Supplemental Letter STATE OF PUNJAB December 23, 2022 International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America INDIA: Loan No. 9438-IN (Punjab: Building Fiscal and Institutional Resilience Program) Performance Monitoring Indicators Dear Sirs and Mesdames: We refer to Section III.A of Schedule 2 to the Loan Agreement of even date between India and the International Bank for Reconstruction and Development (Bank) and Section III.A of the Schedule I to the Program Agreement between the Bank and the State of Punjab. Unless otherwise agreed with the Bank, we shall monitor and evaluate implementation of the Program in accordance with the Performance Monitoring Indicators attached to this letter. Very truly yours, STATE OF PUNJAB By_______________________ Authorized Representative Attachment – Performance Monitoring Indicators Results Framework COUNTRY: India Punjab: Building Fiscal and Institutional Resilience Program Program Development Objective(s) The development objective is to strengthen institutional capabilities, accountability and management of public finances to support public service delivery in Punjab. Program Development Objective Indicators by Objectives/Outcomes Indicator Name DLI Baseline End Target Strengthening institutional capacity Improvement in budget out-turn in DLI 1 76.00 81.00 Category A ADs (Percentage) Operationalization of TIU with DLI 2, 2.3 No TIU exists. TIU operationalized and staff trained. enhanced capabilities to strengthen GST compliance (Text) Enhancing accountability in institutional systems Eligible beneficiaries for two select DLI 6.2 0.00 60.00 schemes verified, including beneficiaries from ecologically vulnerable geographies, with support of the SDIP (Percentage) Awarded contracts published on the e- DLI 4 39.00 60.00 procurement portal (Percentage) Strengthening public finance management to support service delivery Performance based grants distributed DLI 7 No state performance grant system Performance audits conducted and to eligible MCs in accordance with a exists Performance grants are distributed to performance grants based system eligible Municipal Corporations notified by the GoP (Text) Intermediate Results Indicator by Results Areas Indicator Name DLI Baseline End Target Strengthening fiscal resilience and financial management Staff trained on PFM, procurement and 0.00 80.00 planning, as identified in Training Plan approved by DoF and DoP (Percentage) Debt to GSDP ratio reduced (Text) DLI 2.1 Provisional: 48. percent of GSDP, TBD Debt to GSDP ratio reduced by 3 following AG reports percentage points GST taxpayer base is expanded DLI 2.2 0.00 4.00 (Percentage) Number of Category A ADs with DLI 3 0.00 12.00 contractual payment information and procurement plans available on IFMIS and e-procurement portal (Number) Average procurement cycle time 138.00 100.00 reduced (Number) Beneficiaries receiving benefits under DLI 5 0.00 1,297.40 the Udaan scheme (Number (Thousand)) Improving data systems for policy making and support to service delivery Select departments compliant with DLI 6 0 ADs are compliant 2 ADs are compliant Punjab State Data Policy, guidelines and standards (Text) Strengthening local level fiscal frameworks and water service delivery Performance audits conducted for MCs 0.00 13.00 (Number) Connections receiving continuous water DLI 8 0.00 10,000.00 supply in demonstration zones in each city of Amritsar and Ludhiana (Number) Monitoring & Evaluation Plan: PDO Indicators Indicator Name Definition/ Description Frequency Datasource Methodology for Data Responsibility for Collection Data Collection Improvement in Statement of average Annual Budget Document Based on the original Budget DoF budget out-turn in budget out-turn for FY24/25 and annual audited allocations and Actual Expenditure Category A ADs figures published by (figures from AG). If any of the the Auditor General Category A ADs have a budget out- turn of more than 100 percent, the budget out-turn of that AD will be excluded from the computation of average budget out-turn. Operationalization of Tax Intelligence Unit Annual DoF documentation GO to set up TIU and details of DoF TIU with enhanced operationalized to enhance train staff trained issued capabilities to GST compliance strengthen GST compliance Eligible beneficiaries 60 percent of eligible Annual DoGR&PG MIS, Progress reports IVA for two select beneficiaries verified for two schemes verified, short-listed schemes with including support of SDIP beneficiaries from ecologically vulnerable geographies, with support of the SDIP Awarded contracts Increase in awarded Annual e-procurement Share of awarded contracts DoF published on the e- contracts published on e- portal published in the e-procurement procurement portal Procurement portal portal as a share of number of increased to at-least 60 contracts where financial bids/ percent proposals are opened and the contracts awarded Performance based Performance grant system Annual DoLG and MCs Annual assessments and DoLG grants distributed to will include performance allocations published by DoLG and eligible MCs in indicators, assessment MCs accordance with a criteria and modalities, and performance grants financial incentives based system notified by the GoP Monitoring & Evaluation Plan: Intermediate Results Indicators Indicator Name Definition/Description Frequency Datasource Methodology for Data Responsibility for Collection Data Collection Staff trained on Training programs Annual HRMIS reports Name, designation and date of DoF, DoP PFM, procurement organized for staff working training of staff provided using and planning, as on public finance and HRMIS reports identified in planning Training Plan approved by DoF and DoP Debt to GSDP ratio Fiscal sustainability of GoP Annual Annual audited Audited accounts published to DoF reduced will be monitored by accounts of GoP show 3 pp reduction in debt to measuring its total debt to GSDP ratio GSDP ratio GST taxpayer base The indicator will measure Annual GST database GSTN database to show 4% DoF is expanded enhanced GST compliance (Department of Tax cumulative increase in tax payer in the state. and Excise) data base compared to baseline. Number of Procurement Plans to Annual IFMIS, e-procurement Reports generated by IFMIS and DoF, DPPE Category A ADs provide indicative timeline portal e-procurement portal. with contractual for tenders to be issued. payment Contractual Payment Status information and Reports to provide procurement plans information on time and available on IFMIS mount of payments due for and e-procurement awarded contract portal Average Procurement cycle time is Annual e-procurement portal This will be estimated as DoGR&PG procurement cycle calculated as time taken average of all open tenders on time reduced from publication date to e-procurement portal. date of award of contract Beneficiaries Women/girls who are Annual Udaan scheme MIS MIS reports to confirm number DoSS&WCD receiving benefits eligible to receive sanitary of beneficiaries. Citizen under the Udaan pads for improving health feedback as per PAP. scheme and hygiene, under the Udaan Scheme Select departments To verify if department data Annual DoGR&PG Progress report DoGR&PG compliant with and information systems Punjab State Data are in adherence to the Policy, guidelines PSDP, guidelines and and standards standards Performance audits The audits will measure the Annual Performance audits Information collected through DoLG, MCs conducted for MCs performance of Municipal conducted by performance audits of all MCs Corporations, on agreed set independent agency on key parameters as agreed in of parameters under SPGS. the design of SPGS. Connections The demonstration zones Annual Database and Information collected from the AMC, LMC receiving will demonstrate delivery of performance reports private O&M Operator. Data continuous water sustained continuous water received from and progress report from AMC supply in supply to connections. Operators appointed and LMC. demonstration for demonstration zones in each city of zones. Amritsar and Ludhiana