progress report on tranche release · (i) the fiscal year (fy) of the government and its agencies...

Progress Report on Tranche Release

This consultant’s report does not necessarily reflect the views of ADB or the government concerned. [For PPTAs: Also, all of the views expressed herein may not be incorporated into the proposed project’s design.]

Project Number: 44453 Loan Number: 2926 July 2014

India: West Bengal Development Finance Program (Second Tranche) This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011.

CURRENCY EQUIVALENTS (as of 25 June 2014)

Currency unit – Indian rupee/s (Re/Rs)

Re1.00 = $0.0166

$1.00 = Rs60.056

ABBREVIATIONS ADB – Asian Development Bank ADSR – additional district subregistrar ARA – additional registrar of assurances COSA – computerization of salary accounts DCT – Directorate of Commercial Taxes DDO – drawing and disbursing officer DSR – district subregistrar FY – fiscal year GSDP – gross state domestic product GRIPS – government receipt portal system IFMS – integrated financial management system IMFL – Indian-made foreign liquor IT – information technology MTEF – medium-term expenditure framework MTFP – medium-term fiscal plan OSMS – online salary management system OTR – own-tax revenue PAN – permanent account number PPP – public–private partnership TA – technical assistance TIMS – tax information management system WBMSC – West Bengal Medical Services Corporation xPERT – excise program for effective revenue tracking

NOTES

(i) The fiscal year (FY) of the government and its agencies ends on 31 March. FY before a calendar year denotes the year in which the fiscal year begins, e.g., FY2014 begins on 1 April 2014.

(ii) In this report, "$" refers to US dollars.

Vice-President W. Zhang, Operations 1 Director General H. Kim, South Asia Department (SARD) Director B. Carrasco, Public Management, Financial Sector, and Trade Division,

SARD Team leader H. Mukhopadhyay, Senior Public Management Economist, SARD Team members V. Rekha, Principal Counsel, Office of the General Counsel A. Gacutan, Senior Operations Assistant, SARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

I. INTRODUCTION 1

II. MACROECONOMIC AND FISCAL DEVELOPMENT 1

III. STATUS OF PROGRAM IMPLEMENTATION 2

IV. THE TECHNICAL ASSISTANCE GRANT 9

V. PROGRAM MONITORING 10

VI. PROGRAM ASSURANCES AND MONITORING FRAMEWORK 10

VII. CONCLUSION 10

VIII. THE PRESIDENT’S DECISION 11

APPENDIXES

1. Chronology of Loan Review Missions 12

2. Fiscal Performance 13

3. Policy Matrix 15

4. Progress against Outcome and Outputs of Design and Monitoring Framework 18

I. INTRODUCTION 1. The Asian Development Bank (ADB) approved a program loan of $400 million and a technical assistance (TA) grant of $0.7 million on 30 October 2012 to the Government of India for the West Bengal Development Finance Program.1 The program was designed to be released in two tranches of $200 million each. The first tranche of the program loan was released to the Government of India on 5 December 2012 following loan effectiveness for onlending to the Government of West Bengal (state government).2 Six loan review missions were conducted in Kolkata during January 2013–May 2014 to support and review the implementation of the program (Appendix 1). 2. In May 2011, there was a change in the state government after 34 years that ushered in a wave of reforms. As part of the reform agenda, the state government requested ADB assistance to initiate a comprehensive fiscal consolidation plan in the state.3 A major contributory factor to fiscal distress in West Bengal had been the state’s low own-tax revenue (OTR) performance and high nondiscretionary expenditure (salaries, interest, and pensions). This has had extremely negative consequences on pursuing the state government’s development agenda as development financing (capital outlays) remained extremely low (below 1% of gross state domestic product [GSDP]), undermining the state’s growth prospects. 3. Against the backdrop, the logic of the program was to create fiscal space as a means to augment and sustain higher development spending in the state while preparing the way for improvements in service delivery. However, it was almost impossible to cut nondiscretionary committed expenditure over 2–3 years. More importantly, a further squeeze in capital outlays and operation and maintenance expenditure would have had serious adverse implications for growth and employment. Thus, it was agreed that the program would facilitate the necessary steps to augment revenue and improve targeting of scarce public resources to improve the overall efficiency of spending. A follow-on program in 2015 is expected to focus on consolidating the reforms initiated under this program and rationalizing public expenditure to improve the efficiency of public resource allocation. 4. The benefits of the program, therefore, are expected to be evident in the generation of additional resources for development financing (public investment) while reducing the fiscal deficit. The program specifies three areas to support fiscal consolidation and set state finances on a path consistent with a revised and sustainable medium-term fiscal plan: expenditure rationalization, own-revenue reform, and better debt management.

II. MACROECONOMIC AND FISCAL DEVELOPMENT 5. West Bengal is a large state with a population of more than 90 million and a density of 1,029 people per square kilometer—the second-highest among all the states in India. Since the new state government came to power in 2011, the fiscally stressed situation of the state has witnessed a positive turnaround, backed by ADB’s assistance in implementing a comprehensive set of reforms. While this has primarily been driven by revenue administration-led fiscal

1 ADB. 2012. Report and Recommendation of the President to the Board of Directors: Proposed Policy-Based Loan

and Technical Assistance Grant to the Government of India for the West Bengal Development Finance Program. Manila (LN 2926-IND).

2 All 10 first tranche release policy actions were compiled with before Board approval, and remained complied with.

3 ADB had past involvement under the West Bengal Development Finance TA project in 2005–2006, which

undertook a thorough diagnosis of the major deficiencies that had led to fiscal distress.

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consolidation program, the quality and targeting of expenditure have also improved. This is evident from improvements in key fiscal indicators (Table 1). The current deficit is projected to decline to 1.7% of GSDP in FY2013 from 3.7% in FY2010. A major contributory factor is the substantial increase in the state’s OTR–GSDP ratio, which exceeded 5% in FY2012 for the first time in 15 years. The fiscal deficit relative to GSDP also improved by 1.15 percentage points from 4.23% in FY2010 to 3.08% in FY2013. The state government is expected to achieve a primary surplus in FY2014. This increased ability to rein in the fiscal deficit has gradually lessened public debt to 35% in FY2013 from 41% of GSDP in FY2010. Further, the state’s cash and liquidity situation has also improved, with its use of off-budget ways and means advances from the Reserve Bank of India declining to 15 days in FY2013 from 48 days in FY2012 and 113 days in FY2010. The state was in overdraft for only four times for 7 days in FY2013, compared with seven times for 62 days in FY2010. A detailed analysis is presented in Appendix 2.

