The looming question is ‘How will the government manage its expenses to undertake and complete its plans and policies laid across all the sectors?’
Nepal adopted a federal system of governance in its constitution on September 20, 2015 and thus, transformed its unitary system of governance into a three-tier governance structure comprising of a federal, seven provincial and 753 local governments. Following this transformation, provincial governments, which are one of the major spheres of the current governance structure, are authorized to exercise their exclusive and concurrent powers of making laws, policies, plans, and programs that fall under their respective jurisdictions while also making public their finances and budgeting.
Along the same lines, each province is currently preparing its plans and policies for the upcoming FY 2078/79. A brief summary comprising some of the major details is presented below. However, it is to be noted that all of the provinces have not yet disclosed their policies, and hence, there will be another article covering the remaining provinces.
Source: Author’s own
Province 1
The Province 1 Chief, Somnath Adhikari, unveiled the policies and programs of the Province for the upcoming FY 2078/79 in the Province Assembly on June 10, 2021.
The core focus of the plans and policies has been given to the health sector. Within the health sector, the government has targeted to launch a campaign with the slogan ‘Quality Health Care’ considering the detrimental COVID-19 pandemic. In addition to this, the concept of ‘Digital Health, Digital Province’ will also be implemented by keeping electronic health records, providing remote medical consultations and services, and making the vaccine accessible to all. Further, the number of beds, medical equipment, infrastructure, oxygen plants, specialist doctors, and health workers in many of the hospitals of the Province are targeted to be increased so that it can capacitate the Province in serving its ill patients better and smoothly. Similarly, health awareness programs will also be conducted in schools and communities in coordination and participation of political parties, communities, the private sector, media and non-governmental organizations (NGOs).
Besides, on the education front, vocational, technical and skill-based education is being emphasized along with developing curriculum, formulating provincial education policy, providing sanitary pads, and arranging nurses to all secondary schools of the province.
Further, owing to the COVID-19 pandemic, the provincial government has also undertaken a policy of providing relief to the most affected citizens with extremely weak economic conditions, as well as to the farmers by providing them interest subsidy on agricultural loans. Informal, small and home-based entrepreneurs will also be assisted in the rehabilitation either through concessional loans or other facilities that will be explored further. By doing this, the province aims to recover from the strains of the pandemic economically. Another laudable way by which the province aims to economically empower its citizens is by providing access to electricity within two years and also distributing the shares to the people by constructing hydropower with water investment.
Likewise, the provincial policy of tourism and industrial sector will be kept afloat with the promotion of entrepreneurship and tourism. For this, necessary programs with the slogan ‘Tourism Entrepreneur’s Hand with the State Government’ will be implemented for the revival of the tourism sector affected by COVID-19.
Province 2
On behalf of the Province 2 government, Province Chief Rajesh Jha, presented its plans and policies for the FY 2078/79 on June 10, 2021. The provincial government has added COVID-19 control programs while continuing some of the previous fiscal’s plans such as ‘Beti Bachao, Beti Padhao (Save daughter, Teach daughter)’, ‘Where there is road, there is development’ and constituency development program.
On the health front, the province has prioritized making a hospital under construction at Manipal Hospital in Janakpur a COVID designated hospital, adding health workers in hospitals, building health infrastructures, setting up COVID emergency centers and regular transit with India, expanding the capacity of the provincial hospital to 500 beds as well as providing health insurance to health workers.
The government will also make arrangements to transform Janakpur into an education hub by establishing one library in each district and one technical school in each state constituency in the upcoming FY.
Further, the government aims to launch Chief Minister’s Youth Employment Enterprise Development Program for the youth who are currently unemployed due to COVID. It will also promote agribusiness by providing agricultural insurance, agricultural electrification, agricultural irrigation, and tax-exemption for medium agro-industries.
Likewise, the provincial government has outdone its plans and policies for the upcoming FY by giving much-needed focus on uplifting Dalits. For instance, it has laid out that Dalit scholarships and ration cards to needy Dalits will be provided under the current plans and policies. Similarly, Dalit hostel and senior citizen housing program will also be conducted in each district headquarters.
Furthermore, Province 2 has also declared that an additional number of public holidays will be given in the province from the upcoming FY onwards such as on Ram Nawami, Janaki Nawami, Chhath, a day after Holi, etc.
Bagmati Province, Gandaki Province, Province 5 and Karnali Province
The four provinces have not yet revealed their plans and policies for the upcoming FY 2078/79. However, it is to be noted that the official website of the provinces iterates that the process has begun.
Sudurpashchim Province
Province Chief, Ganga Prasad Yadav, presented the policies and programs of the Province for the upcoming FY 2078/79 on June 11, 2021.
Owing to the ongoing COVID-19 pandemic, one of the most notable plans of the provincial government is to build the necessary infrastructure to control the pandemic. In line with this, health services will be expanded for the treatment of the infected and separate COVID-specific treatment rooms will also be arranged in each hospital of the province. Health desks and holding centers will also be set up at the border. Vaccination drive for all its citizens will be given the topmost priority.
Likewise, to address the growing problem of unemployment due to COVID-19, a grant will be made available from the Province Self-Employment Development Fund to the unemployed youth. Province Industry Master Plan will also be prepared to develop the industrial sector. Province Agriculture Development Policy will also be formulated to make the province self-reliant on agriculture.
Moving on, another applause-worthy plan laid out for the upcoming FY is to attract domestic and foreign investment in the province by giving priority to complete big unfinished projects of the current FY. Financial literacy programs will also be taken forward to increase access to banks and financial services in the province.
Concluding thoughts: A brief analysis
Overall, the plans and policies presented by the provincial governments of Provinces 1, 2, and Sudurpashchim, in this article, are focused on the revival of the economy crippling due to the COVID-19 pandemic. As laudable as the plans are, they have to be guided by effective implementation and monitoring, especially at a time when most of the Nepali population and businesses are fed up with the government’s tepid approach to managing the economy.
The looming question is ‘How will the government manage its expenses to undertake and complete its plans and policies laid across all the sectors?’
This question is posed considering the weakening revenue performance of the government as well as a 2.1 percent decline in tax revenue in the current FY projected by the World Bank in its April 2021 update. Further, other reports state that higher government spending without adequate fiscal revenues will not be sustainable. Since revenues from corporate income taxes as well as consumption taxes (such as VAT) are lower, the reduction in government income is inevitable. Considering this, it is the responsibility of the provincial governments to act upon the said plans. One of the immediate responses can be through ensuring taxpayer registration, taxpayer services, tax return, and payment processing are carried out with safety. By doing this, the government can tax its current share of youth citizens and then finance their respective plans and programs as they go. However, more sustainable and innovative solutions have to be thought of by viewing the private sector and civil society as collaborators. The solutions may be unique to each of the provinces but efficiency will not be a far-fetched dream if they are explored and carried out. Only then can the intended benefits from the plans and programs be reaped.
Nasala Maharjan is a Bachelor's in Business Administration (BBA Honors) graduate from Kathmandu University with a major in Finance. She is mostly interested in researching and writing about economic development and contemporary issues in Nepal. She joined Nepal Economic Forum (NEF) as a Research Fellow in 2019 and is currently a beed at beed management.