Report and Recommendation of the President to the Board of Directors

Sri Lanka Project Number: 49209-001 August 2017

Proposed Policy-Based Loan and Technical

Assistance Grant

India: Second West Bengal Development Finance

Program Distribution of this document is restricted until it has been approved by the Board of Directors. Following such approval, ADB will disclose the document to the public in accordance with ADB’s Public Communications Policy 2011.

CURRENCY EQUIVALENTS (as of 1 August 2017)

Currency Unit – Indian rupee/s (₹)

₹1.00 = $0.0155 $1.00 = ₹64.19

ABBREVIATIONS

ADB – Asian Development Bank ERS – early retirement scheme FPMU – Fiscal Policy and Management Unit GOWB – Government of West Bengal GSDP – gross state domestic product IT – information technology MTEF – medium-term expenditure framework PPP – public-private partnership SOE – state-owned enterprise TA – technical assistance VGF – viability gap funding VRS – voluntary retirement scheme WBIIDF – West Bengal Investment and Infrastructure Development Fund

NOTES

(i) The fiscal year (FY) of the Government of India and its agencies ends on 31 March. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2017 ends on 31 March 2017.

(ii) In this report, "$" refers to United States dollars.

Vice-President W. Zhang, Operations 1 Director General H. Kim, South Asia Department (SARD) Director B. Carrasco, Public Management, Financial Sector, and Trade Division (SAPF),

SARD

Team leader N. Karan, Senior Public Management Economist, SARD Team members M. Delos Reyes, Senior Treasury Specialist, Treasury Department

O. Domagas, Senior Financial Control Specialist, Controller’s Department (CTL) A. Gacutan, Senior Operations Assistant, SARD L. Gamolo, Operations Assistant, SARD P. Gutierrez, Project Analyst, SARD S. Janardanam, Principal Financial Management Specialist, Operational Services and Financial Management Department (OSFMD) J. Moreno, Senior Project Assistant, SARD H. Mukhopadhyay, Principal Public Management Specialist, Central and West Asia Department V. Rekha, Principal Counsel, Office of the General Counsel (OGC) J. Romero-Torres, Senior Finance Specialist (Energy), East Asia Department

K. Sarkar, Senior Financial Control Officer, SARD

A. Sen Gupta, Senior Economics Officer, SARD Y. Seo, Senior Counsel, OGC

K. Takamiya, Principal Planning and Policy Economist, Strategy, Policy and Review Department Y. Tatewaki, Principal Portfolio Management Specialist, SARD W. Yang, Senior Financial Control Specialist, CTL

Peer reviewer J.L. Gomez, Principal Public Management Specialist, Southeast Asia Department In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

PROGRAM AT A GLANCE

I. THE PROPOSAL 1

II. THE PROGRAM 1

A. Rationale 1

B. Impact and Outcome 4

C. Outputs 4

D. Development Financing Needs 5

E. Implementation Arrangements 7

III. TECHNICAL ASSISTANCE 7

IV. DUE DILIGENCE 8

A. Technical 8

B. Economic 8

C. Governance 9

D. Poverty and Social 9

E. Safeguards 9

F. Risks and Mitigating Measures 9

V. ASSURANCES AND CONDITIONS 10

VI. RECOMMENDATION 10

APPENDIXES

1. Design and Monitoring Framework 11

2. List of Linked Documents 14

3. Development Policy Letter 15

4. Policy Matrix 18

Project Classification Information Status: Complete

PROGRAM AT A GLANCE

Source: Asian Development BankThis document must only be generated in eOps. 04052017113912315051 Generated Date: 25-Aug-2017 13:43:18 PM

1. Basic Data Project Number: 49209-001Project Name Second West Bengal Development

Finance ProgramDepartment/Division

SARD/SAPF

Country India Executing Agency Finance Department - Government of West BengalBorrower India

2. Sector Subsector(s) ADB Financing ($ million)Public sector management Public expenditure and fiscal management 300.00

Total 300.00

3. Strategic Agenda Subcomponents Climate Change Information Inclusive economic growth (IEG)

Pillar 1: Economic opportunities, including jobs, created and expanded

Climate Change impact on the Project

Low

4. Drivers of Change Components Gender Equity and MainstreamingGovernance and capacity development (GCD)

Institutional developmentPublic financial governance

Knowledge solutions (KNS) Application and use of new knowledgesolutions in key operational areas

Partnerships (PAR) Commercial cofinancingImplementationPrivate Sector

Private sector development (PSD)

Conducive policy and institutional environment

Some gender elements (SGE)

5. Poverty and SDG Targeting Location ImpactGeographic TargetingHousehold TargetingSDG Targeting

NoNoYes

Rural MediumUrban Medium

SDG Goals SDG8

6. Risk Categorization: Complex .

7. Safeguard Categorization Environment: C Involuntary Resettlement: C Indigenous Peoples: C.

8. Financing

Modality and Sources Amount ($ million)

ADB 300.00 Sovereign Stand-Alone Policy-Based Lending (Regular Loan): Ordinary capital resources

300.00

Cofinancing 0.00 None 0.00

Counterpart 131.25 Government 131.25

Total 431.25

Note: An attached technical assistance will be financed on a grant basis by the Technical Assistance Special Fund

(TASF-OTHERS) in the amount of $500,000.

I. THE PROPOSAL

1. I submit for your approval the following report and recommendation on a proposed policy-based loan to India for the Second West Bengal Development Finance Program. The report also describes the proposed technical assistance (TA) for Supporting the Second West Bengal Development Finance Program, and if the Board approves the proposed loan, I, acting under the authority delegated to me by the Board, approve the TA.1 2. The proposed program seeks to facilitate the continuation of a comprehensive fiscal consolidation program in West Bengal initiated in 2012. This will generate fiscal savings and, thereby, assist West Bengal to augment growth-enhancing development financing and improve delivery of public services.

II. THE PROGRAM A. Rationale 3. The need to develop a comprehensive program that addresses fiscal consolidation and development for the Government of West Bengal (GOWB) has been on the agenda of the Asian Development Bank (ADB) since 2005 when the preparatory stage of a policy-based loan was first initiated.2 This acquired renewed focus in 2011 when the state introduced a series of reforms with the change in state administration. Since then, ADB and GOWB have been in constant policy dialogue to develop a durable reform and developmental agenda starting with the preparatory stage of the first policy-based loan in 2012.3

4. In view of the GOWB’s fiscally-stressed situation, ADB approved a policy-based loan of $400.0 million and a TA grant of $0.7 million to India in 2012 for the first West Bengal Development Finance Program (the first program). The key contributory factors to the fiscal stress were the state’s low own-tax revenue4 effort and a high level of non-discretionary expenditure (salaries, interest payments, and pensions), which adversely affected GOWB’s ability to pursue its development financing objective.5 This provided the rationale to the first program, which aimed to create the fiscal space to augment and sustain higher development spending (public investment) in the state.

