World Bank Group approved USD 210 million for strengthening gram panchayats in West Bengal

The World Bank Group (WBG) on 15 March 2017 approved USD 210 million loan to strengthen gram panchayats (GPs) in West Bengal. The loan amount will be utilized for the implementation of the Phase II of the West Bengal Support to Institutional Strengthening of Gram Panchayat Program (ISGPP-II).

The ISGPP-II will support all 3,342 GPs in the state to effectively utilize untied and discretionary funds that are being provided to them under the inter-governmental fiscal transfer system.The program seeks to strengthen local communities’ participation in the planning, budgeting and financial management of projects undertaken in rural areas.

During the first phase of this project (ISGPP-I), performance-based block grants (PBG) were given to 1,000 better performing GPs within nine districts for investing in priority local infrastructure and service delivery projects. So far, 92,000 activities were carried out by the GPs under the ISGPP. Out of them, while 54 per cent of the activities belonged to the transport sector, 23 per cent in the areas concerning water and sanitation.

Similar activities are envisioned under ISGPP-II for all 3,342 GPs. These activities will generate economic benefits including employment generation and increased efficiency in spending. The ISGPP-II will accelerate the pace of decentralization to all gram panchayats across West Bengal through a state-wide unified performance-based grant (PBG) allocation system.

In order to access the PBG, GPs will be assessed on an annual basis through an independent Annual Performance Assessment (APA). The APA will be conducted for all 3,342 GPs in key performance areas including planning and budgeting, project execution and service delivery, accounting, financial reporting and auditing and transparency and accountability.

Some of the other areas that the program will focus on include building human resource capacity for increased transparency and accountability in local government functioning. To achieve these goals, a robust internal audit system will also be developed and implemented in all the gram panchayats.

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