9th Five Year Plan (Vol-1)
[ Vol1-Index ] - [ Vol2-Index ]
<< Back to Index

Implementation, Delivery Mechanism and Institutional Development
Introduction and Review || Strategy for the Ninth Plan || People's Participation || Monitoring and Evaluation - Methodological and Organisational  Issues

Strategy for the Ninth Plan

5.18 For bringing about improvement in project design and implementation, the following steps are required to be taken during the Ninth Plan.

(i) There is a need for better prioritisation of Plan projects. Ongoing projects, in preference to new projects, should have the first charge on the Department’s budgetary allocations so as to optimise on early completion of incomplete projects. The Ministry of Finance and the Planning Commission have already initiated suitable actions in this regard. Some of the measures being proposed include shelving of projects which have not made substantial progress in terms of physical and financial targets during the Eighth Plan, and according priority to projects which are at an advanced stage of completion.

(ii) Improving the quality of projects "at entry" is essential for reducing time and cost overrun of projects. This calls for scientific approach to project planning. Inadequate design and financial planning have resulted in a substantial time and cost overruns in the past. A number of steps are required to be taken to improve project planning. First, the organisations responsible for project design must be made sensitive to the factors that generally contribute to time and cost overruns through dissemination of the findings of ex-post evaluation of projects, so that adequate attention is paid at the planning stage itself to prevent their recurrence. Second, there is a need for capacity building of these organisations through training and interactions with technical institutes. There is evidence that in some projects, technological options have not been realistically evaluated. Third, interagency coordination must begin with the project preparation itself, so as to minimise the procedural delays later.

(iii) The detailed procedures for submission, examination and approval of projects need to be reviewed and clearly defined limits should be set in terms of project cost and processing time for approval by various agencies. A decision has already been taken in this regard. However, it is necessary to review the capacity of the agencies in terms of both staff and technical competence so as to ensure that clearance is given only after detailed scrutiny of the proposals. Wherever required, capacity building of these agencies must be undertaken and accountability fixed.

(iv) There is a need for an appropriate manpower management policy for effective project implementation. Short tenure of key project staff, inadequate provision of technical and administrative personnel for projects and lack of training of project staff affect project implementation. Selection of key project staff must precede project implementation and their continuity ensured during project implementation. It has often been noticed that because of the requirement of approval of higher authorities and formalities of recruitment the required project staff is not available on time. Training of project staff at all stages of the project cycle is also needed.

(v) Adoption of a simplified procedure for acquisition of land is required to avoid time and cost overrun of projects. If the resettlement cost assessment is realistic, much of the delays associated with land acquisition can be eliminated. In China, in the case of one bridge project, the resettlement cost was as high as 46 percent of the total project cost, and the project was successfully implemented. This aspect is, to a large extent, related to the methodological issues of project planning. Appropriate guidelines for cost-benefit analysis of the project must be formulated for realistic assessment of the financial and economic rates of return and the issues relating to subsidy and pricing of project output/service must be brought upfront. The Planning Commission should review the existing guidelines and effect necessary changes.

(vi) One aspect that merits consideration is whether the project entities can be delinked from the budget, so as to ensure that budgetary considerations do not affect the adequate and timely flow of resources to the projects. This is particularly relevant in the context of the reduced role of the Government in the public sector investment and infrastructure projects. This would require some binding arrangements with the financial institutions for loan-financing of projects. This switch-over will eventually give rise to a new dimension for repayment. This, in turn, will induce the policy makers to focus attention on policy reforms and cost recovery, and consequently, make the project entities more cost-conscious. It may also help in moving towards privatisation of some project entities.

(vii) The issues of cost recovery, loan repayment and cost consciousness are also relevant in the context of sustainability of project output, which has been affected for lack of maintenance of capital equipment and infrastructure. The issue of sustainability should be addressed clearly at the planning stage itself and within a broad policy framework authority needs to be delegated to the agencies responsible for project operation and maintenance for setting economic prices and fees. The agencies responsible for project appraisal must ensure that the issue of sustainability of output has been adequately addressed in the project proposals.

