BUDGET NOTES

A total budget of BRLPS for the financial year 2009-10 is proposed of Rs.97.95 Crore, which
is grouped under four major components. The components are

1. Community Institution Development (CID),
2. Community Investment Fund (CIF),
3. Special Technical Assistance Fund (STAF) and
4. Project Management Unit expenses.

A brief note detailing out these components and the related expenses are mentioned under
following paragraphs.

1. COMMUNITY INSTITUTION DEVELOPMENT (CID)

A total of Rs.3223.66 Lacs has been allocated for CID, which is about 32.92% of total budget. The major expenses under CID consist of remuneration of in-sourced (all project staff who work directly with the community institutions) and out-sourced personnel deployed at BPIU, part of DPCU (training cell) and their operational expenses as cost of institution building. The training and capacity building expenses of not only project field staff but the community institutions like SHGs, VOs and BLFs are also the part of community Institution Development. A significant increase in the CID expenses during 3rd and 4th quarter is due to the expansion of the project from 18 blocks to 44 blocks from 3rd quarter.

Basis of calculation of these expenses have been discussed briefly in following paragraphs. The estimated expenses are based on proposed Annual Action Plan discussed and finalized during pre budget conference held at BRLPS Patna, attended by all BPMs, accountants, concerned SPMs, PMs and finance personnel.

2. COMMUNITY INVESTMENT FUND (CIF):

The CIF money is designed to transfer financial and technical resources to CBOs on a demand driven basis through a participatory micro-planning process for use as a catalyst to improve their livelihoods and build their institutions.

Total amount of Rs. 4405.38 Lacs has been allocated for CIF expenses, which is about 44.98% of total budget. CIF expenses for 1st , 2nd , 3rd, and 4th quarter are Rs.761.59 lacs, 934.08 lacs, 1107.55 lacs, and Rs.1602.15 lacs respectively. Significant increase in CIF expenses during 4th quarter is due to introduction of 26 new blocks in 3rd quarter. Expense of CIF has been grouped under following heads

2.1 First phase of CIF

Total amount of first tranche of CIF (also called Initial Capitalization Fund) is Rs. 2329.55 lacs which is about 52.88% of total CIF. This has been calculated by taking approximately Rs. 22,000 for 10702 SHGs as ICF.

2.2 Second phase of CIF

The second phase of CIF will be made available to those SHGs, who have successfully repaid back the ICF money to their respective Village Organizations and have gone through second round of micro-planning. This will be routed only through village organization. Total amount of 2nd phase of CIF is Rs. 332.40 lacs, which is about 7.5 % of total CIF. This has been calculated by taking Rs. 35,000 for each SHG for 926 SHGs.

2.3 Third phase of CIF
This consists of following expenses -

2.3.1 Food security

Total budgeted amount for food security is Rs. 362.50 lacs, which is about 8.23% of total CIF expense. This fund will be managed by both BPIU as well as DPCU. Around 400 village organization will be taking part under this programme. The budgeted amount has been calculated with a unit cost of around Rs. 90000 per village organization.

2.3.2 Asset & Income generation fund

Total budgeted amount for assets and income generation is Rs.827.04 lacs, which is about 18.77% 0f total CIF expenses. This will be mainly used for scaling up of SRI, SWI, PVSP and associated CIF expenditure incurred in partnerships with COMPFED, PRADAN, ASA and other technical service providers.

2.3.3 Social Risk Fund

This includes Health risk fund (HRF) and other social action fund, which will be as per the micro-plans prepared by village organizations. This fund needs to be routed through VOs only. This also includes CIF for flood relief, which may be required in some of the flood prone districts. Total budgeted amount for this head is Rs. 400.90 lacs, which is about 9.10% 0f total CIF expenses.

2.3.4 Tribal development plan

The budget makes special provision for the promotion of livelihoods of tribal community, mainly residing in Purina district. Total budgeted amount for this head is 80 lacs which is about 1.8% of total CIF expenses.

2.3.5 Skill Building

Total budgeted amount for this head is Rs. 72.99 lacs which is about 1.65 % of total CIF expenses. This is kept for mitigating initial survival cost of first few months of trained candidates as a loan.

3. TECHNI C A L AS SISTA N CE FUND.

This component comprises cost of technical support to community based organizations and federations through public-private partnerships. It includes the cost of technical service providers giving services in the areas of institution building, financial services, and livelihoods enhancement directly to CBOs. Total budget amount allocated for this fund is Rs. 985.46 lacs; which is about 10.06% of total budget expenses. The expenses under this head has been detailed under following sub-heads

3.1 Microfinance Investment & Technical Assistance

This consists of proposed expenditure under exposure visit of bankers, costs of hiring insurance services for CBOs, and incubating a Microfinance institution. Total budget expenses for this subhead are 142 lacs, which is about 14.41% of total technical assistance fund.

3.2 Business development fund

This comprises of cost of hiring of technical service provider e.g. COMPFED, PRADAN, ASA to promote SRI, PVSP and SWI. Total budget expense for this subhead is 609.96 lacs, which is about 61.89% of total technical assistance fund. This fund is to be utilized for providing technical assistance in the farm as well as nonfarm sector. This also includes assistance of technical service providers (partners) in areas of service sector and health service.

3.3 NGO Capacity building fund

This comprises of cost of agencies e.g EDA Rural Systems, SAKHI etc. replicating JEEViKA model of institution building and supporting those community based organizations in livelihoods promotions. Total budgeted expenses for this sub-head are 98 lacs, which is about 10% of total technical assistance fund.

3.4 Innovation grant fund

This consists of organizing “Bihar Innovation Forum” and incubating, promoting, generating and preserving some of the innovative ideas at grass-root levels. Total budget amount for this head is 135.5 lacs which is 13.75% of total technical assistance fund budget.

4. PROJ ECT MANAGEMENT FUND

This component includes the costs of overall co-ordination, and managing the project. The costs of SPMU and part of DPCU are budgeted under this component. The total budget expenses under this component are Rs. 1180.38 lacs, which is 12.05% of total budget expenditure for the financial year 2009-10. The major heads of expenditure are as follows –

4.1 Monitoring, Evaluation and communication

This consists of costs of monitoring of the project, mid term review and the internal and statutory auditors. This also includes costs related to communication material prepared for different stakeholders of the project. The total Rs. 355.85 lacs have been allocated for this budget head, which is 30 % of total project management costs.

4.2 Salary and other incidental expenses

This head consists of salary of SPMU and DPCU employees and other related expenses. Total amount of Rs.472.43 lacs (40 % of total project management expenditure) has been budgeted under this head. This has been calculated in accordance with HR manual and due expected increase. Salary of Government employees on deputation basis (CEO, CFO& AO) has been calculated after considering pay revision made as per Government notification.

4.3 Other operating expenses

This comprises State level capital cost, DPCU level capital cost, training cost at SPMU level and other office expenses. Total budget amount for this head is Rs.352.10 Lacs (30% of project management cost), out of which Rs. 131.99 Lacs are capital cost. Budgeting for capital cost has been made as per the procurement plan. Rs.185.28 has been allocated for operating expenses. The operational expenses have been calculated on the basis of actual expenses together with expected increase during the
budget year.