The Department for International Development (DFID) of the UK government has released Rs 225 crore assistance to support the fiscal and governance reforms programme in Orissa.
The money is part of a package of Rs 850 crore structural adjustment assistance pledged by the joint mission of World Bank and DFID for release during 2002-03.
However, the mission which visited the state last in January was non-committal about sanction of the assistance during the current fiscal, thus putting strains on the government resources to meet plan outlay projections.
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Now, the release of funds by the DFID at the fag end of the fiscal has eased the pressure on the government to some extent though there is no news yet on the sanction of World Bank's share of the package yet.
While the money released by DFID is in the form of grant, the funds sanctioned by World Bank will be treated as loan.
According to Charlotte Semour Smith, minister (Development ) and head of DFID, the funds will be transferred to the Centre and passed on to Orissa government. She said the money is meant for direct budget support in 2002-03.
However, further reforms programme could unlock a more substantial medium term programme to enable poverty reduction through a combined World Bank loan and DFID grant.
Seymour said the reforms launched by Orissa government have established Central government mechanism for poverty reduction, reorientation of budget towards projects with high growth potential, state revenue enhancement and improved public expenditure management.
She said the government faced a number of key challenges in its efforts to provide improved access to basic services and expanded economic opportunities for the people and substantial fiscal adjustment to reduce deficit.
The DFID chief said further reforms in these areas, starting in 2003-04 and sustained over next four to five years will facilitate preparation of programmes with further financing by World Bank and DFID. Orissa government is continuing discussion with WB and DFID on support for its reforms agenda, she added.
After super cyclone DFID provided over Rs 202.5 crore for urgent rehabilitation in 14 cyclone affected districts.
In addition, Rs 249 crore of DFID assistance was also provided for reconstruction of 3,500 primary schools destroyed during the cyclone.