditures(ex-factory cost) and 80% oflocal expenditures for otheritems procured locally

Insecticides (Pyrethroids) 64.3 85%

Training, Workshops & Fellowships 7.2IEC & Publicity 1.6 100%Research & Studies 1.4

Malaria link functions, NGO services, 43.2consultant services and operationalresearch

Operating Expenditures 10.5 80% of local expendituresMaintenance 0.3 incurred until June 30, 1999;

55% of expendituresincurred from July 1, 1999until June 30, 2001; and25% of expendituresincurred thereafter.

TOTAL 164.8

Annex 7

Project Processing Budget and Schedule

A. Bank Project Budget (US$ thousands) Planned ActualLending Development 40.0 39.9Pre-appraisal 238.0 228.4Appraisal 108.3 86.2Negotiations 10.3 9.7

TOTAL 396.6 364.2

B. Project Schedule Planned ActualTime taken to prepare the project (months 18 20between identification and effectiveness)First Bank mission (identification) November, 1995 November, 1995Appraisal mission departure October, 1996 February, 1997Negotiations February, 1997 April, 1997Planned Effectiveness Date June, 1997 September, 1997

Project Implementation Plan prepared by: MOHFW and NMP.

Preparation assistance: Consultants funded under Bank funds were A. Arata, E. Dib and R.Romano. Consultants funded under Japanese Grant for Project Preparation were M.Subramaniyam, N. Murthy, and G. Jenkins. Consultants funded under the Canadian Trust Fund(India Allocation) were K. Ranson and J. Vanderheyden. The consultant funded underNetherlands Trust Fund was S. Mehra.

Bank staff who worked on the IDA credit included: P. Jha (Task Manager), S. Habayeb (Back-up Task Manager), K. Casey, V. Ibabao, J. Mittman, J. Mukira, C. Powell-Ambassa, G.Stubblefield and S. Rao-Seshadri (SA2PH); M. Chand, R. Kumar, T. Measham, and S.Subramaniyam (SA2RS); E. Abedin and M. Jansen (ASTEN). Peer reviewers were A. Abrantes(LASHC), J. Hammer (PRDPE), and B. Liese (HSDDR). The Division Chief is R. Skolnik andthe Country Director is R. Drysdale.

Staff from external agencies who provided input on the IDA Credit include: N. K. Shah,Country Representative, India, WHO; V. Orlov and P. Arbani, Regional Malaria Advisers, WHOSEARO; K. Behbehani, Director CTD, WHO; B. Grose, ODA Delhi; and S. Meek, MalariaConsortium, London.

Annex 8Page I of 3

Documents in the Project File

A. Project Implementation PlanNMP (National Malaria Eradication Program). November 1995. "Malaria Control Project for World BankFinancing: Strengthening Malaria Control in India". New Delhi._.___* February 1996. "Supplementary Document: Strengthening Malaria Control in India". New Delhi._.___* February 1997. "Malaria Control Project with World Bank Assistance: Project Implementation Plan".New Delhi.

B. Bank Staff AssessmentsArata, A., Jha, P. 1996. "Review of the Revised Insecticide Policies for India: Outline".

British Council Division, British High Commission, New Delhi. 1996a. "Initial lessons from a communityfinancing of impregnated bednets trial in rural India". Unpublished paper.

_ 1996b. "Malaria: community financing of impregnated bednets in Keonjhar, Orissa".

Jha, P. , Ranson, K., Arata, A. 1996. "Technical Assessment and Economic gains of National Malaria Control inIndia".

Lines, J. 1996a. "Mosquito nets and Insecticides for Net Treatment: A discussion of existing and potentialdistribution systems in Africa". Unpublished paper.

. 1996b. "Making insecticide-treated nets widely available in India". Unpublished paper.

Rao-Seshadri, S., Jha, P., Ibabao, V., 1995. "Social Action Implementation Plan for Malaria Control Project".

World Health Organization and World Bank. "Operational Issues in Malaria Control: Report of a WorkingMeeting". Arlie, Virginia, USA, 1995.

C. Others including external publicationsAsenso-Okyere, W.K. 1994. "Socioeconomic factors in malaria control". World Health Forum 15:265-268.

Barlow, R. 1966. "The economic Effects of Malaria Eradication". American Economic Review1966(Supplement): 130-148.

Barlow, R., L.M. Grobar. 1986. "Cost and Benefits of Controlling Parasitic Diseases". World Bank, PHNTechnical Note 85-17, Washington DC

Bremen, A., H. Veeken. 1992. "Insecticide-impregnated bed nets for malaria control: a review of the field trials".Bulletin of the World Health Organization 70(3):293-296.

Carnevale, P., M. Cossemans. 1995. "Some Operational Aspects of the Use of MMN program Methods AgainstMalaria at Individuals and Community Level". Ann. Soc. belge Med. trop. 75:81-103.

Choi, H.W., J.G. Breman, S.M. Teutsch, S. Liu, A.W. Hightower, J.D. Sexton. 1995. "The Effectiveness ofInsecticide-Impregnated Bed Nets in Reducing Cases of Malaria Infection: A Meta-analysis of Published Results".Am. J. Trop. Med. Hyg 52(5):377-82.

Cohn, EJ. 1972. "Assessing the Costs and Benefits of Anti-Malaria Programmes: The Indian Experience".American Journal of Public Health 63(12): 1086-96.

Annex 8Page 2 of 3

Curtis, C.F. 1994. "Should DDT continue to be recommended for malaria vector control?" Medical andVeterinary Entomology 8:107-112.

El Gaddal, A.A., A.A.M. Haridi, F.T. Hassan, H. Husein. 1985. "Malaria control in the Gazira-Managil irrigatedscheme of the Sudan. Journal of Tropical Medicine and Hygiene 88:153-159.

