Public Disclosure Authorized SOUTH ASIA India Governance Global Practice IBRD/IDA Investment Project Financing FY 2017 Seq No: 3 ARCHIVED on 17-Jan-2019 ISR35620 Implementing Agencies: Republic of India, Assam Society for Comprehensive Financial Management System (AS-CFMS) Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Key Dates Key Project Dates Bank Approval Date: 15-Jun-2017 Effectiveness Date: 25-Sep-2017 Planned Mid Term Review Date: 16-Mar-2020 Actual Mid-Term Review Date: Original Closing Date: 30-Sep-2022 pdotable Project Development Objectives Project Development Objective (from Project Appraisal Document) Revised Closing Date: 30-Sep-2022 13. The Project Development Objective (PDO) is: "to contribute to improvement in predictability and transparency in budget execution and efficiency in tax administration in Assam." The key beneficiaries of the project will include: the Finance Department, Office of Commissioner of Taxes, Department of Excise and Department of Information Technology; procuring agencies in select line departments and government officials. All line departments, directorates and field level units will benefit from having information of budget execution rates and status of payment of bills. The project will also benefit the citizens of Assam through efficient processes and better service delivery provided by public institutions (such as electronic payments and collections for services, better public procurement and enhanced tax payer services) and enhanced transparency. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Strengthening Public Finance Institutional Capacity:(Cost $3.70 M) Strengthening Expenditure and Revenue Information Systems:(Cost $39.00 M) Project Management, Monitoring & Evaluation and Coordination:(Cost $1.20 M) Front end fee:(cost $0.10 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions The project has made progress on the soft elements of reforms such as: cash and debt management; finalization of procurement rules; scale up of e-procurement; development of a common e-collection portal for GoA (e-gras); and making e-payments through RBI portal e-kuber. The 1/17/2019 Page 1 of 10
IN00613591 IN00613592 Finance Department has attempted to address some of the bottlenecks to budget preparation and distribution, and administrative and financial sanctions, by automating these manual processes in the existing FMIS application FinAssam. However, implementation and project disbursements lag behind initial estimates. The following issues are critical to achievement of Disbursement Linked Indicators (DLIs) and to ensure that the development objectives of the project are met in a timely manner: empowerment of the Assam Society for Comprehensive Financial Management System (AS-CFMS) to implement project activities; approval of the procurement rules to support implementation of the Procurement Act approved in April 2017; and decisions on the approach GoA wishes to follow for development of the FMIS solution and procurement of the IT application for Commercial Taxes. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Moderate Moderate Moderate Sector Strategies and Policies Low Low Low Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability Substantial Substantial Substantial Fiduciary Moderate Moderate Moderate Environment and Social Low Low Low Stakeholders Low Low Low Other Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes To contribute to improvement in predictablity and transparency in budget execution Reduction in share of discretionary expenditure reported in the last quarter of the financial year (Percentage, Custom) 55.00 64.00 64.00 48.00 Date 31-Mar-2015 31-Mar-2018 31-Mar-2018 31-Mar-2022 Public access to key budget execution reports (Yes/No, Custom, DLI) 1/17/2019 Page 2 of 10