(viii)The trends of macro-economic variables and the policy evolution, including socio-political changes have to be considered in preparing projects, estimating costs and working out financial and economic returns. Changes in interest rates, exchange rates, fiscal deficit and inflation rate influence the project outcome in different ways. Explicit consideration of these aspects is required in working out the project viability.

(ix) Monitoring and evaluation are important components of investment management. Currently, adequate follow-up action is usually not taken on monitored information, partly because of the inability of the project management to take prompt action and partly due to non-adherence to the accountability criteria. With the delegation of authority to the project management to resolve all implementation related problems within the authority of the Ministry/Department and strict adherence to accountability, the monitoring system is likely to be effective. All large projects must be post-evaluated and the cost of such studies should form a part of the project cost. The findings of such studies need to be discussed in seminars and given publicity to generate awareness among project managers, planners and policy makers about the problems in design and implementation and to draw lessons.

(x) Deficiency in contract management has been a major cause for time and cost overrun. Lack of transparency in contract document, lack of professionalism of the project management and inadequate delegation of authority cause most of the disputes and delays. The weaknesses in the legal systems also stand in the way of speedy disposal of disputes. Apart from building the capacity and skill of the project management, there is a need for suitable amendments to laws so as to prevent frequent adjournment and to ensure speedy disposal of cases.

Development Programmes

5.19 During the past fifty years, there has been an overall progress in all areas of social concern. Yet, the achievements are mixed, with stark contrasts and disparities. The chronic food deficit economy of the fifties and the sixties has been transformed into a self-sufficient one and an elaborate food security system is in place to enable the country to face even droughts without any imports or foreign help. Yet, more than 300 million people live below the poverty line and millions of children remain undernourished. As per the Sixth All India Education Survey, about 94 percent of our population have access to a primary school within one kilometre of walking distance and nearly 85 percent to a middle school within a distance of three kilometres; yet, nearly half of our population and 61 percent of our females above seven years remain illiterate. In the health sector, many communicable diseases have been eliminated or controlled, there have been a marked reduction in birth rate, death rate and infant mortality rate, and life expectancy at birth has risen by about twenty years during the last four decades. However, these achievements are uneven, with marked disparities across States and population groups. Examples of such contrasts and disparities pervade all the development activities and this has happened in spite of the existence of a large number of programmes targetted in favour of the poor and socially disadvantaged. Why is it that these programmes have failed to make much impact on the wellbeing of a large section of the people, even though the welfare goals have been so well laid down in the Constitution and various policy pronouncements?

5.20 The performance of many of these development programmes has been evaluated and reviewed primarily with reference to their immediate objectives, and to identify the factors that have contributed to their success or failure. As will be evident from the review of past experience in the execution of development programmes, presented later in the chapter, the factors affecting the performance of various sectoral programmes are more or less similar in nature. They mostly relate to inadequate resource allocation, faulty design, weaknesses in implementation and institutional bottlenecks. Yet, development programmes have been and continue to be formulated and implemented without dwelling over the basic issues as to why the same weaknesses in design and implementation persist and why corrective mid-course actions for better programme performance are not taken on the findings of concurrent and ex-post evaluation. Obviously, the root causes of unsatisfactory programme performance are systemic rather than symptomatic.

5.21 It is of utmost importance to understand the role such systemic factors could play in influencing the design, implementation, resource allocation and outcome of the development programmes. The single most important reason as to why the programmes aimed at improving access to basic services and development opportunities have not commanded the priority and resources these deserve, is that social goals have not been central to our development strategy. The success or failure of the development process has never been equated with the success/failure of programmes in the areas of poverty alleviation, education, health or safe drinking water supply. Social policies seem to have been formulated within a pre-established macro-economic framework which does not explicitly consider the redistributive and welfare issues. It must be recognised that if the policy-making in the social sectors remains an appendix to economic decisions concerning resource allocation, pricing, fiscal stabilisation, balance of payments etc., it is unlikely that the design and implementation of development programmes would be purged of their deficiencies. Some of the reforms that are required in the planning process to address the systemic deficiencies are discussed in the next two sections dealing with the precondition for success and the strategy for programme implementation.

