Nepal | July 06, 2020

Preventing resource drain: Cut non-essential agencies

Mukti Rijal
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Most of the agencies recommended for disbanding were allegedly created to serve the vested interests of politicians and bureaucrats and also to ensure that those recruited or nominated had access to better remuneration

The Public Expenditure Review Commission (PERC), which had presented its report to the government a few months ago, has recommended disbanding several agencies — boards, authorities — created under the purview of the different federal ministries of the government. The much-vaunted commission has, according to a report published in a vernacular newspaper, singled out disbanding those agencies, boards, committees and commissions created by the government time and again in the past for different purposes, especially when the country was under the unitary framework.

The ground on which the PERC based its recommendation to disband or rationalise these agencies was their lacklustre performance and also their irrelevance in the newly-introduced federalist political context in the country. Moreover, duplication of actions was also tipped as the criterion for mainstreaming, merger and disbanding of the agencies.

When judging these agencies, boards and authorities (Pradhikaran) against the performance yardstick, most of them are miserably poor. Generally, the agencies were expected to help the government to carry out specific functions effectively and diligently in their respective sectors, improve service delivery, increase government visibility and enhance accountability. But they have fallen short of meeting the objectives and serving the purposes for which they were created.

The agencies, often referred to as quasi-government organisations, seem to be of an ad hoc character and are deemed to be political and non-essential. Also, most of them were allegedly created to serve vested interests of politicians and bureaucrats and also ensure that those recruited or nominated in these agencies had access to better remuneration.

Needless to say, many of the fat cat agencies and bodies have been reduced to becoming a part of the patronage infrastructure under the different ministries, in which politicians and ministers mostly nominated or recruited their loyalists. So their disbanding, merger and rationalisation will not make significant difference or disrupt the working of the government and delivery of services to the citizens, rather this will save the wasteful government expenditure incurred on the public exchequer.

In fact, the recommendation of the PERC can be construed as part of the quest for making the government efficient and effective as set forth by the Administrative Reform Recommendations Committee, headed by Kashi Raj Dahal. The committee laid stress on trimming the size of the bloated government to prevent wanton waste of taxpayers’ money in the federalised context of the country.

Furthermore, the committee had recommended limiting the number of federal ministries to 18 by disbanding, merging or mainstreaming some irrelevant and non-essential ministries and departments pursuant to the new federal political context of the country.

However, the government has overruled and superseded the recommendation, and instead increased the number of ministries due to political expediency.

The PERC has been bold in the sense that some visible agencies, like the Local Development Training Academy, Press Council, Nepal Road Board, Trade and Export Promotion Centre, Taragaon Bikash Samiti, to name a few, created and governed under the government rules and regulations and executive orders before the new federal constitution was enacted and promulgated, have been listed for axing.

Some agencies like the Local Development Training Academy should be institutionally reengineered and trans-located to the provinces with a broader mandate to contribute to capacity building of the sub-national government. In the kind of federal set-up we have opted, the functions and competencies are allocated among the different tiers of the government according to the principle of subsidiarity.

The general aim and rationale of the principle of subsidiarity are to guarantee a degree of independence and autonomy to the sub-national government in the execution of their mandates and competencies, considering that these can be implemented and carried out effectively at the local level. It, therefore, involves the sharing of powers between several levels of authority, a principle which forms the institutional basis for federal reorganisation of the states.

Translated into the Nepali multilevel federal context, the principle of subsidiarity means a devolved and decentralised governance system, where sub-national governments are constitutionally enabled and entrusted to exercise the state authority as important spheres of the government. It also seeks to prune the bureaucratic flab, disband the irrelevant and redundant agencies and boards and an expand control and supervision of the sub-national government over the state agencies and bureaucratic organisations.

The PERC recommendations, as disclosed in the news media, show that the parastatal agencies, boards and authorities formed time and again have drained the much-needed national resources. These need to be immediately cut to size and rationalised to ensure that resources are properly utilised, duplications are avoided and policy ambiguities are clarified for the effective implementation of the federal governance system in Nepal.


A version of this article appears in print on July 05, 2019 of The Himalayan Times.


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