The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Strengthening Public Financial Management in Rajasthan (P156869) SOUTH ASIA | India | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2018 | Seq No: 5 | ARCHIVED on 28-Jun-2021 | ISR47392 | Implementing Agencies: Department of Economic Affairs (MOF), Republic of India Key Dates Key Project Dates Bank Approval Date: 01-May-2018 Effectiveness Date: 26-Jul-2018 Planned Mid Term Review Date: 29-May-2021 Actual Mid-Term Review Date: 05-Jun-2021 Original Closing Date: 31-Mar-2024 Revised Closing Date: 31-Mar-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is: "to contribute to improved budget execution, enhanced accountability, and greater efficiency in revenue administration in Government of Rajasthan". Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Strengthening Public Financial Management Framework:(Cost $6.00 M) Strengthening Expenditure and Revenue Systems:(Cost $21.65 M) Project Management and Capacity Building:(Cost $3.30 M) Front End Fee:(Cost $0.05 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions Several complex public financial management (PFM) reforms have been undertaken successfully under the project, including development of a commitment control system, institutional strengthening/business process re-engineering of the Transport Department, updated framework for decentralized participative planning, conduct of a rationalization of schemes exercise, and strengthening of local fund audit/internal audit. It is imperative that these reforms are now fully mainstreamed and made an integral part of government systems. Some of these reforms have been undertaken at the sub-national level for the first time in India, and it will be great to share these achievements and consequent learnings with other States to help expedite PFM reform momentum in the country. The Bank could support this initiative through the PFM Knowledge and Innovation Network (PFMKIN). Following the first year of project implementation, when all critical reform consultancies for the first phase were put in place, the pace of progress slowed down in the last two years due to: (a) COVID-19 lock down and disruptions since March 2020; (b) lower trajectory/changing 6/28/2021 Page 1 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) priorities from revenue (especially Commercial Tax Departments (CTDs)); (c) frequent transfer of senior personnel in implementing departments; and (d) impact of two successive elections (code of conduct). However, the project implementation has improved in last few months, As a result, the overall progress towards achievement of the project development objective (PDO) and implementation progress have been maintained at a level of Satisfactory and Moderately Satisfactory, respectively. The most recent progress on Results Framework indicators and Disbursement Linked Indicators/Performance Based Conditions (DLIs/PBCs) is documented below. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Moderate Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- -- Moderate Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes Project Development Objective IN01012253 ►Strengthened budget execution by improving controls over commitment (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target YR2: Achieved Year 1 target - Policy on Commitment Control, CCS being used in 20 YR3: Target: Policy on along with procedures/ (twenty) departments Commitment Control guidelines, developed covering 90% of their Commitment Control approved and notified Value Year 2 target - Software capital expenditure System does not exist by GoR; solution for Commitment above threshold as Policy, procedures/ Control developed and established by the guidelines and accepted Policy, policy software solution procedures/ implemented in 10 6/28/2021 Page 2 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) guidelines and software (ten) (cumulative) solution piloted in 2 (two) departments. departments Status: Under progress Status: Year 1 indicator achieved. Year 2 indicators expected to be achieved soon. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 Comments: IN01012254 ►Institutional strengthening (IS) of Local Fund Audit Department (LFAD) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Outdated audit manual Year 1 - •IS framework Status: Year 1 New framework and processes and no for LFAD, including a indicator achieved. followed in all Regional automation. time bound action plan Year 2 partially Offices of LFAD and and design for Audit achieved. audit process migrated Management Software to AMS (AMS) developed.• Draft LFA Manual, including Year 3: Target: • risk-based audit Risk-based methodology developed audit methodology implemented across all Year 2 - 5 Pilot audits Regional Offices of completed.Final LFA LFAD. Manual, including risk- • Audit based audit Management Software methodology, approved (AMS) operationalized by GoR ; 50% technical in headquarters and at staff of LFAD trained in least one Regional the new framework. Office of LFAD. • All technical Status: Year 1 indicator staff of LFAD trained in achieved.; Year 2 the new framework. Delayed, but likely to be achieved soon. Status: Pending The time-bound Draft achievement. Strengthening action- plan and LFA Manual have been prepared. The online Audit Management System (AMS) has been developed. 