International Studies Program
West Bengal - The PRI Fiscal Framework (2009 - 2010)
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West Bengal - The PRI Fiscal Framework, Gram Panchayat Financial Management Capacity and Design of Performance Grant System for GP | |
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Client: |
Government of West Bengal |
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Funding Source: |
DFID |
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Type of Grant: |
Research |
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Period Funded: |
June 15, 2009 – February 1, 2010 |
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Location: |
West Bengal, India |
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Amount: |
$118,000 |
Project Summary
Project Publications
Project Team
Project Summary:
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Rural government decentralization in West Bengal has been a focus of the state government since the state’s 1973 Panchayat Act. The three-tiered Panchayat Raj (PRI) system provides a role for governance at the district, block, and gram panchayat levels. The next round of support for the PRIs in West Bengal will focus on a new or revised grant system to promote a “better functioning GP system in the state” and “improved institutional performance by targeted GPs”. DFID and the World Bank commissioned a series of studies to analyze the fiscal situation of the PRIs in West Bengal and develop a proposal for a new grant system. The new grant is designed to phase in as the current DFID project (Strengthening Rural Development, SRD) phases out through 2011. ISP was contracted to produce three studies in this series. Study I provides an update on the status of PRI finances in West Bengal with a focus on the gram panchayat level. The scope of this task did not include a full updating and analysis of the fiscal situation of all GPs. Instead, case studies of nine GPs, two blocks, and one district were used to provide up to date information on the finances of the PRIs in West Bengal, with a focus on the GPs. Data from the PRDD are used to update the status of expenditures, revenues, opening and closing balances for all districts, blocks, and GPs. The first field visits were made in July and the second were made in September, 2009. |
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Study II provides a detailed assessment of the current state of budgeting and financial management capacity of the PRIs, an assessment of PRI financial management reforms, and focused attention to the capacity of the GPs to manage budgets and fiscal flow. Results from this work support development of a new grant program. It highlights budgeting and financial management issues relevant to creating an efficient flow of funds in such a program, given the capacity of the GPs and PRI as assessed. Also, benchmarks that might be considered in a new grant program are provided. On the basis of the first two studies, Study III outlines a detailed proposal for a new fiscal transfer to Gram Panchayats designed to support their financing needs and incentivize enhanced institutional performance. The focus of the new grant is developing financial management capacity at the gram panchayat level to increase the efficiency and effectiveness of service delivery. The new grant mechanism is additionally expected to increase the fiscal autonomy of PRIs, a tall order for a grant system in an intergovernmental fiscal structure where over 94 percent of revenues come from grants.
Project Publications:
Project Team:
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