Gandahusada, S., G.A. Fleming, Sukamto, T. Damar, Suwarto, N. Sustriayu, Y.H. Bang, S. Arwati, H. Arif. 1984."Malaria control with residual fenitrothion in Central Java, Indonesia: an operational-scale trial using both full andselective coverage treatments". Bulletin of the World Health Organization 62(5):783-794.

Glynn, J.R., J. Lines, D.J. Bradley. 1994. "Impregnated Bednets and the Dose-Severity Relationship in Malaria".Parasitology Today 10(7):279-81.

Gratz, N.S. 1996. "Comments on 'Adverse Assessments of Gambusia affinis"'. Journal of the American MosquitoControl Association 12(2): 160- 1.

Hammer,JS.. 1993. "Theeconomicsofmalariacontrol". TheWorldBankResearchObserver 8(l):1-22._ 1996. "Economic Analysis for Health Projects". World Bank Policy Research Working Paper 1611, Policy

Research Department, Washington, D.C.

Huailu, C., Y. Wen, K. Wuanmin, L. Chongyi. 1995. "Large-scale spraying of bednets to control mosquito vectorsand malaria in Sichuan, China". Bulletin of the World Health Organization 73(3):321-328.

Jana-Kara, B.R., W.A. Jihullah, B. Shahi, V. Dev, C.F. Curtis, V.P. Sharma. 1995. "Deltamethrin impregnatedbednets against Anopheles minimus transmitted malaria in Assam, India". J. Trop. Med Hyg. 98:73-83.

Jeffery, G.M. 1984. "The role of chemotherapy in malaria control through primary health care: constraints andfuture prospects." Bulletin of the World Health Organization 62(Suppl.):49-53.

Jha, P., K. Ranson, J-L Bobadilla. 1996 "Measuring the Burden of Disease and Cost-Effectiveness of HealthInterventions: A Case Study in Guinea." World Bank Technical Paper No. 333

Jonkman, A., R.A. Chibwe, C.O. Khoromana, U.L. Liabunya, M.E. Chaponda, G.E. Kandiero, M.E. Molyneux,T.E. Taylor. "Cost-saving through microscopy-based versus presumptive diagnosis of malaria in adult outpatientsin Malawi". Bulletin of the World Health Organization 73(2):223-227.

Kaewsonthi, S. 1991. "Workshop report and recommendations". In Targett, G.A.T. , ed., Malaria: waitingfor thevaccine. Chichester: John Wiley and Sons.

Kaewsonthi, S., A.G. Harding. 1984. "Cost and performance of malaria surveillance in Thailand". Soc. Sci. Med19(10):1081-1097.

Kere, J.F., N.K. Kere. 1992. "Bed-nets or spraying? Cost analyses of malaria control in the Solomon Islands".Health Policy and Planning 7(4):382-386.

Liese, B. 1991. "Malaria and the World Bank". In Targett, G.A.T.,ed., Malaria: waitingfor the vaccine.Chichester: John Wiley and Sons.

MacCormack, C.P., R.W. Snow, B.M. Greenwood. 1989. "Use of insecticide-impregnated bed nets in GambianPrimary health care: economic aspects". Bulletin of the World Health Organization 67(2):209-214.

Mills, A. 1991. "The economics of malaria control". In Targett, G.A.T., ed., Malaria: waitingfor the vaccine.Chichester: John Wiley and Sons.

_ 1992. "The economic evaluation of malaria control technologies: the case of Nepal". Soc. Sci. Med34(9):965-972.

Annex 8Page 3 of 3

1993. "Is malaria control a priority? Evidence from Nepal". Health Economics 2:333-347._.___ 1994. "The economics of vector control strategies for controlling tropical diseases". Am. J. Trop. Medhyg. 50(6):151-59.

Murray, C.J.L, A. Lopez. 1996. "The global burden of disease and injures) ". Harvard University Press.

Najera J.A., B.H. Liese, J. Hammer. 1993. "Malaria". In D.T. Jamison, W.H. Mosley, A.R. Measham, J.L.Bobadilla, eds., Disease Control Priorities in Developing Countries. New York: Oxford University Press.

Olliaro, P., J. Cattan . . .d D. Wirth. 1996. "Malaria, The Submerged Disease". JAMA 275(3):230-233.

Pattenayak, S., V.P. Sha r.pa, N.L. Karla, V.S. Orlov, R. S. Sharma. 1994. "Malaria Paradigms in India and ControlStrategies". Indian Journal of Malariology 31(4):141-99.

Picard, J., M. Aikins, P.L. Alonso, J.R.M. Armstrong Schellenberg, B.M. Greenwood, A. Mills. 1993. "A malariacontrol trial using insecticide-treated bed nets and targeted chemoprophylaxis in a rural area of The Gambia, WestAfrica". Transactions of the Royal Society of Tropical Medicine and Hygiene 87(Supplement 2):53-57.

Preker, A.S. 1996. "Economic analysis in the population, health and nutrition sectors: a conceptual framework fortask managers". Unpublished paper.

Ray, A.P., and G.K. Sharma. 1984. "The socio-economic aspects in the context of malaria and its control. In:Indo-uk Workshop on Malaria. Malaria Research Center (Indian Council of Medical Research), Delhi.

Schreck, C.E., L.S. Self. 1985. "Bed nets that kill mosquitoes". World Health Forum 6:342-344.

Schultz, L.J., R.W. Steketee, L. Chitsulo, J.J. Wirima. 1995. Antimalarials during pregnancy: a cost-effectivenessanalysis". Bulletin of the World Health Organization 73(2):207-214.

Shaw, A.P.M. 1989. "Comparative analysis of the costs and benefits of alternative disease control strategies:vector control versus human case finding and treatment". Ann. Soc. beige Med trop. 69(Suppl. 1.):237-253.

