India First Resilient Kerala Program Development Policy Operation

Public Disclosure Authorized
The World Bank

Resilient Kerala Program (P169907)
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PGD77
INTERNATIONAL DEVELOPMENT ASSOCIATION
PROGRAM DOCUMENT
FOR A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 115.2 MILLION AND US$ 90.4 MILLION
(US$250 MILLION EQUIVALENT)

TO THE
REPUBLIC OF INDIA
FOR THE
FIRST RESILIENT KERALA PROGRAM DEVELOPMENT POLICY OPERATION
May 31, 2019

Social, Urban, Rural, and Resilience Global Practice

South Asia Region
.
This document has a restricted distribution and may be used by recipients only in the performance of their
official duties. Its contents may not otherwise be disclosed without World Bank authorization.
The World Bank
Republic of India
GOVERNMENT FISCAL YEAR
April 1 – March 31
CURRENCY EQUIVALENTS
(Exchange Rate Effective as of April 30, 2019)
Currency Unit = U.S. dollar (US$)
US$ 1.00 = INR 69.56
INR 1.00 = US$ 0.01
US$ 1.00 = SDR 0.7218
Regional Vice President: Hartwig Schafer

Country Director: Junaid Kamal Ahmad
Senior Practice Director: Ede Jorge Ijjasz-Vasquez
Practice Manager: Christoph Pusch
Task Team Leaders: Elif Ayhan
Deepak Singh
Balakrishna Menon Parameswaran
The World Bank
ABBREVIATIONS AND ACRONYMS
ADB Asian Development Bank KSEB Kerala State Electricity Board

AEMU Agroecological Management Unit KSTPII Second Kerala State Transport Project
AEZ Agroecological Zone KWA Kerala Water Authority
AIIB Asian Infrastructure Investment Bank LSGD Local Self-Government Department
CPF Country Partnership Framework LSGI Local Self-Government Institution
CPI Consumer Price Index M&E Monitoring and Evaluation
CSO Civil Society Organization MIS Management Information System
DDMA District Disaster Management Authority MLD Million Liters Per Day
DEA Department of Economic Affairs MTN Medium-Term Note
DOECC Directorate of Environment and Climate NIUA National Institute of Urban Affairs
Change NPAs Nonperforming Assets
DPO Development Policy Operation NRK Nonresident Keralite
DRM Disaster Risk Management O&M Operations and Maintenance
EOC Emergency Operation Center PBMC Performance-Based Maintenance Contract
FDI Foreign Direct Investment PDNA Post-Disaster Needs Assessment
FRBM Fiscal Responsibility and Budget PDO Program Development Objective
Management PFM Public Financial Management
GDP Gross Domestic Product PWD Public Works Department
GFDRR Global Facility for Disaster Risk PWS Piped Water Supply
Reduction and Recovery RBCMA River Basin Conservation and
GO Government Order Management Authority
GoI Government of India RBI Reserve Bank of India
GoK Government of Kerala RKDP Rebuild Kerala Development Programme
GRM Grievance Redress Mechanism RKI Rebuild Kerala Initiative
GRS Grievance Redress Service RKI-IC Rebuild Kerala Initiative Implementation
GSDP Gross State Domestic Product Committee
GST Goods and Services Tax RKP Resilient Kerala Program
HLEC High-level Empowered Committee RPSIA Rapid Poverty and Social Impact Assessment
ICT Information and Communication Technology SAPCC State Action Plan on Climate Change
IDFC Infrastructure Development Finance SC Scheduled Caste
Company SDG Sustainable Development Goal
IMF International Monetary Fund SGST State Goods and Services Tax
IRS Incident Response System SOP Standard Operating Procedure
IWRM Integrated Water Resources ST Scheduled Tribe
Management SWM Solid Waste Management
JRDNA Joint Rapid Damage and Needs TCP Town and Country Planning
Assessment ULB Urban Local Body
KfW Kreditanstalt für Wiederaufbau (German UN United Nations
Development Bank) UNISDR United Nations International Strategy for
KIIFB Kerala Infrastructure Investment Fund Board Disaster Reduction
KRWSA Kerala Rural Water Supply and WRD Water Resources Department
Sanitation Agency WSS Water Supply and Sanitation
KSDMA Kerala State Disaster Management Authority
The World Bank
REPUBLIC OF INDIA
RESILIENT KERALA PROGRAM
TABLE OF CONTENTS
SUMMARY OF PROPOSED FINANCING AND PROGRAM .......................................................................3
1. INTRODUCTION AND COUNTRY CONTEXT ...................................................................................6

1.1. BACKGROUND ..................................................................................................................... 6
1.2. COUNTRY CONTEXT ............................................................................................................ 7
2. MACROECONOMIC POLICY FRAMEWORK....................................................................................9
2.1. RECENT ECONOMIC DEVELOPMENTS............................................................................................ 9
2.2. MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY ........................................................ 11
3. GOVERNMENT PROGRAM ........................................................................................................18
4. PROPOSED OPERATION ............................................................................................................20
4.1. LINK TO GOVERNMENT PROGRAM AND OPERATION DESCRIPTION .......................................... 20
4.2. PRIOR ACTIONS, RESULTS AND ANALYTICAL UNDERPINNINGS .................................................. 21
4.3 TECHNICAL ASSISTANCE.................................................................................................... 35
4.4. LINK TO CPF, OTHER BANK OPERATIONS AND THE WBG STRATEGY .......................................... 38
4.5. CONSULTATIONS AND COLLABORATION WITH DEVELOPMENT PARTNERS ............................... 39
5. OTHER DESIGN AND APPRAISAL ISSUES ....................................................................................40
5.1. POVERTY AND SOCIAL IMPACT .................................................................................................... 40
5.2. ENVIRONMENTAL ASPECTS ......................................................................................................... 42
5.3. PFM, DISBURSEMENT, AND AUDITING ASPECTS ......................................................................... 43
5.4. MONITORING, EVALUATION AND ACCOUNTABILITY .................................................................. 45
6. SUMMARY OF RISKS AND MITIGATION .....................................................................................45
ANNEX 1: POLICY AND RESULTS MATRIX ..........................................................................................50
ANNEX 2: FUND RELATIONS ANNEX ..................................................................................................54
ANNEX 3: LETTER OF DEVELOPMENT POLICY.....................................................................................57
ANNEX 4: ENVIRONMENT AND POVERTY/SOCIAL ANALYSIS TABLE ..................................................62
ANNEX 5: SENDAI FRAMEWORK FOR DISASTER RISK REDUCTION ......................................................64
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LIST OF FIGURES
Figure 1. Kerala Fiscal Indicators (% of GSDP) ............................................................................................ 11

Figure 2. Kerala Deficit and Debt Dynamics ................................................................................................ 11
Figure 3. Central Government Fiscal Deficit and Debt-GDP (%) ................................................................. 12
Figure 4. India Public Debt Sustainability: Baseline and Stress-Test Scenarios .......................................... 12
Figure 5. Kerala Debt Paths under Alternative Scenarios ........................................................................... 17
Figure 6. RKI Institutional Framework: Roles and Responsibilities ............................................................. 19
LIST OF TABLES
Table 1. India Selected Economic Indicators FY14–FY20 ............................................................................ 13

Table 2. India’s Selected Fiscal Indicators FY14–FY20 ................................................................................ 14
Table 3. Kerala Selected Fiscal Indicators FY14–FY22................................................................................. 17
Table 4. DPO Prior Actions and Analytical Underpinnings.......................................................................... 36
The Resilient Kerala Program Development Policy Operation was prepared by a multisectoral team led by
Balakrishna Menon, Elif Ayhan, and Deepak Singh (GSURR); and consists of Anup Karanth, Naho Shibuya, Illika
Sahu, Atishay Abbhi, Ella Jisun Kim, Harjot Kaur, Harsh Goyal, Uri Raich, Mehul Jain, Hemang Karelia, Heather
Sophia Fernandes, Vidya Mahesh, Heather Sophia Fernandes and Lilian McArthur (GSURR); Anil S.V. Das, Smita
Misra, Halla Maher Qaddumi, Abedalrazq F. Khalil, Chabungbam Rajagopal Singh, Srinivasa Rao Podipireddy,
Ravikumar Joseph, Mathews K. Mullackal, and Vaideeswaran S (GWADR); Nagaraja Rao Harshadeep (GENDR);
Pawan G. Patil (GENME); Arnab Bandyopadhyay, Sony Thomas, Indranil Bose, and Wei Yan (GTRTR); Mika
Torhonen (GSULN); Dilip Ratha (GSJDR); Pedro Arizti, Supriti Dua, Heenaben Yatin Doshi, Enoka
Wijegunawardene, Bogdan Constantinescu, and Fabian Seiderer (GGODR); Vinayak Narayan Ghatate, Karthik
Laxman, and Chakib Jenane (GFADR); Fatima Shah (OPSPQ); Aurelien Kruse and Rangeet Ghosh (GMTDR); Martin
Serrano (LEGOG); and Victor Ordonez (WFACS).
The team benefited from the guidance of Sameh Naguib Wahba, Director; Christoph Pusch, Practice Manager
(GSURR); Junaid Kamal Ahmad, Country Director; Hisham A. Abdo Kahin, Operations Manager; and Sumila
Gulyani, Program Leader (SCAIN); as well as OPCS and SARDE Teams.
The peer reviewers who provided advice at various stages of preparation are Ming Zhang, Practice Manager
(GSU10); Marcus J. Wishart, Lead Water Resources Management Specialist (GWA02); Wilhelmus Gerardus
Janssen, Lead Agriculture Economist (GFA06); Dominic Pasquale Patella, Sr. Transport Specialist (GTR03); and Ana
Campos Garcia, Sr. DRM Specialist (GSU13).
Finally, the World Bank team would like to express its gratitude for the collaboration of the Government of Kerala
in the preparation of this Development Policy Operation.
The World Bank
SUMMARY OF PROPOSED FINANCING AND PROGRAM
BASIC INFORMATION
Project ID Programmatic If programmatic, position in series

P169907 Yes 1st in a series of 2
Proposed Development Objective(s)
The Program Development Objective (PDO) is to enhance the State of Kerala's resilience against the impacts of natural
disasters and climate change.
Organizations
Borrower: REPUBLIC OF INDIA
Implementing Agency: STATE OF KERALA
PROJECT FINANCING DATA (US$, Millions)
SUMMARY
Total Financing 250.00
DETAILS
International Development Association (IDA) 250.00

IDA Credit 250.00
INSTITUTIONAL DATA
Climate Change and Disaster Screening
This operation has been screened for short and long-term climate change and disaster risks
Overall Risk Rating
Substantial
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The World Bank
Results
Prior Actions Indicative Triggers Indicator Name
Prior Action 1: The GoK has adopted the Result 1: Resilient recovery from
Rebuild Kerala Development Program for Trigger 1: The GoK has issued guidelines for
2018 floods is implemented in line
enhancing disaster and climate resilience project selection, preparation, and budgeting,
with the RKDP priorities and
through policy, regulatory and institutional including criteria for project readiness,
guidelines, and benefit women and
actions with inclusive and participatory feasibility, and resilience, for the RKDP.
children.
approaches.
Prior Action 2: The GoK has adopted the new Trigger 2: The GoK has issued legal instructions Result 2: Additional public and
flood cess, with effect as of June 1, 2019 for for mobilizing private institutional and retail private financial resources are
financing resilient recovery efforts. finance for financing resilient recovery efforts. mobilized for resilient recovery.
Trigger 3: The GoK has updated and published

Prior Action 3: The GoK has adopted new the State Disaster Management Plan, Result 3: Improved capacity for
protocols for enhancing emergency incorporating disaster risk reduction and emergency, disaster, and climate
preparedness and response capacity of various climate resilience principles and policies and risk management with outreach to
departments. including emergency management and vulnerable communities.
outreach to vulnerable communities.
Prior Action 4: The GoK has established a Result 4: Improved river basin
cross-sectoral State-level committee to draft a Trigger 4: Draft River Basin Conservation and planning and water infrastructure
River Basin Conservation and Management Management Act has been submitted to the
operations management for climate
Authority Act establishing a River Basin State Assembly for approval.
resilience at the State level.
Conservation and Management Authority.
Prior Action 5: The GoK has notified 1 the Result 5: More resilient and
Trigger 5: The GoK has instituted/amended
establishment of five agroecological zones and policies, guidelines, and programs for sustainable agriculture based on
the reorganization of the Agriculture agroecological zones and enhanced
expansion of agriculture risk insurance uptake.
Department along agroecological zones. agriculture risk insurance.
Trigger 6: The GoK has adopted performance-

Prior Action 6: The GoK has notified the criteria based management contract model for
managing the core road network, incorporating Result 6: Improved physical and
for the identification/determination of the core
design and performance standards and institutional resilience of the core
road network and mandated the review of
disaster-related emergency response module. road network, including in hilly
PWD road policies, construction codes, and
manuals to ensure the resilient design, Trigger 7: The GoK has undertaken institutional areas where most tribals are
streamlining in the roads sector to address located.
construction, and maintenance of core road
network. institutional and resource fragmentation and to
strengthen core sector institutions.
Trigger 8: The GoK has reorganized

institutional arrangements to create a single
Result 7: Unified and more up-to-
land record and integrated map for Kerala
date gender-disaggregated land
unifying the current Deeds Registry, Record of
records in high risk areas.
Rights, and Field Book (map) records and
services.
1 ‘Notified’ means publicly declaring the Government decision specific to the subject matter.
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Prior Actions Indicative Triggers Indicator Name
Prior Action 7: The GoK has established a Trigger 9: The GoK has amended TCP Act for
committee to revise the Town and Planning risk-informed master planning. Result 8: Risk-informed master
Country Act to make master plans risk plans are notified and funds for
informed and to revise the annual expenditure Trigger 10: The GoK has revised annual multi-year municipal infrastructure
planning and budget guidelines for urban local expenditure planning and budget guidelines for investments are allocated in annual
bodies to undertake multiyear municipal urban local bodies to undertake multiyear plans by urban local bodies.
infrastructure investments. municipal infrastructure investments.
Trigger 11: The GoK has adopted the policy and

institutional program for strengthening water
Prior Action 8: The GoK has established a supply services including service delivery
cross-sectoral committee to prepare the policy models, O&M cost recovery, MIS, and
and institutional program for strengthening Grievance Redress Mechanism. Result 9: Improved water supply
water supply and sanitation services and their and sanitation services.
resilience to disasters and impacts of climate Trigger 12: The GoK has adopted a State
change. Sanitation and Waste Management Strategy,
incorporating cost-effective septage and waste
management models.
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The World Bank
IDA PROGRAM DOCUMENT FOR A PROPOSED CREDIT TO REPUBLIC OF INDIA
1. INTRODUCTION AND COUNTRY CONTEXT
1.1. BACKGROUND
1. The 2018 floods and landslides in Kerala revealed a series of interconnected problems in disaster
preparedness, emergency management systems, and more importantly, in the management of reservoirs and
water resources in the State. The main challenges and vulnerabilities of Kerala—emblematically—follow the
course of the river, starting from the basins and reservoirs upstream, to the developments in the cities and towns
midstream, all through to farms and livelihoods downstream. The lack of management of the river led to
catastrophic impacts on property, infrastructure, and lives and livelihoods of people, especially affecting the poor
and vulnerable segments of the population. Addressing the underlying drivers of floods and landslides and better
preparing the State for future disasters therefore, follows the course of the river: (i) upstream through integrated
water resources management (IWRM); (ii) midstream through improved planning, land use, and infrastructure
and services; and (iii) downstream through ecologically sound agriculture and irrigation practices. This defines the
areas of transformational reforms required for building resilience so that Kerala would not face the same level of
devastation in future disasters.
2. The State Partnership between the Government of Kerala (GoK) and the World Bank defines how to
systematically address these interconnected problems for protecting lives, livelihoods, and assets of people, as
well as securing the development gains of the State. The scale and comprehensive nature of the changes needed
to address the underlying causes of floods and landslides requires engaging with the State at a broader and higher
level over an extended period. The depth and breadth of the engagement need to be supported by using all the
tools at the World Bank’s disposal, including policy dialogue, political economy analysis, sector engagements,
partnerships, and collaborations with other development partners, and the civil society, as well as bringing in IDA
resources to build a platform for the first State Partnership. The State Partnership, described as the core of the
World Bank Group’s Country Partnership Framework (CPF) for India for FY18-22 2, aims to bring about systemic
changes in state capabilities through policy shifts and institutional transformations. In the case of Kerala, the State
Partnership means working in cross-cutting themes and priority sectors to build systems of resilience in a fiscally,
environmentally, and institutionally sustainable way against natural disasters and climate induced extreme
events.
3. There are three unique aspects of the first State Partnership that the GoK and the World Bank have
established through the proposed operation: (i) the confluence and the combination of the two stories noted
above, (ii) strong commitment of the State for the reform agenda right from the highest level all the way through
the technical and administrative levels, (iii) the use of development policy financing to launch the engagement
and structure the medium-term transformative shifts in policies, institutions, and programs, rather than as a
onetime intervention to effect a limited change.
4. The proposed operation, which forms the foundation for the State Partnership, supports the policy and
institutional reform program of the GoK for enhancing the State’s resilience against disasters and impacts of
climate change. The heavy monsoon of 2018 brought widespread flooding to several districts of Kerala and
triggered thousands of small to big landslides. The extreme and prolonged rainfall spell in August led to the worst
2 Report Number 126667
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flooding in Kerala in nearly a century, affecting almost 5.4 million people, or one-sixth of the State’s population.
The GoK recognized that a traditional approach to recovery and reconstruction would not lead to comprehensive
preparedness for future disasters and the floods should be taken as ‘a challenge and an opportunity to rebuild the
State to ensure better standards of living to all sections of the society.’ 3 The World Bank’s engagement with the
GoK has followed a two-pronged approach—(i) supporting the assessment of impacts of the disaster and assisting
recovery and reconstruction through restructuring ongoing investment operations and (ii) helping establish
policies, institutions, and systems that are required to build systemic resilience to disaster risks and climate
change. This has opened the door to establish a long-term partnership with the State for a Resilient and Green
Kerala. This approach is also aligned with the World Bank’s Climate Change Action Plan of mainstreaming disaster
and climate resilience in the development agenda. The proposed operation of US$250 million, the first in a series
of two Development Policy Operations (DPOs), responds to this context by supporting policy reforms for
mainstreaming long-term resilience to disaster risks and impacts of climate change across the State’s key areas of
development. The proposed operation will be financed by IDA. While India is currently eligible for only IBRD
financial terms, IDA Blend financial terms will be applied to the operation under the amendments approved by
the Board based on the IDA18 midterm review.
1.2. COUNTRY CONTEXT
5. India continues to be the world’s fastest growing major economy. After growing at 8.2 percent in
FY16/17, the economy expanded at a slower pace of 7.2 percent in the following year. In the current fiscal year,
growth is expected to remain at 7.2 percent. Data for the first three quarters suggest that growth has been broad-
based, with an acceleration in industrial growth on the production side and growing contributions from gross fixed
capital formation and exports on the demand side. Meanwhile, the external headwinds that characterized the
first half of the fiscal year have subsided. The decline in oil prices since October 2018 has allowed the current
account deficit to return to relatively benign levels. Likewise, the large portfolio capital outflows that materialized
from April 2018 onward have reversed. Foreign reserves stood at US$411.9 billion, as of end-March 2019,
equivalent of about 9.7 months of imports. Going forward, growth is projected to firm up and stabilize at around
7.5 percent, thanks to resilient private consumption, a rise in exports of goods and services and a gradual increase
in investments. The current account deficit is projected to reach 2.6 percent in FY18/19 and to decline thereafter.
6. With a steady decline in poverty since 1994 and the highest level of human development in India,
Kerala’s challenges are increasingly about the quality of public services and infrastructure. Poverty levels in the
State, 8 percent, are among the lowest in the country. 4 After 2005, Kerala grew and reduced poverty faster than
many other states, with growth being driven mainly by services. Kerala has 99 percent literacy, the highest life
expectancy, and the lowest rates of infant mortality in the country. Although Kerala is home to a small share of
India’s poor, pockets within the State record a high incidence of poverty. While the level of economic and human
development is high in Kerala, the State lags in the development of quality infrastructure. Moreover, existing
infrastructure is highly vulnerable to disasters risks and climate change. Low level of investments in infrastructure
due to fiscal constraints coupled with inefficiencies in the allocation of scarce resources and inadequate quality of
management in public institutions have led to poor quality of infrastructure.
7. Kerala is exposed to hydrometeorological and geophysical hazards and faces challenges in building
resilient communities and infrastructure in the context of climate change. The State is vulnerable to increased
intensity and frequency of flooding during the monsoon period, a water shortage during peak summer months
3 The policy statement of the GoK as per Government Order G.O.(P)No.16/2018/P&EA, dated November 9, 2018.
4 World Bank. 2017. India State Briefs - Kerala: Poverty, Growth, and Inequality.
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along with a subsequent increase in urban temperature, and a potential increase in coastal erosion along the
highly populated coastline due to rising sea levels. The Kerala State Disaster Management Authority (KSDMA)
notes that the State is prone to cyclone, monsoon storm surge, coastal erosion, sea-level rise, tsunami, flood,
drought, lightning, landslide (debris flows), land subsidence, and earthquake. It has a high-average annual
precipitation of about 3,000 mm and approximately 90 percent of rainfall occurs during two monsoon periods.
Almost 15 percent of the State is prone to floods. The high intensity storms during the monsoon months result in
heavy discharges in the rivers, while the prolonged dry seasons jeopardize farmers’ livelihoods and security of
drinking water. Additionally, Kerala has a diverse topography ranging from the high ranges to midland and coastal
plains and lowland areas near the coast that fall 3 m below sea level. This combination of intense rainfall in the
high ranges with a drastic elevation difference over a short distance causing peak runoffs, combined with flat
terrain toward the western coast, presents the conditions for rapid flooding.
8. A Joint Rapid Damage and Needs Assessment (JRDNA) was conducted in September 2018 by the GoK,
supported by the World Bank and the Asian Development Bank (ADB). The assessment estimated the recovery
needs at INR 250 billion or US$3.56 billion (equivalent to 3.6 percent of FY17/18 gross state domestic product
[GSDP]) for priority sectors alone. The JRDNA formed the basis for the comprehensive Post-Disaster Needs
Assessment (PDNA), led by the United Nations (UN) in October 2018, which estimated the total recovery needs at
US$4.4 billion. The sectors that suffered the worst damage were transport, rural infrastructure, livelihoods,
housing, and urban infrastructure. The losses were amplified owing to several factors, including inadequate water
resources management (WRM), poor early warning systems and protocols, unplanned development in disaster-
prone areas, and poor-quality infrastructure. Without immediate recovery, reconstruction, and long-term
resilience building efforts, the recent disasters may undermine the progress that the GoK has made in reducing
poverty and promoting shared prosperity.
9. Following the abatement of floods, the GoK established the Rebuild Kerala Initiative (RKI), a state-level
institutional modality for formulating and coordinating the implementation of building a Green and Resilient
Kerala. Through establishing the RKI, the GoK aims to establish a streamlined and transparent process of decision
making for comprehensive and resilient recovery and rebuilding from the 2018 floods. The RKI aims to catalyze
the State’s transformational shift toward risk-informed sustainable development 5 by putting in place policies,
institutions, and systems for enhancing resilience to disasters and impacts of climate change; by ensuring higher
standards of infrastructure, assets, and livelihoods for resilience; and by fostering equitable, inclusive, and
participatory reconstruction for building back better.
10. The RKI, with support from the World Bank and other partners, has developed the Rebuild Kerala
Development Programme (RKDP), a comprehensive government program for a Green and Resilient Kerala,
through a participatory and inclusive approach. The RKDP will be supported by the World Bank through a
programmatic series of DPOs that create an enabling platform for multisectoral policy and institutional
engagement with the State. This will be complemented by a strong technical assistance program to implement
the reforms and strengthen key institutions. In response to the GoK’s request, the World Bank has tentatively
agreed to reallocate US$45 million from the Second Kerala State Transport Project (P130339) to support
immediate recovery works and finance critical technical assistance after the safeguards disclosure requirements
have been met. The World Bank is also preparing an investment operation aimed at building resilient urban
infrastructure and strengthening urban local bodies (ULBs). The proposed World Bank support will aim to
maximize finance for development by helping the State leverage private sources of finance to support the RKDP
5 Government Order; G.O.(P)No.16/2018P&EA dated November 11, 2018.
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and through enhancing private sector participation in recovery and resilience building. Finally, the World Bank is
collaborating with several development partners, as well as thinktanks and civil society entities to broaden
capacity support for the RKDP. Together, these form the foundation of the World Bank’s emerging State
Partnership with Kerala.
2. MACROECONOMIC POLICY FRAMEWORK
2.1. RECENT ECONOMIC DEVELOPMENTS
11. India’s growth remains robust. After growing at 8.2 percent in FY16/17, the economy expanded at a
somewhat slower pace of 7.2 percent in the following year. In FY18/19, growth is expected to remain at 7.2
percent. Data for the first three quarters of the year suggest that growth has been broad-based, with an
acceleration in industrial growth on the production side, and growing contributions from gross fixed capital
formation and exports on the demand side.
12. Inflation has remained well within policy targets. Thanks in part to the adoption of inflation targeting by
the Reserve Bank of India (RBI) in FY16/17, inflation has remained within the 4 (±) 2 percent target since then.
Inflationary pressures prompted the RBI to raise policy rates twice by a cumulative 50 basis points (to 6.5 percent)
between April and August 2018. However, since then, inflation has declined significantly, driven by a sustained
decline in food prices: headline inflation stood at 2.9 percent in March 2019, and 3.4 percent on average for
FY18/19 till end March. As a result, the RBI reduced the policy rate by 25 basis points in February 2019 and a
further 25 basis points in April 2019. However, core inflation as well as expectations remained elevated.
13. Credit growth has picked up, 6 but credit to industry remains burdened by the prevalence of
nonperforming assets (NPAs) in the banking sector, and fragility in the nonbank segment of the financial sector.
While the Government has introduced measures to address the prevalence of NPAs in the banking sector,
including a novel Insolvency and Bankruptcy Code, combined with an INR 2.1 trillion bank recapitalization
program, their full effects are only expected to materialize over the medium term. Meanwhile, a series of defaults
by the Infrastructure Leasing and Financial Services, a nonbanking financial company, has resulted in a sharp
deceleration in overall nonbank credit growth, which was only partially made up for by increases in bank credit.
14. India’s external position is robust, although the current account deficit has widened recently. The
current account and trade deficits widened to 1.8 percent and 3.1 percent respectively of gross domestic product
(GDP) in FY17/18 on the back of strong import growth. 7 However, stable foreign direct investment (FDI) and strong
portfolio capital inflows allowed for a build-up in reserves. By contrast, India’s external position worsened
significantly in the first half of FY18/19, as elevated oil prices pushed the current account deficit to 2.9 percent in
the second quarter, and large portfolio outflows were triggered by U.S. monetary policy. The nominal exchange
rate depreciated, and foreign reserves declined by over 8 percent from January to October 2018. However, since
then, the decline in oil prices and the U.S. Federal Reserve signaling a slower pace of normalization led to a
reversal. Portfolio capital has flowed back in, and the rupee has appreciated by about 4 percent against the U.S.
dollar since October 2018. For the full fiscal year, the current account deficit is expected to reach 2.6 percent of
GDP. At end-March 2019, foreign reserves stood at a comfortably large level of US$411.9 billion (equivalent to
6Mostly driven by personal and services loans issued by private banks.

