Medium Term Expenditure Framework (MTEF) for Water Sector, Rajasthan, India
Year - 2014
Client - Egis Eau (Project funded by European Union)
The State Partnership Programme (SPP), a multi-sector policy support programme (SPSP) in Chhattisgarh and Rajasthan is based on the European Commission (EC), India Country Strategy Paper (CSP, 2002-06) and National Indicative Programme (NIP, 2004-06). It aimed at poverty alleviation and provided sector budget support targeting pro-poor and sustainable reforms for the relevant sectors. Under the SPP and as a part of State Wide Water Sector Reforms, the Rajasthan Government's State Water Resource Planning Department (SWRPD), in association with the EU Technical Assistance (EU TA) team prepared a draft Water Sector MTEF for 2011-14 based on budgets and projection of various line departments.
We reviewed the existing MTEF and studied the differences between the financial planning and budgeting process of the water sector in Rajasthan; prepared a comprehensive update for the multi-year (2012-13 to 2014-15) need-based and resource-based rolling expenditure framework; and finally sensitised the state planners and the government about the value added MTEF as an improved budgetary tool for comparing the calculation process and projections made through the state's own estimates.
Our research entailed a three-pronged approach:
- Desk review of budget documents of preceding five years (fiscal year 2006-07, to 2010-11), earlier MTEFs, JRM Reports and relevant studies on water sector;
- Interviews and consultative exercises with concerned stakeholders i.e. State Water Resources and Planning Department (SWRPD), members of MTEF Working Group as well as other senior officials (including Principal Secretary) of all the line departments of water sector;
- In-depth discussions with accounts and audit personnel of water related departments about financial management and audit systems.
- The MTEF led to the designing of a "Resource based budget" and a "Need based budget" for the entire water sector over three year period;
- O&M expenditure was included in the budget for the first time in the history of water sector, by taking into account both salary and non-salary components;
- Spending inefficiency gap was identified, by doing counterfactual analysis, for both on-budget and off-budget funds.
"IPE Global has completed the MTEF very well. We are pleased to note that the Government of Rajasthan has also appreciated the report ",
Arno Schaefer, Head of Operations, Minister Counsellor (The European Union Delegation to India)