Type of Review: Annual Review
Project Title: Odisha Modernising Economy, Governance and Administration (OMEGA)
Programme
Date started: April 2009
Date review undertaken: Nov 5-9, 2012
Instructions to help complete this template:
Before commencing the annual review you should have to hand:
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Business Case or earlier project documentation.
Logframe
Detailed guidance (How to Note)- Reviewing and Scoring Projects
Most recent annual review (where appropriate) and other related monitoring reports
Key data from ARIES, including the risk rating
Separate project scoring calculation sheet (pending access to ARIES)
You should assess and rate the individual outputs using the following rating scale and description.
ARIES and the separate project scoring calculation sheet will calculate the overall output score taking
account of the weightings and individual outputs scores:
Description
Outputs substantially exceeded expectation
Outputs moderately exceeded expectation
Outputs met expectation
Outputs moderately did not meet expectation
Outputs substantially did not meet expectation
1
Scale
A++
A+
A
B
C
Introduction and Context
What support is the UK providing?
UK Aid will provide up to £19 million (£8m Financial Aid, and £11m Technical Assistance) over five
years, to departments of Finance, Food Supplies and Consumer Welfare, Panchayati Raj Institution,
Skills, Industries and Micro, Small and Medium Enterprises to help the Government of Odisha enhance
resource mobilisation, attract private investments in infrastructure and industries and improve
implementation of major poverty alleviation programmes through systemic improvements.
What are the expected results?
Impact of the Programme
The programme is expected to enhance the capacity of the government to maintain sustainable growth
for poverty reduction through:
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Attracting increased private investments in the state including public private partnerships for
infrastructure
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Increased revenues for increased development expenditure
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Increased capacity for improved pro-poor service delivery
The expected programme outcomes as per are as follows:
Outcome Indicators
Base line
2014-15
OUTPUT-1
Private investments in industries and infrastructure enhanced with environmental and
social safeguards
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Time taken by District Industries Centre
(DICs) for approval of MSME projects
90 days
Number of consent to operate (CTO)/
consent to establish (CTE) issued after public
hearing
Orange category:45
days high -Orange
to Red category 612months1
30% reduction from
the baseline
40% increase
Source: Department of Industries and Department of Forest & Environment