Singh, N., A.K. Mishra, O.P. Singh, A. Jaiswal, M.T. Khan. 1994. "Feasibility Study of Insecticide-impregnatedBednets for Malaria Control in Forested Villages of District Mandla (M.P.)". Indian Journal of Malariology31:136-40.

Sundar, R. 1995. "Household survey of health care utilization and expenditure". New Delhi: National Council ofApplied Economic Research.

Verma, O.P. 1975. "Cost of disease". Journal of the Indian Medical Association 65:60-64.

Wemsdorfer, G., W.H. Wemsdorfer. 1988. "Social and Economic Aspects of Malaria and Its Control". InWernsdorfer and I.A. McGregor, eds., Malaria: Principles and Practice of Malariology. New York: ChurchillLivingston.

World Bank. 1993. "World Development Report 1993: Investing in Health". New York: Oxford University Press._ 1996. "Implementation Completion Report: Brazil--Amazon Basin Malaria Control Project". Washington

D.C.: The World Bank._ 1996. "India: Country Economic Memorandum, Report No 15882-IN". Washington D.C.: The World

Bank.

World Health Organization. 1996. "Investing in health research and development: report of the Ad Hoc Committeeon Health Research Relating to Future Intervention Options". Geneva: World Health Organization.

Statement of Loans and Credits

Status of Bank Group Operations in IndiaIBRD Loans and IDA Credits in the Operations Portfolio

Difference Last ARPPOriginal Amount in US$ Millions Between expected Supervision Rating b/

Loan Fiscal and actual Development ImplementationProject ID or Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements a/ Objectives Progress

Credit

No.

Number of Closed Loans/credits: 353

Active LoansIN-PA-9925 L28450 1967 TALCHER THERMAL 375.00 0.00 79.90 26.20 106.10 S SIN-PA-9872 C19230 1988 GOI TAMIL NADU URBAN 0.00 300.20 45.47 57.61 99.85 S SIN-PA-9869 L30240 1989 GOI NATHPA JHAKRI HYDRO 485.00 0.00 0.00 265.66 240.29 S SIN-PA-9898 C20100 1989 GOI UPPER KRISHNA PHASE 0.00 160.00 0.00 16.42 8.91 U UIN-PA-9898 L30500 1989 GOI UPPER KRISHNA PHASE 165.00 0.00 120.00 45.00 165.00 U UIN-PA-9910 C20570 1989 GOI FAMILY WELFARE TRG ( 0.00 113.30 40.54 22.09 63.80 S SIN-PA-9941 L30960 1989 GOI MAHARASHTRA POWER 400.00 0.00 46.00 169.26 201.93 S SIN-PA-9956 L30930 1989 GOI ELECTRONICS 8.00 0.00 0.00 2.12 204.12 HS SIN-PA-9973 L29940 1989 STATE PUBLIC WORKS DEPTS STATE ROADS I 170.00 0.00 55.00 21.41 156.41 U UIN-PA-9990 C20080 1989 GOVT OF INDIA VOCATIONAL TRAINING 0.00 250.00 86.15 80.41 177.56 U UIN-PA-9996 C20220 1989 GOI NATIONAL SERICULTURE 0.00 147.00 21.95 30.41 71.72 S SIN-PA-9860 C21310 1990 GOI WTRSH PLAINS 0.00 55.00 0.00 26.41 8.06 S SIN-PA-9882 C21000 1990 GOI WTRSH HILLS 0.00 75.00 0.00 37.27 30.46 S SIN-PA-9890 C21150 1990 GO HYDERABAD W/S 0.00 79.90 0.00 35 .93 23.77 HS 5IN-PA-9895 C20640 1990 GO TECHNOLOGY DEVELOPME 0.00 55.00 0.00 35.11 26.88 HS SIN-PA-9895 L31190 1990 GOI TECHNOLOGY DEVELOPME 145.00 0.00 10.00 37.38 47.38 HS SIN-PA-9932 C21580 1990 GOI SECOND TN NUTRITION 0.00 95.80 28.28 21.50 31.16 HS SIN-PA-9940 C21330 1990 GOI POP. TRG (VII) 0.00 86.70 22.74 18.02 36.88 U UIN-PA-9965 C20760 1990 GOI PUNJAB IRR & DRAINAG 0.00 150.00 4.72 53.53 29.32 S SIN-PA-9981 L31960 1990 GOI CEMENT INDUSTRY REST 300.00 0.00 6.82 43.60 50.42 HS SIN-PA-9982 L32370 1990 GOI NOR REG TRANSM 485.00 0.00 0,00 331.25 307.12 S SIN-PA-9989 C21300 1990 GOI TECH EDUC I 0.00 235.00 24,26 88.35 82.27 5 SIN-PA-10361 C21730 1991 GO ICDS I (ORIS & ANDHR 0.00 96.00 21,65 29.99 36.81 S SIN-PA-10369 C22340 1991 GOVT OF INDIA MAHARASNTRA RURAL WS 0.00 109.90 0.00 62.41 58.70 5 UIN-PA-10381 L33640 1991 GOI GAS FLARING REDUCTIO 450.00 0.00 0.00 29.16 29.16 S SIN-PA-9877 C22410 1991 GOI DAM SAFETY 0.00 130.00 0.00 110.44 106.69 S UIN-PA-9885 L32580 1991 GOI/IPCL PETROCHEMICALS 12.00 0.00 0.00 4.92 4.71 S SIN-PA-9885 L32590 1991 GOI/IPCL PETROCHEMICALS 233.00 0.00 70.30 35.68 -127.02 S SIN-PA-9906 C22520 1991 GOI IND POLLUTION CONTRO 0.00 31.60 0.00 28.51 26.35 S SIN-PA-9906 L33340 1991 GOI IND POLLUTION CONTRO 124.00 0.00 0.00 38.62 -3.48 S SIN-PA-9958 C22150 1991 GOVT OF TAMIL NADU AGR.DEV.I (TN) 0.00 92.80 0.00 30.43 14.09 5 5IN-PA-9958 L33000 1991 GOVT OF TAMIL NADU AGR.DEV.I (TN) 20.00 0.00 0.00 20.00 1.25 5 SIN-PA-9988 C22230 1991 GO1 TECH EDUC II 0.00 307.10 51.37 160.66 137.61 S SIN-PA-9993 L33440 1991 BSES PRIVATE POWER UTIL 1 200.00 0.00 0.00 21.21 20.54 S SIN-PA-10390 C23280 1992 MAHARASHTRA FORESTRY 0.00 124.00 0.00 91.39 33.62 S SIN-PA-10391 C23410 1992 GOI WEST BENGAL FORESTRY 0.00 34.00 0.00 13.16 5.02 S SIN-PA-10393 C23500 1992 GOVT OF INDIA AIDS PREVENTION AND 0.00 84.00 0.00 47.93 35.42 S SIN-PA-10400 L34980 1992 GOI, TEC MAHARASHTRA POWER II 350.00 0.00 0,00 239.81 190.81 U HS tIN-PA-9888 L34360 1992 GOI POWER UTIL EFFIC IMP 265.00 0.00 0.00 139.12 94 .55 S S