5.22 At the operational level, the factors affecting the performance of development programmes are of two types, viz; (a) those relating to diversion, non-utilisation and improper use of funds allocated to these programmes and (b) those relating to design and implementation of programmes. A review of some Centrally sponsored welfare schemes revealed that diversion of funds from priority areas had been substantial. The Reports of the Comptroller and Auditor General of India (CAG) have also hinted at substantial diversion of funds under rural development and welfare programmes. Apart from diversion of funds, available resources have often not been allocated to the priority areas in a sector. Allocation to education has been biased in favour of higher education rather than primary education and that to the health sector in favour of urban health care systems. Until recently, the public distribution system too was highly urban based.

5.23 While diversion and improper use of resources have adversely affected the performance of programmes and led to sub-optimal outcomes, the more fundamental problems of the development process relate to the inadequacies in the planning and implementation of programmes. Evaluation studies conducted by the Planning Commission also suggest that the poor performance of development programmes/projects is primarily due to deficiencies in planning and implementation. Adequate attention is seldom paid to the assessment of beneficiary needs, the fixation of criteria for selection of target groups, the choice of implementation methods and delivery system, the adequacy of physical and financial inputs, choice of indicators to be monitored and the sustainability of programme benefits. Rigid guidelines for the implementation of programmes, high operational costs, improper targetting leading to leakage of benefits to areas/people not targetted, extending the coverage of a programme to a larger (than desired) area/population to avoid the risk of exclusion, inadequacy of the delivery systems of most programmes etc. are all reflections of inadequate planning of programmes before implementation.

5.24 The Planning Commission alone has, till date, conducted nearly 170 evaluation studies. The State Evaluation Organisations have completed another 2200 evaluation studies. Governments, both at the Central and the State levels, can save considerable time and resources, if the findings of these evaluation studies are put to practice in order to select socially acceptable and operationally practical implementation methods. This will avoid inappropriate assumptions about the needs, or forms of cooperation, of the target population and help select appropriate implementing agencies.

5.25 The lessons learnt from the experience of executing thousands of development schemes during the last forty years can be briefly summarised as follows:

(i) There is inadequate analysis of available information during programme formulation. This happens primarily, because there is no established mechanism through which the programme agencies can have ready access to the relevant information regarding the target groups / areas or the findings of evaluation studies. As a result, avoidable errors at the planning stage creep in. For example, in a programme designed for the empowerment of rural women, the basic and well- known fact that most rural women in India are illiterate was not explicitly considered while formulating the operational rules and designing the delivery system. In one rural employment generation programme, there was no correspondence between the seasonal variations in labour supply and the release of money for undertaking employment generating schemes. The installation of piped water supply schemes in areas with erratic electricity supply without the provision of adequate electricity is another example. In a district in one State, 50 percent of the community tube wells installed remained inoperative for varying periods upto two years in the absence of energisation. Some rudimentary analysis of available information at the micro level and logical framework analysis would have helped avoid such errors that lead to wastage of resources and sub-optimal programme impact.

(ii) There is another lacuna which persists at the stage of formulating schemes/projects. While estimating the cost of schemes/ projects, it has become a common practice to apply standard per unit cost. The unit cost varies from region to region because of variations in topography and because of unique nature of some regions like north eastern regions. Consequently, project costs tend to be underestimated and time is wasted later in prolonged correspondence to get additional funds sanctioned by the Central Ministries. This has become a perennial problem in the case of Centrally sponsored programmes.

(iii) Formulation of a multiplicity of programmes in an area of social concern without any specific thrusts can lead to several problems. Available resources are spread too thinly across a large number of projects leading to sub - optimal project outcome. For the out-of-school girl children, for example, a number of programmes are currently in operation. In the formal system itself, special incentives for girls are provided in most States and some of these schemes, as in Tamil Nadu and Maharashtra, have improved the retention rate of girl children. The Girl Centres under Non Formal Education (NFE), the scheme for adolescent girls in Integrated Child Development Scheme (ICDS), the National Open Schools, the Ashram Schools in tribal areas and some special component plans are also trying to reach the same target group. Many such Centres in the non-formal sector do not attract adequate response. As a result, many grassroots level education centres turn out to be non-viable and ineffective resulting in wastage of precious resources.

