India: Improving Rural Livelihoods in
Bihar
Contact: Parmesh Shah, Email: pshah@worldbank.org


What was the development challenge?

The state of Bihar has some of the worst social and economic indicators in India, with
significant challenges of social exclusion, lack of access to finance, landlessness, low
food security, and indebtedness of rural households.

The project facilitated a unique institutional model for the development of rural livelihoods
in the state, using a professional support architecture of service delivery to develop
community institutions of the poor, build social, financial and economic capital, and support
the poor in their interactions with state and market. In seven years of operation, the
project has mobilized 1.4 million poor households into Self Help Groups (SHGs) to access
finance for farm modernization, training, and to start enterprises; some 70 percent of these
households have retired their high-value debts. A recent independent impact evaluation
has also observed that the participant households have higher savings, lower high-cost
debts, higher food security, more assets, and empowered women.

What approaches did this project use to deliver solutions?

The World Bank, returning to Bihar after a gap of 25 years, used four main approaches
to improve outcomes in a difficult environment.  First, the task team engaged intensively
with a broad range of stakeholders to understand political and social realities on the
ground before determining the project design. The team stayed in Bihar for three months
at a stretch, holding 12 major consultations; in addition, potential beneficiaries in over
1,000 villages were consulted to ascertain their needs.

Second, the task team made concerted efforts to get buy-in from the major political
players at the highest levels of government. Furthermore, senior bureaucrats and

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officials were taken on study tours of successful projects in Andhra Pradesh. This peer-to
peer learning proved to be extremely effective.

Third, the project invested in a dedicated cadre of 160 skilled young professionals,
almost half women, who could support village communities, and regularly engage
with the task team to keep them updated about the situation on the ground. Fourth,
an experienced project consultant was placed on the ground in Bihar, making Bank
expertise constantly available to project officials.

What lessons does this project offer for others?

This project showcases four key lessons that helped staff meet their goals in Bihar. First,
to ensure better outcomes for citizens, it is important to spend time on the ground to
understand social and political realities. Second, the project should ensure presence of
quality human resources on the ground. Third, building trust with political leadership and
wider circles of influence is irreplaceable. Last, the Bihar experience suggests that, to
deliver solutions for citizens in difficult socio-economic contexts, it may be advisable to
emphasize geographical expertise rather than sector specialization.




Source: Vinay Vutukuru, World Bank Group.
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