June 6. 2022 Mr. Rajat Kumar Mislhra Additiona! Secretay (MBC) )epartment of Economic AfTairs Mi inistiy of Finance Government of India North Biock Ne\ Ielhi - l 10 001 Dear Mr. Mishra: INDIA: StrengIhening Puhlic Finan cial , aaement in Rajasthan Project (Ln. No.8855-LN) A mendfient to the Loan Agtieemielit We refer to the Loan Agreement (-Loan Agieement") between India ("Borrower") and the International Bank for Reconstruction and Development (-Bank"), and to the Project Agreement (-Project Agreeient) hetween the Bank and the State of Rajasiian ("Project Implementing Entity"). both dated May 29. 2018. pursuant to which the Bank has extended Ilie above-captioned Loan (~Loan~), for the Strengthening Public Financial Managenent in Rajasihan Project ("Project~). We also refer to the letter fiom the Department of Economic Affairs. Ministry of Finance F. No. 19 I8 2016FB-1l dated February 2 1. 2022 requesting a restructuring of the Project. We are pleased to inforn you that the Bank concurs with the above request. and accordingly amends the Loan Aureenient as set forth below: i Part 2.2.4 of Schedule I is hereby revised to read as follows: "2.2.4. Improving efficiency in rexenue administration, tax recoveries/arrears and tax audit in the CT ). (i) Intentioailly letI blank]. (ii) Value oftax recoveries (reduction in arrears) in the CTD (iii) Inproving effeetiveness of tax audit in ( ). 2. The table in Schedule 4 of the Loan Agreenient (Dis,usemeni-Linked Indicators (DLI) Dishmr-semnit-Linked Indicaor Taiets, and Dishiusiment-Linked Vdicatur Valucs Applicable to the Projci) is hereby revised to read as set forth in Annexure I hereto. Sec:ion 1.22 ("Non Stoli Filers~) of the Appendix to the Loan Agreement is liereby deleted. and the remnaining sections are renumbered accordingly. 4. The Results Framework of the Project is revised according!y and is set forth in Annexure II. India Country Office, 70 Lodi Estate, New Delhi 110 003, India P.O. Box 416, Phone: +911141479301 / +911149247601 Lxe): as spee? CLe\ amended hx i Amiendmxent Le:er Aemn I \:e~le; e]r). å! e:ther 'awision of the~ I oanx ,\nreement shal. reman n teul lore and~ effect Ih~e B \lnk whil dicose this Amendment Leuer and relaled infmatin in iccordance \ith11 ilhe \\ orld anks Poli\ en Access lo Information. B\ enlerin into this Ame ndment .eler. the Børro\\er consents lo disore of his Amendment Leler and related infornatin. Please confir our agreement lo the foreging by signing the ferm of contrmaUien sel forih belo\\. and returning ene fu executed orginal ofthis Amendmeni Leler to us and relnin one orinal for o erds. his Amendment Letter shal become eective as of tihe date ofi he last siignature of this Amrendmrent Leter. upon receipi by the Bank of the dul countersigned original of tis Amndment Letter. Yours sincrely. INTERNAT)NAL B3ANK FOR RECONS-)'TRLKCI-lON AND DIVILOPMENTV lideki Mori Acting Couniry Dircior, India AGREED: INDIA Authorized Representati ve Nane: m shra m rs Ite: Date:- ce: Mr. Raeh cKhular. Ixecutive Director l(dia). he World Bank Mr. R ite1h K umar Sinh. Senior Ad\ isor to Ixecutive Director. the World Bank Goverinment of India M r. Han ish Chhabra. Di reclor (W B). Depart ment of Econoiic A ffi is. Mi ni stry of Finance Mr. Suikhhir Singh. Controller of Aid Acconis and Audit. Department of Economic Affalirs. Minislir of Governnent of Rafjasthan NIr. Akhill Arora. Principal Secretary (Finance) Mr. AbhaN Kumar. Additional Chief Secretary ( ransport) Mr. Suresh Chand Gupta. Secretary (Revenue) Mr. Sudhir Kumar Sharma. Secretary (Budget) Mr. Naresh Kumar Thakral Secreiary (Expenditure) Dr. RaNih Kumar Surpur. Commissioner (Commnercial Taxes) NIr. Prakash Rajpurohii. Commissioner (ELxcise) NI r. Ashiitosh Vajpey . Joint Secretary ( VD) Mr. Bhun pesh Kumar Mathur, Director. Treasuries and Accounts Mr, Rajat Kumar Misira -4- jllille 0 0. Annexiire I Revised Schedule 4 to the Loan Areceient Strengthening Puhlic Financial Management in Rajasthan Project (Ln. No.8855-IN) SCHEDULE 4 Disbursenent-Linked Indicators (DLIs)' Disbursenient-Linked Indicator Targets, and Disburseient-Linked Indicator Values Applicable to the Project DLI Targets for DLI Tar-ets for DLI Targets for DLI Tarnets for DLI Indicatørs Baseline Ycar 2 Ycar 3 YCar 4 ca r S March 31, 2019 March 31, 2020 Mlarch 31, 2021 Nlarch 31, 2022 N barch 31. 2023 DII #1: StrengthenCd public procurenient framcwork and capacity DLI #1.1: Stren,gthene(d public procurement dociuments and e-Procurement •Draft SBDs under SPFC Ims Ie\elopei e-Proecrent nee Deparlneni In prepration a ditabse of tender \alue has prwp5red i\ 05) ne. • No database ol dceharred irms and inereased by 30% S1Ds4 nd uploadel on deharred (rms made av ailable to o\ er hseline the Finance D )epartment • -Procurement tender state ond procini g Form\/h website lor use h alec il 2016-201l7 - entities /000/ c; proclrinL enhties. (D I INR 23.000 crorec""i/'"o'" Value- ()8.) Strengthcned public •nformation on award Ml CUo Om/ orm/a- /, / /)/ / procurenient ofconltracts piblished on badou / I maI o a/ue!/hr caell /l] /) documets ah - Stote Public Procurement f. el a lilnd Procureient Portl (SPPP byh the 5 (ei bn l selected departmensis' i lmae millii o ,0%, (oR Lias unreased consideraibly low 10.61% increa tranespareicy h publiIshi ng informan>tion elo awrd ofl contracts en fhese Dils are not time-bond. Tle Iiscal Ycars in whichl they are expectcd to he achicv l is per (is SeChedtile are stricly or indicat ise pupses. I Ehe DLIs can occordingly be met up and until the Closing Date. bit in all cases suiect lt meetieg the reqireents set ont il Sectio l\ elf Shliedule ' to thi Agreement. Energy Department. Transport. Art Cilture and Archaelolg\ Department. Tourism 1)epartment. Inf1ormation lecheology nd Communiction Departm1eni [Supply & Instållation. S\\iss challenec. 1>PPP doCments. Modiled Annit\ . IT E ,quipment Mir. Rajat Kiumar MIishra -11une . u0?2 DLI Targets for D1 Tar'ets for1 DI TarSets fo- DI I fage for DLA I artets ffr \ ear I DLI Indicators Bascline Yerca 2 Vear 3 \ ear 4 1 càr Mlarch 31, 209 cMarch 31, 2020 larch 31, 2021 \larch 31, 2022 Niarch 31, 2023 in VY 2020-21 STPP upto "0% oi the (rounded to 10% 'or the total no. of hids tenders' purposes f 1'calculation pubLShed h\ the 05 D1) > s~elIected departmen I .30 milhon I ýSS Foriua-a SS L1000 /or euc/i pc crc;ueae DI #1. value 1.70 0.30 0.30 1.10 I)I.IHI.2: Reduced delays by making awards wvithin initial bid validity period 50 1 ntracts are 1ssue and pUblish ILes (0% ontracts 8,% coniiacts l nhanced awx ardled within initial undcr tie RT 1P1 Act liF awaided w\ithin initial taarded ithin T ra/nSp'areinc\ in PubMlie bid validity per'iod minimizing delas\ in bid x aidity perliod in initial hid \alidit\ Procureement wnd awuaìd w\ithin initial hid the te deparmientis. period in the teli Reduced dela ; 1 hvI dildity period. erninu/a- ( 'U)W) departments. makin, a I wIdS \\ lhin i i ' io rm/nulo nitial hid ualiditv mc1-cuse oì.m 50% 10 00f rì upi ia a n I .1111of percenfagc ilm