India ink $300 Million loan agreement with ADB to promote fiscal reforms in West Bengal
The Union Government has inked $300 million loan agreement with Asian Development Bank for Second West Bengal Development Finance Program.
The new program is built on earlier intervention under Phase I of project through the $400 million Program that targeted comprehensive fiscal consolidation program in the state. It will continue series of fiscal reforms in West Bengal to improve quality of public service delivery.
Second West Bengal Development Finance Program
The program aims to further deepen reforms with focus on expenditure rationalization, improvement in revenue administration, and facilitation of more private investment in the state. It also targets to further increase in public investment through reduction of unproductive expenditure and savings from efficiencies in revenue collections.
It will create the fiscal space necessary to sustain higher public investment in the state which could put state’s finances on balanced and sustainable path. It targets both public and private investments more directly by creating an infrastructure facility to support project preparation, development and appraisal with emphasis on public-private partnerships (PPP) in health and education sectors. It also seeks to simplify the registration and licensing procedure for micro, small and medium enterprises (MSMEs).
It is spread over two years and carry forward reforms such as linking medium term expenditure plans to actual budgets, supported by strengthening internal audit system and enhancements in integrated financial management system (IFMS). It will also cover other activities such as improved tax monitoring and continued support for information technology systems in strengthening tax and land administration.
ADB’s first West Bengal Development Finance Program focused on augmenting public investments that reached almost 1.3%, as percentage of gross state domestic product in FY2016 from 0.5% in FY2012 while fiscal deficit reduced to 2.2% from 3.4% in same period.
Asian Development Bank (ADB)
ADB is a regional development bank which aims to promote social and economic development in Asia. It was established on 19 December 1966. It is headquartered in Manila, Philippines. The ADB has been modelled closely on the World Bank. It has 67 members, of which 48 are from within Asia and the Pacific and 19 outside.