Kathmandu. Rule 26 (5) of the Economic Procedure and Fiscal Responsibility Regulations, 2077 BS states that budget cannot be allocated for projects not included in the National Project Bank. However, the project bank has not been effective even after completing five years of the regulation. However, the practice of tampering in the project bank by breaking the law and seeking compatibility in the budget is not only repeated every year but has also become a destiny. Not only have the monitoring and regulatory bodies repeatedly raised questions, but there is no scope for implementation even when they make suggestions for reforms.
Project Bank was considered to be an important weapon to stop the distribution of plans on the basis of power and access, budgeting for unprepared projects, and ensuring resources indiscriminately. But this tool has become a tool to break budget discipline. On the one hand, the tendency to keep the schemes not kept in the bank in the annual budget has not been broken, while at the same time, the work of entering projects indiscriminately against the law and standards to removing them with prejudiced intentions has been repeated this year as in the previous financial year.
No synergy with budget
The provisions of the Economic Procedure and Financial Responsibility Regulations to keep only the projects of the Project Bank in the budget are unlikely to be fully implemented this time as well. However, officials of the Ministry of Finance and the National Planning Commission are optimistic about the implementation of the regulations. “The work of planning is still going on. We will know how successful we will be in this regard after the budget comes,” Finance Ministry spokesperson Shyam Prasad Bhandari told RSS. Coordination between the thematic ministries and the Planning Commission is also underway. We believe that the provisions of the regulations will be implemented. ’
Plan registration against criteria
Entering the plan into the project bank after mid-March is a violation of the criteria set by the government itself. But even two days before the budget is announced, various ministries are planning in the project bank. Point 4 (5) of the National Project Bank (Operation and Management) Standards, 2081 states that the project should be entered into the project bank by mid-February of the previous fiscal year. In case of new projects to be implemented in the upcoming fiscal year 2082/83 BS, the project should be entered by mid-March.
Spokesperson at the Ministry of Finance Shyam Prasad Bhandari and Joint Secretary of the Planning Commission Arjun Bhandari admitted that the scheme entry was still going on. “This year, the criteria were issued in February. All the projects could not be entered by mid-March. That’s why we are still planning. The Planning Commission can take some decision on extending the deadline,” said Arjun Bhandari, joint secretary of the Planning Commission. This year, the commission has set the deadline for entering the scheme in the project bank till May 15.
Political pressure and employee non-cooperation
Considering the inevitability of the project bank to comply with the allocation efficiency and financial discipline, it was made mandatory in the law. But the political leadership and the bureaucracy could not be serious about it. Former Vice Chairman of the Planning Commission Dr Min Bahadur Shrestha said that the project bank could not succeed due to the tendency of putting plans indiscriminately in the annual budget due to political pressure and non-cooperation of the employees’ mechanism. “While making the budget, politicians forget acts, laws, regulations, budget discipline. It is only concerned whether the plan is planned according to the project list given by the leaders. Dr Shrestha said, “When we insisted last year that the budget should be allocated only to the projects kept in the project bank, the thematic ministries and employees did not cooperate in it.” Dr Shrestha also said that a large number of project entries were made at the same time last year while trying to make the provisions of the project bank regulation mandatory.
Former secretary Madhu Kumar Marasini also said that both the political leadership and the staff mechanism have failed to understand the provisions made mandatory by the law. “We don’t understand the sensitivity of the project bank. We have also failed to train all the employees to comply with the issues mentioned in the law,” Marasini said, adding, “There was no clarity on what projects would be placed in the project bank last year.” When we tried to force them, many schemes were put in the bank at the same time. Most of them are old plans. The quality was not focused on the compulsion. ’
haphazard ‘entry’
In recent years, the trend of indiscriminately entering projects in the project bank and sowing budget seems to be increasing. The data provided by the Planning Commission also confirms this. According to the Commission, 6,644 projects were entered into the project bank in the fiscal year 2077/78 BS. Similarly, 99 in fy 2078/79, 39 in FY 2079/80, 2080. A total of 11,014 projects were transferred to the project bank in 2081/82 and 221 projects in the current fiscal year 2081/82.
Last year alone, 7,377 projects of the Ministry of Urban Development, 5,294 projects of the Ministry of Physical Infrastructure and Transport and 2,859 projects of the Ministry of Drinking Water were transferred to the Project Bank. Similarly, 640 schemes of the Ministry of Energy, Water Resources and Irrigation, 615 of the Ministry of Health and Population and 228 of the Ministry of Communications and Information Technology were included in the bank.