5. Given the difficulties of rationalizing public expenditure over 2‒3 years, ADB and GOWB agreed that the first program would facilitate the necessary steps to augment revenue and lay the foundations for improved targeting of scarce public resources to improve the overall efficiency of

1 The proposed program is a continuation of the West Bengal Development Finance Program (the first program). A

follow-on program was envisaged in the original design of the first program. 2 West Bengal is a densely populated state, fourth largest in India, with a population of 91 million people and

strategically located in eastern India bordering Bangladesh, Bhutan, and Nepal. 3 ADB. 2012. Report and Recommendation of the President to the Board of Directors for Proposed Policy-Based Loan

and Technical Assistance Grant to India for West Bengal Development Finance Program. Manila (Loan 2926-IND, approved on 30 October 2012).

4 The state’s revenue receipts comprise (i) own revenues, which include those tax and non-tax revenues that fall within the jurisdiction of the Government of West Bengal (GOWB), and (ii) transfers from the Government of India in the form of grants and share in central government’s taxes and duties.

5 These have had an adverse impact both in terms of (i) preventing effective use of the budget as an instrument to set policy priorities particularly through discretionary spending; and more importantly, (ii) constraining both public and indirectly private investments, thus undermining economic growth and development in the state. These have also had serious implications for manufacturing growth in the state leading to a narrowing of the commercial tax base.

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spending. The GOWB achieved full compliance on all policy actions under the first program, and has moved beyond the goals of the first program.6 Independent assessments recognized the GOWB’s commitment to fiscal consolidation, and the GOWB received several awards for e-governance in tax administration in 2014.7

6. Policy actions in the first program clearly enhanced the revenue performance of GOWB in a broad-based manner, and improved the state’s finances (Table 1). Public investment (as a percentage of gross state domestic product [GSDP]), reached almost 1.3% in FY2016 from 0.5% in FY2012, although the fiscal deficit reduced to 2.2% in FY2016 from 3.4% in FY2012. This was one of the major contributions of the first program.

Table 1: Key Fiscal Parameters (% of gross state domestic product unless stated otherwise)

Item FY2010 FY2012 FY2015 FY2016

Fiscal deficit 6.3 3.4 3.4 2.2 Revenue deficit 5.4 2.8 2.1 1.0 Capital outlay 0.8 0.5 1.2 1.3 Debt stock 42.0 39.3 34.7 32.6 Cost of revenue collection as a percentage of revenue

2.43 1.64 1.03 …

Own-tax revenue 4.2 4.7 4.9 4.5 (…) = not available, FY = fiscal year. Source: Government of West Bengal, Finance Accounts, FY2010–FY2016.

7. The first program was an example of successful partnership between the GOWB (and the Government of India) and ADB. It critically hinged on the political commitment of GOWB to bring about necessary fiscal reforms, so that it can set the fiscal objectives on a balanced and sustainable path geared toward meeting the state’s long-term development financing needs. 8. It was recognized in the original design of the first program that the full effect of the reforms on improvements of public service delivery would need a period of 5 years to materialize, and that the GOWB will require additional support under a follow-on program. 8 Additional external assistance is required to sustain the reform momentum because of the following reasons:

(i) Some of the reforms already initiated, by their very nature, have a long-term implementation cycle. The foundations of these reforms were laid under the first program but they now need to be carried forward. These reforms include linking the medium-term expenditure frameworks (MTEFs), initiated under the first

6 The PCR rating for the first program was successful. The TA was rated highly successful. ADB. 2015. Project

Completion Report for West Bengal Development Finance Program. Manila. 7 In recognition of the success of many e-governance initiatives, the GOWB’s Directorate of Commercial Taxes

received the FY2015 Government of India’s National Award for excellence in government process re-engineering. Similarly, the Finance Department received FY2014 CSI-Nihilent e-governance awards for (i) promotion of information management in administration of commercial taxes, and (ii) workflow-based file and letter tracking system. Furthermore, the Excise Department received the 2014 Skotch digital inclusion award for the e-Abgari system, which introduced an online tax filing system in the state excise administration that also helps track production, distribution, and sale of liquor. Finally, the Finance Department received an award from the Chief Minister on the occasion of the 68th Independence Day of India on 15 August 2014 for the outstanding contribution to citizen-friendly tax reforms and e-governance. In recognition of the improvements in finance and tax-related compliances, GOWB was recognized by the Department of Industrial Policy and Promotion under the Ministry of Commerce and Industries, Government of India in May 2014 report on improving business environment across India.

8 The GOWB requested a second program in a letter to the Department of Economic Affairs dated 29 October 2014. It considers a second program necessary to further consolidate its finances and step-up financing of infrastructure, social welfare, and development programs, which are important prerequisites for improved service delivery.

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program, with actual budget allocations; payments for the voluntary retirement scheme (VRS) and/or early retirement scheme (ERS) in selected state-owned enterprises (SOEs) to ensure effective implementation of the subsidy rationalization strategy; and digitizing legacy data on registered property deeds in all registration offices in the state. A continued assistance for such reforms through the proposed second program would consolidate and sustain gains made towards better own-revenue management and expenditure rationalization.

(ii) The first program focused on augmenting public investment. However, creating an enabling environment for facilitating private investment, especially in the areas of social and economic infrastructures, is equally important in the context of growth and public service delivery. Thus, the second program envisages supporting private investments more directly. This is intended to be achieved by creating an infrastructure facility for supporting project preparation, development, and appraisal activities as well as for viability gap funding (VGF).9

(iii) The follow-on reforms will have major cost implications, such as linking the

medium-term expenditure frameworks (MTEFs) with actual budget allocations; payments for the voluntary retirement scheme (VRS) and/or early retirement scheme (ERS) in selected state-owned enterprises (SOEs), settlement of liabilities of two SOEs, and VGF for PPP projects. If GOWB has to incur the entire cost of reforms, then this could undermine GOWB’s regular budgetary allocations for public investment (enhanced under the first program).