Institutional roadmap for PPPs
Developed and
agreed
Number of MOUs entered by GoO with
NSDC partners and job placements made
X
Progress: 12 MOUs
signed (placements
to l start from march
1
Year 3 actions
implemented
X + 20%
Non-Polluting enterprises (Green Category) are exempt from CTE/CTO. Polluting enterprises in the Orange
Category and Red Category need to obtain the CTE/CTO. This data on the number of not publicly available as
most cases are subject to litigation and RTI. It is however understood that the average approval time for a lowmoderate Orange category industry is 45 days and for a high-Orange to Red category is on average more than 6
months and in certain cases can exceed 1 year
2
2013)
Y + 30%
Source: NREGA website and DFID Supported data collection and compilation
OUTPUT-2
GoO capacity for revenue mobilisation and effective expenditure management enhanced
Laws, rules and systems for VAT – Tax policy
Policy, capacity and
VAT processes fully
business processes
operational
in line with VAT
Training of staff – People and Change management
-
100% staff trained
Computerised monitoring system established – Data
analysis and Business Process Reengineering
-
E-services and
monitoring system
fully operational
Pending audit objections
19477(X%)
(software prepared,
pilot ongoing)
Efficiency gains in procurement in target
departments**
Weak or nonexistent
benchmarking
X%- 70%
50% efficiency
gains over the
benchmark
OUTPUT-3
Poor people’s access to priority poverty alleviation programs increased
Districts supported with development of climate
resilient projects in NREGA works and improved
implementation
PDS Implementation Improvement Action Plan
(IIAP)
2
20
Implementation
Improvement Action
Plan (IIAP)
prepared and
agreed
Review of impact
Source: NREGA website and DFID Supported data collection and compilation
Goal: Enhanced GoO capacity to maintain sustainable growth for poverty reduction
Purpose: Increased GoO capacity to attract private investments, generate revenue and improve service
delivery
Outputs
1.
Private investments in industries and infrastructure enhanced with environmental and social
safeguards;
2.
Build capacity of the GoO for revenue mobilisation and effective expenditure management;
3. Poor people’s access to priority poverty alleviation programmes increased strengthened
Monitoring and Evaluation
OMEGA’s technical and financial performance is proposed to be assessed on a six-monthly and annual
basis. The Joint Annual reviews (comprising of representatives from the Government of Odisha and
DFID) are proposed to monitor progress against the programme log-frame/ milestones matrix, and to
agree the milestones for subsequent 6- months.
Additionally as required by the Department of Economic Affairs, GoI, an independent mid- term
evaluation of the program is proposed in 2014.
3
What is the context in which UK support is provided?
State Context
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37% of 41.94 million population of Odisha is below the poverty line (Andhra Pradesh – 21.1%,
Bihar – 53.5%2)
State’s own tax revenues to GSDP ratio was only 5.73% in 2010-11(Andhra Pradesh – 8.05%,
Bihar – 4.86%3)
Only 2% farmers have access to organised markets
Off-take by genuine poor beneficiaries in pro poor schemes is hardly 27%
MSME participation in formal sector is less than 10%
Private participation in social sector is negligible
What are we trying to address?
The Government of India and the state government allocate substantial funds for employment
guarantee and public distribution, the implementation is still challenged with administrative loopholes
and significant shortage of improved mechanism for adequate monitoring and evaluation. DFID support
will address some of the key
systemic bottlenecks in the implementation of the National Rural
Employment Guarantee Scheme and the Public Distribution System through use of IT and online data
scrutiny and monitoring mechanisms. It will help institutionalise transparency mechanisms and citizen’s
engagement. There is limited accountability towards the people. Strengthening accountability, including
the demand side accountability, is an important OMEGA objective. District and state level work will
ensure CSO and NGO participation. In addition, OMEGA will help GoO enhance its potential to
generate revenue by at least 17% through systemic improvements by supporting IT enabled
administrative improvements in the Department of Commercial Taxes. The project will also improve the
investment attractiveness of the state through support on policy formulation and implementation in
sectors where Odisha has comparative disadvantage and which havesome of the highest employment
potential -tourism, food processing and agro- based industries and auto component industries. DFID
support will help establish product market linkages and identify products that have potential to be
scaled up to improve incomes to the farmers. The objective is to make growth more inclusive DFID will
support a skills strategy at the district level based on comparative advantage of each district; identify
trainees and facilitate imparting of skills in identified trades; Facilitate linkage of training providers with
the trainees and facilitate post- training placements. OMEGA will build capacity within government
institutions and industries on social and environmental safeguards and facilitate compliance. OMEGA
will help build a strong long-term sustainable institutional mechanism to address skills shortage in the
state.
What will DFID do?
DFID support, both financial aid and technical assistance under OMEGA will fund amongst others:
 Design and develop a software for online monitoring of the doorstep delivery mechanism for foodgrain to the fair- price shops to plug leakages;
 Help develop a comprehensive decentralised and online monitoring and evaluation mechanism for
the rural employment guarantee scheme(The Mahatma Gandhi National Rural Employment
Guarantee Act).
 Support establishment of a Programme Performance and Outcome Monitoring Unit (PPOMU) in
the Finance Department for concurrent monitoring of the state and central government schemes.
 Develop an online Industrial Investment Tracking System to help build investors’ confidence and
2
3
Source: Planning Commission (http://planningcommission.nic.in/data/datatable/0904/tab_45.pdf)
RBI Study of State Finances
4
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improve Odisha’s image as an investment destination in non- mining sector.
Develop skill strategy and impart skills to meet the shortage in line with the demand estimated to
be generated due to investments in identified sectors.
Help build a long- term sustainable institutional mechanism for addressing skills shortage in the
state.
Develop Policy, Compliance and Administrative measures for the commercial tax department for
plugging leakages
Create capacity and precedence in line departments to identify and develop infrastructure projects
with private sector participation, especially in sectors where PPP mode has not been adopted in
the state.
Who will implement?
The programme will be implemented by the departments of Finance, Food Supplies and Consumer
Welfare (DFS&CW), Panchayati Raj Institutions, Employment, Technical Education & Training
(DTET)T, Industries and Medium and Small Scale Enterprises (MSME), Planning and Coordination. A
Project Steering Committee (PSC), chaired by the Chief Secretary, Government of Odisha, has been
established to guide the project at a strategic level. A Project Management Committee (PMC) chaired
by the Principal Secretary, Finance has been established to provide implementation support, better
coordination between departments and monitor overall outcomes.
The OMEGA Technical Assistance Support Team (OMEGA TAST) contracted by DFID provides the
technical assistance required to achieve the desired outcomes in identified sectors.
Section A: Detailed Output Scoring
Output 1: Private investments in industries and infrastructure enhanced with environmental and
social safeguards
Output 1 score and performance description: A Output met expectation
Progress against expected results:
Output Indicators
1.1
1.2
Value of investment (Rs.)
(a) District Industries Centres in
MSME sector
Baseline
(2010-11)
200 crore
Milestone (201213)
220 crore
Value of investment (Rs.)
(b) PPPs (ongoing and in
pipeline)
9169 crore
b)nil
10086 crore
b)5
Proportion of implementation to
approved investments
43%
No Milestones for
2012-13. Target
(2014-15) is 48%
1.3
1Source:
Directorate of Industries (http://as.ori.nic.in/diOdisha/)
Department 3 Source: IPICOL, Department of Industries
5
2
Progress
(2011-12)
245.14 core1
10,000 crore2
5(various stages,
progress stated
below)
46.61% 34
Score
A+
A
A
Source: PPP Cell, Planning & Coordination
a) Time taken by District
Industries Centre (DICs) for
approval of MSME projects
90 days5
b)Number of consent to operate
(CTO)/ consent to establish
(CTE) issued after public
hearing)
Orange
category:45
days high Orange to
Red category
6-12months6
1.5
Institutional roadmap for PPPs
Developed
and agreed
1.6
Number of MOUs entered by
GoO with NSDC and;
Job placements made
1.4
No Milestones for
2012-13. Target
(2014-15) is 30%
reduction from
baseline Y
Year 1 actions
implemented
10% increase
3
11008
B
10% increase
5% increase
7
Business
Requirement
Specification
completed
Priority sectors
identified and
supporting the
line departments
as per GoO
request
A
12 MOUs signed
with private skill
training providers
for imparting
placement linked
short term
vocational
training in the
state
A+
Progress against/towards milestone
1.1 Value of investment (Rs.) - District Industries Centres in MSME sector
 Technical support is being provided to MSME department for fostering MSME growth. In the last
year, DIC’s have received investment proposals worth Rs.245 crore, an increase of around 20%
from the baseline. To strengthen District Industrial Centres(DICs) and streamlining approval
process for MSME, a business process reengineering and manpower planning study for DICs
and Regional Industrial Centres (RIC)s have been completed; and National informatics centre
has been commissioned for pilot implementation of automation to streamline the approval
process-Entrepreneur Memorandum 1(EM1) and Entrepreneur Memorandum 2 (EM2)
 Supported the government in identification and development of MSME clusters. TAST team have
helped in establishing market linkages for onions from Boudh, thereby helping 7500 farmers with
50% higher price realisation and income.
 Technical support is being provided for developing Cashew Cluster at Ganjam- TAST has
identified gaps to be addressed and is in the process of identifying buyers for market linkage.
5
Under the Odisha Industries Facilitation Act, 2004, DICs act as the DLNA ( District Level Nodal agency) for the
District Level Single Window Clearance Authority (DLSWCA) and are responsible for approving all investments
upto INR 50 crore. All MSME investments are covered under this process. The average time taken by DLSWCA to
approve a project is 90 days.
6 Non-Polluting enterprises (Green Category) are exempt from CTE/CTO. Polluting enterprises in the Orange
Category and Red Category need to obtain the CTE/CTO. This data on the number of not publicly available as
most cases are subject to litigation and RTI. It is however understood that the average approval time for a lowmoderate Orange category industry is 45 days and for a high-Orange to Red category is on average more than 6
months and in certain cases can exceed 1 year
7 Government of Odisha
8 Department of Employment, Technical Education and Training
6
1.2 Value of investment (Rs.) – PPPs (Ongoing and in pipeline)
 Supported GoO in establishing PPPs in five sectors namely Roads, Health, Warehouse,
Education and Water Supply entailing an investment of Rs 1775 crores.
 Supported the Works Department in project preparatory activities of three road projects with a
total project cost of Rs 375 crores.
 Progress against PPP projects:
 Road sector-Technical feasibility report for the Suakati-Dubuna road is under preparation.
 Process for engagement of technical consultant for two other road projects– Capital Region Ring
Road (CRRR) and Bridge over river Ib is underway.
 Water Supply- 16 bids have been received in response to RFQ and 11 bidders have been
shortlisted. Project documents such as draft Concession Agreement, bulk water purchase
agreement etc. have been prepared and the proposal for central government Viability Gap
Funding has been sent to the PPP Cell, Department of Economic Affairs, GoI for approval.
 Education- residential school, RFQ has been finalized. The project documents such as draft
Concession Agreement and RFP have been prepared and the approval for central VGF is
awaited.
 Health (medical college project) approval of the empowered committee has been obtained. All
project documents including the RFQ, RFP, concession agreement, proposal for in-principle
approval of central government VGF have been prepared and submitted to Health Department
 Warehousing- The feasibility report and the demand assessment has been completed. The
project is waiting for the approval of Food Corporation of India (FCI).
1.3 Proportion of implementation to approved investments
The ratio of projects under implementation (production/ partial production started) to the total number of
approved projects stands at 46.619%
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Supported the Industries Department and its associated agencies such as IPICOL10, IDCO11 etc.
in listing, tracking of approved investment proposals and issues/bottlenecks in implementation.
TAST has examined 125 investment proposals and provided follow up support for 36 projects.
To attract new investment, OMEGA TAST has provided policy support to GoO.
 Supported drafting of new Industrial Policy- A benchmarking exercise of Orissa’s IPR together
with comparison to other industrially progressive states has been completed. This includes a list
of indicative incentives for the proposed new policy.
 Supported the industries department by providing a best practices note on the land acquisition/
concession provided by other states.
 Supported the state Government in drafting of the Food processing policy – provided
competitiveness assessment of Odisha, identified the policy and implementation gaps,
recommended set of interventions and helped the state in drafting of guidelines and notifications
of the proposed policy.
 Provided policy and implementation support for the Orissa- Special Economic Zone (SEZ) policyexamined individual SEZ files and identification of action points to expedite operationalization of
SEZs. ; assisted the state government in formulating the amendments of the draft policy., TAST
has also supported in submitting a proposal for NMIZ (National Manufacturing Investment Zone)
 Provided technical support to GoO on developing a civil aviation plan, airline contact programme,
low carbon development mechanism.
1.4 a) Time taken by District Industries Centre (DICs) for approval of MSME projects
b) Number of consent to operate (CTO)/ consent to establish (CTE) issued after public hearing
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Assistance is being provided to the MSME department for automation of the registration process
to bring down the delays in approval of MSME projects. TAST has prepared and submitted the
Business Requirement Specification (BRS) for Entrepreneur Memorandum (EM1). Based on the
9
Source: IPICOL, Department of Industries, Government of Odisha
Industrial promotion and Investment Corporation of Odisha Limited
11 Indiustrial development Corporation of Odisha
10
7
BRS, NIC has been commissioned for preparing an online EM1 registration portal.
1.5 Institutional roadmap for PPPs
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Prepared the PPP Diagnostics report. The report focusses on the institutional measures required
for strengthening the capability for creating PPPs in the state and is assisting in formulation of the
Viability Gap Funding (VGF) policy for the state.
Five priority sectors have been identified in consultation with the Finance Department and the
state PPP Cell for focused intervention and support is being extended to concerned line
departments in identifying and successfully completing the PPP projects in these sectors.
1.6 Number of MOUs entered by GoO with NSDC and job placements made
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OMEGA TAST is supporting the Department of Employment, Technical Education &Training
(DETE&T) Department of Technical Education and Training (DETET) for achieving its target of
providing 375000 jobs in next two years.
Supported the development of Action plan for
employment linked skill development for three identified districts.
Supported DTET in signing of MoUs with private skill training providers for imparting placement
linked short term vocational training in the state. Till date 12 private players have entered into
MOU with DETE&T with a training capacity of 35,000 candidates per annum. Of these, three
agencies have already started (Gram Tarang, L&T, CIDC) imparting vocational training to 1400
students.
TA support is being provided to GoO for restructuring/reorientation of the district employment
offices. Accordingly, OMEGA TAST is supporting the department in its effort to manage six
Employment Exchanges through PPP and developing Monitoring and evaluation framework for
vocational training.
Recommendations:
Output 1 ( Private Sector Development)
Skills Development
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Revise contract agreements with Programme Implementing Agencies (PIA’s) for their viability
and sustainability. OMEGA TAST need to compare and benchmark the existing contract terms
with those of Odisha Rural Development and Marketing Society (ORMAS) and State Urban
Development Agency (SUDA) and make suitable amendments in PIA’s contracts in consultation
with DETET and finance department.
Finalise the on-going discussion with private sector to set up training facilities in the state and
provide employment opportunities.
Ensure development of MIS and Monitoring framework and operationalize it at state level In
consultation with DETET
OMEGA TAST to support realignment of the focus from a district oriented strategy to a sector
focused strategy (, Manufacturing , Construction, Food Processing and Health) on skill
development in view of the emerging employment opportunities in these sectors
Industries/IPICOL
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There should be closer coordination by OMEGA TAST with Industries Department and IPICOL
to progress on key initiatives such as Single Window facilitation, Policy formulation, PMIS
implementation
Finalise the Auto, IPR CSR, IT/ITeS and SEZ policy and notification issued by GoO.
OMEGA TAST should support GoO in attracting targeted non-core investments in the state
through a focused approach and MoUs signed.
MSME Development
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OMEGA TAST should finalise BPR and ensure that EM1 &EM2 to is operationalised.
OMEGA TAST should establish market linkages and sale of forest products, cashew and
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PPP
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tamarind.
Identify gaps and improve investments and infrastructure of existing MSME clusters. Assess the
potential for new clusters and prepare integrated plan to develop the new clusters.
Launch the MSME website as a convergence platform to provide MSMEs in Odisha a one stop
access to all relevant stakeholders and services ( registration to export linkages)
Promote ancillary and downstream development through identification of products sourced by
large units from MSMEs and mapping them to MSME capabilities in the state
OMEGA TAST should focus on development of existing product clusters in the state
OMEGA TAST should provide continued support to Works Department for identifying and
fructifying more PPP projects
Complete the feasibility study of two roads project.
Concessional agreement with identified private players on health, education and water supply
PPP project should be agreed and signed. OMEGA TAST to continue to pursue with the GoO to
ensure that necessary clearances and land is made available at the proposed locations for PPPs.
Impact Weighting (%):35%
Revised since last Annual Review? Y/N
No
Risk: Low/Medium/High Medium
Revised since last Annual Review? Y/N
No
Output 2 (Commercial Tax): Build capacity of the GoO for revenue mobilisation and effective
expenditure management
Output 2 score and performance description: A+ Output moderately exceeded expectation
Progress against/towards milestone
Output Indicators
Baseline 201011
Milestone
2012-13
Progress
2011-12
Score
GoO capacity for revenue mobilisation and effective expenditure management
Laws, rules and
systems for GST
Policy, capacity
and processes
in line with VAT
Training of staff for
GST
Computerised
monitoring system
established
Laws, rules and
systems for
GST adopted
and in use
Outcome on Track. Stated in
Key achievements
The output indicators specifying
the time-lines the road map has
been agreed with the
department.
A+
Training needs
assessment
completed and
50% staff
trained
As agreed with the GOO,
training to be undertaken in
FY14 after completion of BPR
exercise in FY13
Not rated
as the
milestone has
not been
reached and
GoO has
indicated that
this activity
should be
undertaken in
FY13
Registration database validated.
Online update of database in
progress. Returns data validated
A+
Invalidated data
9
for FY10, FY11 and FY12
Pending audit
objections
Efficiency gains in
procurement in
target departments
19,477
As per Pending
audit objections
(Inception
Report) for
2006-07 - 201011
Status: On Track
A+
X-40%
(progress details provided in
Key Achievements section)
Milestones: No milestone for
2011-12.
Weak or nonexistent
benchmarking
Not undertaken since the
delegation of financial rules has
been recently revised. Will be
reviewed on enactment of the
Procurement Law by the centre.
Not evaluated
During the year looking at the emerging priorities the road map pertaining to the Tax Component was
reviewed, discussed and agreed with the GoO.
Progress against expected results:
TAX POLICY

