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Rediff.com  » Business » $20 mn US loan for 3 states

$20 mn US loan for 3 states

Source: PTI
May 19, 2004 15:11 IST
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The United States Agency for International Development said on Wednesday it would extend $20 million (Rs 90 crore) to Uttaranchal, Jharkhand andKarnataka to improve their fiscal management systems.

The five-year assistance, under the 'Reform' programme, will enable the three states to strengthen their fiscal management system for better forecasting, budgeting and investment, an American Embassy press release said.

It said the area focus in three states include better budget preparation processes, updated information systems to guide financial decision-making, practices to track and manage state debt and use of appropriate global standards in public finance to inform and engage public decision-making.

The move to extend assistance to these states comes after a detailed discussion with ministry of finance and USAID has awarded $11.8 million (Rs 53.1 crore) to the US-based Bearing Point (formerly KPMG Consulting)

for the first phase of the programme, it said.

Despite India's strong growth, state governments' finances were strained, limiting investment in social and physical infrastructure -- education, health, roads, ports and agriculture irrigation, USAID said.

"States continue to be stressed by high fiscal deficits, raising concerns on the long-term sustainability of India's overall national growth." The release said there were not enough resources for social investment and capital improvements, which often 'cuts services to those who need and use them most: the poor, the unemployed and the illiterate."

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