IN00613593 IN00613604 IN00613605 No No No Yes Date 31-Mar-2016 31-Mar-2018 31-Mar-2018 31-Mar-2022 Public access to procurement contracts awarded (Percentage, Custom Supplement) 0.00 8.00 8.00 90.00 To contribute to improvement in efficiency in tax administration in Assam Reduction in cost of collection of tax revenue in Excise Department (Percentage, Custom) 4.01 3.17 3.17 3.00 Date 31-Mar-2015 31-Mar-2018 31-Mar-2018 31-Mar-2022 Reduction in cost of collection of taxes in office of the Commissioner of Taxes (Percentage, Custom Breakdown) 1.27 1.24 1.24 0.80 Date 31-Mar-2015 31-Mar-2018 31-Mar-2018 31-Mar-2022 Overall Comments PDO Most of the PDO Indicators are tracked annually and will be updated in May-June 2019 based on information from the State s audited Annual Financial Statements for FY 2017-18, which is not yet available in the public domain. These indicators are currently based on the unaudited monthly accounts of the AG and data from the treasury information system (CTMIS) There is an increase in share of discretionary expenditure in the last quarter of the financial year 2017/18. The reasons for this are (i) continuing practice of making large fund releases in the last quarter of the financial year; (ii) various new schemes announced in the budget of FY 2017-18, for which funds were released only in last quarter and (iii) accounts of various forest and works divisions not accounted for by the AG in the 3rd quarter due to non-receipt of accounts. This is expected to gradually reduce over 2-3 years once the following reforms are implemented (i) decision support system on monthly budget execution reports for both Finance and line departments and actual spend in previous year informing the budget outlay for the next year; (ii) integrating works and forestry payments/ accounting into treasury payment changes in borrowing strategy for open market borrowings which will allow for a more even availability of funds and (iii) focused capacity building in areas of planning, budgeting, procurement and scheme designs in selected high spending departments. Agencies have commenced publication of contract ward information and have achieved 8% in FY 2017-18 and till Oct 2018 it was 20%. In order to increase the % of publication of award in the public domain the Finance 1/17/2019 Page 3 of 10
IN00658948 IN00658949 IN00658912 Department is moving to a centralized management of collection and refund of earnest money deposit and linking (automating) issue of financial sanctions for funds release to "Award of Contract" in public domain. Cost of collection of taxes both in CoT and Excise has shown improvement (reduction). The reason for this is the reduction in cost of collection in excise are - administrative reforms by way of changes in excise rules, which enabled collection at first point of sale and implementation of a interim IT application for issue of transport permits etc. Intermediate Results Indicators by Components Strengthening Public Finance Institutional Capacity Enhanced capacity in Cash and Debt Management (Text, Custom) Fragmented institutions for debt management; absence of active cash and debt management and cash-flow forecasting Cash & Debt Mgt cell constituted and annual borrowing plan and monthly cash flow forecasts developed for FY 2018-19 Cash & Debt Management Cell constituted and annual borrowing plan and monthly cash flow forecasts developed for FY 2018-19 and updated weekly Cash and Debt Management Unit established; annual borrowing informed by realistic cashflow forecasts; Debt Statistical Bulletin published. Date 31-Mar-2016 13-Dec-2018 31-Mar-2022 Strengthened public procurement framework and capacity building of officials (of which 5% are female) (Text, Custom) Procurement rules and SBD In progress. Draft notified and Procurement rules Draft Procurement published; Outdated procurement finalized and vetted by Rules and first set of resolution of rules; no SBDs; and no legislative department. SBDs are ready and procurement system for public Preparation of Standard awaiting Cabinet grievances procurement training Bidding Document in approval for the rules. disclosed progress. publicly; enhanced procurement Increased coverage of e-procurement (Text, Custom) 1/17/2019 Page 4 of 10
IN00658913 IN00658909 IN00658950 GO issued for mandatory e-procurement for procurement above INR 20 lacs; e-procurement tender value in 2015â2016 - INR 5,700 crores. 