The Revenue Gap Analysis with respect to State VAT for Odisha together with an inter-state
comparison of 17 states has been completed. This first of its kind study also contains a ranking
of States according to their Tax Effort index for State VAT. Odisha ranks 10th amongst the 17
states considered for this report. The revenue gap for Odisha excluding petroleum products is
estimated at Rs.1,207 Crore for FY11 and Rs.1,351 Crore for FY12. This gap can be further
sub-divided into Policy gap, Compliance gap and Administrative gap.

Amongst the two major industries which have significant gap in revenue are the Petroleum
industry and Construction and Real Estate. For instance, the VAT rates on Petroleum products
in Odisha are substantially lower than some of the neighbouring states. In the Construction and
Real estate industry, there seem to be significant compliance gaps arising due to policies which
are not taxpayer friendly.

Classification of VAT rates on commodities across 17 states has been compiled, based on
which weighted VAT rates for the states have been computed. This compilation of VAT rates
will form the basis for reclassification of commodities under the various tax rate schedules. The
objective of this exercise is to widen the tax base and reduce compliance gaps arising out of
classification issues.
DATA ANALYSIS AND BUSINESS PROCESS REENGINEERING

The first validation of the Registration database has been completed. Based on the validation
report, the Odisha Commercial Tax Department has undertaken an online dealer data validation
process which is being undertaken in phases to address gaps in core mandatory, mandatory
and optional fields in the registration database.

The first validation of the tax returns database for FY10 and FY11 has been completed. The
quality of the tax returns database was adversely affected in FY10 and FY11due to manual tax
returns filing and physical data entry of returns. Introduction of e-filing of returns in FY12 has
significantly improved the quality of the tax returns database. However, additional validations
need to be built into the online tax returns form to ensure completeness, timeliness and
correctness of data

A framework for electronic scrutiny of returns has been provided to the Commercial Tax
Department. Based on this framework, preliminary scrutiny is being conducted on monthly tax
returns data for FY13, the results of which have been shared with the Odisha Commercial Tax
Department (OCTD). Significant discrepancies have been noticed in ITC being availed by
dealers, which needs to be followed up by the OCTD.

The design of new registration form and process already submitted to the OCTD. Since the
Centre is expected to issue a recommended registration form for the GSTN, OCTD has decided
10
to defer the introduction of the recommended registration form till the GSTN form is issued.
However, recommendations relating to amendments in process are being evaluated and
changes will be implemented in FY13. A streamlined registration process is expected to lead to
a 5% increase in number of registrants.

The process gap report for all processes has been prepared. Based on this report business
process reengineering of all the processes related to Returns, Tax payments, Refunds,
Recovery and Statutory forms will be conducted in FY13.

Measures are being undertaken to ensure greater coverage of returns scrutiny (50% in FY13),
Audit of randomly selected ‘Nil’ filers (1% in FY13), wider Audit coverage of TIN dealers (3% in
FY13) and increased submission of Audit Visit Reports (50% in FY13).
PEOPLE & CHANGE MANAGEMENT

OCTD has initiated an SMS communication strategy to remind dealers to file their returns on
time. This will ensure better compliance, especially from dealers whose returns are filed by tax
practitioners/ advocates.
Output 2 : Non Tax
Progress against expected results: A
Output
Indicators
Pending
audit
objections
Baseline
(2010-11)
19477
(X)
Milestone
(2012-13)
X%- 40%
Progress
(2011-12)
Status: On Track
Score
A
(work in progress: The software has been
designed and developed. Pilot underway)
Key Achievements (2011-12):

An Audit Objection Monitoring and Management Software called OCAMP12 (ODISHA CENTRAL
AUDIT MANAGEMENT PORTAL) has been developed. The software is designed to cover over 7000
users across 40 departments and currently a pilot is underway in Panchayati Raj Department
and Health and Family Welfare Department.

