WASHINGTON, June 15, 2017 – The World Bank will support the Indian state of Assam in its efforts to utilize public resources more efficiently through better management of its finances, increase efficiency in the tax administration as well as improve the transparency and predictability in the execution of its budget.
The $35 million loan for the Assam State Public Finance Institutional Reforms (ASPIRe) Project, approved by the World Bank Board of Executive Directors today, will strengthen the capacity of the Departments of Finance, Taxation and Excise in delivering critical public services to its citizens using information technology and enhanced human resource capacities as the key drivers. The project will be implemented over a period of five years.
“Establishing robust public financial management systems and capacities at the state level will help Assam better utilize its resources and enhance its revenue for delivering efficient services to its people,” said Junaid Ahmad, World Bank Country Director in India. “It will also contribute to the broader national goal of achieving a robust federal system of finance,’’ he added.
ASPIRe will help the Government of Assam put in place financial management systems and an architecture that will support it to execute the budget more efficiently; modernize the entire revenue administration, collection and payment systems in order to reduce the turnaround time in delivering public services to other departments/citizens; strengthen public procurement framework and scale up e-procurement; and enable more efficient online tax services and assessment procedures such that the revenues of the state are monitored and managed more effectively. Capacity building of staff is an important intervention under the project.
The project will also help the government establish an IT-enabled budget preparation, execution and decision support systems (also known as Financial Management Information System), linking over 6000 departmental officials and creating an automated interface for a “paperless” and “cashless” payment system. This will be done through substantial investments in enhancing the capacity of state officials in the area of public financial management. It will also complement the efforts at the national level by building the capacity of the staff for a smooth rollout of the Goods and Services Tax (GST) in the state.
“With enhanced devolution of taxes, 60 percent of the public expenditure now takes place at the state level. This, coupled with greater flexibility in planning development programs to suit local needs, deepening public financial management capacity at the state level is imperative. World Bank’s International experience and learnings from other states of India will help Assam gain from appropriate solutions,” said Mohan Gopalakrishnan, Senior Financial Management Specialist and World Bank’s Task Team Leader for the project.
The $35 million loan from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 19 years.