Table 1: Key Fiscal Indicators (% of Gross State Domestic Product)

Indicators

FY2010

FY2011

FY2012

FY2013 Revised Estimate

FY2014 Budget

Estimate

Own-tax revenue 4.57 4.68 5.27 5.51 5.57

Current expenditure 13.96 13.77 13.20 13.13 12.99

Current deficit 3.74 2.74 2.22 1.70 0.00

Capital outlay 0.48 0.52 0.73 1.30 1.85

Fiscal deficit 4.23 3.33 3.08 3.08 1.80

Primary deficit 1.09 0.34 0.25 0.33 (0.80) ( ) = negative, FY = fiscal year. Note: A negative primary deficit implies a surplus. Source: Budget publications, Government of West Bengal.

III. STATUS OF PROGRAM IMPLEMENTATION

6. The state has made considerable efforts to fulfill the second tranche release policy actions and has achieved full compliance. The release requires compliance with 15 policy conditions under three broad policy reform areas: expenditure rationalization, revenue reforms, and debt management. The status of compliance of each policy action is explained in paras. 8–37. The policy matrix is in Appendix 3.

1. Expenditure Rationalization Measures 7. The policy actions under this component aim to improve the allocative efficiency of scarce public resources. The proposed reforms in this area are critical to track expenditure and minimize fiduciary risk. 8. Medium-term fiscal plan for FY2014–FY2017 approved by the Government of West Bengal4 (complied with). In line with the statute of the West Bengal Fiscal Responsibility and Budget Management Act, 2010 as amended and the rules thereto, the MTFP for FY2014– FY2017 was approved by the Finance Department on 17 February 2014. The plan approved for FY2014 presents the rolling targets of the state for the budget year (FY2014) and three outer years (FY2015–FY2017) on three key fiscal indicators: current deficit, fiscal deficit, and total

4 While stating an agreed policy action, as stated in the loan agreement, the Government of West Bengal has not

been replaced by the ‘state government.’

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debt stock. Preparation and endorsement of such a plan ensures transparency in the state’s commitment to fiscal discipline. 9. Actions taken by the Finance Department on the recommendations of the action plan on subsidies (complied with). In view of the of state government’s fiscally stressed situation, the Finance Department had prepared an action plan for subsidy rationalization in FY2012 as part of the first tranche release conditions of this program. In line with the recommendations of this action plan, the state government adopted a three-pronged approach to put the plan into effect, which involved (i) increasing the cost-recovery rate across sectors, (ii) rationalizing expenditure in nonmerit and select merit-II sectors,5 and (iii) leveraging private investments in the state through public–private partnership (PPP). Examples of measures under implementation include (i) the ongoing voluntary retirement scheme for employees in the four state-run transport corporations; (ii) commercial utilization of unutilized excess and/or idle vacant land in six Calcutta Tramways Company depots for which request for proposal has already been issued for the 99-year lease; (iii) restructuring select closed and/or perpetual loss-making concerns;6 (iv) revamping the public distribution system through measures including digitization of ration cards and ongoing construction of warehouses to meet the existing shortfall of storage space and avoid wastage; and (v) periodic filing of tariff petitions by the West Bengal State Electricity Distribution Company before the state regulator. All such measures are expected to rationalize the burden of subsidies on the state’s exchequer and help generate fiscal savings. 10. Four modules under the integrated financial management system: (i) drawing and disbursement module (bill preparation, submission, and management); (ii) employees’ database; (iii) budget–treasury interface (e-allotment); and (iv) state government revenue receipt portal system developed and rolled out by the Finance Department (complied with). Implementation of the IFMS was initiated under the first tranche policy actions of the program. The Finance Department awarded the contract for its rollout to CMC Limited. The four modules have been developed and deployed in the treasuries across the state, and are fully functional. Further, the complete rollout of the remaining modules envisaged under the IFMS is expected by September 2015. In the final IFMS rollout stage, these four modules will be integrated with the other modules, which are not part of the second tranche policy action, with customization and/or modification, if required. A brief description of compliance with each of the four subpolicy actions is presented in paras. 11–14. 11. Drawing and disbursement module. The entire chain of processes (i.e., bill capturing, automatic bill distribution, token generation, allotment, ceiling verification, bill checking, ceiling adjustment, and automatic pay-order generation) is done electronically in each treasury through an online transaction processing system that enables users to carry out all of the steps in a treasury environment and produce the desired outputs. The drawing and disbursement module has been developed on client server architecture. This will facilitate expenditure planning and forecasting of cash requirements over the budget cycles, which are critical to avoid short-term unexpected borrowings. 12. Employees’ database. On 1 March 2012, the Finance Department issued

5 Merit sectors are those which are considered a necessity for the society irrespective of individual’s willingness or

ability to pay (e.g. primary health, elementary education). 6 Consultants have already been selected by the Department of Public Enterprises to suggest restructuring options

for Lily Products, Neo Pipes and Tubes, and National Iron and Steel.

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Memorandum No. 1829-F(Y), which made it mandatory for all head of offices and/or drawing and disbursing officers (DDOs) to prepare government employees’ salary bills using the computerization of salary accounts (COSA) software package developed by the National Informatics Centre. This action was taken to create a centralized and comprehensive database of employees that would facilitate proper financial management. By January 2014, data from the 6,505 DDOs, representing all 346,075 state government employees, had been captured in this database. In future, the COSA software will be integrated into the IFMS’s human resources management system module. 13. Budget–treasury interface. An effective budget–treasury interface is another critical prerequisite for expenditure planning and management. The interface is currently operational and budgets are being distributed to the DDOs through the different levels, such as directorates, regional offices, divisional offices, and subdivisional offices, as applicable through the e-Bantan module of the IFMS. The DDO management submodule of e-Bantan maps the DDOs to the corresponding treasuries for bill processing. 14. State Government Revenue Receipt Portal System. The Government Receipt Portal System (GRIPS) is a centralized portal for electronic receipt of all types of state government tax, nontax revenue, and other deposits. It was introduced by the state government vide notification no. 8298-F(Y), dated 3 October 2012, and is now fully operational.7 GRIPS will reduce the interface between taxpayers and tax officers, thereby improving transparency in tax administration. It will also minimize tax compliance costs, which will have significant implications for revenue augmentation. 15. Medium-term expenditure frameworks for health, education, and public works departments approved by the Finance Department (complied with). Following the preparation of an action plan in FY2012 to introduce rolling MTEFs in the state, three departments with large expenditures were selected for pilot implementation. MTEFs prepared and approved on 6 June 2014 for 3 years in 1 budget year (FY2014) and two outer years (FY2015 and FY2016) were premised on the long-term government strategies and objectives in the state’s five-year plan for the sector. A pro-poor focus and gender responsiveness have been included in the preparation of the MTEF reports through the selection of relevant performance indicators and identification of reform interventions aligned with the departments’ long-term strategies (see also Appendix 4). The next logical step is to link the MTEF targets and the MTFP indicators in the budget-making process. This will be taken up in a follow-on program in 2015.

