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: 6 | ARCHIVED on 28-Jun-2020 | ISR42200 | Created by: Sonia Bhambri on 05-Jun-2020 | Modified by: Tanuj Mathur on 24-Jun-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 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 16.79 million to finance ongoing activities of the Government of HP. The review was held in May/ June 2020 via video conferences to discuss 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 16.79 19.21 47% 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 6/28/2020 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 % for DLI ID DLI Type Description Coc DLI Amount Status Coc 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 2,000,000.00 67 % citizen engagement Achieved DLI 4 Inc value of transac Partially 4 Regular USD 5,000,000.00 1,500,000.00 30 % through e-Pro Achieved 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 25-May-2020 In Progress Case forwarded to Dept of Personnel to review the issues highlighted by the ACS on opening up avenues for Completion 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 Measurement GST security aspects have been included in training content. several rounds of training has been provided . Comments Action Description Preparation of policy notes on fund and debt management 6/28/2020 Page 2 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 Technical Client Due Date 25-May-2020 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 implementation of commitment control system will improve fund management 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 Measurement Workshop for concerned DDOs in the last week of November 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 Meeting on Standardization of Model Bidding Document on 22nd Nov 2019. Now a decision of the GoHP is awaited Completion Measurement in this regard 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 Measurement Checklists received for all sites Comments Action Description Articulate and implement a communication and outreach plan to ensure effective change management. Source DLI# Responsibility Timing Timing Value Status 6/28/2020 Page 3 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Other Client Due Date 25-May-2020 In Progress Completion Measurement GoHP's success will be documented in PFM KIN 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 25-May-2020 Completed Completion Measurement Adequacy of staffing 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 Measurement Network Uptime report received from DIT for 17-18 and 18-19. Downtime report of VSAT to be obtained. 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 Measurement Screening is not required as construction happens on govt land only and hence there is no social impact Comments Action Description Preparation of site-specific ESMPs Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Recurrent Continuous In Progress Systems ESMPs prepared for completed as well as under-construction buildings. Progress and completion reports are Completion Measurement prepared and shared with the Bank for under construction buildings. Comments 6/28/2020 Page 4 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Action Description Green Building Certification for the treasury/sub-treasury offices Source DLI# Responsibility Timing Timing Value Status Environmental and Social Client Due Date 25-May-2020 In Progress Systems Completion Measurement The agency Design 2 Occupancy is hired for the certification and two sites being registered. 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 Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Low Low Low Other -- -- -- Overall Moderate Moderate Moderate RiskComments Comments India’s Gross Domestic Product (GDP) growth has slowed in the past three years, and the COVID-19 outbreak is expected to have a significant impact. Growth has moderated from an average of 7.4 percent during FY15/16-FY18/19 to an estimated 4.2 percent in FY19/20. The growth deceleration was due mostly to unresolved domestic issues (impaired balance sheets in the banking and corporate sectors), which were compounded by stress in the non-banking segment of the financial sector, and a marked decline in consumption on the back of weak rural income growth. Against this backdrop, the outbreak of COVID-19 and the public health responses adopted to counter it have significantly altered the growth trajectory of the economy, which is now expected to contract in FY20/21. This poses a higher risk to the Project. Results PDO Indicators by Objectives / Outcomes Increased value of transactions processed through the e-Procurement system IN00855069 6/28/2020 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 (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Software implemented in 5 Increase in value of departments and 15 transactions processed parastatals with sporadic Target achieved for FY Target achieved for FY through the e- Value usage (of the six modules) 17 - 18 17 - 18 Procurement system and value of transactions by 90% over baseline processed at INR 24.41 billion Date 31-Mar-2016 20-Nov-2019 25-May-2020 31-Mar-2022 Comments Backlog of pending VAT/ CST assessments reduced IN00855070 ►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 of in-years assessments Pending tax assessments of in-years assessments and (90% of) in-year met and Year 2 target of Value (VAT and CST) is 294,000 met and Year 2 target of assessments DLI achieved, however (2011/12–2015/16) DLI achieved, though completed within 1 claim not yet submitted with some delay year of return filing to IVA Date 31-Mar-2016 20-Nov-2019 25-May-2020 31-Mar-2022 Comments Reduce variance between originally approved budget to expenditure IN00855068 ►Reduce variance between originally approved budget to expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Target may need to be Variance between Variance between Target may need to be restated since the originally approved originally approved budget restated since the baseline data needs to budget to expenditure Value to expenditure outturns of baseline data needs to be revised. outturns of six large six large departments was be revised Restructuring request departments reduced 44% (FY2015–16) pending with DEA to 15% Date 31-Mar-2016 20-Nov-2019 25-May-2020 31-Mar-2022 Comments