7Exports were constrained by temporary working capital bottlenecks after goods and services tax (GST) implementation, and structural
competitiveness weaknesses.
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around 9.7 months of imports).
15. Public finances remain stable, although fiscal consolidation at the central level was temporarily put on
hold. The Central Government’s fiscal deficit reached 3.5 percent of GDP in FY17/18, 0.3 percentage points above
the original budget target.8 At the state level, some consolidation is believed to have taken place over the same
period, with the aggregate fiscal deficit of states falling by 0.4 percentage points to 3.1 percent. As a result, the
general government deficit declined to 6.4 percent. For FY18/19, the deficit of the Central Government was
revised upward to 3.4 percent of GDP (up by 0.1 percentage points relative to the initial budget) on account of a
new income transfer scheme for farmers. Nonetheless, further consolidation by states should bring the general
government deficit down to 6.2 percent of GDP by FY 19/20.
State of Kerala Context
16. Kerala has enjoyed respectable economic growth in recent years, albeit below the Indian average. Real
GSDP has grown by approximately 5.8 percent, on average, between FY11/12 and FY16/17 (below the 7.0 percent
average for Indian states), although it has risen to 7.4 percent in the two most recent years (FY16/17 and
FY17/18) 9. The structure of Kerala’s economy has changed significantly over the past decade, with the share of
agriculture in gross value added falling from around 18 percent in FY04/05 to 11 percent in FY16/17, and the
shares of industry and services increasing from 23 percent and 60 percent to 26 percent and 63 percent
respectively. Remittances provide a significant source of financing for Kerala, which received almost 20 percent
of all remittance inflows to India (US$56.6 billion) in FY16/17. Within services, tourism is a key subsector,
accounting for 10 percent of the State’s GDP.
17. Kerala has recorded high fiscal deficits in recent years. After some improvement over FY02/03 to
FY10/11, Kerala’s fiscal performance deteriorated from FY11/12 onwards, with the fiscal deficit crossing the 3
percent mark that year, and remaining above it, in all subsequent years. This deterioration was primarily driven
by gradual increases in committed expenditure (especially on salaries and subsidies) and in FY16/17 (when the
deficit reached 4.3 percent,) particularly by the implementation of the 10th pay revision, and the clearance of large
contingent liabilities. Kerala stands out, among comparable states, in terms of both (i) low own-revenues and (ii)
high committed expenditures to GSDP. Although the State adopted a Fiscal Responsibility and Budget
Management (FRBM) Act in 2003 (including an amendment, which came into force in April 2017 mandating the
State to maintain a fiscal deficit of no more than 3 percent of GSDP during FY17/18 to FY19/20), this had little
practical effect. In FY17/18, the fiscal deficit stood at 3.9 percent of GSDP.
18. Total revenues have risen, but so have expenditures. On the revenue side, own-tax revenues, have been
stable over the last five years, averaging 6.8 percent of GSDP 10, while the State’s share in central taxes increased
significantly in FY15/16, to account for over one-fourth of total tax revenues. By contrast, nontax revenues
increased over the last decade from 1.7 percent to about 3 percent of GSDP, owing to increases in both States’
own nontax revenues and grants in aid from the center. Overall, funds received from the Central Government
have risen significantly to 4.3 percent of GSDP in FY18/19, making up over 34 percent of total state revenues.
Meanwhile, total expenditures have also increased steadily. Over the past decade, expenditures ranged from 12.6
8 With the slippage mostly due to additional outlays required to compensate the states for GST revenue shortfalls.
9 Kerala’s growth is believed to have been negatively affected by demonetization and GST introduction due to the features of its industrial
and services base, which is essentially made up of small production units.
10 Accruing primarily from the sales and value-added taxes, excise duties, motor vehicle tax and land revenue, as well as state goods and
service tax since 2017.
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percent of GSDP in FY09/10 to 16.1 percent of GSDP in FY17/18. Current expenditures, which account for more
than 90 percent of the total, on average, have increased since FY10/11 from 11.3 percent to 14.6 percent of GSDP
in FY17/18. The main reasons for their rise, especially in FY17/18, include the implementation of the 10th pay
revision and the distribution of social security pensions and long-pending arrears. In turn, committed
expenditures 11 accounted for the bulk of current expenditures (approximately 63 percent, on average, over the
past 10 years). Capital spending, whose share in total expenditures has traditionally been low, stood at 1.5 percent
of GSDP in FY17/18, much below the national average of 3.0 percent. However, it should be mentioned that (i)
Kerala has historically devoted a significant share of expenditure to social sectors, in such a way that it has built a
significant human capital base and (ii) recurrent expenditures also include transfers to municipalities that have
been high by Indian standards and partly channeled to municipal infrastructure.
Figure 1. Kerala Fiscal Indicators (% of GSDP) Figure 2. Kerala Deficit and Debt Dynamics
Source: Government of Kerala ‘Medium Term Fiscal Policy and Strategy Statement’, 2019.
19. As a result, Kerala’s public debt has been increasing gradually as a percent of GSDP. Public debt declined
continuously between FY07/08 and FY11/12, but rose rapidly thereafter, due to (i) relatively low GSDP growth,
and (ii) relatively high deficits. While the public debt/GSDP ratio increased by just under two percentage points,
from 24.6 percent in FY11/12 to 26.4 percent in FY14/15, it shot up in the following years—to reach 30.7 percent
at the end of FY17/18, still only marginally above the target of 30.4 percent prescribed by the State’s FRBM.
2.2. MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY

National Outlook
20. Economic growth is projected to gradually accelerate in the coming years, and overall macroeconomic
stability to be maintained. Private consumption is expected to remain the primary driver of growth, while
investment and exports should pick up moderately. Inflation and external conditions are expected to normalize
after the temporary shocks experience in the first half of FY18/19. Inflation is projected to average 3.7 percent for
the full fiscal year, and to increase moderately thereafter as food prices firm up. The current account deficit is
anticipated to widen to 2.6 percent of GDP in FY18/19 (reflecting a period of high oil prices) but to decline as oil
prices stabilize at lower levels, and past exchange rate adjustments trigger supply responses. On the fiscal front,
the combined fiscal deficit of the center and states should continue to decline in coming years, albeit gradually.
The general government deficit is projected to decline to 6.3 percent of GDP in FY18/19 and further to 6.2 percent
by FY19/20. In the medium term, the rollout of the GST is expected to improve tax compliance, foster greater
formalization of the economy, and boost interstate trade. Taken together, gradual fiscal consolidation and robust
11 Which includes salaries, wages, pensions, subsidies, interest payments, and devolution to local self-governments.
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economic growth are thus expected to drive a continued decline in the general government debt.
21. According to the latest Debt Sustainability Analysis, India’s debt remains sustainable as it is
denominated in domestic currency, of long/medium-term maturity, and predominantly held by residents.
Under the baseline assumption of planned fiscal consolidation and an acceleration in nominal GDP growth, the
Central Government debt-to-GDP ratio is expected to decline to below 45 percent by FY20/21 (figure 3). Given
that a captive market for debt caps the interest cost, the sustainability of debt is mostly contingent upon shocks
to real GDP growth and fiscal slippages. India’s external debt, at around 21 percent of GDP and predominantly of
long duration, remains sustainable.
22. Stress tests show that the most significant risk to India’s debt sustainability is low growth. A stress test
corresponding to a growth shock yields a deteriorating debt path with debt-to-GDP ratio reaching a peak of 71
percent of GDP. A combined macro fiscal shock yields slightly worse outcomes though the debt path would return
to a downward trajectory (figure 4).
Figure 3. Central Government Fiscal Figure 4. India Public Debt Sustainability: Baseline and Stress-Test
Deficit and Debt-GDP (%) Scenarios
Source: India Central Statistics Office, staff Source: International Monetary Fund (IMF) Article IV 2018.
calculations.
23. India’s macroeconomic policy framework is considered adequate for the proposed DPO. Economic
growth is robust, the initial disruptions caused by demonetization and the introduction of the GST have been
overcome, and the economy has also proved resilient to external shocks. Structural reforms, including initial
efforts to address financial sector weaknesses are also expected to pay off over time. In recent years, the monetary
policy framework has been strengthened. While fiscal consolidation is proving to be slower than anticipated,
especially at the central level, it is noteworthy that India’s states have been increasingly prudent fiscally in recent
years. Moreover, the 15th Finance Commission is expected to mandate a fiscal consolidation glide path for both
the center and each state that will provide an anchor for fiscal policy in the coming years. Debt and deficit levels
are relatively high, but ample domestic funding is available and refinancing risks are moderate. India’s exposure
to external volatility has increased in recent years, but so have buffers given high reserve levels and limited
external financing needs.
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Table 1. India Selected Economic Indicators FY14–FY20

FY14 FY15 FY16 FY17 FY18 FY19 FY20
Key Macroeconomic Indicators
Actual Actual Actual Actual Actual Estimated Estimated
Real Economy (Annual percentage change unless otherwise Indicated)
Nominal GDP (local currency) 13.0 11.0 10.5 11.5 11.3 11.4 12.0
Real GDP 6.4 7.4 8.0 8.2 7.2 7.2 7.5
Per Capita GDP 1,486.2 1,609.7 1,639.8 1,751.9 1,974.8 — —
(real US$, Atlas method)
Contributions to growth (percentage points)
Consumption 4.2 4.4 5.2 5.2 5.7 5.1 5.3
Investment 0.5 0.8 2.0 2.6 2.9 3.1 2.6
Net exports 4.5 0.2 0.2 0.1 −2.8 −1.4 −1.8
Unemployment rate 3.4 3.5 3.5 3.5
GDP deflator 6.2 3.3 2.3 3.1 3.8 3.9 4.2
Consumer price index (CPI)
9.4 5.9 4.9 4.5 3.6 3.7 4.0
(average)
Fiscal accounts (general
(Percent of GDP)
government)
Revenues and grants 19.6 19.2 19.9 20.2 20.3 20.7 20.4
Expenditures and net lending 26.2 25.9 26.8 27.1 26.7 27.0 26.6
Overall balance −6.7 −6.7 −6.9 −6.9 −6.4 -6.3 -6.2
Public debt 67.1 66.6 68.5 67.7 67.6 67.2 66.1
Selected monetary accounts (Annual percentage change unless otherwise indicated)
Base money (M0 or reserve money) 8.8 10.1 12.1 −1.3 — — —
Credit to nongovernment 14.8 11.1 9.7 7.9 — — —
Interest rate (Repo rate and period
7.6 7.9 7.0 6.4 6.1 6.4 6.1
average)
Balance of payments (Percent of GDP, unless otherwise indicated)
Current account balance −1.7 −1.3 −1.0 −0.7 −1.8 −2.6 −1.9
Imports 28.4 26.6 22.4 21.4 22.1 24.9 26.4
Exports 24.5 23.2 19.6 19.4 19.0 20.0 20.8
Foreign direct investment (net) 1.1 1.5 1.7 1.6 1.1 1.2 1.4
Gross reserves (in US$ billion, eop) 304.2 341.6 360.2 370.0 424.5 — —
In months of next year's imports 6.6 8.2 8.7 — — — —
External debt 23.9 23.4 20.0 20.5 20.8 — —
Terms of trade (FY2000=100) 60.2 57.9 71.8 — — — —
Exchange rate (INR per US$1,
60.9 61.2 65.7 67.1 64.5 69.9 70.0
average)
Other memo items
Nominal GDP in US$ (billions) 1,916.9 2,042.9 2,146.8 2,286.1 2,650.8 2,723.9 3,049.1
Nominal GDP in INR (trillions) 112.3 124.7 137.7 153.6 170.9 190.5 213.4
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Table 2. India’s Selected Fiscal Indicators FY14–FY20

FY14 FY15 FY16 FY17 FY18 FY19 FY20
Key Fiscal Indicators
Actual Actual Actual Actual Actual Revised Budget
Central Government (Percent of GDP)

