By Modnath Dhakal
Kathmandu, June 20: The state governments have failed to be introduce new programmes and strategy for development and resource mobilisation, concluded the experts.
They termed the budget of the seven sub-national bodies for the coming fiscal year 2020/21, announced on 16 June, traditional and unrealistic that would ultimately fail to address the present health crisis as well as address the development and employment gaps in the respective provinces.
Experts also said that the states’ exercise to imitate the policy and programmes of the federal government would lead them nowhere since they did not have the mechanism and institutions to execute such programmes while the central government had not been significantly successful in implementing its own development projects.
“The provincial budget has become the victim of the lack of institutional and technical capabilities in the states and poor budgeting process,” said economist Dr. Dilli Raj Khanal.
He said that the capital expenditure status of the provinces was very poor as they could spend only about 20 per cent of the development budget in the current fiscal year before the beginning of the COVID-19 pandemic.
“Their budget is not realistic. There are some programmes to address the immediate need such as creating health infrastructure and employment generation through the investment in agriculture but I have a doubt about their impactful execution,” said Dr. Khanal who had led the Public Expenditure Review Commission this year.
Former Vice-Chairman of the National Planning Commission Prof. Dr. Govinda Raj Pokharel said that the state budgets should have been focused to containing the infection of coronavirus, its treatment, relief and employment creation but they continued with the popular programmes following the track of the previous years instead.
“Since they failed to spend the budget in the last one and a half years, they should have come up with programmes to address the policy bottlenecks and create institutional structures,” he said.
According to Dr. Pokharel, the states are just functioning as subordinate bodies of the federal government expecting the grants from the centre so they need better alternatives of sources.
Economist Keshav Acharya said that provincial governments miserably failed in two fronts: creating innovative programmes as per local needs without following the policy of the centre, and forging cooperation among the local governments in creating better infrastructure.
“The sub-national bodies couldn’t focus on revenue mobilisation and failed to use their rights enshrined in the constitution,” he said. “Meanwhile, the federal government did not extend its cooperation to the states in enhancing their technical capabilities in terms of formulating the budget and spending it,” he said.
Former Member of the NPC Dr. Chandra Mani Adhikari also questioned the structure and capability of the states in terms of mobilising the resources and utilisation of the budget. “Given the past experiences, there is no high hope about the provincial budget. The budget has also failed to connect with the policy and programmes,” he said.
However, the experts said that the priority to programmes meant to fight the COVID-19 pandemic, agriculture and employment generation were some good components in the provincial budget.
Dr. Adhikari said that the aims
of the budgets were good. “Setting priorities in line with the federal government in the time of crisis may help in fighting the pandemic together,” he said.
Likewise, Acharya said that promotion of agriculture and programmes to create storage for agricultural goods and grants for the inputs are promising programmes in the budgets.
He especially appreciated State 5 for not allocating budget for the parliamentarians’ individual development funds terming it a ‘daring step’.
Dr. Khanal said that some large infrastructure projects included in the provincial budgets were good but he suggested creating a streamlining agency to create harmony among the budgets of the federal and state governments.
The combined budget of seven states for the next year amounts to Rs. 264.20 billion, Rs. 5.37 billion less than the current fiscal year. However, the budget of Bagmati and Sudurpaschim has increased significantly. Bagmati has the largest budget size with Rs. 51.42 billion followed by State 1 Rs. 40.89 billion; State 5 Rs. 36.35 billion; and Gandaki Rs. 34.84 billion. Likewise, Karnali announced the budget of Rs. 33.74 billion, State 2 Rs. 33.56 billion and Sudurpaschim Rs. 33.38 billion.
– The Rising Nepal