Nepal | July 07, 2020

Fund transfer to small projects draws flak

Pushpa Raj Acharya
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Kathmandu, March 9

The Finance Committee of the Legislature-Parliament summoned Deputy Prime Minister and Finance Minister Krishna Bahadur Mahara, Finance Secretary Shanta Raj Subedi and Vice Chairman of National Planning Commission (NPC) Min Bahadur Shrestha, today, to seek clarification on the haphazard manner in which budget was released to small projects that do not have significant impact on the economy.

Lawmakers have spoken out on how NPC and the Ministry of Finance (MoF) have been misusing the taxpayers’ money that needs to be spent on infrastructure development, employment creation and capital formation.

Speaking in the meeting of the House panel, former finance minister Ram Sharan Mahat, said that NPC has approved additional resources for small projects in the election constituencies of influential ministers of the Cabinet and MoF has also released funds to projects that do not have any significance.

According to Mahat, 149 small projects in election constituency- 2 of Chitwan district recently received budget of Rs 520 million. Similarly, 150 small projects in Rolpa district received budget worth Rs 450 million.

“These projects are going to be implemented by Consumers’ Committee, which means there won’t be any transparency and accountability,” he said, adding, “MoF and NPC have been violating financial discipline by distributing taxpayers’ money for the purposes that have not been prioritised in the fiscal policy.”

Mahat alleged that some influential Cabinet ministers have diverted resources to their constituencies, thus violating the election code. “Projects implemented by the Consumers’ Committee do not have to follow procurement rules and the resources granted through such committees will not deliver any substantial result. It will be misused,” he stated.

Another former finance minister Surendra Pandey informed that fund transfer is allowed only for ongoing national level projects. “Besides national-level projects, budget should not be transferred to small projects. It is non-budgetary expense,” said Pandey, adding, “The government cannot spend the taxpayers’ money without the consent of the Parliament.”

Other lawmakers of the House panel also stressed that fund transfer should be rational and justified. “Fund transfer is valid only to bridge the resources gap for well-performing large-scale projects, national-level projects, projects that could have an impact on the economy and for unforeseen
liabilities of the government like natural disasters and others,” said Sher Bahadur Tamang, member of the finance committee.

However, Mahara and NPC Vice Chairman Shrestha said that fund transfer has become a regular trend and previous governments have also been involved in transferring funds of non-performing projects to other projects to raise capital expenditure.

“We have not spent beyond our budget,” said Deputy Prime Minister and Finance Minister Mahara, adding, “The MoF has released additional funds and guaranteed certain funds for early implementation of projects with good performance by seizing allocated resources from non-performing projects and the funds were transferred based on the demand of concerned line ministry that was approved by NPC.”

Finance Secretary Subedi highlighted some of the major fund transfers, namely, post-earthquake reconstruction works (Rs 25 billion); local election purpose (Rs 10.32 billion); vehicle purchase for newly established high courts (Rs one billion); vehicle purchase for parliament and parliamentary committees (Rs 80 million); for Trishuli 3 A project (Rs 620 million) and road improvement in Kathmandu, Bhaktapur and Lalitpur districts (Rs 1.5 billion) till date.

The House panel has directed the MoF and other line ministries that have transferred funds to small projects to submit details of fund transfer to the panel within seven days. “Further discussions will be held after the committee receives the details,” said Prakash Jwala, chairman of the Finance Committee.

A version of this article appears in print on March 10, 2017 of The Himalayan Times.

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