9. An integrated solution comprising a policy-based loan with clear program costs supported by the attached TA is the appropriate lending approach and modality. This will help ADB and GOWB to design and implement additional policy actions to carry forward GOWB’s own reform agenda without putting unsustainable strain on the public exchequer to finance reforms costs. The second program will support key elements of the state’s agenda including making the tax administration more efficient and transparent through simplification of rules and e-governance, enhancing outlays for capital creation, and improving the business environment for micro, small and medium enterprises.10 10. ADB’s India country partnership strategy for 2018–202211 aims to support the Government of India’s goal of higher, inclusive, and sustainable economic growth with its emphasis on three pillars, viz. (i) boosting competitiveness to create better jobs; (ii) inclusive provision of infrastructure and services, comprising public sector management among other thrust areas; and (iii) addressing climate change and increase climate resilience. The strategy declares that ADB will extend assistance to improve the efficiency of public sector resource management at state, local body, sector (including public sector undertaking), and project level. The first area of emphasis in public sector management includes ADB’s support towards fiscal space creation and sound fiscal discipline at state and urban local bodies levels, through fiscal consolidation and improved capacity of public financial management. Support may include budgetary reforms with

9 Viability gap funding (VGF) is a grant that is provided as capital subsidy to attract private participation in those public-

private partnership (PPP) projects that have economic justification but may not be financially viable without that grant. 10 Government of West Bengal, Finance Department. 2017. Budget 2017‒2018: Speech by Finance Minister. Kolkata

http://www.wbfin.nic.in/Page/budgetSpeech.aspx. 11ADB. Forthcoming. Country Partnership Strategy: India, 2018–2022 Accelerating Inclusive Economic Transformation.

Manila. The overall goal of the forthcoming country partnership strategy is in line with ADB. 2013. Country Partnership Strategy: India, 2013-2017. Manila.

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medium-term expenditure frameworks, rationalization of recurrent expenditures and subsidies, and strengthening revenue mobilization systems of state governments and urban local bodies. 11. A key lesson learned from the first program, which also provides the rationale for the proposed second program, is that sustained political commitment and strong ownership of reforms in the state is the most important prerequisite for a successful policy-based loan. Another important lesson is that ownership is guaranteed through long-term association with the development partner(s) and continuation of the key implementation staff. B. Impact and Outcome 12. The impact will be improved accessibility, quality, and affordability of public services.12 The outcome will be improved and sustained investment in the state, particularly in the social and economic sectors.13 C. Outputs 13. The three output areas under the second program will be:14

(i) Expenditure rationalization efforts accelerated. To consolidate reforms initiated under the first program, the second program will include (a) VRS and/or ERS for select SOEs, including state transport corporations and Shalimar Works Limited (as part of continued implementation of the action plan on subsidy rationalization prepared under the first program);15 (b) settlement of liabilities for restructuring of inoperative or loss-making SOEs; 16 (c) linking MTEFs (health and school education) initiated under the first program to the actual budget allocations for FY2019;17 (d) implementing the remaining three modules of the integrated financial management system; 18 and (e) strengthening internal audit in the Finance Department.

12 Government of West Bengal, Department of Planning. 2013. Annual Plan 2013‒2014. Kolkata. 13 The design and monitoring framework is in Appendix 1. 14 There are 25 policy actions under the second program, of which 11 are in the first tranche. The GOWB has already

complied with the policy actions in the first tranche, which is expected to be released in October 2017. The balance 14 second tranche actions are expected to be completed within 22 months of the release of the first tranche, or by August 2019.

15 State transport corporations include Calcutta State Transport Corporation, Calcutta Tramways Company, South Bengal State Transport Corporation, North Bengal State Transport Corporation, and Shalimar Works Limited.

16 These include National Iron and Steel Company Limited and Neo Pipes and Tubes Company Limited. 17 An MTEF requires policymakers to look across sectors, programs, and projects to examine how public spending can

best serve national development objectives over the medium term. In doing so, they must weigh the importance attached to short-term goals against the attached to medium-term objectives and set aside the narrow self-interests of spending agencies. MTEFs can promote fiscal discipline by addressing several causes of deficit bias. By specifying an overall resource constraint, MTEFs rein in the political tendency to overcommit public resources (the common pool problem) by requiring policymakers to acknowledge that the total amount of resources is limited, to negotiate collectively, and to commit themselves to detailed multiyear fiscal constraints. Further, by imparting a medium-term perspective to budgeting and taking into account the future fiscal costs of government policies and programs, an MTEF can fill information gaps that allow politicians to renege on their commitments to implement affordable policies. A few studies suggest that fiscal discipline is stronger in many countries after adoption of MTEFs. World Bank. 2013. Beyond the Annual Budget: Global Experience with Medium-Term Expenditure Frameworks. Washington, D.C).

18 Four out of the seven modules have been implemented under the first program viz.drawing and disbursement module, computerization of salary accounts (COSA) software, the budget-treasury interface (e-allotment) module, and the government revenue receipt portal system. The three remaining modules are e-pradan, e-centralized treasury system, and centralized budget monitoring system.

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(ii) Facilitation of private investment improved. The state’s public‒private

partnership (PPP) policy was developed under the first program. To catalyze private investments in the state further, it is proposed that the GOWB sets up the West Bengal Investment and Infrastructure Development Fund (WBIIDF) to facilitate PPPs through VGF, with emphasis on health and education projects.19 In addition, the GOWB will set up a centralized single window portal for statutory compliance requirements for micro, small, and medium enterprises to support ease of doing business.

(iii) Revenue administration strengthened. Activities proposed under the program

are broadly in continuation of the reform agenda initiated under the first program. These include: (a) improved tax monitoring by the Directorate of Commercial Taxes; (b) completion of preparatory steps for integration with the goods and services tax network; 20 (c) continued support to information technology (IT) systems in strengthening administration of the Excise Directorate; (d) continued support to IT systems in strengthening administration of the Land and Land Reforms Department, and the Directorate of Registration and Stamp Revenue to complete the digitization of legacy deed data in both departments, and enable simultaneous mutation of land records on the registration of a property; and (e) improved service delivery for taxpayers by setting up facilitation centers in the selected registration offices.

14. The objective of the second program is to help the GOWB sustain a fiscal profile that ensures elevated public investment in the state without breaching the key fiscal targets. Higher investment in economic and social infrastructure, combined with policies to promote private investment, will remain an important prerequisite for sustaining high growth and employment. Without high growth, especially manufacturing growth, GOWB’s own revenue will not grow in adequate measure to support the state’s development financing needs. Once public finances are placed on a sustainable path, the GOWB will also be in a strong position to provide affordable public services, leading to a discernible positive impact on the livelihoods of the people of West Bengal.

