Second Education Sector Development Policy Credit

The purpose of PEDPC-II is to provide financing for the Province of Punjab, which has embarked on a wide-ranging reform agenda to improve fiscal management, promote devolution and improve service delivery. Key pillars (development objectives) of the Punjab Education Sector Reform Program (PESRP) are: (a) Public finance reforms to increase public spending for education (and other pro-poor services) and to ensure fiscal sustainability. These include establishment of a Medium Term Budget Framework (MTBF) under which Punjab has been increasing public expenditures on education both at the provincial level, and by enhanced funding for district education budgets. (b) Reforms that strengthen devolution and improve the fiduciary environment and governance. These include (i) supporting devolution through measures that decentralize financing and decision making at the district level; increase accountability of districts for resource use; clarify the roles of all levels of government through the Terms of Partnership instrument; and strengthen the capacity of districts to assume their new responsibilities under decentralization; and (ii) strengthening the governance and fiduciary environment through better procurement and financial management practices. (c) Education sector reforms to improve quality, access and sector governance.Sector governance includes strengthening the education department, improving teacher management (by increasing transparency in recruitment, reducing teacher absenteeism, achieving greater local involvement in teacher selection), revitalizing School Councils, strengthening monitoring & evaluation. Improvements in access include provision of critical incentives such as textbooks and stipends, and provision of missing facilities to the schools. Improvements in quality focus on teacher professional development and improving the learning of students, including through better textbooks. The status of agreed outcomes indicators below presents the end-of-program (i.e., after FY06) targets, as agreed in the overall framework of the Program for the three-year period. However, the progress to date captures the performance under this second credit which supported FY05. The section on intermediate indicators capture the targets for the current credit (i.e., second credit for FY05).