Overall balance −4.5 −4.1 −3.9 −3.5 −3.5 −3.4 −3.4
Primary balance −1.1 −0.9 −0.7 −0.4 −0.4 −0.2 −0.2
Total revenues (and grants) 12.1 11.8 12.6 13.2 13.2 13.2 13.5
Tax revenues 10.1 10.0 10.6 11.3 11.6 11.9 12.1
Taxes on goods and services 2.9 2.9 3.6 4.2 4.8 4.8 4.8
Taxes on income and profits 5.6 5.5 5.4 5.6 6.0 6.4 6.6
Taxes on international trade 1.5 1.5 1.5 1.5 0.8 0.7 0.7
Other taxes 0.1 0.1 0.0 0.0 0.0 0.0 0.0
Nontax revenues 1.8 1.6 1.8 1.8 1.4 1.3 1.3
Recoveries of loans 0.1 0.1 0.2 0.1 0.1 0.1 0.1
Expenditures 16.8 16.1 16.7 17.0 17.3 16.9 17.3
Current expenditures 15.1 14.5 14.9 15.1 15.6 15.2 15.7
Interest payments 3.3 3.2 3.2 3.2 3.2 3.1 3.2
Others (salaries, supplies, and so on) 8.9 8.5 8.0 7.9 8.5 8.1 8.5
Tax transfers to states 2.9 2.7 3.7 4.0 4.0 4.0 4.0
Capital expenditures 1.7 1.6 1.8 1.9 1.6 1.6 1.6
Central Government Financing 4.5 4.1 3.9 3.5 3.5 3.3 3.4
External (net) 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Domestic (net) 4.4 4.1 3.9 3.5 3.6 3.3 3.4
State Governments (Percent of GDP)
Overall balance −2.2 −2.6 −3.1 −3.5 -3.1 -2.6 —
Revenues 12.2 12.8 13.3 13.4 14.6 15.0 —
Expenditures and net lending 14.4 15.6 16.4 17.0 18.1 17.9 —
Public Debt (Percent of GDP)
General Government 67.1 66.6 68.5 67.7 67.6 67.2 66.1
Source: India Central Statistics Office, Staff calculations.
State Government Outlook
24. In contrast with the State’s track record of relative fiscal profligacy, Kerala’s fiscal position has improved
in FY18/19, and the budget for FY20—presented together with a Medium-Term Fiscal Policy—included
significant measures to maintain state finances in line with the FRBM, while making space for expanded capital
spending. Some significant fiscal improvements are believed to have taken place in FY18/19 (according to revised
estimates, as of January 2019). Relative to FY17/18, the revenue deficit is expected to fall by 0.8 percentage points
of GSDP (from 2.5 percent to 1.7 percent) owing to an increase in revenue receipts (with higher grants from the
center on account of disaster relief but also higher own-tax revenues) and to a decline in committed expenditures
(by 1.1 percentage points of GSDP), compensating for an increase in non-committed recurrent outlays. With
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capital spending constant at 1.5 percent of GSDP, the overall fiscal deficit is also expected to decline from 3.9
percent of GSDP in FY17/18 to 3.1 percent in FY18/19.
25. According to the GoK’s medium term fiscal plan—presented/adopted together with the FY19/20
budget—the consolidation trend is expected to continue, resulting from a combination of the following, which
will enhance the state’s compliance with the FRBM Act:
• Subdued recurrent expenditure growth. Kerala is targeting further declines in recurrent expenditures (as a
share of GSDP), stemming from compressions in committed expenditures. After peaking at 10 percent of
GDSP in FY17/18, committed expenditures are expected to decline to 8.9 percent in FY18/19 and further to
8.0 percent by FY20/21. While interest obligations are expected to remain stable as a share of GSDP, outlays
on salaries, wages, and pensions are all projected to fall from 7.5 percent in FY17/18 to 6.7 percent in
FY18/19 and further to 5.7 percent in FY20/21 (following the payout of all pay/pension revision arrears in
FY18/19 and given that new pay revisions will only take effect from FY21/22 onwards); according to the
State’s Medium-Term Fiscal Policy increases in salary and pensions in FY21/22, following the new pay
revisions would be contained to 0.6 percent of GSDP.
• Significant gains on the revenue side. Revenue receipts are projected to increase as a share of GSDP by 2
full percentage points between FY17/18 and FY21/22, from 12.1 percent in FY17/18 to 12.9 percent in
FY18/19, and 14.1 percent of GSDP in FY21/22, owing mostly to significant expected gains in own-tax
revenues underpinned by:
(a) Expected positive developments in overall economic activity (as the planned increase in public
investment boosts construction activity and helps relieve supply-side constraints) and in GST
collections (as the new tax stabilizes and Kerala’s businesses—mostly made up of small units—
gradually absorb the initial compliance costs), and
(b) An extensive list of policy initiatives to boost revenues as outlined by the Minister of Finance in the
Budget Speech 2019–2020 including
(i) New temporary tax measures (for two years) in the form of a 1 percent cess on the supply of
goods and services with a GST rate of over 5 percent and a 0.25 percent flood cess on all goods
under the fifth schedule (gold, silver, platinum, and ornaments), as well as a 2 percent
increase in taxes applicable to sale of liquor, a 10 percent levy on cinema sales by local bodies,
a 1 percent increase in the onetime tax on new motor vehicles, the introduction of stamp
duty for electronic records and agreements, an increase in the ‘fair value’ of land by 10
percent, revisions to the luxury tax rate for residential buildings, and the introduction of a
onetime tax and luxury tax to be levied on finished buildings, and a 5 percent increase in all
charges and fees for service provided by state departments;
(ii) Enhanced measures to detect tax evasion under the GST and strengthen assessment and
enforcement (including through reorganizing and upskilling the relevant departments, invoice
matching based on GSTR-2A, real-time e-way bill verification at state borders using automatic
number plate recognition technologies);
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(iii) Measures to broaden the tax net (including surveys of service providers, outreach efforts, the
deployment of e-ticketing in cinema halls and the provision of accounting software for
traders); and
(iv) The implementation of amnesty programs to collect tax arrears in the form of onetime
settlement schemes; Measures to strengthen GST administration, with the creation of a
Coordination Committee bringing together the relevant state and central commissioners.
26. In turn, these improvements should make room for increased non-committed recurrent expenditures
and capital spending—in line with ambitious reconstruction objectives—while keeping the deficit within FRBM
targets. Indeed, non-committed recurrent expenditures are budgeted to rise from 5.7 percent in FY18/19 to 6.5
percent by FY21/22; as for capital spending, after hovering around an average of 1.5 percent of GSDP over the
past decade, it is budgeted to rise by almost 1 percentage point, from 1.5 percent in FY18/19 to 2.3 percent by
FY21/22 (a nominal increase of INR 137.5 billion, or almost US$2 billion). The projected decrease in the revenue
deficit should make space for the capital budget to rise without affecting the overall fiscal deficit. The symmetrical
increase in revenue receipts and decline in revenue expenditure should result in a narrowing revenue deficit, from
2.5 percent of GSDP in FY17/18 and 1.7 percent in FY18/19, to 0.6 percent by FY20/21, allowing the overall fiscal
deficit to remain strictly at 3.0 percent.
27. Under that baseline scenario, which assumes a robust nominal growth rate of 13 percent (up from 12.8
expected in FY18/19), as renewed investment boosts economic activity, Kerala’s debt trajectory is projected to
decline steadily and the debt to GSDP ratio to fall below 30 percent by FY20/21. Indeed, the debt to GSDP ratio
is expected to reach 30.5 percent in FY18/19 and to decline each year to reach 30.2 percent in FY19/20 and 29.7
percent the following fiscal year.
28. Under alternative scenarios—modeled by the World Bank team—Kerala’s debt is still declining. In
Scenario 1, the impact of lower growth from FY19/20 onwards is modeled (12 percent versus 13 percent in the
baseline). In this case, the debt to GSDP ratio only crosses the 30 percent mark by FY22/23. In Scenario 2, a higher
primary deficit in FY18/19 (1.2 versus 1.0) and a more gradual declining path with slightly slower growth than in
the baseline (12.6 percent in FY18/19 and 12.5 percent thereon) is modeled. In this scenario, the debt-to-GSDP
ratio crosses the 30 percent mark by FY21/22.
29. Thus, Kerala’s macroeconomic policy framework is also considered adequate. With respectable
economic growth and gradual fiscal consolidation that still makes room for greater capital spending, the
debt/GSDP ratio is expected to fall over the medium term. This positive medium-term outlook is subject to several
downside risks, as its realization is contingent on sustained economic growth, significant improvements in revenue
collection, and continued efforts at fiscal consolidation. However, the State’s own Medium-Term Fiscal Policy
framework provides comfort to the extent that it (i) explicitly acknowledges that the past patterns of relative fiscal
profligacy—while once justified in light of social spending priorities and adverse shocks—must now be reversed,
(ii) provides for detailed measures to improve revenue collection, and (iii) builds in margins of maneuver to further
cut non-committed recurrent and capital expenditures, should revenue targets not be met or committed
expenditure growth exceed stated goals. Moreover, the programmatic nature of the proposed DPO series
provides an avenue for further engagement with the authorities on the fiscal framework as discussed in section
4.3.
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Figure 5. Kerala Debt Paths under Alternative Scenarios
Source: GoK ‘Medium Term Fiscal Policy & Strategy Statement’, 2019; staff calculations.
Table 3. Kerala Selected Fiscal Indicators FY14–FY22

