India : evaluating Bank assistance for public financial accountability in the 1990s - a country assistance evaluation
Sahgal, Vinod | Chakrapani, Deepa
The report assesses the impact of the Bank's efforts on public financial accountability in India, an area though very recent for the Bank, is nascent and growing. Therefore, the Bank has not yet articulated a consistent long-term strategy for strengthening public financial accountability, and, while elements of a strategy are slowly emerging at the state level, The Bank has yet to deal with public financial accountability issues at the country level. At the project level, the Bank has made efforts to improve accounting, auditing, and budgeting systems at the project implementing agency level, and in specific operating departments in state government. With the recent emphasis on programmatic lending in India, the overall public financial accountability systems assume greater importance, and the Bank is commended for pioneering work in this area in the state of Uttar Pradesh. However, this is not sufficient, accountability has to be induced, and is the result of a complex set of incentives, transparency in processes, and checks and balances at various levels of government. Lessons from implementing the Loan Administration Change Initiative suggest the importance of Bank, and borrower commitment to financial management accountability, to be enhanced by training and experience sharing in public sector auditing, accounting, and scrutiny systems. Most importantly, awareness on the eventual communication to the borrower of consequences for less than satisfactory compliance with fiduciary obligations, is highlighted.
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