(iv) The general approach in implementation is ‘top-down’ and ‘target-oriented’. Some physical and financial targets are sought to be achieved in most programmes. However, evaluation studies by the Planning Commission reveal that the fulfilment of these targets does not necessarily ensure that the programme objectives are being met. In many anti- poverty programmes, though the targetted number of families/beneficiaries /districts/villages have been covered and the allotted money spent, such programmes have failed in making the desired impact on the wellbeing of the beneficiaries. The implementing agencies are often more concerned with the mere fulfilment of targets assigned to them than with the actual flow of benefits to the target groups.

The ‘top-down’ approach in planning and implementation has led to formulation of schemes without assessment of the needs of the people. It was observed that in almost all the TSP states, the major part of the Tribal Sub-Plan funds was spent on the creation of infrastructure like irrigation structures and buildings for schools and health centres, most of which are not being used by the tribals for lack of complementary inputs. Had such programmes been planned more holistically in coordination with other complementary programmes taking into account the beneficiary needs and the profiles of the people and area, their impact would have been greater. In a district of one state, it was noted that financial allocations under different employment generating schemes are being pooled to create structures for soil conservation measures, school buildings and many other capital intensive works in which the involvement of the local people is minimum. In many programmes, the targets and financial allocations are often unrealistic. In a study of the functioning of community health centres in one State, it was noted that the number of patients seeking treatment under a national programme is many times more than the target set and it was reported that the resources allocated are grossly inadequate even to carry out the most inexpensive clinical tests. However, because of the "target oriented" and "top down" approach to implementation, targets are shown to have been met on paper, whereas in practice, neither the actual incidence of the disease gets reported, nor do the patients receive quality treatment.

(v) For some programmes separate implementing agencies are created, whereas these are actually implemented by the existing line departments, who work independently for different components of a programme. This results in lack of focus on target groups, wastage of resources and lack of coordination among the line departments. The creation of such agencies without the necessary institutional changes makes them redundant and affects the implementation and operation of programmes. An evaluation study conducted by Programme Evaluation Organisation (PEO) revealed that there is a separate administration for planning and implementation of tribal development projects, whereas in practice various schemes are being implemented through the existing line departments. Except in Andhra Pradesh and Maharashtra, the project officer and staff of ITDPs have very little role to play in the design, implementation, monitoring and co-ordination, for which ITDPs were created.

(vi) Monitoring and Evaluation (M and E) of programmes are undertaken to introduce the necessary correctives steps in programme formulation and implementation. In spite of the existence of an elaborate M and E system in the country, the findings of M and E are not put to use for a variety of reasons. First, the physical and financial indicators regularly monitored often do not reflect the actual performance of programmes . In an area development programme, for example, it was found that, while at the aggregate level the targets with regard to areas under forestry, irrigation and soil conservation were met, the primary objective of the scheme, viz.; integrated watershed development was not achieved, as these activities were not integrated at the watershed level. Second, whatever information is generated through the M and E system, this is not analysed with a problem-solving perspective to aid the implementing agencies to re-assess the original schedule of work. Third, there is no mechanism through which the planners and implementing agencies can have ready access to information in a format that is useful to them. Publicity and systematisation of available information in a user-friendly format is needed to ensure their use in decision- making.

(vii) Lack of accountability of the implementing agencies either to the Government or to the people has been the single major cause for diversion of funds in development programmes. It is well known that implementing agencies and administrators can get away easily with time and cost overruns or non-fulfilment of targets by attributing these to factors beyond their control. In many cases, they may indeed be justified, as most programmes leave too many loose ends at the planning stage. Nevertheless, several cases of improper use of funds meant for anti-poverty programmes have come to light. In one of the employment generating schemes, it was found that the muster rolls were not maintained at the grassroots level. A voluntary organisation unearthed several cases of large scale misappropriation of funds in rural development programmes in four districts of one State. This happened primarily because of lack of people’s participation in the implementation of programmes, lack of transparency in the operation of schemes and inadequacy of monitoring mechanism. Suitable institutional reforms, involvement of the people and grassroots level non-government agencies in the formulation and implementation are needed to overcome this problem.

