The Indian Economy Overview

The World Bank and India

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The Bank and the Singrauli Projects

Since 1960, the Singrauli region in central India has witnessed large-scale developmental activity. It includes power, mining projects, chemical plants, fertilizers, pesticides and aluminium industries.

A common feature of these developmental projects has been excessive dependence on foreign aid—both multilateral and bilateral. The World Bank has been the lead financier in this region. Since late 1970s, the Bank has laid the ground for a number of bilateral donors from Japan, Norway, Sweden, Germany and erstwhile USSR.

Since 1977, the Bank committed loans to this region totaling $850 million for construc-tion of Singrauli (Stage I and II) power project, development of Dudhichua coal mine and transmission lines for Rihand power project.

The Bank's huge investment along-with other bilateral funding in the region resulted in a massive displacement of the local population from their lands, culture and skills productive resources which provided means of subsistence for the predominantly tribal population. Many of the oustees underwent multiple displacement from various projects within a span of 25 years. Estimates of displaced persons varies between 2,00,000 and 3,00,000.

The Bank in Singrauli
Projects Type Amount
Singrauli I IDA 150
Singrauli II IDA 300
Rihand Power Transmission IBRD 250
Dudhichua IBRD 151
NTPC Power Project IDA 400
Source: The World Bank 1993 [US$ million]

The huge investment by the Bank in the region has resulted in massive displacement of the local population from their lands and productive resources.

Till date, the Bank and project authorities do not have cared to collect the exact number of persons displaced by the projects and the figures cited in different documents do not tally. The Bank's various projects were believed to have displaced nearly 23,000 persons since 1977.

According to the latest Bank review titled "Resettlement and Displacement-1994" the revised estimates of displaced persons in Singrauli I and II alone is 49,000.

Inspite of such colossal investment and displacement, no significant efforts were made by the Bank to address the problem of proper rehabilitation of these oustees. Years after the loans have been sanctioned and disbursed, the oustees still continue to live in crowded, unhealthy and ill-equipped resettlement sites. Many oustees are still awaiting cash compensation promised by the project authorities. Very few oustees have been fortunate enough to get permanent employment in the projects. The mess of rehabilitation is reluctantly accepted and casually explained away by the Bank officials as if it were a thing of the past, a characteristic of yester years when rehabilitation cons-ciousness was not high. This only demonstrates that the Bank is knowingly covering up for the borrower institutions gross neglect of rehabilitation. Reports of several studies sponsored by the Bank also admit that poor rehabilitation is not a matter of the past. In fact, in 1993 during the presence of the World Bank executed study team in the Singrauli region, a number of houses in Nimiadand were bulldozed and oustees forced to move without adequate arrangements. This was documented in one of its main reports.

The benefits of these power projects have yet to reach the oustees who have paid a heavy price for development. Many of the oustees still do not have access to electricity produced in the region.

The benefits of these power projects have yet to reach the oustees who have paid a heavy price for other development. Ironically enough, many of the oustees still do not have access to electricity produced in the region! Most of the electricity generated by the plants is consumed by cities like Delhi or reaches even far off places like Goa. Besides, thousands of hectares of fertile lands have been converted into waste land for disposal of nearly six million tons of fly ash generated every year by all the thermal power projects in the region. This, in the foreshore region of the Rihand reservoir.

Moreover, recent studies found none of the ground water samples meeting drinking water standards with mercury, cadmium and particulate contamination reported in wells of Anpara-Shaktinagar. Air pollution is significantly high—as much as 50% of the population of Bina mining area were found to be affected by pulmonary diseases, according to a health survey carried out as part of a World Bank sponsored study.

Despite the poor environmental and rehabilitation record of the Bank funded projects in June 1993 it cleared the $400 million loan to NTPC. A major part of this loan was meant to be utilized for 2000 MW capacity addition in two of its plants at Singrauli. Besides, the region is set to see the investment of a few hundred million dollars worth of World Bank loans for expansion of the Dudhichua mines and laying of a transmission network. The other portion of the loan is to be used for effecting structural changes in NTPC to make it a commercially viable organization.

Despite the poor environmental and rehabilitation record of Bank funded projects, the Bank in June 1993 cleared the $ 400 million loan to NTPC. A major part of this loan is meant to be utilized for 2000 MW capacity addition in two of its plants at Singrauli.

Since June 1993, when the loan was sanctioned, the NTPC has been under severe pressure from the Bank to recover its outstanding dues from State Electricity Boards. Under worldwide criticism for its poor record of environmental protection and rehabilitation of oustees, the NTPC came up with a new rehabilitation policy. This new policy was approved by the Bank and Indian government in 1993. However, the new policy makes no promises of jobs to the oustees and while there is provision for land-for-land, the policy finds the availability of land problematic. Besides, the policy will, in the first instance, be only applicable to the oustees of the new projects, who are fewer in number. The oustees of earlier projects will have to await fresh socio-economic surveys They will determine whether they have really lost their former standard of living after displacement.


For further details contact:PIRG (Public Interest Research Group) 142, Maitri Apt, Plot No 28, Indraprastha Ext. Delhi 110092. India. Ph: 2432054 Fax: 2224233 email: kaval@pirg.unv.ernet.in


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