“Main Feature Of Budget Is Rural Focus”


Aug. 22, 2011, 5:45 p.m. Published in Magazine Issue: Vol. : 05 No.-05 Aug. 19-2011 (Bhadra 02,2068)<br>

Vice-chairman of The National Planning Commission Dr. DINESH CHANDRA DEVKOTA has long experiences of working in the development sector.  At a time when there are various debates going on since the announcement of the budget, Dr. Devkota spoke to NEW SPOTLIGHT on various issues. Excerpts:

As The vice-chairman of The National Planning Commission involved in the preparation of the budget, how do you look at the proposed budget?

Policy-wise, this budget was prepared on the basis of the Interim Constitution, Three Years’ Interim Plan and the white paper presented by Finance Minister Bharat Mohan Adhikari. The programs reflect these three elements. Another basis is commitments made by the government, and the progress report on MDGs.

Does the budget adequately allocate money to meet the MDGs?

We also allocated enough budgets to fill the gaps shown by the need assessment report on MDGs. MDGs are one of our main guidelines as Nepal has already made commitment to achieve the MDGs.

This budget said to have favored cooperatives and ignored the role of the private sector. How do you look at this?

In terms of economics, the budget stresses promotion of cooperatives. However, it does not mean that we have ignored the public and private sectors. We have been following a three-pillar economic policy for the last many years. In the process of implementation of the three-pillar economic policy, we stressed the cooperatives to generate money in the rural sector. This budget and program are directed towards this.

What other things are in the budget?

As per the rule, just one third of the budget has been released and the Legislature Parliament is yet to discuss and pass the budget, I cannot say more than this. What I can say is that the present budget tries to support the rural parts of Nepal, encouraging development activities directed to poor and socially excluded populations.

Are you happy about the budget?

Looking at comments and criticisms, I am happy to say that this time nobody raised a question about the distribution of the budget. Nobody raised objections on the distribution pattern, such as that this budget has ignored the rural parts. Although I was criticized by some of the leaders that I have not allocated adequate budget to my district and my village, I don’t mind it. This is good budget.

How do you elaborate on the budget targets?

This is for the first time that we have produced a budget targeting the rural and remote parts of Nepal. As the vice-chairman of the National Planning Commission, I cannot allocate the budget only to my village or district, but I have to look at all of Nepal. I believe that I have to rise above the village and district level of priority. What I can say that I have done justice to my district and village and there is a fair distribution. But, some persons, who just look at their village and district, criticize me.

What about infrastructure development?

We have proposed 8 to 10 north south corridors and south-north corridor roads. The road linking Gaur of Rautahat district to northern part of Nepal is one of them. Another area is Bagauda region of Banke. We have proposed special programs for Mechelangna of Mugu and Marim of Dolpa and road to Humla. The road from Mansarovar of Tibetan Autonomous region of China will be linked to the road of Humla. Similarly, we allocated the budget for Bajhang Taklakot road. Of course, there are many challenges including how we will spend the money but the budget holistically will be able to address the challenges and problems faced by the people living in remote parts of Nepal. This year’s budget and programs include mega projects like fast track roads, 601 MW Budhi Gandaki Project, and Hulaki road. We have allocated budget to start a new highway in mid-west and far-west. We have plans to blacktop some of the portions of mid-hill highway.

What is the distribution pattern of the budget?

If you look at the distribution of the budget, we have tried to allocate more money to rural and remote parts of Nepal. If you compare the budgets for Manang and Kathmandu, you can see this clearly. For instance, budget per person in Manang district will be Rs. 43.000.000 and the figure for Kathmandu will be less than Rs. 3000.00. This indicates that the budget focuses on the rural and remote parts of Nepal. I accept the fact that the implementation mechanisms are very poor in those areas. The whole budget will be determined by the capacity of the civil servants working in rural parts of Nepal. We have allocated 20/22 percent national budget for far west and mid-western region. This time we have allocated enough budgets to Karnali district by forming Karnali Commission. These areas have been always ignored in the process of development.

What are the expected outcomes of the budget?

