Sangam Prasain & Prithvi Man Shrestha

All the seven provinces announced their annual budgets for the next fiscal year on Monday, focusing on specific programmes to fight the Covid-19 pandemic. Largest portions of the budgets have also been allocated to infrastructure development in hopes of creating more employment for those who’ve lost jobs or returned from abroad.

The combined budget of all the provinces comes to Rs264.20 billion, a slight reduction from the current fiscal year’s Rs269.57 billion. The budgets for two provinces—Bagmati and Sudurpashchim—have increased significantly while Province 2 has observed a sharp drop.

The budget of the provincial governments is based on grants provided by the federal government and revenue collected from the local level.

Most provincial governments have announced austerity measures for government employees, with cuts to allowances and non-essential purchases, amid a real possibility of reduced earnings. But despite widespread public grievances, a number of provinces have continued to allocate ‘constituency development’ funds for provincial lawmakers.

Province 1

Province 1 has reduced its budget size for the next fiscal year, announcing a Rs40.89 billion financial plan, down from Rs42.20 billion for the current year. Of this amount, Rs18.93 billion has been earmarked for recurrent expenditure, Rs21.92 billion for capital expenditure, and Rs40 million for financing.

The Province 1 budget has allocated Rs1.10 billion to strengthen health infrastructure and increase medical services, provisioning Rs500 million to purchase medicines and necessary health infrastructure for Biratnagar’s Koshi Hospital, the designated frontline Covid-19 hospital. The budget has also earmarked Rs230 million to purchase medical equipment, including ventilators, for Mechi Hospital in Jhapa.

The province has launched a Rs50 million ‘rural healthy mother’ programme, which will provide emergency medical evacuations by air for pregnant and post-delivery women with serious complications.

Province 1 has allocated Rs3.83 billion for the development of the agriculture sector and Rs4 billion for the irrigation sector. It has launched a Rs120 million ‘my agriculture, my pride’ programme under which interest-free loans will be provided to young people who wish to engage in commercial agriculture. The programme will focus on using the skills of migrant workers who have returned home due to the pandemic. The province has also allocated Rs105 million to boost winter maize production in the hills and Tarai regions.

The province has allocated Rs135 million for the construction of cold storage facilities and another Rs80 million for the construction of drying, processing and storage facilities. For the development of the tea sector, it has earmarked Rs165 million.

The province has allocated Rs8.74 billion for the development of road and transport infrastructure.

Province 2

Province 2 has announced a budget of Rs33.56 billion for the next fiscal year, a significant reduction from Rs38.72 billion in the current fiscal year.

Presenting the budget, Minister for Economic Affairs and Planning Bijay Kumar Yadav said that the budget has accorded priority to controlling Covid-19 and generating jobs in the agriculture sector for migrant workers who have returned home.

Since Province 2 is the province hit hardest by the pandemic, with 2,280 cases, the provincial government has created a Rs250 million Covid-19 control and treatment fund. It has also allocated Rs455 million to transform Janakpur regional hospital into an academy of health sciences.

The provincial budget has allocated Rs700 million to strengthen medical infrastructure and ensure the supply of medicines in times of crisis.

The budget has allocated Rs120 million to set up custom hiring services to promote farm mechanisation for commercial agriculture and Rs 317 million have been allocated for the promotion of livestock and fisheries.

The province has allocated Rs672 million for the development of 64 road projects.

The province has also continued its women literacy programme ‘Beti Bachao, Beti Padhao’ (save daughters, educate daughters) allocating Rs306.4 million in the next fiscal year. The programme will cover education insurance for 25,000 girls enrolled in the school level. For the development of tourism infrastructure, the province has allocated Rs1.13 billion, which will focus on the Ramayana Circuit, which is a Hindu religious circuit that will connect 15 religious sites associated with Ram and Sita in South Asia, including Janakpur in Nepal.

Bagmati Province

Bagmati Province, which houses the federal capital of Kathmandu, has announced a budget of Rs51.42 billion for the next fiscal year, up from Rs47.60 billion. Bagmati has the highest budget allocation among all provinces.

The provincial government has allocated a hefty Rs17.80 billion for the development of physical infrastructure and has continued with the construction of the Bhimphedi-Kulekhani tunnel highway and construction of a province-level ring road.

Bagmati Province has earmarked Rs194 million to combat Covid-19 and another Rs563 million for the development of medical infrastructure. It has allocated Rs160 million in grants for dairy farmers where farmers will get subsidies of Rs2 on a litre of milk.

Bagmati Province has announced that it will provide Rs2,000 per month as an allowance for orphans as part of its social security scheme. The provincial government has continued its ‘one school, one nurse’ programme by allocating a budget of Rs198 million.

Gandaki Province

Kiran Gurung, the economic affairs and planning minister for Gandaki Province, presented a budget of Rs34.84 billion for the next fiscal year, up from Rs32.13 billion in the current fiscal year. The budget focuses on combating Covid-19, economic recovery and job creation. 

At a time when the federal government and most other provinces have reduced their budget citing a lack of revenue, Gandaki Province has increased the budget size by Rs2.70 billion, stating that resources saved from this fiscal year will be employed in the next fiscal year. The provincial government expects to spend just 63.55 percent of the current budget.

Gandaki Province has allocated Rs2.91 billion to fight Covid-19 by building quality quarantine centres and dedicated hospitals and procuring test kits and other medical equipment.

