The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Himachal Pradesh Public Financial Management Capacity Building Program (P156687) SOUTH ASIA | India | Governance Global Practice | Requesting Unit: SACIN | Responsible Unit: ESAG2 IBRD/IDA | Program-for-Results Financing | FY 2017 | Team Leader(s): Tanuj Mathur Seq No: 5 | ARCHIVED on 17-Jan-2020 | ISR39917 | Created by: Sonia Bhambri on 11-Dec-2019 | Modified by: Tanuj Mathur on 13-Jan-2020 Program Development Objectives Program Development Objective (from Program Appraisal Document) The Project Development Objective (PDO) is to improve the efficiency of Public Expenditure Management and Tax Administration in Himachal Pradesh. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Implementation Status and Key Decisions Himachal Pradesh (HP) PFM Capacity Building Project was approved by the Board of the Bank on May 17, 2017 and became effective on July 11, 2017. The project has disbursed USD 14.29 million to finance ongoing activities of the Government of HP. The mid term review was held in November 2019 and this reviewed the activities undertaken by the project implementation agencies and the progress on Disbursement Linked Indicator (DLI) targets. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P156687 IBRD-87530 Effective USD 36.00 36.00 0.00 14.29 21.71 40% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P156687 IBRD-87530 Effective 17-May-2017 31-May-2017 11-Jul-2017 30-Sep-2022 30-Sep-2022 1/17/2020 Page 1 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) DLI Disbursement Achievement Disbursed amount in Disbursement % DLI ID DLI Type Description Coc DLI Amount Status Coc for DLI Loan: IBRD87530-001 DLI 1 Electronic interface Partially 1 Regular USD 8,000,000.00 2,000,000.00 25 % of IFMIS Achieved DLI 2 Int cntrlsof FD Partially 2 Regular USD 5,000,000.00 2,000,000.00 40 % strengthened Achieved DLI 3 Inc transp and Partially 3 Regular USD 3,000,000.00 1,000,000.00 33 % citizen engagement Achieved DLI 4 Inc value of transac 4 Regular USD 5,000,000.00 Not Achieved 0.00 through e-Pro DLI 5 CMS in IPH dept Partially 5 Regular USD 3,910,000.00 1,000,000.00 26 % impl Achieved DLI 6 VAT CST assmnt Partially 6 Regular USD 4,000,000.00 1,000,000.00 25 % reduced Achieved DLI 7 Insti perf ETD 7 Regular USD 3,000,000.00 Not Achieved 0.00 improved DLI 8 e gov excise fn 8 Regular USD 4,000,000.00 Not Achieved 0.00 implemented Program Action Plan Action Description Appoint IT managers (Asst Programmer) across all implementing departments, namely the DoTA, IPH, and ETD Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 31-Mar-2019 In Progress Completion Case forwarded to Dept of Personnel to review the issues highlighted by the ACS on opening up avenues for Measurement promotion opportunities for computer operators. Comments Action Description Training of staff on IFMIS, GST readiness and gender issues. Source DLI# Responsibility Timing Timing Value Status Technical Client Recurrent Continuous In Progress Completion GST security aspects have been included in training content. More guidance is sought by GoHP on gender sensitivity Measurement training. . Comments 1/17/2020 Page 2 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Action Description Preparation of policy notes on fund and debt management Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 31-Mar-2019 In Progress DEMPA study is done. Debt management policy will be drafted based on DeMPA findings. Completion Measurement Standardisation of Sanction order is proposed and AG’s concurrence on Sanction Order template is being sought. Comments Action Description Ongoing training of departmental Finance Officers in the IPH, ETD, DIT, and HPSEDC on Program FM. Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems Client Due Date 31-Mar-2018 In Progress Completion Workshop for concerned DDOs in the last week of November Measurement Comments Prepare the model bidding document based on the broad guidelines issued in the HPFR 2009 and consistently use Action Description them in the Program departments. Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 31-Mar-2020 Not Yet Due Completion Meeting on Standardization of Model Bidding Document on 22nd Nov 2019 Measurement Comments Action Description Screening for exclusions of high-risk activities; ; Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Recurrent Continuous In Progress Systems Completion Checklists received for all sites Measurement Comments 1/17/2020 Page 3 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Action Description Articulate and implement a communication and outreach plan to ensure effective change management. Source DLI# Responsibility Timing Timing Value Status Other Client Due Date 31-Mar-2019 In Progress Completion A 2-Page note on Program successes will be uploaded on the website by GoHP Measurement Comments Action Description Adequate staffing of the PRD to ensure smooth functioning and interdepartmental coordination . Source DLI# Responsibility Timing Timing Value Status Technical Client Due Date 31-Mar-2018 Completed Completion Adequacy of staffing Measurement Comments Full team working in the PFM Reforms Division Maintain or strengthen