D. Development Financing Needs 15. A development financing gap has been estimated based on discussions with GOWB about (i) additional development financing needs, (ii) the current fiscal profile of the state, and (iii) a sustainable fiscal consolidation road map for 5 years (FY2018‒FY2022) to carry forward fiscal consolidation efforts initiated under the first program. At a macro level, the proposed second program will help the state to augment and sustain development financing. Development expenditure (capital outlays) as a percentage of gross state domestic product (GSDP) is expected to rise from 1.3% in FY2016 to 1.5% and 1.7% in FY2018 and FY2019, respectively, so as to eventually reach 2.2% by FY2022 under the program. The policy reforms under the program will lead to improved revenue generation and contain growth of total expenditure leading to improved fiscal outcome under a reform scenario. The reforms will generate additional revenue equivalent to $1.9 billion over the program period directly through revenue administration reforms, and

19 This will be in line with the Government of India’s policy for VGF. 20 Goods and services tax is a comprehensive, multi-stage, destination-based single indirect tax that will be levied on

every value addition and subsumes within it 5 taxes at the central level and 6 taxes at the state level. Other levies which were applicable on inter-state transportation of goods have also been done away with in GST regime. It has been implemented with effect from 1 July 2017.

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indirectly through revenue buoyancy impact of increased growth-enhancing investments. The second program will thereby contribute towards sustainability while increasing development spending in a sustained manner. However, there is a development financing gap (additional capital outlays plus additional current expenditure under the ADB-supported reform program net of new fiscal space created under the program) of $431.3 million over the program period. ADB’s assistance will help cover 69.6% of the gap (Appendix 5).21

16. Based on the development financing requirements of the policy reform program, the Government of India has requested a regular loan in the amount of $300 million equivalent from ADB’s ordinary capital resources, in regular terms, to help finance the program. Two tranches in the amount of $150 million equivalent each are envisaged, with the first tranche disbursed upon loan effectiveness, and the second tranche approximately 22 months after the first tranche. 17. At the request of the Government of India,22 ADB will provide the Government of India with an option to request disbursement in Indian rupees (INR) for either or both of the tranches under the second program.23 In effect, withdrawals under either or both of the tranches may be made in INR or United States Dollar (USD), on terms and conditions set forth in the draft loan and program agreements. The local currency financing option is at the discretion of the Government of India―it can choose not to exercise it. At the same time, ADB has provided this option to the Government of India on a best efforts basis. If the market condition is not conducive and ADB is unable to raise INR in full, the disbursement for that tranche will be, in part or in full, as applicable, in USD. 18. The USD portion of the loan will have a 15-year term, including a grace period of 3 years, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a commitment charge of 0.15% per year, and such other terms and conditions as set forth in the draft loan and program agreements. Based on the straight-line method, the average loan maturity is 10.39 years, and there is no maturity premium payable to ADB. The Government of India will relend to GOWB the local currency generated from the proceeds of the total loan amount in USD in accordance with its arrangement for transfer of external assistance to the GOWB. The tenor and grace period of the INR portion of the loan will match that of the USD loan, and have a 15-year term, including a grace period of 3 years. The terms and conditions of any disbursement in INR will be specified in the INR pricing notice, provided to the GOWB in response to its withdrawal request for disbursement in INR.24 19. The Government of India has provided ADB with (i) the reasons for its decision to borrow in local currency and USD under LIBOR-based lending facilities based on the above terms and conditions, and (ii) an undertaking that these choices are its own independent decision and not made in reliance on any communication or advice from ADB.

21 Economic Analysis (accessible from the list of linked documents in Appendix 2). 22 This request was followed by the Government of India’s relaxation of its regulatory requirements, facilitating ADB to

raise INR funding. ADB may raise INR funding by, among others, issuance of local currency bonds or through cross-currency swaps with domestic bank counterparties.

23 ADB. 2005. Introducing the Local Currency Loan Product. Manila. The drawdown amount in INR would be computed using the ADB foreign exchange book rate (https://forex.adb.org/fx_rate/) on the date of receipt by ADB of the INR withdrawal request.

24 Government of India can request for indicative cost any time before the disbursement date and it will submit a formal irrevocable withdrawal request at least 20 days prior to the requested disbursement date.

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E. Implementation Arrangements

20. The Finance Department of GOWB will continue to be the executing agency of the second program, and the Principal Secretary of the Finance Department will be the focal point for matters pertaining to the program. 21. The Fiscal Policy and Management Unit (FPMU), set up during implementation of the first program, will assist the line departments implementing the program. It will be headed by a senior GOWB official as the program director. The FPMU will be responsible for:

(i) overall coordination and monitoring of the program, including the policy actions; (ii) preparing and submitting all required reports to ADB; (iii) submitting the quarterly reports to ADB; and (iv) helping to implement the attached TA.

22. Procurement, advance contracting, and retroactive financing are not expected. The program will be implemented over 2 years. The proceeds of the loan will be disbursed in accordance with ADB’s simplification of disbursement procedures and related requirements for policy-based loans.25 ADB will monitor program implementation through periodic progress reports and will field regular missions to confirm fulfillment of policy actions for tranche release.

III. TECHNICAL ASSISTANCE 23. The attached TA will strengthen the key institutions responsible for implementing reforms to improve fiscal management performance in the state. The TA components are:

(i) Revenue administration strengthened. The TA will support the GOWB in (i) implementation of the goods and services tax; (ii) implementation of supply chain management system in excise, and (iii) strengthening of the property registration system.

(ii) Project appraisal and monitoring capacity strengthened. The TA will train and assist FPMU in project appraisal and monitoring.

(iii) Medium-term expenditure frameworks developed. Support will be provided to update the MTEFs prepared under the first program and link the updated MTEFs with actual budget allocations for FY2019.

(iv) West Bengal Investment and Infrastructure Development Fund operationalized. Technical support will support and build capacity of the FPMU staff to select, structure, and develop the PPP projects that will be provided viability gap funding under the WBIIDF.

(v) Internal audit strengthened. The TA will help strengthen the internal audit department within the Finance Department, including introduction of a risk-based audit manual.

