India’s states are among the most indebted in the world. Poor fiscal management limits investment in education, health, roads, ports and agricultural irrigation. A lack of funding for infrastructure and social improvements affects the citizens who use and need those services the most – the poor, the unemployed and the illiterate.

USAID’s REFORM program helps the Indian states of Jharkhand, Karnataka and Uttaranchal improve their fiscal management practices. REFORM has worked with these state governments to establish specialized, dedicated fiscal analysis units. REFORM trains these units to:

• Collect socio-economic data and conduct rigorous analysis of macro-economic situations in the states
• Forecast revenue and tax collections
• Develop project design, appraisal and management skills
• Use performance-based budgeting to link project funding with targets for achieving development goals
• Create fiscally responsible expenditure plans and establish controls and surveillance mechanisms
• Formulate specialized budgets for infrastructure projects
• Better manage debt and investment on behalf of the state’s financial health.

REFORM also helps to build cadres of skilled financial management specialists. Working with each state’s Administrative Training Institutes and national training institutions, the program develops curricula and diploma programs to train central and state government employees in fiscal practices.