No new budget means no pay for govt staff

KATHMANDU, OCT 30 -

Government employees and teachers under the Ministry of Education (MoE) may not get their salaries next month if a new budget is not issued soon.

The government had presented a one-third budget last July as a stopgap measure due to differences among the political parties, and it prevents ministries from spending more than one-third of last year’s expenditure under each heading.

As a result, the MoE has said it will not be able to pay the salaries for Kartik (mid-October to mid-November) if an alternative mechanism is not in place within a fortnight.

Although the Ministry of Finance (MoF) has asked all the ministries to pay the salaries by transferring money from other headings under recurrent expenditure, education secretary Suresh Man Shrestha said that there wouldn’t be enough funds for all the offices.

“Due to the holidays, I cannot say right away which offices will face money problems, but it is sure that some offices under the MoE will be hard-pressed to pay their staff if alternative arrangements are not made,” said Shrestha. He added that the MoE had already asked the MoF to help arrange the required money.

MoF spokesperson Rajan Khanal said that the Education, Home, Defence and Local Development ministries had complained before Dashain about inadequate budget allocations to pay their staff.

As per current rules, budget allocations under the capital expenditure heading cannot be spent for purposes under the recurrent heading. “The government has adequate resources, but we cannot use them as we wish due to constitutional and legal provisions,” said Khanal.

The Ministry of Federal Affairs and Local Development (MoFALD) said that it was OK with regard to paying the salaries of its staff, but it would be difficult arranging extra funds for the increasing number of people receiving social security benefits.

The government has been providing allowances to senior citizens over the age of 70, single women and the handicapped. “We have directed district development offices to distribute the allowances for the first trimester any way they can, but we don’t have enough funds for the increased number of beneficiaries this year,” said MoFALD spokesperson Dinesh Thapaliya. The allowances are distributed on a three-monthly basis.

According to him, the ministry requires Rs 10.19 billion to pay the social security allowances for this fiscal year, but it can spend only one-third of the Rs 8.54 billion spent last year due to the partial budget .

Meanwhile, the inadequate budget ary allocation, besides making it difficult to pay the salaries and allowances, has had a more serious impact on development projects. Government officials said that small projects had been affected more than multi-year contract projects due to the absence of a full budget .

“As the budget has not been issued for the entire year, there is confusion whether to invite tenders for one year or not as it is not certain there will be adequate funds for the project,” said Khanal of the MoF. “Even large projects being implemented under multi-year contracts have been hit as the government has not been able to issue payment to the contractors.

Full budget ‘at any cost’

A meeting of the ruling coalition parties on Monday agreed to introduce a full budget for this fiscal year within mid-October ‘at any cost’. Opposition parties, however, have stood firm against full budget .

Terai Madhesh Loktantrik Party leader and Minister for Physical Planning Works and Transport Management Hridayas Tripathi said ruling the parties have agreed on a full budget by holding discussions with stakeholders, including the opposition parties and the private sector. “We will take participatory approach by involving the opposition parties in setting priorities and programmes,” said the minister.

Tripathi said the ruling collation would not backtrack on the decision even if a consensus is not reached. “The government will definitely send the budget ordinance to the President for endorsement by mid-November. A full budget has been necessary even to pay salaries to the government staff and managing rations for jailbirds, let alone continuing development activities,” said Tripathi, adding the government has been unable to utilise even donors’ resources in the absence of a full budget .

Source: The Kathmandu Post