16. Payment of salary to the state-government-aided secondary school teachers under COSA8 fully implemented by the Finance Department (complied with). Manual preparation and generation of salary bills for teachers at state-government-aided secondary schools is fraught with delays in disbursements, and has a higher chance of human error than information technology (IT)-based systems, including the problems associated with “missing teachers.” To conduct this function effectively, the teachers’ salaries are now being released through an IT-based system-driven process, which includes the development of a new software application called online salary management system (OSMS). OSMS is fully compliant with the computerization of salary accounts of the state government employees and has been made fully operational. Data entry for all 191,477 teachers of 12,662 government-aided secondary schools

7 See Directorate of Commercial Taxes, Government of West Bengal. Government Receipt Portal System.

http://wbcomtax.nic.in/e-Services/e_payment.htm 8 COSA refers to computerization of salary accounts.

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across 19 districts of the state has been completed, and the salary for April 2014 was credited to the teachers’ individual accounts on 2 May 2014.9 17. Procurement of medicines through the West Bengal Medical Services Corporation fully operationalized (complied with). WBMSC has been made fully operational. Its procurement wing is headed by an officer on special duty and staffed with professionals, including one procurement manager and five biomedical engineers. Recent instances include procurement of antimalarial and anti-kala-azar medicines, and diethyl carbamazine citrate 100 milligram for mass drug administration. The tendering process has been standardized and is effected through open tender. There is a tender committee for the selection of the vendor, comprising key officials of WBMSC, technical experts nominated by the Health and Family Welfare Department, and representative(s) of the indenting authority. The tenders are invited by generic name and e-tendering is mandatory for all drug procurements valued at Rs0.5 million or more. The quality control system is ensured through quality analysis of all drug procurements on a sampling basis. The condition in the tender document of 2% deduction from every bill of the vendor to meet drug testing and cost of handling charges ensures transparency and commitment to quality. The procurement of bulk drugs through WBMSC is expected to bring down the costs associated with drug procurement.10 18. Government of West Bengal’s annual growth in nominal salary bill does not exceed 7% in 2013–2014 (complied with). Salary expenditure averaged 45% of the state’s total revenue receipts during FY2004–FY2012. This high level of committed expenditure, along with pensions and interest payments, used to leave very little room for development expenditure. Moderating salary growth by rationalizing the rate of replacement of employees against natural attrition, and thus reducing growth in nondiscretionary committed expenditure, became imperative. Without such a measure, it would have been difficult to moderate current expenditure and current deficit. Accordingly, the state government’s nominal salary bill increased from Rs283,434 million in FY2012 to Rs303,218 million in FY2013, registering an annual growth of 6.98% in FY2013, which was within the targeted (ceiling) growth rate of 7%. 19. Comprehensive database on Government of West Bengal employees and pensioners to facilitate rationalization of state government expenditures prepared by the Finance Department (complied with). A comprehensive, centralized employee–pensioner database management information system is essential for proper financial management and to help the state to account for existing and projected financial liabilities in this area. The state government has achieved this through the introduction of standardized COSA software. By January 2014, the data from all the 6,505 DDOs in the state representing the 346,075 state government employees and 535,371 pensioners had been captured in this database. 20. Annual capital outlays–gross state domestic product ratio increased by 0.5 percentage points during 2013–2014 and 2014–2015 over the previous years (complied with). Capital outlays grew by 103% in FY2013 and 64% in FY2014. Accordingly, the annual capital outlay–GSDP ratio increased by 0.57 percentage points during FY2013 and by 0.55 percentage points during FY2014 over the respective previous years. This is critical to build up capital formation and support higher GSDP growth.

9 Expenditure tracking surveys carried out under the project preparatory TA showed that there are opportunities for

expenditure rationalization by computerizing salary payments to the teachers of government-aided secondary schools, as well as streamlining drugs procurement and stock management (para. 17).

10 A study shows that 50%-80% cost savings can be achieved by procuring drugs through a well-run medical service corporation with appropriate infrastructure (see: http://www.ijpcsonline.com/files/07-649.pdf).

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2. Revenue Reform Measures 21. Tax policy is only as good as the tax administration that supports it. Given the state government’s poor revenue efforts, the approach was to simplify tax policy and procedures along with compliance-based tax systems and backed by risk-based tax audits to substantially strengthen the tax base and thus increase own-revenue collection. 22. Tax information management system further enhanced by the Finance Department by (i) making the payment, recovery, and appeal modules fully operational; (ii) enabling interface between the tax information management system and state excise; and (iii) Introducing permanent account-number-based registration numbers for better cross-checking of information (complied with). The state’s tax information management system (TIMS) is a software application named “information management for promotion of administration in commercial taxes.” This policy action was conceived to leverage the benefits of information and communication technology toward strengthening tax administration and encouraging compliance. A brief description of how compliance has been achieved under each subpolicy action is presented in paras. 23–27. 23. Payment. The e-payment module operates through internet banking facilities via GRIPS and is fully functional (footnote 7 and para. 14). Trade Circular No. 16/2012, issued on 1 November 2012 by the Directorate of Commercial Taxes, made the e-payment of all commercial taxes through GRIPS compulsory. This citizen-centric e-service has made the process much easier and has removed the need for dealers to stand in long queues to pay taxes. This crucial aspect of IT applications reduces the scope for irregularities due to face-to-face collusion (para. 17).11 24. Recovery. This module is operational and is for the internal use of the Directorate of Commercial Taxes (DCT). Usually, if any amount of tax assessed, penalty imposed, or interest determined by the appropriate authorities remains unpaid after the date specified in the demand notice, the assessing authority refers such cases to the tax recovery officer, who proceeds to recover the dues using the various means available (e.g., a demand notice or court order). The module does not have any citizen interface because it deals with recovery proceedings. 25. Appeal. Trade Circular No. 14/2013, dated 5 December 2013, was issued by the DCT notifying the electronic filing of appeal petition (along with revision and review) to the appellate authority for dealers registered under the Value Added Tax Act, 2003 and Commercial Services Tax Act, 1956 within the jurisdiction of the corporate division, which handles more than 65% of the directorate’s revenue. With successful functioning of this appeal module for dealers of the corporate division, the DCT issued an addendum to the Trade Circular on 26 March 2014 notifying the extension of the module to the entire state. The module is available online and is thus fully operational.12 26. Interface between the tax information management system and excise. The interface between TIMS and state excise has been facilitated by making a web service available

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This is perhaps the most important step for improving tax compliance. E-payment of commercial taxes jumped from Rs99 billion in FY2010 to Rs166 billion in FY2012.