5 Pilot audits have been completed. The strengthening plan, the LFA Manual, and the AMS will be modified based on the feedback from the departments and the Bank and findings from the pilots. Training to be provided. Status: Year 1 and Year 2 indicators Delayed 6/28/2021 Page 3 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Hiring of Consultancy firm for development of SBD’s is under process and will be finalized soon. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012255 ►Strengthened public procurement framework and capacity (including training of minimum 5% female employees of the department) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Year 1 - The Finance Department has notified, and published up to 5 SBDs for new contracting Year 3: Target : 4,000 methods, in the Official officials trained and Gazette certified in public Draft SBDs for new Year 2 -SPFC has procurement contracting methods developed a SBDs notified and under preparation. database of published. Status: Year 1 and 2 - debarred firms Delayed due to late Lack of institutionalized and made it Database of debarred hiring of consultants, Value public procurement available to state firms developed. work now underway. training system with and procuring Year 3 - Pending due limited outreach. entities. Procurement capacity to delay in hiring of of the officials consultants, No database of debarred Status: Year 1 and Year enchanced. procurement process firms. 2 indicators Delayed now underway. Hiring of Consultancy firm for development of SBD’s is under process and will be finalized soon. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012356 ►Improving effectiveness of Tax Audit in the Commercial Taxes Department (CTD) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Year 1 : New audit methodology prepared and approved Status: YR1: Achieved Year 2 : Audit hit rate improves to 12% Year 3 Target: Audit hit rate improves to Audit hit rate improved Value Audit hit rate low (10%) Status: Year 1 indicator 15% to 20% Achieved; Year 2 Indicator delayed. Status YR2 and YR3: Pending achievement. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 Intermediate Results Indicators by Components 6/28/2021 Page 4 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Strengthening Public Financial Management Framework IN01012357 ►Implementation of a strengthened decentralized participatory planning process in Rajasthan (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Year 1 ,and Year 2 delayed but likely to be achieved The DPP framework and procedures from the perspective of rural Weak decentralized District level planning planning have been participatory planning Status: YR 1: Pending. under strengthened submitted. These are in Value process and not linked to YR2: Partly achieved framework the process of being the annual budget YR3: Pending. mainstreamed in further strengthened to process. RDPR and DoP. include urban planning, integration of plans and linkage with state budget. Pilot in one district is in progress but impacted by the COVID situation. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012359 ►Institutional strengthening of internal audit (IA) function (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Year 1 and Year 2 indicators Final roadmap for strengthening IA and IA Manual have been submitted. The Modernized Internal consultant will Audit setup needs Audit Manual incorporate the strengthening; Outdated Status: YR 1, YR2 and developed and action Value comments and feedback manual, rules, circulars, YR3: Achieved. plan for received from the and processes. implementation department and the Bank notified. and findings from the pilots. GoR will take decision on two key aspects on institutional arrangements and risk- based audit Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012361 ►Data for policy action (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved for Year Usage of developed Administrative/MIS/trans 1 and in advanced indices in planning and actional data not being Status: YR1, YR2 and Value stages for completion of monitoring; develop used for planning and YR3: Achieved. Year 2. Capacity bldg plan on updating monitoring purposes. underway. indices. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 6/28/2021 Page 5 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Strengthening Expenditure and Revenue Systems IN01012358 ►Increased coverage of e-procurement (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: In advanced stage of reporting as achieved, data to be made available both for Year 1 and Year 2. State reports that the e- e-Procurement tender procurement value in Status: YR1, YR2 and Enhanced coverage of Value value in 2016-17 - INR total has increased by YR3: Achieved. e-Procurement 23,000 crores more than 10% of the baseline during the year 2018-19. A data-based report is under preparation and will be submitted soon. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012360 ►Reduced delays by making awards within initial bid validity period in ten identified departments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Year 1 Achieved, Year 2 to be confirmed. The Government of 90% contracts Estimated 50% contracts Status: YR 1 and YR2: Rajasthan has issued the awarded within initial Value are awarded within initial Achieved. YR3: Report notification dated bid validity period in bid validity period. awaited 06.08.2018 for the the ten departments. amendment in RTPP rules. DLI achieved. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012362 ►Improved awareness of SPFC (percentage citing awareness in total users surveyed) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Enhanced awareness Survey done by Status: Study to of SPFC among Consumer Unity & Trust Survey to be done in Value assess awareness of stakeholders; survey to Society International Year 3 and 5. SPFC is ongoing. be conducted in Year 3 (CUTS) (12% for SPFC) and Year 5. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012363 ►Reduction in tender notice advertisement expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Year 1 likely The expenditure incurred Tender notice achieved; Year 2 Status: YR1 and YR2: in the Year 207-18 on advertisement Value expected to be Achieved Achieved YR3: NIT is 0.41% of the expenditure reduced soon. Modalities for Pending procurement value up to 0.20% of the taking appropriate 6/28/2021 Page 6 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) (Rs.27,000.00 cr.) during actions for minimizing procurement value 2017-18. expenditure on during 2020-21. advertising have been finalized. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012364 ►Improve debt management - Enhance transparency and systemize procedures (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Debt records are manual and not centralized. Consolidated and electronic debt recording Strengthened debt system does not exist. management - reliable Status: Delayed for Year MTDS, DSA prepared; 1 and Year 2 as the Status: YR1 and YR3: Value MTDS is not prepared. consolidated debt consultant is yet to be Pending. database used to brought on board DSA does not include prepare analytical shocks and scenario outputs. analysis. Dedicated debt statistical bulletin not prepared. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012365 ►Improved cash management practices as measured by improved accuracy in cash flow forecasts (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Cash flow forecasts Status: Delayed for both, Status: delayed due to prepared more Monthly cash flow year 1 and 2, as the hiring of consultants. Value accurately and error forecasts not prepared. consultant is yet to be Proposed (Yr1 to Yr 2) margins reduced to brought on board. to be shifted forward. less than 10%. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012366 ►Strengthened tax administration in the CTD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Year 1 Achieved. Year 2 TNA Need to align institutional completed. Report on Status: Year 1 indicator structure and processes institutionalizing Capacity of the CTD Value Achieved. Year 2 in the CTD to evolving training strategy and strengthened. indicator to be confirmed. indirect tax regime. training courseware prepared Year 3 : Pending. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012367 ►Decline in non/stop-filers in the CTD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Non/stop filers (annual To be confirmed: A report Status: YR 2 and 3: Risk to revenue returns) as percentage of with data and relevant Pending. managed by reducing 6/28/2021 Page 7 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) active dealers. Baseline information is under the percentage of to be determined on the preparation and will be non/stop filers as basis of FY 17-18 in FY submitted to the Bank. percentage of 2018-19. registered active dealers to 15%. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012368 ►Value of tax recoveries (reduction in arrears) in the CTD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status for year 1 and 2: Tax arrears for last three Tax arrears for last Data to be confirmed - In Status: YR1, YR2 and Value years at 57% of total three years reduced to advanced stage of YR3: Pending. arrears. 30% of total arrears. reporting as achieved Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012369 ►Strengthening of Transport Department (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Status: Achieved for year 1 and 2. The BPR (Business Process Reengineering) study of the Transport Department has been completed. The study The average growth in report contains Action Growth in Transport the Transport Plan for the Status: YR1 and YR2: Department's revenue Department revenue strengthening of the Value Achieved YR3: for FY 2021-22 over during past four years Transport Department. Pending. FY 2020-21 by (from 2013-14 to 2016- Various 14.00%. 17) is 12.24%. recommendations of the study report have already been implemented by the Department. Manual collection of taxes has been discontinued - IVA report is under review by the Bank. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 IN01012370 ►Strengthening of Excise Department (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The average growth being the CGAR in the Growth in Excise Status: Delayed for both Status: YR1 and YR2: Excise Department Department's revenue years, as consultant is Outstanding, but Value revenue during past for FY 2021-22 over yet to be brought on underway YR3: three years (from 2014- FY 2020-21 by board. Pending. 15 to 2016-17) is 14.00%. 12.46%. Date 01-May-2018 27-Jul-2020 18-Jun-2021 31-Mar-2024 6/28/2021 Page 8 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P156869 IBRD-88550 Effective USD 21.70 21.70 0.00 5.26 16.44 24% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P156869 IBRD-88550 Effective 01-May-2018 29-May-2018 26-Jul-2018 31-Mar-2024 31-Mar-2024 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 6/28/2021 Page 9 of 10 The World Bank Implementation Status & Results Report Strengthening Public Financial Management in Rajasthan (P156869) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 6/28/2021 Page 10 of 10