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Rev. Rev.
Actual Actual Actual Actual Projected Projected Projected
Est. Est.
(Percentage of GSDP)
Fiscal Deficit −3.6 −3.6 −3.2 −4.3 −3.9 −3.1 −3.0 −3.0 −3.0
Primary Deficit −1.9 −1.7 −1.2 −2.3 −1.7 −1.0 −1.0 −1.0 −1.1
Revenue Deficit −2.4 −2.7 −1.7 −2.5 −2.5 −1.7 −1.0 −0.6 −0.8
Total Revenues 10.6 11.3 12.4 12.3 12.1 12.9 13.2 13.5 14.1
Tax Revenues 8.5 8.4 9.3 9.3 9.6 10.1 — — —
Own Tax
6.9 6.9 7.0 6.8 6.8 6.9 7.5 7.7 8.2
Revenues
Nontax
2.1 2.9 3.1 3.0 3.3 3.1 — — —
Revenues
Own Nontax
1.2 1.43 1.5 1.6 1.6 1.7 1.7 1.8 1.8
Revenues
Expenditures 14.2 15 15.6 16.6 16.1 16.1 16.2 16.6 17.2
Revenue
13.0 14.0 14.1 14.8 14.6 14.6 14.2 14.1 14.9
Expenditures
Committed 8.4 8.6 8.8 9.2 10.0 8.9 8.1 8.0 8.4
Interest
1.8 1.9 2.0 2.0 2.2 2.0 2.0 2.0 1.9
Payments
Salaries and
4.2 4.2 4.2 4.5 4.6 4.2 3.7 3.6 3.9
Wages
Pensions 2.1 2.2 2.3 2.5 2.9 2.5 2.2 2.1 2.4
Subsidies 0.3 0.2 0.2 0.3 0.2 0.2 0.2 0.2 0.2
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FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Rev. Rev.
Actual Actual Actual Actual Projected Projected Projected
Est. Est.
Non-
4.6 5.4 5.3 5.5 4.6 5.7 6.1 6.2 6.5
Committed
Capital
1.2 1.0 1.5 1.8 1.5 1.5 2.0 2.4 2.3
Expenditures
Debt Stock 25.6 26.4 28.2 30.3 30.7 30.5 30.2 29.7 29.3
Kerala Nominal
12.8 10.2 8.9 10.5 11.4 12.8 13.0 13.0 13.0
GSDP Growth
Kerala Real GSDP
3.9 4.3 6.8 7.4 7.4 7.4 — — —
Growth
Source: GoK ‘Medium Term Fiscal Policy & Strategy Statement’, 2019
3. GOVERNMENT PROGRAM
30. The floods provided an opportunity to the GoK to accelerate long-pending policy and institutional
reforms that address the drivers of natural disaster and climate change risks faced by Kerala, as well as better
prepare the State against future disasters. To facilitate this process, as noted earlier, the Government established
the RKI through a Government Order (GO) to “bring about a perceptible change in the lives and livelihoods of its
citizens by adopting higher standards of infrastructure for recovery and reconstruction, and to build ecological and
technical safeguards so that the restructured assets could better withstands floods in the future” 12 The RKI is
mandated to help identify critical reforms and investments across sectors and departments, drive the change
process within the Government and across the State, and partner with various development partners and civil
society entities. The GO describes the RKI institutional framework for developing, implementing, and monitoring
the policy reform agenda and the overall recovery and reconstruction process (figure 6). It aims to ensure a
consultative and participatory process; maximize synergies across sectors, departments, and agencies; and
streamline decision making to enable a comprehensive yet rapid, resilient recovery, and reconstruction.
12 Government Order; G.O.(P)No.16/2018P&EA dated November 11, 2018.
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Figure 6. RKI Institutional Framework: Roles and Responsibilities
31. The GO also outlines the methodology and procedures to identify priorities and channel proposals from
ideation to implementation. Based on the findings of the PDNA, the GoK has carried out development seminars,
workshops, and idea exchanges using face-to-face and virtual platforms among state departments, local self-
governments, stakeholders of major programs and projects in Kerala, and the general public. Major policy and
institutional initiatives and important project proposals are anchored to this consultative and inclusive process.
Ideas and concepts developed are taken by the RKI as inputs for identifying policy and institutional changes as
well as developing programs and projects to be part of the RKDP. In short, this inclusive and participatory process
led by the RKI has helped in developing the RKDP.
32. The RKDP constitutes the GoK’s road map for a Green and Resilient Kerala. Its goal is to catalyze
rebuilding of Kerala in a way that (i) addresses key drivers of floods and other natural disasters and climate change
risks and (ii) strengthens preparedness against future disasters. The RKDP encompasses cross-cutting and sector-
based policy, regulatory and institutional actions, as well as priority programs that are critical for resilient and
sustainable recovery and rebuilding of the State. The cross-cutting areas in the RKDP are Disaster Risk
Management and Resilience, Environment and Climate Change, Strengthening Institutional Efficiency and
Resilience, and Open Data. The sectors in the RKDP include Integrated WRM, Water Supply, Sanitation, Urban,
Roads and Bridges, Transportation, Forestry, Agriculture, Animal Husbandry and Dairy, Fisheries, Livelihoods, and
Land. Further, the RKDP outlines financing and implementation modalities, including partnerships with public and
private sectors, development partners, and the civil society. The RKDP serves as a foundation toward resilient
development and promotes a pathway to resilient recovery. The draft RKDP was shared with the public at large
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by the RKI on March 7, 2019. In addition, structured consultations led by the RKI and facilitated by GoK
departments and the UN were held with domain experts and other key stakeholders during March 2019. The final
RKDP, incorporating feedback received from stakeholders, was reviewed by the RKI-IC, the HLEC, and the Advisory
Council, approved by the Council of Ministers in May 2019 and, will be launched statewide in July 2019.
33. The RKDP prioritizes inclusive development and climate sensitivity. In fact, inclusive development is one
of its core principles. All priority program and reforms are to be implemented, and resilient recovery undertaken,
so that Kerala’s assets and livelihoods become less vulnerable to future shocks, so that all citizens, including
vulnerable members such as women, the elderly, persons with disabilities, scheduled castes (SCs) and scheduled
tribes (STs), migrant workers, and fisherfolk, participate fully in the efforts and are not left behind in any way.
Sectoral engagements will focus on integrating the specific concerns of these populations. The RKDP’s cross-
cutting chapter of Environment and Climate Change additionally analyses the environmental factors contributing
to disasters, such as the floods of August 2018, and the potential future impacts of climate change. Given the
demonstrated links between environment and disaster risk, the RKDP strives for recovery through creating
resilient measures that mitigate the impacts of any future incidents or disasters.
4. PROPOSED OPERATION
4.1. LINK TO GOVERNMENT PROGRAM AND OPERATION DESCRIPTION
34. The first Resilient Kerala Program DPO financed by the World Bank is closely aligned with the vision,
priorities, and programs of the RKDP and driven through the RKI institutional framework. The World Bank’s
support to the RKDP, using resilience and sustainability as overarching themes, aims at assisting the GoK in
integrating the most critical cross-cutting and sectoral policy and institutional actions that will put the State on a
pathway toward a Green and Resilient Kerala. While the RKDP has a larger mandate, World Bank support will focus
on cross-cutting and sector areas that suffered the worst damage from the recent disaster and where the impact
on enhancing resilience will be most significant and the World Bank’s support would provide the greatest value
addition. The main platform of World Bank support would be a programmatic series of two DPOs. Following these,
depending on the nature and pace of the reforms, a third DPO or other forms of specific investment support could
be considered. The reform process would be supported by a robust program of technical assistance from the
World Bank team and through external domestic and international partners. This holistic and comprehensive
approach to build alliances among development partners is already under way, as described in section 4.5.
35. The development objective of the proposed operation, as the first in a programmatic series of DPOs
and as the primary platform for establishing a State Partnership, is to enhance the State of Kerala’s resilience
against the impacts of natural disasters and climate change. This objective will be achieved through policy and
institutional reforms under two pillars:
• Pillar 1: Enhancing Kerala’s Institutional and Financial Capacity for Managing Disaster Risks and
Climate Change
• Pillar 2: Mainstreaming Disaster and Climate Resilience into Critical Infrastructure and Services
36. The proposed DPO directly contributes to India’s national and Kerala’s state objectives for enhanced
DRM, including strengthening disaster risk governance, reducing risk, enhancing preparedness for effective
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response and ‘building back better‘ in recovery and rehabilitation, as articulated in the Sendai Framework for
Disaster Risk Reduction 2015–2030 (Annex 5), adopted by the Government of India (GoI) at the Third UN World
Conference for Disaster Risk Reduction in Sendai, Japan, in March 2015. The DPO also supports priority areas
regarding overall disaster governance, rehabilitation through building back better following the disasters, as well
as disaster risk financing defined under the National Disaster Management Policy 2009, State Disaster
Management Policy 2010, National Disaster Management Plan 2016, and State Disaster Management Plan 2016.
37. The proposed operation would also contribute to India’s overall progress toward Sustainable
Development Goals (SDGs). It covers SDGs 6, 9, 11, and 13 for (i) sustainable management of water and sanitation
for all; (ii) building resilient and inclusive infrastructure; (iii) making cities and human settlements inclusive, safe,
resilient, and sustainable; and (iv) taking urgent action to combat climate change and its impacts.
38. Finally, the proposed operation aims at maximizing finance for development. It will support the GoK in
leveraging private sources of finance to complement public finances through innovative modalities such as Masala
and Diaspora Bonds targeting institutional and retail investors respectively, as well as help bring private sector
finance and expertise in the development, management, and operation of key infrastructure and other assets in
sectors such as water, roads, and agriculture that will be built or rebuilt by the GoK as part of recovery and
resilience. In fact, the first Masala Bond issued by the Kerala Infrastructure Investment Fund Board (KIIFB) on
March 25, 2019, through a private placement amounted to approximately INR 21.5 billion or US$300 million.
39. The proposed programmatic series of DPOs supports an innovative approach to respond to disasters.
Emergency operations prepared right after disasters typically focus on early recovery and reconstruction without
creating a broad enough platform to address the vulnerabilities that turn natural phenomena into disasters.
Interventions to improve DRM and climate resilience usually require cross-sectoral coordination and collaboration
across central, regional, and local levels of the Government. Considering this, it was felt that a high-level policy
and institutional engagement effected through a programmatic DPO series and complemented through technical
assistance and partnerships under the rubric of a State Partnership would serve as a strategic tool to effectively
address the complex challenges of DRM and climate change and to mainstream resilience in a more holistic way.
4.2. PRIOR ACTIONS, RESULTS AND ANALYTICAL UNDERPINNINGS
40. The prior actions for DPO1, indicative triggers for DPO2, and expected results from the programmatic
reforms are presented below.
Pillar 1: Enhancing Kerala’s Institutional and Financial Capacity for Managing Disaster Risks and Climate Change
41. The objectives of Pillar 1 are (i) to enhance technical and institutional capacity and (ii) to establish
innovative sources of financing for disaster recovery, reduction, and climate resilience. Specifically, the GoK aims
to reform and modernize its public sector and investment management processes and systems to rebuild more
resilient and efficient infrastructure. Prior Action 1 defines the policy framework toward resilient recovery and
green development as outlined in the RKDP; Prior Action 2 paves the way to sustainably finance the
implementation of the policy framework as outlined in the RKDP; and a strong disaster management system
supported by Prior Action 3 constitutes the permanent institutional mechanism to better prepare for future
disaster and climate risks in line with the foundational element on DRM and resilience under the RKDP.
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Prior Action 1 for DPO1 in Disaster Risk Management: The GoK has adopted the Rebuild Kerala Development
Program for enhancing disaster and climate resilience through policy, regulatory and institutional actions with
inclusive and participatory approaches.
Indicative Trigger 1 for DPO2: The GoK has issued guidelines for project selection, preparation, and budgeting,
including criteria for project readiness, feasibility, and resilience, for the RKDP.
42. The recent disaster gave momentum to the GoK to consider long-pending policy and institutional
reforms that aim to address the drivers of floods and other critical natural disaster and climate change risks
faced by the State. The 2018 disaster amplified the drivers of risk and legacy challenges that Kerala has faced in
the past decades: lack of a clear vision to mitigate disaster and climate change risks, weak coordination among
key departments and agencies coupled with limited capacities of sector agencies, and poor quality and resilience
of public services and infrastructure. The GoK recognized the need to go beyond traditional approaches to
recovery and reconstruction to not only recover fully from the current disaster but also prepare better for future
disasters. Led by the Chief Minister, the RKDP sets a bold vision for a new Kerala –Nava Keralam—that is more
resilient, green, inclusive, and vibrant.
43. The first prior action will internalize a holistic road map of reforms for resilient development, in
particular mainstreaming these structural changes within the Government’s policies, systems, and programs.
The RKDP is a strategic road map of reforms for mainstreaming resilience within existing Government’s policies,
systems, and programs. The RKDP includes ‘Sector Notes’ that define critical interventions required for addressing
key drivers of August 2018 floods and the State’s legacy challenges associated with respective sectors. Priority
sectors covered are Integrated Water Resources Management, Water Supply, Sanitation, Urban, Roads and
Bridges, Transportation, Forestry, Agriculture, Animal Husbandry and Dairy, Fisheries, Livelihoods, and Land.
Cross-cutting areas include Disaster Risk Management and Resilience, Environment and Climate Change,
Strengthening Institutional Efficiency and Resilience, and Open Data for Resilience. Each of these sectors and
cross-cutting areas are led by the associated governmental departments and agencies for implementation, with
overall coordination by the RKI. The RKDP also outlines a plan for financing the resilience agenda as well as
institutional modalities for monitoring and evaluating the results.
44. The RKDP was formulated through an inclusive and participatory approach recognizing that the disasters
hit the vulnerable groups such as women, migrants, the elderly, fisherfolk, tribal population, disabled, and the
poor much harder. All policies and institutional actions included in the RKDP aim to alleviate the burden on the
vulnerable groups. The RKDP was presented to the HLEC and approved by the Cabinet for disclosure for public
consultation in March 2019. Following this, the GoK, in partnership with the UN, organized consultations on the
draft RKDP and obtained comments from sector specialists, local communities, civil society organizations (CSOs),
and the private sector, in addition to feedback received from the public online. Based on the comments received,
the GoK has revised and finalized the RKDP, which was approved by the Cabinet on May 23, 2019. The approved
RKDP is expected to launch statewide in July 2019.
45. Establishing the basis for making the RKDP operational, the proposed trigger will issue guidelines for
project selection, preparation, and budgeting, including criteria for project readiness, feasibility, and resilience,
for the RKDP. This is a first step toward the creation of a single and robust statewide public investment
management system. The guidelines will aim to improve the allocative efficiency of public investments through a
more stringent cross-sector vetting and prioritization process for high-impact, affordable, and ready projects,
based on formal and transparent criteria and reviews. These guidelines will also include the good practices for
inclusion to ensure that the vulnerable groups that are put in the forefront of the policy reform agenda actually
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benefit from the programs and projects implemented on the ground. The guidelines will be prepared based on
the KIIFB’s standards and international good practices to enhance operational efficiency and development impact.
The GoK will integrate systematic climate risk and resilience screening in the guidelines, especially for large-scale
projects or projects in priority areas with significant development impact.
46. As a result, the proposed reforms will ensure that ‘Resilient recovery from 2018 floods is implemented
in line with the RKDP priorities and guidelines.’ Progress toward achieving this result will be measured based on
(i) the percentage of medium-term resilient recovery activities being implemented according to RKDP priorities
and programs and (ii) the number of women and children benefitting from RKDP programs.
Prior Action 2 for DPO1 in Disaster Risk Financing: The GoK has adopted the new flood cess, with effect as of June
1, 2019 for financing resilient recovery efforts.
Trigger 2 for DPO2: The GoK has issued legal instructions for mobilizing private institutional and retail finance for
financing resilient recovery efforts.
47. This prior action underpins how the development program for a Green and Resilient Kerala will be
financed through a reform-oriented approach. The overall planning for financing the recovery needs of US$4.4
billion is ongoing as part of the RKDP road map, considering debt sustainability and FRBM Act requirements. The
GoK has so far generated commitments of approximately US$1.8 billion, including public finances, external
funding, and market-based resources for 2019–2021. The 2019/20 budget approved by the legislature on January
31, 2019, underscores the GoK’s commitment by allocating resources for recovery and resilience, including by
establishing the case for leveraging private financing through bonds and increasing public sources through a flood
cess. The GoK’s plan to finance the RKDP, including recovery needs will be discussed in a donors’ conference
planned in parallel to the launch of the RKDP.
48. A 1 percent ‘Kerala flood cess’ is levied on goods coming within the GST tax bracket of 12 percent, 18
percent, and 28 percent imposed on the value of supply. A 0.25 percent flood cess is levied on all goods coming
under the fifth schedule, including gold, silver, and platinum ornaments, on the value of supply. All services attract
1 percent cess. Based on the Rapid Poverty and Social Impact Analysis (RPSIA) prepared, the flood cess is not likely
to have an adverse impact on the poor as it is levied on consumables which are not used as much by vulnerable
groups. Initial estimates by the GoK suggest that INR 10 billon or US$145 million will be raised through the Kerala
flood cess over a two-year period.
49. The GoK, through the KIIFB, issued a Masala Bond through a Medium-Term Note (MTN) Program and
raised INR 21.5 billion or approximately US$300 million from the international capital markets in March 2019.
The MTN Program is listed on the International Securities Market of the London Stock Exchange and the Singapore
Stock Exchange. KIIFB has become the first state level entity to secure a public international credit rating, and it
became the first public sector enterprise in India to access the international debt capital markets by raising
offshore bonds. This landmark deal showcased the acceptance and confidence by international investors in Kerala
as it became the largest local currency issue by a sub-sovereign entity from all the emerging markets and Asia.
50. The indicative trigger seeks the issuance of legal instructions to mobilize additional private finance for
financing resilient recovery efforts. To support the RKDP, the KIIFB plans to register and list a Diaspora Bond in
the Abu Dhabi Securities Exchange and Riyadh Stock Exchange. The first Diaspora Bond is expected to raise INR 10
billion or US$145 million. Kerala has over 2 million non-resident Keralite (NRK) workers overseas, over 93 percent
of whom are working in the Gulf Cooperation Council countries. Annually, the NRKs send home nearly US$13
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billion in remittances. Their annual savings are estimated to be over US$4 billion. The Diaspora Bond program will
channel diaspora remittances and savings to productive investment activities. In the longer term, it will build a
‘structural bridge’ to the diaspora for sustained engagement in Kerala’s resilient development. Such borrowings,
however, must be managed prudentially, through regular Debt Sustainability Analysis based on realistic scenarios
for growth and infrastructure development. The debt service on the Diaspora Bond is expected to be well below
the annual rate of growth of the State’s revenue, which has averaged over 13 percent in recent years.
51. As a result, the proposed reforms will ensure that ‘Additional public and private financial resources are
mobilized for resilient recovery’. Progress toward achieving this result will be measured based on the amount of
public and private financing mobilized to finance recovery and resilience programs through the cess and the
Masala and the Diaspora Bonds.
Prior Action 3 for DPO1 in Disaster Risk Management: The GoK has adopted new protocols for enhancing
emergency preparedness and response capacity of various departments.
Indicative Trigger 3 for DPO2: The GoK has updated and published the State Disaster Management Plan,
incorporating disaster risk reduction and climate resilience principles and policies and including emergency
management and outreach to vulnerable communities.
52. The KSDMA’s existing institutional setup and resources mostly focus on post-disaster response, and its
role as the State’s coordinating agency for ex ante DRM measures can be strengthened. This prior action will
improve Kerala’s preparedness and response capacity to manage disasters and impacts of climate change. Based
on lessons learned from the 2018 floods, the State Executive Committee of the KSDMA has updated the standard
operating procedures (SOPs) and adopted new protocols on May 9, 2019 for enhancing emergency preparedness
and response capacity of various state departments. The Executive Committee has approved and issued the
updated Orange Book of Disaster Management—Kerala—SOPs and Emergency Support Functions Plan, which
contains a Monsoon Preparedness and Emergency Response Plan and an Incident Response System (IRS) structure
as a statutory requirement. The updated Orange Book details the State’s crisis management mechanisms,
responsibilities of State and District Emergency Operation Centers (EOCs), and the SOPs to be followed while
dealing with hazardous rain, flood, cyclone, tsunami, high waves including storm surge, landslide, petrochemical
transportation accident, and space debris such as meteorites. The updated Orange Book also contains the
Emergency Support Functions Plan indicating the suo-moto responsibilities of various departments in the event
of emergencies. The new Monsoon Preparedness and Emergency Response Plan defines the roles and
responsibilities of the State EOC, central agencies, District Disaster Management Authorities (DDMAs), and 29
state departments during the monsoon season (June to December) for enhanced emergency preparedness and
coordination. The Orange Book has incorporated an IRS structure as a statutory requirement to be followed at the
state, district, and taluk level. The KSDMA will also initiate a training program for the government officials to
enhance the emergency preparedness and response capacity of the state departments based on the new
protocols.
53. The proposed trigger seeks the adoption and publication of the amended State Disaster Management
Plan. As required by the National Disaster Management Act of 2007, the KSDMA prepared the State Disaster
Management Plan in 2016. The recent disaster highlighted the need for updating the plan to incorporate climate
change adaptation and emergency management of extreme weather events. Reflecting on lessons learned from
the recent disaster, the KSDMA has adopted a new IRS structure as part of its updated Orange Book of Disaster
Management, Kerala, with updated SOPs for the emergency support functions plan, detailing the crisis
management mechanism put in place in the State and the desk responsibilities of EOCs at state and district levels.
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The implementation of the aforesaid will strengthen the institutional mechanism to better prepare for future
disaster and climate risks, social inclusion, and outreach to vulnerable communities to (i) formulate investment
plans for integrated risk reduction and climate change adaptation and (ii) devise an action plan for upgrading EOCs
with a functioning disaster management information system, including an operational decision support system
that will serve as a predictive system for climate-informed long-term disaster risk planning, and early warning
systems at the state and district levels.
54. As a result, the proposed reforms will ensure ‘Improved capacity for emergency, disaster, and climate risk
management.’ The progress will be measured by satisfactory completion of a Statewide emergency management
exercise, according to the updated State DRM Plan, which will cover disaster and climate resilience and improved
outreach, as evidenced by an independent observer’s report.
Pillar 2: Mainstreaming Disaster and Climate Resilience into Critical Infrastructure and Services
55. The objective of Pillar 2 is to mainstream disaster risk reduction and climate resilience into critical areas
of infrastructure development and service delivery. The World Bank’s support to the State’s mainstreaming
effort at this juncture is vital to keep the momentum in the right direction for comprehensive and integrated
sector reforms that will take time due to their complex nature. Addressing the underlying drivers of floods and
landslides and better preparing the State for future disasters follow the course of the river: (i) upstream through
IWRM (Prior Action 4 and Trigger 4); (ii) midstream through improved planning (Prior Action 7 and Triggers 9 and
10), land use (Trigger 8), and infrastructure and services (Prior Actions 6 and 8 and Triggers 6, 7, 11, and 12); and
(iii) downstream through ecologically sound agriculture and irrigation practices (Prior Action 5 and Trigger 5).
These reforms together address long-standing issues around the management of river and cross-sectoral
committees have been established to ensure coherence and coordination. These policy and institutional shifts
involve multiple departments and levels of the Government and have a significant public interface. These prior
actions enable the implementation of the following key sector priorities defined in the RKDP: Integrated Water
Resources Management (Prior Action 4); Agriculture (Prior Action 5); Roads and Bridges (Prior Action 6); Urban
Development (Prior Action 7); Water Supply and Sanitation (Prior Action 8); and Land (Trigger 5).
Prior Action 4 for DPO1 for Water Resources Management: The GoK has established a cross-sectoral state-level
committee to draft a River Basin Conservation and Management Authority Act establishing a River Basin
Conservation and Management Authority.
Indicative Trigger 4 for DPO2: Draft River Basin Conservation and Management Act has been submitted to the
State Assembly for approval.
56. The August 2018 floods damaged flood protection, irrigation, and water resources infrastructure with
an estimated total recovery cost of US$211.9 million. 13 The floods damaged approximately 886 km of river banks
and 103 km of coastal protection and drainage systems, over 540 km of distributary canals, and more than 350
hydraulic structures affecting the irrigation water supply, 200 storage ponds, and 70 small dams. Approach roads
leading to dams, site offices, and residential areas were also heavily damaged. The drainage systems in urban
areas were blocked due to flood waters carrying heavy sediment loads, compounded by intense rainfall. Gushing
waters spread deep into the habitations, aggravating the damages to public and private assets.
57. A lack of reliable hydrometeorological data, uncoordinated reservoir operations, and absence of
13 PDNA 2018.
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necessary institutional mechanisms exacerbated the disaster. There are 76 dams in the State, including four
managed by Tamil Nadu, in addition to over 18,000 storage ponds. Seven of the largest dams constitute 74 percent
of total storage capacity of 5.8 billion m3. The Kerala State Electricity Board (KSEB) operates 58 hydropower dams,
the State’s Water Resources Department (WRD) owns 16 irrigation dams, and Kerala Water Authority (KWA) owns
two water supply dams. The Irrigation Department oversees flood protection and maintenance of irrigation canals.
The State has weaknesses in the three fundamental areas of water resources development and management: (i)
poor coordination across and low capacity of various water-related institutions; (ii) inadequate hydrological
database, information systems, and tools for sound decision making, forecasting, and early warning to trigger
emergency response; and (iii) insufficient investments in building resilient infrastructure and poor operation and
maintenance (O&M) of assets. Inadequacies in these three areas contributed to the disastrous consequences of
the 2018 floods.
58. While the 2008 Water Policy recognizes IWRM, the State has not been able to fully implement the
policy, resulting in institutional ineffectiveness and suboptimal performance of various water-dependent
sectors. The policy calls for a river basin management approach for planning, development, and management of
water resources and emphasizes the importance of comprehensive watershed and water quality management
and the establishment of evidence-based planning and monitoring systems. However, adoption of the policy has
been challenging due to institutional weaknesses; fragmentation of water management among multiple line
agencies (for example, irrigation, drinking water, industrial water, and hydropower); and duplicated functions
between the WRD and other agencies (for example, the Irrigation Department and State Pollution Control Board).
The approach of the agencies is largely supply driven, without attention to water demand management, leading
to suboptimal performance of the sectors and the agencies.
59. Using the 2018 floods as an opportunity for implementing the long-pending reform in WRM, this prior
action catalyzes the most critical step to operationalize the 2008 Water Policy for introducing a river basin
planning and management approach. The GoK has established a high-level cross-sectoral committee of
secretaries and experts to draft a River Basin Conservation and Management Act as well as to establish and
operationalize a River Basin Conservation and Management Authority (RBCMA), based on lessons learned from
the recent disaster as well as past floods and droughts. The GO for establishing the committee outlines clear terms
of reference and time lines for drafting the proposed act. The committee will streamline and define roles and
responsibilities of various institutions (for example, WRD, KSEB, KSDMA, agriculture, irrigation, and so on) and
mechanisms for improved coordination under the new institutional setup of the RBCMA as an apex body for
overseeing IWRM. The committee will draft a River Basin Conservation and Management Act and define the roles
and responsibility of the RBCMA and other water-related institutions. The committee will consider international
good practices and lessons learned from establishing river basin organizations for IWRM, as well as the
transboundary nature of dam operations with the neighboring State of Tamil Nadu.
60. The proposed trigger seeks the institutionalization of integrated river basin planning and management
based on the River Basin Conservation and Management Act. The Act will enable the establishment and
operationalization of the RBCMA with core functions of (i) developing and operating modern information and
analytical systems to improve the quality and reliability of data and information, enhance real-time monitoring,
and improve the scientific basis for informed decision making in the water sector; (ii) integrating planning across
all water-related sectors on a basin or sub-basin basis, including developing water allocation and use strategies
and identifying and preparing a prioritized shelf of investments that make more productive use of water resources
and mitigate risks; and (iii) strengthening systems for coordinated real-time water infrastructure (for example,
dams and irrigation networks), including rolling out statewide flood forecasting and early warning systems and
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improving the integrated operation of reservoirs in the State through updated cross-sectoral operation
guidelines. The Act will include the regulatory regime for IWRM, dam safety, and integrated reservoir operations.
The RBCMA, to be established through the Act, will be responsible for these functions. The adequate provision of
these functions will require institutional reforms (for example, cross-sectoral coordination, restructuring the WRD
along river basins) and capacity building (skilling and equipping appropriate staff).
61. As a result, the proposed reforms will ensure ‘Improved river basin planning and water infrastructure
operations management for climate resilience at the state level’. Progress toward achieving this result will be
measured based on the development of river basin management plans by the RBCMA for two priority river basins
(that is, Pamba and Periyar river basins).
Prior Action 5 for DPO1 supporting reforms in Agriculture: The GoK has notified 14 the establishment of five
agroecological zones and the reorganization of the Agriculture Department along agroecological zones.
Indicative Trigger 5 for DPO2: The GoK has instituted/amended policies, guidelines, and programs for expansion
of agriculture risk insurance uptake.
62. The August 2018 floods and landslides caused widespread damage to the agriculture sector of Kerala.
Approximately 50 percent of Kerala’s geographical area is under cultivation. 15 Around 17 percent of the State’s
population depends on the primary production sector including crops, livestock, and fisheries. 16 The crops sector
incurred damages in flood-hit areas as well as the other areas due to incessant rains followed by high
temperatures, leading to destruction of seasonal crops and reduction in yields of tree crops. Damages to the crops
sector were estimated at INR 27.23 billion or US$382 million, with estimated crop production losses of INR 35.58
billion or US$500 million across 89,610 ha. 17 The major damage includes destruction of irrigation systems and
structures, crops, agriculture buildings and assets, and soil degradation. This directly affects people’s livelihoods
and their ability to bounce back after a disaster. Making the agriculture sector resilient to disasters and impacts
of climate change directly improves resilience of farmers and communities.
63. Agroecological approaches offer a paradigm shift to more sustainable and resilient food systems while
restoring ecosystem services and biodiversity in the context of climate change. While the present system of
planning accounts for cropping patterns and macro-climatic conditions, it does not factor in ecological variance
between blocks within a district. Resources are allocated at the district level based on past cropping and
expenditure patterns. Adoption of agroecological approach will be a significant departure from the existing
practices of planning and resource allocation for agriculture in the State, leading to increased resilience of the
farmers.
64. The prior action catalyzes a paradigm shift in agriculture practice in the State, through notifying the
division of Kerala into five agroecological zones (AEZs) 18 and reorganizing the Agriculture Department based on
AEZs. This division was done based on comparable agroclimatic parameters to delineate areas suitable for various
farming systems. Each of these zones is characterized by distinct agroecological parameters such as
geomorphology, soil types, rainfall, temperature, and elevation. Each zone has been further subdivided into
Agroecological Management Units (AEMUs). The AEMU boundaries have been kept consistent with administrative
14 ‘Notified’ means publicly declaring the Government’s decision specific to the subject matter.
15 Department of Economics and Statistics. 2017. Agriculture Statistics 2016-17.
16 Department of Economics and Statistics. 2013. Agriculture Census 2011.
17 UN. 2018. PDNA: Kerala.
18 These are (i) coastal plains, (ii) mid-land laterites, (iii) foot hills, (iv) high hills, and (v) Palakkad plains.
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block boundaries for ease of administration and ecologically informed service delivery. As a result, Kerala has been
divided into agroecologically similar groups of blocks having unique agroecological characteristics and suitability
for specific crops and extension needs. The restructuring of the Department of Agriculture through the prior action
aims to ensure that planning, resource allocation, and deployment of human resources are aligned with
agroecological classification of blocks and districts. This will enable a service delivery ecosystem that provides
tailored extension support and necessary incentives to promote adoption of agroecologically informed farming
systems. Based on the full road map of actions provided in the RKDP, the Agriculture Department is currently
preparing a detailed action plan with time lines, which will be aligned along AEZ divisions to enable the paradigm
