IN Swachh Bharat Mission Support Operation

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India has been one of the fastest growing economies during the last decade. Between 2004 and 2011, Gross Domestic Product (GDP) expanded at a rate of 8.3 percent per year while poverty declined by an average of 2.5 percentage points per year, a pace significantly faster than earlier periods. Poverty reduction was supported by higher economic growth and greater responsiveness of poverty to growth, including through the expansion of social programs. Increases in non-farm wage employment, especially in construction, greater rural-urban integration, and higher rural wage growth were amongst the key drivers. However, in the more recent period since 2012, a slowdown in rural real wage growth and volatility in construction activity may have had a sobering effect on the pace of poverty reduction. At the same time, acceleration of growth to 7.3 percent in 2015, if sustained, may lead to further gains for the poor. Maintaining the growth momentum, and increasing the responsiveness of poverty reduction to growth, is an India’s key challenge going forward. The overall experience of the past national sanitation programs offer several lessons. First, eliminating OD will not be achieved through a top-down approach of constructing toilets. Instead, it needs to be driven by changing behavior at the community level. This requires complementary ‘soft’ interventions such as interpersonal communication of hygiene messages. Second, the implementation of SBM-G is being conducted by the states, and therefore the role of MDWS is to support states with allocation of funds and incentives for achievement of programs goals and objectives. This role is proposed to be expanded to provide additional capacity building and technical support to the implementing institutions in the states. Third, by recognizing and incentivizing good performance of states and their implementing agencies, especially GPs, fiscal programs should intelligently provide incentives to those implementing the program and who are key facilitators in achieving and sustaining the success of SBM-G. In order to implement an operation of national scale, a hybrid operation is proposed using two lending instruments: (a) Program for Results (PforR), for results orientation and supporting the incentive component of the national program; and (b) Investment Project Financing (IPF), for program management and capacity building at the national level.