It was also criticized as it was suspicious that so many projects entered the same financial year. The Ministry of Finance and the Commission were accused of keeping the detailed project report, technical preparation, cost analysis and environmental assessment in the project bank without completion. However, the then leadership has been defending it. They claimed that the number of projects in the project bank has increased even though not only schemes like small budgets but also programs have been entered.
Accountant General’s Question
The Office of the Auditor General has been continuously raising questions for the last five years over the failure of the project bank. Questions have been raised on the effectiveness of the project bank continuously from the 58th report of the Auditor General, 2078 to the 62nd report 2082. The Auditor General has pointed out that the budget was distributed without entering the project bank to the entry of projects against the criteria into the bank.
“The federal government has allocated budget to implement projects costing less than Rs 30 million and less than Rs 10 million from the state by incorporating projects estimated to cost less than Rs 30 million into the bank. The Commission did not appear to have followed the provisions mentioned in the analysis and evaluation of the projects entered into the project bank,” reads the 62nd report of the Auditor General.
Last fiscal year 2080. Of the 18,012 projects entered into the project bank, 7,705 were in the current stage. Looking at the number of ongoing projects of the Ministry of Physical Infrastructure and Transport alone, it appears that there are 3,185 projects. However, budget was allocated for 3,990 projects in the fiscal year for the Ministry of Physical Infrastructure. That is, 805 projects that have not been included in the project bank have been budgeted. Similarly, 4,962 projects of the Ministry of Urban Development were allocated budget without entering the project bank.
In this way, the Auditor General had raised questions even in the projects that were not included in the project bank. The Auditor General has also suggested that the Planning Commission and the Ministry of Finance should make arrangements to allocate budget only for the projects entered into the project bank while discussing and approving the annual programmes of the concerned ministries.
‘scissors’ in project bank without study
The government has adopted a policy to cut down the projects as it is difficult to raise resources for the upcoming fiscal year 2082/83 BS. The Ministry of Finance and the Planning Commission are indicating that the projects that fall in the government’s red book but cannot be implemented and do not even give results will be scissors. Last year, around 8,000 projects in the project bank have been reduced as it is not possible to implement them. That is, about 10,000 to 11,000 projects in the project bank are going to be cut. However, no study has been done on what kind of projects can be removed from the bank while cutting the project and what effects can be seen when removed in such a way. The Planning Commission, however, has maintained that the project has been adjusted as per the bank (operation and management) standards.
The Ministry of Finance has also said that there will be a huge reduction in the plan this year due to pressure on resources. Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel, at a pre-budget discussion programme organised by the Society of Economic Journalists of Nepal (SEJON) on May 29, had said that the allocation efficiency was weak and the tendency of distributing schemes was rampant. “There has been a huge gap between budget allocation and implementation and we are responsible for that. More than 11,000 projects have been added to the project bank in the current fiscal year alone, which also shows the efficiency of our allocation,” poudel said. I have sought support from all walks of life. He claimed that efforts would be made to make the budget of the upcoming fiscal year realistic and the budget would be brought with the assurance of implementation. Finance Minister Poudel had also said in various public programs that the budget for the upcoming fiscal year would be allocated with efficiency, efforts would be made to return to discipline and unlimited responsibilities would be prioritized.
New criteria
According to the National Project Bank (Operation and Management) Standards, 2081, the project has to be entered into the project bank by disclosing the timeline and budget cost to be implemented for certain objectives, goals and results. According to the criteria, infrastructure, economic, social, cultural, environmental and other development related works that have been completed, increase or transform public property after the completion of the construction, will be considered as projects and such projects will be kept in the project bank.
Similarly, what is the source of project construction? It also has to be revealed. All types of projects operating with the resources of the Government of Nepal, foreign and internal loans or grants should be kept in the project bank. Public-private partnership projects, national priority projects to be implemented by the state and local governments should also be kept in the project bank. According to the criteria, only projects costing more than Rs 30 million or allocated have to enter the project bank. Similarly, only projects other than projects or programs of ongoing nature or implemented in a year-on-year manner should be kept in the National Project Bank.
Provision has also been made to link the project bank with various other information systems of the government. There is a provision to interlink the project management information system with medium-term expenditure structure, budget management information system (LMBIS), electronic procurement system and integrated ‘online’ monitoring system. Joint Secretary Bhandari said that the Commission is also preparing for this. According to him, project banks are also needed in all the provinces and local levels, so preparations are being made to formulate the standards of integrated project bank and information system in coordination with the Commission.
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