Intermediate Results Indicators by Results Areas Improving effeciency of the FD in an enhanced control environment IN00855082 ►Strengthening PFM in the state by provision of comprehensive and wide-ranging training (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/28/2020 Page 6 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Training needs analysis Training needs analysis undertaken, and training undertaken and training strategy developed. E- Development of strategy developed. E- learning modules on e- training needs learning modules on e- Procurement and CMS assessment, training Procurement and CMS Training neither strategic have been prepared. plan, and provision of Value have been prepared. nor according to a plan DoTA and NIC are adequate resources to DoTA and NIC are working towards deliver required working towards creating creating e-learning training to all e-learning modules on modules on IFMIS. stakeholders IFMIS. Regular training Regular training being being imparted. imparted. Date 31-Mar-2016 20-Nov-2019 25-May-2020 31-Mar-2022 Comments IN00855085 ►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. DeMPA is complete. Recommendations No recent studies (last PEFA has commenced. PEFA has commenced. made to the GoHP on review during PEFA 2009) Value Workflow studies will be Workflow studies will be fund, debt, revenue, conducted to refine the taken up April 2020 taken up April 2020 and expenditure core functions onwards. onwards. management Date 31-Mar-2016 20-Nov-2019 25-May-2020 31-Mar-2022 Comments Increasing effeciency and performance through better contract management IN00855083 ►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 25-May-2020 31-Mar-2022 There are some issues with year two targets - once 'help desk' is in place, the system will get a boost in Comments terms of moving towards achievement Unlocking revenue potential through modernization of the ETD IN00855081 ►Institutional strengthening and modernization of the ETD (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target EIU consultant and Recommendations are Service Tax advisor will All accepted short- being implemented. be hired through NICSI in and medium-term Weak institutional and EIU, Service Tax Unit, Jan 2020. recommendations Value organization structure and and Tax Audit Unit have Recommendations for implemented including obsolete e-applications been established and institutional strengthening optimizing the staffed. Training is will be put up for assessing function going on. government approval. 6/28/2020 Page 7 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Date 31-Mar-2016 20-Nov-2019 25-May-2020 31-Mar-2022 Comments IN00855084 ►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 arrangement ETD trained in GST rollout training to be for all training will be put Training is ongoing functional aspects of imparted and systematic Value in place. Staff attending subject to COVID 19 GST. Additionally, training instituted for the GST training in disruptions training and department Chandigarh. communication provided to dealers. Date 31-Mar-2016 20-Nov-2019 25-May-2020 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. Decision on Value -- from departments (throu in abolishing of LoC abolishing of LoC system system taken in May 2020 Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 2 Internal controls of the FD strengthened (Intermediate Outcome, 5.00, 40%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Commitment Control Commitment Control being implemented. Data being implemented. Data Weak internal controls; Value entry into Debt entry into Debt -- specific FM functions stil Management module Management module completed. completed. Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 3 Increased transparency and citizen engagement (Output, 3.00, 33%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Real-time disclosure on Annual budget disclosure at FD needs to work with Value the GoHP website of -- scheme level; nascent NIC and IPH for required contracts awarded/ 6/28/2020 Page 8 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) integration for March procurement opportunities 2020 targets through e-Procurement and progress on large IPH contracts Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 4 Increased value of transactions processed through the e-Procurement system (Process, 5.00, 30%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Software implemented with Year 1 targets have been Year 1 targets have been Value -- sporadic usage (of the s achieved. achieved. Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 5 CMS in IPH Department implemented (Output, 4.00, 25%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Further actions needed Further actions needed to Used in 17 divisions but Value to ensure that DLI is fully ensure that DLI is fully -- usage irregular met met. Delays due to COVID Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 6 Backlog of pending VAT/ CST assessments reduced (Intermediate Outcome, 4.00, 25%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Year 2 targets achieved; Results to be verified by Year 2 targets achieved; Pending tax assessments IVA. Deemed Results to be verified by Value (VAT and CST) are assessment and one- -- IVA - however this is 294,000 time settlement schemes delayed. need to be launched quickly Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 7 Institutional performance of the ETD improved (Intermediate Outcome, 3.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 Personnel need to be EIU has been setup. No specialized units; Value hired/ deployed quickly Claim will be sent to IVA in -- recovery process is weak followed by training July 2020 6/28/2020 Page 9 of 10 The World Bank Implementation Status & Results Report Himachal Pradesh Public Financial Management Capacity Building Program (P156687) Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments ►DLI 8 e-Governance application for excise function implemented (Output, 4.00, 0%) Baseline Actual (Previous) Actual (Current) Indian FY 21-22 No e-Governance Consultant hiring for SRS Consultant hiring for SRS Value application for excise development underway. development underway. -- function an Delayed by 18 months. Delayed by 24 months. Date 01-Apr-2016 20-Nov-2019 25-May-2020 -- Comments 6/28/2020 Page 10 of 10