Economic recovery is another area prioritised by the budget. Gandaki has decided to create a Rs1 billion ‘enterprise survival fund’ to revitalise industries affected by the pandemic. The tourism sector, which has been badly affected by the pandemic, also stands to benefit from the fund, said Gurung. 

The provincial government will also run skill development programmes to create employment among those who’ve lost jobs at home and abroad. For this, Gandaki province has allocated Rs184.20 million. It has also provisioned Rs105 million for skills training in partnership with federal and local governments and an additional Rs98.9 million for training under the Centre for Technical Education and Vocational Training.

In order to create jobs in the agriculture sector, a budget of Rs185 million has been allocated, with Rs20.5 million allocated to jobs in the tourism sector alone. 

Roads and bridges have been allocated a substantial budget of Rs6.17 billion. 

The budget has cut overtime allowances, meeting allowances, food and tiffin expenses and risk allowances as a part of austerity measures, Gurung said. The budget, however, does not mention whether these measures apply to both elected officials and bureaucrats.

Gandarki Province too has continued with the Electoral Constituency Infrastructure Development Programme, despite widespread criticism.

Province 5 

Chief Minister Shankar Pokharel of Province 5, who is also the economic affairs and planning minister, presented a budget of Rs36.35 billion for the next fiscal year, a slight decrease from Rs36.41 billion in the current fiscal year.

Pokharel has allocated a substantial budget for physical infrastructure development, along with emergency funds of Rs1 billion for the Covid-19 pandemic.

Province 5 has the second highest number of Covid-19 cases with 1,741 as of Monday, after Province 2 which has 2,280 cases, according to the Health Ministry.

According to the budget, Province 5 has allocated Rs15.02 billion for physical infrastructure development, which is 41 percent of the total allocated budget.

Job creation is another major focus of the Province 5 budget. The provincial government has allocated Rs165 million to enhance the skills of the youth and create 10,000 new jobs.

“An integrated mechanism for the labour and employment sector will be brought into operation to address the impact of Covid-19 on jobs,” Pokharel said.

The budget has envisioned a programme called ‘agriculture tools in every hand: employment in every village’ with an allocation of Rs650 million. The province plans to create 42,000 jobs under this programme. A fund of Rs100 million has also been created for self-employment in small industries for those who have lost jobs at home and abroad.

The budget has cut meeting allowances, repair and maintenance costs, and office and fuel expenses for government employees. Government offices, other than health and security-related ones, will be discouraged to purchase new vehicles, according to the budget.

Karnali Province

Economic Affairs and Planning Minister Prakash Jwala presented a budget of Rs33.74 billion, down from Rs34.35 billion this fiscal year, with a focus on combating Covid-19 pandemic, food security and economic recovery in the province. The province has allocated Rs 1.5 billion in programmes related to health, education and food to combat Covid-19.

The province plans to procure medical goods and prepare 200-bed isolation wards in provincial hospitals along with revolving hospitals to provide easier access to people. The provincial government also plans to provide Rs100,000 in relief to families of those who’ve died from Covid-19. It has allocated Rs500 million for food procurement and supply amid a possible food shortage due to arrivals of more people from foreign lands.

As the Karnali region frequently faces food shortages, ensuring food security is a top priority for the budget. Jwala said that the provincial government would increase food storage capacity and run a ‘One Local Level: One Grain Storage’ programme in partnership with local governments.

Karnali Province will operate the Chief Minister’s Employment Programme and the Labour-based Employment Programme for Food for those who’ve lost jobs at home and abroad. In order to create labour-based employment, the budget says that machines will not be allowed in projects whose budget is less than Rs10 million. The total budget for employment and development activities is Rs6.54 billion.

Austerity is also the focus of the budget, as Jwala said that the budget has reduced allocations for both recurrent expenditure and administrative expenditures. 

“No new vehicles will be purchased in the next fiscal year, except for ambulances,” he said.

Allowances for maintenance, fuel, trips, furniture, and seminars have been significantly reduced.

Sudurpaschim Province 

Economic Affairs and Planning Minister Jhapat Bohara presented a budget of Rs33.38 billion for the next fiscal year, a significant increase from Rs28.16 billion in the current fiscal year. The budget focuses on the health sector amid the Covid-19 pandemic with the budget for the health sector increased to Rs3.26 billion from just Rs780 million, according to Bohora.

“The fiscal year 2020-21 will be marked as Health Service Improvement Year, “ Bohara said.

The province has also allocated Rs500 million as an emergency fund to fight Covid-19. The budget plans to build 10-bed Covid-19 treatment hospitals in seven districts.

The provincial government has also allocated Rs50 million to build drinking water facilities, roads, bridges, and health and education infrastructure at Byas, a region that India has occupied and Nepal has demanded back.

Sudurpaschim has allocated Rs4.72 billion to the road sector, aiming to build 528 km road, 11 motorable bridges and 22 suspension bridges. As the permanent capital of the province has not yet been determined, the budget has allocated Rs27.4 million for necessary preparations for infrastructure development of a to-be-decided capital area.

As a part of austerity measures, allowances for all government employees, except for health workers and security personnel working on the front lines against Covid-19, will be scrapped, according to the budget.

Published on: 16 June 2020 | The Kathmandu Post