The Government of India and the World Bank signed agreements amounting to IDA credit of $7.98 million additional finance for the Uttarakhand Decentralized Watershed Development Project which will support the ongoing watershed development Project in Uttarakhand.

 Agreement for the Additional finance for theUttarakhand Decentralized Watershed Development Project was signed by  Shri Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; Shri M. H. Khan, Secretary, Watershed on behalf of the Uttarakhand Government; and Mr. Roberto Zagha, Country Director India, on behalf of the World Bank. 

The additional funding of $7.98 million for the Uttarakhand Decentralized Watershed Development Project will sustain support for ongoing activities like helping farmers set up small agribusinesses.  These are critical to achieving the planned 10% increase in rural incomes in project areas by the end of the implementation period.  The need for additional funds was brought about largely by increases in prices of goods and services since the Project began in 2004.

According to a mid-term impact survey of 400 households in 40 villages conducted by TERI, real income in these households has grown by 7%, two percentage points higher than the mid-term target of 5%. This increase is driven by farm income growth which is twice the non-farm income growth during this period.  Irrigated area under the project has increased by 10%, cropping intensity has gone up by 24%, and crop yields by 7%. The area under high-value horticulture has increased by 30% in the project villages.

Speaking on the occasion, Shri Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance  said that if current trends are maintained, the targeted 10 percent increase in the household income by end of the Project is likely to be realized for the project.  The additional financing will help support critical agribusiness activities and further boost rural incomes, he added.

The credit is provided by the World Bank’s fund for the poorest, the International Development Association (IDA), and has 35 years to maturity and a 10-year grace period.

Uttarakhand is currently implementing 2 State projects together amounting to $203 million. This constitutes around 1% of the total net commitments in India.

International development financing sustains a watershed project in Uttarakhand to boost rural incomes and agribusiness opportunities. An additional IDA credit was provided to the Uttarakhand Decentralized Watershed Development Project to sustain watershed activities and agribusiness support addressing cost increases and to advance the project's rural income objectives; mid-term survey results show household real income and agricultural indicators have improved, and the credit carries long-term maturity and a grace period.