A Conference on Fiscal Responsibility and Intergovernmental Finance

Transcription

1 Draft: June 17, 2005 A Conference on Fiscal Responsibility and Intergovernmental Finance Program June 22 24, 2005 The Administrative Staff College of India Bella Vista, Rajbhavan Road, Hyderabad Organized by Administrative Staff College of India and the World Bank

2 Program Day 1 (Wednesday, June 22 nd ): Morning Conference Registration Inauguration 8: :15 a.m. 9: :15 a.m. Mr. M. Narasimham, Chairman of Court of Governors, Administrative Staff College of India, Hyderabad. (5 minutes) Welcome by Dr. S.K. Rao, Director-General, Administrative Staff College of India. (5 minutes) Address by Honorable Dr. Y. S. Rajasekhara Reddy, Chief Minister, Andhra Pradesh Address by Dr. C. Rangarajan, Chairman, Economic Advisory Council of the Prime Minister and former Chairman, Twelfth Finance Commission. Address by Dr. Ashok Lahiri, Chief Economic Advisor, Ministry of Finance, Government of India. Closing remarks by Mr. Michael F. Carter, Country Director (India), World Bank. Coffee Break 11: :30 a.m. Theme I: Report of the Twelfth Finance Commission and State Fiscal Reforms Session II 11:30 a.m. -- 1:00 p.m. Intergovernmental Finance and Policy Coordination: Implications of the Report of the Twelfth Finance Commission. The Twelfth Finance Commission has made recommendations on the restructuring of fiscal transfers from the Centre to states for the period ; proposed annual borrowing limits as a measure of fiscal discipline and suggested incentives for fiscal reform as part of a package of debt relief. This session will examine the incentives and implications of these recommendations for prudent fiscal behavior and efficient and equitable delivery of state services as well as implementation challenges. Dr. Parthasarathi Shome, Advisor to the Finance Minister, Government of India Professor Indira Rajaraman, RBI Chair Professor, National Institute of Public Finance and Policy, New Delhi. Dr. D.K. Srivastava, formerly Member, Twelfth Finance Commission, and Senior Fellow, National Institute of Public Finance and Policy Dr. Stephen Howes, Lead Economist (India), The World Bank Lunch Break 1: :15 p.m. 1

3 Day 1 (Wednesday, June 22 nd ): Afternoon Session III 2: :45 p.m. India s Fiscal Federal Architecture: Incentives and Penalties for Fiscal Discipline. Rules-based fiscal policy can contribute to fiscal discipline provided it is seen as credible. A major concern in this regard is developing an appropriate framework within which the states operate, in particular the borrowing and transfer regime. This session examines, in the light of the Twelfth Finance Commission, recent and possible reforms to India s fiscal federal framework, drawing upon India s own experience, and experiences of other federal countries. Mr. D. Subba Rao, Secretary to the Prime Minister s Economic Advisory Council. Mr Subhash Garg, Joint Secretary, Ministry of Finance, Government of India. Dr. Amaresh Bagchi, Professor Emeritus, National Institute of Public Finance and Policy, New Delhi Dr. Anwar Shah, Lead Economist (Public Sector Governance), World Bank Institute, The World Bank Coffee Break 3: :00 p.m. Session IV 4: :30 p.m. Fiscal Challenges and Reforms for States. This session will discuss the serious fiscal challenges and farreaching fiscal reforms being undertaken by India s states in such areas as fiscal responsibility, adjustment and transparency, expenditure reforms and tax reforms. This session takes stock of those initiatives and provides perspectives on the way forward. Dr N.J. Kurian, Director, Council for Social Development Dr. Parthasarathi Shome, Advisor to the Finance Minister, Government of India Dr. Govinda Rao, Director, National Institute of Public Finance and Policy, New Delhi. Dr. U Sarat Chandran, Principal Finance Secretary, Government of Orissa Dinner (at Viceroy or Taj Hotel) :30 p.m. After-dinner speech: Fiscal Reforms in South Asia Speaker: Dr. Shantayanan Devarajan, Chief Economist, South Asia Region, The World Bank 2

4 Day 2 (Thursday, June 23 rd ): Morning` Theme II: Fiscal Responsibility Legislation -- Need and Content Session I 9:30-11:00 a.m. Overview of Fiscal Rules in Emerging Markets This session will examine recent international experience with fiscal responsibility legislation, especially in developing countries. Drawing on the volume he has recently edited, Rules-Based Fiscal Policy in Emerging Markets: Background, Analysis and Prospects, the main speaker in this session, Mr. Kopits, will address recent experiences in fiscal policy rules, especially rules of sub-national governments. He will address trade-offs between flexibility and simplicity, and between fiscal adjustment and composition. Speaker: Dr. Saumitra Chaudhari, Chief Economist, ICRA Dr. George Kopits, Member, Monetary Council, National Bank of Hungary and former Assistant Director, Fiscal Affairs Department, International Monetary Fund 11: :15 a.m. Session II 11: :45 p.m. Fiscal Responsibility Legislation: Experiences of Brazil and South Africa. Large federal countries are exposed to considerable macroeconomic volatility arising from internal and external sources. Given the endemic deficit and debt biases as major sources of instability in many of these countries, the introduction of constraints on budget balance, government expenditure growth or stock of public indebtedness has become appealing. Brazil and South Africa has enacted these constraints as part of comprehensive fiscal responsibility legislation. This session will highlight experiences of Brazil and South Africa with fiscal responsibility legislation and its impact on fiscal discipline and debt sustainability at all levels of government. Professor Indira Rajaraman, RBI Chair Professor, National Institute of Public Finance and Policy, New Delhi. Ms Selena Peres Peres Nunes, Fiscal Policy Advisor, Institute for Socioeconomic Studies, Brazil Mr. Ismail Momoniat, Director, Ministry of Finance, Republic of South Africa. Lunch Break 12: :15 p.m. 3

