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2.
3.
Objective and methodology of review
Synthesis of findings from the 8-state review
• Overall assessment
• Thematic findings
• Development Grants
• Planning
• Capacity Building Support
• Programme Management and M&E
Options for improving impact of BRGF
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1.
Bridge critical gaps in local infrastructure and other development requirements that are not being adequately met through existing inflows.
2.
Strengthen, to this end, panchayat and municipality level governance with more appropriate capacity building, to facilitate participatory planning, decision making, implementation and monitoring, to reflect local felt needs.
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3. Provide professional support to local bodies for planning, implementation and monitoring their plans.
4. Improve the performance and delivery of critical functions assigned to panchayats, and counter possible efficiency and equity losses on account of inadequate local capacity
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Assess progress in the implementation of the programme with respect to objectives;
Highlight what has worked; and
Recommend what needs improvement.
Focus on:
 Development fund management
 Decentralized participatory planning
 PRI and ULB capacity building
 Program management and M&E
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 Preparatory activities:
 Reviewed guidelines and secondary data
 Prepared the data collection checklist/ questionnaire and report format for 8 state teams
 Agreed on the scope and outputs of the assignment with MoPR
 Primary data collection in each of the 8 states
 Typical state team: World Bank, UNDP, MoPR consultant, state focal points from DoPR and SIRD
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 Interview stakeholders and collect data in min. 2 districts, 2
Intermediate Panchayats, 2 ULBs and 2 GPs
 Reviewed more than 55 projects financed by BRGF
 Debriefing and validation of findings with Dept of Panchayati
Raj, SIRD, and reps from PRIs/ULBs
 Debriefing with MoPR on preliminary findings
 Analysis and synthesis
 8 state reports and a national report
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 BRGF financed many small scale investments in public infrastructure of benefits to local communities
 The discretional nature of the BRGF development funds to PRIs and small ULBs was the most appreciated feature of BRGF
 BRGF provides 5-40 % of the discretionary development funding in ULBs and 50-90% in
PRIs
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Types of works financed by BRGF in Rajasthan (2007-8 funding)
Aganbari bhawan
Bridge/culvert
Construction of pacca drainage
Construction of Class room and Latrine
Helth Sub /Centre/A.N.M Residene
Community Meeting Bhawan
Courtyyard School. panchayat Bhawan ground
Construction of Roads and Bridge
Plantation and Management of park
Panachaytat Bhawn
Other
Patwar Ghar
Animal Health Sub Centre
Rain wate Harvesting/Tanka/Anikat
Energy and Street Light
Handpump
Sports Ground
Siverage and Sanitation
Residence of Gram Sevak
Farmer Service centre and distribution hatt
Irrigation Dranages
Construction of irrigation dranage
Quality improve Anmal and collection of grass centre
Passengers Facilities
Shop of fare value
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 BRGF allocation is too small to make a dent at local level or address regional imbalance
 0.4% of total GoI budget; less than 10% of NREGS Budget
 BRGF per capita annual allocation is meagre: Rs 103 nationally; q1=81, q2=111, q3=176; q4=3,162
 Most GPs get 2 - 6 lakhs per annum (in all states)
 Blocks get: 0 lakhs in Rajasthan; 16 lakhs in AP; 55 lakhs in
Assam
 ZP: 0 lakhs in Rajasthan; 2.5 crore in Assam; 3.9 crore in
Bankura in West Bengal; 5 crore in AP;
 An average PRI undertakes a very small number of micro projects of Rs 1-4 lakh size; an average ULB undertakes a few projects of Rs 2-6 lakh size
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 In most states, BRGF stimulated grassroots participation in
Gram Sabha and bottom-up planning
 In other states “petitioning” is a more accurate description of current role of PRIs, with DPC/HPC holding ultimate discretion and line departments absent in local planning
