MoF flooded with budget requests for politically motivated projects

KATHMANDU, May 26: With just two months remaining in fiscal year 2010/11, Ministry of Finance has started receiving massive budget requests for small scale programs that largely serve interests of political leaders rather than fulfilling people´s developmental needs.



“Everyday we are receiving at least 30 files seeking budget on new programs or least priority areas,” said a MoF official, elaborating that small personal and community roads make significant chunk of the demand.[break]



Local and national level political figures, including lawmakers from different constituencies, can be seen approaching the Finance Minister, Secretary and officers of Budget Division carrying the files themselves, pushing for the release of budget on personal programs. Experts have long been raising questions over genuine spending and effectiveness of such programs.



“Demands for such distributive programs run in millions of rupees,” the source said, adding: “As usual, the last hour pressure is too much.”



The pressure is coming not just from individual politicians. Ministry of Tourism and Civil Aviation (MoTCA) too has demanded additional budget of Rs 370 million to organize tourism fair and develop tourism infrastructures across the country. In its proposal, MoTCA has said that it would distribute Rs 5 million each to all the districts to implement tourism promotional programs. It has also not clarified the types of infrastructure that it intends to develop with the fresh budget.



“We don´t believe that the ministry will be able to build any meaningful tourism infrastructure within two months. If the program is genuine, we can always fulfill that through upcoming budget,” said the official, indicating that the demand of MoTCA was meant for distribution.



Placing demand for non-budgetary programs of different scale and seeking additional budget for least prioritized projects at the final hour of the fiscal year is a common trend. Although concerned MoF officials try to control actual release of amount, they admit that their success rate remains pretty low.



“We become helpless when ministers themselves do not understand the rationale of maintaining financial discipline and push for the release of budget,” stated the source.



Such final hour distribution of budget on personal recommendations goes against prudent fiscal norms. According to MoF´s assessment, such last hour disbursements are leakages that eat away scarce resources of the country.



Such trend has been helping to swell arrears as well.



“If the government checked such last hour disbursements, it can substantially lower arrears by 40 percent,” Bimala Subedi, deputy auditor general had told the Public Accounts Committee (PAC) of the parliament on Monday.

Auditor General´s Office had pinpointed that government´s arrears had risen by 37.37 percent and touched Rs 25.21 in 2009/10 because of the failure of the government to adhere to its own norm.



Sikta gets additional Rs 300m



Ministry of Finance has provided additional Rs 300 million to Sikta Irrigation Project -- one of the national priority projects.



“Sikta has remained one of the best performing projects and given the present low spending of capital expenditure, we decided to provide it with additional finances on top of previously allocated Rs 980 million,” said an official at MoF.



Likewise, the ministry has allowed Mid-Hills Highway Project to use Rs 250 million meant for opening track in the western segment of the highway to continue development works in the eastern segment.



The project office has been implementing the track opening and development works in the eastern segment at a fast pace. However, the process in the western segment is moving slowly.



“Hence, we allowed the project to use the budget allocated for one segment to finance development in the other segment where works are progressing at a good pace,” said the source.



The government had allocated a total of Rs 1.21 billion to widen and open track along the remaining segment of the mid-hills highway in the budget for 2010/11.



Apart from these two national priority projects, Fast Track Project that links Kathmandu with Tarai too has sought additional budget of Rs 50 million. The government had allocated Rs 680 million to the project to implement track opening works.

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