By Modnath Dhakal
Kathmandu, June 6: The scrapping of the two major national programmes for infrastructure building and poverty reduction is expected to have positive impact on local development and poverty alleviation.
The government has tossed out the Local Infrastructure Partnership Development Programme (LIPDP) and Poverty Alleviation Fund (PAF) through the budget of the coming Fiscal Year 2021/22 which is touted as a bold decision of the government.
However, Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel told The Rising Nepal on Saturday that it was a ‘necessary decision’ for resource management. While public opinion was largely against the LIPDP, the programme that handed over a purse of Rs. 40 million annually to each member of the House of Representative (HoR) elected directly to conduct small infrastructure programmes in their election constituency, former FMs succumbed to the pressure of the lawmakers to keep the programme afloat.
Former FM Dr. Yuba Raj Khatiwada unsuccessfully tried to do away with the LIPDP but only could reduce the amount by Rs. 20 million from Rs. 60 million. FM Paudel had the luxury of saving himself from the lawmakers’ criticism as the budget came as an ordinance in absence of the HoR as Hari Raj Adhikari, who represented Gorkha-1 in the parliament, said.
“I have scrapped the LIPDP due to the need to manage resources for the prevention, control and treatment of the COVID-19 pandemic, and relief and economic rehabilitation programmes and respect the public opinion,” FM Paudel said in the budget speech presented on May 29.
Resource for priority projects
The scrapping of the programme means additional resource of Rs. 6.6 billion available for other prioritized projects. Finance Secretary Shishir Kumar Dhungana maintained that the programme was of no use since there was no parliament. However, Adhikari said that the decision could be revised after the reinstatement of the parliament or election of new HoR although he did not favour the programme.
“The programme was discriminatory as it was available only to the members elected through the first-pass-the post elections. The government should have treated the members elected through the proportional representative system in this regard,” he said.
But it would be better to involve the parliamentarians in the policy and budget planning at all levels of the government rather than providing cash to them. It is not good to distribute the taxpayer’s money through the hands of lawmakers, he said.
Local levels have welcomed the scrapping of both the programmes. Chairman of the National Association of Rural Municipalities in Nepal (NARMIN), Hom Narayan Shrestha termed the decision a ‘positive’ one. “The cancelling of the programme would have no negative impact on the development at the local level. However, there was a chance of having one or two additional projects that would have been financed by the LIPDP,” he said.
Lawmakers could mobilise more than Rs. 500,000 budget to a maximum of 20 programmes to spend their share of funds.
Budget of the next fiscal has allocated Rs. 3.3 billion to start 616 km road project to connect the centres of 28 local bodies to the national road network. It has also included programmes like Tarai-Madhesh Prosperity, Himali Area Prosperity and Northern Area Development and Living Status Improvement and allocated about Rs. 4.52 billion to execute them.
Rs. 19 billion of PAF to Coops
The PAF was created during the Maoist insurgency to support in socio-economic development to alleviate poverty. About 32 thousand or so community groups are created to mobilize Rs. 19 billion. According to FM Paudel, the groups would be transformed to cooperatives and the amount would be used as the seed money for them to run employment generation programmes.
“There are some legal complications to immediately scrap the PAF but the government is set to gradually phase out the programme and utilise the money in employment and self-employment generation,” said Dhungana.
Chairman of the NARMIN, Shrestha, said that the phasing out of PAF would create new opportunities for the local bodies who can make it more active and result-oriented. He expressed hope that the mobilisation of capital in productive sectors would create employment at the local level.
The budget of the next FY has announced to run entrepreneurship development programmes for the marginalised people, Dalits, landless and squatters and communities through cooperatives. Concessional loan would be mobilised to the cooperatives for the processing of agricultural and livestock products and creating a value chain. Likewise, support would be extended to the cooperatives to develop agricultural market centres in cooperation with the local levels.
However, the government has continued the ‘Bishweshwor with the poor’ programme.
– The Rising Nepal