When we prepared the three years’ interim plan, we projected to achieve 5.5 percent growth. Last year, we expected the growth of 4.5 percent but we revised it to 3.5 percent in reality. Right now India’s and Vietnam’s growths are in double digits and their inflation is gradually lowering compared to ours. For a country like Nepal, what is required now is formation of the national capital. As 70 percent of Nepalese population has been living in remote parts of Nepal, contributing below 30 percent, but 30 percent of the population living in urban areas are contributing 70 percent to GDP. This showed us where the state needs to target set its targets.

Why are you focusing so much on rural Nepal?

Frankly speaking, we need to focus on 70 percent of the population who can really make a lot of difference in the national economy. We have proposed the cooperatives to address the problems of rural population. The three pillar economic system with public, private and cooperative sectors has already been established in Nepal. This three-pillar norm is accepted by all the political parties in Nepal. Our aim is to increase the production in rural parts of Nepal through mobilization of cooperatives. We are importing huge amounts of lemon and goats from India and lambs from China. Nepal also imports rice from India.

What is the present state of the economy?

Nepal’s current reality is that the country is surviving on the basis of remittances. It is unfortunate that we have been spending such money to buy consumptive items. If we can produce those things in the villages through mobilization of cooperatives, we can bring a lot of changes. We need to produce the products that we can sell from one part of the country to another. Our economy is import based and we don’t have any product to export. From cars to oil and agriculture products, we are importing almost everything. We need to change the pattern of production. We are supplying noodles to villages but we are unable to bring anything from rural parts of Nepal.

Do not you think that all this will reduce the private sector’s role?

I don’t think we can ignore the role of the private sector. We have definitely emphasized the role of cooperatives, but there is also a role for the private sector. For instance, increasing number of poultries in villages will require cold storage and cooperatives cannot invest in this, thus they require private sector investment. We need a lot of processing industries. Our aim is to encourage the cooperatives to increase the production. Private sector’s role is required to export the products and invest in mega projects. What Nepal requires is cooperatives to provide employment. Private sector needs to play a very important role in construction of cement factories as well as railways. There is no need for the private sector to get panicky. We don’t want to ignore their role.

What are the major challenges?

The challenges before us are in the implementation side. We need support of political parties to implement the budget. Political parties should carry development and economic agenda. It should be the agenda of all political parties. We need to attract the youths of YCL, Youth Force and Tarun Dal. Our failure is that we are unable include them in our economic agenda. Political parties need to rise above the political interests for this.

UCPN-Maoist leader Dr. Baburam Bhattarai recently charged that you have cut down the development budget of Gorkha district. What do you say about his comment?

National Planning Commission has been working for the broader interest of the country, rather than the interest of a particular individual or district or village. Although I am also from Gorkha district, I cannot focus my complete priority to my district. So far as cutting the development budget of Gorkha district is concerned, it is completely wrong. A leader of such a high stature needs to speak of the scenario by looking at the facts and figures.

Out of 384.90 billion rupees proposed budget, over 45 percent budget is allocated to development expenditure or capital investment.  The budget is allocated under the current expenditure and capital expenditure. The total current expenditure is Rs 266. 607 billion and capital investment is Rs. 72 billion 600 million rupees.

How do you see the role of Nepal’s development partners?

They are very positive to Nepal’s development.  Just last week we have decided to prepare United Nations Development Framework (UNDF). Vice-chairman of the National Planning Commission is co-chair with UN Resident Coordinator Robert Piper. In a meeting, we discussed what strategies are going to be there of UN agencies for 2013-2017. UN can contribute a lot in capacity building of the various ministries. They will also provide the budgetary support as per the government’s requirement.  I met 19 representatives of various UN agencies working in Nepal and all of them responded to us very positively.  I am enthusiastic. There is immense possibility to attract the international funds working together with UN agencies.

What makes you enthusiastic about their work?

I am very enthusiastic about the response of UN. National Planning Commission is ready to provide all necessary support to UN agencies. I am also very positive to the work and support given by International Non-governmental Organizations. I have been meeting various representatives of Nepal-based development partners including DFID, ADB, the World Bank and others and I am enthusiastic about their response. Nepal’s development partners including INGOs are also supportive to Nepal’s case.


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