Agriculture has always been an important sector of India’s economy. In 2009, it contributed 16% of the country’s gross domestic product, and in 2010, employed 53% of its workforce. Over a decade before project appraisal in 2010, however, sector performance had been below government targets due to lack of infrastructure, weak backward-forward linkages, and inadequate production capital.
Over 90% of the terrain of the state of Uttarakhand in northern India is hilly and minimally connected through rail and air, making roads the lifeline of its transport system. But at project appraisal in 2006, about 30% of the state highways and major district roads and more than 70% of the other district and village roads needed repair or rehabilitation.
In mid−2000s, Madhya Pradesh in central India suffered from high electricity losses and poor service levels due to antiquated electrical distribution systems, particularly in the rural areas. This was the result of many years of insufficient funding for the expansion and maintenance of the systems.
In 2004, the Government of India set the target of installing an additional 100,000 megawatts (MW) of generation capacity to provide electricity access to all households by 2012. Without improving the national transmission grid, transmission bottlenecks could worsen with increased generation capacity.
At 24% in 2001, the urbanization level in Rajasthan in northwestern India was lower than the national average. However, slums were emerging fast and by then were already home to more than 20% of the urban population. The growth in slums and slum populations hastened the deterioration of the urban environment.
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