World Bank approves $150 million loan to Punjab for better finances, public services

World Bank approves $150 million loan to Punjab for better finances, public services

The World Bank has approved a loan of $150 million (nearly 1,200 crore) to Punjab to help it better manage its financial resources and improve access to public services, the global money lender said in a statement.

“The ‘Punjab: Building Fiscal and Institutional Resilience Program’ will support the state’s efforts to strengthen the institutional capabilities of various government departments, manage fiscal risks and make informed policy choices to support sustainable growth”, the statement said.

Terming Punjab’s growth as ‘below potential’, the World Bank said a combination of fiscal challenges and institutional capacity constraints ‘means that scarce resources are spread thin across development priorities’.

The World Bank said the new project will support Punjab’s development goals by strengthening planning, budgeting and monitoring functions and leveraging digital technology, adding that the project will also aim to increase accountability in the public procurement systems by supporting state-wide implementation of new legal and policy reforms.

“The World Bank is pleased to be a partner of the state of Punjab in the state’s effort to deliver timely, cost-effective and good-quality public services, which is critical for inclusive development,” Auguste Tano Kouame, the World Bank’s Country Director in India, was quoted in the statement. “This new project will support the implementation of the state’s new data policy, which aims to bring together various social protection initiatives and reduce potential leakages while delivering essential services”, he added.

The project will pilot two initiatives, the first to introduce a performance-based grants system for incentivising municipal corporations to improve service delivery. The second initiative includes demonstrating 24×7 water supply in select areas in Amritsar and Ludhiana.

On September 10, Punjab chief secretary Vijay Kumar Janjua had met a World Bank Delegation to complete the work of Punjab Municipal Services Impact Project, and said the objective of the project is to improve water supply in the above two cities. The $300 million project is jointly funded by the World Bank, Asian Infrastructure Investment Bank and the Punjab government.

The $150 million loan has a maturity of 15 years including a grace period of 6 months, the statement added.

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