C*4D

r 'IC

Difference Last ARPPoriginal Amount in US$ Millions Between expected Supervision Rating b/

Loan Fiscal and actual Development Implementation

Project ID or Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements a/ Objectives Progress

CreditNo.

IN-PA-9921 C23290 1992 GOI & STATES SHRIMP & FISH CULTUR 0.00 85.00 0.00 80.60 54.36 U U

IN-PA-9946 C23650 1992 GOI NAT. HIGHWAYS II 0.00 153.00 0.00 104.11 37.98 U U

IN-PA-9946 L34700 1992 GO NAT. HIGHWAYS II 153.00 0.00 0.00 153.00 0.00 U U

IN-PA-9963 C23940 1992 GOI POPULATION VIII 0.00 79.00 0.00 77.92 41.63 S S

IN-PA-10407 C24330 1993 GOI ADP - RAJASTHAN 0.00 106.00 0.00 59.72 13.33 S S

IN-PA-10408 C24390 1993 GOI BIHAR PLATEAU 0.00 117.00 0.00 97.25 46.35 S S

IN-PA-10410 C24490 1993 GOI RENEWABLE RESOURCES 0.00 115.00 0.00 96.90 172.00 S S

IN-PA-10411 C24500 1993 JHARIA MINE FIRE CON 0.00 12.00 0.00 6.80 6.25 5 5

IN-PA-10416 L35770 1993 PGC POWER SYSTEM 350.00 0.00 0.00 222.63 120.63 S S

IN-PA-10418 C24830 1993 GOI KARNATAKA WS & ENV/S 0.00 92.00 0.00 80.28 36.22 U U

IN-PA-10422 L36300 1993 GOT PRIVATE POWER DEVT T 20.00 0.00 0.00 19.49 19.49 U U

IN-PA-10423 L36320 1993 NTPC NTPC POWER GENERATIO 400.00 0.00 0.00 338.32 318.32 5 S

IN-PA-10424 C25280 1993 GOI NATL LEPROSY ELIMINA 0.00 85.00 0.00 61.45 27.57 HS S

IN-PA-9955 C25090 1993 GOI UTTAR PRADESH BASIC 0.00 165.00 0.00 97.25 2.01 HS SIN-PA-9959 C24090 1993 GOI RUB9BER 0.00 92.00 0.00 83.87 37.43 U U

IN-PA-9961 C25100 1993 GOI UP SODIC LANDS RECLA 0.00 54.70 0.00 41.57 10.00 S S

IN-PA-9977 C24700 1993 GOI ICDS II (BIHAR & MP) 0.00 194.00 0.00 181.79 57.54 S S

IN-PA-10448 C25720 1994 GOI FORESTRY RESEARCH ED 0.00 47.00 0.00 39.06 16.21 S S

IN-PA-10449 C2S730 1994 GOI ANDHRA PRADESH PORES 0.00 77.40 0.00 67.38 12.87 S S

IN-PA-10455 C26110 1994 GOI BLINDNESS CONTROL 0.00 117.80 0.00 110.76 14.21 S S

IN-PA-10457 C26300 1994 GOI POPULATION IX 0.00 88.60 0.00 83.28 8.93 S S

IN-PA-34162 C25940 1994 MAHARASHTRA EARTHQUA 0.00 246.00 0.00 164.71 81.48 S U

IN-PA-9870 L37530 1994 GOVT. OF INDIA CONTAINER TRANSPORT 94.00 0.00 0.00 82.60 37.27 S S

IN-PA-9964 C25920 1994 GOI WATER RES CONSOLID H 0.00 258.00 0.00 225.51 35.51 U S

IN-PA-10461 L39070 1995 GOI MADRAS WATER SUP II 6.00 0.00 0.00 .01 23.06 S S

IN-PA-10461 L39076 1995 GOI MADRAS WATER SUP II 269.80 0.00 0.00 269.80 0.00 S S

IN-PA-10463 C26450 1995 GOI INDUS POLLUTION PREV 0.00 25.00 0.00 25.63 24.99 S S

IN-PA-10463 L37790 1995 GOI INDUS POLLUTION PREV 93.00 0.00 0.00 88.00 -2.45 S S

IN-PA-10463 L37806 1995 GOI INDUS POLLUTION PREV 50.00 0.00 0.00 50.00 0.00 S s

IN-PA-10464 C26610 1995 GOI DISTRICT PRIMARY ED 0.00 260.30 0.00 231.29 21.36 S S

IN-PA-10476 C27450 1995 GOI TAMIL NADU WRCP 0.00 282.90 0.00 250.45 24.88 S SIN-PA-10489 C26630 1995 GOVERNMENT OF INDIA AP 1ST REF. HEALTH S 0.00 133.00 0.00 128.54 14.19 S S