5 Day 2: (Thursday, June 23 rd) : Afternoon Session III 2: :45 p.m. Fiscal Policy Rules in India. In 2003, the Fiscal Responsibility and Budget Management Act came into being at the all-india level. Several states have also passed such Acts, and the Twelfth Finance Commission has recommended that all states follow suit. The Reserve Bank of India has constituted a committee of officials, including state finance secretaries to develop a model fiscal responsibility act (FRA). This session will reflect on the experiences with fiscal policy rules at the Government of India level, the report of the RBI Committee, and the experience of the states. Dr. Vinaya Swaroop, Lead Economist (Public Finance), South Asia Region, The World Bank Dr. R.K. Pattnaik, Adviser, Dept of Economic Analysis and Policy, Reserve Bank of India, Mumbai. Mr. S.C. Pandey, Officer on Special Duty (Fiscal Responsibility and Budget Management), Ministry of Finance, Government of India. Dr. Renuka Vishwanath, Advisor, Planning Commission of India 3: :00 p.m. Session IV 4: :30 p.m. Fiscal Responsibility Legislation: the View from the States. At the time of writing, seven states in India, as well as the Government of India, have introduced fiscal responsibility legislation and fiscal management reforms. What has been the experience so far? What issues have been revealed as central for successful design and implementation? Mr. Narayan Valluri, Chairman, Institute of Public Enterprise, Hyderabad. Dr. Stephen Howes, Lead Economist (India), The World Bank Mr. Sudhakar Rao, Principal Finance Secretary, Government of Karnataka, Mr. K. Jose Cyriac, Principal Finance Secretary, Government of Kerala Evening: Light and Sound Show at Golconda Fort. 4

6 Day 3: ( Friday, June 24 th ) : Morning Theme III: Fiscal Responsibility Implementation and Public Expenditure Management Session I 9: :00 a.m. Developing A Medium-Term Fiscal Framework. Multi-year fiscal planning is a key component of any fiscal responsibility legislation. Indeed, fiscal responsibility legislation can be viewed as giving legal sanction to a government s Medium-Term Fiscal Framework (MTFF). This session will discuss issues in putting together and implementing an MTFF, from both the expenditure and revenue side. Discussion will include links with other macroeconomic indicators (for example, economic growth), the need to chart out a path for key strategic fiscal policy goals that is consistent with the overall policy objectives, revenue forecasting, links to other public expenditure management objectives. Dr. Amaresh Bagchi, Professor Emeritus, National Institute of Public Finance and Policy, New Delhi. Dr. Vinaya Swaroop, Lead Economist (Public Finance), South Asia Region, The World Bank Mr. L. Krishnan, Special Secretary Finance, Government of Tamil Nadu 11: :15 a.m. Session II 11: :45 p.m. Budgeting for Results. For effective public governance, government must be accountable to citizen-voters for economic management and service delivery performance. Regrettably, the line item budgets used in most countries lack the basic information needed to underpin an informed response by the citizens. Performance based budgeting is potentially a useful tool in this regard, as it provides the necessary links between budgetary allocations and performance. This session will highlight approaches to introducing a results/output based budgeting process, and some of the issues encountered in implementing such approaches. Lessons from experience in OECD and developing countries will be presented. Dr. Adarsh Kishore, Secretary, Department of Expenditure, Ministry of Finance, Government of India. Dr. Anwar Shah, Lead Economist (Public Sector Governance), World Bank Institute, The World Bank Dr. Nandini Azad, Advisor, Programme Outcome and Response Mechanism, Planning Commission of India Lunch Break. 12: :15 p.m. 5

7 Day 3: (Friday, June 24 th ): Afternoon Session III 2: :45 p.m. Public Financial Management: Internal Controls and External Oversight. This session will examine the functioning of a modern Internal Audit system, reviewing organizational principles and standards, the value added of internal controls, risk management, audit committees, problems and reforms, the role of professional bodies, and insights on how to sell internal audits to the rest of the organization. It will also place external audit in the accountability chain and review planning and programming, incentive structures, organization and independence of Supreme Audit Institutions, the role of Public Accounts Committees and civil society, and the evaluation of government performance. Mr N.R. Rayalu, Director General (Audit), Comptroller and Auditor General, Government of India Mr. M.J. Joseph, Joint Controller General of Accounts, Ministry of Finance, Government of India Mr. Vinod Sahgal, Lead Financial Management Specialist, The World Bank 3: :00 p.m. Session IV 4: :30 p.m. Lessons Learnt and the Way Forward. As the concluding session of the Conference, it will gather the lessons learnt from international experience and from fellow states, and discuss possible directions for moving forward. In particular, the session will highlight some steps that could be taken by different states over the coming years to make progress in promoting their fiscal reform agendas. Moderator: Dr. S. K. Rao, Director-General, Administrative Staff College of India, Hyderabad Panelists: Dr. Amaresh Bagchi, Professor Emeritus, National Institute of Public Finance and Policy, New Delhi. Mr. P. Ramakant Reddy, Principal Finance Secretary, Government of Andhra Pradesh Dr. Vinaya Swaroop, Lead Economist (Public Finance), South Asia Region, The World Bank 6