Aid Accounts & Audit Division

Government of India

Website: www.aaad.gov.in

Outline

• Part A• Details of External Assistance

• Part B• Functional aspect

Part – A

GOI policy on External Assistance• Guide lines issued in 2005 on Bilateral Assistance emphasize

reduced reliance on external assistance

• Bilateral Assistance accepted only from G-8 countries and EC; tied aid not accepted.

• Channelization of external assistance from smaller partners (other than those mentioned above), through multilateral organizations to promote greater aid harmonization

• Countries can provide bilateral development assistance directly to autonomous institutions, universities, NGOs, etc.

Facts• GOI o/s External Sovereign Debt as on 31st March 2012

at US $ 63.37 Billion• 2011-12: Receipts at US$ 5.14 (US$ 4.57 Loans and

US$ 0.56 grants) Billions and repayment at US$ 3.35 (Principal US$ 2.67 and interest & commitment US$ 0.68) Billion

• 2012-13: Receipts estimated at US$ 5.44 (US$ 4.90 Loans and US$ 0.54 grants) repayment at US$ 3.74(Principal US$ 2.99 and interest &commitment US$ 0.75) Billion

• External sovereign debt as %age of GDP for 2011-12: 3.62%

Bilateral Donors

Donor Disbursements During 2011-12 (Loans on Govt. Account)

Debt OutstandingAs on 31st March 2012

Japan 1,185.38 14,995.32 Germany 292.58 2,701.58

Russian Federation 7.05 1,364.62 France - 325.29 USA - 297.64 Switzerland - 3.57Italy - 0.37

Total 1,485.39 19,685.39

All figs. In millions of US Dollar

Multilateral Donors

Donor Disbursements During 2011-12 (Loans on Govt. Account)

Debt OutstandingAs on 31st March 2012

IDA 1,453.66 26,853.06

IBRD 619.68 8,896.47

ADB 976.26 7,568.20

IFAD 27.99 326.17

OPEC 3.31 14.12

EEC   27.65Total 3,080.9 43,685.67

All figs. In millions of US Dollar

Maturity Profile and Terms of LoansDonor Type of Interest Grace Period Maturity RemarksADB LIBOR + Spread 0-5 years 15-25 years LIBOR

Range 0.40 to 5.54For last 10 years

IBRD LIBOR + Spread 5 years 18 years

IDA @ Fixed 0.75% 10 years 35 & 25 Years

1.25 %

Japan * Fixed 0.01 to 4.25%

10 years 30.5 & 40.5 years

0.55, 0.65 and 0.75 for Environment Projects with 40 years maturity

Germany **

Fixed 0.75 to 5.50%

5-10 years 15-50 years

IFAD Fixed 0.75% 10 years 40 years

Note: Does not include other charges such as commitment fees* 0.01% for Consultancy and 0.65% for environmental.** Current being 0.75% for treasury portion and 2.49 % for bank portion.@ New IDA terms and conditions: Under Blend/Harden Terms apart from Service fee of 0.75% Interest Rate of 1.25% will be charged

Commitment ChargesIndicates cost incurred on undisbursed amount: slow moving projects bear greater liability.

Note: * Commitment Charges are not levied on the agreements signed after 16.05.2007.** At present commitments charges have been fully waived.*** Commitments Charges are on the agreements signed after 01.10.2007 and arrears

paid during FY 2010-11.

Donor (rate) 2007-08 2008-09 2009-10 2010-11 2011-12ADB (0.15%) 15.57 12.38 11.81 9.83 8.30

IBRD (0.25%)* 8.83 7.03 6.05 4.17 2.73

IDA (0.50%)** 6.17 2.97 - - -

Japan (0.10%)*** - - - 5.20 4.09

Germany (0.25%) 0.43 0.82 1.23 5.99 1.22

US $ in million

Currency Composition of Outstanding Stock

Indicates debt stock as on 31st March 2012

Inflow/outflow on indicated currency except SDR

40.65

31.87

21.43

5.67 0.38

Spl. Drawing Rights DOD = 40.65% (IDA, IFAD)

US Dollars DOD =31.87% (IDA, IBRD, ADB, Russia USA)

Yen DOD=21.43% (Japan)

Euro DOD = 5.67% (Germany, France, Italy)

Others DOD= 0.38% (Switzer-land, EEC(SAC), Russia)

Interest rate breakdown of Outstanding

Variable rates are applicable for ADB and IBRD loans (as per Libor).

74% of Debt Stock is at fixed rate.

48.32

17.61

7.76

0.46

25.85 0 to 0.75%

(IDA, Germany, Japan, IFAD)

0.76 to 2.50%(Japan, France, IFAD, OPEC, USA)

2.51 to 4.00%(Japan, France, Germany)

Above 4%(France and Germany)

USD 6 Months LIBOR(IBRD and ADB)

Interest Range wise %age of Outstanding

Part – B Functional Aspects

Part A: Process – Loan agreement– Disbursements (Reimbursement and Direct)– Debt servicing– External assistance budget – Imparting training to project authorities

Part B: Reporting – Brochure– MIS reports for project management– Data submission to World Bank for publication in Global Development

Finance (GDF)– Data for Template on International Reserves and Foreign Currency

Liquidity– Special Data Dissemination Standards (SDDS) reporting– Responsible for reconciliation of External Debt with International

Agencies

Functions of AAAD

Coordination with various agencies

AAAD

MoFCredit

Div./Department of Expenditure

State Govt.

RBIProject Authority

Donors/ External Agencies

Commercial Banks

Dynamics at AAAD• 18 donors with varied systems and procedures

• Around 1165 active loans/grants

• Maintenance of two Websites – caaa.gov.in for users only and aaad.gov.in in public domain

• Maintenance of debt records in loan currency and INR

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 Central Bank 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

Project Financing

BudgetingStep-I Annual Requirement of Rupee resources the

expenditure of the Project to be approved by the Planning Commission.

Step-II Inclusion of the funds requirement in the Annual

Budget of the Government.

19

PROJECT CYCLE

Negotiations (Donor & Govt.)

Appraisal By Donor

Proposal To Donor

Identification By Govt.

Evaluation by Donor

Completion Report

Project Completion

Project Execution

Declaring the AgreementEffective

Financial Agreement Donor –- GOI Project Agreement Project State – Donor

1 Loan Agreement to be declared effective

2 Procurement Procedures as laid down in the agreement to be followed.

3 Authorized signatory to withdraw funds (CAAA)

4 Authorized Signatory to sign claims (PIA)

5 Participatory Agreements to be entered into between Government of India / State Government and the Project Executing Agency, if applicable.

6 Submission of audit certificate by the prescribed date.

CONDITIONS PRECEDENT TO DISBURSEMENT

Expenditure Budget of P.I.A.ClaimsA.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 Local office

Disbursement Flow Chart- Reimbursement

Disbursement Flow Chart- DirectProject Implementing Agency

AA&A Div.

Donor office in India/ Head Quarters

Advise AAAD

Direct Payment to Payees Account

Recommendation of ACA to Department of Expenditure

RBI, C.A.S. Nagpur

State Govt. Account- Credit/Debit Credit AAAD Account

System supported activities

Claim HandlingDisbursements

Additional Central Assistance

Donor’s DemandRepayment Sanction

Recording of Repayments

Budget PreparationBrochure Generation

MIS

Interface with CS-DRMS

Loan Agreement

DisbursementProcess

RepaymentProcess

CompilationProcess

DebtManagement

Consolidation& CompilationPortfolioAnalysis

For more information, please refer to our website: aaad.gov.in