Govt set to overhaul budget
Development projects to bear the brunt

By Ram Sharan Sedhai

KATHMANDU, Dec 5 The current budget is set to undergo drastic changes as the government prepares to unveil new financial measures to accommodate the extraordinary security demands of the state of emergency.

The changes in the budget are to be announced through a royal ordinance, a highly placed government official told The Kathmandu Post. The announcement could come soon.

The government has cut development expenses in the past too, but an ordinance is required to increase the internal loan in order to meet the growing security expenses, officials say. The government is planning to curtail some low priority sector projects, as well as slash expenses on some heads.

The National Planning Commission (NPC) is currently in the process of identifying the projects to be scrapped. The government’s budget priorities are also being re-oriented. A top NPC official said the government’s move would have an impact on almost 50 per cent of the budgetary projects for the fiscal year 2001/2002.

Since there are around 100 donor-funded projects, a large number of development projects would be affected by the changes in the budget. About Rs 10 billion will be diverted from those projects to security arrangement, said the source.

However, the appropriated amount on ongoing projects and those directly related to the social sector, would not be scaled down. Similarly, the budget on health sector would not be cut, according to the source at the Finance Ministry.

There would be immense pressure from different quarters while cutting the budget on development projects. Therefore, the budget of those projects that are still in the pipeline and those that are not donor-funded, will be the first ones to be reduced. And later some of those projects could be resumed based upon the priority assigned to them by the secretaries of the respective ministries, said the NPC source.

"The government has agreed to make changes in the current budget through an ordinance and the cabinet will approve it soon," the official told The Kathmandu Post. Whether a supplementary budget will be introduced or amendments will be made to the current one is not decided yet. According to a highly placed source at the Finance Ministry, discussions are on to cut the constituency development fund by 50 per cent, and to scrap some of the low priority projects, which have no foreign funding. Currently, Rs 1 million each has been appropriated for 265 parliamentarians including the members of the Upper House. A Supreme Court decision a couple of months ago had ordered the government to earmark the budget by formulating proper laws.

The source at the Finance Ministry also said that the regular expenditure is expected to rise by almost Rs 4 billion. The government has decided to meet the increased amount through internal loans. The budget has made a provision whereby Rs 9 billion could be borrowed in the form of internal loans.

The government had proposed a Rs 99.79 billion budget for the current fiscal year of which Rs 14.12 billion is to be covered by foreign assistance, Rs 16.42 billion from loans and the rest from revenue and internal loans. Though the budgetary target is to collect Rs 60 billion from revenue, given the present trend, it would not be able to realize more than Rs 56 billion. This too has prompted the government to cut down on development funds.

The government is forced to increase the amount of internal loan in order to meet the growing security expenses, which otherwise would have had an adverse impact upon the economic stability. Due to rising regular expenditures, the government had drawn an overdraft of over Rs 6 billion in the last fiscal year, going beyond the set limit. This fiscal year too, the government has drawn an overdraft exceeding the threshold.

The Finance Minister, Ram Sharan Mahat, had only recently said that since maintaining peace and security is the prime job of the government, it shall be following a policy of fulfilling all the reasonable demands of the security forces even if development funds had to be reduced significantly.

However, the government has also made overtures to the donor agencies to provide it with additional financial assistance, with a view to giving continuity to development activities. The donor agencies, on their part, have responded to the call positively, said the source at the ministry. The fact that a recent IMF report had good things to say about reforms in Nepal’s financial sector has also heightened the possibility of additional assistance from donor agencies.

Eleventh Summit on schedule

By Binaj Gurubacharya

KATHMANDU, Dec 5 – Despite security concerns and a state of emergency in the host nation Nepal, the summit of the South Asian Association for Regional Co-operation (SAARC) is all set to take place next month.

"There is no question of postponing the SAARC summit that will be held according to the time scheduled," said Prime Minister Sher Bahadur Deuba, who will take up the chairmanship of the regional body after the Kathmandu summit.

The summit of the heads of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka is scheduled for Jan 4-6 next month. The summit planned for Kathmandu has been long delayed due to conflicts in the region between member countries.

According to SAARC General Secretary Nihal Rodrigo both Indian Prime Minister Atal Behari Vajpayee and Pakistani President Pervez Musharraf have confirmed their participation.

However, just when all the countries including India and Pakistan had agreed to finally come forward for the summit and a date for the summit was fixed, the imposing of a state of emergency in Nepal is threatening to disrupt the summit once again.

Both Nepali and SAARC officials are optimistic the summit will take place in Kathmandu and on the scheduled dates. Prime Minister Deuba ruled out that there would be any problem with security during the meeting though he refused to say how long the army operation against the Maoists will continue and when the state of emergency will be lifted.