IN-PA-10503 C26990 1995 AGRIC HUMAN RES DEVT 0.00 59.50 0.00 55.10 10.46 S S

IN-PA-10506 C27000 1995 GOI MP FORESTRY 0.00 58.00 0.00 50.28 -.27 S S

IN-PA-10522 C27330 1995 GOI ASSAM RURAL INFRA 0.00 126.00 0.00 115.07 7.08 U U

IN-PA-10563 L38560 1995 GOVT OF INDIA FINANCIAL SECTOR DEV 350.00 0.00 0.00 200.00 -150.00 S s

IN-PA-10563 L38576 1995 GOVT OF INDIA FINANCIAL SECTOR DEV 144.00 0.00 0.00 144.00 0. 00 5 S

IN-PA-10480 C27630 1996 GOVT OF INDIA B SEWAGE DISPOSAL 0.00 25.00 0.00 5.04 6.97 S S

IN-PA-10480 L39230 1996 GOVT OF INDIA B SEWAGE DISPOSAL 167.00 0.00 0.00 167.00 12.77 S S

IN-PA-10484 L40560 1996 GOI UP RURAL WATER 59.60 0.00 0.00 59.60 .70 S SIN-PA-10485 C27740 1996 GOVT OF INDIA HYDROLOGY PROJECT 0.00 142.00 0 .00 126.17 -4.00 S S

IN-PA-10529 C28010 1996 GOI ORISSA WRCP 0.00 290.90 0.00 259.84 -12.41 S SIN-PA-35170 L40140 1996 GOI ORISSA POWER SECTOR 350.00 0.00 0.00 350.00 0.00 S SIN-PA-35821 C28760 1996 GOI DISTRICT PRIM EDUC 2 0.00 425.20 0.00 421.36 0.00 S SIN-PA-35825 C28330 1996 GOI STATE HEALTH SYS II 0.00 350.00 0.00 328.62 6.36 S S

IN-PA-39935 C28380 1996 IL&FS ILFS-INFRAS FINANCE 0.00 5.00 0.00 4.91 .50 S SIN-PA-39935 L39920 1996 IL&FS ILFS-INFRAS FINANCE 200.00 0.00 0.00 200.00 0.00 S S

IN-PA-43310 C28620 1996 GO0 COAL ENV&SOCIAL MIT. 0.00 63.00 0.00 59.55 -3.00 S S

IN-PA-36062 C29160 1997 GOI ECODEVELOPMENT 0.00 28.00 0.00 28.17 0.00

Total 6,893.40 7,270.60 735.16 8,763.05 4,023.00

Active yLoas Closed Loans Total

On?4

Difference Last ARPPOriginal Amount in US$ Millions Between expected Supervision Rating b/

Loan Fiscal and actual Development ImplementationProject ID or Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements a/ Objectives Progress

CreditNo.

Total Disbursed (IBRD and IDA): 4,845.16 28,420.26 33,265.42of which has been repaid: 223.95 7,844.31 8,068.26

Total now held by IBRD and IDA: 13,204.89 19,981.10 33,185.99Amount sold 0.00 133.77 133.77

Of which repaid 0.00 133.77 133.77Total Undisbursed : 8,763.05 29.66 8,792.71

a. Intended disbursements to date minus actual disbursements to date as projected at appraisal.b. Rating of 1-4: see OD 13.05. Annex D2. Preparation of Implementation Summary (Form S90). Following the FY94 Annual Review of Portfolio performance (ARPP), a letter

based system will be used (HS = highly Satisfactory, S = satisfactory, U = unsatisfactory, HU = highly unsatisfactory) see proposed Improvements in Project and

Portfolio Performance Rating Methodology (SecM94-901), August 23, 1994.

Note:Disbursement data is updated at the end of the first week of the month.

(PDoq

O (D

Annex 9Page 4 of 6

IndiaSTATEMENTOF IFC's

Committed and Disbursed Portfolio(As of March 31, 1997)