12Directorate of Commercial Taxes, Government of West Bengal. eAppeal, eRevision and eReview. http://wbcomtax.nic.in/e-Services/e_appeal_revision_review.htm There was a large decline in the number of pending appeal cases from 15,067 as of 31 March 2012 to 1,150 as of 31 March 2013

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in the state excise portal for internal use since May 2014.13 Under the earlier system, the waybills for alcohol and alcohol products used to be issued by the DCT to the excise licensees and/or importers prior to the grant of import permit-cum-pass from the excise authority, and thus had the potential for revenue leakages. Under the present arrangement, data pertaining to waybills for importing excisable goods is being automatically pushed by TIMS at 6 hours interval to this portal of state excise. Using this MIS support, the excise authority can now inspect and do a physical verification of the tankers and/or importers at the check posts to detect revenue leakages. The information can also be shared through this portal on a need basis as and when desired by the excise authority. 27. Permanent-account-number-based registration. Permanent account number (PAN) is now a mandatory field for all electronic submission of applications for getting the registration under the Value Added Tax Act, 2003 or the Commercial Services Tax Act, 1956. No new registrations are granted without submission of a valid PAN. For old registrations, all dealers were notified by the DCT to submit their PAN. Since the registration process under the central acts like central excise and service tax is also PAN-based, this is likely to strengthen the coordination across tax authorities and increase the scope for detecting potential revenue leakages.14 28. System of barcoding of transit documents and linking of checkposts with tax information management systems to address tax leakages in transit of goods introduced by the Finance Department (complied with). To address tax leakages during transit, a system of barcoding of transit documents has been introduced in the state whereby officials at commercial tax checkposts endorse these documents using barcode scanners. The system has been introduced and is fully operational in all the major checkposts (Barobisha, Boxirhat, Chichira, Dalkhola, Duburdi, Jaigaon, Melli, More, Phansidewa, and Sonakanya). Barcode scanners and the necessary infrastructure have been introduced in these checkposts, and multiprotocol label switching system, connection and application software have also been provided to enable scanning of documents. The system is linked with the DCT central server, which provides real-time access to information. 29. Excise management system implemented by the Finance Department including (i) online license renewal, (ii) product registration, (iii) issuance of import passes for bulk spirit for industrial and medicinal purposes, (iv) a barcode-based supply chain management system, and (v) single point-duty on wholesale of Indian-made foreign liquor (complied with). Excise program for effective revenue tracking (xPERT) is a web-based application that has been developed with ASP.NET 3.5, SQL Server 2008 as the backend database. It is hosted at the National Data Centre, located at the headquarters of the National Informatics Centre, New Delhi, with disaster recovery facilities, and easily accessible.15 Details of the subpolicy actions are in paras. 30–32. 30. Online license renewal, registration, and issuance of import passes. As part of the e-governance initiatives of the excise administration, the online renewal of excise licenses, label registration, and issuance of import passes for bulk spirit for industrial and medicinal purposes have already been implemented.

13

http://wbexcise.gov.in/webservice/xpert_mmpct.asmx 14

The DCT received 34,766 online applications with PAN numbers, and 24,571 applications were granted registration in FY2012.

15xPERT is accessible through the website of the Government of West Bengal’s Excise Department https://www.wbexcise.gov.in

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31. Barcode-based supply chain management. In an initiative to improve the system of supply chain management of packaged IMFL and country spirit, and to establish a mark of authenticity on state-produced and state-imported bottled liquor, a barcode-based supply chain management system has been developed and is functioning in the existing xPERT package of the excise directorate. At present, barcodes are being printed on import permits and/or transport passes using xPERT software, which enables the state government to track the production, distribution, and sale of IMFL and country spirit consignments. This system has been put into effect in line with Circular No. 01E/14-15 dated 25 April 2014 issued by the excise directorate. 32. Single-point duty on wholesale of Indian-made foreign liquor. Recognizing the possibility of leakage of excise revenues in transit from the factory to the bonded warehouse, the state government has discontinued the practice of collecting excise revenue from bonded warehouses, and has introduced a single-point duty at the factory instead. This measure has streamlined the system of collection of excise revenues and facilitated tax compliance. The state government effected this policy action from 1 April 2014 as per the Gazette Notification No. WB (Part-I)/2014/SAR-55 dated 21 January 2014 and Government Order No. 36 Ex dated 16 January 2014. 33. Property registration management system strengthened by the Finance Department by (i) implementing e-stamps requirement, and (ii) digitizing legacy deed data on a pilot basis in two subregistrars’ offices and rolling out the process of digitization of legacy deed data in at least 20 subregistrars’ offices (complied with). E-stamping is a computer-based application available at the website of the Directorate of Registration and Stamp Revenue, Government of West Bengal. It helps to generate the e-stamp certificate in place of physical stamps, and thus gives the convenience of paying stamp duty without going to the trouble of obtaining a stamp paper. The e-stamping system has also redressed various problems associated with stamp paper, such as shortage of stamp paper of the required denomination; fake stamp papers; high administrative costs of procuring, transporting, and distributing stamp papers; and difficulty in reconciling accounts. Provisions in the West Bengal Registration Rules, 1994 were amended for the introduction of e-stamping in all registration offices as per Notification No. WB/SC-247 dated 27 November 2012. The e-stamping system has been made compulsory for payment of stamp duty and registration fees above Rs5,000, and has been implemented in 160 registration offices in the state. 34. Further, the Directorate of Registration and Stamp Revenue initiated the task of digitizing legacy deeds (land registration records) in the state. Data entry and scanning of legacy encumbrance data for 4 years has been completed in two registration offices—Diamond-Harbour and the office of the Additional District Sub Registrar Alipore/DSR-I in South 24 Parganas—under a pilot scheme as approved by the Finance (Revenue) Department vide no. 427 FT Dt. 28.03.2012. An order has been issued by the Finance Department vide no. 504-F.T FT/O/1M-11/2014 registration dated 27 March 2014 for implementing the digitization of legacy encumbrance data in the offices of ARA I and ARA II in Kolkata, DSR Howrah, ADSR Bidhannagar, and in 20 other registration offices. 35. Number of tax slabs under the profession tax rationalized (complied with). The state government had a very elaborate tax structure of professional tax, particularly compared to other states such as Andhra Pradesh, Karnataka, and Maharashtra. There was clearly a need to simplify the tax structure for improved compliance. Recognizing the implicit gains of lower administrative complications and better understanding of the tax structure by the taxpayer, the state government rationalized the professional tax schedules contained in the Finance Act 2014 (dated 11 March 2014). The rationalization entailed (i) consolidating the tax slabs by removing

