Manila, Philippines (BBN)- The Asian Development Bank (ADB) will provide US$100 million in loans to India’s Mizoram state for public sector financial reforms to improve the state government’s finances and service delivery.
ADB’s board of directors on Tuesday approved the funds for the Mizoram Public Resource Management Program of India aiming to help the state government create fiscal space by taking steps to raise additional revenue from tax and non-tax sources, and improve debt management including pre-payment of high cost loans, an ABD press statement said.
The program also focuses on strengthening service delivery in the education and health sectors.
The loans have a 15-year term, including a 3-year grace period, with interest set in accordance with ADB’s LIBOR-based facility. The program is set to run from August 2009 to July 2012 and the state’s Finance Department will be the executing agency.
The reforms will support, among other things, improvements to the state health insurance scheme by targeting more efficient service in a cost effective manner, the statement said, adding that revamping the state’s costly pension scheme is another priority, while the program will seek to overhaul loss-making public sector enterprises, with downsizing or closure not excluded among the options.
“Funds will also be allocated for a voluntary retirement scheme for under-qualified teachers in primary and secondary schools as part of ongoing efforts to improve the education sector,” the ADB added.
BBN/SS/SSR/AD-19August09-1:46 am (BST)