In US$ Millions

Committed DisbursedIFC IFC -

FY Company Loan Equity Quasi Partic Loan Equity Quasi ParticApproval1964 MUSCO 0.00 .47 0.00 0.00 0.00 .47 0.00 0.001975 MUSCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001978 HDFC 0.00 .41 0.00 0.00 0.00 .41 0.00 0.001979 MUSCO 0.00 .19 0.00 0.00 0.00 .19 0.00 0.001981 ITW Signode 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001981 M&M 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001981 Nagarjuna Steel 0.00 .07 0.00 0.00 0.00 .07 0.00 0.001981 TISCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001982 Modi Cement 17.31 0.00 0.00 0.00 17.31 0.00 0.00 0.001984 Bihar Sponge 13.43 .63 0.00 0.00 13.43 .63 0.00 0.001984 India Lease 0.00 .35 0.00 0.00 0.00 .35 0.00 0.001986 EXB-City Mills .48 0.00 0.00 0.00 .48 0.00 0.00 0.001986 EXB-CECL .01 0.00 0.00 0.00 .01 0.00 0.00 0.001986 EXB-NB Footwear .19 0.00 0.00 0.00 .19 0.00 0.00 0.001986 EXB-Paharpur .22 0.00 0.00 0.00 .22 0.00 0.00 0.001986 EXB-STG .46 0.00 0.00 0.00 .46 0.00 0.00 0.001986 EXB-TAN .03 0.00 0.00 0.00 .03 0.00 0.00 0.001986 EXB-Wires & Fab. .11 0.00 0.00 0.00 .11 0.00 0.00 0.001986 GESCO 0.00 8.46 0.00 0.00 0.00 8.46 0.00 0.001986 India Equipment 0.00 .30 0.00 0.00 0.00 .30 0.00 0.001986 ITW Signode 0.00 .30 0.00 0.00 0.00 .30 0.00 0.001986 TISCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001987 Hindustan 8.49 0.00 0.00 0.00 8.49 0.00 0.00 0.001987 HDFC 0.00 .26 0.00 0.00 0.00 .26 0.00 0.001987 Titan Watches .97 .39 0.00 0.00 .97 .39 0.00 0.001988 GKN Invel 0.00 1,07 0.00 0.00 0.00 1.07 0.00 0.001988 Tata Telecom 0.00 .05 0.00 0.00 0.00 .05 0.00 0.001988 Titan Watches 1.99 0.00 0.00 0.00 1.99 0.00 0.00 0.001989 AEC 14.72 0.00 0.00 0.00 14.72 0.00 0.00 0.001989 Gujarat State 11.15 0.00 0.00 0.00 11.15 0.00 0.00 0.001989 JSB India 0.00 .37 0.00 0.00 0.00 .37 0.00 0.001989 Tata Electric 32.30 0.00 0.00 0.00 32.30 0.00 0.00 0.001989 TISCO 8.69 12.34 0.00 0.00 8.69 12.34 0.00 0.001989 UCAL 0.00 .63 0.00 0.00 0.00 .63 0.00 0.001990 CESC 19.05 0.00 0.00 0.00 19.05 0.00 0.00 0.001990 HOEL 0.00 .28 0.00 0.00 0.00 .28 0.00 0.001990 India Lease 1.31 .21 0.00 0.00 1.31 .21 0.00 0.001990 ICICI-IFGL 0.00 .16 0.00 0.00 0.00 .16 0.00 0.001990 ICICI-SPIC Fine 0.00 1.02 0.00 0.00 0.00 1.02 0.00 0.001990 IL & FS 12.75 0.00 1.81 0.00 12.75 0.00 1.81 0.001990 M&M 1.00 5.78 0.00 4.00 1.00 5.78 0.00 4.001990 MUSCO 0.00 .42 0.00 0.00 0.00 .42 0.00 0.00

Annex 9Page 5 of 6

Committed Disbursed-I IFC - IFC -

FY Company Loan Equity Quasi Partic Loan Equity Quasi ParticApproval

-f990 Tata Electric 30.26 0.00 0.00 0.00 30.26 0.00 0.00 0.001990 Tata Telecom 0.00 .02 0.00 0.00 0.00 .02 0.00 0.001990 Titan Watches 0.00 .12 0.00 0.00 0.00 .12 0.00 0.001990 TDICI-VECAUS 11 0.00 1.94 0.00 0.00 0.00 1.94 0.00 0.001991 Bihar Sponge 0.00 .05 0.00 0.00 0.00 .05 0.00 0.001991 Block KG-OS-IV 0.00 .02 0.00 0.00 0.00 0.00 0.00 0.001991 BSES 45.00 0.00 0.00 0.00 45.00 0.00 0.00 0.001991 Gujarat State 2.65 0.00 0.00 0.00 2.65 0.00 0.00 0.001991 HDFC 40.00 .32 0.00 0.00 40.00 .32 0.00 0.001991 ITW Signode 0.00 .11 0.00 0.00 0.00 .11 0.00 0.001991 Triveni 0.00 .36 0.00 0.00 0.00 .36 0.00 0.001991 VARUN 6.25 1.35 0.00 0.00 6.25 1.35 0.00 0.001992 Arvind Mills 0.00 6.55 0.00 0.00 0.00 6.55 0.00 0.001992 Creditcapital VF 0.00 .45 0.00 0.00 0.00 .45 0.00 0.001992 CESC 30.00 0.00 0.00 67.00 30.00 0.00 0.00 67.001992 GESCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001992 Indus VC Mgt Co 0.00 .01 0.00 0.00 0.00 .01 0.00 0.001992 Indus VCF 0.00 1.00 0.00 0.00 0.00 1.00 0.00 0.001992 Info Tech Fund 0.00 .64 0.00 0.00 0.00 .64 0.00 0.001992 Nippon Denro 28.57 5.77 0.00 0.00 28.57 5.77 0.00 0.001992 NICCO-UCO 2.06 .15 0.00 0.00 2.06 .15 0:00 0.001992 SKF Bearings 6.70 0.00 0.00 0.00 6.70 0.00 0.00 0.001992 Tata Telecom 0.00 .03 0.00 0.00 0.00 .03 0.00 0.001992 TISCO 0.00 3.03 0.00 0.00 0.00 3.03 0.00 0.001993 Arvind Mills 0.00 10.55 0.00 0.00 0.00 10.55 0.00 0.001993 GESCO 0.00 2.56 0.00 0.00 0.00 2.56 0.00 0.001993 HDFC 0.00 1.30 0.00 0.00 0.00 1.30 0.00 0.001993 India Equipment .60 0.00 0.00 1.47 .60 0.00 0.00 1.471993 Indo Rama 21.88 9.84 0.00 8.75 21.88 9.84 0.00 8.751993 IL & FS 0.00 3.11 0.00 0.00 0.00 3.11 0.00 0.001993 ITW Signode 0.00 .60 0.00 0.00 0.00 .60 0.00 0.001993 M&M 0.00 .71 0.00 0.00 0.00 .71 0.00 0.001993 Titan Watches 0.00 .52 0.00 0.00 0.00 .52 0.00 0.001993 Triveni 0.00 .75 0.00 0.00 0.00 .75 0.00 0.001993 20TH Century .93 .80 0.00 5.87 .93 .80 0.00 5.871994 Centurion Growth 0.00 2.39 0.00 0.00 0.00 2.39 0.00 0.001994 Chowgule 15.00 4.58 0.00 27.00 6.88 4.58 0.00 12.381994 Crdcap Asset Mgt 0.00 .32 0.00 0.00 0.00 .32 0.00 0.001994 DLF Cement 15.32 0.00 0.00 17.00 15.32 0.00 0.00 17.001994 Global Trust 0.00 3.19 0.00 0.00 0.00 3.19 0.00 0.001994 Gujarat Ambuja 0.00 8.23 0.00 0.00 0.00 8.23 0.00 0.001994 GESCO 0.00 2.03 0.00 0.00 0.00 2.03 0.00 0.001994 GKN Invel 0.00 .33 0.00 0.00 0.00 .33 0.00 0.001994 GVK 40.00 8.30 0.00 38.74 30.00 8.30 0.00 38.741994 India Equipment 0.00 .14 0.00 0.00 0.00 .14 0.00 0.001994 India Lease 0.00 .30 0.00 0.00 0.00 .30 0.00 0.001994 Indo Rama 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001994 ICICI-IFGL 0.00 .14 0.00 0.00 0.00 .14 0.00 0.001994 IL & FS 15.00 0.00 0.00 10.00 15.00 0.00 0.00 10.00

