World Bank Asks Maharashtra To Reorient Reform Process

Mumbai, July 25: | Updated: Jul 26 2002, 05:30am hrs
The World Bank has called upon the Maharashtra government to reorient its reform process as “pro farmer and pro poor” for its successful implementation for regaining the state’s leadership which was currently under serious threat.

...Wants MSEB Unbundling
Our Bureau
Mumbai, July, 25: The World Bank has asked the government to unbundle the ailing Maharashtra State Electricity Board (MSEB) into a transmission company and several generation and distribution companies.
These companies should operate in a commercial environment under the regulatory framework of the Maharashtra Electricity Regulatory Commission (MERC).
However, it has cautioned that state power sector’s growth would depend to a large degree on the outcome of the Dabhol arbitration process.
The World Bank, in its exhaustive report on “Maharashtra: reorienting government to facilitate growth and reduce poverty,”, has suggested that the government should ensure political and bureaucratic commitments to reform, monitor its progress, improve public service delivery and governance and concentrate on core public services.

The state government sources told The Financial Express that the report would come up for discussion during the two-day visit between July 29 and 31 by a World Bank team headed by its lead economist Vinaya Swaroop.

In its communication to the state government, the bank’s economist Paramaita Dasgupta said, “During our visit we would like to get an update on the various announcements made in the 2002-03 budget.

We would be grateful if you can provide us a written update on key fiscal and sectoral developments. In particular, we would like to know about the status of the Fiscal Responsibility Bill and the white paper on power sector reforms.”

The government sources said that the state cabinet has set up a cabinet sub- committee to finalise the draft Fiscal Responsibility Bill which is likely to be tabled in the state legislature during the monsoon session beginning from July 29. In case of white paper on power sector reforms, chief minister Vilasrao Deshmukh has already announced that the Maharashtra State Electricity Board (MSEB) would give its draft by July 31 and the final white paper is expected to be released by September-October this year.

The Wold Bank has said that the state’s fiscal stress, be it due to power and irrigation subsidies or the losses in cotton and sugar interventions, has a close connection with the rural sector.