Final dissemination event of the USAID-funded India State Fiscal Management Reform Project (REFORM)

October 22 , 2008

NEW DELHI – U.S. Agency for International Development (USAID) Director George Deikun and the
Honorable Minister of Finance, Government of India, Shri P Chidambaram opened the final
dissemination event today of the very successful USAID/India REFORM program; a five-year
partnership designed to provide practical skill transferal, based on international best practices, to
strengthen Indian states’ fiscal analytical expertise, structures, and systems.

Welcoming the participants, Deikun said, “REFORM was developed to help selected Indian state
governments strengthen their fiscal capacity, enabling them to make good choices supported by
information, databases, and best practice tools and techniques. USAID-India has been extremely
fortunate to have been able to work with three very forward-looking state governments - Jharkhand, Karnataka, and Uttarakhand - which provided critical direction towards a solid fiscal management infrastructure in their respective states.

The REFORM project represents the first time such a comprehensive effort was undertaken at the
state level to strengthen fiscal management practices. This is especially important in light of the
emerging challenges that Indian states will face with the gradual opening up of the Indian economy
and with state finances increasingly being linked to market forces. The REFORM interventions will
also help to improve the quality of service delivery to India’s citizens.

Commenting on the impact of the REFORM project, Special Secretary, Expenditure, Ministry of
Finance, Rita Menon has said: “the REFORM intervention indicates that there can be significant
fiscal gains through sustained policy design and efforts in restructuring fiscal management
practices.”

At the event, the Finance Minister released one of the key products of the partnership: A Compendium with Practitioners’ Guides, which will serve as an important resource for state governments all over India to implement improved fiscal management practices. He also launched “Fiscal Watch”, an online resource center designed to promote greater collaboration and provide best practices and information exchange on fiscal policy and management.

Looking towards the future, Deikun said: “We believe that each of the three partner states is wellpositioned to sustain and further improve their fiscal management reforms and we are confident that what we have learned from the REFORM experience can eventually be utilized throughout the country to improve the quality of state level financial management, which in turn will have a positive impact on service delivery for India’s citizens.”