roll and function of various stake holders towards external assistance and fund flow mechanism
TRANSCRIPT
Govt. of India - Ministry of Finance
Department of Economic Affairs
Department of Revenue
Department of Expenditure
Multilateral Institutions Division
Bilateral CooperationDivision
Budget Division
Multilateral RelationsDivision
AAA&D Division
Department of Financial Services
Economics Division Infra & InvestmentDivision
Divisions under DEA
FUNCTIONS of AA&AD1. External Aid Accounting
2. Disbursements
3. Debt Servicing
4. Coordinating with Project Implementing Agency, Donor, Bank etc.
5. Budget for External Aid Receipts & Payment
6. Maintaining External Aid Statistics Debt Statistics and other Reports
in computer system for management.
Aid Accounts &
Audit Division
Role of BorrowerMinistry of Finance (DEA)
(Multilateral Institutions and Bilateral Cooperation Divisions)
Facilitates Appraisal Processing and Negotiations Signing of Agreements Causing agreements to take effect Follow up of project implementation and monitoring Coordinating mid-term review and completion report to
donor All other actions relating to Agreements viz. Amendments,
Reallocation, etc.
Role of Project Implementing Authority Helps in project appraisal Signing project agreement Ensuring proper procurement procedures acceptable to donor Responsible for all project activities and sending periodical reports
to donor Maintaining proper accounting records based on sound financial
management Responsible for preparing reimbursement claims and sending the
same to Aid Accounts & Audit Division, New Delhi Ensuring timely audit of accounts and reports to donor by due date Prepare completion report of the project identifying further phase
of the project where donor can finance
Role of Aid Accounts & Audit Division(AA&AD) Authorized signatory to withdraw funds from the loan accounts from the
Donor Responsible for maintaining special account for advance deposit received
from the Donor and ensuring submission of audit certificate to the Donor Arranges periodical payment to Donor of all loan charges and principal
repayment by due date Supplies disbursement details to PF-I, Department of Expenditure for release of
Additional Central Assistance to State Governments. Maintaining Sovereign Debt Statistics and reconciling the same periodically with
Donor. Rendering Periodical Accounts to C.G.A. for incorporation in the Union Finance
Account. Publication of Annual External Assistance Brochure.
Role of RBI towards External Aid Repository of all Foreign Currencies Inflows INR equivalent of Foreign Currency Flow from
External Aid is passed on to the Credit of CAA&A Maintenance of Loan-wise Special Account in disbursed
currency for the advance/deposits received from Donors.
Coordinating with CAA&A for sending External Debt data to Donor and other institutions.
Providing Exchange Rate for Government transactions of major Foreign Currencies to AAAD on daily basis
Role of Commercial Bank towards External Aid
S.B.I., B.O.B., Canara Bank, BOI, UBI and PNB are designated banks.
Responsible for remitting foreign currencies to the donors towards repayment of principal and interest payment and other charges on due dates
Coordinates with CAA&A and RBI in discharge of their functions.
Multilateral Agreement
Agreement with an institution or bank whose capital is subscribed by two or more countries / institutions / banks to finance in different (multi) currencies equivalent to loan currency e.g. agreement with International Financial Institutions like World Bank, Asian Development Bank etc.
Bilateral Agreement
Agreement between two sovereign government Financing can either be in the currency of the donor or
different currency equivalent of loan designated in donor currency
Foreign Expenditure
Expenditure in the currency other than the currency of the borrower
Local Expenditure
Expenditure in the currency of the borrower
PROJECT CYCLE
Negotiations (Donor & Govt.)
Appraisal By Donor
Proposal To Donor
Identification By Govt.
Evaluation By Donor
Project Completion Completion Report
Declaring The Agreement Effective
Project Execution
Financial Agreement Donor /GOI & Project Agreement Donor/
Project State
Disbursement Flow ChartProject Implementing Agency
AA&A Div.Reimbursement Claims Under
Revolving Fund ProcedureReimbursement Claims Not Under Revolving Fund And All Direct Payment ClaimsR.B.I. Mumbai
AA&A Div.Donor office in India
Donor Head Quarters
Reimbursement Claims
C.A.A.&A’s Account at RBI, New Delhi Through RBI Bombay
Direct Payment
Payees Account
Advise AA&A Div.
Claims
Advice
Statement
For Expenditure Budgeted at S.R. of F.C. by P.I.A
Credit CAA&A’s Account
S.R : Selling Rate of RBI.F.C. : Foreign CurrencyP.I.A. : Project Implementing AgencyD.R. : Daily RateD.O.E. : Department Of ExpenditureP.F. Div. : Plan Finance DivisionC.A.S. : Central Accounts Section
ClaimsAA&A Div.
Donor through local office
Payee’s Account Advise AA&A Div.
Rs. at Selling RatePMU Div. D.E.A
P.F. Division at D.O.E.
R.B.I. C.A.S. Nagpur.
Cr/Dr. State Govt.Account
ExpenditureIncurred
Interest.
Fund Flow Chart Direct Payment Procedure
Fund Flow Chart- Reimbursement Procedure
Expenditure Budget of P.I.A.
Claims
A.A.& A Div.
For Claims Under Revolving Fund For Claims Outside Revolving Fund
Donor RBI Mumbai
A.A.& A. Div.
Statement
Disbursement to CAA&A Account
P.F. Div. of D.O.E
PAO Expenditure RBI, C.A.S. Nagpur
State Govt. Account- Credit
P.I.A. : Project Implementing AgencyP.F. : Plan FinanceD.O.E. : Department of ExpenditureC.A.S. : Central Accounts Section
Through Loacl office
Back to Back Loans
12th Finance Commission recommended that External Assistance may be passed on to states on the same terms and conditions, on which the loans/grants are received by GOI.
Government of India has accepted this recommendation. All External aid agreements for State Projects except for
Special Category States w.e.f. 1st April 2005 are now on Back to Back basis. However there is no change in upfront payment to donor by AAAD and for release of ACA by PF-I.