World Bank approves $60 million for Himachal

World Bank on Tuesday approved a credit of $60 million for the Himachal Pradesh mid-Himalayan Watershed Development Project to help the state reverse degradation of its natural resource base, improve productive potential of natural resources and boost rural income.

'Himachal Pradesh has shown a consistent commitment to increase productivity of rural areas while preserving its natural heritage,' World Bank Country Director for India Michael Carter said in a statement released in Washington.

'This operation will support policy and institutional development to improve management of watersheds, while enhancing livelihood opportunities for poor people across the state,' he said.

The bank noted that while tourism and hydropower are increasingly important, the economy of Himachal Pradesh remains largely agrarian.

Nine out of ten households are rural, and most of these live in small settlements, typically located in remote valleys.

Around 28 per cent of the state's six million residents live below the poverty line. Constraints to rural development include rugged topography and poor access to social and economic services.

The project is designed around four components -- Institutional strengthening; building capacity of communities and local governments to effectively manage watershed development in a participatory, transparent, and demand-driven manner; watershed development and management; enhancing mountain livelihoods comprising promotion of value-addition in agriculture and income-generating activities, particularly for tribal and vulnerable groups.

The project builds on the successful experience of the Integrated Watershed Development Project, which closed on September 30.

"This project aims to scale up the experience of this previous project in higher elevations of Himachal Pradesh, using participatory methods that involve both communities and their local governments.

Under this project, we expect improvements in the environment as well as increased incomes for the rural poor," said Daniel Sellen, Senior Agriculture Economist at the World Bank.