The State of Madhya Pradesh encompasses the major part of the highlands of Central India and constitutes parts of the upper catchments of five principal river system– the Yamuna, Ganga, Mahanadi, Godavari and Narmada. It is endowed with rich and diverse forest resources. Variability in climatic and edaphic conditions brings about significant differences in forest types. The latest estimate of the Forest Survey of India suggests that forests cover 24.4% of the State’s land area. The landscape being targeted by the project is also endowed with globally significant biodiversity. The districts in which the project will be undertaken are home to 2 National Parks and 3 Sanctuaries. Some of the key threatened and endangered faunal species in these protected areas are Tiger, Panther, Wild dog, Chausingha Bison, and many other species of mammals and reptiles in addition to approximately 200 species of birds. The maintenance of the ecological balance of the state is hence of critical importance to the Nation as a whole, as it provides ecosystem services beyond its borders such as water and climate regulation, and provides some of the last remaining habitats for India’s threatened biodiversity.

        Despite the thrust towards watershed development in the last decade, catchments continue to degrade and rates of soil erosion continue to be high in the State with negative downstream externalities. Unsustainable land management practices, especially deforestation and overgrazing, have been both cause and consequence of the livelihoods crisis among tribal and rural communities living in and around forest areas. In the absence of a large and coordinated intervention, with incremental support from GEF, that builds on the vast experiences in integrated management of natural resources in the State, the livelihood system being practiced in forest fringe villages, which consists of (a) low productivity, rain fed, extensive agriculture; (b) uncontrolled grazing of livestock in forests; and (c) unsustainable exploitation of NTFPs, will continue to undermine ecosystem services. This will be further compounded by the effects of climate change and variability that are increasingly threatening traditional ways of life. In order to preserve the range of ecosystem services important for local livelihoods as well as for the global environment, the long-term solution is to support and promote sustainable rural livelihoods, which balance socio-economic needs with environmental benefits at the community-level. Furthermore, each component of the livelihood system should be adapted to increase its resilience to climate change and variation. The main barriers to realizing this vision and to remove the direct drivers of environmental degradation and loss of ecosystem services can be clustered as follows: (a) institutional barriers; (b) economic and financial barriers; (c) technology and knowledge barriers. The project strategy is thus to focus on removing barriers to promoting sustainable rural livelihoods that are ecologically sustainable and provide a broader range of livelihood options for the tribal/rural poor. Demonstration activities will be targeted in four districts of Madhya Pradesh organized on the basis of 4 micro-catchments/ watersheds.

      Global environmental benefits will accrue from addressing land degradation trends that are adversely affecting critical ecosystem services, such as water holding capacity of the land, soil carbon sequestration, agricultural productivity, habitat and range of threatened and endangered wildlife resources that depend on forest areas and adjacent lands in national parks and reserve forests. Global benefits include: enhancement of ecosystem services through SLEM on approximately 17,500 ha of land in critical upper watershed areas. Benefits will be further magnified through replication and up-scaling of good SLEM practices developed by the project through a National SLEM Replication Mechanism linked to the World Bank-led SLEM Partnership for India..