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Tracking the Rupee An Overview of Expenditure Tracking Work in India : Gaps, Challenges, Opportunities and the PAISA Project. Yamini Aiyar Accountability Initiative July 2009. The Great Indian Paradox. People want change: Growing demand for transparency and accountability.

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Tracking the RupeeAn Overview of Expenditure Tracking Work in India : Gaps, Challenges, Opportunities and the PAISA Project

Yamini Aiyar

Accountability Initiative

July 2009

people want change growing demand for transparency and accountability
People want change: Growing demand for transparency and accountability
  • From ‘vote’ to ‘voice’
  • India’s civil society space a hub of innovation: RTI, Social Audits, NREGA
  • Accountability: a new buzz word
the story so far many innovations many tools
The story so far: Many innovations, many tools
  • Tracking outlays:
      • Budget analysis – gained prominence in 1995
      • Focus on outlays from a social sector perspective: CBGA – centre, Disha, BARC, CBPS – state level
      • Sector specific outlays: Gender budgeting, child budgeting, dalit budgeting
  • Monitoring Outcomes:
      • ASER (education outcomes)
      • Citizen report cards
      • Performance evaluation of MPs and MLAs
the story so far gaps and challenges
The story so far:Gaps and challenges

Relatively little focus on expenditures – social audits in NREGA the exception

Sporadic efforts at PETS and Absenteeism surveys (PROBE II and WB study are underway now)

Limited scale and co-ordination

Links between micro and macro level work not very strong

why do expenditures matter
Why do expenditures matter?

Helps identify systemic inefficiencies: utilization levels, timeliness of fund flows, procedural complexities

Helps identify leakages

Creates transparency in procedures

Better planning: Linked with needs and performance

Citizens ‘right to know’

but getting to expenditures requires some serious detective work
But….. Getting to expenditures requires some serious detective work

The Sarva Shiksha Abhiyan Example

institutional design of ssa
Institutional design of SSA


Central Releases

State Releases

State Society



Funds outside AG

District Implementation Unit

Block Resource centre


Cluster Resource


Village Education Committee

information bottlenecks
Information bottlenecks

Central Government

  • Release treated as ‘expenditure’
  • Annual Physical and Financial Progress reports include ‘spillovers’. Thus no information on ‘real expenditures’ for specific financial years
  • Data disaggregated by state NOTdistrict
  • No incentive to collect ‘real expenditures’: SSA plan size increases (33% between 2004-07) even when information on actual expenditure not available

State Government

  • Data on states shares not easily available
  • Physical, financial monitoring done by implementation society
information bottlenecks1
Information bottlenecks

State Implementation Society

  • Monthly physical and financial reports BUT
    • Does not account for ‘spillovers’
    • Fund transfers bear no connection to expenditures hence no incentives to track
    • No investment in maintaining good MIS systems
    • Some states report district level transfers on their websites but these are not regularly updated
  • Audits undertaken by private auditorsBUT
    • Reports not made public
    • Complex and difficult to understand
information bottlenecks2
Information bottlenecks

District Implementation Society

  • Annual Work Plan (AWP) do not report annual expenditures
  • Monthly progress does not account for ‘spillovers’ and do not highlight variations in release
  • Significant delays in reporting as utilization certificates not received on time
  • Audits undertaken by private auditors BUT
    • Delays are common
    • No uniform auditing pattern: some audit reports provide balance sheets of assets and liabilities + income and expenditure; others disaggregate by budget heads but NOT by AWP

Reports are complex. Need de-mystifying

information bottlenecks3
Information bottlenecks

Cannot disaggregate from district to the service provider level

No publically available data on what happens after the district.

When and how to funds get transferred to the service provider? How much gets spent? Do UCs reflect ground realities?

This requires primary ‘physical-financial’ verification

how does one get to the bottom of this
How does one get to the bottom of this?

You need to investigate:

  • Center, state and district: yearly allocations, releases and expenditure data to identify spillovers
  • State and district: AWPs, release calendar, expenditure registers, audit reports
  • Service provider: primary surveys
So what is PAISA all about?

Collecting Information + Building Capacity

the paisa plan
The PAISA Plan


  • To enhance accountability in public expenditure management for basic service delivery in India by:
    • Collecting and widely disseminating data related to planning processes, resource allocations, expenditures and institutional arrangements for service delivery
    • Build capacities for primary stakeholders to effectively participate in planning and resource tracking

First phase focus on Elementary Education

paisa activities
PAISA Activities

Understanding the big picture:

Plans, Allocations and expenditures

Desk-based research

  • Allocations and releases at the central level: Budget Briefs
  • Unbundling fund flow systems at the local level: Resource mapping tool-kit
  • Assess annual work plans
planning analysis of bihar state awp
Planning:Analysis of Bihar State AWP




Total AWP size increased from Rs.3145 crore to Rs.5429 crore



Pattern of Utilization of SSA

  • The components that seem to be most affected are:
  • Civil works
  • Teacher training
  • Grants to school
  • Innovative activities
  • Between 60 and 70% of total plan allocation

Source: Budget Brief on Education Sector, Accountability Initiative

paisa activities1
PAISA Activities

Understanding Expenditures at the Service Delivery Point

Expenditure tracking study

  • Primary data collection: District level surveys to track fund flows from the district society to the school: Survey of 100 schools in Nalanda, Bihar, planned survey in Sehore, Madhya Pradesh (details to follow in tomorrow’s presentation)
paisa activities challenges
PAISA Activities: Challenges

Data access (despite RTI): strong links with the local administration can help

Poor record keeping

Skill level of surveyors, data analysts (not everyone’s cup of tea)

Time and resource intensive when thinking of scale

Partnerships: A possible opportunity?

paisa activities2
PAISA Activities

Capacity Building for VECs

Developing a tool kit to improve local decision making and planning

  • Resource Flows
    • Strengthening VEC understanding of financial norms and procedures
    • Equipping VEC with tools to access data on school level budgets and expenditures (Based on data collected through expenditure tracking)
  • Planning and Decision Making
    • Strengthening VEC understanding of the roles and responsibilities of the VEC
    • Enhancing VEC capacity to develop plans and programs for the school
    • Encourage discussions on learning outcomes
paisa activities3
PAISA Activities

Sehore, Madhya Pradesh VEC intervention

  • Baseline completed in May 2009
  • Tool kit for resource mapping and roles and responsibilities tested
  • First intervention: VEC meeting, meeting with Panchayat president and meeting with the village completed

To early to tell but the first intervention seems to have made some impact

paisa activities challenges1
PAISA Activities: Challenges

Community mobilization – strong local presence essential

Local dynamics and politics

Multiple interventions- time and resource intensive which makes scaling up a question mark

Links with the state, an opportunity for scale?

and finally
And Finally

In the final analysis implementation is the key binding constraint to achieving outcomes. PETS and Absenteeism studies hold the key

There are many challenges but the environment is ripe and the opportunities are endless

This is the most important job in the world

Good Luck!