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first three tax slabs for two categories—salaried employees and wage earners, and persons engaged in any profession (but not as employee, e.g., legal or medical practitioners); and (ii) reducing the entire schedule from 23 categories of persons and/or entities in FY2012 to 4 categories in FY2014.

3. Public Debt Management Measures 36. The program has supported the strengthening of debt management based on factual information and a clear debt strategy that seeks to (i) mobilize resources for physical and social investments at the lowest costs, and (ii) achieve a clear and positive gap between returns and costs of borrowing while reducing risks. Proper debt management has enormous potential to create fiscal space. 37. A debt database with comprehensive and up-to-date information on all state government debt, including contingent liabilities, cost of funds, and maturity profile prepared by the Finance Department (complied with). The National Informatics Centre has developed an integrated debt management system for the Finance Department. This system is fully functional. Up-to-date data on all market, National Small Savings Fund, and other institutional loans have been captured by the system. The debt management system has also been strengthened by adding the facility to record the state government’s contingent liabilities. A manual has also been prepared to serve as a guide and reference tool for the standardization of processes. This database is expected to strengthen the capacity of the Finance Department to manage the stock of state government debt effectively and improve its ability to reallocate resources from interest servicing toward its development agenda.

IV. THE TECHNICAL ASSISTANCE GRANT 38. The state has benefitted from the TA. Several initiatives that are important for meeting the tranche release policy actions were supported under the TA.16 These include (i) providing inputs to the Finance Department to make the debt management database more comprehensive; (ii) providing expertise during development and implementation of the integrated financial management system (IFMS), thereby contributing to strengthening the capacity of the Finance Department during the process; (iii) preparing MTEFs for the three concerned departments and building the capacity of the Finance Department in their preparation; (iv) documenting the various actions taken by the state government toward subsidy rationalization; and (v) organizing training in public financial management for the concerned state government officials.17 Further, the TA team helped strengthen the institutional capacity of the public–private partnership (PPP) cell in the Finance Department, and developed a PPP handbook at the request of fiscal policy and management unit, which serves as a ready reference practical guide for the planning and execution of PPP projects by the state government. During the course of the program, the TA team also supported the state government in the preparation of the memorandum to the Fourteenth Finance Commission.18

16

Total contracted TA amount is $448,096 (excluding training and contingency). 17

One batch of five officials has already completed the outstation training. Another batch will start very soon. 18

Finance commissions are appointed every 5 years under Article 280 of the Indian Constitution by the President of India, primarily to design the revenue-sharing mechanism (i.e., fiscal transfers) between the center and the states, and the allocation of grants to the states.

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V. PROGRAM MONITORING 39. The program activities continue to be monitored at different levels, including through (i) regular loan review missions (Appendix 1); (ii) tripartite review meetings between ADB, the Government of India, and the state Government; and (iii) review of the mission’s aide memoires by the Department of Economic Affairs, and the state government.

VI. PROGRAM ASSURANCES AND MONITORING FRAMEWORK 40. The Borrower and the state government are in full compliance with all the covenants of the loan and program agreements.19 The state government has also confirmed that all the first tranche policy actions continue to hold. Appendix 3 details the status of the program outcome and outputs. The outcome indicators have all been achieved. Fiscal deficit, own-tax revenue (OTR), and debt stock targets have been met, showing steady and sustainable improvements in all areas while increasing development spending. One important output that was fully achieved during the program period is the preparation by FY2014 of well-documented pro-poor and gender responsive MTEFs for the departments of health and family welfare, school education, and public works based on their long-term sector strategies (Appendix 4).

VII. CONCLUSION 41. The program has been an example of successful partnership between the state government (and the Government of India) and ADB. The program critically hinges on the political commitment of the state government to bring about necessary fiscal reforms so that it can set the fiscal situation on a trajectory that is balanced, sustainable, and geared toward meeting the long-term development financing needs of the state’s citizens. Fiscal reforms are always difficult to implement in a timely manner, especially when dealing with complex revenue administration reforms and expenditure rationalization measures. They require strong political ownership. This finding is also corroborated by ADB’s review of the public resource management programs in India and elsewhere.20 42. Considering the political sensitivity of many policy actions proposed under the program, the state government has shown strong commitment to initiate the reforms. Consolidating the professional tax slabs and introducing single-point duty on IMFL are the two important policy changes geared toward simplifying tax rules and leading to better compliance and reduced leakage. Implementing computerized salary payments of teachers, procuring medicines through WBMSC, keeping the salary growth within the target, and strengthening the excise management system are important elements of the state government’s endeavor to improve public financial management. Its strenuous efforts to introduce e-governance in tax administration and expenditure management to improve transparency and accountability are also laudable. All these measures have been reflected in improving revenue performance and consolidating state finances through lower deficits (Table 1). 43. The state government has moved beyond the program requirements and initiated additional reforms. In 2012, it allowed the power distribution companies to raise the power tariff because of the rising cost of generation, transmission, and distribution. It also introduced a

19

All three safeguard categories are categorized C. 20

M. Attinasi and B. Carrasco. 2008. Public resource management Program: Do they Work? Manila: ADB; and (ii) ADB. 2007. Special Evaluation Study: ADB Support to Public Resource Management Programs in India. Manila.