An internal audit manual for Government of Odisha has been developed to strengthen internal
control mechanism and internal audit systems, in keeping with modern internal audit processes
and techniques.

To address audit pendency (2,23,22513 units) unaudited for the last 23 years (in case of
educational institutions), alternate mechanism to undertake internal audit has been designed
and developed. Pilot audit of Maharishi College of Natural Law Bhubaneswar (transaction value
of GBP 0.63 million or INR 5,02,05,902) was conducted. To upscale the pilot state-wide, an
overall scope of work for audit firms engagement, audit toolkits and formats and standard fee
structure has also been developed.

A dedicated and specialized wing: Programme Performance and Outcome Monitoring Unit
12
The software covers over 7000 users including (i) designated representatives of 38 departments across the state (ii) Auditors/
Audit officers (iii) 6779 Drawing and Disbursement Officers (DDO) posted across the districts and (iv) AG office within the State
is hosted online at web-address http://ocamp.ipetechnologies.com
13
Total LFA pending as on 1-4-2012, Source: Finance Department, Government of Odisha
11
(PPOMU), first of its kind in the country has been established. The objective of this is to
institutionalize outcome based budgeting, monitoring flagship government schemes and
evaluate spending efficiency and service delivery performance based on outcome indicators set
out by the department(s). The Department has allocated an annual budget of GBP 0.62 million
(INR 5,00,00,000) to establish and operationalize the PPOMU.

Supported implementation of Automated Payroll mechanism under HRMS developed by OMGI
in all 40 Administrative Departments of Government of Odisha. The intervention has expanded
the user base of HRMS to more than 10,000 employees covering over 400 offices across the
state.

Supported the Finance Department in designing the Specifications for an integrated
modernisation of its Treasury Management Software (iOTMS) to create a fully integrated and
comprehensive financial management system.
Recommendations:
Output 2 (Tax)
Registration

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

Implement online dealer validation of registration database for all data fields in phases
Implement recommended changes in the Registration process
Identify dealers with a) no purchase and sale turnover over a period of two years b) Purchases
but no sales turnover over a period of two years and c) Turnover below threshold over a period
of two years. For such dealers identify their a) geographical location b) nature of business
activity c) commodities in which they deal and d) date of issue and validity of registration
certificate. Undertake suspension/ cancellation of such TINs after show cause notice and spot
verification.
Collect third party information from Central Excise department, Income tax department, Works
dept. and Shops and Establishment depts. to find missing dealers. Also conduct regular field
surveys and compile information about unregistered dealers while conducting audit of
registered dealers to find dealers who are liable to be registered but are unregistered.
Returns



Undertake regular electronic scrutiny of returns, especially of monthly returns to find
inconsistencies in tax declarations. This will ensure 100% mandatory scrutiny as per law and
obviate the need for any manual intervention. It will also provide inputs for detailed scrutiny of
returns and audit.
Build validation checks for Completeness, Timeliness and Correctness of information in the
returns as highlighted in “Online scrutiny of returns”, especially validation checks for a) Input tax
credit and b) Input tax reversals and c) matching of turnover with the data from C-form, F-form
and Waybills
Non-filers: Follow-up with non-filers through emails, SMSs, telephone calls and field visits to
recover tax due. Conduct speedy provisional assessment of all monthly tax defaulters. Monthly
taxpayers with tax liability of less than INR 1 lakh should be converted to Quarterly taxpayers.
Audit




Design effective audit plan to improve coverage by size, sector, compliance issues and revenue
yield
Increase the focus on audit of LTUs
Set up a dedicated team for scrutiny and audit work – department to undergo functional
organization
Issue oriented partial audit – verification of ITC claim should be started on a pilot basis at
Bhubaneswar and Cuttack for 1-2 tax periods
Recovery

Ensure early recovery of demand from provisional assessment
12






Prepare action plan for vacating stay granted by Supreme Court/ High Court
Fix early hearing and speedy disposal of cases in which stay has been granted
Speedy disposal of assessment cases involving vigilance reports and recovery of demands
created as a result of assessment
Recover recoverable arrears through special recovery drive
Create separate recovery cells at the Circle level
Create detailed action plan for disposal of appeal cases pending with OCTD
Influencing

Ensure that the OMEGA tax reform experience feeds into DFID India’s wider policy
engagement on tax in India, including encouraging Indian Think Tanks to increase the profile
and public debates on tax policy choices.
Output 2 (Non-Tax):


Develop a simple software to help government aided colleges and schools maintain their
accounts
Integrate the treasury management software with HRMIS software to enable seamless
transactions for payroll and salary payments through direct bank credit to employee accounts.
Impact Weighting (%):30%
Revised since last Annual Review? Y/N
No
Risk: Low/Medium/High
Medium
Revised since last Annual Review? Y/N
Output 3: Poor people’s access to priority poverty alleviation programmes increased
strengthened
Output 3 score and performance description: A+ Outputs moderately exceeded expectation
Progress against expected results:
Output Indicators
Districts supported with
development of climate
resilient projects in
NREGA works and
improved implementation
Baseline (2010-11)
Milestone
13)
2
8
13
(2012- Progress
(2011-12)
Score
No milestone for
A+
2011-12. Current
Status: 6. Intensive
support through
positioning district
teams to
undertake pilots in
6 districts.
Additionally
Support is being
provided to the
714 identified
potential pockets
across the
selected districts
for preparing
action plans.
PDS Implementation
Improvement Action Plan
(IIAP)
Implementation
Improvement
Action(IIAP) Plan
prepared
Implementation as
per plan prepared
and agreed
Current Status: On
Track
A+
MGNREGS Implementation Support
Key Achievements 2011-12
Institutional Development and System Strengthening

Provided dedicated TA and implementation support to the district administration in 6 districts Balangir, Cuttack, Ganjam, Keonjhar, Kandhamal, and Koraput..

Panchayati Raj Department (PRD) has committed a budget of about GBP 0.2 Million (INR
2,29,32,000) annually for establishing a dedicated institution - MGNREGS Odisha Society. The
State has also established Odisha Society for Social Audit Accountability and Transparency
(OSSAAT) to govern state-wide social audit of MGNREGS and other PRI schemes. PRD has
dedicated an annual budget of GBP 5 million for this society. These initiatives have been actively
supported by OMEGA TAST14.
Building Climate Resilience through Convergence

OMEGATAST has conceptualised IRADP15 (Integrated Rural Asset Development Plan) to
encourage environment friendly works under MGNREGS. The pilot implementation of IRADP has
been initiated in Keonjhar. The intervention seeks to curb the adverse environmental impact
(especially on soil and water bodies) of large scale mining through strategic MGNREGS works
which can facilitate ground-water recharge, enhanced soil fertility and increase bio-mass.