51% increase in eprocurement tender value over baseline 51% increase in e- procurement tender value over baseline Enhanced coverage of e- Procurement (250% increase over baseline) Date 31-Mar-2016 31-Mar-2018 31-Mar-2018 31-Mar-2022 E-Procurement tender value in FY 2017-18 was Rs 8600 crores as compared to baseline figure of Rs 5700 crores in FY 2015-16. All e-procurement.shifted to one portal as against use of multiple portal earlier. However, GoA has increased the e-procurement threshold from Rs. 20 lacs to Rs. 50 lacs. Increased human resource capacity in PFM of officials (of which 10% are female) (Text, Custom) No formal training strategy and sporadic training on PFM TNA is in progress Training Needs Assessment in progress Enhanced PFM capacity of the GoA's finance officials (2250 officials trained) Strengthening Expenditure and Revenue Information Systems Enhanced controls in budget execution and reporting (Text, Custom, DLI) GoA has automated the budget allotment In progress. GoA has Processes for budget process from the Budget distribution by automated the budget distribution, budget Finance Dept to BCO HoDs and BCOs, allotment process from control, and bill and DDO for FY 2018- budget control by the the Finance Dept to BCO submission by the DDOs 19 by interface of Treasury, and bill and DDO for FY 2018-19 are manual; and no CTMIS and FinAssam submission by the by interface of CTMIS decision support system as an interim measure, DDOs and FinAssam as an for Finance Department pending decision on automated; decision interim measure the approach of implementing FMIS. Date 31-Mar-2016 31-Mar-2018 13-Dec-2018 31-Mar-2022 GoA is in the process of taking an informed decision on the approach of implementing FMIS - scaling up the existing FinAssam; or developing/acquiring a solution implemented by NIC in another state; or acquiring FMIS through a private vendor through competitive bidding. Increased e-collection and e-payments (Text, Custom, DLI) E-collection for Excise A common e-collection 100% of excise NIL; portal has been and non-gst for the CoT 35% by developed with tax In progress volume for VAT and nil support from NIC and administered by for excise has been CoT collected other taxes; and onboarded while ; 1/17/2019 Page 5 of 10
IN00658966 IN00658914 IN00658971 fragmented systems and low base of e-payments onboarding of non- GST taxes of CoT is in progress. and at least 90% of the payments made by the treasuries. Selected departments, including Excise Department have been on-boarded to e-gras while onboarding of CoT is in progress. Finance Department will issue office memorandum mandating use of egras for deposit of government revenue once some issues pertaining to ownership and maintenance are resolved. Treasuries are migrating to e-payments using RBI s e-kuber system and have achieved 35% both by volume and value till Oct 31 2018 Enhanced public disclosure of budget information and Citizen's Engagement (Text, Custom) Budget Disclosures enhanced in FY 2018- Budget Disclosures 19 Budget. These enhanced in FY 2018-19 Enhanced include Budget. These include (i) budget (i) budget at a glance budget at a glance disclosure to (highlights); (highlights); (ii) an citizens, (ii) an analytical analytical statement; (iii) including Limited budget statement; information on transfers compliance disclosures (iii) information on to local bodies; (iv) report with the transfers to local on actions taken on the disclosure bodies; budget of the previous requirements of (iv) report on actions year; and (v) a children s the Assam taken on the budget of budget and a gender FRBM Act. the previous year; and budget. (v) a children s budget and a gender budget. Date 31-Mar-2016 31-Mar-2018 31-Mar-2018 31-Mar-2022 Enhanced services provided by office of the Commissioner of Taxes (CoT) using e-governance (Text, Custom, DLI) Fragmented and outdated IT applications; e-return Enhanced filing at 15% for VAT; taxpayer ereturns Contract for new IT services do not have in-built In progress application for CoT yet provided by electronic scrutiny to be awarded. CoT for returns, feature; obligations and No e-governance communication solutions for non GST state taxes GoA is to take a decision on award of contract for development of an IT application for the Commercial Tax Department. Strengthened institutional capacity in office of the Commissioner of Taxes (CoT) (Text, Custom) 1/17/2019 Page 6 of 10