(viii) The operational cost of some programmes tends to be abnormally high, partly because of redundant and ineffective administration and partly due to other inadequacies in planning and implementation. In a programme for rural women, it was observed that the unit delivery cost was nearly four times the benefit received by a beneficiary. This happened because of inadequacies in planning and implementation. The delivery cost also increases because of vertical implementation of a number of programmes in an area. For example, in one State it was noted that the number of village level functionaries involved in the administration of rural development programmes was as many as 22.

(ix) Several social sector programmes are formulated without addressing the question of sustainability of benefits. The primary objective of such programmes should be to build the capability of the vulnerable groups to become self-reliant. In reality, most programmes run with ever expanding Government budgets and thus pre-empt resources which could find better alternative uses. It is possible to recover the full or a part of the operation and maintenance costs of many programmes, if service delivery is improved and if people are involved in the formulation, implementation and operation of schemes. The PEO evaluation study of the Accelerated Rural Water Supply Programme (ARWSP) in 1996 revealed that the facilities created under the programme have become defunct over time for lack of maintenance. As a result, the number of no- source villages has been rising, even though more and more villages are being brought under the programme. But, in one village in a district of Maharashtra, the maintenance of a piped water supply scheme was being looked after by the villagers successfully. Decisions on water consumption norms, sanitation rules and water charges are taken collectively in the Gram Sabha, the violations of which attract penalty. They employed an operator with their own money and had reserve funds for exigencies. The PEO field teams came across other instances of successful management and operation of schemes by the people themselves.

(x) The most distressing part of financing of the development projects and programmes under the Five Year Plan regime has been the failure to ensure timely and adequate flow of funds to the implementing agencies. This requires proper management of flow of funds. It may be mentioned in this context that in the budgetary process which has been provided for in the Constitution and practised in India, there is very little of management of funds flow. All the rules and regulations which have been formulated are only intended to control the public expenditure. This is only a part of the management system. However, when the Five Year Plans were launched, the Central and the State Governments faced a practical problem of integrating the Plans into the annual budgetary process. This was because planning is a long term exercise, whereas government budgeting is a short term annual exercise. Even so, the Central and the State Governments split the Five Year Plans into Annual Plans and integrated the Annual Plans into the regular budgets, which also came to obtain legitimacy as they were approved by the Central and State legislatures. By so doing, they solved only one problem, namely, getting the required approval of the legislature for incurring expenditure under Plan account. But it did not ensure regular flow of funds from the Central Government or the State Governments to all the implementing departments. Both the Central Government, and the State Governments faced ways and means problems. In the case of Central Government this was overcome by resorting to ad hoc borrowing from the Reserve Bank of India (RBI) against the security of adhoc treasury bills, which came to be known as deficit financing. But no such corresponding financial facility was available for the State Governments. Whenever they faced financial problems, they used to take recourse to unauthorised overdrafts from the RBI. Therefore, whatever revenues they received on cash flow basis was allotted to the priority sectors as identified by the political leaders in power. All the development projects and programmes did not receive regular instalments due for spending. More often, the funds start flowing only in the middle of the calendar year in small amounts and the flow picks up by the end of December. Even so, not even the second instalment due for planned project is received by the departments. Invariably most of the allocated money reaches the departments either in February or March. This untimely flooding of funds creates a piquant situation and leads to unduly hasty expenditure. To begin with, the project implementation work is affected by bits and bits for want of funds and after reaching the last month of the financial year, the implementing departments are not in a position to absorb the entire amount. Consequently, some funds lapse. Repetition of such mismatched flow of funds adversely affects the implementation of Plan projects and programmes.

Even to this day, no satisfactory solution has been devised to get over this problem. This has become a major stumbling block in the successful implementation of the Plan programmes and projects.

Pre-conditions for Success

5.26 The general weaknesses in the programme formulation and implementation notwithstanding, there have been several cases of success. Such success stories have generally come about where different models of participation by people’s institutions are being adopted. There is evidence that voluntary organisations, co-operatives, government agencies and even the corporate sector have successfully designed and implemented rural development programmes and have contributed towards improving access to public services through people’s participation. One can identify a number of other factors like meticulous planning, social leadership, external technological and managerial inputs, holistic approach, availability of resources, dedication of government officials and continuous monitoring of progress in implementation which have contributed to success. But, without exception, people’s participation has been a critical factor. The people have participated at various stages of planning and implementation of programmes through the Gram Sabha and formation of socially functional groups like self-help groups (SHF) and producer/ beneficiary co-operatives.

