As long as there is easy money flowing in, the provinces will not have the incentive to boost their economy
On Wednesday, the finance ministers of the respective provinces presented budgets totalling Rs 305.5 billion for fiscal 2022-23, with priority going to economic enhancement and increased productivity.
Barring Karnali, all the remaining six provinces have increased their budget for the coming fiscal year, an increase by Rs 44.46 billion. Bagmati Province has unveiled the highest budget of Rs almost 71 billion, followed by Madhes with Rs 46.88 billion while Karnali has the least budget of Rs 32.61 billion.
As in the previous years, all the provinces have allocated more for capital expenditure than recurrent expenditure, in sharp contrast to the federal budget where 42 per cent of it has been allocated for recurrent expenditures and 21 per cent for capital expenditures for the next fiscal. However, there is not much gap between allocation for recurrent expenditure and development activities in Province 1 and Madhes. Out of a budget of Rs 39.74 billion, Province 1 has allocated Rs 14.16 billion for recurrent expenditure (35.6%) and Rs 15.5 billion for capital expenditure (39%), while Madhes has a recurrent expenditure of Rs 21.76 billion (46.44%) and capital expenditure of Rs 25.82 billion (53.21%).
The budget tabled by each of the seven provinces on Wednesday is the final budget of the provincial governments elected in 2017. With the local elections having taken place on May 13, the provincial elections are due in November this year. Over the past five years, five budgets have been presented by the provincial governments, in line with the 2015 federal constitution that divided the country into seven provinces.
While the budgets have kept increasing year after year, the provinces are increasingly becoming dependent on grants and loans from the centre instead of trying to raise internal revenue. Provincial and local governments get four types of grants or fiscal transfers from the federal government every year - equalisation grants, conditional grants, complementary (matching) grants and special grants. For the next fiscal, the federal budget has set aside 24 per cent for grants to provincial and local governments.
As long as there is easy money flowing in, the provincial governments are less likely to be accountable in their spendings or boosting the local economy. One heading that the provincial governments could have scrapped for good is the controversial Constituency Infrastructure Development Special Programme, which Bagmati Province has done.
Merely having a large budget does not translate into quicker development in the provinces. Budget implementation is the key. The government should have the capacity to spend the allocated developments funds in time, which, unfortunately, hovers at around 65 per cent, much of it spent in the final months of the fiscal year in a hurry. Fiscal discipline is also weak in the provinces. Moreover, there is overlapping of budgets of the three levels - federal, provincial and local - with all of them vying for the same project. The provincial budgets will serve their purpose only if the provinces have a clear vision of what they wish to achieve, if they have the relevant human resource and if there is political stability.
Submit poll expenses
It has been more than a month since the local level elections were held on May 13. Almost all elected officials, except one in Budhiganga Municipality in Bajura, have already assumed their offices, and some of them are preparing to present the policies and programmes of their respective municipalities. However, most of the candidates have not submitted their poll expenses as required by the law. As per the rules, all candidates must furnish details of their poll expenses within one month from the date of election.
A report from Tanahun has stated that out of the 1,637 candidates who contested the local level election, only 140 have submitted their election expenses within the set deadline. Those who submitted their poll expenses are from small political parties, who did not win any seats there. It shows the major political parties have flouted the rules by not submitting their election expenses to the concerned agency. In this regard, the Election Offices in all districts should take legal action against those candidates who have failed to submit the poll expenses within the deadline.
It is also the duty of the major political parties to abide by the rule of law, which should be equally applicable to all.
A version of this article appears in the print on June 17, 2022, of The Himalayan Times.