shift. The plan aims to significantly improve efficiency and resilience by better targeting resource allocation
(including subsidies), inputs, extension services, market development, and water management for ecologically
similar areas. Regulatory environment and farmer advisory services—both public and private—will also gear up
accordingly to support or disincentivize agriculture practices based on relevance within the AEZ. The GoK is
committed toward developing value chains for key commodities to reduce market side risks. These activities have
been included under the action plan being prepared.
65. The agroecological approach will enhance coordination between the Department of Agriculture, WRD
and LSGIs toward climate smart irrigation planning and management. There is considerable scope to improve
agricultural water and moisture management for climate smart agriculture. Notwithstanding significant public and
private investment in irrigation, many irrigation systems in the State are underperforming and do not adequately
serve end users. Over time, the agricultural sector has become increasingly reliant on groundwater in many parts
of the State, which has now surpassed surface or canal water as the primary source and is increasingly under
stress. The core reason for the poor performance of irrigation systems in Kerala appears to be the shift in cropping
pattern from paddy-dominated food crops to coconut and rubber-dominated cash crops over the past five to six
decades, while most of the irrigation systems are designed for irrigating paddy fields. There is a glaring mismatch
between agriculture sector requirements with regard to capital investments for development of large-scale canal
irrigation systems and absence of corresponding area expansion under canal irrigation. Joint initiatives by the
Department of Agriculture and WRD, and LSGIs based on AEZs will enable technically and agroecologically
suitable irrigation schemes, including micro-irrigation in hilly areas.
66. Promotion of agroecologically relevant farming systems is expected to sustainably enhance production,
increase resilience to climate shocks, and lead to improved market development and trade integration. The
AEZ-based agriculture development approach calls for ecosystem-based adaptation of agriculture practices, thus
moving from a ‘one-size-fits-all’ approach to ecologically sustainable farming practices. AEMU-level planning
emphasizes local planning and development based on agroecological boundaries as against top-down planning
and implementation based on administrative boundaries. Agroecological planning can herald sustainable
development of agriculture in Kerala through efficient land use planning, mapping suitable crop varieties to
AEMUs, optimizing resource allocation, tailoring schemes, interventions, and technologies to AEMUs, improved
risk analysis of climate hazards, and identification of suitable mitigation measures. Agriculture advisory services,
mechanization, input production and application will be tailored to the relevant farming systems. Agriculture
support institutions at various levels will benefit from improved clarity pertaining to their catchment areas’ needs
and can build their capacities and delivery systems to provide ecosystem-based services.
67. To advance the reform agenda supporting AEZs, the indicative trigger seeks the institution/amendment
of policies, guidelines, and programs for expansion of agriculture risk insurance uptake. In addition to national
schemes such as the Pradhan Mantri Fasal Bima Yojana and the Weather Based Crop Insurance Scheme, Kerala
has its own crop insurance scheme. However, uptake remains less than 10 percent across the State, affecting the
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resilience of farmers. To improve uptake, the Agriculture Department will (i) develop a strategic plan to expand
awareness of crop insurance based on AEZs, (ii) develop a road map for enhanced coverage of crop and livestock
insurance schemes, (iii) provide special compensation packages and insurance plans to joint liability groups that
are vulnerable to post-flood scenarios, and (iv) expand the coverage of insurance packages for climate resilient
agriculture by including additional crops such as rubber and damages from extreme winds and rains. The GoK will
devise a new agriculture risk insurance scheme for providing an end product-based insurance coverage to all
sectors of farmers by leveraging the modern technology tools and global good practices.
68. As a result, the proposed reforms will ensure ‘More resilient and sustainable agriculture based on AEZs
and enhanced agriculture risk insurance.’ Progress toward achieving this result will be measured based on (i)
resilient and sustainable AEZ development plans adopted for at least two AEZs; and (ii) agriculture risk insurance
uptake enhanced to at least 20 percent.
Prior Action 6 for DPO1 in Transport and Roads Sector reforms: The GoK has notified19 the criteria for the
identification/determination of the core road network and mandated the review of PWD road policies,
construction codes, and manuals to ensure the resilient design, construction, and maintenance of core road
network.
Indicative Trigger 6 for DPO2: The GoK has adopted performance-based management contract model for
managing the core road network, incorporating design and performance standards and disaster-related
emergency response module.
Indicative Trigger 7 for DPO2: The GoK has undertaken institutional streamlining in the roads sector to address
institutional and resource fragmentation and to strengthen core sector institutions.
69. During the recent disaster, approximately 48 percent of the state highways and major district roads
were reported damaged, mainly due to floods, landslides, earth slips, soil movement, and rock falls. The flood
inundation map shows that most of flooding occurred in the areas of backwaters and lower reaches of the river.
In the middle and upper reaches, the flooding was less but damage occurred in areas where discharges were in
excess of full bank flow. The PDNA estimated that about US$372 million would be required for reconstructing
damaged state highways and major district roads. Damages to the road network also had implications for rescue
and relief operations.
70. The road sector in Kerala, which is the dominant mode of transport supporting the State’s agriculture,
tourism, and socioeconomic activities, faces inadequate capacity and institutional ineffectiveness to meet the
growing demand and to reduce its exposure and vulnerability. Kerala’s road network density is around 37
percent higher than the national average of 387 km per 100 km2. This network caters to 75 percent of the State’s
freight transport and 85 percent of passenger travel. Of the 205,000 km of road network, the core road network
of the State consists of approximately 1,780 km of national highways, 4,340 km of state highways, and 27,470 km
of major district roads, together constituting roughly 16 percent of the total road network and carrying about 80
percent of road traffic. This core road network has come under increasing pressure from growing population and
rapid traffic growth, at around 12–14 percent annually. Around 70 percent of state highways are still single lane,
with 54 percent in poor condition. Because of poor design standards and low-quality construction and
maintenance, the core road network is also vulnerable to disaster and climate change risks. Inadequate capacity
and poor quality of roads is exacerbated by the fragmentation of institutions that manage the network, competing
for same funding sources and creating an uncoordinated approach to asset development and management. The
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FY18–19 State budget allocated approximately INR 350,000 or US$5,000 per km for development and
maintenance of state highways and major district roads, which is significantly lower than the national average.
71. This prior action helps the GoK strategically prioritize risk reduction investments in the core road
network. The road network is divided into three functional classifications—primary, secondary, and tertiary. The
core network is a subset of the primary network and determined based on the following criteria: traffic volume,
connectivity with economic growth centers, public transport route, higher share of commercial vehicle and
resilience functionalities such as provision of emergency services (for example, access to hospitals, ambulances,
search and rescue) and delivery of relief goods and equipment for speedy restoration in times of disaster. The
identification of the core road network enables the State to make strategic decisions for prioritizing rehabilitation
and upgrades of the core road network to enhance its resilience. The resilient core road network will enhance the
resilience of local communities including the hilly areas where majority of the tribal population is concentrated.
72. In parallel, this prior action will define climate resilient standards on road designs, construction, and
maintenance. The existing manuals of the Public Works Department (PWD) do not consider climate change
impacts and require stronger regulatory enforcement across multiple institutions. The proposed DPO will support
developing policies that embed climate resilience in road infrastructure planning, investment prioritization,
design, construction, and asset management. Based on the new policies, the PWD will subsequently update its
code and manual, incorporating principles of risk assessment and improved resilience standards and technologies.
Any intervention in the core road network and risky areas will be monitored in compliance with the new standards.
The GoK will incrementally roll out the resilient standards to the entire core network over time. The PWD will
require technical assistance to build its capacity in adopting and enforcing the new policies.
73. The indicative Trigger 6 seeks the adoption of performance-based management contract (PBMC) model
for managing the core road network. The PBMC will incorporate resilient performance standards and cover the
responsibility of contractors for timely emergency response and restoration in times of disaster. This will ensure
that the core road network is designed, built, and maintained with higher and more resilient standards using
advanced private sector expertise. As part of testing the new approach, the World Bank will help the GoK assess
and address potential risks and liabilities arising from the PBMC. Several Indian states are adopting the PBMCs for
road construction and maintenance with increasing success, including Andhra Pradesh and Karnataka. The PWD
will learn from and build on these examples.
74. To strengthen institutional resilience, the indicative Trigger 7 seeks to address institutional and resource
fragmentation in the roads sector and to strengthen core road sector institutions. The road sector institutions
will be streamlined with dedicated institutional mechanisms for managing the core road network and creating a
coordinated approach toward risk-informed asset development and management. This will include defining clear
roles and responsibilities of the PWD for developing and managing green, safe, and resilient road networks
through the development of the DRM Plan, including emergency preparedness and response procedures.
Institutional streamlining will contribute to more efficient emergency response and rapid restoration of the core
road network which is critical for transportation of emergency goods, materials, and ambulances in times of
disaster. The streamlining will also support strategic investment decision making, efficient resource allocation,
and asset management. Institutional streamlining of the transport sector will likely face bureaucratic resistances.
The GoK will establish a Road Sector Modernization Task Force to undertake a consultative process and to achieve
consensus among key stakeholders on time.
75. As a result, the proposed reforms will ensure ‘Improved physical and institutional resilience of the core
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road network.’ Progress toward achieving this result will be measured based on (i) the number of key core road
network corridors, including in hilly areas where most of the tribal population is concentrated, adopting the PBMC
based on resilient standards for maintenance and (ii) increased share of budget allocation for the core road
network by 20 percent from the 2019 budget allocation for the core roads.
Indicative Trigger 8 for DPO2 for structural transformation in Land and Cadaster: The GoK has reorganized
institutional arrangements to create a single land record and integrated map for Kerala unifying the current
Deeds Registry, Record of Rights, and Field Book (map) records and services.
76. In Kerala, land records keeping is fragmented and while progress has been made in connecting the
records, their data on land ownership differ. Registration of deeds is done by the Department of Registration
under the Minister of Registration, the Record of Rights by the Revenue Department, and the Field Book (cadastral
map) by the Survey and Land Records Department under the Minister of Revenue and Housing. The latter two
records are often not updated after the registration of a land transaction deed. The interlinked processes are
constrained and often neglected, leading to a situation where the information on a property differs between the
three records. Notably, land rights-related litigation dominates courts in Kerala, stemming in part from the system
that allows registration of deeds without verifying the property details or existence of previous deeds on the same
land parcel. Also, a large percentage of land transactions between 1947 and 1967 have not been registered
anywhere and vast state land areas are being encroached to an unknown, but significant extent. The cadastral
map is grossly outdated for 46 percent of Kerala’s close to 1,700 villages, requiring a resurvey. Apart from sheer
upscaling of investment, success with land records requires an institutionally and operationally integrated
program to complete and update land records systematically across Kerala. Finally, although a digitization
program is under way, in many places land records are often stored in poor conditions without adequate
safeguards from natural disasters.
77. This trigger enables comprehensive and secure land records in Kerala, offering critical protection of
rights when population is displaced by a disaster. The Kerala Land Records Modernization Mission led by the
Land Commissioner of the Revenue Department will unify the land records and registry map completion work of
the Department of Revenue, Department of Land Records and Surveys, and the Department of Registration. The
program will include (i) establishment and operationalization of the institutional arrangements for land records
modernization, (ii) a programmatic approach for systematic completion of land records in a share of the most
disaster-prone areas, and (iii) establishing an enabling regulatory framework for maintaining modern land records
and land registration services in Kerala. Comprehensive land records and information on land use and built
environment lead to improved understanding of risks and evidence-based land use planning and land
management that among others directs housing to areas of low hazard exposure. Secure tenure directly
contributes to rapid disaster recovery and resilience of vulnerable households. In addition, secure tenure and
comprehensive land administration systems increase investments in dwellings, which reduces risks and improves
resilience through better siting and construction of buildings.
78. The proposed trigger seeks the creation of a single land record and integrated map for Kerala, unifying
the current Deeds Registry, Record of Rights, and Field Book (map). This will enable integrated, digital, and up-
to-date land records in Kerala and provide a functional platform for the required investments of scale in a
programmatic manner.
79. As a result, the proposed reforms will ensure ‘Unified and more up-to-date land records in high risk areas.’
Progress will be measured based on the implementation of a program for single digital land record and map in at
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least two high-risk districts and provision of gender-disaggregated data on land ownership and transactions by
Kerala Land Records Modernization Mission.
Prior Action 7 for DPO1 in Urban Development: The GoK has established a committee to revise the Town and
Planning Country Act to make master plans risk informed and to revise the annual expenditure planning and
budget guidelines for urban local bodies to undertake multiyear municipal infrastructure investments.
Indicative Trigger 9 for DPO2: The GoK has amended TCP Act for risk-informed master planning.
Indicative Trigger 10 for DPO2: The GoK has revised annual expenditure planning and budget guidelines for urban
local bodies to undertake multiyear municipal infrastructure investments.
80. City-level planning is mostly driven by a fragmented and ad hoc annual planning and expenditure cycle.
The current budget allocation system does not leave much flexibility for ULBs to undertake long-term capital
planning and investments in key infrastructure and service delivery sectors, including solid waste management
(SWM), drainage, and sanitation. ULBs also have responsibility for implementing the state programs in
socioeconomic sectors such as health, education, agriculture, animal husbandry, agriculture, and fisheries. The
annual planning guidelines of the Local Self-Government Department (LSGD) require the ULBs to allocate a
minimum share of the plan funds by sector, based on discussions in ward committee meetings and 14 to 19
sectoral working groups in each ULB. Excessive earmarking of the plan funds among various sectors has resulted
in severe allocation inefficiencies and hindered the incorporation of resilience principles into planning, design, and
construction of critical municipal infrastructure, which often requires multi-year planning and investments. Lack
of resilient municipal infrastructure, such as drainage, sanitation, and SWM systems, contributed to greater
disaster vulnerability as well as induced health and other human hazards during the 2018 floods.
81. The current municipal master planning system in Kerala does not fully incorporate climate and disaster
risk information. The 2016 Kerala TCP Act allows the municipal master plans to include regulations for natural
hazard prone areas. While the KSDMA and DDMAs prepare district-level natural hazard maps, ULB master plans
do not yet include hazard layers due to differences in mapping scales at the ULB level and inadequate technical
capacity of ULBs in preparing hazard maps. Moreover, although 23 out of 97 master plans have been notified, the
sanctioning of the master plans is often delayed, resulting in both non-enforceability of the master plans and
inconsistency with ULB’s annual plans and budgets.
82. This prior action offers an important milestone for introducing risk-informed urban planning in Kerala.
The objectives of the Government are to (i) mandate master plans which would ensure risk-based urban planning
and (ii) enact new policies that allow ULBs to plan and carry out capital investments that span multiple years in
resilient urban infrastructure. Addressing these issues will require detailed analysis of specific legal and
institutional changes that are needed, convening of multiple government departments and tiers and consultations
with civil society stakeholders. Through this prior action, the Government will establish a high-level committee
and outline clear terms of reference, processes and time lines, emphasizing its commitment to specific policy and
institutional changes and time-bound implementation plans that would allow the above objectives to be met
under DPO2.
83. The proposed triggers seek the development and approval of guidelines for preparation and official
notification of risk-informed urban planning. The guidelines will mandate risk-informed master planning to
reduce vulnerability of the built environment to natural disasters and climate change impacts. Also, guidelines for
multiyear planning and budgeting will be adopted by the LSGD and initialized by ULBs for resilient infrastructure
development and service delivery. This will include assigning plan funds to multiyear infrastructure and service
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delivery projects. These guidelines will ensure consistency between the master plans and district- or local-level
plans and enable appropriate land demarcation for essential municipal services and risk-informed municipal
infrastructure development.
84. As a result, the proposed reforms will ensure that ‘ULBs notify risk-informed master plans and start
allocating funds for multiyear infrastructure investments in their annual plans.’ Progress toward achieving this
result will be measured based on based on (i) preparation and notification of risk-informed master plans by at
least two ULBs and (ii) undertaking of multiyear municipal infrastructure investment planning and budgeting by
at least two ULBs.
Prior Action 8 for DPO1 regarding structural changes in Water Supply and Sanitation: The GoK has established a
cross-sectoral committee to prepare the policy and institutional program for strengthening water supply and
sanitation services and their resilience to disasters and impacts of climate change.
Indicative Trigger 11 for DPO2: The GoK has adopted the policy and institutional program for strengthening water
supply services including service delivery models, O&M cost recovery, MIS, and Grievance Redress Mechanism.
Indicative Trigger 12 for DPO2: The GoK has adopted a State Sanitation and Waste Management Strategy,
incorporating cost-effective septage and waste management models.
85. The recent floods and landslides exacerbated the poor sanitation conditions in Kerala. Kerala ranks high
in the availability of household toilets, but many of them still use leach pits, which cause groundwater pollution
due to the high groundwater table. These create extra challenges for the women who are responsible for the
health and hygiene practices for the family. Sewage collection and treatment is absent in almost all ULBs except
partial coverage in Trivandrum and Kochi. The State has promoted decentralized management of biodegradable
waste at the household level and recovery and recycling of non-biodegradable waste. However, disposal facilities
for inert rejected waste are lacking and non-biodegradable waste is not recovered or recycled at present. Because
of dumping of solid waste and untreated sewage, contamination of water bodies is common. In fact, a vast amount
of waste, including debris, sewage, municipal solid waste (for example, plastics and e-waste), industrial waste
(hazardous and non-hazardous), and biomedical waste accumulated along the river banks, canals, drainage
systems, open wells, and wetlands during the 2018 floods.
86. Despite recognizing sanitation as one of the critical issues, the GoK has not been able to address the
problem due to several reasons, including (i) limited financial resources through existing plan funds and own
source revenue as compared to the investment needs for sanitation; (ii) lack of mechanisms to plan city- and
village-wide improvements; (iii) limitations in the current decentralized annual planning process that leads to
fragmented investments and small-scale projects at the local level; (iv lack of critical human resources to design,
implement, and maintain key infrastructure; and (v) lack of land.
87. Inadequate piped water supply (PWS) and sanitation services in Kerala led to serious contamination of
drinking water sources during the 2018 floods, posing a risk to public health and the environment. Access to
PWS is low, with most households continuing to use well water. Based on 2018 data from KWA, about 54 percent
of rural population and 60 percent of urban population have access to household water supply connections and
public stand posts. However, only 28 percent of 8 million households have piped household connections, showing
under-utilization of the assets created. According to the GoI’s Integrated Management Information System
database, based on a sample survey, around 95 percent of groundwater sources are contaminated, of which 85
percent of sources have bacteriological contamination and 15 percent have chemical contamination. Coliform
contamination is found mostly in the well water sources (95 percent of the samples) and limited in PWS (1 percent
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of the samples). Boiling of water is the standard practice of treatment adopted by most households in Kerala. Lack
of PWS coupled with inadequate sanitation services led to contamination of drinking water sources during the
2018 disaster. This posed risk to public health as well as adverse impacts on the quality of surface water bodies,
freshwater, and marine ecosystems (for example, habitat change and loss of biodiversity), and tourism.
88. The existing policy and institutional framework, such as the State Water Policy (2008), does not
envisage any target for PWS coverage or service delivery parameters, including hours of supply, quantity of
supply, and metering. There are fragmented responsibilities and limited planning and coordination among the
KWA, Kerala Rural Water Supply and Sanitation Agency (KRWSA) and LSGD. Ownership by local governments is
limited due to inadequate technical and financial capacity and lack of incentives to improve connections and
service delivery. The Grama Panchayats and ULBs promote small water supply schemes mainly to address issues
in summer months when most wells go dry. The lack of any financial support, beyond contributions by local
communities, results in several schemes slowly becoming defunct. According to KWA estimates, the State has an
installed water treatment capacity of 3,016 million liters per day (MLD), but only about 2,608 MLD of water is
being produced. The KWA is adding another 1,064 MLD of treatment capacity through ongoing schemes. Given
the excess capacity issues, there is lack of strategy for revenue enhancement. Policy changes would be also
required to incentivize demand for household connections.
89. Kerala’s water supply service is not built on full cost recovery principles, weakening the financial
sustainability of the KWA, especially in the context of climate variability and change. Kerala follows volumetric
tariff structure for charging for water, fixed by the State Government. However, it is not built on full cost recovery
principles and the state budget has not always provided subsidies on time for the 2.2 million connections served
by the KWA. The baseline O&M cost recovery for the KWA is estimated at 41 percent without considering power
subsidies. At the same time, the KRWSA shows good practices in service delivery for rural water supply schemes
including full O&M cost recovery from beneficiaries for about 0.2 million connections. Further, most cities and
villages have about 45 percent nonrevenue water. Declining groundwater levels and high variation of rainfall over
the years have increased vulnerability, with many dried wells getting inundated during the floods. Finally, sector
information is presently scattered among different institutions with no standard mechanism to monitor service
delivery performance.
90. As part of the prior action for DPO1, the GoK has issued the terms of reference for a cross-sectoral
committee for preparing the policy and institutional program for water supply, sanitation, and waste
management services, and for their enhanced resilience to disasters and impacts of climate change, including
key principles and time-bound action plan. The sanitation and waste management strategy and program focuses
on scaling up cost-effective septage (including sewerage) and waste management models to address the current
challenges in the sector and ensure improved protection of water resources and public health during disasters.
The policy and institutional framework for water supply will enhance service delivery orientation by adopting
performance standards, ringfencing of the KWA into administrative units for internal benchmarking, exploring
service delivery models for local bodies and the KWA, reducing nonrevenue water, and promoting energy-efficient
services. The policy will clarify the O&M program, including connections policy, metering policy, volumetric tariffs,
and regulatory aspects to gradually enhance revenues and reduce subsidies. The policy will include monitoring
and evaluation (M&E) systems, grievance redress mechanisms (GRMs), and citizen engagement programs, and
ensure improved resilience of water supply infrastructure, and enhanced access to safe water, especially during
disasters. The GoK will prepare a detailed policy and institutional program for water supply, sanitation and waste
management sectors for DPO2.
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91. Through the prior action, the GoK has set up a committee to recommend the policy and institutional
program for strengthening water supply and sanitation (WSS) services and their resilience to disasters and
impacts of climate change. The policies and institutional program will (i) clarify roles and responsibilities of
different WSS agencies, including regulation, investments and financing, service delivery, and O&M; (ii) establish
performance and service delivery standards, including climate and disaster resilient standards; (iii) recommend
appropriate institutional and service delivery models; (iv) enhance accountability of WSS agencies through
performance-based financing and service delivery-based contracts; (v) identify measures and incentives for more
efficient operations; (vi) recommend cost-effective sewage and septage programs; (vii) increase customer
orientation by improving management information systems (MIS), developing Citizen Charter, and establishing
GRMs. This will contribute to improving the reliability and safety of drinking water sources and minimize
contamination of drinking water sources in times of disaster.
92. The indicative triggers seek the adoption of the policy and institutional program for strengthening WSS
services, including service delivery models, O&M, cost recovery, MIS, and GRM. The policy and institutional
framework for accountable and efficient water supply will ensure improved resilience of water supply
infrastructure, and enhanced access to safe water and improved public health, especially during disasters. The
GoK will adopt the state sanitation and waste management program in ULBs, including cost-effective septage and
waste management models sensitive to the needs of vulnerable groups such as women, SCs, and STs. The GoK
would also adopt the water supply program in at least ULBs, including service delivery models, O&M program,
and volumetric tariffs to increase cost recovery and reduce subsidies, MIS and GRM and citizen engagement
program, ensuring last-mile delivery to urban and rural households.
93. As a result, the proposed reforms will ensure ‘Improved WSS services.’ Progress toward achieving this
result will be measured based on (i) adoption of nonrevenue water reduction models in at least two ULBs, (ii)
recovery of O&M cost increased to at least 50 percent at the state level, (iii) public disclosure of annual
performance report by the KWA, and (iv) cost-effective septage and sewerage programs adopted in at least five
ULBs.
4.3 TECHNICAL ASSISTANCE
94. A technical assistance program will provide analytical and capacity development support to the GoK in
implementing reforms to complement the DPO series. The technical assistance program will span two years
coinciding with the expected timing for the two DPOs. The multisectoral technical assistance will include the
following themes to help the GoK achieve the results (Annex 1) and the RKDP: (i) maximizing finance for
development; (ii) fiscal and public financial management at the State and local levels; (iii) revitalization of fisheries
for resilience and sustainability; (iv) inclusive resilience; (v) open data for improved risk assessment, flood
monitoring and forecasts, and emergency response; (vi) risk-informed urban planning and hazard maps; (vii)
mainstreaming resilience in WSS, WRM, and transport sectors; (viii) disaster risk financing and insurance; (ix)
agroecology; (x) environmental management capacity building of the Directorate of Environment and Climate
Change (DOECC) and line departments; and (xi) more detailed environmental and social analysis on the potential
impact of the results expected from the policy reforms.
95. Furthermore, the technical assistance program will comprehensively strengthen the State’s fiscal and
public financial management capacity of the GoK. This will include (i) the development of a customized fiscal
sustainability analysis framework for the State allowing to model the impact of shocks on the fiscal and debt
outlook and to develop medium-term fiscal projections for better policy making and fiscal discipline; (ii) an
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extension of the debt sustainability analysis to the broader reconstruction financing plan of the government,
including investments to be channeled through the KIIFB; (iii) public investment management, particularly the
planning, appraisal, and vetting stage to make it more resilient, cost-efficient, and participatory by mainstreaming
and institutionalizing the innovative approach introduced in the RKDP; (iv) tax administration; (v) public
expenditure management; (vi) planning and comprehensive top-down and bottom-up budget preparation; (vii)
strengthen cash and debt management; (viii) state policy on commitment control along with procedures and
guidelines; and (ix) the State’s integrated financial management information system with greater focus on data
analytics, business process re-engineering, system security, data storage facilities and open data portal making
key basic data accessible in open, public, and analysis-ready format.
96. The estimated total budget for the abovementioned technical assistance program is approximately
US$6 million. An initial US$3 million has been made available from the proceeds of the restructuring of the
ongoing Kerala State Transport Project II.20 Further, the World Bank team is reaching out to relevant Trust Fund
programs (for example, Global Facility for Disaster Risk Reduction and Recovery [GFDRR]) as well as other
development partners. The World Bank team is also currently finalizing discussions with the Gates Foundation to
provide up to US$500,000 for technical assistance. In addition, the World Bank team is facilitating innovative
partnerships between the GoK and national and local thinktanks to enhance the capabilities of key State
departments and agencies. A Memorandum of Understanding between the GoK and the Infrastructure
Development Finance Company (IDFC) Foundation will be the first of these partnerships. Under this arrangement,
the IDFC Foundation is expected to provide domain experts, site-based capacity support, and change management
experts to GoK in priority sectors (for example, DRM, WRM, agriculture, transport, urban development, WSS, and
land) and areas of resilient development over a two-year period. In addition to the amounts for technical
assistance, the KfW has already committed US$3 million grant for supporting policy reforms and institutional
strengthening and for developing investment programs in the roads sector.
97. The analytical underpinnings for the Prior Actions are listed in Table 4.
Table 4. DPO Prior Actions and Analytical Underpinnings
Prior Actions Analytical Underpinnings
Pillar1: Enhancing Kerala’s Institutional and Financial Capacity for Managing Disaster Risks and Climate Change
• UN. 2015. Sendai Framework for Disaster Risk Reduction 2015-2030:
Prior Action 1: The GoK has adopted International Agreement Adopted on Disaster Management.
the Rebuild Kerala Development • Kerala State Disaster Management Authority. 2016. Kerala State Disaster
Program for enhancing disaster and Management Plan.
climate resilience through policy, • World Bank. 2010. Natural Hazards, Unnatural Disasters: The Economics of
regulatory and institutional actions Effective Prevention.
with inclusive and participatory • World Bank and Asian Development Bank. 2018. Kerala Floods and Landslides,
approaches. JRDNA.
• UN. 2018. Kerala PDNA.
Prior Action 2: The GoK has adopted • World Bank. 2014. Financial Protection against Natural Disasters: An
the new flood cess, with effect as of Operational Framework for Disaster Risk Financing and Insurance.
June 1, 2019] for financing resilient • Clarke, Daniel Jonathan, Darcy Gallucio, and Olivier Mahul. 2016. Disaster Risk
recovery efforts. Finance as a Tool for Development: A Summary of Findings from the Disaster Risk
20 P130339
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Finance Impact Analytics Project.
• Centre for Migration and Inclusive Development. 2017. God’s Own Workforce:
Unravelling Labour Migration to Kerala.
• Ratha, Dilip, Sanket Mohapatra, and Elina Scheja. 2011. Impact of Migration on
Economic and Social Development: a Review of Evidence and Emerging Issues.
• UN. 2015. Sustainable Development Goals 2015–2030.
Prior Action 3: The GoK has adopted
• India National Disaster Management Authority. 2009. National Disaster
new protocols for enhancing
Management Policy.
emergency preparedness and
• India National Disaster Management Authority. 2016. National Disaster
response capacity of various
Management Plan.
departments.
• UN. 2015. Guide to Developing Disaster Risk Frameworks.
Prior Action 4: The GoK has
established a cross-sectoral state-level
committee to draft a River Basin • The World Bank and Global Facility for Disaster Risk Reduction and Recovery
Conservation and Management (GFDRR). 2017. Flood Risk Management at River Basin Scale: The Need to Adopt
Authority Act establishing a River A Proactive Approach. Urban Floods Community of Practice.
Basin Conservation and Management
Authority.
• Srinivasan, Jeena T.2011. Agriculture – Wetland Interactions: A Case Study of the
Prior Action 5: The GoK has notified 21 Kole Land, Kerala. Center for Economic and Social Studies, Hyderabad
the establishment of five • Howden, S. Mark, Jean-François Soussana, Francesco N. Tubiello, Netra Chhetri,
agroecological zones and the Michael Dunlop, and Holger Meinke. 2007. Adapting Agriculture to Climate
reorganization of the Agriculture Change.
Department along agroecological • Altieri, M. A., C. I. Nichoolls, , A. Henao, and M. A. Lana. 2015. “Agroecology and
zones. the Design of Climate Change-Resilient Farming Systems.” Agronomy for
Sustainable Development.
Prior Action 6: The GoK has notified 22

