20-26 June 2014 #712

Local spending

Rameswor Khanal in Himal Khabarpatrika, 15-21 June

The annual budget looks at the allocation for development under a three-year plan. Up to 60 per cent of this comes from foreign aid. Nepal government has to raise the rest from taxes and revenue. The 2-3 per cent of the budget (amounting to up to Rs 20 billion) that is set aside for small local projects have always been mired in controversy.

Local roads, bridges and irrigation projects is also where there is the most interference and abuse. Elected lawmakers, ministers and local political cadre lobby hard to get projects allocated to their constiuencies. MPs take delegations to meet the Finance Ministry and apply pressure. Then there are the property owning class which tries to profit from the proximity of new roads. Although large infrastructure projects are important for long-term development, local development when responsibly executed is still our best bet to ensure a dramatic improvement in people’s lives.

If one believes that development can only be possible through decentralised decision-making then these projects must be implemented at the district level. There is less chance of the project being hijacked and more likely that the amount will be spent. A budget is effective when such small irrigation, road and water supply systems are built locally. There is relatively more accountability and checks-and-balance at the local level. Of course, things would have been even better if local elections were held. Transparency is the most effective way to fight budget misuse.

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