Treasury Reforms in Indian States and Transition to IFMIS

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    Treasury Reforms in Indian States and Transition to IFMIS: Challenges and Opportunities

     

    India Public Resource Mobilization & Management Team of the Governance Global Practice, in partnership with the Government of Andhra Pradesh, conducted a two
    day workshop titled “Treasury Reforms in Indian States and Transition to IFMIS: Challenges and Opportunities”. It
    was financed by the two ongoing non-lending technical assistances to Budget Division, Government of India and (ii) Controller General of Accounts for strengthening public financial management systems and capacity. The
    workshop is the first in a series of
    knowledge exchange events on public financial management planned by the Bank to show case good practices by States ,  promote cross learning and generate interest and demand for PFM reforms, particularly  among the low income states.

      

    Close to 100 delegates attended the workshop, including senior officials from finance department of 22 states,  Comptroller & Auditor General of India,
    Controller General of Accounts , Dept. of Expenditure, Government of India, State Bank of India and the Reserve Bank of India.

     

    In all, 11 presentations were made during the two days which included presentations by six States. The States and corresponding themes of presentation were pre-selected in a manner to avoid duplication,  to bring out good practices and unique features of the particular States’ treasury systems, and to cover the entire gamut of treasury operations comprising e-payments, e-receipts, online budget management, reforms in revenue administration, integration with other applications such as human resources information system, procurement systems etc. States shared their experiences on evaluation between customized off the shelf solutions (COTS) and bespoke systems in transition to IFMIS ,  implementation and change management challenges, and related topics. While Andhra Pradesh made a presentation on COTS approach that they are adopting for implementing IFMIS, several states (Karnataka, Rajasthan, Madhya Pradesh& Gujarat) made presentations on the bespoke approach. Focus was on the challenges encountered and how they were mitigated during design/implementation. Cem Dener, Senior Public Sector Specialist from the
    World Bank, presented international experiences from Brazil and Korea. Every presentation was followed by a Q&A session which was interactive and featured a high degree of audience participation, resulting in frank discussions of the ground realities, implementation challenges and possible solutions. The technical session was followed by a panel discussion chaired by Dr.P.V.Ramesh, Principal Secretary (Finance), Government of Andhra Pradesh;  Mr. V. Ravindran, Director General, Government Accounts, C&AG; Mr. Rameshwar Singh, Principal Secretary (Finance), Government of Bihar; Mr. Ashish Upadhyay, Principal Secretary Finance,  Government of Madhya Pradesh and Dr. D. S. Ravindran, Secretary Khajane II,  Government of Karnataka.

     

    The conference agenda, presentations and pictures are available at the following link : https://wbg.box.com/s/2qb7lvnq6l91vh4sxqc1

     

    The need for real-time information and analysis was expressed by many participants.  Participants also emphasized the need for an early decision on the new chart of accounts recommended by the Sundaramurti Committee,appointed by the Centre,  as the states, in the process of upgrading their treasury software, need to make necessary provision for building this intotheir new software. It was also expressed that GoI should take lead in coordinating the treasury systems development across States with help from otherstakeholders (CAG, CGA) to ensure consistency and remove redundancies that are
    likely to creep in when every state tries to go through the same process. Developing a core structure of IFMIS for pan India application (as has been the
    experience in Brazil) could give better value for money and better implementation results. A few States highlighted the need for a uniform model
    Treasury Code which States could adopt with some customization.

     

    The workshop also introduced the concept of a Community of Practice (CoP) for Government officials engaged in area of Public Finance to facilitate and sustain peer to peer cross-learning through a common platform which the Bank proposed to support. The delegates to the workshop endorsed the following:

    1.     All the participants appreciated this initiative and strongly felt the need to continue this knowledge exchange series.

    2.     There was an overwhelming support to the idea of Community of Practitioners (CoP) of Public Finance.

    3.     By show of hands six States offered support to other states in treasury reforms and transition to  IFMIS (Andhra Pradesh. Telangana,Karnataka, Haryana, Gujarat & Orissa) and another six expressed the need for support from other states (Kerala, Jharkhand, Bihar, Assam, Meghalaya &Chhattisgarh)

     

    Immediate next steps include:

    1. Bank to initiate work on a formal launch of the Community of Practitioners (CoP) of Public Finance and bring all the key participants representing different states and the Government of India  on a common platform.  The expert panel suggested that a core group of 4-5 states can take the initiative to design the concept
    for the CoP with institutional support from the Bank and a Government Training Institute like the National Institute of Public Finance and Policy (NIPFP) or
    National Institute of Financial Management (NIFM). The CoP website could provide the platform where relevant documentation on treasury
    reforms could be uploaded by states who wish to share these with other states.      

     

    2. Bank to continue the knowledge exchange series, and on the basais of feedback from participants suggested the following thematic areas for CoP (in the order of
    priority): Treasuries/IFMIS, Budgetary Reforms, Revenue/Cash management, Financial reporting and  Internal audit.

     

    Public Resource Mobilization & Management Team,

    New Delhi, India