"The security arrangements have been planned and security would not be a reason to cancel the summit," Minister for Agriculture and Cooperatives Mahesh Acharya told The Kathmandu Post before leaving for Pakistan to extend an invitation to President Musharraf.

After Pakistan, Minister Acharya will be heading to Bangladesh and then to Bhutan while his colleague in the government Finance Minister Ram Sharan Mahat is flying to India, Maldives and Sri Lanka to extend the invitation on behalf of the host nation.

"I believe that all the leaders will agree to come for the summit which has already been stalled too long and it should not be that way any more," Minister Acharya said.

The last summit was held in the Sri Lankan capital Colombo on July 29, 1998. The Kathmandu summit was suppose to happen a year later but the military take over of Pakistan prompted India to seek the postponement.

The SAARC charter says that any decision taken has to be unanimously and decisions are not based on majority votes like in some other regional groups. So if one nation disagrees to come there is no summit.

The visit by President Musharraf to India this year has somewhat eased the situation between the two nuclear neighbours paving the way for the up-coming summit.

Though the group does not take up bilateral issues for discussion, the leaders will be discussing poverty alleviation, social issue and also terrorism. The September 11 terrorist attacks in the United States has put the South Asian region on the focus point with the American forces attacking on targets in Afghanistan.

The leaders will be signing Conventions on protection of the rights of children and on controlling cross border trafficking of women and children in the region.

Workers have been working overnight shifts in the capital city to repair the roads and movies posters and banners are being cleaned to give the city a new look. The last summit in Kathmandu had seen a complete facelift of Kathmandu with roads expanded, street lamps installed and all the houses in the roadside made to repaint.

Funds please, Royal Nepal Academy is sinking

By Kiran Chapagain

KATHMANDU, Dec 5 For the past 16 years, promises have been made that the country’s premier cultural body, Royal Nepal Academy (RNA), will have its branches in all the five development regions. That it has not happened has mostly to do with the lack of government funds.

The budgetary crunch has thwarted not merely the expansion plan, but it has also brought research and other activities to a halt in the last couple of years. The 44-year-old RNA is now a doddering body, struggling to do justice to its aim of promoting the languages, literature, culture and the arts.

The situation is so grim that the Academy is barely able to run its routine chores. "The money the RNA receives from the government can only take care of the salary of the 220 staff members and the 11 life members. It is also just about enough for publication of the Academy’s regular books and magazines, but not enough for research or other activities to be carried out," says RNA member secretary, Tulsi Bhattarai.

Then there is the case of the RNA library—home to 18000 books—which still is not open to the public, despite plans to do so. Plans to erect another library building for the purpose has been caught up in bureaucratic red tape.

The RNA was established in 1957 by King Mahendra, who gave two ropanis of his land for the now-imposing building at Kamaladi in the capital. The King also managed the finances for the Academy.

Efforts to set up RNA branches date back to 1985. In that year, the then Prime Minister Lokendra Bahadur Chand while visiting the far western development region with late King Birendra, had announced that an RNA branch would come up in Dhangadi. Even 2 bighas of land was gifted to the academy by the Dhangadi Municipality. Nothing more happened, and the RNA continues to pay revenue for the land.

Now almost 16 years later, Prime Minister Sher Bahadur Deuba too is talking about extending the RNA, something he made public at the November 10 launch function of Lokendra Bahadur Chand’s poetry anthology, Sandhyawali. Is it again a case of a prime minister paying lip service?

Last year, the Academy spent about 24 million rupees in salary, out of its total budget of 26.1 million. The remaining two million rupees or so was spent in holding annual functions like poetry festivals and plays. There was no money for promotional exercise of any sort. "The RNA is being run merely to give continuity to its existence, it is not doing anything to meet its main objectives," says secretary Bhattarai.

There is a lot of disquiet among most RNA employees, who believe that the RNA’s performance has been poor over the years. "The RNA has published about 700 books, but it has done little in the field of research," says an employee on condition of anonymity.

Meanwhile, surprisingly, the talk of expansion itself is something that the Ministry of Tourism, Culture and Civil Aviation, has not even heard about. Says Ministry, spokesperson Subarna Lal Shrestha, "We do not know anything about the extension plans."

Unaware of consumer laws, fake is for real in Nepali market

By Tashi Dolma Thinley

KATHMANDU, Dec 5 – Nepal might be the ultimate shopping destination for the average Indian tourist, but for the Nepalese consumers themselves, it is a tough act to decide on the genuineness of the products they buy, swamped as they are by foreign goods from all kinds of places.

