Laxmi Prasad Paudyal
The ineffective implementation of the provincial budget is considered as an important tool to question the provincial government. Another criticism to the provincial government is related to the number of corruption complaints and financial irregularities. Effective implementation of the budget and the issue of irregularities is also connected with budget formation. The success of a provincial government in a financial year can be evaluated by the implementation of its budget. This article will discuss the problems in the budget making process of Karnali province. Also, suggestions will be offered on how to make the budget making process of the provincial government effective.
The implementation of the budget is related to the formation of that budget. Therefore, its formation process has a great meaning and influence on the effective implementation. That is, if the budgeting method is not effective, its implementation cannot be effective. Based on the model of provinc-level plan formulation guidelines created by the National Planning Commission in 2075, the Karnali Province Government has created the Budget Formulation and Implementation Guidelines, 2075 and the Karnali province Plan Formulation Guidelines 2075. The Karnali province government prepares the budget accordingly these documents.
In an opinion survey conducted by the Hriti Foundation, 145 people (72.5%) from Karnali Province’s civil society, stakeholders, and youth responded to the question “What has the most impact when the Karnali province government’s budget is allocated?” as “Party division.” This goes to show that there is political interference in the budget making process. When more than one option was given, 135 participants answered that the ‘powerful leader’s statement’ affects the budget allocation, while 126 people said that the bureaucracy affects the provincial budget allocation. There were insignificant respondents who said that the method and thematic requirements have an effect.
Hriti Foundation also studied about the questions raised during the special and zero time of the first term of the Karnali provincial Assembly. An interesting fact was found that special and zero-time topics were studied in the provincial assembly meetings other than the budget session. At that time, 33 percent of the questions were related to budget and planning. One-third of the questions in the policy and law session were related to budget and planning. From these two figures, it becomes easier to understand the level of political interference and political influence in the effective budget formation.
Due to the drive of political parties and leaders (MPs, ministers, leaders-activists) in the improper use of the budget, there is a problem in its systematic allocation. As a result, the budget and plans are not made according to the rules but are centred towards a select few. When the budget is disproportionately larger in the area of an influential person or leader, citizens start to protest.
This all signifies that political bias has a great impact on budget allocation. There is a tradition of protesting for the sake of protesting, perhaps due to lack of good political culture. The politicians feel like they should get a share, otherwise the budget is not acceptable to them. It is a major challenge, as in cases of political instability, this kind of mentality has a huge impact.
Politicians’ race to take credit for development is also a major challenge in the budget making process. It is because of this citizens line up in front of the MP and Minister’s residence to ask for budget and plans. The expectations of the citizens then increase towards the political leaders.
Another major challenge in the budget making process is the political division and electoral agenda. Such programs and plans are rushed without any research, study and long-term impact evaluation. They fall victim to the agreement of political parties and make plans that go outside the law. While this may bring self-fulfilment limited only to the politicians, it comes at the cost of effective budget making.
Another thing is that the understanding of development among the citizens is limited to only roads and buildings. They believe that political leaders can change it whenever they want. Due to this, the citizens go to the leadership in line to ask for a plan, and the leaders try to take credit annotating that they are the ones who have to pass the budget.
Due to the lack of a system to work lawfully, the frequent changes in the political leadership in the province and the change in the employees working in the provincial bodies also seem to have an impact on the budget making process. The relationship between public representatives and these employees also affects the budget allocation as the employees have the main responsibility in the procedural management of the budget creation and allocation. Therefore, a common understanding between the employees and public representatives is necessary.
Another important issue is the lack of a clear standard to allocate the budget for budget preparation by the province. Clear guidelines on the limits of budget allocation and the criteria for project selection to assert that the allocation cannot be outside this set of standards is a problem. An action plan is necessary for budgeting. Effective performance will be achieved if the action plan is created and followed accordingly.
Another challenge in the budget formulation is the lack of preparation and adequate study. There should be a lot of preparation for the budget to be created by the province, but so far that’s not the case. It is necessary to have a long-term study of the plans and programs included in the budget. It is necessary to give an active role to the Provincial Planning Commission for this purpose. The province government needs to include the suggestions of the stakeholders in the budget making process. For this, pre-budget discussions should be held at various locations and with various stakeholders. Their suggestions should be incorporated accordingly. It is also important to include private sector in this conversation and listen to their suggestions and expectations.
There is also a challenge that need assessment is not done before the budget and programs are made. Before making a budget for any program and plan, long-term impact study should be done after assessing the need. There are many examples in Karnali province where policies and programs are not made based on facts and research, and the implementation of those programs is not effective.
The responsibility for smaller plans can be handed over to the local level and the province government can keep medium scale schemes in the budget. The large number of projects is also a challenge in the budgeting process. Due to the lack of effective coordination between the three levels of government, there is a problem of duplication of projects. For this, it is necessary to develop an effective coordination mechanism which can reduce problems like duplication.
Therefore, it is important that everything is done according to law during the budgeting process. If the budget is created as per the established methods, it can be implemented effectively. Otherwise, no matter how good the law is, if it is not followed, there is no validation for it. A clear standard is necessary for the preparation of the provincial budget. Another important task is to make citizens aware of the budgeting process. Their expectations will be built according to their understanding. It is important to develop a method to build the budget so that it can be collectively owned and cannot be affected by political and administrative instability. It is necessary to create a long-term development strategy for the province. In the long term, the impact of the strategy should be studied to make policies. An independent and automatic system should be developed to prevent development projects from being interrupted by changes in political and administrative leadership in the province. Even if there is a change in leadership, it is necessary to strengthen and stabilize the working agencies to ensure effective performance.
This article was published originally in the Nepali language on Sajha Bisaunee Daily.
