New Delhi: Multilateral funding agency ADB on Thursday said it has sanctioned a $300 million loan facility for carrying forward fiscal reforms in West Bengal.
The board of Asian Development Bank (ADB) approved a loan of $300 million to continue a comprehensive series of fiscal reforms in West Bengal to bring about more accessible, affordable, and high quality public services, ADB said in a release.
West Bengal, for the first time in 2012 had received a $400 million from ADB -- its first policy based lending -- with an aim to create a fiscal space necessary to sustain higher public investment in the eastern India.
"We entered into a successful partnership through a first programme in 2012 with the West Bengal government to bring about fiscal reforms that could put the state’s finances on a balanced and sustainable path," said Navendu Karan, an ADB Senior Public Management Economist.
Karan said ADB recognised that a full effect of reforms would require at least 5 year to materialise alongside a follow on programme to carry these forward.
In West Bengal, public investment as a percentage of gross state domestic product reached almost 1.3 percent in 2015-16 from 0.5 percent in 2011-12.
While, fiscal deficit reduced to 2.2 percent from 3.4 percent in the same period, ADB stated.
Under new loan programme to be carried out over two years, linking medium term expenditure plans to actual budgets supported by strengthening internal audit system and enhancements in the integrated financial management system (IFMS) are part of the reform process.
Other activities under the programme include improved tax monitoring and continued support for information technology systems in strengthening tax and land administration, ADB said.
The capital outlay as a percentage of gross state domestic product is expected to rise to 2.2 percent by 2021-22 under the second programme, with improved budget
allocations geared toward development expenditure, it said.
"Accompanying the loan is a technical assistance grant of $500,000 to strengthen key institutions responsible for carrying out fiscal management reforms in the Indian state," ADB said further.
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Updated Date: Sep 21, 2017 14:39:54 IST