Supported Kandhamal and Mayurbhanj to undertake climate resilient work. Substantial increase of
21% and 15% respectively in climate resilience works during 2012-13 has been recorded over the
last year (Source: NREGA website)

PRD has identified 3493 potential pockets16 across the state. Assisting the e department in
developing MGNREGS action plans for 714 such potential pockets across the selected districts in
tandem with GSSK17 priorities.
Encouraging Participatory Decision Making and Transparent Governance

Created a favourable environment18 and space19 for CSOs engagement in MGNERGS
implementation. The intervention has been recognized at national level and has found place in the
14
OTAST has provided TA for (i) institutional structuring of the societies, (ii) developing the operational manuals (HR and
Financial Manual) and (iii) recruitment support for the society. OTAST developed a recruitment software (available at
http://orissacareer.ipetechnologies.com) to facilitate online receipt and processing of applications in a transparent manner. Over
3000+ applications received using the software and the recruitment process is ongoing currently.
15
The model initiative seeks to ensure sustainable community assets management and follows the community based approach
to building climate resilient projects considering natural resource profile of the region
16
Potential pockets have been referred to as GPs where MGNREGS off-take is low and holds particular reference to urban and
coastal regions within Odisha.
17
GoO has initiated a state-wide campaign Gram Sabha Sashaktikaran Karyakram (GSSK) across all 6236 Gram Panchayats
(GPs) and 51349 villages of Odisha. The intervention seeks to strengthen MGNREGS and climate resilience through
convergence undertaking 70,000 hectares of land development activities (plantation);
16000 Check Dams for Flood
Control and 2,12,000 Multi-purpose farm ponds for ground-water recharge.
18
OTAST organized a first-ever state-wide multi-stakeholder workshop engaging more than 100 representatives from diverse
NGOs/CSOs, Donor groups, programmes (OTELP, WORLP) etc. on exploring possibilities of NGO involvement in MGNREGS.
14
new draft scheme guidelines MGNREGS 2.0 circulated by Ministry of Rural Development. The
DRDAs across OMEGA TAST supported districts Koraput, Keonjhar, Ganjam and Balangir have
initiated pilot NGO engagement for undertaking participatory planning. More than 350 village level
plans were developed (using PRA techniques) documented, compiled and presented in Gram
Sabhas across 44 GPs for encouraging need based and inclusive decision making. The NGO
engagement has led to an increase in building climate resilient works shelf by about 80%.

Developed and implemented village level social audit20 engaging NGOs and community (following
a Community Based Approach (CBA) .The pilot covered over 4000 households across 75 villages
in 6 pilot districts21 and resolved over 700 issues related to scheme implementation. The state has
taken ownership for the intervention and seeks to up-scale the pilot using OMEGA FA support up
to GBP 0.1 million.

Developed a convergence based action plan and strategy to address distress migration. Pilot has
been undertaken in 8 GPs of Belpara and Bongamunda Blocks in Balangir District. The
intervention has successfully retained 2100 distress migrant households22 provisioning 100 days’
work under MGNREGS along with aligned interventions23. PRD has proposed to up- scale the pilot
in neighbouring districts Nuapada and Bargarh.
Improving service delivery quality through e-Governance

PRD has initiated the development of workflow based automation of MGNREGS based on
MGNREGS ++ Design concept24 . The state has proposed to utilise GBP 1.5 million from OMEGA
FA budget over next five years to operationalize this e-governance initiative.

Supported PRD in the development and establishment of a centralised grievance management
mechanism “Panchayat Helpline”.

Supported the development and deployment of Dashboard25 Monitoring system for effective district
level scheme implementation performance tracking based on set of 50 priority indicators.
PDS Improvement Action Plan

Key Achievements 2011-12:
The workshop proceedings were published widely and circulated nationally as well as across the state for experience sharing.
http://odishapanchayat.gov.in/English/Pdf/NGOS_MGNREGS_Workshop_Proceedings.pdf .
19
OTAST has evolved formal engagement modalities, scope of work and professional fee framework for engaging NGOs in
select variety of task including participatory planning, community facilitation, works management, sustainable asset
management and social audit
20 OTAST developed overall methodology, formats and checklists for said Social Audit as well as provided necessary TA
support for effective pilot implementation at district level
21
For the pilot 2 Blocks and 2 GPs per block per district (Balangir, Ganjam, Keonjhar, Koraput, Cuttack and Kandhamal)
22
Identified during the baseline assessment conducted by WONC (consortium of NGOs working in Balangir)
23
As a part of convergence initiative OTAST has facilitated following tasks: (i) Skills development training for individuals for
security guard jobs (ii) Mobilising the Children of Migrant Families retained in the Village for enrolment under Sarva Shiksha
Abhyan (SSA); (iii) IEC in the form of campaigns “Mo Gaon & Mo Kama” (“My village my work”) (iv) Organizing Rozgar Diwas
(Employment Day) to improve MGNREGS off-take by providing a platform for community awareness generation, public
disclosure and grievance recording and redressal. (iv) Exploring linkages with schemes such as PDS, NRLM, etc. for ensuring
food security and additional fund provision.
24
OTAST conceptualised an end-to-end workflow automation approach for MGNREGS for PRD. The concept has potential to
integrate other rural development schemes and shall ensure efficiency, reduction in pilferages and enhanced transparency in
operations through real time reporting.
25
The software is available online on http://orissaprd.dashboardmonitoring.com/
15
Implementing the Reform Action Plan

Supported the Department of Foods Supplies and Consumer Welfare (DoFS&CW) to prepare a
State level PDS Implementation Action Plan with a commitment of INR 74.5 crores over next 5
years for end-to-end PDS computerization.
Systemic Reform and Business Process Re-engineering


Facilitated DoFS&CW to conceptualise and adopt the Door-Step Delivery Mechanism26 across all
30 districts from April 2012. The intervention is the stepping stone for implementation of PDS
reform action plan and marked the abolishment of 2 decade old storage agent system in the state.
The new mechanism has improved efficiency in supply chain management as it has reduced
pilferage of food grains, shortened supply waiting time and enhanced predictability of supplies for
beneficiaries. It has also enabled the state to operationalize the existing under-utilized storage
capacity of about 50,000 MT across 130 godowns.
Door-Step Delivery mechanism introduced within the state has improved the financial viability for
about 30,000 Fair Price Shops (FPS)across the state with an average increase of more than
80%27 in the income of FPS.
Automation for Improved Service Delivery



DoFS&CW has piloted an online Supply Chain management system involving Departmental
Storage Centre’s (DSC) automation in Sonepur district. The pilot has improved operational
efficiency by 350%28 and provided online access to officials to access, monitor and approve
transactions online. The reform measure29 is being up-scaled across Khurda, Cuttack, Rayagada,
Kalahandi and Bargarh by DoFS&CW.
A Model DSC30 in Sonepur featuring modern infrastructure and scientific facilities to improve work
environment, efficiency, transparency and safety & security has been put in place.
Developed the integrated banking portal within the supply chain management software to improve
funds flow tracking for Civil Supplies office.
Improving Transparency and Accountability



Supported digitization of ration cards database in (Balangir Block) Balangir District. The pilot is the
first ever initiative to furnish details of all the 1, 04,049 beneficiaries of 25780 PDS households in
public domain and is based on NPR 2011 validated on ground using bio-metric authentication. The
reform measure has facilitated the DoFS&CW to identify 3928 inclusion errors (bogus cards) and
7530 Exclusion errors (eligible but not included in the beneficiary list).
Designed and developed a Paddy procurement software which will be pilot tested in Godbhaga
Market Yard in Bargarh district in KMS 2012 (December – February 2013). This initiative shall
facilitate transparency in procurement process by providing necessary details in public domain in
sync with the supply chain management software.
Implemented a Personnel Management System (PMS) in Odisha State Civil Supplies Corporation
26
Also referred to as Departmental Storage System, the Door-Step delivery mechanism involves establishing or converting
existing Rice Receiving Centers (RRCs) into Departmental Storage Centers and provisioning of transport facility for loading and
lifting the commodities to-from DSC to FPS or retailers.
27
Data available from Field Study recorded in Sonepur
28
The intervention has reduced the per truck loading and unloading time from 90 minutes to 20 minutes
29
The model approach was showcased to the chief Minister of Odisha and was also presented at national level in Ministry of
Consumer Affairs, Food and Public Distribution by DoFS&CW and OTAST.
30
Model DSC features - scientifically designed furniture and fixtures for better workflow, climate control facility to ensure stable
temperature within the office, Drinking water facility, and token system for truckers for systemic operations on the weigh bridge
and loading/unloading point, Digital Display boards integrated with supply chain management software providing real time data
on stock position for enhanced transparency. Truckers token display Board for organizing truckers, CCTV surveillance and
monitoring using IP cameras providing access to visuals at any remote location, Fire Fighting equipment.
16
(OSCSC) to improve personnel management and provide a platform for establishing a transparent
and accessible Grievance Redressal support mechanism in PDS. The PMS includes and is
enabled with a transparency portal for overall grievance management at state and district level.
Piloted implementation of an off-the shelf accounting software (TALLY ERP 9.0) in Khurda District
for strengthening OSCSC accounting system handing transaction value of over INR 28,44,30,065
(GBP 3.5 million). The pilot is proposed to be rolled out across all 30 districts with support from
OTAST.