cUse 6()%.1 m'erf 0(),,ý up lin a 1(1ia11nnun of 80% DIAf1.2 Value 0.55 0.15 0.20 0.20 DIl#1.3: Reduction in tender notice advertisement expenditure i he expenditure inCurred De eelop mechanisn and Tendei notice Tlender lintice in the Year 2017-18 on frame apprepriate rulies ad\ ertisement ad\ ertisement o'eiroentae award efcentract infbrmation shall he taken as total numher of tenders for w hich awx ard ofecontract iniormation is a\a milabhle (I' R total nIumhet1'ì of tenders puhlished in the given financial ycar in SPIP oioR. i he dataset considered for the baseline and target or DI 1 is based on the information availahbe oni SPPP. Variatin is expected. in no. ef hids tnders published data av aiIable On potal wx.r.t. actual data wxhich wx ili be r-ecei\ ed fro the depa1rtment during the piOcess ef the A\w ardi ofC'oìtrat i \o(i puisuhinw under the DI. 13id publis1hed heie means inf'ormation available on SPIP ef total pubilished hids h the department excludinc cancelled hids. Nlr. R히zlt K∥mill Misllra …―／∥， N/ln RaJat Kumar Mislira D1,1 Tar-ets for N-ear I D1 , l T111.2ets for for DLI Vargets for D1,1 l avzel'ý lot Year 2 Year 3 Y o N car n D1,1 Indicators March 31, 2019 M arch 3 1, 2020 Ma rc fi 3 1. 2 0 2 1 _N I a r c l 1 3 1, 2 0 2 2 N få rch 3 1, 2023 1,1 Tar-- et' 1-.' '\ e CCS heim, kl';cd in Lipt c( Policy on Coll)lnltlllcl)t SoftN\jl-C SOIL11i01) 101- PI-ollocol on wýed m conti-ol, älom-, \Nith Conlillitillcilt Controls Com illitillellt l 0 (tull) s Lipto ?0 (IN\ c111.\ i ý)1-oceciLll.cs/,-,itideiiiies. developed alld Conti (11 ýIppi.o\ cd Co\ el-ing deN eloped ý]Ccclgtcýl - (1 S ý'0. l 5 und cii-ciiiýtteii 1,ol- Capital CXI)CI)llitlll-c ý0"'ý' ol illeit- m illjon) im plementatioli ),i 2\1)Cllýlitili-e 1.oý.JJIIIÄI- I SS "'ý'000 GoR - i i S' IS, 0. 1 o 11 or Y 'S P 0 ýIC -111-otocol. "ti-ci)gtlici)ed bud-et 1-ý1.()ccdili-es,'t-,iiideiiiies Is o\ el- CCS docs not exist and solbvare es and 00 loi cý cn SOILltion piloled in 2 Sokilloil lm( w 1ý ýtlilýlc[]3c1ltcui in 10 r( m ( (m o) LICIýý11'tlllcllt"" cl fliW 05 SSO. 115 iniffion) - (len) 0. 2 i mu-v ol m 21/' i iii( i "(1ýc fol CYCI.) 000 Yo/ cVC9fhý'11 ý , ýý , i ww 11m1 'h/ [1'ý' 111c D1,1 43 Valne 2.10 = 0. 3 0 030 0. 0 0. 0 0 0 ý3O 0.50 0.50 0. 1) DIA 43 Vabie 2.10 0.30 D1,144: Improving E fficienev in Revenne Administration, Tax Recoverics /At-real-s and Tax Audit in CTD i D1,1 p41: in nonktop (CTD) D1,1 P-1.1 N aluc 1.5 0.4 0.35 0.4 5 D1,1 DLI tt4.1 valuc - - 0.00 -0.0 0 0 0 0. 0 0 0 ý0 ýDI,144.2: Valuc of Tax Recoveries (reduction in arrcai-s) in the (TD Mr. Rajm K[1Jㄲtll Mi｀밍1〕I&i. -8- ．ㅣ，.”。 。－ .&01&[& ;iㅣㅣ―「l-!llies-I… !, ,-....=&.-.--..--.- ！『샀［；팝；夕쌨꽈―[[[[I[l:J샐1.｀컫纛‘i\―쎄팟［[F써쫴！珊ㅣi:::i:[:；료긱Il··叩ㅃ·t：··曲·m·】】··dh：··柏n，·…，··…m·나·瀚··“… Mr. Rajilt Kum∥ Mi깁〕m -()- .j[11깟 6. 기’그，& 11111--l-1111…―［」 \41-. RaJat Kumar Mishra -lo- Revised Results Frameýýork Strengthening Public Financial iMana-ement in Rajasthan Projecl (Ln. No.8855-IN) I' S A. PDO Indicator,-, I Ic 1ý . lo cof1l111,1I1" lo 111)pim ed 1,11cIýIct C\celilioll, cilliall'-C, w d LICýItel et,licienc\ in IL\ClILIL ad1111111ý:IIII1o11 III k ' o\ el lillielil ol, ký11w.ýIllan 1No Rci-iwon% propoý,',1 in Me 1,DO'ýtalemel1t1 Tli"e 1-e%lillý are a( Pl oject I cý el i)e"lopnicirit Objeclive Indicator,, Indicator Nanie 'e 't o, Blawhinne N -clar car S af."ýel Collitilitillent Colitfol Polic\ 011 ý;offi\are ýofillio. iýo, tTý-,ot-oeol helwi IIýCII III em,' H,, i Il blid"et execiltion cloe.ý not exlýt Collillillilicilt Uommitment Control C0111o111111(é1111t control liýcd ni 10 len) .'