1. Aid Accounts & Audit Division Government of India Website: www.aaad.gov.in

2. Outline Part A Details of External Assistance Part B Functional aspect

3. Part – A

4. 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.

5. Facts GOI o/s External Sovereign Debt as on 31 st 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%

6. Bilateral Donors DonorDisbursements During 2011-12 (Loans on Govt. Account) Debt Outstanding As on 31 st March 2012 Japan 1,185.38 14,995.32 Germany 292.58 2,701.58 Russian Federation7.05 1,364.62 France- 325.29 USA- 297.64 Switzerland-3.57 Italy-0.37 Total1,485.3919,685.39 All figs. In millions of US Dollar

7. Multilateral Donors DonorDisbursements During 2011-12 (Loans on Govt. Account) Debt Outstanding As on 31 st March 2012 IDA1,453.66 26,853.06 IBRD619.68 8,896.47 ADB976.26 7,568.20 IFAD27.99 326.17 OPEC3.31 14.12 EEC 27.65 Total 3,080.943,685.67 All figs. In millions of US Dollar

8. Maturity Profile and Terms of Loans DonorType of InterestGrace PeriodMaturityRemarks ADBLIBOR + Spread0-5 years15-25 yearsLIBOR Range 0.40 to 5.54 For last 10 years IBRDLIBOR + Spread5 years18 years IDA @ Fixed 0.75%10 years35 & 25 Years 1.25 % Japan *Fixed 0.01 to 4.25% 10 years30.5 & 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 years15-50 years IFADFixed 0.75%10 years40 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

9. Commitment Charges Indicates 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)2007-082008-092009-102010-112011-12 ADB (0.15%) 15.57 12.38 11.81 9.838.30 IBRD (0.25%)* 8.83 7.03 6.05 4.172.73 IDA (0.50%)** 6.17 2.97 - -- Japan (0.10%)*** - - - 5.204.09 Germany (0.25%) 0.43 0.82 1.23 5.991.22 US $ in million

10. Currency Composition of Outstanding Stock Indicates debt stock as on 31 st March 2012 Inflow/outflow on indicated currency except SDR

11. 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.

12. Part – B Functional Aspects

13. 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

14. Coordination with various agencies AAAD MoF Credit Div./Depart ment of Expenditure State Govt.RBI Project Authority Donors/ External Agencies Commercial Banks

15. 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

16. Role of Borrower Ministry 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.

17. 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

18. 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

19. Project Financing Budgeting Step-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

20. 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 Agreement Effective Financial Agreement Donor –- GOI Project Agreement Project State – Donor

21. 1 Loan Agreement to be declared effective 2 Procurement Procedures as laid down in the agreement to be followed. 3Authorized signatory to withdraw funds (CAAA) 4Authorized Signatory to sign claims (PIA) 5Participatory Agreements to be entered into between Government of India / State Government and the Project Executing Agency, if applicable. 6Submission of audit certificate by the prescribed date. CONDITIONS PRECEDENT TO DISBURSEMENT

22. 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 ExpenditureRBI, C.A.S. Nagpur State Govt. Account- Credit P.I.A. : Project Implementing Agency P.F. : Plan Finance D.O.E. : Department of Expenditure C.A.S. : Central Accounts Section Through Local office Disbursement Flow Chart- Reimbursement

23. Disbursement Flow Chart- Direct Project 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

24. System supported activities Claim Handling Disbursements Additional Central Assistance Donor’s Demand Repayment Sanction Recording of Repayments Budget Preparation Brochure Generation MIS Interface with CS-DRMS Loan Agreement Disbursement Process Repayment Process Compilation Process Debt Management Consolidation & Compilation Portfolio Analysis

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