KATHMANDU, June 1: Officials at the Ministry of Federal Affairs and Local Development (MoFALD) have said that the local units cannot increase social security allowances on their own.

Commenting on recent announcements by different local units to increase allowance for senior citizens, MoFALD Secretary Dinesh Kumar Thapaliya said that the local units are not allowed to distribute such allowances as only the central government can decide on the issue.

The budget for the coming fiscal year 2017/18 has allocated Rs 36 billion for the purpose. The budget has been kept at the center and will be distributed through local units.

Following his election to the post, the Mayor of Pokhara-Lekhanath Metropolitan City, Man Bahadur GC, on Sunday announced that the metropolis will increase allowance for senior citizens by 10 percent. Similar distributive announcements have also come from other elected representatives of local units. During his election campaign, Mayor of Kathmandu Metropolitan City, Bidya Sunder Shakya, had promised to hike social security allowance to senior citizens to Rs 5000, up from current Rs 2000. After assuming office on Wednesday, Shakya decided to provide additional allowance of Rs 1,000.

Both government officials and experts fear that such tendency will lead to misuse of resources meant for development activities and programs. 

In a draft Guidelines for Local Units on Preparing Budgetary Programs and Plans, MOFALD has stated specific areas where local units can spend. The draft guideline has been tabled in the cabinet for approval. 

“It will be circulated to all local units,” said Thapaliya. 

Similarly, Balanand Paudel, an expert on federal restructuring, said that councils of each local unit have to devise budgetary programs and endorse it before making any spending.

However, Paudel still fears local units will misuse resources by bringing distributive programs and endorsing them from the council.

Paudel said that the local units can spend their internal resources for programs aimed at benefiting senior citizens and differently-able people. “But the distributive nature of those programs could create additional burden for them,” he added. 

The government has allocated Rs 225 billion for 744 local units. Under financial equalization grant, each rural municipality has got a minimum of Rs 100 million and a maximum of Rs 390 million. Similarly, municipalities and sub metropolis have received between Rs 150 million and Rs 460 million, and Rs 400 million and Rs 630 million, respectively.  The local units have also received a separate Rs 76 billion under conditional grants. The budget will be allocated for specified areas only.

“Elected representatives still do not know how to invest. Many might have misconception that they can decide spending on their own,” Mahesh Bhattarai, an under-secretary with MoFALD, said. “They have to spend to generate jobs, not to provide jobs to people.”

 
• ministry of federal affairs and local development
 
• local units
 
• social security allowance