Improving Vigilance and Transparency

Developed the first ever set of guidelines for conducting Social Audit under PDS using
Community Based Approach (CBA). The pilot implementation is being carried out in Keonjhar
covering more than 300 households in 2 GPs.

Supported establishment of Gram Panchayat Level Advisory Committee (GPLAC) and Block
Level Advisory Committee (BLAC) in Balangir. These bodies are oversight and review forums
involving the PDS officials, PRI members and beneficiaries. They meet monthly to review
performance and address issues of food grains access, availability, and quality and staff
performance. The pilot intervention was initially carried out in 1 GP and 1 Block by the OMEGA
TAST; and is now being scaled-up across all 14 blocks and 285 GPs of Balangir district. The
intervention is also being scaled-up in select GPs and Blocks of Sonepur district.

Developed and implemented a Court Case Monitoring System (CCMS) in OSCSC to facilitate
tracking and management of over 500 court cases
Recommendations:

To review and revise the log frame to reflect the evolution of the programme, particularly scope
of MNREGA.

Initiate a pilot for FPS automation to complete the cycle of process automation and ensure
transparency and accountability to the beneficiaries. Integrate systems at procurement, storage
and delivery points with the agreement of the government.

Review the policy on entitlement and allocation of rations and enhance the viability of Fair Price
Shops.

Explore the possibility of developing a unified public complaint handling mechanism linking PR
Departments helpline with other existing forms of public grievance mechanisms such as Block
grievances, CM grievances, Sanjog helpline etc.

Current efforts at reducing migration need to link up with other schemes / initiatives such as the
Odisha Livelihood Mission (OLM) initiatives. The district team may support the efforts of forming
SHGs with migrant families and enabling access to National Rural Livelihood Mission (NRLM)
funds for sustainable livelihood.

Explore the possibility of undertaking an alternate mobile based payments pilot under
MGNERGS with the Government of Odisha to ensure timely payments to the beneficiaries.
Impact Weighting (%):35%
Revised since last Annual Review? Y/N
No
Risk: Low/Medium/High : Medium
Revised since last Annual Review? Y/N
No
17
Section B: Results and Value for Money.
1. Progress and results
1.1 Has the logframe been updated since last review? Yes/No
Yes- Partially. Some key indicators for Output 2 (Tax) have been updated since last year.
1.2 Overall Output Score and Description:
Score: A+. All the three outputs have been rated. Output 1 is Rated as: A, Output 2 : A+ and Output 3
as A+.
1.3 Direct feedback from beneficiaries
OMEGA has received positive feedback from the highest level of bureaucracy in Odisha and from other
key stakeholders and beneficiaries of the programme. DFID has received positive feedback during the
visit made by the delegation of the UK Parliamentarians to Odisha during the August 2012. The
delegation was particularly pleased with the interventions made under the product market linkage
initiative wherein the poor producer groups/farmers are being integrated in direct value chain of large
corporate buyers.
During Field Visits of the Annual Review Team to Sonepur and Bolangir, there was positive feedback
from various stakeholders and beneficiaries about the role and support OMEGA and OTAST in PDS
and MGNREGS initiatives.
The District Administration and Civil Supplies team in Sonepur acknowledged the efforts of OMEGA in
computerisation of Departmental Storage Centres (DSCs) and Paddy Procurement System Automation
(PPSA). They requested to continue OMEGA’s support in the district to make the pilots sustainable.
During visit to a model Fair Price Shop (FPS) at Haradakhol GP (Sonepur), the team met and
interacted with about 150 beneficiaries who voiced several improvements in availability and quality of
food-grains: Sanatan Mahaling, Excutive Officer, Hardakhol GP, Sonepur Block indicated, “As
everybody know we Executive Officers are burdened with workload in GP and there were many
problem in PDS system like delivery to FPS ,less quality of commodities, lesser than the allotment
but now through SMS we get the information of PDS commodities. Previously Ex. Officers & Salesman
were fully dealing PDS but now the PRI members are also getting involved in the process which makes
our work easier. Committee is now working actively monitoring the PDS distribution”. Karuna Sankhua,
BPL Card Holder, Baidyanath, Hardakhol GP, Sonepur Block said, “Previously we used to get
information about arrival of PDS commodities from GP peon, but now we are getting it through mobile
SMS alerts. OMEGA officials are educating us by conducting meetings in our villages. Now we are
aware about the Grievance Redressal process. We are getting the right quantity & good quality of PDS
commodities in time” The team also visited Panishiali for review of the Model DSC, Sonepur District
and interacted with 30 officials. Rudra Kumar Mahakud, Transport Contractor, Birmaharajpur Block,
Sonepur said, “Earlier workers used to create problems in delivering the PDS commodities in GP but
through the A/C note document they are unable to divert the PDS commodities & the supplies are
bound to reach the commodities in GP in time. Earlier when truck reached GP no responsible person
used to be present but through SMS at least one GP staff wait for truck to unload/receive the
commodities” (translated)
Similarly, in Balangir where digitised ration cards are being issued to beneficiaries, there was
tremendous appreciation of the initiative. Some beneficiaries at Tushurabahal GP (Balangir District)
raised the issue of not having ration cards after separating from their earlier joint family. This issue can
be addressed by moving away from the current ‘household based’ ration card system which is possible
only after digitisation of the entire beneficiary list. This was discussed in the Project Steering Committee
meeting and will be addressed once there is clarity on the provisions of the proposed Food Security
18
Act.
The team interacted with abiut 20 beneficiaries of MGNREGS in Balangir district who usually migrate
out to other states during this period. At a site in Dangiriguda Village of Kapani GP (Belpara Block of
Balangir District), while most beneficiaries appreciated the new initiatives and wanted to stay back if
work was regularly provided, they were concerned that 100 days of work under MGNREGS is not
sufficient to sustain their family. They requested 200 days of work per year in order to make it feasible
for them to depend on this. Similar feedback was given by MGNREGS beneficiaries of Admonda
Village of Gambhari GP (Belpara Block of Balangir District) where an older participant requested for
linked livelihood opportunities such as goat rearing etc. to make it a viable alternative to migration.
1.4 Summary of overall progress
The Odisha Modernising Economy, Government and Administration Programme is well on track to
achieve the impact and outcome indicators. Overall progress is satisfactory and moderately exceeded
expectation. Substantial progress is noted in development of climate resilient projects in MNREGA and
its implementation and improving service delivery quality through e-governance and automation. The
initiative to facilitate linkages of farmers with the corporate retailers under taken through OMEGA is
functioning well. OMEGA’s support has helped GoO in tying up with private skill providers for imparting
placement linked vocational training in the state.
A dedicated and specialized wing: Programme Performance and Outcome Monitoring Unit (PPOMU),
first of its kind has been set up in the finance department. This wing will help improve expenditure
management of the state through institutionalising outcome based budgeting, monitor flagship
government programmes and evaluate spending efficiency and service delivery performance based on
outcome indicators.
The OMEGA has supported GoO in creation of PPPs in five sectors and tracking of approved
investment proposals. The concerns now are to ensure that the approved PPPs and the investment
proposals are implemented. Other notable achievements are:
Tax: The Revenue Gap Analysis with respect to State VAT for Odisha together with an inter-state
comparison of 17 states has been completed. This study aims to identify the revenue gaps prevailing in
Odisha. The study will enable the GoO to undertake required policy measures to address these gaps
and ensure sustainable increase in the tax-GSDP ratio.
Audit tracking: To enable the government to effectively monitor, track and respond to the audit
objections, DFID has supported the design, developed and implementation of an automated Odisha
Central Audit Management Portal (OCAMP).
Social audit: Pilot an innovative Palli Sabha (village) level social audit based on Community Based
Approach (CBA) covering 6 districts and 75 villages. The intervention identified more than 600 issues
which were discussed, recorded and redressed during the pilot. Certain cases of fraud and corruption
were also highlighted to the state level for appropriate action and systemic reforms through the Odisha
Society for Social Audit, Accountability and Transparency (OSSAAT).The citizen centric pilot has
received an encouraging response from the state and is proposed to be up-scaled across all the 30
districts to ensure participatory and transparent decision making. DFID is supporting developing an
online portal for Government of Odisha to facilitate reporting and redressal of social audit findings and
objections. The portal will ensure transparency as this will be in public domain and facilitate social audit
management.
Grievance management in local government: Development of a grievance management portal
‘Panchayat Helpline’. The portal enables the citizens to lodge their grievances relating to all the
schemes implemented by Panchayati Raj Department. The software facilitates automated escalation of
grievances over a defined period of time and ensures effective response management. The details of
grievances received/ suggestions and action taken are available in the public domain
19
Development and implementation of supply chain management software- To automate and bring about
BPR within the existing supply chain mechanisms under Public Distribution System (PDS) The
software facilitates information dissemination for all the stocks sent out through the Departmental
Storage Centres (DSC) using SMS alerts. The intervention has been piloted in Sonepur. The pilot is
being up-scaled across Odisha and should achieve state wide coverage by 2013-14
Digitization of ration cards using bio-metric identification in (Balangir Block) Balangir District. This
would ensure reduction in inclusion and exclusion errors as well as elimination of ghost cards.
1.5 Key challenges
Governance Programmes evolve over time to adapt to changing priorities. Although the programme is
designed for flexibility to incorporate emerging priorities, coordinating and engaging with diverse
departments and keeping the focus of the programme on key deliverables amidst increasing demands
of the departments and maintaining the pace is a challenge.



