ADB grants $100 mln loan to Assam

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Singapore, Sep 17 (UNI) The Asian Development Bank (ADB) today announced a loan of 100 million dollar to Assam to boost the economy and reduce poverty in the state's hinterlands.

The loan will be released in three tranches - 40 million dollars each in the first and second tranches and 20 million dollars during the third tranche.

The Japan Special Fund, through the ADB, will provide an additional technical assistance of 6,00,000 dollars for capacity development and programme implementation. The State Government will contribute a further 1,50,000 dollars towards it.

The second sub-programme of the Assam Governance and Public Resource Management Sector Development Programme (AGPRM), the loan and technical assistance will focus on increasing the revenue department's administrative capacity, including implementation of new information and communication technology systems.

It will also help take steps to further improve expenditure management, strengthen debt management systems and close a number of loss-making public sector enterprises.

The first sub-programme was implemented from 2005 to 2007 in close consultation with ADB.

''The aim is to improve the state government's financial flexibility and ensure that the available fiscal space is utilised to more actively promote social and physical infrastructure development. This is expected to support more private sector investment, income generation and higher employment in the state with a consequent reduction in poverty in the state,'' said Kyung Nam Shin, a financial sector economist in ADB's South Asia Regional Department.

Assam is the largest of seven states in north-eastern region with a population of 27 million and a high incidence of poverty.

During late 1990s and early 2000s, Assam's finances suffered from the effects of pay revisions of the government employees, high debt ratio to gross state domestic product and high interest rates.

UNI XC AK CS1911

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