11


lifetime tax when registering new vehicles, merging the road tax, additional road tax, video tax, audio tax, registration charges, and other related tax into one. This measure is expected to greatly improve compliance. 44. The state government has also achieved the program’s key objective of strengthening development financing in the state. It invested approximately $125 million (of $200 million in the first tranche release) as seed money to create and operationalize the West Bengal Highways Development Corporation to modernize and upgrade the state highways. This is an extremely important step to enhance development financing in the state in a cost-effective manner. 45. However, consolidating and sustaining the reform initiatives over the next 2–3 years is equally important. Improving allocative efficiency of scarce public resources will not materialize unless the medium-term fiscal plan (MTFP) and the departmental MTEFs are integrated in the budget-making process, and department budget allocations are made based on this exercise. Similarly, implementing all seven modules of the IFMS will be critical to meet the MTEF targets. All these actions will need to be accomplished over the next 2–3 years. Land registration data in all the subregistrars’ offices will also need to be digitized. The state government will remain vulnerable unless follow-on support is provided to the concerned line ministries or departments. 46. The state government is also embarking on two important projects with far-reaching implications for service delivery and transparency in government operations: (i) introduction of e-payments for all direct benefit transfers to avoid leakages; and (ii) building on the current program’s policy actions (para. 33), introduction of a comprehensive land records management system.21 These initiatives will also require effective implementation and monitoring. Introduction of PPP projects in health, education, and urban service delivery remain at a nascent stage in West Bengal. More needs to be done before designing financially viable PPP projects in these areas. The current program represents an important first phase of a successful partnership between ADB and the state government that will have to be continued to further entrench critical improvements to state finances.22

VIII. THE PRESIDENT’S DECISION 47. In view of the significant progress made in implementing the overall program, and the full compliance with all 15 policy actions for the release of the second tranche, the President is satisfied with the overall implementation of the West Bengal Development Finance Program and that the necessary actions for the release of the second tranche have now been fulfilled. In accordance with the established procedure, the President will authorize the release of the second tranche in the amount of $200 million. The authorization shall be effective not less than 10 working days after the circulation of this progress report to ADB’s Board of Directors.

21

This will include services such as e-integration of registration and land records; and queue management based on first-in, first-out interface with citizens to receive all the necessary information including online viewing of property records. ADB also provided support for a similar project in Bangladesh (ADB 2011. Strengthening Governance Management Project. Manila.)

22 ADB has already initiated consultations with the Government of India and the state government for a follow-on loan in 2015.

12 Appendix 1

CHRONOLOGY OF LOAN REVIEW MISSIONS

Type of Mission Date Location

Loan review mission 1 February 2013 Kolkata TA inception mission and TPRM 6–7 March 2013 Kolkata and Delhi Midterm review mission 16–18 June 2013 Kolkata Review mission 25–26 October 2013 Kolkata Review mission 27–29 January 2014 Kolkata Review mission 19 May 2014 Kolkata

TA = technical assistance, TPRM = tripartite portfolio review meeting. Source: Asian Development Bank.

Appendix 2 13

FISCAL PERFORMANCE

1. The critical success factor in this recent turnaround in the state government’s finances has been the strong increase in collection of own-tax revenue (OTR) receipts (Figure A2.1). The average annual growth rate of OTR is expected to be 22.9% during FY2011–FY2013 compared with 13.6% during FY2005–FY2010. This strong revenue collection has been driven by the virtuous cycle of investment-led broad-based growth, as designed under the program, and reflected in buoyant revenue collection across almost all taxes, including the major ones—value-added tax, state excise, and stamps and registration fees. This upturn followed the comprehensive tax reform strategy pursued by state government with ADB support, which was sharply focused on strengthening revenue administration—including systems and procedures—and reducing compliance costs.1

Figure A2.1: Trends in Own-Tax Revenue (% of Gross State Domestic Product)

Source: Budget documents, Government of West Bengal.

2. OTR mobilization played an important role in the reductions in the current deficit in FY2012 and FY2013. The relative performance is more prominent in FY2013, which was a full program year (Figure A2.2).

Figure A2.2: Contributions to Reduction in Current Deficit (%)

( ) = negative, FY = fiscal year. Note: All the numbers in any year should add up to 100. Since central government transfers decline in FY2012 as against FY2011, therefore the contribution of central government transfers in the reduction of current deficit is negative. Source: Budget publications, Government of West Bengal and staff estimates.

1 See A.K. Bhattacharya. 2014. How Mr. Mitra Fixed Bengal’s Finances. Business Standard. 18 March; and Ghosh,

S, S. Karmakar, and A. Nath. 2014. Refinancing West Bengal. Economic and Political Weekly. 10 May.

2

2.5

3

3.5

4

4.5

5

5.5

6

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 RE

Program period

14 Appendix 2

3. Moreover, the cost of collection as a percentage of revenue collected by the Department of Commercial Taxes declined gradually over time, signifying discernible benefits of e-governance in tax administration (Figure A2.3).

Figure A2.3: Cost of Collection as a Percentage of Total Revenue

FY = fiscal year. Source: Administrative Report FY2012, Directorate of Commercial Taxes, Government of West Bengal.

4. Aided by the program’s strong emphasis on revenue reform and the state government’s deep commitment to strengthening investment expenditure, the capital outlay–gross state domestic product (GSDP) ratio increased from 0.5% in FY2010 to 1.3% in FY2013, and is projected to increase to 1.9% in FY2014. While containing nonplan expenditure2 wherever possible, the state’s growth-oriented plan expenditure, which contracted in FY2010, has also been improving consistently, growing by 19% in FY2011, 35% in FY2012, and 43% in FY2013 (Figure A2.4). The state government has undertaken expenditure restructuring exercises supported by the program, which have helped reduce its subsidy burden. For example, it is revamping the public distribution system, and is restructuring selected closed and/or perpetual loss-making state public sector undertakings.

Figure A2.4: Plan and Nonplan Expenditure (% of Gross State Domestic Product)

FY = fiscal year. Source: Budget publications, Government of West Bengal and staff estimates.

2 Nonplan expenditure primarily consists of salaries, interest, pensions, transfer payments, and operation and

maintenance expenditure. Plan expenditure consists of outlays proposed for new projects, expansion, and modernization of the existing assets. Both plan and nonplan expenditure cover both capital and current (revenue) accounts.

1.28

1.11

0.96

0.80

0

0.2

0.4

0.6

0.8

1

1.2

1.4

FY2009 FY2010 FY2011 FY2012

0

2

4

6

8

10

12

14

16

18

FY2010 FY2011 FY2012 FY2013 FY2014

Plan

Expenditure

NonPlan

Expenditure

Program period

Appendix 3 15

POLICY MATRIX

Objective: To help the Government of West Bengal stabilize its public finance for augmenting and sustaining development financing.

