ADB Releases Second $150 Million Loan as Budgetary Support for West Bengal
MANILA, PHILIPPINES (25 November 2019) — The Asian Development Bank (ADB) has approved the release of $150 million for the second part of a program in West Bengal to provide budgetary support for the state government.
The policy-based program loan of $300 million for the Second West Bengal Development Finance Program was approved in September 2017 to create fiscal space for the state to boost capital investment and improve infrastructure.
The program comprised two tranches of $150 million each to rationalize expenditure with measures such as implementing voluntary retirement schemes to revive the financial health of public sector enterprises, introducing medium-term expenditure frameworks in two departments, and implementing an integrated tax monitoring system; improve revenue administration with 3D hologram-based logistics system in state excise department and digitalization of property and land records; and facilitate private sector development with support to public–private partnerships in social sector projects. Tranche 1, with 11 policy actions, was disbursed on 1 December 2017 on full compliance with the 11 actions. For tranche 2, 14 further policy actions were specified, and 13 of these were fully complied with, with one partial compliance, by 30 September 2019, triggering the second tranche.
“The program has made significant achievements toward structural change in West Bengal, which has placed state finances on a much stronger foundation,” said ADB Senior Public Management Economist for South Asia Mr. Navendu Karan. “The envisaged objective of increasing growth-enhancing expenditures while maintaining healthy finances has been achieved.”
The three-year period financial year (FY) 2017 to FY2019 saw improvements in key fiscal ratios, compared to the previous three-year period, with the fiscal deficit reducing from 3.4% during FY2014–2016 to 2.9% during FY2017–2019.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.