Remarks by George Deikun, Mission Director, USAID India, at Inauguration of Fiscal Analysis Cell in State of Jharkhand

August 16, 2005

Good afternoon. I am honored to be part of this festive and important occasion to inaugurate a joint initiative of the United States and India. Opening this unique, specialized fiscal unit in the state of Jharkhand is a celebration of good government and bilateral partnership. I am confident that it will reap financial and social benefits for the citizens of the state.

This is my first visit to Jharkhand – one of India’s “youngest” states, so to speak. Since forming at the beginning of the new millennium, the state government has set forth ambitious goals and welcomed the opportunity to work with the United States to realize its vision for a more prosperous, educated and healthy citizenry.

And what better time for us to officially begin this collaboration… U.S.-India relations are stronger than they have ever been. Prime Minister Singh and President Bush – at their historic meeting in July – pledged to transform the relationship between the countries and establish a global partnership. As the Mission Director of the United States Agency for International Development, I look forward to an era of increased partnership on many fronts – joint efforts in economic growth, health, energy and education that build on our common values and interests and help India achieve wider prosperity and well-being for its people.

Today is the first day of my four-day visit to the state. It is an honor to be welcomed by such a distinguished group: Honorable Finance Minister Shri Raghubar Das, Chief Secretary Shri P.P. Sharma, Principle Secretary Finance Shri Rahul Sarin, and other ladies and gentleman. During my stay, I will have the chance to see how U.S. investments are bolstering the work of Indian partners to increase access to family health care, raise awareness about HIV/AIDS, nourish needy mothers and children, and create opportunities for vulnerable people – particularly youth – through education.

Before I expand on those efforts…let me say a few words about why we are here – in this setting – today.

The Inauguration

Today we inaugurate the Center for Fiscal Studies – a specialized fiscal analysis cell within the state government aimed at strengthening public finance systems in Jharkhand. It is an important step toward better forecasting, budgeting and investment of public resources. And it is a milestone in the partnership between USAID and Jharkhand to invigorate public fiscal management.

Few states in India have such dedicated cells to conduct fiscal analysis on a regular basis. The office we open for business today is part of a broader, five-year USAID initiative called “Reform,” which operates in three states: Jharkhand, Karnataka and Uttaranchal. This fiscal unit is the first of its kind under the Reform project.

The USAID “Reform” project exemplifies the new tenor in U.S.-India relations. American and Indian counterparts will openly share information, expertise and knowledge in fiscal management.

USAID will provide “hands on” technical expertise, fiscal analysis methods and tools with dedicated state public finance professionals to inform financial decision-making. Knowledge and practices gained will help the state better forecast state revenues and the impact of budget policies, improve budget preparation processes, and update information systems that track and manage state debt and spending.

Before I go any further, I would like to acknowledge Mr. Rahul Sarin and his team. He is the dedicated person behind the Reform effort in Jharkhand who is making this vision a reality. Without his diligence and hard work we would not be here today.

Development prospects for Indian states, and for the country as a whole, in recent years, have been jeopardized by structural weaknesses in public finance at the state level. The weaknesses are a result of a lack of analytical capacity and institutional systems – especially within key state departments of finance and planning. This lack prevents forward-looking fiscal management, grounded in good governance.

The newly created state of Jharkhand, though gifted with a resource-rich revenue base, faces extreme expenditures pressures. There is an urgent need for efficient revenue mobilization to meet the challenges of higher spending. If appropriate fiscal capacity, structures and systems are introduced now, the state has the opportunity to realize its full growth potential. Fortunately, the state possesses the most important pre-requisite for reforms – the vision and willingness on the part of leadership to make changes and set their fiscal house in order.

For more than a year, USAID and the state government of Jharkhand have been working closely to make this inauguration day a reality. In that time, they have already started developing program performance budgeting, macro-economic and tax analysis, debt and investment tracking, treasury reform, and civil service training.

Now we open the doors of this working unit – a place where specialized staff will be dedicated to good fiscal policy-making on behalf of the people of Jharkhand.

A healthier bottom-line in public budgets can fuel economic growth and improve quality of life for all of India’s citizens. At the state level in particular, fiscal strength can promote access to social services for people who need and use them most: India’s poor and vulnerable.

Other U.S. Investments in Jharkhand

Earlier I mentioned other U.S. development investments in the state – some of which I will see in progress over the coming days. Briefly, let me outline for you the focus areas of those programs, beyond state fiscal reform. For those of you in the audience, or members of the press, I have a fact sheet with me that details USAID activities in Jharkhand.

Working with Indian partners, U.S. assistance in Jharkhand invests in education and health – to increase opportunities for vulnerable people, nourish the neediest, prevent disease and raise living standards in urban and rural settings.

In education…

USAID elementary education initiatives in Jharkhand – valued at about $4.5 million – complement the Government of India’s national “Sarva Shiksha Abhiyan” (or “Education for All”) effort. Activities focus on:

• Getting out-of-school children back to classrooms through specialized learning techniques – “bridging” them back to classrooms through alternative education. The effort reaches 34,000 children in Jharkhand.
• We use communications technology – radio broadcasts of English lessons, for example – to connect underserved, rural children with quality teaching. Through broadcast programs, 25,000 children and their teachers have had access to English lessons, and there is a move to translate learning modules into tribal dialects.
• And we work to keep girls in school – particularly after adolescence – by upgrading sanitation facilities in schools so they have safe and private places to meet their personal needs. The effort includes health and hygiene curriculum for students, teachers and parents to engage the community in ensuring decent schools for their children.

In health…

A number of multi-state activities take place in Jharkhand with the aim to give couples more birth spacing options, slow population growth, better maternal health and child survival, and prevent infectious diseases, particularly HIV/AIDS – which is a growing threat to India’s future.

• The Innovations in Family Planning Services project – one of USAID’s largest reproductive health initiatives – increases access to family planning choices for couples, and raises the quality of maternal and child health services. After a decade of success in Uttar Pradesh, the effort is expanding to Uttaranchal and Jharkhand. Creating public-private models that demonstrate and deliver higher quality family health care services is the focus. Nationally, the four-year project is valued at $50 million.
• In a companion effort, USAID helps to commercialize and market affordable and effective contraceptive and other health products and services for Indian consumers.
• We support the Government of India’s effort to feed its most needy with U.S. food commodities and integrated health services – attracting mothers and children to village “anganwadi” centers for immunizations, vitamin supplements, essential newborn care and life-saving information about HIV/AIDS.
• We increase food security and raise living standards for rural people, many of whom live in tribal communities, through food-for-work efforts that nourish people and leave behind better land use, water and farming practices.
• And, with our Indian partners, we battle key infectious diseases – polio and HIV/AIDS – by generating demand for polio vaccinations, and raising awareness about HIV/AIDS and how to prevent transmission among villagers and urban citizens, and in the workplace.

Closing

In all of these efforts, let me say once again, I am honored to represent USAID at this ceremony, and play a part in helping the state of Jharkhand build a brighter future…a future that can realize economic growth and greater well being for the state and its citizens.

Thank you.