The UN pays all soldiers in its peacekeeping forces the same rate: $ 1,350 in monthly salary and $ 70 for recreational leave during the six months of their service. But riflemen of the RNA take home only $ 720 every month while officers draw $1,000 as monthly salary. Most of the lower ranked soldiers do not even know how much is deducted from their salary, with the major chunk of it going to the military welfare fund chaired by the Chief of the Army Staff.

Today 3,027 Nepali soldiers are on UN peacekeeping stints. The fund, aimed at the welfare of serving and retired military personnel and their families, has collected over Rs 1 billion a year from the UN peacekeeping agreement. Official records show that last fiscal year it earned more than $13 million from the UN. The money that goes to the Military Welfare Fund is disbursed by nine committees. They spend Rs 40 billion on the Birendra Military Higher Secondary School every year and also run the Birendra Military Hospital, Swayambhu Arsenal and an explosives manufacturing plant in Makwanpur. The fund also bears all expenses incurred in sending Nepali troops as UN peacekeepers. In the last four fiscal years, the fund has also provided Rs 10 million annually to the Army Officers' Wives Association, which has disgruntled many former army officers.

In addition, the Tribhuban Army Officers' Club has used the fund to run two petrol pumps and to establish the Basundhara canteen, which provides goods to soldiers at discounted prices. But the financial records of the committees have not been audited for the last 22 years. The Auditor General's report of 2004 noted that it had repeatedly reminded the RNA to do the auditing but the army replied it was unnecessary because the canteen was not run from the national budget. Ex-general Dipta Prakash Shah says the fund has established residences and clubs for serving officers but has done nothing for retired ones. "There is not even a single guesthouse for army officers who come to Kathmandu on duty tour," he says.