The forests of the Pradesh are not only known for their grandeur and majesty but also play a significant role in maintaining the fragile eco-system of the Western Himalayas. State Government is according special emphasis on conservation of forest wealth so that ecological balance could be maintained of this fragile region. The World Bank has agreed in principle to implement Rs. 540 croreIntegrated Watershed Development Project for Mid Himalayas, which would serve as a boon to the local communities in this region and also leave durable and positive impact on the environment and ecology of the region for focus sustainability of livelihood. The Ist phase of the project, which has become operational on 1st October, 2005 in the State aimed at protection and conservation of natural resource base and improve its productive potential alongwith increasing the income of the rural households in the project area. It would also envisage support policy and institution development to harmonize watershed development projects and policies across the state in accordance with the best practices. The total cost of the Ist phase of the project is Rs.365 crore out of which World Bank contribution will be 70 per cent, State share 20 per cent and beneficiary contribution 10 per cent. The project would be completed in next 6 years. The project will be implemented in Mid Hills and High Hills Zones with altitude varying from 600 meter to 1800 meters covering 545 Panchayats of 42 Development Blocks of 10 districts excluding the tribal areas of the State. Only the degraded areas with poverty and backwardness have been selected for treatment under the project. Dehar catchment mainly in Chamba district, Dehar and Baner in Kangra district, Uhl and Seer in Mandi district, Parvati, Gadsa and Tirthan in Kullu district, Pabber and Satluj in Shimla district, Giri and Yamuna catchment in Sirmaur district, Ghamber in solan district, Govind Sagar catchment in Bilaspur and Una district and Hamir catchment in Hamirpur district have been selected for treatment under the project. CAT plans areas, wildlife sanctuaries and national park and the areas where other international projects are being implemented have been excluded. Gram Panchayat Watershed Development Plan will be prepared by the Gram Panchayat, out of the proposals received from various wards of the Panchayats. These plans will be discussed and approved by the Gram Sabha and implemented by work committee of the Panchayats. Non-arable land treatment involving plantations and soil and conservation works, water harvesting programmes, arable land treatment involving agriculture land development, high value crop demonstration, livestock development, fodder improvement programmes, foot paths, foot bridges construction, potable water supply schemes are some of the major activities which will be implemented under the new project. Major thrust will be given on improving the livelihood of the rural poor by implementing income generation activities. World Bank team has visited the State from 18th September, 2005 to work out the final details of the project and approval by the Board of Management of the World Bank is planned for December, 2005, while agreement is likely to be signed in January, 2006. Till such time, World Bank has agreed in principle for retroactive financing of eligible expenses from 1st October, 2005. The new project will be implemented through Himachal Pradesh Natural Resource Management Society, while Forest Department would be the nodal agency for the project. The State Government is deeply committed to increase the productivity of the rural areas while preserving its natural heritage. Integrated Watershed Development Project would be viewed as a priority approach to ensure that the land and water resources are sustainably managed and livelihood of the rural inhabitants enhanced. The State is also committed to further progress on financial, administrative and political decentralization to Gram Panchayats to strengthen local governance and ensure democratic and participatory development. The innovative and ambitious Forestry Project would not only help to raise forest cover in the State but also bring sea change in the living standard of the people by providing them various direct and indirect benefits from the forests.