Program and Performance Budgeting in India
2003 -2008 || U.S. Agency for International Development
The USAID-funded India State Fiscal Management Reform Project (REFORM) worked with the Government of Jharkhand (GoJ) between 2003 and 2009 to improve its overall fiscal management. At the request of the GoJ, the REFORM project was focused on introducing Program and Performance Budgeting (PPB) to state nodal departments, including the departments of health. This intervention was necessary to help improve the transparency and accountability of its annual budgeting process and to more effectively link results to budgetary obligations. Over 80 health service personnel in 23 districts of the state received training in performance budgeting.
The decision of the Government of India (GoI) to introduce Outcome Budgeting techniques required state governments to change the way their budgets were being prepared and presented. To this end the GoJ needed to develop its budget preparation capacity, as well as examine the systems under which budgets were currently being prepared and how the system could change to help facilitate the new procedures in a transparent and accountable way.
Deloitte worked closely with the GoJ by providing information and resources to help them implement the Program and Performance Budgeting (PPB) approach within their state budgeting activities. This budgeting technique, which is considered an internationally recognized best practice, helped the GoJ in its efforts to achieve a number of critical state goals:
An ambitious PPB roll-out plan was initiated in July, 2005 in Jharkhand with the goal of having at least a third of the state budget (both plan and non-plan) prepared in this manner by Fiscal Year (FY) 2007-08. In 2005, two pilot departments received training in PPB methodology and they prepared their FY 2006-07 budgets in the PPB format. Ten additional departments prepared budgets for FY 2007-08 using the skills received from REFORM project training workshops. To date, approximately 129 senior and middle level officials have been trained in PPB methodology. In addition, a PPB manual has been prepared and is in use by PPB Task Forces in these 12 GoJ nodal departments.
This significant progress has been possible due to the keen interest of the Finance Department, and Department of Health. The inaugural workshops during both years were attended by the Principal Finance Secretary and a number of Secretaries and other senior government officials. Some of the opinions expressed by GoJ officials on the PPB budgeting approach follow:
As a result of this PPB, the budgetary practices in the State began shifting their focus from projected outlays to actual outcomes. The new PPB-compliant budgets produced by the GoJ allowed more efficient transparency in public budgeting, helped provide government officials with clear performance measures (outcomes) against which they could measure their progress, and helped allow decision makers to more clearly articulate their goals and objectives as well as the outcomes the public can expect from the state government. More importantly, the REFORM project worked closely with the GoJ to help realize the following achievements:
The cumulative effect of these results has been an improvement in matching budget outlays to program outcomes in order to more effectively track public service delivery, identify budget over- or under-allocations, and generally help improve the quality of expenditure and health activities within the GoJ.
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