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                                                         December 9, 1991
The Secretary to the Government of India
Department of Economic Affairs
Ministry of Finance,
New Delhi, India
            Re:   Credit 2022-IN/Loan 3065-IN
                  (National Sericulture Project)
                  Amendment
Dear Sir:
         Please refer to the Development Credit Agreement dated June 16,
1989 (hereinafter the "Development Credit Agreement") between India and
the International Development Association (hereinafter the "Association")
and to the Loan Agreement of even date herewith (hereinafter the "Loan
Agreement") between India and the International Bank for Reconstruction
and Development (hereinafter the "Bank").  In response to your request
and the discussions between our respective representatives, we are
pleased to inform you that the Association agrees to amend the
Development Credit Agreement for the purpose of incorporating certain
changes relating to auditing, loans to reelers, disbursement and
procurement in Section 4.01 and Schedules 1, 2 and 3 thereto which are
incorporated in the Loan Agreement pursuant to Section 3.01 thereof.
         Accordingly, the Association agrees to amend the Development
Credit Agreement as follows:
1.          The words "including those for the Special Account" in
Section 4.01 (b) (i) are deleted.
2.          The word "six" in the second line of Section 4.01 (b) (ii) is
deleted and the following substituted there for: "nine".
3.          Section 4.01 (a) is renumbered as Section 4.01 (c) and is
moved to appear after Section 4.01 (b).
4.          The words "paragraph (a) of this Section" in renumbered
Section 4.01 (c)  are deleted and the following words substituted there
for: "sound accounting practices".
5.          A new Section 4.01 (a) is inserted to read as follows:  "The
Borrower shall maintain or cause to be maintained records and accounts
adequate to reflect in accordance with sound accounting practices the
operations, resources and expenditures in respect of the Project of the
departments or agencies of the Borrower responsible for carrying out the
Project or any part thereof."
6.          A new paragraph (d) is inserted in Section 4.01 to read as
follows:
            "(d) The Borrower shall have the Special Account for each
            fiscal year audited in accordance with appropriate auditing
            principles consistently applied by independent auditors
            acceptable to the Association and furnish to the Association,
            as soon as available, but in any case not later than six
            months after the end of each such year, a certified copy of
            the report of such audit by said auditors, of such scope and
            in such detail as the Association shall have reasonably
            requested. "
7.          A new paragraph 4 is inserted in Schedule 1 to read as
folLows: "To the extent practicable, and except as the Association and
the Bank may otherwise agree, disbursements under each category set forth
in the table in paragraph 1 of this Schedule shall be made at a ratio of
85% from the proceeds of the Credit or the Loan, and 15% from the
proceeds of the Swiss contribution, at the applicable percentage of
expenditures to be financed under each such category."
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8.          Part H (i) of Schedule 2 is deleted and the following
substituted therefor:  "Establishment of a revolving fund for providing
working capital loans to (a) private sector reelers in Andhra Pradesh,
Jammu and Kashmir, Tamil Nadu, West Bengal and the Pilot States for
purchasing cocoons; (b) private sector reelers in Karnataka for
purchasing bivoltine cocoons; and (c) government reelers in the Pilot
States and the States acceptable to the Association and the Bank for
purchasing cocoons in the Pilot States and for purchasing bivoltine
cocoons in the States."
9.          The word "works" in the first line of Part C.l of Section I
of Schedule 3 is deleted.
10.         Part C.2 of Section I of Schedule 3 is amended in its
entirety to read as follows:
            "2.  Items or group of items estimated to cost less than the
            equivalent of $20,000 per contract, up to an aggregate limit
            of $4,000,000 for CSB and $500,000 for each of the States,
            may be procured under quotations solicited from a list of at
            least three suppliers eligible under the Guidelines, in
            accordance with procedures satisfactory to the Association."
11.         Part C.3 of Section I of Schedule 3 is amended in its
entirety to read as follows:
            "3.  Works estimated to cost less than Rs. 100,000 per
            contract, up to an aggregate limit of $3,000,000 for CSB and
            $600,000 for each of the States, may be procured through
            force account."
            As authorized representative of India under the Development
Credit agreement and the Loan Agreement, please confirm your agreement to
the foregoing amendment by signing and dating this letter in the space
provided below   Upon such confirmation, the reference in Section 3.01 of
the Loan Agreement to Section 4.01 and Schedules 1, 2, and 3 of the
Development Credit Agreement shall be deemed to be a reference to such
section and Schedules as amended herein.
            This amendment may be executed in two counterparts each of
which shall be an original.  upon your confirmation, please return one
fully executed original to the Association.  This amendment will be
effective as of the date of this letter upon receipt by the Association
of one fully executed original of this amendment.
            Because of their interest in the matter, we are sending a
copy of this letter to the authorized representatives of the States of
Andhra Pradesh, Jammu and Kashmir, Karnataka, Tamil Nadu and West Bengal
and the Central Silk Board.
                        Very truly yours,
                        INTERNATIONAL DEVELOPMENT ASSOCIATION
                        INTERNATIONAL BANK FOR RECONSTRUCTION
                        AND DEVELOPMENT
                        By:
                                    Heinz Vergin
                                      Director
                            Country Department IV, India
                                  South Asia Region
CONFIRMED:
INDIA
By:   /s/ S.G. Hoda
      Authorized Representative under the
      Development Credit Agreement and the
      Loan Agreement
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Date: 17th January 1992
copy to:    Chief Secretary to the Government
              of Andhra Pradesh
            Hyderabad, Andhra Pradesh, India
            Chief Secretary to the Government
              of Jammu and Kashmir
            Srinagar, Jammu and Kashmir, India
            Chief Secretary to the Government
              of Karnataka
            Bangalore, India
            Chief Secretary to the Government
              of Tamil Nadu
            Madras, India
            Chief Secretary to the Government
              of West Bengal
            Calcutta, West Bengal, India
            Central Silk Board
            United Mansions
            39 Mahatma Gandhi Road
            Bangalore - 560 001, India