 District Planning Cell (technical secretariat) very weak or non-existent
 Current convergence examples are mostly PRIs using BRGF as bandages to fix other schemes’ deficiencies
 PRIs/ULBs unlikely to play a leading role in integrated planning when its discretionary budget is dwarfed by other players
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 BRGF stimulated capacity building (esp. top-down orientation and training) activities targeted at PRI officials and functionaries; some states are doing much more (e.g.,
West Bengal, AP); reaching a large number of LG officials through cascading model and satellite
 Little progress in filling staffing gaps in PRIs and ULBs
 Confusion about using 5% development grant for filling staffing gap
 Reluctance to use Plan budget for recurrent costs
 ULBs are neglected in capacity building program
 PRIs/ULBs do not have much control over capacity building content or intensity
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 Major bottlenecks in planning and budgeting processes and flow of funds impede utilization of BRGF budget allocation
 There is one financial year release back log from GoI to the
States (some places 2 years) due to
▪ layers of “approval or review/veto” of development plan
▪ Further delay in state release to PRIs/ULBs (more than 15 days stipulated by
Guideline), sometimes related to Model Code of Conduct or Interim Budget for first
4 months
▪ In Rajasthan it took up to 4 months in the first year and 2 months in the second year to release to GP (more than stipulated 15 days)
▪ Subsequent disbursement further delayed by current requirement of submission of UC (100% for Year T-2 and 75% for Year T-1)
Implication of the current fund flow system: PRI/ULB that spends fast and accounts fast will have to wait for slower peers; requiring 100% UC for any year is risky (even one laggard can affect entire district)
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State
AP
Assam
Bihar
Chhattisgarh
MP
Orissa
Rajasthan
West Bengal
•
From GoI to State
Jan 7, 2008
State to PRIs and ULBs
• March 2008 (1 st release)
• March 2009 (2 nd release)
• No release yet • Release only for one district
(Morigaon) during 2009/10
• January 2008
• Dec 12, 2008
• 31-10-07
• March and May 2008 for Madhubani and
Samastipur respectively (1 st instalments)
• Feb 16, 2009 & Mar7, 2009
• 7-12-07
• Ganjam – Dec 27, 2007
• Dhenkanal – May 8, 2009
• Jan 29, 2008
• July 3, 2009
• March 08 (90%) + 10% March
2009
• Feb 2008 (90%)
• May 27, 2008 (90%)
• July 2009 (10%)
• Bankura Feb 21, 2008
• Pururia Feb 28, 2008

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Despite staffing gaps, considerable absorption capacity was noted at both PRI and ULBs, when funds were released
Time lag between receipt of funds and initiation of project is often less than a month
Implementation often between 3-6 months
The quality of investments observed was generally satisfactory in the states visited or at least comparable with other projects in the area
Supervision and control by various levels of engineers
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Planning and budgeting for O&M is weak in all states
Community based O&M was not emphasized in all local bodies; community members perceived O&M to be the responsibility of the PRIs and ULBs
Some ULBs attempted to budget for O&M but their budgets are meagre
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No regular learning and adjustment mechanism in program management
 No baseline or updated measurement to inform whether BRGF is achieving objectives of building PRI/ULB capacity or addressing regional imbalance
Insufficient staffing for program management at MoPR, state, district levels, particularly in the areas of financial management, planning, M&E, capacity building, communications
State HPC should focus on strategic management of
BRGF rather than rubber-stamping or vetoing district plans; ditto for DPC

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Given existing funding for BRGF, what’s a feasible goal?
 Can current BRGF funding address regional imbalance?
 Is integrated planning at local level feasible when
PRIs/ULBs have so little discretionary resource?
 Is BRGF the best instrument for financing local investment and capacity building for ULB?