24. The TA is estimated to cost $600,000, of which $500,000 will be financed on a grant basis by ADB’s Technical Assistance Special Fund (TASF-Others). The GOWB will provide counterpart support in the form of counterpart staff remuneration, office accommodation and supplies, local transport, other logistical support, and other in-kind contributions. 25. The implementation arrangements for the TA will be aligned with those of the policy-based

25 ADB. 1998. Simplification of Disbursement Procedures and Related Requirements for Program Loans. Manila.

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loan. The FPMU will implement the TA components, and the Finance Department will carry out overall supervision and coordination. A total of 28 person-months of consultancy services (national) will be required intermittently. The consulting firm will be engaged for recruiting the national consultants using the quality and cost-based selection method with a standard quality cost ratio of 90:10. All consultants will be recruited in line with ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time). All disbursements under the TA will be made in accordance with ADB's Technical Assistance Disbursement Handbook (2010, as amended from time to time).

IV. DUE DILIGENCE

A. Technical 26. Several outputs of the program have technical components at their core. The information and communication technology-driven initiatives such as QR-code based holograms for liquor bottles and SMS-based detection facility for liquor bottles will continue to boost compliance of various state taxes. Integration with the goods and services tax network will remain a major challenge. Preparation, selection, and monitoring of PPP projects to be funded under the WBIIDF will require strong financial and project management skills. Updating the MTEFs and linking them with actual budget allocations will require sound technical knowledge. Capacity building support under the program will assist the relevant government departments to manage these technical operations better. B. Economic 27. The program was subject to economic analysis, the results of which demonstrate that its benefits considerably outweigh the costs. The key direct benefits considered are (i) reduced compliance costs in revenue administration (due to e-filing of tax returns, for example, and other IT-based taxpayer services) leading to higher tax buoyancy; (ii) fiscal savings from greater efficiency and cessation of systemic leakages; and (iii) targeted public expenditure on health and education over the medium to long run. A comparison between the baseline and the pro-growth reform program scenarios shows that the overall fiscal deficit is expected to remain around the target figure of 3% of GSDP despite higher capital outlays (development financing) under the reform scenario (Table 2). Fiscal space created under the program, resulting both from revenue augmentation and expenditure rationalization, will contribute to this outcome. Moreover, the debt stock–GSDP ratio will decline from 33.71% in FY2017 to 30.01% in FY2022 under the reform scenario (footnote 21).

Table 2: Baseline and Reform Scenarios (% of gross state domestic product)

Item FY2018 FY2019 FY2020 FY2021 FY2022

Baseline Scenario Fiscal surplus or deficit (2.95) (2.90) (2.85) (2.85) (2.85) Capital outlays 1.45 1.50 1.60 1.70 2.05 Debt stock 32.86 32.05 31.29 30.62 30.02 Reform Scenario

Fiscal surplus or deficit (2.93) (3.07) (2.89) (2.88) (2.82) Capital outlays 1.50 1.70 1.80 1.90 2.20 Additional capital outlays 0.05 0.20 0.20 0.20 0.15 Debt stock 32.83 32.20 31.41 30.70 30.01

( ) = negative. Source: Asian Development Bank estimates.

9

C. Governance 28. As part of program preparation, a governance risk assessment was conducted along the lines prescribed by the implementation guidelines of ADB’s Second Governance and Anticorruption Action Plan. ADB’s Anticorruption Policy (1998, as amended to date) was also explained to and discussed with the GOWB’s Finance Department. Consistent with its commitment to good governance, the implementation of the program will adhere to ADB’s Anticorruption Policy. This assessment was complemented by a review of areas of possible risk and vulnerability in state financial management. The assessment found some risks that could affect the proposed program. They include risks related to (i) political support for and ownership of GOWB, especially for sensitive reforms; and (ii) institutional dimensions of the proposed program (e.g., weak capacity in the relevant institutions). The financial assessment found several areas of concern: (i) weak appraisal capacity of investment projects and integration of capital and current budgets through proper planning, (ii) weak internal audit systems, and (iii) lack of alignment between sector goals and resource allocation. 26 While no major risks of mismanagement of resources at the executing level can be discerned, issues identified in the financial assessments are targeted for capacity development under the TA and policy changes under the loan. D. Poverty and Social 29. The poverty reduction and social impacts of the program are positive. The support for augmenting and sustaining development financing will have a substantial impact on human and income poverty. The program’s emphasis on better expenditure targeting, especially in health and education through linking MTEFs with budget allocations, is clearly geared toward protecting the poor and other vulnerable groups. The health indicators for women and children in the state are poor because of ineffective delivery of public services and lack of adequate budget allocations. This is manifest in many ways. For example, higher maternal mortality rates in West Bengal, compared with some other advanced states, reflect inadequate health services and facilities for antenatal and obstetric care. Rectifying these problems becomes more challenging if GOWB is unable to invest in economic and social infrastructure―either directly or through partnerships with the private sector.27 E. Safeguards 30. Given the nature of the program, all three safeguard categories (environment, involuntary resettlement, and indigenous peoples) are categorized C. F. Risks and Mitigating Measures 31. Major risks and mitigating measures are described in detail in the risk assessment and risk management plan.28 Fiduciary risks are moderate because of strong commitment of GOWB to reforms, as evidenced in the first program. Overall, the risks are assessed to be low and the integrated benefits and impacts are expected to outweigh the costs.

26 An updated Results-Based Public Sector Management Assessment Framework (accessible from the list of linked

documents in Appendix 2). 27 Summary Poverty Reduction and Social Strategy (accessible from the list of linked documents in Appendix 2). 28 Risk Assessment and Risk Management Plan (accessible from the list of linked documents in Appendix 2).

10

Table 3: Summary of Risks and Mitigating Measures Risks Mitigating Measures

GOWB’s commitment to sensitive fiscal reforms is not sustained.

ADB staff will engage continually with GOWB, and will adopt pre-emptive strategy to avoid potential bottlenecks. ADB staff will also carry out regular monitoring to ensure alignment of reforms measures with policy initiatives taken by GOWB.

Weak capacities in institutions affects proper identification and development of the PPP subprojects

Two experts (i.e., PPP specialist and PPP legal specialist) will be provided under the TRTA to train the staff on relevant topics and assist the FPMU in carrying out key activities like project identification, transaction advisory, and bid process management.

Interdepartmental transfers of key GOWB officials adversely impacts project implementation.

ADB will engage with GOWB to stress the importance of continuity of GOWB staff. TRTA consultants will build the capacity of the next level of department officials and ensure continuity if senior officials are transferred.

Fiduciary risks ADB will support improved public financial management through TRTA, policy actions under the loan, and effective monitoring of the program outputs.

Exogenous macroeconomic shocks may impact investment decisions.

ADB staff engages continually with GOWB to devise an appropriate response to such shocks.

FPMU = Fiscal Policy and Management Unit, GOWB = Government of West Bengal, PPP = public‒private partnership, TA = technical assistance. Source: Asian Development Bank.