First Tranche

Second Tranche (approximately 18 months after the first tranche)

I. Expenditure Rationalization Measures Objective: Improving allocative efficiency of public resources

1. FPMU in the Finance Department set up by GoWB and made fully operational to supervise (i) fiscal programming, (ii) project appraisal and evaluation, (iii) debt management, and (iv) overall program implementation (Document required: Copy of notification)

2. PPP policy for the state notified by GoWB (Document required: Copy of the notification and PPP policy)

1. MTFP for FY2014 to FY2017 approved by GoWB (Document required: Budget document highlighting the MTFP)

3. Action plan on subsidies prepared by the Finance Department (Document required: action plan approved by the Finance Department)

2. Actions taken by the Finance Department on the recommendations of the action plan on subsidies (Document required: Action taken report by the Finance Department)

4. IFMS for improved public financial management notified by GoWB (Document required: Budget document that includes IFMS)

3. Following four modules under the IFMS developed and rolled out by the Finance Department: (i) Drawing and disbursement module (bill

preparation, submission, and management);

(ii) Employees’ database; (iii) Budget–treasury interface (e-allotment);

and (iv) State government revenue receipt portal

system. (Document required: A report by the Finance Department on IFMS)

5. Action plan to introduce MTEFs for the health, school education, and public works departments issued by the Finance Department (Document required: Copy of action plans as issued by the Finance Department to the state departments)

4. MTEFs for health, education, and public works departments approved by the Finance Department (Document required: MTEF reports as approved by the Finance Department)

6. COSA for all state government-aided secondary school teachers to improve expenditure targeting notified by GoWB (Document required: Copy of notification as issued by the Finance Department)

5. Payment of salary to the state government-aided secondary school teachers under COSA fully implemented by the Finance Department (Document required: A report on COSA for aided school teachers prepared by the Finance Department)

7. Roadmap for the procurement of medicines and stock management through the WBMSC to streamline drug procurement in a cost-effective manner notified by GoWB (Document required: Copy of roadmap as

6. Procurement of medicines through the WBMSC fully operationalized (Document required: A report on the drug procurement activities of the WBMSC prepared by the health department)

16 Appendix 3

First Tranche


issued by the health department) 7. GoWB’s annual growth in nominal salary bill

does not exceed 7% in 2013–2014. (Document required: Budget documents)

8. Comprehensive database on GoWB employees and pensioners to facilitate rationalization of state government expenditures prepared by the Finance Department (Document required: A report on the database highlighting the key statistics as prepared by the Finance Department)

9. Annual capital outlays to GSDP ratio increased by 0.5 percentage points during 2013–2014 and 2014–2015 over the previous years. (Document required: Budget documents)

II. Revenue Reform Measures Objective: Improving own-revenue mobilization by strengthening revenue administration and reducing compliance cost.

8.

Value-added Tax: Tax administration strengthened toward progressively reducing interface requirements between taxpayer and tax officers by undertaking the following by the Finance Department: (i) Digital signatures for returns; (ii) Online waybill (transit documents for

importing goods from other states) generation for new dealers;

(iii) Online cancelation of way bills; and (iv) System-based matching of waybill and

return data. (Document required: Report issued by the Finance Department)

10.

TIMS further enhanced by the Finance Department by: (i) Making the payment, recovery, and appeal

modules fully operational; (ii) Enabling interface between TIMS and state

excise; and (iii) Introducing permanent account number-

based registration numbers for better cross-checking of information.

(Document required: Report and relevant notifications by the Finance Department)

9. Tax compliance through better service delivery to taxpayers by introduction of the following by the Finance Department: (i) A system of VAT return preparers; (ii) Digitization of over-the-counter tax

payments; (iii) Migration to pure online tax filing without

hardcopy submission requirement; (iv) Online grievance redressal system; and (v) Simplified registration and tax payment

for one-off transaction. (Document required: Report issued by the Finance Department)

11. System of barcoding of transit documents and linking of checkposts with TIMS to address tax leakages in transit of goods introduced by the Finance Department. (Document required: Report and relevant notifications by the Finance Department)

12. Excise management system implemented by the Finance Department including for (i) online license renewal, (ii) product registration, (iii) issue of import passes for bulk spirit for industrial and medicinal purposes, (iv) a barcode-based supply chain management system, and (v) single-point duty on wholesale

Appendix 3 17

First Tranche


of IMFL (Document required: Report and relevant notifications by the Finance Department)

13. Property registration management system strengthened by the Finance Department by: (i) Implementing e-stamps requirement; and (ii) Digitizing legacy deed data on a pilot basis

in two subregistrars’ offices and rolling-out the process of digitization of legacy deed data in at least 20 subregistrars’ offices.

(Document required: Report and relevant notifications by the Finance Department)

14. Number of tax slabs under the profession tax rationalized (Document required: Copy of notification by the Finance Department)

III. Debt Management Measures Objective: Reducing debt servicing burden and better management of debt.

10. Debt strategy that sets out policy, guidelines, and institutional arrangements for government borrowings and management of government debt approved by the Finance Department (Document required: Debt strategy approved by the Finance Department)

15. A debt database with comprehensive and up-to-date information on all state government debt, including contingent liabilities, cost of funds, and maturity profile prepared by the Finance Department (Document required: Report of the Finance Department including database)

COSA = computerization of salary accounts, FPMU = fiscal policy and management unit, GoWB = Government of West Bengal, GSDP = gross state domestic product, IFMS = integrated financial management system, IMFL = Indian-made foreign liquor, MTEF = medium-term expenditure framework, MTFP = medium-term fiscal plan, PPP = public–private partnership, TIMS = tax information management system, VAT = value-added tax, WBMSC = West Bengal Medical Services Corporation. Source: Asian Development Bank and Government of West Bengal.

Appendix 4

18

PROGRESS AGAINST OUTPUTS OF DESIGN AND MONITORING FRAMEWORK

Outcome as per DMF Progress against Targets

Fiscal deficit is within the prescribed limit of the Fiscal Responsibility and Budget Management Act, 2010 (3% of GSDP) net of additional capital expenditure by FY2014

Fiscal deficit–GSDP ratio is expected to be 1.8% by FY2014, even with additional capital expenditure.

At least 0.5 percentage points increase in own-revenue–GSDP ratio by FY2014

Own-revenue–GSDP ratio improved by 1 percentage point during FY2010–FY2014.

