45267-001: Municipal Finance Policy Loan in Himachal Pradesh

Project Data Sheet (PDS): Details

Project Rationale and Linkage to Country/Regional Strategy

The proposed Municipal Finance Policy Loan in Himachal Pradesh (MFPLH, the Program) will be designed to strengthen municipal financing while improving service delivery by the urban local bodies (ULBs) and strengthening institutional capacity of ULBs consistent with the Jawaharlal Nehru Urban Renewal Mission (JNNURM) and Urban Infrastructure Development Scheme in Small and Medium Towns (UIDSSMT) in Himachal Pradesh. The program will also help the Government of Himachal Pradesh (GoHP) to meet the criterion set under the Incentive Framework for General Performance Grant by the Thirteenth Finance Commission. The program will draw on similar policy-based lending in India. The program will help GoHP to incentivize and promote reforms (including improved service delivery) among interested and competing ULBs, and provide capacity development support. Reforms in the areas of public financial management and improved capacity development will help the participating ULBs to improve revenue effort and attract investment to sustain the service delivery improvements. Building on these best practices in the participating ULBs, and streamlining of devolution to ULBs and making it more effective - to be designed and supported under the MFPLH- will help GoHP to spread improved service delivery initiatives throughout the state.


Sustained access to improved urban public services in the state

Project Outcome

Description of Outcome

Improved fiscal, financial, and institutional capacity of ULBs in the state

Implementation Progress

Description of Project Outputs

1. Improved public financial management in ULBs 2. Improved accounting and budget practice 3. The system of devolution from the state to ULBs is streamlined. 4. Service delivery in selected areas of urban utilities in the selected ULBs is improved.

Safeguard Categories

Environment: C
Involuntary Resettlement: C
Indigenous Peoples: C

Summary of Environmental and Social Aspects

Environmental Aspect


Involuntary Resettlement


Indigenous Peoples


Stakeholder Communication, Participation and Consultation

During Project Design

The potential stakeholder groups include central policymakers at the Department of Economic Affairs and Ministry of Urban Development, Government of India; Government of Himachal Pradesh (GoHP) officials based in various departments; nongovernmental organizations; academicians in Himachal Pradesh; and users of public services. Participatory public consultations and targeted group discussions will be carried out. Consultations with the stakeholders will be carried out based on the needs of the program through a mix of formal and informal consultations.


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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