▪ Current BRGF contribution to poverty reduction and capacity building in ULBs is superficial
▪ MoPR and Dept RD&PR have no mandate for ULBs
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Addressing regional imbalance within current resource envelope is unrealistic;
As the only gesture by GoI to “empower”
PRIs/ULBs, BRGF should focus on the PRI/ULB empowerment goal and do it well
Suggest reframing the goal as:
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Simplify planning process:
Give PRIs/ULBs exclusive decision-making power within their mandate and let them be accountable for their decisions
Delete DPC/HPC approvals that add little value: they should not intervene in
PRI/ULB priorities; should focus on technical support not control
Clarify planning roles of stakeholders in guidelines
Clarify guidelines for use of funds within the spirit of the BRGF
 Clarify a List of non-eligible expenditures (Negative List) prior to the start of planning
(and allow PRIs/ULBs full discretion to allocate the BRGF within the provided menu – positive list)
 Clarify the use of the 5 % for functionaries (and how the increased staffing costs should be addressed beyond BRGF)
 Allow a percentage of the BRGF development grant to be used for O&M
 Ex post spot check of compliance and audit rather than ex ante approval
Start the planning process much earlier with announced budget envelope and planning calendar
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Improve disbursement system:
Change the current disbursement system based on UC submission to e.g., a replenishment system
 Front loading of funds with regular replenishments
 Allow a higher level of unspent funds
Direct transfer of funds from state to PRIs/ULBs where possible
Consider moving away from ex ante control to ex post audit and monitoring
Better communications
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A much more focused CB approach is needed
Every state needs to systematically monitor level of PRI/ULB governance practice capacity in core areas (esp. planning, accounting, engineering, record keeping, asset O&M) and adjust CB interventions accordingly
 Create basic staffing strength in core areas
 Target training and hands-on support to weak areas
Every state requires a LG CB Coordinator; similarly at district level
Supplement the current supply-driven approach with a demand-driven approach in capacity building program
 Give LGs some discretion to manage their own capacity development
 State can consider establishing a competitive market for capacity building and focus on stimulating supply and ensuring quality
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CB delivery system is weak in many states; funding for CB is NOT the binding constraint
States with weak SIRD need to outsource training providers
MoPR establishes a PRI CB Cell to monitor progress, facilitate experience sharing, peer to peer reviews
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 Keep the link between development grant and capacity building, but need some gradual introduction of performance incentive to stimulate improvement, e.g.,
 Link disbursement of development grant to improvement in governance practice and capacity
 Lapse all unspent allocation of each FY
 Potentially link allocation of development grant to performance
 Reallocate unspent balance of slow PRIs/ULBs to fast ones within FY, or
 Allocate a performance bonus based on previous year performance (e.g., absorption and accountability)
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Need to establish regular learning and adjustment mechanism in program management
 Annual field review of 1/3 of states
 Regular desk review of core indicators of PRI/ULB capacity (and backwardness, if it’s a BRGF goal)
Strengthen program management at MoPR, state, district levels, particularly in the areas of financial management, planning, M&E, capacity building, communications
State HPC should focus on strategic management of
BRGF rather than rubber-stamping or vetoing district plans; ditto for DPC

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BRGF funding should be increased significantly
 to make PRIs/ULBs relevant players in local planning process
 to enable PRIs/ULBs to make significant investment in local infrastructure
 to possibly expand geographic coverage
BRGF allocation formula needs to be improved to make it an equalization grant
 Transparent formula with readily available and widely accepted predictors of poverty as indicators, e.g., agric labor as share of active labor force, % ST/SC population
 Current allocation has no poverty targeting
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per capita BRGF & district population
3500
3000
2500
2000
1500
1000
500
0
0 1000000 2000000 3000000 4000000 5000000 6000000 7000000 8000000
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Per capita BRGF & backwardness ranking
3500
3000
2500
2000
1500
1000
500
0
0 100 200 300 400 500 600 700
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1500
1300
1100
900
700
500
300
100
-100
0
Per capita BRGF & backwardness ranking (for districts with backwardness ranking of 1-250)
50 100 150 200 250
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Per capita BRGF & share of agric labor
3500
3000
2500
2000
1500
1000
500
0
0 10 20 30 40 50 60 70
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BRGF has started a process of PRI/ULB strengthening through providing discretionary resource and capacity building support to PRI/ULB
PRIs/ULBs are using discretionary resource to address local needs identified through participatory process
Bottlenecks in BRGF development grant disbursement need to be addressed
BRGF development grant is very small, compared to other schemes, hence slow progress in improving integrated planning
Capacity building component needs major improvement
BRGF objective needs to be clarified
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Support a national framework aiming at promoting strong LGs
Support states that are willing to provide LGs with autonomy and capacity building support
Help a few states pilot a LG capacity and performance monitoring system
Help introduce in a few states links between LG capacity/performance and development grant disbursement and/or allocation
Help revise BRGF district allocation formula, if there will be significant increase in Development
Grant
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