Annex 9Page 6 of 6

Committed DisbursedIFC IFC -

FY Company Loan Equity Quasi Partic Loan Equity Quasi ParticApproval1994 Nippon Denro 30.00 0.00 0.00 60.00 0.00 0.00 0.00 0.001994 Tata Electric 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001994 Taurus Starshare 0.00 7.17 0.00 0.00 0.00 7.17 0.00 0.001994 TCAMC 0.00 .16 0.00 0.00 0.00 .16 0.00 0.001994 TISCO 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001995 Centurion Bank 0.00 3.87 0.00 0.00 0.00 3.87 0.00 0.001995 Creditcapital VF 0.00 .60 0.00 0.00 0.00 .60 0.00 0.001995 EXIMBANK 25.00 0.00 0.00 0.00 25.00 0.00 0.00 0.001995 India Equipment 0.00 .33 0.00 0.00 0.00 .33 0.00 0.001995 ICICI-SPIC Fine 0.00 .86 0.00 0.00 0.00 .86 0.00 0.001995 ISIC 0.00 .32 0.00 0.00 0.00 .32 0.00 0.001995 JSB India 0.00 .84 0.00 0.00 0.00 .84 0.00 0.001995 Prism Cement 15.00 5.02 0.00 15.00 15.00 5.02 0.00 15.001995 Rain Calcining 19.25 5.40 0.00 0.00 6.00 4.72 0.00 0.001995 RPG Communicat 0.00 8.30 0.00 0.00 0.00 6.28 0.00 0.001995 Sara Fund 0.00 7.02 0.OQ 0.00 0.00 1.10 0.00 0.001995 SRF Finance 15.00 5.00 0.00 0.00 15.00 4.39 0.00 0.001996 CVF Oil Gas-AL 8.00 8.00 0.00 0.00 0.00 0.00 0.00 0.001996 India Direct Fnd 0.00 7.50 0.00 0.00 0.00 .78 0.00 0.001996 Indo Rama 0.00 2.14 0.00 0.00 0.00 2.14 0.00 0.001996 Indus II 0.00 5.00 0.00 0.00 0.00 2.00 0.00 0.001996 Indus Mauritius 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001996 ITW Signode 0.00 .54 0.00 0.00 0.00 .54 0.00 0.001996 Moser Baer 5.70 .60 0.00 0.00 5.70 0.00 0.00 0.001996 NICCO-UCO 0.00 .22 0.00 0.00 0.00 .22 0.00 0.001996 United Riceland 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001996 VARUN 5.67 0.00 0.00 6.00 5.67 0.00 0.00 6.001997 CEAT 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001997 GVK 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001997 NICCO-UCO 0.00 .13 0.00 0.00 0.00 .13 0.00 0.001997 Owens Corning 25.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001997 WIPRO 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001997 20TH Century 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Portfolio Totals: 648.50 185.79 1.81 260.83 499.13 158.22 1.81 186.21

Pending Commitments1996 * CESC 11 -BLINC 0.00 0.00 0.00 37.001996 * DEV CREDIT BANK 0.00 1.89 0.00 0.001995 * IB VALLEY POWER 50.00 20.00 0.00 0.001997 * ITC CLASSIC 20.00 0.00 10.00 0.001994 * NEYVELI POWER 30.00 18.00 0.00 150.001994 * NIPPON DENRO ISP 0.00 6.00 0.00 0.001997 * NIPPON EXPANSION 15.00 6.00 0.00 25.001997 * OWENS CORNING 25.00 0.00 0.00 0.001995 * SPIC-RGHTS ISSUE 0.00 .86 0.00 0.001996 * TARUN SHIPPING 0.00 .80 0.00 0.00

Annex 10Page 1 of 2

India at a glancePOVERTY and SOCIAL South Low-

India Asia Income Development dlamond-Population mid-1995 (mi/lions) 929.4 1,243 3,188GNP per capita 1995 (USS) 350 350 480 Life expectancyGNP 1995 (billions US$) 327.0 435 1,466

Average annual growth, 1990-95

Population (%) 1.8 1.9 1.8 GNP GrossLabor force (%) 2.1 2.4 1.9 per primaryMoat recent estimate (latest year evailable since 1989) capita enrollmentPoverty headcount index (% of population)Urban population (% of total population) 27 26 29Life expectancy at birth (years) 62 e1 63Infant mortality (per 1, 000 live births) e8 73 58 Access to sah wabrChild malnutrition (% of children under 5) 63 82 38Access to safe water (X of population) 85 81 75Illiteracy (% of population age 15+) 48 50 34Gross primary enrollment (% of school-age population) 102 98 105 India