Better coordination of Industries Department and IPICOL to progress on key initiatives such as
Single Window facilitation, Policy formulation, PMIS implementation
Finalisation and signing of the Concessional agreements with identified private players on
health, education and water supply PPP project.
Ensuring that necessary clearances and land is made available at the proposed locations for
PPPs
1.6 Annual Outcome Assessment
OMEGA is contributing towards strengthened governance at state and helping address some of the
systemic bottlenecks in the administrative systems of the state. OMEGA has helped in identification
and creation of PPP projects entailing total investment of $165m (app). Systems improvements
initiatives in the Commercial Tax Department led to identification of 10368 new dealers and
cancellation of licenses of 24805 dealers on account of misuse of registration numbers and undue tax
credit claims. The initiative to facilitate linkages of farmers with the corporate retailers helped sale of
5000 MT of onions by the Framer’s Institution and generated livelihood for more than 1000 households
in the first season. It is expected that this intervention will reach out to 35000 farmer families over next
three years. Helping GoO in contracting 12 private skills training providers linked with job placements
with a capacity to train 35000 candidates per annum has the potential to create an additional income of
£20 m for poor families. To ensure productive engagement of poor in agricultural activities OMEGA
supported creation of climate resilient land development works to about 3,00,000 households under
MGNREGS. To address delays in processing wage payments to the beneficiaries an electronic fund
transfer (eFMS) has been rolled out across the state. This will also help generate demand for work
under the scheme. The digitisation of PDS beneficiaries identified an error of about 3928 beneficiaries
in pilot Block of Bolangir district. It is estimated that this intervention facilitated an overall saving of
about $0.3m annually. The Door-Step Delivery Mechanism piloted under OMEGA is the stepping stone
for implementation of PDS reform action plan and marked the abolishment of 2 decade old storage
agent system in the state. The new mechanism has improved efficiency in supply chain management
system and enabled the state to operationalize the existing under-utilized storage capacity of about
50,000 MT across 130 godowns. Although there is no study available quantifying pilferage of food
grains in the PDS supply, anecdotal accounts indicate misappropriation of the supplies by the
departmental officials. OMEGA helped redesign the PDS sytem to include Internal controls such as
separation of functions and transparency mechanism –SMS to the beneficiaries minimize the possibility
of misappropriation and or pilferage of food grains.
20
2. Costs and timescale
2.1 Is the project on-track against financial forecasts: Y/N
Yes. The project is on track to achieve the milestones for 2012-13
2.2 Key cost drivers
Key cost drivers of the project come from two separate mechanisms: Financial Aid (FA) and Technical
Assistance (TA). DFID will provide up to £19 million, of which up to £8 million will be Financial Aid (FA)
and £11 million will be Technical Assistance (TA). . The FA allocation will be utilised for meeting the
costs of software. Government of Odisha will bear all the incidental expenses of housing the TA
consultants in one of its buildings.
TA funds are used to support implementation of studies, evaluations, quality improvements, monitoring,
capacity building, piloting innovations. Cost drivers under TA are the remuneration and travel/logistics
costs of expert professionals to support implementation of reform initiatives and pilot projects, develop
capacity of government departments, strengthen human resource, financial management and MIS
systems.
2.3 Is the project on-track against original timescale: Y/N
The project is on-track against original timescale
3. Evidence and Evaluation
3.1 Assess any changes in evidence and implications for the project
No changes in evidence are noted and thus, no implications are qualified. The assumptions used in the
project design still hold, however internal capacities of government are found to be limited. Speedier
procurement processes and government approvals can further improve project progress. Staff
shortage and short tenure of key officials continues to be a challenge. Hand holding support through
the TAST and implementation of pilots at district levels therefore continues to be significantly large and
needs to be extended in the current year. DFID policy division is in the process of reviewing our global
approach to Capacity Building in Public Service Reform, including Institutional Analysis. This work
stream will produce evidence based policy advice.
3.2 Where an evaluation is planned what progress has been made?
The programme was approved by the DEA only in in February 2012
The programme is to be implemented in two phases. The Programme Memorandum envisages an
independent assessment to the different elements in mid-2014. This will also take stock of emerging
priorities of the Government of Odisha.
Evaluations of the pilots on automation of Departmental Storage Centre (DSC for PDS), Social Audit
and Grievance Mechanism System (PRD) is planned to be undertaken in 2013.
21
4. Risk
4.1 Output Risk Rating: Low/Medium/High
The programme is judged to be of medium risk with the potential of high return.
4.2 Assessment of the risk level
Key risk
factors
Weak
Implementing
capacity
Status
Risk
rating
Weak institutional structures and insufficient capacity to coordinate efforts across Departments could undermine effective
project delivery. This was a key challenge identified in the
implementation of OPSRP. Prior assessment of institutional
structures at State and District level, and sustained
consultancy and technical expert support, with a strong focus Medium
on capacity building have been designed to address this
issue. A Project Steering Committee headed by the Chief
Secretary and the pivotal role of the Principal Secretary,
Finance will also help improve co-ordination.
Management - Weak planning, poor contracting and
supervision by line Departments leading to low impact on
ground. In the initial stage hand holding support by the
management consultants and greater supervision by DFID is
required, while building the capacities within the Departments.
Procurement
Low
The programme is helping strengthen accountability
mechanisms in the departments. The improved accountability
and transparency initiatives will also help address this issue.
The risk is assessed as Low as the FA funds can only be used
for procuring software in agreement with DFID and also with
the approval of the PSC.
Interventions not environmentally sustainable. Environmental
Environmental sustainability framework will be developed for the programme.
Interventions, especially output one and two, to mainstream
Medium
environmental impacts.
Fiduciary risk
Political
The detailed fiduciary risk assessment for the programme is
not required as per the guidance available as there is limited
DFID FA support (£8m) to specified budgeted line items. The
fiduciary risk is low as the programme is designed to address
systemic deficiencies and improve and strengthen GoO
system.
Our earlier experience of OPSPR indicates that there is risk of
limited acceptability and ownership by the line Departments of
reforms being supported. l The milestone matrix and work
plan are agreed in the Steering Committee under the
guidance of the Chief Secretary and the Programme is
monitored by the Project Monitoring committee(PMC) chaired
by the finance Secretary. Further, monitoring and
implementation responsibilities are also attached to the
Principal Secretary/Secretary of each Department. This will
increase the sustainability and ownership of the programme
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Low
Low
Social
accountability
There is limited accountability towards the people.
Strengthening accountability, including the demand side
accountability, is an important OMEGA objective. District and
State level work will ensure the participation of CSOs. TA
support and collaboration with other DFID programmes such Medium
as PACS in the State District will further enhance
accountability.
4.3 Risk of funds not being used as intended
At the state level, there is no risk of diversion of UK AID grants for other programmes. The state
proposes to allocate UK AID funds through a separate budget line. At the department level, the risk of
funds not being used as intended under the programme is rated to be low. Each implementing
department is required to spend funds as per its plan of activities duly approved by the Project
Management Committee and the Project Steering Committee of OMEGA.
4.4 Climate and Environment Risk
In general, the programme interventions are not likely to create any adverse impacts on either the
climate or the environment. However, in order to ensure that environmental safeguards are in place,
OMEGA is supporting an Institutional Review of the Odisha State Pollution Control Board to assess the
existing human resource and technological capacities and based on national and international best
practice; provide recommendations for enhancing capacities to meet the increasing demand of the
services likely to emerge.
5. Value for Money
5.1 Performance on VfM measures
VfM is assessed in terms of improvement in efficiency and effectiveness by UK Treasury’s ‘3 Es’,
namely ‘economy’ (efficient procurement of inputs), ‘efficiency’ (efficient delivery of outputs), and
‘effectiveness’ (achieving the intended impact).
Some of the illustrative VfM measures include:
Mobilisation of Private Sector:


