World Bank to provide $31.58 mn loan for financial systems management project in Uttarakhand

The World Bank has signed an agreement to provide USD 31.58 million (about Rs 221 crore) loan for a project to improve Uttarakhand's financial systems and better utilisation of development resources in the state. A tripartite agreement was inked between the central government, the Uttarakhand government and the World Bank for Uttarakhand Public Financial Management Strengthening project, Finance Ministry said in a release on Tuesday.

The loan will improve the state's ability to manage its financial systems and lead to better utilisation of development resources, it said. The project will support the state government's initiative to build and modernise the technical and financial management capabilities of its local bodies and state-owned enterprises.

"The government of Uttarakhand has worked over the last decade to strengthen its public financial management systems," Sameer Kumar Khare, Additional Secretary, Department of Economic Affairs, Ministry of Finance said. He said the World Bank supported project will help the state enhance accountability in public finances and increase the effectiveness of revenue management systems.

The loan agreement was signed by Khare on behalf of the central government; Savin Bansal, Additional Secretary, Finance, Uttarakhand and Shanker Lal, Acting Country Director, World Bank India. "Uttarakhand has made substantive progress in reducing poverty over the years. This project will help the state deploy relevant technologies to further streamline the management of its finances - leading to the more efficient execution of public projects," Lal said.

It will help the people of Uttarakhand access more and better quality public services, he said, adding that the project components will improve capacity in the areas of cash and debt management, planning and budgeting, appraisal and monitoring of high-value projects and public audit. The project will support measures to improve the transparency of budget and procurement information. Using GIS mapping technologies, it will also strengthen the state's revenue management systems, including that of urban local bodies, the release added.

"The project will benefit the citizens of Uttarakhand by creating a more transparent and efficient system of management of public finances, including administration of tax and non-tax revenues," it said. The project funding by the World Bank for Uttarakhand project follows similar funding in Himachal Pradesh, Assam, Rajasthan and Chhattisgarh.

The loan from World Bank arm, International Bank for Reconstruction and Development (IBRD), has a 5-year grace period and a final maturity of 11 years.