Bengal gets $300 mn ADB loan to carry forward fiscal reforms
New Delhi/Kolkata: Multilateral funding agency ADB on Thursday said it has sanctioned a $300 million loan facility for carrying forward fiscal reforms in Bengal.
The board of Asian Development Bank (ADB) approved a loan of $300 million to continue a comprehensive series of fiscal reforms in Bengal to bring about more accessible, affordable, and high quality public services, ADB said in a release.
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 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.