NATIONAL 6 -(Spotlight Weekly)]

Plugging The Loopholes

The PER Commission suggests a number of ways to stop waste of resources. Will the government act?

By BHAGIRATH YOGI

Three 'Made-in-Japan' vehicles are lying in dilapidated conditions within the premises of the District Irrigation Office in Nuwakot district. A Toyota pick-up van remains unattended for the last four years at the District Land Conservation office. According to Nepal Samacharpatra daily (Nov. 16), there is nobody to take care of vehicles worth millions of rupees belonging to the District Agriculture Office, District Forest Office and Nepal Electricity Authority. The District Agriculture Office called an open tender to sell one of its vehicles with spare parts at Rs 151,000 but there were no buyers.

Government property worth millions of rupees is wasted every year in Nepal but there is no one to take responsibility. Whether it is a foreign-aided project or a development program run from the government's internal resources, the story is more or less the same. The `beruju' (unsettled account) at different government agencies and department has crossed the Rs 50 billion mark. The plundering and loot of scarce public resources have become the rule rather than the exception. "In Nepal, only 40 paise out of every rupee spent is utilized properly," says Dr. Bal Gopal Baidya, a former member of National Planning Commission.

Studies agree. "Nepal's fiscal situation is significantly weaker than those of her neighbors. The low level of revenues combined with relatively high expenditures have led to larger fiscal deficits and heavy aid dependence in Nepal," says a report entitled "Nepal: Public Expenditure Review (PER)," published by the World Bank in April this year.

Schools without teachers and health posts without medicines and health manpower are a common scene in Nepal. Reports say not even 20 percent of the total manpower assigned for the health system can be found serving at their offices at a time. Similarly, nearly 60 percent of the teachers are still untrained and those who are trained are rarely seen teaching in their classes.

To change the situation, the government constituted a five-member Public Expenditure Review Commission (PERC) in September this year with a mandate to submit a report along with professional and expert recommendations for improving the government's expenditure management practices. The interim report of the PERC, submitted to Finance Minister Mahesh Acharya, has dwelled on the very concept of governance, identified problem areas and has also recommended actions.

In what would be a bold step, the PERC has recommended that services like education and health be handed over to local bodies. The government should provide annual grants to run these institutions to local bodies and monitor the efficacy of such grants every three years. "There is no need for the government to be present below the district level except for jobs such as security and general administration," says the report.

The interim report has recommended amendments to a number of existing laws, restructuring ministries and departments and bringing about reforms in the modus operandi of the government agencies. The commission has also asked the government to be selective while negotiating for foreign aid. "Foreign loan should be borrowed only for those projects in the productive sector which have an internal rate of return of 15 percent or more. There is no rationale for using foreign loan to social sector including education, health and training," the report says.

The commission has recommended that private and non-governmental sector should be encouraged to seek foreign loans for projects related to industrial development and tourism promotion.

Regarding regular expenditure, the commission has recommended that the expenditure on internal security should not exceed 7 percent of the internal revenue. The provision may force the government to impose self-restraint in the wake of spiraling expenses on security matters. The commission has recommended a number of measures to strengthen intrnal control system, reduce 'unsettled accounts,' and review the existing manpower of civil service.

The commission's recommendation to dismantle the Ministry of Women, Children and Social Welfare and Population and Environment, however, have received severe criticism. "The commission has no job to recommend dissolution of a new ministry like ours," says Kamala Pant, Minister of State for Women, Children and Social Welfare. Adds Dr. Ramhari Aryal, a population expert and joint secretary at the Parliament Secretary, "There is a need to strengthen the Population Ministry in view of commitments made by the government in ICPD conference in Cairo, rather than dismantling it."

Experts say such comments may have emanated out of "departmental ego." "The recommendations by the commission are in line with the suggestions provided by the Administrative Reforms Commission in the past," says Dr. Hiramani Ghimire, a public administration expert.

Member-secretary of the commission, Yubaraj Bhusal, says the commission will submit its final report to the government by February next year after gathering comments and suggestions from different quarters. "We are hopeful that the government will implement these suggestions gradually in their true spirit." A daunting task, indeed.