the criteria for the • Paris Agreement on Climate Change at the 21st Conference of Parties, December
identification/determination of the 2015.
core road network and mandated the • Kerala State Planning Board and Stakeholder Discussions. State Economic Review
review of PWD road policies, 2016/2017.
construction codes, and manuals to • Weili Zhang and Naiyu Wang. 2016. “Resilience-based Risk Mitigation for Road
ensure the resilient design, Networks.” Structural Safety. Volume 62.
construction, and maintenance of
core road network.
• World Bank. 2016. Unbreakable: Building the Resilience of the Poor in the Face of
Natural Disasters.
Land and Cadaster
• Chacko Ann Mary. 2017. “Land Reforms and Women Land Owners in Kerala: A
Question of Power and Empowerment.”
No Specific Prior Action
• Aundhe, Madhuchhanda Das, and Ramesh Narasimhan. 2012. “Project
Nemmadi: The Bytes and Bites of ICT Adoption and Implementation in India.”
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Journal of Information Technology Teaching Cases 2 (1).
• Government of Kerala, State Planning Board, Twelfth Five-Year Plan 2012–2017.

Prior Action 7: The GoK has • Government of Kerala, State Planning Board, Thirteenth Five-Year Plan 2017-
established a committee to revise the 2022:
Town and Planning Country Act to • World Bank. 2017. Building Regulatory Capacity Assessment: Level 2- Detailed
make master plans risk informed and Exploration.
to revise the annual expenditure • G. K., Bhat, Raghupati Usha, Rajasekar Umamaheshwaram, and Karnath Anup.
planning and budget guidelines for 2013. Urbanisation–Poverty–Climate Change: A Synthesis Report – India, Volume
urban local bodies to undertake 1.
multiyear municipal infrastructure • The World Bank and GFDRR. 2017. Land Use Planning for Urban Flood Risk
investments. Management.
• P. S., Harikumar. 2016. Water Quality Management of Kerala- Issues, Challenges,

and Solutions, Republic Working Group on Environment, Kerala State Planning
Board. p. 9.
• P. S., Harikumar, and K., Kokkal. 2009. Environmental Monitoring Program on
Water Quality. Kerala State Council for Science, Technology and Environment.
Prior Action 8: The GoK has • NIUA (National Institute of Urban Affairs). Urban Climate Change Resilience,
established a cross-sectoral Policy Brief 4: Water Security Resilience against Climate Change.
committee to prepare the policy and • NIUA. 2014. Urban Climate Change Resilience, Policy Brief 5: Urban Health
institutional program for Inclusive Health Policy and Climate Resilience Inclusive Urban Health Policy.
strengthening water supply and • Jha, Abhas K., and Robin Bloch Jessica Lamond. 2013. Cities and Flooding: A
sanitation services and their resilience Guide to Integrated Urban Flood Risk Management for the 21st Century.
to disasters and impacts of climate • Dr. Gupta, Anil K. Presentation on Flood Risk Management: Challenges for Urban
change. India. National Institute of Disaster Management.
• Department of Environment and Climate Change. 2014. Kerala State Action Plan
on Climate Change, Government of Kerala.
• GoK. 2018. Memorandum of Floods Summary of the Flood Event, Damages,
Impacts, and Needs Performed by the State Government.
4.4. LINK TO CPF, OTHER BANK OPERATIONS AND THE WBG STRATEGY
98. The proposed operation is fully aligned with the objectives and approaches of the World Bank Group’s
CPF for India for FY18–22. The CPF has three focus areas: (i) Resource Efficient Growth; (ii) Enhancing
Competitiveness and Enabling Job Creation; and (iii) Investing in Human Capital. The CPF recognizes that improving
DRM and resilience to climate change (Objective 1.5) and improving living conditions and sustainability of cities
(Objective 1.2) are critical for facilitating resource-efficient growth and poverty reduction. For enhancing India’s
ability to create more and better jobs, the CPF supports enablers such as increasing resilience of the financial
sector and financial inclusion (Objective 2.2) and improving connectivity and logistics by making the transport
systems more climate and disaster resilient (Objective 2.3). As a cross-cutting theme, the CPF pursues climate
smart engagement to support India’s climate change mitigation and adaptation efforts across the portfolio. The
CPF notes that addressing complex challenges requires reforms and engagement in multiple sectors to achieve
success. The proposed DPO contributes to achieving the abovementioned objectives through policy and
institutional reforms in an integrated fashion. The proposed operation adopts the four catalytic approaches
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outlined in the CPF to achieve the objectives: (i) leveraging the private sector, (ii) engaging a Federal India, (iii)
strengthening public sector institutions, and (iv) supporting a Lighthouse India 23 by leveraging experience and
lessons learned from the other states where the World Bank has supported post-disaster recovery and
reconstruction.
99. The proposed operation directly contributes to the World Bank’s twin goals of ending extreme poverty
and promoting shared prosperity. As a robust emerging economy, India faces the challenge of sustaining rapid
economic growth while lowering the greenhouse gas intensity and reducing the vulnerability of its large
population and growing stock of infrastructure. The country’s estimated average annual economic loss from
natural disasters is US$9.8 billion. 24 India has the largest number of people exposed to natural hazards in the world
(1.02 billion or 82 percent of the entire population). Climate change effects are estimated to have the potential
to push 45 million people into poverty in India. The proposed operation supports Kerala’s recovery from the floods
and aims to protect the development gains by enhancing the State’s resilience against natural disasters and
climate change.
100. The proposed operation builds on the World Bank’s existing and pipeline engagement in the State and
catalyzes the first of its kind State Partnership. The ongoing Second Kerala State Transport Project (KSTPII) is
being restructured to support initial recovery efforts. The restructuring and additional financing for the National
Dam Rehabilitation and Improvement Project aims to improve the safety and operational performance of selected
existing dams in the participating states, including Kerala. The National Hydrology Project aims to improve the
extent, quality, and accessibility of water resources information and to strengthen the capacity of targeted WRM
institutions in India, including Kerala. The National Cyclone Risk Mitigation Project Phase 2 aims to reduce
vulnerability to cyclone and other hydrometeorological hazards of coastal communities in coastal states, including
Kerala, and increase the capacity of the State entities to effectively plan for and respond to disasters. The Kerala
Urban Service Delivery Improvement Project, currently under preparation, aims to integrate resilience principles
into and undertake investments in critical urban infrastructure.
4.5. CONSULTATIONS AND COLLABORATION WITH DEVELOPMENT PARTNERS
101. During the preparation of the operation, consultations were conducted with a broad range of
stakeholders. The preparation of the JRDNA and PDNA involved consultations with various State departments,
district and local governments, affected local communities including vulnerable groups such as women, the
elderly, the SCs, and the STs, the private sector, and CSOs. Relevant State departments and the World Bank held
several sector workshops. These consultations helped identify the following: (i) transformational policy and
institutional reforms for strengthening resilience in the respective sectors, (ii) immediate and critical sector
studies, and (iii) priority investments. The GoK conducted statewide workshops and consultations to obtain public
comments and feedback on the RKDP in March 2019 and has finalized the RKDP based on the comments received.
Further stakeholder consultations with a focus on sectors and cross-cutting themes will be followed up by
continued dialogues with the GoK and inform the development of a holistic State Partnership Framework.
102. The World Bank has been a strong convener for the GoK’s recovery efforts by exploring opportunities
to collaborate with other development partners. The JRDNA was conducted jointly by the GoK, World Bank, and
23 ‘Lighthouse India’ stands for analyzing, curating, and disseminating the country’s vast experience and knowledge internally between
states as well as externally with the rest of the world and by doing so positioning India as a lighthouse.
24 UNISDR. 2015. Global Assessment Report.
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ADB and served as the basis for preparing the PDNA by the UN and the European Union. The RKDP takes a strategic
approach to partnerships on financing, capacity development, and citizen outreach. With World Bank support, the
GoK is exploring partnerships with other major donors, including the ADB, Japan International Cooperation Agency
and the Asian Infrastructure Investment Bank (AIIB). At present, the GoK and the World Bank are closely
coordinating with KfW on a partnership comprising investment and technical assistance support. The first phase
of KfW support will likely involve a concessional loan of EUR 170 million in support of the RKDP in roads sector, a
grant of EUR 10 million in livelihoods sector, and a grant of EUR 3 million for technical assistance. In addition, KfW
is also presently considering EUR 150 million support to the RKDP through parallel financing of the World Bank’s
DPO series, as well as expanding the resources for technical assistance. The AIIB has professed initial interest to
support up to US$300 million for investment operations under the RKDP. Coinciding with the launch of the RKDP,
the GoK has requested World Bank support to convene a forum of development partners to mobilize additional
partners and resources to programmatically support the RKDP.
103. In view of the need for sustained capacity support required for implementing key policy and
institutional reforms envisaged in the RKDP and the Resilient Kerala Program (RKP), the World Bank is
facilitating a partnership between the GoK and IDFC Foundation, a semi-government think tank in Mumbai. The
partnership will design and deliver a programmatic capacity-building program for key GoK agencies so that the
key policy and institutional actions can be effectively implemented, and the relevant institutions are able to
maximize the benefits of the reforms. Similar partnerships with other national and local thinktanks are also being
explored in specific sectors.
5. OTHER DESIGN AND APPRAISAL ISSUES
5.1. POVERTY AND SOCIAL IMPACT
104. The recent floods and landslides have disproportionately affected a significant share of the poor and
marginal population in Kerala, straining their limited resources and eroding their weak coping mechanisms. It
is estimated that 578 tribal settlements were directly affected by the floods, comprising over 10,000 ST
population, with more than 7,000 requiring direct shelter assistance. 25 Major damages were reported in hill
districts such as Wayanad, Palakkad, and Idukki with high tribal concentrations, with landslides and slips in roads
affecting access to relief measures and damaging plantations and paddy fields. Because many tribal settlements
are in remote forest areas, rescue and relief operations reached these places much later than others. Over 89,000
SC households in low-lying areas experienced physical damages and losses due to the floods. It is estimated that
there are more than 677,000 female-headed households in the 10 districts most affected by the floods and
landslides. 26 Of the 322,000 people sheltered in over 3,600 relief camps across 14 districts, more than 60 percent
were women and 30 percent were children as of August 2018. While the exact number of elderly people affected
by the floods is unknown, many of them reported that they were unable to save their belongings during
evacuation. Approximately 1,000 fishermen voluntarily supported rescue operations during the 2018 floods.
However, many of their boats suffered damages due to debris underlying the flood water. The policy reforms
under the DPO therefore focus on the need for specific actions for poorer and more vulnerable groups, involving
them in a participatory manner, and mitigating the differential impacts of floods on them.
105. The reforms will generate significant positive social effects, especially for the poorer and vulnerable
25 Government of Kerala. 2019. Economic Review 2018: Kerala State Planning Board. Thiruvananthapuram: GoK.
26 Government of Kerala. 2019. Economic Review 2018: Kerala State Planning Board. Thiruvananthapuram: GoK..
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groups. An RPSIA was conducted as a good practice considering that the RKDP itself would involve significant
infrastructure development and rehabilitation. It was conducted from February to March 2019 based on a desk
review and interviews with key stakeholders including the State and Panchayat officials, academia, and female
beneficiaries of Kudumbashree 27 (comprising group leaders, SC women, and women from the fishing community).
The activities to be undertaken under this DPO are expected, mostly, to benefit and support vulnerable groups
including women, the elderly, persons with disability, SCs and STs, migrant workers from other Indian states, and
fishermen living in coastal areas. The RKDP is gender informed to integrate women’s needs and their knowledge
as resilience champions. Accordingly, all future disaster resilience plans, urban master plans, and similar plans and
strategies supported under the DPO will be gender-informed and will consider specific needs of women for
shelter, safety, and sanitation in times of disaster. Key findings of the analysis, including a high-level impact
assessment of prior actions and the GoK’s existing systems for inclusion, are summarized below.
106. Pillar 1 of this operation will enhance the State’s institutional and financial capacity to protect the assets
and livelihoods of poor and vulnerable groups through an inclusive and participatory approach. The proposed
operation will build the State’s technical and institutional capacity to implement the RKDP, which is guided by the
principle of ‘Fast, Efficient and Inclusive’ resilient development. The proposed operation will implement more
effective policies for resilient recovery from floods and other natural disasters and moreover help build resilience
of communities against such future disasters. Kerala has a very strong cadre of women in Kudumbashree, which
is used for traditional gender initiatives such as saving and livelihood creation and promotion. However,
Kudumbashree also played an extensive role in the 2018 post-flood relief and recovery efforts. Kudumbashree
members reportedly cleaned houses and public offices, provided counseling to families, managed community
kitchens in affected areas, collected relief material and distributed it in camps, provided assistance for packing of
take-home kits, supplied volunteers for various activities, housed flood victims in their homes, and conducted
mass cleaning activities in some districts. Further, nearly half of all members in local self-government institutions
(LSGIs) in Kerala are women. However, the office bearers of these LSGIs often do not have the capacity to select
projects to address interests of women and children. The RKI will help strengthen the institutional capacity of the
RKDP at all levels, so at least a given proportion of projects selected can address issues specifically faced by women
during disaster (for example, last mile connectivity, different or nonexistent information channels, and so on) and
tap their capacity as resilience champions. In terms of other actions under Pillar 1, enhancing the State’s financial
capacity through a flood cess is unlikely to affect the poor as it applies to luxury goods. Finally, it is expected that
an enhancement in the State’s emergency preparedness and response capacity will help protect vulnerable groups
such as the elderly, women, children persons with disability, and those who live in remote communities, so they
can be evacuated and rescued efficiently.
107. Mainstreaming resilience into critical infrastructure and services under Pillar 2 will contribute to
improving the livelihoods of poor people and vulnerable groups. Especially, the shift to agroecological farming
is expected to improve agricultural productivity, thereby directly improving the livelihood of small and vulnerable
farmers. Enhanced resilience of road networks especially in hilly areas will mitigate disruptions to emergency
transportation services (for example, search and rescue, relief, and health service) for ST communities. Improving
the State’s land records and maintenance will help the GoK obtain gender-disaggregated data on land ownership
and transactions in the State. Currently, there are no reliable figures on the proportion of women owning land in
Kerala because the land registry does not provide gender-disaggregated data on land ownership. Including this
dimension will support women’s financial inclusion as they will be able to show that they have collateral. Such
data can also be used to design more targeted support to women without land ownership. Improved water supply
27 Kudumbashree is the state’s initiative for poverty eradication and women’s empowerment.
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coverage and sanitation services will benefit especially women and SC and ST households without access to safe
drinking water. The revised annual planning guidelines will mandate ULBs to implement plans in a socially
sustainable manner that are sensitive to the needs of vulnerable groups such as women, children, elderly, and
persons with disability. The risk-informed master plans will likely help the most vulnerable groups by facilitating
the regulation of land use in hazard-prone areas. The RKDP states that all risk informed master planning would be
forward looking and would not require immediate resettlement. If there are settlement areas that pose imminent
threat to lives and livelihoods of communities, socially acceptable and inclusive special programs will be prepared.
The World Bank will provide support to the GoK through a technical assistance program during the
implementation period of the DPO1 and will also carry out more detailed environmental and social analysis on
the potential impact of the results expected from the policy reforms.
108. The GoK’s policies and programs to address the needs of vulnerable groups indicate that the State has
adequate capacities and systems in place to manage social risks and enhance positive effects of the operation.
For example, the State Planning Board prepares a separate gender and child budget to ensure that planning,
financing, implementation and evaluation by sectoral departments take into account considerations of women
and children. In addition, the GoK has mainstreamed gender considerations into local-level planning by, inter alia,
earmarking a minimum of 10 percent of LSGI budgets to the Women Component Plan, ensuring women’s
representation in the LSGI’s sectoral Working Groups, and requiring gender impact statements as part of cost-
benefit analysis. However, the capacity of the Panchayats needs to be built so that women’s interests, especially
in the wake of disaster, are effectively addressed by the LSGIs. The State’s exemplar Kudumbashree program
empowers women by improving their livelihoods and integrating them into local governance processes. Also,
Kudumbashree implements an educational program for children with disabilities. In the aftermath of the 2018
floods, groups of women under Kudumbashree played an extensive role in clean-up and relief efforts, and also
contributed generously to the relief fund. There are special programs to assist the aged, SC and ST population,
migrant workers, and fisher women. While most of these programs received additional FY19/20 budget to address
the post-disaster recovery needs, many migrant workers were unable to benefit from such schemes during the
floods due to lack of access to information, loss of identity cards in the floods, and lack of social support. The
proposed operation will enhance the institutional and technical capacity for managing disaster risks, which will
contribute to building robustness of various social programs in times of disaster.
5.2. ENVIRONMENTAL ASPECTS
109. The State’s environment and forestry sector incurred total damage and loss of US$4 million and
recovery needs of US$21 million according to the PDNA. The impact on forest ecosystems is marked by soil
erosion, loss of humus, and widespread destruction of the riverine vegetation. Due to the flooding, wetlands,
especially the Ramsar site Vembanad Kole, have received sizeable quantities of solid and industrial wastes which
adversely affected the water quality. During the floods and landslides, approximately 770 different landscapes
including riverine, forest, plantations, and agricultural fields were affected, which will have a long-term impact on
biodiversity due to habitat modification. Of the 25 key aquatic biodiversity areas in Kerala identified by the
International Union for Conservation of Nature, eight systems have been severely affected by the disaster.
110. The policy and institutional reforms will generate significant positive environmental effects but will
require significant improvements in the State’s environmental management capacity and systems. Although the
proposed operation focuses on policy and institutional reforms and it is not mandatory, a rapid policy strategic
environmental assessment was conducted considering that the RKDP itself would involve significant infrastructure
development and rehabilitation. The assessment was conducted from February to March 2019 based on a desktop
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review and meetings with line departments, Directorate of Environment and Climate Change (DOECC), and the
Forests Department. The reforms will help prevent the occurrence of similar-scale damages and environmental
protection from future events. The other sector reforms will also contribute to positive environmental effects. For
instance, river basin management will protect the riparian environment and lead to environmentally improved
flow of soil and better flow of silt to the sea. This will have a positive impact on conserving the beach sand, an
important coastal resource. Also, the agroecological management approach will reduce the pressure on the land
resources. The main sector reforms that will have bearing on forests pertain to water resources and roads. Both
sectors have reforms that embed sound environmental principles. For instance, the introduction of green, climate-
resilient road construction practices such as better slope protection and strengthened stormwater management
particularly in the hilly ranges will have a positive contribution to reducing landslide risks. These efforts will help
in the management and mitigation of future floods. Furthermore, Prior Actions 2, 8, and 6 are designed to
implement actions in line with the State Action Plan for Climate Change, in addition to the actions in the RKDP
(Prior Action 1). While the RKDP will integrate principles of environmental sustainability as evident in the cross-
cutting sector note on Environment and Climate Change led by the Departments of Environment and Forests, it
may have significant negative impacts on the environment and forests in the absence of proper environmental
due diligence procedures and systems.
111. Strengthening the capacity of line departments and the DOECC, in managing environmental risks is
critical. The responsibility for managing environmental issues within the State lies with the Department of
Environment in general, and the DOECC in particular. The responsibility for coordinating, monitoring and
evaluating implementation of the State Action Plan on Climate Change (SAPCC) also lies with the DOECC. The
institutional capacity of the DOECC is inadequate with fewer than 10 environmental specialists and without field
presence. The capacity of line departments was also found to be inadequate. As a result, coordination by the
DOECC with other sectors and integration of environmental and forests management considerations by line
departments have been limited. Therefore, institutional strengthening of the DOECC and line departments is
imperative to be more effective in achieving all the reforms through the various specific actions. A technical
assistance program will facilitate the institutional strengthening of the DOECC and line departments as discussed
in section 4.3. This is a focus area of the RKDP as it aims a green development, less susceptible to climate-induced
disasters.
5.3. PFM, DISBURSEMENT, AND AUDITING ASPECTS
112. The public financial management (PFM) system and the framework for public financial accountability
are progressive and will be strengthened for enhanced effectiveness in certain areas through technical
assistance. The GoK’s PFM systems face a number of challenges, many of which are common to other Indian
states. Budget credibility is undermined by adjustments in the budget during the year through supplementary
grants and to accommodate deficiencies in revenue projections. Budgetary processes have not yet sufficiently
internalized medium-term fiscal planning and focus on performance management with no effective structure for
commitment control. During FY16/17, 16 percent of the total budget allocation was surrendered at the end of the
financial year. Furthermore, FY16/17 Comptroller and Auditor General’s report on State finances signals (i)
inconsistencies in the GoK’s debt management system, (ii) issues with public investment management with lack
of adequate project appraisal system and comprehensive costing and comparison, (iii) high infrastructure
maintenance costs stemming from the excessive use of force account for roads and infrastructure repairs, (iv)
excess payment of pension and non-settlement of advances by drawing and disbursing officers, and (v)
accumulated unutilized program funds in Treasury saving bank accounts.
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113. While the GoK’s public investment management framework is quite comprehensive, its effectiveness
can be strengthened to deliver more resilient and efficient infrastructure. It is anchored on the Kerala Fiscal
Responsibility Act of 2003, financial regulations, and the Kerala Infrastructure Investment Act of 1999, which was
amended in 2016. The delays and cost overruns of infrastructure projects that are centrally funded suggest
weaknesses in the current system and important potential efficiency gains. The percentage of cost overrun for
centrally funded projects in Kerala is 16.5 percent, which is above the national average of 14 percent. Also, Kerala
has 21 delayed projects, with delays that range between 9 and 31 months. Furthermore, the substantial flood
damages and infrastructure reconstruction needs estimated at US$4.4 billion underscore the need to strengthen
the resilience of the State’s infrastructure. This is a core objective of the RKDP and of this operation.
114. The GoK is in the process of addressing some of the challenges. Specifically, it is rolling out the web-
based integrated financial management system for capturing the Government’s financial transactions including
allocation and distribution, fund management, treasury operations, and accounting. Going forward, the PFM
system could greatly benefit from a technical assistance program as described in section 4.3
115. The World Bank has reasonable assurance that the control environment for foreign exchange in the RBI,
which is the Central Bank of India, is satisfactory for the purposes of this operation. This assessment is based on
the RBI audit report and the satisfactory outcomes of other operations, which have been disbursed and managed
through the RBI. The IMF has not carried out a Safeguard Assessment of the central bank (RBI) so far. As part of
the preparation for this operation, the RBI’s audit report and published annual financial statements for the year
that ended on June 30, 2018, were reviewed by the World Bank. The audit report has a clean, unqualified opinion
and was conducted by private firms of chartered accountants. The financial statements are prepared in
accordance with the RBI Act, 1934 and the notifications issued thereunder and are in the form prescribed by the
RBI General Regulations 1949, and the audit has been conducted following auditing standards generally accepted
in India.
116. The GoK makes public the annual budget allocations and utilizations details of the State Government
on adoption by the state legislature. The annual budget speech details the budget strategies with due emphasis
on the State’s development focus and fiscal position. The annual ‘Budget in Brief’ discloses budgetary transactions
and gives a broad picture of Kerala’s economy for the last decade in comparison with that of all other states. It
also provides the information on the State’s various resources, expenditure on development and non-
development activities, and the annual plan outlays earmarked under different sectors such as Agriculture,
Education, Industries, Irrigation, and so on. In addition, gender budget and child budget, detailed demand for
grants, performance budgets, supplementary budgets, audited state financial statements, and so on are duly
made public. District-level budgets are also made public through LSGIs, albeit with time lags. While initiatives have
been taken toward budget transparency, the GoK is yet to adopt a formal framework or policy for the same. The
State has developed online systems for bottom-up departmental budget preparation; however, budget
preparation remains an administrative process with no specific efforts toward public participatory budget
preparation.
117. Disbursement. Upon effectiveness of the credit, the GoI will submit to the World Bank a Withdrawal
Application for the credit. The World Bank will disburse the U.S. dollar proceeds of the credit to the GoI’s account
with the RBI. This account is controlled by the Office of the Controller of Aid, Accounts, and Audit of the
Department of Economic Affairs and is part of the GoI’s general foreign exchange reserves. Upon receipt of the
credit proceeds, the GoI will transfer the equivalent Indian rupee amount to the GoK according to the guidelines
for the transfer of external assistance to the states. The GoK will confirm to the World Bank within 30 days the
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receipt of the tranche and its credit into the consolidated fund of the State. The credit proceeds for this operation
do not finance specifically agreed activities. The proceeds may be used for any purpose, in support of the program,
other than to finance excluded expenditures (as defined in the financing agreement for the operation). Pursuant
to the Legal Agreements for this operation, India (in its capacity as the recipient of the IDA credit) and Kerala will
undertake not to use the proceeds to finance any excluded expenditures. If any amount of the credit proceeds is
used to finance excluded expenditures, the Legal Agreements will authorize the World Bank to require India or
Kerala (through India) to refund the amount. The amounts so refunded shall be cancelled from the credit.
5.4. MONITORING, EVALUATION AND ACCOUNTABILITY
118. The RKI will be responsible for the M&E of the result indicators of the proposed operation. The RKI will
have an overall coordination role and directly monitor the implementation of the reforms, institutional actions,
and major recovery activities in line with the RKDP. The RKI has demonstrated a good capacity to coordinate with
various state departments. Relevant sector departments such as the Department of Finance, PWD, LSGD, KSDMA,
WRD, and KWA will have the primary responsibility to implement the structural reforms under the coordination
of the RKI as described in this Program Document and monitor their respective sectoral result indicators. The
change process will be supported by close monitoring and a strong multisectoral technical assistance support from
the World Bank, which would be part of broader State Partnership with Kerala.
119. The World Bank will monitor the status of implementation through biannual implementation support
missions and tracking of results indicators. As part of the M&E process, the World Bank will track the baseline
and output indicators provided in the policy and results matrix (Annex 1). The outcomes of implementation
support missions will be reflected in the Implementation Status and Results Reports. An Implementation
Completion and Results Report will be completed within one year after the closing date of the programmatic
series of the two DPOs.
120. Grievance redress. Communities and individuals who believe that they are adversely affected by specific
country policies supported as prior actions or tranche release conditions under a World Bank Development Policy
Operation may submit complaints to the responsible country authorities, appropriate local/national grievance
redress mechanisms, or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are
promptly reviewed in order to address pertinent concerns. Affected communities and individuals may submit their
complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur,
as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after
concerns have been brought directly to the World Bank's attention, and Bank Management has been given an
opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance
Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints
to the World Bank Inspection Panel, please visit www.inspectionpanel.org.
6. SUMMARY OF RISKS AND MITIGATION
121. Overall, the operation faces substantial risks to achieving its development outcomes. Especially, risks
associated with governance, sector strategies and policies, environmental and social, technical design of the
program, institutional capacity for implementation and sustainability, and stakeholders are considered
Substantial. The risks associated with macroeconomic situation and fiduciary are rated as Moderate.
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122. Governance risk is considered Substantial. The reforms supported by the programmatic DPO may
present a threat to vested interests as shifting from the prevailing operational norms in a number of sectors will
be met with some resistance, as is expected when aiming for institutional and policy change. Key risks and
mitigation measures are discussed in the following paragraphs.
123. The RKDP covers multisectoral reforms and ensuring sectoral coherence and coordination will likely
face a challenge. The RKI was set up for this purpose to ensure smooth coordination and implementation of the
reforms among multiple departments. Each committee that will be established to draft policies and Acts in the
WRM, WSS, urban, and transport sectors will be represented by multiple departments to ensure coherence. The
multisectoral nature of the reforms introduces additional challenges in terms of communication from the GoK.
High-level recognition and endorsement of the RKDP by the Chief Minister’s Office and the inclusive and
streamlined RKI institutional modality would provide the enabling environment for the proposed reform agenda.
Furthermore, a technical assistance will be provided to help the GoK implement the institutional reforms as
described in section 4.3.
124. Institutional streamlining and restructuring of the state departments and agencies related to WRM,
agriculture, transport, and WSS will face bureaucratic resistances. Through establishing the RBCMA, the powers
of oversight, asset ownership, service delivery and the associated human resource, and state budgets are being
restructured and resistance will likely arise as these functions were previously performed by various state
departments and agencies (for example, the WRD, KSEB, KWA, and Irrigation and Agriculture Departments). While
the cross-sectoral state-level committee represented by concerned departments and consultative processes will
partly mitigate this risk, it may take time to achieve consensus among various departments. Similarly, institutional
streamlining of the transport sector presents a significant threat to vested interests of more than ten transport
institutions through merger and closure. The GoK plans to establish a Road Sector Modernization Task Force
represented by the relevant road institutions to obtain consensus in an accelerated manner. Revising the annual
expenditure planning and budget guidelines to enable multiyear municipal infrastructure investments (for
example, sanitation) will face resistances from the other sectoral working groups in ULBs as it will result in
reduction of their plan funds. Reorganization of Agriculture Department will unlikely face strong resistances within
the department as the budget and human resources will largely remain the same, if not increase. These risks are
partly mitigated through a technical assistance as discussed in section 4.3 and by the high-level commitment from
the GoK under the leadership of the Chief Minister to address the institutional ineffectiveness as evident in the
RKDP and GOs issued by the respective state departments. Also, the design of the operation as a programmatic
series of DPO introduces decision points before the next phase of the DPO to mitigate risks.
125. While anti-corruption and public sector ethics regulations exist in Kerala and are generally enforced
through the State Vigilance and Anti-corruption Bureau, there was alleged misconduct by the PIU in the World
Bank-funded KSTPII. 28 The World Bank’s Integrity Vice Presidency (INT) conducted a preventive investigation of
the KSTP and the PIU developed a Governance Improvement Action Plan in 2018. The PIU successfully
implemented the action plan and there has been no alleged misconduct related to the project since then. There
has been no misconduct in other projects funded by the World Bank and development partners such as Swiss
Development Cooperation, ADB, and KfW in the State. In the case of proposed operation, it is evident that the
GoK has adopted the key principles of good governance from the PDNA to the RKDP by leveraging the State’s
strong social capital, ICT competencies and the innovative and participatory approach of RKI. The World Bank will
leverage the State’s legal system for anti-corruption and conduct a regular review of RKDP implementation in
28 P130339.
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coordination with the State Vigilance and Anti-corruption Bureau. In addition, the World Bank will provide support
to the RKI in establishing a good governance framework for implementing the RKDP.
126. At the program level, the political context is relatively stable and not likely to significantly affect the
PDO. The RKDP outlines a clear set of priorities for resilient development, which are supported across the political
spectrum. In fact, a Cabinet Meeting held on March 5, 2019, directed the RKI and state departments to take
necessary steps to implement the reforms and comply with the requirements of the proposed operation.
127. The risks pertaining to sector strategies and policies are considered Substantial. Sectoral policies and
strategies outlined in the RKDP are considered transformational and constitute the State’s overall resilient
development strategy. However, sector governance has some weaknesses such as fragmentation among
institutions especially in roads and WRM sectors and duplication of task and responsibilities or missing functions
in sanitation and SWM. While some bureaucratic resistances are expected as explained, the RKDP supported by
the DPO directly aims at streamlining these inefficiencies and proper implementation of reforms would serve as
a mitigation measure. The mobilization of alternative finances through the proposed operation as well as
implementation of the GoK’s medium-term financing strategy will mitigate the risk of inadequate funding, which
has been traditionally the case in infrastructure sectors.
128. The environmental and social risks are considered Substantial mainly because of the weaknesses in the
state system, including in the DOECC, key line departments and ULBs in charge of the reforms. The RKDP will entail
infrastructure development and rehabilitation, requiring significant improvements in the State’s environmental
and social due diligence procedures and systems. The RKDP includes specific time-bound actions and programs to
strengthen DOECC, especially at the field level, and to enhance environmental governance across the State.
Further, the proposed technical assistance will include support to build capacities for environmental management
in Kerala. One of the four cross-cutting priorities of the RKDP supported by Prior Action 1 is environmentally
sustainable resilient development.
129. The risk regarding the technical design of the program is considered Substantial. A set of
transformational yet complex reforms are being implemented over a short period which have limited precedent
in India. The program design was informed by the PDNA, key drivers of the 2018 floods, as well as an in-depth
analysis of legacy challenges and current issues in the State’s sectoral and cross-cutting policies and institutions.
However, many of the transformative reforms such as river basin management, agroecology, and resilient road
networks require further analytical works and capacity building to ensure the technical soundness of reforms. The
GoK recognizes this requirement and identified key analytical works to inform the reforms as listed in the RKDP.
This risk is mitigated through the multisectoral technical assistance program as discussed in section 4.3.
130. The risks regarding institutional capacity for implementation and sustainability is considered
Substantial. Technical capacity building and knowledge transfer will be provided to design and implement the
transformative reforms and achieve the results, especially with regard to emergency preparedness and response,
river basin management, agroecology, hazard maps for risk-informed urban planning, and quality infrastructure
and services delivery. The series of DPOs brings a programmatic approach, which will be supported with a strong
technical assistance engagement as discussed in section 4.3 as well as a technical capacity-building program in
collaboration with development partners as discussed in section 4.5 to help gradually grow the institutional
capacities to a level that ensures the success and longevity of the reform agenda. This comprehensive and
medium-term state engagement approach has found very strong political and bureaucratic ownership in the GoK.
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131. Involvement of multiple implementing agencies and development partners requires a high degree of
coordination and ability to meet the M&E requirements. Several key institutions have limited or no experience
in implementing multisectoral programs. While all the implementing agencies, except the Department of
Agriculture, are familiar with the World Bank’s policies and procedures related to Investment Project Financing
through the past and ongoing operations in the State, this is their first DPO engagement and will likely require
extensive implementation support from the World Bank throughout the project life. The GoK has developed an
overall results framework for the RKDP with clear targets and responsibility of implementing agencies in M&E.
The World Bank will provide support for the RKI and the State Government to ensure that various interventions
including those supported by other development partners and M&E arrangements are consistent with the RKDP
and complementary to the proposed operation. The RKI will continue to play a key role for coordination and work
toward ensuring the sustainability of reforms and achievement of results.
132. The risks regarding stakeholders are considered Substantial. Some sector reforms such as agriculture,
urban planning, and WSS may have direct implications to local communities and other stakeholders such as CSOs.
While the adoption of agroecology offers a paradigm shift to more sustainable and resilient food systems, it may
involve changes to crop varieties suitable to AEMUs which may pose challenges to the farmers who are
traditionally engaged in the other crops. This risk is mitigated by providing targeted extension services to the
farmers as part of the RKDP. Revising the annual expenditure planning and budget guidelines to enable multiyear
municipal infrastructure investments by ULBs may lead to reduction in the other plan funds, which could affect
the resource allocation to CSOs and other partner organizations. The ULBs and LSGD will conduct stakeholder
consultations and carefully mitigate this risk when revising the guidelines to optimize the outcomes toward a
Green and Resilient Kerala. The introduction of volumetric tariffs may also face objections from the consumers.
The GoK will conduct an analytical work to set an appropriate level of tariffs and conduct stakeholder consultations
to obtain consensus. The establishment of a WSS-specific GRM will contribute to mitigating this risk. The State has
conducted a number of stakeholder consultations in March 2019 and incorporated comments and feedback from
the general public, civil society, private sector, academia, and other donors when finalizing the RKDP. Provided
that a participatory vision and consultative approach as defined in the RKDP are followed throughout the reform
process, the stakeholders’ risks should not be beyond manageable.
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Table 5: Summary Risk Ratings
Risk Categories Rating