(I delmI-lillelitý 'JCIMIIIII, l')I, Colilfol, Iilolig kle\ cloped mid allIllo\cd Ilod depaltillenlý Co\clin" ol ol hc11 confroN "ko" ot "Ilt ý\itil plocedures'' accepled 101 Co\ cl ][li, C plo,ýcdilleý Im plellielit;1l1o11 IIN ')f fl1c11 CýIllital llenditille (ICýclollcd ý-111deli i le, Illid Ille I millec C\pendituje ýof t\ýýire ýollition 1)I_Pýlitillelil, (rok piloted ]il 2 (I\\o) P[olocol, C,ý and ýoffiý,Ille sollition illiplejllented m (ICII) j)"u lillen tý -dc - - S tren" I Ile 1)IIII-t <ýMDý fol 1ICN\ M1ý C IIIIý (le\ clope 'I Il 500 ollICIIII" 11a111c11 MW, C0l1t1-aclim, foetflodI;, datýlbase of,dchIII-led I111(1 I-cI(Ificd 11) ol,dch,111, d j)rociirement lillefel- prepaIIII1o11 lum,ý and Ilmde ]t public ploc111c111,111 III 111ý IC\ cluped fraylleý% (,rk ,lyld ol z]\ ýIllabli lo ýIale IIIIII (etinlillalj\ e) Ploe111c111c111 ýlp, ýll\ , (includim, il entitleý apacifý Delmiitment (,l lhc nill, ],il, traillill," ol' pilblic plocutement I inimum S'Y,, 'le\\ feluffle elliplo.vet,ý IIIIIIted o[Iticach uplo 1I1C,1 011 ol' tile departin cl] 1) 1: ... IkImItIllcill ahæC ol N\ell.ýIle ol (jolý l01 dehaired LI'e h\ proL:1111mý C i t c,ý Mr. Rajat Kumar Mishra1-.112. I7 3. Institutional Oucd adit manul IS iifrac ork for 5 Plot audits Risk-based audit .\ \ N e w c n k drIengthcsingss ad no IIFAD, ncluding com'Npl)ed methodolog operaionalied operationahIed nl ILTAed m a I 1,ciI Ling ( S ) m Iaion a ime bound FiL I /\ Nuamud. iplmn ted aross in ti nal all Rtgional 1i RIgional ( )ee of I)alFum action plin and incluinii risk-based aii Rcxxll Regional ithc RCional )N of I i\) 1 \ nd (udI Audit Deparlment)desin fo \udit udit mthexIodlgy ilA 1 c of ioc nimc o Manaement approed by GtR /\l lit Manae mn)t Software~~~~~~~~~ ( AMNI0 ehiclsafo Sfwr /M eveloiped I l\D trained in thle plerhtionh d til IDraft 1I/\ newx trameork iheadqlLirters andL M, lanl easn Reional including risk- ()1ICC oil 1 A ) based audit iletlod1oloL\ All technical stalI dev cloped oil 1 AD tillill in thie newý h amew\\ork 4 lmprovinN Adit hi [rate Iow Ni aidit 250 CT1 olici al Additional 25) Audil hit rate \udit hil rt Audi hil rite effeclivenes o I 01, mCeilodloiLN trained on Audit CT ) oliicial implox xIes to imprix t I 5 O L . io I ti Audit in the piCId Ld under (T rained oin Audit i i1 ( oy\ eý ill be C011CILICtCd in Yem- 3 und Yeur Mdr. Raljat Kunar Mvi.shra - 4-Jun i C 0. Dedicated dcht stitistical hulletin not preparl Cd. 7. 1 niproved cash Monthly cash s [im rWl. in Imnanagee nt losw lorecasts Iily [st\h o Ir s in Cas fou p)racetie asiol rprd oeat on a dalily Cashýi ihm lorecast pepr measured s rollini, asis for a lorecasls more aICCuri: Ii Msproved da period reduced to less In[d iorlm accuracy in casli ep d mth t lh" rd d'l flow forecasts errragins n tan i" St. Institutional Audit setup Road map for Dral inized P riA>ir P strengthening of needs strengthgning Internal Audit d onstrating stengäthinp intrludi is strvnähnn internal audit stlÅtnm: A dcloped ntal risk-hnsed and nIt1rn1 Audid and de Cloped aInd iintcr \mini]]], (JAX) fil nction - dICs cliopecd alIuC-Udded naj ioderiii/ed rlicod out Imodic[rni,,c,J Imanuall. rules. uddts compl;letedi In1t12rna1d \Uld Inomaýlýl \lich Crculas and ManI Jl 1 appm Cd dnd disseiiaited cloped an11d1 r approIx d fior mnplemlentutionm lm nt in ÄN r, no.iernmi --\lidit Roiledoil Strengthene( tax Nccd to alien Functional ad 1. TNA apacit i of hpei l l a(mnistrition in institutional institutional compleed, tx auIdit iiiimctionll