Just, judicious and need-based allocation of resources is the key to the success of any development project. The development budget needs to be allocated and spent based on the principle of equity, fairness and necessity. It should enhance basic infrastructure development, create jobs and fuel economic growth. This is because the countries with scarce resources lack economic wherewithal to boost the development activities. Failure to properly utilise the tax payers’ money result in failure of projects. This causes the cost and deadline of projects overrun. Numerous factors come into play to hinder the desired level of development in the countries marred by political instability, bad governance and political favouritism. The tendency to channel budget to the election constituencies of influential leaders or lawmakers has negative repercussion for the overall development of the nation. The backward regions, provinces and districts bear the consequences of the policy of funding the pork-barrel projects aimed at pleasing the voters.
Such a defective allocation of capital spending breeds imbalanced development and creates many economic backwaters across the country, ultimately triggering resentment among the masses, who have been denied the access to resources and fair share of national wealth. Under the influence of the parochial political interest, the government is forced to create the legal and institutional mechanisms to distribute money to the lawmakers so that they hold sway in their constituencies. Many saw the Local Infrastructure Partnership Development Programme (LIPDP) in similar light. It provides Rs. 40 million annually to each member of the House of Representatives elected directly to conduct small infrastructure programmes in their election constituency. Apparently, LIPDP was considered to directly meet the development needs of the areas where the national and sub-national government fails to provide adequate budget. However, it came under fire for its partisan allocations and alleged misappropriation of the state coffers.
Responding to the growing criticisms of LIPDP, Finance Minister Bishnu Prasad Paudel, while unveiling the budget for the new fiscal year, has recently scrapped it as well as the Poverty Alleviation Fund. According to the news report carried by this daily, he axed these two programmes to manage resources for the prevention, control and treatment of the COVID-19 pandemic, ensure relief and economic rehabilitation programmes and respect the public opinion. Paudel has called his decision to write off them as ‘necessary’ in view of the dissolution of the House of Representatives. Authorities have argued that the LIPDP discriminated against the lawmakers elected through the proportional representative system as the fund was available only to the directly elected members. The parliamentarians are supposed to brainstorm and formulate the policy and budget planning. It sounds odd to put the state’s fund in the hands of lawmakers without installing the credible oversight agencies to monitor how the funds are spent.
The government will gradually phase out the programmes operating under the PAF by converting them into cooperatives. It has invested Rs. 19 billion in the PAF to improve the economic condition of the poor people through the formation of around 32,000 community groups. Now it plans to use PAF’s budget as the seed money to run employment and self-employment generation programmes by channeling budget into more productive areas. No matter wherever the tax payers’ money goes, it requires abiding by basic fiscal discipline – transparency, accountability, zero corruption and timely completion of projects-- so that the target groups or communities benefit from them.