1. Political and Governance  Substantial
2. Macroeconomic  Moderate
3. Sector Strategies and Policies  Substantial

4. Technical Design of Project or Program  Substantial
5. Institutional Capacity for Implementation and Sustainability  Substantial
6. Fiduciary  Moderate
7. Environment and Social  Substantial

8. Stakeholders  Substantial
9. Other
Overall  Substantial
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ANNEX 1: POLICY AND RESULTS MATRIX

PDO: The development objective of the proposed operation is to enhance the State of Kerala’s resilience against the impacts of natural disasters and climate
change.
Prior Actions and Triggers Results

Prior Actions under DPO1 Indicative Triggers for DPO2 Indicator Name Baseline (May 2019) Target (February 2021)
Objectives: (i) to enhance technical and institutional capacity; and (ii) to establish innovative sources of financing for disaster risk reduction and climate resilience.
Prior Action 1: The GoK has adopted the Trigger 1: The GoK has issued Result 1: Resilient Recovery projects are not based At least 25 percent of
Rebuild Kerala Development Program for guidelines for project selection, recovery from 2018 on resilient recovery planning medium-term (1-3 years)
enhancing disaster and climate resilience preparation and budgeting, floods is implemented criteria. resilient recovery activities are
through policy, regulatory and institutional including criteria for project in line with the RKDP implemented as per RKDP
actions with inclusive and participatory readiness, feasibility and resilience, priorities and priorities and programs.
approaches. for the RKDP. guidelines and benefits
women and children. At least 1,000,000 women and
Coordination: RKI CEO children benefit from RKDP
programs.
Prior Action 2: The GoK has adopted the Trigger 2: The GoK has issued legal Result 2: Additional Recovery and resilience At least $500 million of public
new flood Cess, with effect as of June 1, instructions for mobilizing private public and private programs are financed through and private financing is
2019 for financing resilient recovery institutional and retail finance for financial resources are public finances. mobilized to finance recovery
efforts. financing resilient recovery efforts. mobilized for resilient and resilience programs
recovery. through cess, Masala and
Coordination: Finance Department Diaspora Bonds.
Prior Action 3: The GoK has adopted new Trigger 3: The GoK has updated Result 3: Improved Weak coordination capacity A State-wide emergency
protocols for enhancing emergency and published the State Disaster capacity for among key agencies to respond management exercise is
preparedness and response capacity of Management Plan, incorporating emergency, disaster, to emergencies and weak satisfactorily completed as per
various departments. disaster risk reduction and climate and climate risk outreach to vulnerable updated State DRM Plan,
resilience principles and policies management with communities, as evidenced which covers disaster and
Coordination: KSDMA and including emergency outreach to vulnerable during August 2018 Floods. climate resilience and
management and outreach to communities. improved outreach, as
vulnerable communities. evidenced by independent
observer’s report.
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Objective: to mainstream disaster risk reduction and climate resilience into critical infrastructure development and service delivery.
Prior Action 4: The GoK has established a Trigger 4: Draft RBCMA Act has Result 4: Improved Inadequate river basin planning River basin management plans
cross-sectoral State-level committee to been submitted to the State river basin planning and management functions at are developed for two priority
draft a River Basin Conservation and Assembly for approval. and water the State level. river basins (i.e. Pamba and
Management Authority Act establishing a infrastructure Periyar river basins) by River
River Basin Conservation and Management operations Basin Conservation and
Authority. management for Management Authority.
climate resilience at the
Coordination: WRD State level.
Prior Action 5: The GoK has notified 29 the Trigger 5: The GoK has Result 5: More resilient (i) Climate and disaster (i) Resilient and sustainable
establishment of five agroecological zones instituted/amended policies, and sustainable vulnerable agriculture agroecological zone
and the reorganization of the Agriculture guidelines and programs for agriculture based on practices; (ii) Low levels of development plans are
Department along agroecological zones. expansion of agriculture risk agroecological zones agriculture risk insurance adopted for at least two
insurance uptake. and enhanced uptake at less than 10 percent. agroecological zones; (ii)
Coordination: Department of Agriculture agriculture risk Agriculture risk insurance
insurance. uptake is enhanced to at least
20 percent.
Prior Action 6: The GoK has notified 30 the Trigger 6: The GoK has adopted Result 6: Improved Road design and maintenance Performance-based
criteria for the performance-based management physical and programs are not climate management contract based
identification/determination of the core contract model for managing the institutional resilience change and disaster risk on resilient standards is
road network and mandated the review of core road network, incorporating of the core road proofed. adopted for maintenance of at
PWD road policies, construction codes and design and performance standards network, including in least five key core road
manuals to ensure the resilient design, and disaster-related emergency hilly areas where most network corridors, including at
construction and maintenance of core response module. tribals are located. least one in hilly areas where
road network. most of the tribal population is
concentrated.
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Coordination: PWD Trigger 7: The GoK has undertaken Road sector budget is not Share of budget allocation for
institutional streamlining in the allocated according to the the core road network is
roads sector to address priority of roads in the network. enhanced by at least 20
institutional and resource percent from the 2018 budget
fragmentation and to strengthen allocation for the core roads.
core sector institutions.
No Specific Prior Action Trigger 8: The GoK has reorganized Result 7: Unified and Separate Deeds Registry, A program is implemented by
institutional arrangements to more up-to-date Record of Rights and Field Book Kerala Land Records
Coordination: Department of Revenue, create a single land record and gender-disaggregated (map) are maintained for land Modernization Mission for
Survey Land Records Department and integrated map for Kerala unifying land records in high risk records. single digital land record and
Department of Registration the current Deeds Registry, Record areas. map in at least two high-risk
of Rights and Field Book (map) districts, providing gender
records and services. disaggregated data on land
ownership and transactions.
Prior Action 7: The GoK has established a Trigger 9: The GoK has amended Result 8: Risk-informed No urban local bodies have risk- Risk-informed master plans
committee to revise the Town and TCP Act for risk-informed master master plans are informed master plans. are prepared and notified by
Planning Country Act to make master plans planning. notified and funds for at least two urban local
risk-informed and to revise the annual multi-year municipal bodies.
expenditure planning and budget Trigger 10: The GoK has revised infrastructure No plan funds assigned to Multi-year municipal
guidelines for urban local bodies to annual expenditure planning and investments are multi-year infrastructure infrastructure investment
undertake multi-year municipal budget guidelines for urban local allocated in annual investments. planning and budgeting is
infrastructure investments. bodies to undertake multi-year plans by urban local undertaken by at least two
municipal infrastructure bodies. urban local bodies.
investments.
Coordination: LSGD/State Planning Board
Prior Action 8: The GoK has established a Trigger 11: The GoK has adopted Result 9: Improved (i) Non-Revenue Water is 45 (i) Non-Revenue Water
cross-sectoral committee to prepare the the policy and institutional water supply and percent reduction models are adopted
policy and institutional program for program for strengthening water sanitation services. in at least two Urban Local
(ii) O&M Cost Recovery is 41
strengthening water supply and sanitation supply services including service Bodies;
percent
services and their resilience to disasters delivery models, O&M cost
(ii) O&M cost recovery is
and impacts of climate change. recovery, MIS and Grievance (iii) No Annual Performance
increased to at least 50
Redress Mechanism. Report by KWA
percent at state level;
Coordination: WRD, LSGD, KWA, KRWSA
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(iii) Annual Performance
Report is publicly disclosed by
KWA.
Trigger 12: The GoK has adopted a 14.3 million population affected Cost-effective septage and
State Sanitation and Waste by poor sanitation and waste sewerage programs are
Management Strategy, management services 31. adopted in at least 5 Urban
incorporating cost-effective Local Bodies.
septage and waste management
models.
31 Based on seven districts which were fully affected by flood.
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ANNEX 2: FUND RELATIONS ANNEX