V. ASSURANCES AND CONDITIONS

32. The Government of India and the GOWB have assured ADB that the implementation of the program shall conform to all applicable ADB policies including those concerning anticorruption measures, 29 safeguards, gender, procurement, consulting services, and disbursement. Full compliance with all first tranche policy actions will be the condition for loan effectiveness.

VI. RECOMMENDATION 33. I am satisfied that the proposed policy-based loan would comply with the Articles of Agreement of the Asian Development Bank (ADB) and recommend that the Board approve the loan of $300,000,000 equivalent to India for the Second West Bengal Development Finance Program, from ADB’s ordinary capital resources, in regular terms, with interest to be determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility; for a term of 15 years, including a grace period of 3 years; and such other terms and conditions as are substantially in accordance with those set forth in the draft loan and program agreements presented to the Board.

Takehiko Nakao President

28 August 2017

29 ADB. 2006. Second Governance and Anticorruption Action Plan (GACAP II). Manila.

Appendix 1 11

DESIGN AND MONITORING FRAMEWORK

Impact the Program is Aligned with: Accessibility, quality, and affordability of public services improved (Budget Speech 2017–2018)a

Results Chain

Performance Indicators with Targets

and Baselines

Data Sources and

Reporting

Risks

Outcome Investment in the state, particularly in social and economic sectors, improved and sustained

By 2019: a. Gross capital formation (as a

percentage of GSDP) in the state improved by 2% points (2015 baseline: 35.4%)

b. School drop-out rate in classes 3‒10

reduced by 0.75%b (2016 baseline: classes 3‒4: 2.23%; classes 5‒7: 3.46%; and classes 8‒10: 14.08%)

a. Annual finance accounts and annual economic review of the GOWB for FY2019 b. Memo from the Finance Department, GOWB

Exogenous macroeconomic shocks may impact investment decisions.

Outputs 1. Expenditure

rationalization efforts accelerated

By 2019: 1a. At least 70% VRS and/or ERS

disbursed to targeted employees of four state transport corporationsc

and Shalimar Works Limited (2016 baseline: not applicable)

1b. At least 90% of total financial

liabilities of Neo Pipes and Tubes Company Limited and National Iron and Steel Company Limited (Rs462.13 Crore) completely settled (2016 baseline: not applicable)

1c. Gender sensitive MTEFs for the Department of Health and Family Welfare, and the Department of School Education integrated into the budget for FY2019, and gender impact assessment reports submitted for the selected programs (2016 baseline: not applicable)

1d. OPD introduced in all 34 new BRGF

hospitals (2016 baseline: none) 1e. 100% premium paid for at least 95%

of the registered beneficiaries under Rashtriya Swasthya Bima Yojana (National Health Insurance Scheme)

1a-1g. Memo from the Finance Department, GOWB

GOWB’s commitment to sensitive fiscal reforms is not sustained. Interdepartmental transfers of key officials adversely impact project implementation

12 Appendix 1

Results Chain

Performance Indicators with Targets

and Baselines

Data Sources and

Reporting

Risks

(2015 baseline: premium paid for 81% of registered beneficiaries)

1f. New risk-based internal audit manual

fully operationalized in Finance Department with submission of three cases under this new procedure (2016 baseline: not applicable)

1g. Remaining 3 modules of IFMS have

been operationalized (2016 baseline: 4 of 7 modules operationalized)

1h. Finance Department ensured that

the capital outlay is not less than 1.5% of GSDP (revised estimate) in FY2018 and 1.7% of GSDP (budget estimate) in FY2019 (2015‒2016 baseline: 1.3%)

1h. Budget Statements for FY2019, GOWB

2. Facilitation of private investment improved

2a. Finance Department disbursed and/or paid at least 60% of the VGF corpus and submitted a detailed status report on VGF disbursements (2016 baseline: VGF corpus created with initial allocation of ₹3000 million)

2b. Centralized single window portal for

important statutory compliance requirements for micro, small, and medium enterprises established (2016 baseline: single window system launched for large industries)

2a-b. Memo from the Finance Department, GOWB

3. Revenue administration strengthened

3a. At least 80% of commercial tax circles integrated under the tax monitoring system (2016 baseline: 56.25%)

3b. Verification of 100% of permanent

account number of the dealers completed as preparatory steps for the state’s integration to the new GSTN (2016 baseline: partially verified)

3c. Excise Directorate fully implemented

the QR-code based holograms along with SMS-based detection facility on 100% of liquor bottles (2016 baseline: 40% coverage).

3a-g. Memo from the Finance Department, GOWB

Appendix 1 13

Results Chain

Performance Indicators with Targets

and Baselines

Data Sources and

Reporting

Risks

3d. Directorate of Registration and Stamp Revenue completed digitalization of old property record data in all registration offices in the state (2016 baseline: completed in 5% of the 247 registration offices).

3e. Facilitation centers set-up in 50

registration offices (2016 baseline: 0).

3f. Land and Land Reforms Department

completed digitization of old land records in all block land and land reform offices in the state (2016 baseline: partially digitized).

3g. Directorate of Registration

implemented the system of simultaneous registration and mutation in all registration offices in the state with the corresponding land offices (2016 baseline: implemented in 39% of the 247 registration offices)

Key Activities with Milestones Not applicable. Inputs ADB: $300 million equivalent (regular OCR loan) $500,000 (TASF-Others) Government: $131.25 million

Assumptions for Partner Financing Not applicable.

ADB = Asian Development Bank, BRGF = Backward Region Grant Fund, Crore = ten million, ERS = early retirement scheme, FY = fiscal year, GOWB = Government of West Bengal, GSDP = gross state domestic product, GSTN = goods and services tax network, IFMS = integrated financial management system, MTEF = medium-term expenditure framework, OCR = ordinary capital resources, OPD = outpatient department, QR = quick response, SMS = short message service, TA = technical assistance, TASF = technical assistance special fund, VGF = viability gap funding, VRS = voluntary retirement scheme. a Government of West Bengal, Finance Department. 2017. Budget 2017‒2018: Speech by Finance Minister. Kolkata

http://www.wbfin.nic.in/Page/budgetSpeech.aspx. b Drop-out rate reduction for each category (i.e., classes 3‒4, classes 5‒7, and classes 8‒10) will be 0.25% (under

tranche 1) and 0.50% (under tranche 2). c The four state transport corporations are: Calcutta State Transport Corporation, Calcutta Tramways Company, South

Bengal State Transport Corporation, and North Bengal State Transport Corporation. Source: Asian Development Bank.