5.27 However, people’s participation cannot come about automatically, as the vast majority of the rural people are poor and illiterate and not capable of organising themselves as agents of socio-economic change because of their lack of knowledge and inadequate access to information, and physical and financial resources. In fact, in most of the successful interventions, the constraints and inertia of the rural people have been removed through the involvement of facilitators/animators coming from all walks of life. Among them were political leaders, social activists, philanthropists, corporate managers and government officials who successfully catalysed the development process through people’s participation.

5.28 In the past, some political leaders were instrumental in mobilising the milk producers of Kaira district of Gujarat to form the village and district level co-operatives which eventually gave birth to the Anand Milk Union Ltd., a successful venture in the co-operative sector. Some individual social activists who initiated the rural development through social mobilisation in pilot projects, went on to form voluntary organisations, like: Bharatiya Agro-Industries Foundation, Gram Gaurav Pratisthan, Hind Swaraj Trust and Kishore Bharati, and replicated their models of development successfully. In the corporate sector, rural development schemes through people’s participation have been successfully implemented by Tata Steel in Chhotanagpur (Bihar), by Mafatlal Group in Parbhani (Maharashtra), by Lupin Laboratories in Bharatpur (Rajasthan) and by Hindustan Lever in Etah (Uttar Pradesh). These are only a few of a number of such successful interventions facilitated by individuals and organisations.

5.29 There have been successes in development programmes initiated by government agencies too. The impact of programmes like Development of Women and Children in Rural Areas (DWCRA) in Andhra Pradesh, Kerala, Nagaland and Tripura and of the Employment Guarantee Scheme (EGS) in Maharashtra has been encouraging. There are also examples of how villagers, through their collective efforts, have mobilised resources and taken advantage of government programmes to improve their access to basic needs. In a village in the Nizamabad district of Andhra Pradesh, the villagers formed a Village Development Committee and generated funds through donations, first to build a community hall and then a stable and pucca safe drinking water supply system and an upper primary school over a period of time. In the process, they linked their resources with the funds available in the various programmes initiated by the Government. Pooling of resources, both physical and financial, has enabled them to have a piped water supply system with five bore wells and pumps and an upper primary school with 8 rooms and 6 teachers of whom 3 were community sponsored. The same villagers contributed Rs. 90.00 to get an electric sub-station sanctioned to the village.

5.30 One interesting lesson that could be learnt from most of these successful interventions is that the development of the disadvantaged groups is not possible with focus on a single activity. Most of the agencies and activists, who catalysed the development process, initially focussed on a single activity but, soon realised that deprivation of the poor is multi-dimensional and that a multi-pronged strategy is needed both for social mobilisation of people and for sustainabiliy of the development process. It was noted that without addressing the problem of illiteracy, ill health, poverty and the forward and backward linkages of their primary activities simultaneously, the people could not be motivated to participate in the development process. They soon had to change their approach from "project" focus to "holistic". This lesson underscores the need for convergence and inter-programme synergy in implementation of our development programmes.

5.31 These success stories are, however, localised and have not been replicated on a wider scale, partly because of inadequate physical, financial and human resources of the organisations involved, and partly due to the weakness of the existing social institutions in promoting and sustaining the processes and methods adopted in the successful interventions. In a country where the number of absolute poor exceeds 300 million and many more do not have adequate access to basic minimum needs, such isolated experiments cannot make any perceptible impact on social and economic development. Yet, these micro level experiments represent the seeds of change which, if multiplied on a wider scale, can contribute significantly towards realisation of the development goals like poverty alleviation, health for all and universalisation of elementary education. The challenge, therefore, is to multiply the seeds of change sown in the success stories. Multiplication on a wider scale would obviously require institutionalisation of the processes and methods adopted in these interventions.

[ Vol1-Index ] - [ Vol2-Index ]
^^ Top
<< Back to Index