The World Bank on Wednesday extended a $36 million loan to support Himachal Pradesh in its efforts to spend money more efficiently by improving the financial planning, budgeting and accounting of public funds in key government departments.
The tripartite agreement for the Himachal Pradesh Public Financial Management Capacity Building Programme was signed here among the government of India, the state government and the lender bank.
"This programme will help the state government put in place systems for better economic planning and budget management," said Raj Kumar, Joint Secretary with Department of Economic Affairs of the Union Ministry of Finance, said in a statement.
The four key departments that will directly benefit from the programme include Finance, Excise and Taxation, Irrigation and Public Health and the Department of Information Technology.
The programme will help the departments put in place an architecture that will support them to execute their budget more efficiently, modernise their entire payment systems and enable more efficient tax assessment procedures.
"For cooperative federalism to be effective, robust financial management systems are needed at the subnational level," World Bank Country Director in India Junaid Ahmad said.
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"This programme will build the capacity of the state both for efficient utilisation of its resources as well as for collection of revenue. We expect the entire state budget to leverage its benefits over the next five years," he added.
The state government has already initiated several reform initiatives to improve its budget and expenditure management.
The $36 million loan from the International Bank for Reconstruction and Development (IBRD) has a five-year grace period and a maturity of 19 years.
--IANS
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