14 Appendix 2

LIST OF LINKED DOCUMENTS http://www.adb.org/Documents/RRPs/?id=49209-001-3

1. Loan Agreement2. Program Agreement3. Sector Assessment (Summary): Public Sector Management4. Contribution to the ADB Results Framework5. Development Coordination6. Attached Technical Assistance Report7. Economic Analysis8. Country Economic Indicators9. International Monetary Fund Assessment Letter10. Summary Poverty Reduction and Social Strategy11. Risk Assessment and Risk Management Plan12. List of Ineligible Items

Supplementary Documents 13. Updated Results-Based Public Sector Management Assessment Framework14. Public‒Private Partnership Policy for the Government of West Bengal15. Development Financing Gap

Appendix 3 15

DEVELOPMENT POLICY LETTER

16 Appendix 3

Appendix 3 17

18 Appendix 4

POLICY MATRIX

First Tranche

Second Tranche

(22 months after the first tranche or earlier)

Accelerated expenditure rationalization efforts

Rationale: Improved allocation of scarce public resources, leading to better allocative efficiency of public funds.

1. Government of West Bengal (GOWB) to (a) announce, through a gazette notification, voluntary retirement scheme (VRS)/early retirement scheme (ERS) payments for (i) four state transport corporations (viz., Calcutta State Transport Corporation [CSTC], Calcutta Tramways Company [CTC], South Bengal State Transport Corporation [SBSTC] and North Bengal State Transport Corporation [NBSTC]); and (ii) Shalimar Works Limited (SWL); and (b) ensure disbursement of at least 70% of the VRS/ERS payments of the four state transport corporations and SWL for the targeted numbers of beneficiaries indicated in the table below. (Document required:

GOWB to submit a copy of the gazette notification

and the compliance report for VRS/ERS payments).

Name of

the public

sector

enterprise

Number of

people entitled

to VRS/ERS as

of 1 April 2016

Number of people

proposed for

VRS/ERS payments

in Tranche 1

CSTC 1000 338

CTC 600 0

SBSTC 100 80

NBSTC 1300 370

SWL 25 0

12. Finance Department to ensure (a) disbursement of at least 70% of the VRS/ERS payments of the four state transport corporations and SWL for the targeted numbers of beneficiaries indicated in the table below; and (b) submission of gender disaggregated database for beneficiaries. (Document required: GOWB to

submit a copy of the compliance report for

VRS/ERS payments and the gender disaggregated

database)

Name of

the public

sector

enterprise

Number of

people entitled

to VRS/ERS as

of 1 April 2016

Number of people

proposed for

VRS/ERS payments

in Tranche 2

CSTC 1000 662

CTC 600 600

SBSTC 100 20

NBSTC 1300 930

SWL 25 25

2. GOWB to announce, through a gazette notification, settlement of the financial liabilities of Neo Pipes and Tubes Company Limited (NPT) and National Iron and Steel Company Limited (NISCO), amounting to Rs462.13 Crores. 1 (Documents required: Finance

Department to submit a copy of the gazette

notification).

13. Finance Department to ensure that at least 90% of the financial liabilities of NPT and NISCO, amounting to Rs462.13 Crores, have been completely settled. (Document required: Finance Department to

submit a copy of the status report).

3. Finance Department to issue a circular to link budget allocations for FY2018–2019 with the MTEF, for the Department of Health and Family Welfare, and the Department of School Education, which include the activities indicated in the table below. (Document

required: Finance Department to submit a copy of

the circular for MTEF preparation, which shall

include the activities indicated in the table below).

14. Finance Department to: (a) issue a report on the actions taken with respect to the budget allocations for the FY2018–2019, based on the MTEF, for the Department of Health and Family Welfare, and the Department of School Education; and ensure completion of the activities covered in the circular, including those indicated in the table below; and (b) submit gender impact assessment reports for the

1 Crores means ten million. Notwithstanding the current figure of Rs462.13 crores as opposed to the earlier figure of Rs120.87 crores, the GOWB shall ensure that the additional amount thus required to comply with this settlement will also be borne from its State budget resources.

Appendix 4 19

First Tranche

Second Tranche

(22 months after the first tranche or earlier)

Upgradation2 of Elementary

Schools to Secondary Schools

with an objective of closer

access to education

100 schools

Upgradation of Secondary

Schools to Higher Secondary

Schools with an objective of

closer access to education

150 schools

Starting of OPD service in newly established BRGF Super Specialty Hospitals3

15 Hospitals

Rashtriya Swasthya Bima Yojana (RSBY)

Additional coverage for 100,000 families

FY2018-2019 budget allocations for the two major programs/schemes in each of the Department of Health and Family Welfare and the Department of School Education.a (Document required: Finance

Department to submit (a) copy of the report on the

actions taken, (b) copy of the budget document to

evidence fund allocation for the MTEF activities, (c)

four gender impact assessment reports for (i)

students benefited through reduced girl student

dropouts from classes 3rd to 10th, and (ii) female

patients treated in new OPDs and covered under

RSBY.)

Upgradation of Elementary

Schools to Secondary

Schools with an objective of

closer access to education

100 schools

Upgradation of Secondary

Schools to Higher Secondary

Schools with an objective of

closer access to education

150 schools

Starting of OPD service in newly established BRGF Super Specialty Hospitals

19 hospitals

RSBY 100% premium payment (for at least 95% of the beneficiaries registered under RSBY)

4. Finance Department to submit a status report on the implementation of the remaining three modules of the integrated financial management system (IFMS) (viz., e-Pradan, e-Centralized Treasury System [e-CTS], and Centralized Budget Monitoring System [CBMS]), which includes the following target timeline of completion for e-Pradhan and e-CTS: (a) all District Disbursement Offices shall have implemented and use e-Pradan by 31 December 2017; and (b) all treasuries shall have implemented and use e-CTS by 31 December 2017. (Document required: Finance Department to

15. Finance Department to fully operationalize CBMS. (Document required: Finance Department to

submit a copy of the report on the

operationalization of the remaining third and final

module of IFMS i.e. CBMS and submit a status

report on e-Pradan and e-CTS:).

2 “Upgradation of schools” includes addition of classrooms/hostel rooms/laboratories/library/furniture/books/equipments and engagement of more teachers in such schools. The cost of upgradation from elementary school to secondary school is about Rs9 million per school, and of upgradation from secondary school to higher secondary school is about Rs12 million per school. Thus, the total cost to school education department would be Rs2,700 million each for the school upgradation in first and second tranche actions. The cost to the Department of Health and Family Welfare will be Rs300 million each for the first and second tranche policy actions. The GOWB will provide counterpart funding on 70:30 basis vis-à-vis the ADB loan.