The TA support in PPP for the period 2011-12, approximately £ 0.7 m, has resulted in
identification and creation of projects entailing total investment of approximately £ 165 m. These
projects are at various stages of project development. The TAST is also assisting the Works
department in project preparatory activities of road projects worth £ 45 m.
TAST has worked closely with the Department of Employment, Technical Education & Training
(DETET) in contracting 12 private skill training providers with capacity to train 35,000
candidates per annum. This has potential for creation of annual income of £ 20 m for poor
families (assuming annual income of £ 600 for a skilled worker). The TA support to DETET for
the period 2011-12 was approximately £ 0.04 m. Even a mere 1% attribution shows a benefitcost ratio of 5 which is commendably good.
TA support of £0.3m has increased efficiency in coverage, transparency and collection in
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Commercial Tax.

TA support has helped the Commercial tax department to redesign the Dealer Registration
System. This has improved the efficiency in terms of ease of registration, validation and tax
returns. Due to the systems improvement, 10,368, new dealers registered during 2011-12
under VAT act. Improved systems and validation has led to identification of non-existent
dealers and cancellation of licenses of 24 805 dealers on account of misuse of registration
numbers, undue Input Tax Credit claims etc.
Effectiveness measures in Commercial Tax



An improved IT systems and electronic scrutiny process have resulted in better inputs for the
audit process and effectiveness of the assessment and recovery process.
The Revenue Gap Analysis has quantified the revenue gap for Odisha and has provided a
roadmap for improved compliance and tax administration.
Since the work on Commercial tax has only effectively commenced from April 2012 it is difficult
to quantify the benefits and calculate the VfM at this early stage of the project. We will be able
to capture the gains and calculate the VfM through increase in coverage, efficiency in collection
and compliance at the end of this fiscal year once the data is available
TA support of 0.7m has helped in reduced Inclusion errors and significant leakages in PDS
and thereby increased public spending efficiency

Digitization of PDS beneficiary database identified an inclusion error (bogus cards) of about
3928 roughly 12% of beneficiaries in pilot Block of Balangir district. It is estimated that this pilot
achievement shall facilitate an overall saving of about GBP 0.3 million on an annual basis for
the DoFS&CW. Scaling of this initiative across the state will reduce leakage and create huge
savings for GoO.

Field visit confirmed that pilot initiative of Digitisation of supply chain for PDS have significantly
reduced leakage and ensured timely and quality food supply in the pilot villages.
It is difficult to calculate the vfm accurately for this intervention as there is no authentic study in public
domain that quantifies the leakages in PDS system in India or Orissa.
5.2 Commercial Improvement and Value for Money
TA procurement under the programme was through open competitive bidding. The TA contract follows
an Output-based Payment Deliverable system thereby ensuring maximum value for money. In 201112, approximately £2.8 m of TA support was provided to the twelve departments of Government of
Odisha. Excellent knowledge and experience transfer was ensured as the OMEGA TAST worked in
tandem with the concerned department officials operating out of the premises of concerned line
departments.
The sub-contracting by TAST has followed good procurement procedures complying with UK AID
guidelines as given under:
 The Terms of Reference (TOR) for the subcontract activity is approved by both GoO and DFID.
 Contracting of TA inputs is subject to UK AID approved procurement procedures.
 Regular reviews of TA work is conducted by GoO and DFID linked to Monthly Progress Reports
The value for money was maximized through procurement of subcontracts in the open market. In terms
of contract value, about 58% procurement had been through ‘open tendering’. Given the limited subcontract fund availability, OTAST also utilized available funds for innovative pilot interventions under
small value direct contracts, which represent 42% of the total contract value. TAST could save through
negotiations 10 % of the negotiated contract value (£14,269). Further cost savings were achieved by
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using government facilities for trainings, conferences and working space for TAST personnel.
5.3 Role of project partners
There has been a strong commitment from the political leadership and higher level bureaucracy of the
state. OMEGA is assisting Government of Odisha in areas such as such as public distribution system,
implementation of the flagship employment generation program MNREGS, skill development etc. which
the political and senior bureaucratic leadership on many occasions have presented as the State’s
priorities. This is evident through the quarterly project steering committee meeting chaired by the Chief
Secretary and the project monitoring committee chaired by the Principal Secretary, Finance who is also
the Nodal Officer of the Government of Odisha for the program.
5.4 Does the project still represent Value for Money : Y/N
Yes
5.5 If not, what action will you take?
Not Applicable
6. Conditionality
6.1 Update on specific conditions
There are no specific policy conditions placed by DFID on the Government of Odisha for the OMEGA
program. DFID has been and will continue to be an active partner, maintaining close contact to ensure
that the programme is implemented as planned. Annual plans are prepared in consultation with senior
GoO officers from the beneficiary departments and are duly approved by the project monitoring
committee.
7. Conclusions and actions
The Odisha Modernising Economy, Governance and Administration (OMEGA) Programme is on
track to achieve its impact, outcome and output indicator milestones. The officials are appreciative
of the role played by OMEGA in implementing innovative and new systems such as the 24 hour
complaint line, rolling out of GSSK31-, Support to Odisha Society for Audit and Transparency,
Gram Sabha Sashaktikaran Karyakram- PRD’s initiative at the village level to enable people’s participation to prepare village
level plans, involve them in implementation of the development schemes ,enable them to avail the benefits, address grievances
at the ground level
31
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Automation of the Department Storage Centres etc. There is strong ownership of the government.
OMEGA has proactively responded to the emerging priorities of GoO: Supporting GoO to undertake
Road Strategy for the state, e-auction process for licencing of vendors for the finance department,
enhancing monitoring through the design and implementation of a dashboard mechanism for PRD
etc.
The Challenge is now to maintain the pace and keep the focus of the programme.
Actions:


To ensure that the departments effectively draw the FA funds as per agreed plans.
To ensure that the pilots on Department storage Centres and digitisation of ration cards are
scaled up across the state.
8. Review Process
The Joint Annual Review was undertaken during November 2012 (5th-9th). The review included field
visits and state level presentations and discussions. The field visit was conducted in Sonepur district, a
priority district for targeted public distribution system in the state.
The review participants included DFID team, officials of Government of Odisha including Chief
Secretary; Principal Secretary, Finance; Principal Secretary, DETET; Principal Secretary, MSME;
Secretary, Industries; Commissioner, Employment Mission; Commissioner, Commercial taxes; CMD,
IPICOL, and members of OMEGA TAST
The Annual Review Report is further informed by independent sources. Presentations by GoO
Departments on programme progress, a steering committee meeting with all participating Departments
under the chairmanship of the Chief Secretary and reports from the technical assistance team, TAST,
were reviewed to support the conclusions in this review.
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