connectivity for all departments implementing the Program through a defined service standard; Action Description ensure power backup; insurance of strong room; adequate data storage capacity; Disaster Recovery Plan Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems Client Due Date 31-Mar-2019 In Progress Completion Network Uptime report received from DIT for 17-18 and 18-19. Downtime report of VSAT to be obtained. Measurement Comments Undertake screening of the land identified for construction of Treasury/ sub-treasury buildings to rule out any social Action Description impact Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Recurrent Continuous In Progress Systems Completion Screening is not required as construction happens on govt land only and hence there is no social impact Measurement Comments Action Description Preparation of site-specific ESMPs 1/17/2020 Page 4 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Recurrent Continuous In Progress Systems Completion ESMPs prepared for completed as well as under-construction buildings Measurement Comments Action Description Green Building Certification for the treasury/sub-treasury offices Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Due Date 30-Nov-2019 In Progress Systems Completion The Consultant has been finalized and will be appointed shortly Measurement Comments Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Low Low Low Macroeconomic Low Low Low Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Sustainability Moderate Moderate Moderate Fiduciary Moderate Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Low Low Low Other -- -- -- Overall Moderate Moderate Moderate Results PDO Indicators by Objectives / Outcomes 1/17/2020 Page 5 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Increased value of transactions processed through the e-Procurement system IN00783192 ►Increased value of transactions processed through the e-Procurement system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Software implemented in 5 Increase in value of departments and 15 Increase in usage of transactions processed parastatals with sporadic software but all modules Target achieved for FY through the e- Value usage (of the six modules) (including Award of 17 - 18 Procurement system and value of transactions Contract) not put to use by 90% over baseline processed at INR 24.41 billion Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments Backlog of pending VAT/ CST assessments reduced IN00783193 ►Backlog of pending VAT/ CST assessments reduced (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Backlog reduced by Backlog reduced, target Backlog reduced, target 100% over baseline Pending tax assessments of in-years assessments of in-years assessments and (90% of) in-year Value (VAT and CST) is 294,000 met and Year 1 target of met and Year 2 target of assessments (2011/12–2015/16) DLI achieved, though DLI achieved, though completed within 1 with some delay with some delay year of return filing Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments Reduce variance between originally approved budget to expenditure IN00783191 ►Reduce variance between originally approved budget to expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Variance between Variance between Target may need to be originally approved originally approved budget Variance for FY 17-18 restated since the budget to expenditure Value to expenditure outturns of continues to be above baseline data needs to outturns of six large six large departments was 40% be revised departments reduced 44% (FY2015–16) to 15% Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments Intermediate Results Indicators by Results Areas Improving effeciency of the FD in an enhanced control environment IN00783195 1/17/2020 Page 6 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) ►Strengthening PFM in the state by provision of comprehensive and wide-ranging training (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Training needs analysis undertaken and training strategy developed. E- Development of learning modules on e- training needs Training and discussion Procurement and CMS assessment, training Training neither strategic with staff. Specific have been prepared. plan, and provision of Value nor according to a plan training has been DoTA and NIC are adequate resources to provided working towards deliver required creating e-learning training to all modules on IFMIS. stakeholders Regular training being imparted. Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments IN00783198 ►Strengthening components of the PFM cycle through analytical studies of the core FD functions (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target DeMPA is complete. Recommendations No recent studies (last Assessment based on PEFA has commenced. made to the GoHP on review during PEFA 2009) Value PEFA methodology has Workflow studies will be fund, debt, revenue, conducted to refine the been kicked off taken up April 2020 and expenditure core functions onwards. management Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments Increasing effeciency and performance through better contract management IN00783196 ►CMS in IPH Department implemented (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 25.00 100.00 Date 01-Apr-2017 15-Jul-2019 15-Jul-2019 31-Mar-2022 Comments Unlocking revenue potential through modernization of the ETD IN00783194 ►Institutional strengthening and modernization of the ETD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target EIU consultant and All accepted short- Departmental functioning Service Tax advisor will and medium-term Weak institutional and is being modernized - be hired through NICSI recommendations Value organization structure and Excise and GST function in Jan 2020. implemented including obsolete e-applications split at directorate level Recommendations for optimizing the institutional assessing function 1/17/2020 Page 7 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) strengthening will be put up for government approval. Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments IN00783197 ►Enhanced capacity of officials implementing GST by providing training not covered by the sovereign function (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Field-level staff of the Institutional EY team has completed ETD trained in GST rollout training to be arrangement for all training. Other training functional aspects of imparted and systematic training will be put in Value opportunities being GST. Additionally, training instituted for the place. Staff attending explored with national training and department GST training in level institutions communication Chandigarh. provided to dealers. Date 31-Mar-2016 15-Jul-2019 20-Nov-2019 31-Mar-2022 Comments Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Electronic interface of IFMIS implemented in all departments (Intermediate Outcome, 8.00, 25%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Roll out to 30% DDOs Roll out to 30% DDOs Manual submission of bills complete. However delay complete. However delay Value -- from departments (throu in abolishing of LoC in abolishing of LoC system system Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments ►DLI 2 Internal controls of the FD strengthened (Intermediate Outcome, 5.00, 40%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Revised Treasury Rules Commitment Control and manuals made being implemented. Data Weak internal controls; Value operational. Budget entry into Debt -- specific FM functions stil Preparation process Management module automated completed. Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments ►DLI 3 Increased transparency and citizen engagement (Output, 3.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 1/17/2020 Page 8 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) DLI Yr 2 target on better FD needs to work with Annual budget disclosure at disclosure has been NIC and IPH for required Value -- scheme level; nascent achieved and paid in integration for March 2020 June 2019 targets Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments ►DLI 4 Increased value of transactions processed through the e-Procurement system (Process, 5.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Increase in usage of software but all modules (including Award of Contract) not put to use. Software implemented with Year 1 targets have been Value However promising -- sporadic usage (of the s achieved. progress has been made and year 1 target may be achieved by Sept/ Oct 2019 Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments ►DLI 5 CMS in IPH Department implemented (Output, 4.00, 25%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 CMS implemented in 25% divisions. Used in 17 divisions but Department more or less Further actions needed to Value -- usage irregular on target to achieve Year ensure that DLI is fully met 2 target with minor delays Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments ►DLI 6 Backlog of pending VAT/ CST assessments reduced (Intermediate Outcome, 4.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Year 2 targets achieved; Backlog reduced, target Results to be verified by Pending tax assessments of in-years assessments IVA. Deemed Value (VAT and CST) are -- for year 1 met now and assessment and one-time 294,000 paid for in June 2019 settlement schemes need to be launched quickly Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments 1/17/2020 Page 9 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) ►DLI 7 Institutional performance of the ETD improved (Intermediate Outcome, 3.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Steps taken but EIU Personnel need to be No specialized units; needs to be equipped Value hired/ deployed quickly -- recovery process is weak with analytics software followed by training and specialist staff Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments ►DLI 8 e-Governance application for excise function implemented (Output, 4.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 FRS developed. No e-Governance Consultant hiring for SRS Consultant hiring for SRS Value application for excise development underway. development underway. -- function an Delayed. This is being Delayed by 18 months. followed up vigrously Date 01-Apr-2016 15-Jul-2019 20-Nov-2019 -- Comments 1/17/2020 Page 10 of 10