3 34 Super Specialty Hospitals are now in various stages of completion. OPD services including deployment of doctors and nurses will be undertaken in 15 hospitals under the first tranche and 19 hospitals under the second tranche.

20 Appendix 4

First Tranche

Second Tranche

(22 months after the first tranche or earlier)

submit a copy of the status report with completion

timelines for e-Pradan and e-CTS)

16. Finance Department to operationalize new risk-based internal audit procedures and submit a report on 3 cases wherein these new procedures have been fully implemented. (Document required: Finance

Department to submit a copy of the report on

implementation of the new risk-based internal audit

system on 3 cases).

17. Finance Department to ensure that capital outlay to gross state domestic product ratio is not less than 1.5% (revised estimate) for FY2017-2018 and 1.7% (budget estimate) for FY2018-2019. (Document required:

Finance Department to submit a copy of the

relevant budget documents).

Improved facilitation for private investment

Rationale: Improved business environment, leading to higher investment and improved manufacturing growth in the state. Higher private investment (through public–private partnerships [PPPs] in health and education, in particular) leading to better service delivery. 5. In continuation with the state’s PPP Policy of 2012, Finance Department to announce, through a gazette

notification: (a) a policy on providing viability gap

funding (VGF) to promote private sector investments in

the state; and (b) creation of West Bengal Investment

and Infrastructure Development Fund with a minimum

corpus of Rs300 Crores. 4 (Document required:

Finance Department to submit a copy of the gazette

notification for (a) the VGF policy, and (b) the

creation of the West Bengal Investment and

Infrastructure Development Fund with a minimum

corpus of Rs300 Crores).

18. Finance Department to disburse at least 60% of the VGF corpus and submit a detailed status report on the same. (Document required: Finance Department to

submit a copy of the status report on VGF

disbursements).

19. GOWB to operationalize a system of single-point contact for important statutory compliance requirements for micro, small and medium enterprises.b (Document required: Finance Department to submit a status report on the operationalization of the system)

Strengthened revenue administration

Rationale: Improved compliance leading to higher revenue mobilization. 6. The Directorate of Commercial Taxes to undertake the integration of the tax monitoring systems in at least 80% of Commercial Taxes Circles of the state through the integrated tax monitoring system. (Document required: Finance Department to submit a compliance report)

20. The Finance Department to complete the integration of the tax monitoring systems in the remaining 20% of Commercial Taxes Circles of the state through the integrated tax monitoring system. (Document required: Finance Department to submit a compliance report)

7. The Directorate of Commercial Taxes to complete verification of 100% of the permanent account number

4 The West Bengal Investment & Infrastructure Development Fund (WBIIDF) has been created under Cabinet Memo no. 622-F.B.

dated 16.8.2016 to provide Viability Gap Funding (VGF) to the projects which are taken up under PPP. Rs3,000 million have been transferred to the said VGF under U.O. no. 1936 dated 5/10/2016.

Appendix 4 21

First Tranche

Second Tranche

(22 months after the first tranche or earlier)

as the necessary preparatory step for the state’s subsequent integration into India’s new Goods and Services Tax Network. (Document required: Finance

Department to submit a status report).

8. The Excise Directorate to notify, through an administrative order, the introduction of QR-code based holograms on at least 50% of liquor bottles across the state to enable tracking of legally produced liquor, and a short messaging system (SMS)-based detection facility for citizens to identify illegal liquor. (Document required: Finance Department to submit a copy of the notification)

21. The Excise Directorate to fully implement the QR-code based holograms along with SMS-based detection facility on 100% of liquor bottles across the state. (Document required: copy of the status

report).

9. The Excise Directorate to notify, through the administrative order, the creation of new 51 Excise Circles under its administration and the provision of mobile support to its officers for effective enforcement and monitoring. (Document required: Finance

Department to submit a copy of the notification)

22. The Directorate of Registration to complete digitalization of old property record data in all registration offices in the state. (Document required:

Finance Department to submit a status report).

10. The Directorate of Registration to finalize the list of 50 important registration offices where facilitation centers will be set up and submit a plan for such centers.c (Document required: Finance Department

to submit a copy of the list of facilitation centers

and the plan).

23. The Directorate of Registration to set up facilitation centers in the 50 important registration offices. (Document required: Finance Department to

submit a status report).

24. The Land and Land Reforms Department to complete digitization of the old land records in all block

land and land reform offices in the state. (Document

required: Finance Department to submit a status

report).

11. The Directorate of Registration to implement a system of simultaneous registration and mutation in 100 registration offices, out of total 247 as on date, with the corresponding land offices. (Document required:

Finance Department to submit a copy of the status

report).

25. The Directorate of Registration to implement the system of simultaneous registration and mutation in all registration offices in the state with the corresponding land offices. (Document required: Finance

Department to submit a copy of the status report).

a The two programs/schemes of the Department of Health and Family Welfare are: (i) Rashtriya Swasthya Bima Yoina; and (ii) Janani Suraksha Yojana. The two programs/schemes of the Department of School Education are: (i) Drinking Water and Sanitation project; and (ii) Sarva Shiksha Abhiyan.

b A sample list of statutory compliances includes: (i) Certificate of Incorporation from the Office of Registrar of Companies (ROC), Ministry of Corporate Affairs; (ii) Environmental Clearance/No Objection Certificate (NOC) from West Bengal Pollution Control Board under The Environment (Protection) Act, 1986; (iii) Power connection from West Bengal State Electricity Distribution Company/Calcutta Electricity Supply Corporation under ‘The Electric Supply Act,1948; (iv) Registration with the Directorate of Commercial Taxes, GOWB under Sales Tax Act (Central Sales Tax & Value Added Tax Registration); (v) Registration with the Directorate of Commercial Taxes, GOWB under Section 7(1)/7(2) of Central Sales Tax Act, 1956; (vi) License under Factories Act, 1948; (vii) ‘NOC’/‘Fire Safety Certificate’ and ‘Fire License’ under West Bengal Fire Safety Act, 1950; and (viii) Trade License.

c Facilitation centers are aimed to provide quick and hassle-free delivery of services to citizens in major registration offices across the state. These centers will provide key services, such as: search and inspection of registered deeds; entry of personal and property details of a deed; and assessment of market value, including determination of chargeability of stamp duty, registration fees payable thereon and issuance of certified copies.