the CTD - structure and assessment of Report on strcngthcned proccsses in the C[D instituionaii the C Tl) to complcted n1 rinin evo1) ling Iiinformation state\ d indirCct tax n tr4n regimle. Commiiiiiuniicaitio) COuISC'eaC nl teclniology prelred upgrdCd for StClting up tile CTD revNu r1IsCrch str ngtlie nii al odit lunctionl siln d h (ai) improvemnent of skils through specialzed tri oudit nnN ding Id d assssn s. (h) intioduln d 'It manual . i risk-baiscd sciection ior mudit ilirpro unent. Id ( d) pcir reiw olf midi repor't NIr. Rajat Kumar Mishra -15- June 6. S? and analytics hody n (i oR 1f. Decline in non/stop filers in Indicaotr Removed the CTD I Ile I]L i j el oj 1-lic 111eilh'el o l 14 nilliber o l. Value of x l .18 entries in I recoveries DCR (numhers entries in Ilie entries in Ihe entries in thile (reduction in i Mllion DCR reduced h 1D CR reduced 1)( R rducedh arreans) in the 8) 41" .I FY 21-22 by 5(1% in FY 50% in I ) 11-7 arreas) i the 1.18 \TD - ever haseline '-'3 o er o \r h.celic Notes - *Tax (numbers m hascline Arrears Million .71) (numbels in emi-anates froni Million e59 Nlue added CiST. Luur tax and n etinment Tax. DCR means Demand Collection Register maintained by CUi)k (slä 12. Data foi policy Admiinistratix e Mobheliiatioan Data analy tics. Construction o i onstLuction l sagce o 'se action MIlS tiaisacti ol consultants. sensi/.u/tioll. and indices for at least indices for de\eloped dc elopedi onal data not data capacity building two sectors another lx e indices in mdice in being used for compilation. of stakeholders sectors plarini and plii and planning and and quality mlonol mrite n ,,n nonitoring assessnent dexelop plan on dc\clop P ln on purpJOSeS _ updatin indlice upd-in indIiLL" Strengthenin of Manual Develop 131R Adopt action plan Transport Transport )D ep 1 IWR Transport collection of and action plan and initiate Department Department has husine procesx Departent taxes. fees and for the implementatien introduing (I) discontineed e\ vie\i n 15 Center ol Excelhne Ker Revenue Research and Analysis established in the GoR to perform funtiols oltax analysis and tax data integitioi är plinii rex enuec leakages and enhancement of tax collection. Nr. Rat Kumar Mshra -16- jinie 6. ne in ' strenglemn Disrintnue t nual p ]n)n I rnsport ol tle MaInal coleCtion updating of del,Iement and the strenichninw department. liransport and mo\ e to lul x ehicle prices and initiated ol h I I 'se and Department electronic sxsten 2 olaraing one- autmaliic D 111L:11m nmtering øl ol taxes. les and linie ta\ delaceient on e- electrmcjauito lines. GR . matedI system I A com1put1er does not exist s stem implemented lo 'Lheilitate infornation exchange het"een 4. Streuigthning of Te aN erae cinduet De\elop action Growll in lXcie ( rom in ( em Excise griith liben instituLtional plan f,r tIle 'Department' Department Excise in i the (GAR ing assessment oP stengtheini of rexenue lor FY contains Departmend I the xcise R of the xeise the 1xeise o-20 oN er ( ()VID, inmpact reInsC l Y c D iepartient Dep. Depanmenti ýY2 I.-I9 h '?n excse 20o]--w2 I L)\ er 20Q re enue durm lg I10% ~ revenue for lY FY2019 -2i0 hx lian bas.elne past tliree 2W I bI years (IroM aehex hg FY 19- 2D14-15 to 20 lexcl. 2016-I 7) is 1_2.46% lr non-tianslport xcheiles pres are I'etcled liam I lomoloation portal. lor others arry capalcit is delermined bx seating Ior passenger x hiele ros x1li.e x eiht makn t a lex el pla\ ing id nIrelated to priec. - eeCe DepartIent rexenue for ,Y 20 16-17 is Rs. 7053.8 cr.