IN00658972 IN00659167 Inadequate audit systems that is, lack of system based audit selection and limited tax analytical capacity In progress Report on institutional assessment and capacity-building needs for the COT has been completed and CoT has prioritized some activities. Core tax administration functions strengthened Based on the study, CTD has prioritized the following activities - creation of Tax Analytics function in the department with software and data analytics tool; training on Service Taxation; institutional reorganization to create new zones; and strengthening Tax Audit capacity Enhanced services provided by Excise Department using e-governance (Text, Custom, DLI) All procedures and processes are manual in the Excise Department; Excise revenue INR 808 crore in 2015-2016 In progress Excise Rules approved by way of Gazette Notification. The bid for onboarding the Systems Integrator for the Excise e-governance solution is in an advanced stage of evaluation. solution operationalized in the Excise Department with (a) eservices to taxpayers and (b) MIS for monitoring and regulation; 80% increase in excise revenue over baseline Disbursement Linked Indicators DLI 1 Enhanced controls in budget execution and reporting (Text, Intermediate Outcome, 8.50, 0%) Baseline Actual (Previous) Actual (Current) Processes for budget distribution, budget control, and bill submission by the DDOs are manual; and no decision support system for Finance Department GoA has automated the budget allotment process from the Finance Dept to BCO and DDO for FY 2018-19 by interface of CTMIS and FinAssam as an interim measure, pending decision on the At least 90% of excise and non- GST tax (administered by the COT) collected through the e- collection portal; and at least 80% payments made by the treasuries have been done 1/17/2019 Page 7 of 10
IN00659168 IN00659171 IN00659176 approach of implementing FMIS. Date 13-Dec-2018 Budget allotment and distribution module has been developed on existing FinAssam and integrated with CTMIS. GoA is in the process of taking a decision on the approach to implement FMIS. DLI 2 Public access to key budget execution reports (Yes/No, Intermediate Outcome, 3.50, 0%) Baseline Actual (Previous) Actual (Current) At least 90% of excise and non- GST tax (administered by the COT) collected through the e- collection portal; and at least 80% payments made by the treasuries have been done No No Date 13-Dec-2018 DLI 3 Increased e-collection and e-payments (Text, Intermediate Outcome, 3.00, 0%) Baseline Actual (Previous) Actual (Current) E-collection for Excise NIL; for the CoT 35% by volume for VAT and nil for other taxes; and fragmented systems and low base of e-payments A common e-collection portal has been developed with support from NIC and excise has been onboarded while onboarding of non-gst taxes of CoT is in progress. Date 13-Dec-2018 At least 90% of excise and non- GST tax (administered by the COT) collected through the e- collection portal; and at least 80% payments made by the treasuries have been done Excise Department has transitioned to e-gras while CoT is in progress pending resolution of some issues. DLI 4 Enhanced services provided by office of the Commissioner of Taxes (CoT) using e-governance (Text, Intermediate Outcome, 5.50, 0.00%) Baseline Actual (Previous) Actual (Current) At least 90% of excise and non- 1/17/2019 Page 8 of 10
IN00659172 Fragmented and outdated IT applications; e-return filing at 15% for VAT; ereturns do not have in-built electronic scrutiny feature; No e-governance solutions for non GST state taxes Contract for new IT application for CoT yet to be awarded. Date 13-Dec-2018 GST tax (administered by the COT) collected through the e- collection portal; and at least 80% payments made by the treasuries have been done GoA to take decision on award of contract or rebidding DLI 5 Enhanced services provided by Excise Department using e-governance (Text, Intermediate Outcome, 5.00, 0%) Baseline Actual (Previous) Actual (Current) All procedures and processes are manual in the Excise Department; Excise revenue INR 808 crore in 2015-2016 Excise Rules approved by way of Gazette Notification. The bid for on-boarding the Systems Integrator for the Excise e-governance solution is in an advanced stage of evaluation. Date 13-Dec-2018 At least 90% of excise and non- GST tax (administered by the COT) collected through the e- collection portal; and at least 80% payments made by the treasuries have been done Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P157198 IBRD-87650 Effective USD 35.00 35.00 0.00 2.32 32.68 6.6% 1/17/2019 Page 9 of 10
Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P157198 IBRD-87650 Effective 15-Jun-2017 27-Jun-2017 25-Sep-2017 30-Sep-2022 30-Sep-2022 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 1/17/2019 Page 10 of 10