India—Assessment Letter for the World Bank
April 24, 2019
This note provides the IMF staff’s current assessment of India’s macroeconomic conditions, prospects, and
policies. The assessment has been requested in relation to a proposed program credit to India to be considered
by the World Bank in June 2019.
Overview. India remains among the fastest growing large economies in the world. Over the past year, ahead of
the elections, government policies shifted mainly to implementation of earlier reforms rather than initiating new
ones. Growth slowed in the last two quarters and the balance of risks is tilted to the downside. Budget pressures
have been rising.
The Indian economy has recorded strong growth in recent years. Recently-revised official data indicate that real
GDP growth averaged 7.9 percent during FY2014/15-FY2016/17. Activity was supported by generally lower oil
prices after 2015, supportive policy actions including implementation of some important structural reforms, a
return to normal monsoonal rainfall, and a stronger balance of payments and international reserves.
Transitory shocks have caused some headwinds to growth. Activity was affected by the late-2016 currency
exchange initiative, the mid-2017 introduction of the Goods and Services Tax (GST)—a welcome reform but with
some implementation challenges, and the 2018 bout of external pressures when an oil price spike compounded
the effects of an emerging markets selloff. The latest high-frequency and national accounts data (growth of 6.8
percent during the second half of 2018 (y/y)) suggest softer activity. Growth projections in the April World
Economic Outlook (7.1 percent in FY2018/19; 7.3 percent in FY2019/20) are predicated on stabilized international
oil prices, easier monetary and fiscal conditions, and recovering bank credit. Near-term growth remains
underpinned by robust private consumption, while gross fixed capital formation is on track for a second year of
double-digit growth despite remaining weaknesses in corporate and public sector banks’ balance sheets, still-
subdued capacity utilization in core sectors, and supply-side bottlenecks.
The balance of economic risks is tilted to the downside. On the external side, oil prices have recently risen above
US$70 per barrel, considerably higher than the US$59 per barrel baseline projection for FY2019/20. If sustained,
this could dampen domestic purchasing power and private consumption growth. Despite strengthened reserve
buffers, tighter global financial conditions could be disruptive. Rising regional geopolitical tensions could affect
confidence. Domestic risks derive from delays in fiscal consolidation, lingering effects from GST implementation
issues, and further weakening of bank, non-bank financial corporation, and corporate sector balance sheets.
Moreover, policy uncertainties in the wake of the national elections could adversely affect growth.
India’s external position is broadly consistent with fundamentals and reserves are adequate. The current
account deficit (CAD) is expected to widen to 2.5 percent of GDP in FY2018/19, on higher oil prices and imports,
and remain at that level in FY2019/20. Foreign direct investment inflows have increased significantly, from US$27
billion in FY2012/13 to US$39 billion in FY2017/18 and are expected to continue to support financing of the CAD.
Gross international reserves stood at US$407 billion in late-March 2019 (around 6.6 months of import cover). As
noted in the IMF’s 2018 External Sector Report, the external position appears broadly consistent with medium-
term fundamentals and desirable policy settings, with the real effective exchange rate assessed to be in line with
fundamentals with an overvaluation/ undervaluation range of -6 to +6 percent for FY2018/19.
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Budget pressures have been on the rise, both on the revenue and expenditure side. The recently-released
Interim Budget targets central government fiscal deficits of 3.4 percent of GDP in FY2018/19 and FY2019/20
(authorities’ definition), marking slippages of 0.1 and 0.3 percentage points compared to last year’s budget
announcement. For FY2018/19, revenues appear to have fallen short of the revised budget estimates, while the
newly-announced rural farm income support scheme will add about 0.1 and 0.3 percent of GDP to budgetary
outlays in FY2018/19 and FY2019/20, respectively. The latest plans delay the time to reach the medium-term
central-government debt target of 40 percent of GDP. A full budget, expected to be presented in July after the
general elections, will shed more light on medium-term policies. To ensure that the debt target is met by 2025,
further steps to increase GST compliance, income tax reforms, and additional reductions in fuel and food subsidies
are needed to support the consolidation plans. India’s general government debt (about 70 percent of GDP) is
relatively high, but owing to a favorable growth-interest differential, debt is projected to remain sustainable
(including under stress scenarios).
Low food prices have kept inflation at bay but the RBI should remain vigilant to inflation pressures. Inflation
remained low at 2.9 percent (y/y) in March 2019, on low food prices. The Reserve Bank of India’s (RBI) Monetary
Policy Committee cut the policy repo rate by 25 basis points (bps) each in February and April 2019 to 6.0 percent.
Headline inflation is expected to rise gradually and average about 3.9 percent in FY2019/20. In the medium-term,
inflation is expected to converge to 4 percent, the mid-point of the RBI’s inflation target band (4 percent CPI
inflation ± 2 percent). Given elevated core inflation (excluding food and energy), volatile food prices, and less-
than-earlier planned fiscal consolidation, it will be important for the RBI to remain vigilant to upward pressures
on inflation. Supply-side reforms, particularly in agriculture, continued fiscal consolidation, and strengthening
monetary transmission are needed for low inflation in the medium term.
Financial sector reforms have progressed, but further steps are needed to enhance the efficiency of credit
provision. Important steps have been taken to relieve the balance sheets of India’s public sector banks (PSBs,
which make up two-thirds of India’s banking system) and large corporates from non-performing assets (NPAs).
These include the recognition of NPAs—raising them to 14.8 percent of PSBs’ risk-weighted assets as at end-
September 2018, compared to 3.8 percent for private sector banks), the recapitalization of public sector banks
(PSBs), and the resolution of some distressed assets through the implementation of the new Insolvency and
Bankruptcy Law. Accelerating the cleanup of balance sheets, a decisive strengthening of PSBs’ governance to
improve their risk management and operations, and a reduction in the public sector’s role in the financial system
are needed to revive bank credit and enhance the efficiency of credit provision. In addition, a gradual reduction
of the statutory liquidity requirement and priority sector lending would help intermediate funds more efficiently
toward productive activities.
Structural reforms have been paying off, but labor market, land, and product market reforms are needed for
rapid inclusive medium-term growth. India has made considerable progress on both the pace and the
composition of structural reforms in recent years, including as evidenced by India’s recent improvement in the
World Bank’s Doing Business Indicators. Important measures include power sector reforms; further easing of FDI
sectoral ceilings; enhancements to financial inclusion; and some limited steps to create more flexible labor and
land markets (particularly at the state level). Faster growth is needed to create jobs for a young and growing
population and sustaining inclusive growth. Structural reforms should translate into higher investment and
employment and raise medium-term growth. Accordingly, more needs to be done to address long-term structural
bottlenecks, particularly enhancing flexibility in labor markets, tackling obstacles to female labor force
participation, land reforms, and product market and agricultural sector reforms.
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IMF Relations. On July 18, 2018, the IMF’s Executive Board concluded the 2018 Article IV Consultation. The next
Article IV consultation is expected to take place in August. A joint IMF-World Bank Financial Sector Assessment
was published in late 2017.
India: Selected Economic Indicators, 2016/17-2020/21

(Annual percentage change, unless otherwise indicated)
Population (2017/18): 1.34 billion
Quota (current): SDR 13,114.4 million/ 100 percent of quota Per capita GDP (2017/18 estimate): 1,980 USD
Literacy rate (2015): 72.23%
Poverty rate $1.90 a day PPP (2011): 21.20%
Main products and exports: Petroleum, chemical and primary products, business and IT services. Key export markets: EU, USA,
United Arab Emirates, China, Singapore, and Saudi Arabia.
FISCAL YEAR 1/ 2016/17 2017/18 2018/19 2019/20 2020/21

Est. Projections
Output 8.2 7.2 7.1 7.3 7.5
Real GDP growth (%)
Prices
Inflation, CPI-Combined (%) 4.5 3.6 3.5 3.9 4.2
General government finances 20.2 19.8 20.6 20.4 20.4
Revenue (% of GDP)
Expenditure (% of GDP) 27.3 26.8 27.3 27.2 27.0
Fiscal balance (% of GDP) -7.1 -7.0 -6.7 -6.9 -6.6
Public debt (% of GDP) 69.0 69.8 69.8 69.0 67.8
Money and credit
Broad money (% change) 10.1 9.2 13.0 11.0 12.0
Credit to the private sector (% change) 7.8 9.5 15.3 11.6 12.7
3-month Treasury bill interest rate (%) 2/ 5.8 6.1 6.4 … …
Balance of payments
Current account (% of GDP) -0.6 -1.8 -2.5 -2.5 -2.4
FDI, Net (% of GDP) -1.6 -1.1 -1.3 -1.6 -1.6
Reserves (months of imports) 7.6 7.5 6.6 6.2 5.9
External debt (% of GDP) 20.6 20.0 21.1 20.9 20.7
Exchange rate
REER (% change) 3/ 1.2 2.7 -4.2 ... ...
Memorandum item:
Terms of Trade (% change) 1.4 -2.3 -1.9 1.8 1.2
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ANNEX 3: LETTER OF DEVELOPMENT POLICY
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ANNEX 4: ENVIRONMENT AND POVERTY/SOCIAL ANALYSIS TABLE

Significant Positive or Negative Significant Poverty, Social, or Distributional
Prior Actions
Environment Effects Effects, Positive or Negative
Positive: The RKDP is prepared using an

Disaster Risk Management Positive environmental effects as the
inclusive and participatory approach. The
Prior Action 1: The GoK has policy and institutional reforms
consultations process was open to public as
adopted the Rebuild Kerala contained in the program will bring
well as direct stakeholders. For the
Development Program for about positive environmental
implementation period, the RKDP includes
enhancing disaster and climate benefits, particularly in the water
publicly available monitoring and evaluation
resilience through policy, regulatory resources (river basin management),
through open platforms and beneficiary
and institutional actions with agroecological zoning, sanitation and
feedback. It also places a special emphasis
inclusive and participatory waste management, environment
on all vulnerable groups including women
approaches. and forest sectors.
and children.
Disaster Risk Financing No positive or negative
No positive or negative social impact. The
Prior Action 2: The GoK has adopted environmental effects, as this
flood cess will only be applicable on luxury
the new flood cess, with effect as of
pertains solely to raising of funds for
items which attract higher GST (18%/28%);
June 1, 2019 for financing resilientresilient recovery in the context of
unlikely to have an impact on the the poor
recovery efforts. floods.
Positive environmental effects as the
Positive: It is likely that the protocols will not
new protocols will lead to building
Disaster Risk Management only enhance emergency preparedness and
the capacity not only to respond to
Prior Action 3: The GoK has adopted response capacity, but also provide early
floods but also to manage in a more
new protocols for enhancing warning signals to remote communities and
environmentally responsible manner
emergency preparedness and groups who are otherwise vulnerable at the
(for example, there are particular
response capacity of various time of rescue such as elderly persons,
protocols for dealing with the
departments. women, children, and persons with
immediate environmental impacts of
disabilities.
monsoons).
Positive environmental effects, as
Water Resources Management
the cross-sectoral approach is bound
to bring actions that are integrated in
established a cross-sectoral state-
nature and result in better water
level committee to draft a River No positive or negative social impact: No
resource management. The
Basin Conservation and Management significant social impact is anticipated.
Departments of Environment and
Authority Act establishing a River
Forest have been explicitly included
Basin Conservation and Management
as a part of the cross-sectoral
Authority.
approach.
Agriculture
Prior Action 5: The GoK has Positive environmental effects as the Positive: Shift to agroecological farming is
notified 32 the establishment of five shift to agroecological zones is bound likely to reduce risk and improve agricultural
agroecological zones and the to result in more appropriate crop productivity, thereby improving livelihood
reorganization of the Agriculture selection and reduced use of prospects for poor and vulnerable groups
Department along agroecological fertilizers and pesticides. who are engaged in farming.
zones.
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Transport and Roads

Prior Action 6: The GoK has notified Positive environmental effects as the
the criteria for the resilient design, construction, and
Positive: Better road networks are likely to
identification/determination of the maintenance are bound to increase
improve connectivity and create job
core road network and mandated the lifetime of the road
opportunities for the local population and a
the review of PWD road policies, infrastructure assets, which implies
focus on improving roads in hilly areas is
construction codes, and manuals to less dependence on new mining
likely to benefit the tribal population.
ensure the resilient design, resources for sand and quarry and
construction, and maintenance of less debris/waste disposal.
core road network.
Positive: Gender-disaggregated data on land
ownership and transactions will give a true
Land and Cadaster sense of the extent to which women own
No significant environmental effects.
No Specific Prior Action land in the State. Currently, these data are
very difficult to gather as land records are
not available in one place.
Positive: The revised annual planning
Urban Development
guidelines will mandate ULBs to implement
plans in a socially sustainable manner and in
established a committee to revise
a way that is sensitive to the needs of
the Town and Planning Country Act Positive environmental effects as
vulnerable groups such as women, children,
to make master plans risk informed risk-informed master plans are
elderly, and persons with disabilities.
and to revise the annual expenditure bound to address those arising from
planning and budget guidelines for environmental issues.
Positive: The risk-informed master plans are
urban local bodies to undertake
likely to help the most vulnerable groups by
multiyear municipal infrastructure
facilitating the regulation of land uses in
investments.
hazard-prone areas
Positive: Strengthening the policy and
Positive environmental effects as the institutional framework for water supply
Water Supply and Sanitation
policy and institutional program will focuses on improving consumer service and
contribute toward addressing one of grievance redressal. Increased coverage and
established a cross-sectoral
the development priorities that is improved water supply services will benefit
committee to prepare the policy and
relevant not only in terms of building all, especially women and SC and ST
institutional program for
resilience but also in addressing an households, a significant number of whom
strengthening water supply and
ongoing development challenge. The do not have access to drinking water on their
sanitation services and their
Department of Environment is a part premises; they will potentially incur less
resilience to disasters and impacts of
of this committee to formulate this costs on coping with rationing and supply
climate change.
policy and institutional program. intermittency as well as on treating water
before consumption.
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ANNEX 5: SENDAI FRAMEWORK FOR DISASTER RISK REDUCTION
The Sendai Framework is a 15-year, voluntary, non-binding agreement which recognizes that the State
has the primary role to reduce disaster risk, but that responsibility should be shared with other
stakeholders including local government, the private sector and other stakeholders. It was endorsed by
the UN General Assembly following the 2015 Third UN World Conference on Disaster Risk Reduction.
Countries, including India, committed to the Sendai Framework in 2015.
The Sendai Framework has seven global targets:

(a) Substantially reduce global disaster mortality by 2030, aiming to lower average per 100,000 global
mortality rates in the decade 2020-2030 compared to the period 2005-2015.
(b) Substantially reduce the number of affected people globally by 2030, aiming to lower average global
figure per 100,000 in the decade 2020 -2030 compared to the period 2005-2015.
(c) Reduce direct disaster economic loss in relation to global GDP by 2030.
(d) Substantially reduce disaster damage to critical infrastructure and disruption of basic services,
among them health and educational facilities, including through developing their resilience by 2030.
(e) Substantially increase the number of countries with national and local disaster risk reduction
strategies by 2020.
(f) Substantially enhance international cooperation to developing countries through adequate and
sustainable support to complement their national actions for implementation of this Framework by
2030.
(g) Substantially increase the availability of and access to multi-hazard early warning systems and
disaster risk information and assessments to the people by 2030.
Under the Sendai Framework, four priorities for action are identified:
1. Understanding disaster risk: DRM should be based on an understanding of disaster risk in all its
dimensions of vulnerability, capacity, exposure of persons and assets, hazard characteristics and the
environment. Such knowledge can be used for risk assessment, prevention, mitigation, preparedness
and response.
2. Strengthening disaster risk governance to manage disaster risk. Disaster risk governance at the
national, regional and global levels is very important for prevention, mitigation, preparedness,
response, recovery, and rehabilitation. It fosters collaboration and partnership. Creation and
operationalization of national platforms are a critical part of this process, bringing together
stakeholders with a role to play in risk reduction and management.
3. Investing in disaster risk reduction for resilience. Public and private investment in disaster risk
prevention and reduction through structural and non-structural measures are essential to enhance
the economic, social, health and cultural resilience of persons, communities, countries and their
assets, as well as the environment.
4. Enhancing disaster preparedness for effective response and to ‘Build Back Better’ in recovery,
rehabilitation, and reconstruction. The growth of disaster risk means there is a need to strengthen
disaster preparedness for response, act in anticipation of events, and ensure capacities are in place
for effective response and recovery at all levels. The recovery, rehabilitation and reconstruction
phases present a critical opportunity to build back better, including through integrating disaster risk
reduction into development measures.
Page 64

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The World Bank

INTERNATIONAL DEVELOPMENT ASSOCIATION

IN THE AMOUNT OF SDR 115.2 MILLION AND US$ 90.4 MILLION

(US$250 MILLION EQUIVALENT)

FIRST RESILIENT KERALA PROGRAM DEVELOPMENT POLICY OPERATION

May 31, 2019

Social, Urban, Rural, and Resilience Global Practice

Regional Vice President: Hartwig Schafer

ABBREVIATIONS AND ACRONYMS

ADB Asian Development Bank KSEB Kerala State Electricity Board

RESILIENT KERALA PROGRAM

SUMMARY OF PROPOSED FINANCING AND PROGRAM .......................................................................3

1. INTRODUCTION AND COUNTRY CONTEXT ...................................................................................6

Figure 1. Kerala Fiscal Indicators (% of GSDP) ............................................................................................ 11

Table 1. India Selected Economic Indicators FY14–FY20 ............................................................................ 13

SUMMARY OF PROPOSED FINANCING AND PROGRAM

Project ID Programmatic If programmatic, position in series

Proposed Development Objective(s)

Borrower: REPUBLIC OF INDIA

Implementing Agency: STATE OF KERALA

PROJECT FINANCING DATA (US$, Millions)

Total Financing 250.00

International Development Association (IDA) 250.00

Climate Change and Disaster Screening

Trigger 3: The GoK has updated and published

Trigger 6: The GoK has adopted performance-

Trigger 8: The GoK has reorganized

Prior Actions Indicative Triggers Indicator Name

Trigger 11: The GoK has adopted the policy and

IDA PROGRAM DOCUMENT FOR A PROPOSED CREDIT TO REPUBLIC OF INDIA

1. INTRODUCTION AND COUNTRY CONTEXT

2 Report Number 126667

1.2. COUNTRY CONTEXT

5 Government Order; G.O.(P)No.16/2018P&EA dated November 11, 2018.

2. MACROECONOMIC POLICY FRAMEWORK

2.1. RECENT ECONOMIC DEVELOPMENTS

6Mostly driven by personal and services loans issued by private banks.

around 9.7 months of imports).

State of Kerala Context

service tax since 2017.

2.2. MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY

Table 1. India Selected Economic Indicators FY14–FY20

Table 2. India’s Selected Fiscal Indicators FY14–FY20

Central Government (Percent of GDP)

Figure 5. Kerala Debt Paths under Alternative Scenarios

Table 3. Kerala Selected Fiscal Indicators FY14–FY22

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

12 Government Order; G.O.(P)No.16/2018P&EA dated November 11, 2018.

Figure 6. RKI Institutional Framework: Roles and Responsibilities

4.1. LINK TO GOVERNMENT PROGRAM AND OPERATION DESCRIPTION

4.2. PRIOR ACTIONS, RESULTS AND ANALYTICAL UNDERPINNINGS

4.3 TECHNICAL ASSISTANCE

Table 4. DPO Prior Actions and Analytical Underpinnings

Prior Actions Analytical Underpinnings

Prior Actions Analytical Underpinnings

Prior Action 6: The GoK has notified 22

Prior Actions Analytical Underpinnings