It might be the Hong Kong market at Bhrikuti Mandap with its Chinese (Khasa) wares, or the ever-mushrooming supermarkets, but the consumer is hard put to decide whether the product he buys is a fake or the real one. For years, the Nepali buyer was happy that he could choose from a variety of foreign—read non-Indian—goods, but now the consumer seems to think that going for Indian products is the safest option in terms of quality. And more importantly, being familiar with the Indian rupee value, the Nepali shopper would know exactly how much the Indian product really costs.

That cannot be said about many other foreign items, whose price tags vary from one shop to another. Also, the possibility of going home with a fake is all too real. It is this latter possibility that has made the consumer now more demanding about the quality of the product he buys. And here, he feels the Indian items, most of which have guarantee periods, are the best bet.

"There used to be a time when people would buy anything that was foreign. But today they think it is the Indian goods that are reliable. And it is not only the consumer, the shopkeepers also are not willing to go for a product just because it has a foreign label," says a New Road cosmetics proprietor.

This reporter was witness to a scene where a salesman was trying to convince a lady to buy a mixer of Western make. But the lady refused. She said, "I now buy only Indian products because they can be repaired easily, and there will also be a guarantee."

Some of the blame has to be borne by the proprietors. In many cases, although they are not sure about the quality of a brand, they still try to push it to the unwary customer. And when complaints emerge, they just shrug them off.

It’s here that the country’s consumer laws ought to step in. Although there are at least two bodies, Consumer Forum and Pro Public, whose mandate is protect consumer interests, awareness of the existence of these bodies among the general public is almost nil. In the case of the Consumer Forum, one can approach it to file cases or seek compensation, while the Pro Public organisation safeguards public interest on a variety of issues ranging from environmental safety to gender. To put it differently, if, for example, you are suspicious about the quality of the mineral water that you bought, you could approach one of these bodies.

But these two consumer organisations themselves admit that the laws are not effective. But it could be, if the first step is taken, says Sharmila Parajuli, an advocate at Pro Public. "While full justice or compensation might not happen, at least we can put pressure on the concerned authority," she says.

Citing the instance of food products, Parajuli says in the cases of complaints received, her organisation can help lobby the Chief District Officer, who can then get the product to be tested at the Department of Food Technology and Quality Control Centre at Babar Mahal in the capital.

But this hardly happens, as there are no complainants. Says Paras Pradhan at the Consumers Forum. "We cannot blame the law. It has been there for years, but there have been hardly any complaints lodged for the law to be activated." Pradhan says all that it needs is a phone call to his organisation, which will then take the matter to the courts.

Army repulses terrorist attack

Post Report

KATHMANDU, Dec 5 - A team of the Royal Nepal Army guarding the repeater station of Nepal Telecommunication Corporation at Nagarkot in Bhaktapur repulsed an attack by Maoist terrorists on Tuesday, said a statement issued here today by the Defence Ministry.

The army also repulsed the terrorist attack on them at Hatiya, a small market place in Baglung district yesterday. Two of the terrorists involved in the attack were arrested. The statement added that the army directed aerial fire against a group of Maoist terrorists in a forest at Chitre in Gorkha district. The loses suffered by the terrorists are yet to be ascertained.

The Ministry also said that the army arrested a terrorist who was injured in the clash between the army and the Maoists in Salleri in Solukhumbu district last week.

The army also defused several different improvised explosive devices that were used by the Maoists during their attack on a police post at Gokuleshwar in Darchula district last week.

The statement concluded that the search and cordon operation of the army continues in several districts.

SC quashes CIAA’s decision

Post Report

KATHMANDU, Dec 5 - The Supreme Court on Wednesday ruled that the Commission for Investigation of Abuse of Authority (CIAA) had no right to recommend action against the then Education Minister Govinda Raj Joshi.

The decision comes in response to a writ petition filed by the then minister Joshi, nearly nine months ago, after CIAA had recommended to take action against him in a case related to teachers’ selection. Joshi was charged of amending the Education Regulation to serve his interest in a teachers’ selection case where 87,000 candidates succeeded in a written examination, a number far greater than that required.

The order was issued by a division bench of Chief Justice Keshav Prasad Upadhyaya and Justice Kedar Prasad Giri.

"With the Supreme Court’s verdict today, the teachers selection process which had been withheld for a long time is solved," said advocate Lalit Basnet who had pleaded in the case. "The court decision has made it clear that the cabinet has collective responsibility regarding its decision but a minister need not be accountable individually ," Basnet added. The decision regarding the techinicalities was made by the cabinet then.