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th Five Year Plan noted that the urban slum population is growing despite sharp reductions in poverty and rising incomes. The central and several state governments recognized the need for intervention by initiating, or enlarging existing urban housing and other slum subsidy programs. With this in mind, the Government of India (GOI) has requested a loan from the World Bank to implement a more effective strategy and delivery mechanism for the financing of urban slum improvement and sanitation provision in underserved areas. In order to support the GOI to achieve the goals delineated in 10th Five-year Development Plan concerning slum improvement and poverty alleviation in urban areas, the Bank has agreed to consider a program that will focus on (a) refining the national policy framework for the upgrading of urban slums and sanitation in underserved areas in India; (b) working with the states and various beneficiaries to establish a methodology which measures program performance of both the GOI and the states, and identifies concrete monitorable steps that can be taken to improve this performance; (c) developing appropriate monitoring mechanisms to enable the evaluation and modification or redesign of the programs which would improve the transparency, efficiency, administrative simplicity, and targeting of the assistance; and (d) developing funding schemes for slum improvement and sanitation that could provide incentives so that resources are used more effectively and the program reach expanded. In doing so, the program will: (i) contribute to poverty alleviation in the poorest urban areas in India; (ii) strengthen human capital in poor neighborhoods by increasing community participation in planning, delivery and maintenance of public works and services; (iii) improve the efficacy of the use of more than $400 million of annual government expenditures on these programs. This paper is the first joint GOI-World Bank attempt to examine the existing housing and sanitation programs with a view to developing a framework for evaluating them. Data was collected for four Housing Subsidy programs and two Sanitation programs from a series of conversations with government officials in concerned ministries at both the federal and the state government levels and from Government of India documents. The structure of the paper is as follows. First, the caveats to the analysis are spelled out. The next section presents the necessary background. Then section III briefly describes the five programs evaluated. Section IV examines how each of these programs measures up against the evaluative criteria. Section V presents the conclusions while section VI outlines the way forward.
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