The Punjab Government Efficiency Improvement Program (PGEIP) had been initiated by the Government of Punjab (GoPb) with the assistance of the Asian Development Bank (ADB) in 2005 as a comprehensive reform package with an aim to strengthen provincial finances, institutional development, result based management and incentive mechanisms for public service delivery. The program particular emphasises pro-poor sectors and the creation of an enabling environment for private sector development to make it an engine of growth for the economy.
For the PGEIP cluster, GOPb had requested ADB’s support through three well sequenced single tranche loans. For Sub Program-1 of PGEIP a loan of $250,000,000 from ADB’s ordinary capital resources was pledged to be provided. The loan was to have a 15 years term including a grace period of three years. Sub Program 2 and 3 of PGEIP were envisaged to provide a loan each of $250,000,000 during 2008-09 and 2010-2011, respectively.
On completion of Sub Program I of PGEIP, ADB released its first tranche of US $250 million (Program Loan no 2385) in January 2008. Sub Program II was implemented over 2007-2009 while Sub Program III over 2009-2012. All the actions under the two programs were carried out effectively, with majority of the actions complied and few partially complied with/not complied with. Without no significant delays in the implementation of the program actions. For Sub Program II of PGEIP, ADB released second tranche in September 2009 and DPL was reduced to US $150 million (Program Loan no 2547) from US $250 million agreed earlier, due to ADB headroom issues. Whereas, under SP III, the tranche of $250 million could not be released at all. Despite non-release of the SP III tranche, the Government pursued the reform agenda and achieved majority of the targets. ADB did not release its last tranche originally expected in June 2012.
Objectives
The objective of Punjab Government Efficiency Improvement Program (PGEIP) was to assist the Punjab Government in reducing poverty through good governance including improved efficiency of public sector resource management. The objectives of PGEIP are detailed as under:
- Improvement of fiscal discipline through rationalized expenditure management, improved tax administration & structure and improved contingent liability management.
- Improvement of effectiveness, predictability and accountability in financial management.
- Improvement of functions, streamline businesses, and modernized human resource management
- Capacity enhancement of relevant Government departments, as well as public sector organizations.
- Regulatory reforms for private sector development and public-private partnership.
- Promotion of Public Private Partnership for infrastructure and social service delivery.
- Adoption of Punjab’s strategy for economic growth and service delivery and Result based management framework by linking development objectives, outcomes, outputs, systems, and resources to guide reforms and monitor the progress.
Components of PGEIP
The components / Core policy Areas were:
- Fiscal and Financial Management
- Pension Reform
- Civil Service Reform
- Private Sector Development
- Result Based Management
Expected Outcomes
The expected outcomes of the program were to yield significant benefits leading to overall improvement of governance structure in Government of Punjab. Some are discussed as follows:
- Improved public resource management and greater performance-orientation in planning and budgeting. This in turn was to enforce fiscal discipline, improve linkages between resource flows and performance outcomes, improve coherence between policy priorities and development expenditures, and foster better public service delivery with direct benefit to the poor.
- A financially sustainable and adequate pension system. These were to provide retirement income security to civil servants, and create fiscal space for pro-poor expenditures. Longer term benefits included promotion of private saving and asset accumulation, which was in turn to be contributed to the province’s financial sector development and economic growth.
- Improved public resource management and greater performance-orientation in planning and budgeting. This in turn was to enforce fiscal discipline, improve linkages between resource flows and performance outcomes, improve coherence between policy priorities and development expenditures, and foster better public service delivery with direct benefit to the poor.
- A financially sustainable and adequate pension system. These were to provide retirement income security to civil servants, and create fiscal space for pro-poor expenditures. Longer term benefits included promotion of private saving and asset accumulation, which was in turn to be contributed to the province’s financial sector development and economic growth.
- An efficient and effective civil service. Improved human resource management in the civil service to make it more efficient and effective. The efficiency gains were to lead to benefits in service delivery and private sector development. A more responsive civil service was to further lead to more equitable expenditure allocation of public resources with benefit to the poor.
- A dynamic private sector. A coherent private sector development strategy and an improved regulatory framework were to help reduce the cost of doing business, and result in greater efficiency, investments, growth, and poverty reduction. Likewise a robust public private partnership framework was expected to mobilize resources towards better provision of service delivery.
- To promote a stronger culture of results through clearly defined development targets thereby improving the efficiency of resource management.
Technical assistance activities of PGEIP were further divided into:
- Operational support, including equipment and related software
- Studies and assessments
- Training and capacity building
Implementing Agencies
Under PGEIP, Finance Department, Planning & Development Department and office of the Accountant General Punjab were the main IAs for public financial management and pension reforms. The Public Policy and Change Management Wing of the Services and General Administration Department and the Management and Professional Development Department were the major IAs for civil service reforms. The Departments of Commerce and Investment; Industries; Environment; and Labor were the major IAs for private sector development. For RBM, Livestock & Dairy Development Department, Higher Education Department and Irrigation Department were selected for implementing results framework. Various other departments/agencies participated as IAs for pilot phase.
Monitoring & Evaluation
To monitor and evaluate implementation of PGEIP, a detailed action plan was developed through consultative process between the specific Implementing Agency (IA), ADB and Executive Agency (EA) for SP I, SP II and SP III of PGEIP. The action plan of SP II guided the implementation towards the subsequent SP III. The action plan was revised over time after endorsement by the Executive Agency, the specific IA, and ADB. The agreed policy actions under SP I, SP II and SP III of PGEIP are listed below in the form of Policy Matrix.