Male 113 110 112 Low-incomegroupFemale 91 87 98

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1975 1985 1994 1995GOP (billions US$) 91.0 214.3 301.2 329.9 Economic ratlosGross domestic investment/GDP 20.8 23.9 23.2 24.2Exports of goods and non-factor services/GDP 8.2 8.0 11.3 12.4 Openness of economyGross domestic savingsfGDP 20.4 20.8 21.5 22.3Gross national savings/GDP 20.8 21.1 22.3 22.6Current account balance/GDP -0.1 -2.8 -0.9 -1.8Interest payments/GDP 0.3 0.e 1.3 1.3 Savings InvestmentTotal debt/GDP 15.1 19.1 32.9 31.0Total debt service/exports 13.1 22.7 26.3 25.6Present value of debGDP .. .. 23.5Present value of debtlexports . *- 176.7 Indebtedness

1975-84 1988-95 1904 1996 1996044(average annual growth) IndiaGDP (factor cost) 4.0 5.1 6.3 6.0 6.0 Low-lncone groupGNP per capita 1.7 3.1 6.1 4.6 4.68 ~ Lwicm ruExports of goods and nfs 4.0 10.7 4.1 17.8 8.9

STRUCTURE of the ECONOMY

(56 of GDP) 1975 1985 1994 1098 roh rats of output and Investment 56)Agriculture 40.5 33.0 31.1 30.3 20Industry 23.7 28.1 28.0 28.9 10

Manufacturing 16.7 17.9 17.4 18.4Services 35.8 38.8 40.9 40.9 .10 92 04 95

Private consumption 70.2 68.1 68.2 67.3 -20General government consumption 9.4 11.1 10.3 10.3 GDI GDPImports of goods and non-factor services 6.e 9.1 13.0 14.3 -0G

1975-84 1985-95 1994 1995 8(average annual growth) Growth rates of exports and Imports (Y6Agriculture 2.4 3.8 4.9 3.0 30Industry 5.2 5.9 8.3 10.0 20

Manufacturing 5.4 5.8 9.0 12.2Services 4.7 5.7 6.0 5.3 1\Private consumption 4.4 4.7 5.0 4. 00 01 92 50 04 06General govemment consumption 8.2 4.2 3.0 8.5 *10Gross domestic investment 3.7 5.1 19.8 11.2 .20Imports of goods and non-factor services 9.3 4.7 19.8 13.7 Export G importGross national product 4.0 5.2 6.5 6.4

Note: 1995 data are preliminary estimates.

Annex 10Page 2 of 2

IndiaPRICES and GOVERNMENT FINANCE

Domestic prices 1975 1985 1994 1995 Inflaton(%)(% change) 15Consumer prices 5.7 5.5 10.2 10.2ImplicitGDPdeflator -1.5 7.6 11.1 8.5 10

Govemment finance s(% of GDP) 0Current revenue .. 23.5 21.2 21.3 go o1 92 93 94 95

Current budget balance .. 2.2 0.2 -1.2 -GDPdef. | CPlOverall surplus/deficit .. -10.4 -9.0 -10.3

TRADE1975 1985 1994 1995 .

(millions US$) Export and Import levels (mIll. USS)Total exports (fob) 9,463 26,763 32,502 40,000

Tea 611 311 292Iron .. 473 413 463 30.000

Manufactures .. 5,639 21,088 25,770Total imports (cif) .. 17,298 31,269 38,256 2.0

Food .. ~~~~~~ ~~~~~~ ~~~~1,321 1,464 2,354Fuel and energy .. 4,054 5,928 6,885Capital goods .. 3,603 6,366 7,152 0

Exportpriceindex(1987=100) .. 80 118 121 99 9o 91 92 93 94 95

Import price index (1987=100) .. 96 121 128 j Exports rnportsTerms of trade (1987=100) .. 83 98 94

BALANCE of PAYMENTS1975 1985 1994 1995

(millions USS) Current account balance to GDP ratlo (%)Exports of goods and non-factor services 5,650 12,773 34,047 40,971Imports of goods and non-factor services 5,990 19,422 39,047 47,207 99 90 9 92 94 95

Resource balance -340 -6,649 -5,000 -6,236

Net factor income -191 -1,653 -3,905 -4,677 T INet current transfers 470 2,207 6,200 5,499 |2

Current account balance,before official transfers -61 -5,995 -2,705 -5,414 .3 1

Financing items (net) 636 6,807 9,563 3,120Changes in net reserves -575 -812 -6,858 2,293

Memo: |

Reserves including gold (mill. US$) 2,064 9,730 24,079 21,930Conversion rate (local/US$) 8.7 12.2 31.4 32.4

EXTERNAL DEBT and RESOURCE FLOWS1975 1985 1994 1995

(millions US$) fComposItIon o total debt, 1995 (mIll. US$)Total debt outstanding and disbursed 13,708 40,971 98,990 102,318

IBRD 436 2,396 11,120 9,849 G AIDA 2,809 9,750 17,666 17,499 s5 9849

Total debt service 822 3,634 10,516 11,910 | BIBRD 89 313 1,598 1,716 F 17499IDA 24 124 315 357 29120

Composition of net resource flows COfficial grants 511 450 612 650 2719Official creditors 1,260 1,424 976 1,732Private creditors 83 2,276 148 1,863 DForeign direct investment 85 106 620 1,300 E 4843Portfolio equity 0 0 4,729 1,273 32603

World Bank programCommitments 917 2,882 2,066 1,427 A - IBRD E -BilateralDisbursements 531 1,375 1,707 1,318 B -IDA D-Other multilateral F - PnvatePrincipal repayments 63 157 1,021 1,169 C-IMF G-Short-termNetflows 467 1,218 686 149 I 1

Interest payments 50 280 891 903Net transfers 417 938 -205 -754

SA2CI and International Economics Department 8/20/96

IMAGING

Report No.: 16571 INType: PAD