Debt stock–GSDP ratio decline by at least 5 percentage points by FY2014

Debt stock–GSDP ratio declined by more than 5 percentage points from 40.5% of GSDP in FY2010 to 35.3% in FY2013.

Outputs as per DMF Progress against Targets

I. Improved expenditure efficiency

100% of public investment decisions of the state government vetted by the FPMU by 2014

As per the Notification No. 965-FB dated 27 August 2012 issued by the Finance Department, FPMU was constituted. All public investment decisions of the state government are vetted by the senior officers of FPMU.

Well-documented, pro-poor, and gender responsive MTEFs in place for the departments of health and family welfare, school education, and public works based on long-term sector strategies by FY2014

The MTEFs are in place. MTEFs for the departments of school education, health and family welfare, and public works have been prepared in such a way that they bridge the gap between the long-term state FYP and annual departmental budgeting exercise with a sharp focus on results-oriented public expenditure. It may be noted that the state’s FYP indicates the state’s objectives are aligned with national objectives over a fixed 5-year term and specifies sector targets to be achieved. Its formulation is coordinated by the state planning department in conjunction with the central planning authority, the Planning Commission of India. MTEFs have been prepared keeping in view the long-term priorities and government goals and/or objectives stated in the FYP for the sector. This is how MTEFs are premised on the long-term sector strategy being pursued by the state government. Further, MTEFs prepared for the three departments place special emphasis on adopting pro-poor and gender sensitive strategies. This is clear through the following aspects: • Identification and/or inclusion of relevant performance

indicators. Because of the nature of the activities of these departments, some schemes directly and exclusively target either the poor, females, or both (e.g., construction of primary health care centers, and primary healthcare subcenters in rural areas, and incentives for poor female students in secondary and higher-secondary education). However, there are other schemes that do not have outputs that exclusively affect these categories. Nonetheless, to give targeted attention to the socioeconomic upliftment of these groups, poverty-based and gender-based performance indicators have been included for the schemes that affect them, although indirectly, in the logical framework exercise done for the department.

Appendix 4 19


Examples of pro-poor and/or gender sensitive performance indicators for schemes that have an indirect effect on these categories are MMR for the scheme assistance to the State Blood Transfusion Council; percentage of people living within X kilometers of a subcenter, primary health center, child health center, subdivision hospital, district hospital, and state hospital for the establishment of the West Bengal Medical Services Corporation; gender parity index at elementary school level for the scheme Provision for Sarva Shiksha

Abhiyan (Education for All). • Identification of reform interventions. At a broad level, the MTEF

for the School Education Department focuses on universalization of elementary and secondary education and ensuring 100% enrollment of female students, especially those from backward, reserved, and minority communities. The MTEF of the Department of Health and Family Welfare has targeted the provision of affordable, accessible, sustainable, high-quality essential health care for all with a special focus on the poor, mothers, children, and the elderly, and those living in underserved areas. The MTEF of the Public Works Department aims to alleviate poverty through the construction of bridges, roads, and public buildings; and support for improving transport services. While maintaining the overall strategy of these departments, areas of reform interventions to be pursued during the 3-year MTEF period, FY2014–FY2016, have been proposed. Examples of pro-poor and/or gender sensitive reform interventions proposed in the departments’ MTEFs are: o School Education: Monthly stipend to all secondary and higher-

secondary students living below the poverty line, and a free bicycle to all female students at secondary and higher-secondary level.

o Health and Family Welfare: Construction of primary health infrastructure (catering to rural areas); strengthen information, education, and communication; and/or behavioral change and communication activities to promote delivery of babies in the health care institutions (and hence reduce MMR).

o Public Works: New construction work for district roads to increase connectivity to remote areas. • Considerations during reprioritization exercise of reform

interventions. For years in which the resource envelope estimated under top-down budgeting of departmental MTEFs is found to be inadequate to meet the projected expenditure requirements of the department. Under the bottom-up budgeting approach of the MTEF, due consideration has been accorded to the poverty-focused and gender-sensitive reforms and it has been proposed to implement them without any adjustments. For instance, recognizing the huge impact that low-cost information, education, communication, and behavioral change and communication activities can have on promoting delivery of babies in the health care institutions, it made economic sense to pursue this reform intervention even though the resource envelope was insufficient to fund all the projected expenditure requirements of the Department of Health and Family Welfare.

No more than 5% variance in Health: A variance of 2.65% (Rs1,490 million) was observed in

Appendix 4

20


the annual budgets of health and education from their MTEFs for FY2014

FY2014, with the MTEF estimate of Rs57,809 million exceeding the annual budget estimates for the Department of Health and Family Welfare of Rs56,319 million. Education: A variance of 3.87% (Rs7,337 million) was observed in FY2014 between the MTEF estimate of Rs182,196 million and the annual budget estimates for the School Education Department of Rs189,533 million.

II. Improved revenue efforts

At least 20% annual increase in VAT revenue by FY2014

Average annual growth rate is 20.0% during FY2012–FY2013 and 19.3% during FY2012–FY2014 (FY2014 data are budget estimates).

At least 17% annual increase in revenue from stamp duties and registration fees by FY2014

Average annual growth rate is 27% during FY2012–FY2014 and 31% during FY2012 and FY2013 (FY2014 data are budget estimates).

At least 25% annual increase in revenues from excise duties by FY2014

Average annual growth rate is 22% during FY2012–FY2014 and 23% during FY2012 and FY2013 (FY2014 data are budget estimates).

At least 2% additional annual growth in revenues from profession tax

Average annual growth rate remained same at 5% in FY2012 and FY2013.

III. Efficient debt management

Debt management system is in place by FY2012

The debt management system of the state government was notified in 2012 as part of compliance in one of the first tranche conditions of the West Bengal Development Finance Program.

100% documentation of incurred debts and contingent liabilities in a debt database by FY2014

All debts and contingent liabilities have been fully documented.

All staff responsible for debt management skilled in use of debt database management software by FY2014

Experienced in-house staff members of the Finance Department are responsible for debt management.

DMF = design and monitoring framework, FPMU = fiscal policy and management unit, FY = fiscal year, FYP = five-year plan, GSDP = gross state domestic product, MMR = maternal mortality rate, MTEF = medium-term expenditure framework, VAT = value-added tax. Source: Asian Development Bank.

progress report on tranche release · (i) the fiscal year (fy) of the government and its agencies...

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