India today signed a USD 300 million loan pact with multilateral lending agency Asian Development Bank (ADB) to continue a series of fiscal reforms in West Bengal to improve the quality of public service delivery.
The Second West Bengal Development Finance Programme targets a further increase in public investment through reduction of unproductive expenditure, and savings from efficiencies in revenue collections, according to an official statement.
"The programme will build on earlier intervention under phase I of the project through the USD 400 million programme that targeted a comprehensive fiscal consolidation programme in the state," the finance ministry said in the statement.
Stating that the new programme will not only target public investment, but would also support private investments more directly by creating an infrastructure facility to support project preparation, development and appraisal, with emphasis on public-private partnerships in health and education, it said.
According to the statement, spread over two years, the programme will also carry forward reforms such as linking medium term expenditure plans to actual budgets, supported by strengthening internal audit system, and enhancements in the integrated financial management system (IFMS).
"Other activities under the programme include improved tax monitoring and continued support for information technology systems in strengthening tax and land administration," it said.
With improved budget allocations geared towards development expenditure, the statement said that capital outlay as a percentage of gross state domestic product is expected to rise to 2.2 per cent by fiscal year 2022 under the second programme.
"Accompanying the loan is a technical assistance grant of USD 500,000 to strengthen key institutions responsible for carrying out fiscal management reforms in the state,"it said.
ADB's first programme focused on augmenting public investments that reached almost 1.3 per cent, as a percentage of gross state domestic product in fiscal year 2016 from 0.5 per cent in fiscal year 2012 while the fiscal deficit reduced to 2.2 per cent from 3.4 per cent in the same period.
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