Dubious constituency funds

Published On: September 4, 2017 12:53 AM NPT By: Anirudra Neupane

Once there are elected federal and provincial parliaments, the budgets allocated for 601 members and 240 electoral constituencies will be irrelevant. This is thus the right time to stop this program. 

Budgetary processes and systems in Nepal have been revised many times to ensure proper allocation and utilization of public purse. All the changes and modifications seem to be directed at allocating budget based on public needs and priorities. But the principle of budget allocations has been deliberately misinterpreted and misused by powerful politicians and this practice has been institutionalized through the legislature parliament. 

In fiscal year 2017/18, budget for constituency development program was increased to Rs 5 million, to be spent by each individual MP. Likewise, the budget for the electoral constituency infrastructure special program was increased to Rs 30 million for each constituency, which is again to be spent as per the discretion of individual MPs, irrespective of pre-defined formal processes of spending. 

Parliamentarians always want to fulfill the promises they make during elections in order to lock in their vote banks. Thus the efforts of parliamentarians to channel more money to their respective constituencies can be seen as normal practice in a parliamentary democratic system. In a way, it can be seen as part of their effort to fulfill their electoral promises, which is not necessarily bad. But the practice of providing funds to electoral constituencies, with significant discretionary powers granted to parliamentarians in fund allocation and spending, has many downsides. 

Electoral constituencies are not local government units. They are rather clusters defined to elect people’s representatives to central or provincial parliaments. When a person is elected, she will be member of respective parliament and her role will be to make central or provincial laws and policies, and electoral constituency as government structure will then lose its relevance till next election. Allocating fund for constituencies thus contradicts the principle of decentralization. Therefore this discretionary power of our MPs to allocate and spend public money in the name of constituency development undermines local governance.

Conflict of interest 
Parliament has both the role and the capacity to amend and approve government budget proposal, and budget oversight is among its main responsibilities. If MPs are themselves involved in spending the budget, their role in policymaking and overseeing central and provincial government is compromised. They can be members of different parliamentary committees with oversight responsibilities. If such members are themselves involved in budget implementation, we cannot expect any meaningful oversight. 

An MP, for example, can also be member of the parliament’s Public Accounts Committee (PAC), which is tasked with drawing the attention of government or other constitutional bodies to act based on the recommendations of the Auditor General on fiscal indiscipline or arrears. If, say, a case of violation of financial propriety is related to constituency development program of an MP, who is also a PAC member, there is no question of proper oversight. This shows how the oversight role of parliament is undermined by these programs. 

Check and balance is the beauty of a democratic system. The executive, the legislative and the judiciary are three important pillars of democracy which check and balance each other. But the parliamentary development program may become an instrument for the government to influence the parliament to approve particular bills or proposals. 

MPs had held the parliament hostage with their demand that the constituency development program fund be increased to Rs 50 million each, or they would not pass the annual budget for F/Y 2014/15. The government was then forced to give Rs 10 million rupees to each constituency to be spent on projects selected by individual MPs, with a further promise of gradually increasing the budget. This is an example of how such programs are becoming tools for the executive to influence legislators, which violates the principle of check and balance. 

Democracy should ensure equity and justice. Distribution of equal sum of money for all electoral constituencies has been explained as a tool for equitable distribution of resources. But this is not true. The amount of budget should vary based on indicators such as needs, population, geography and socio-economic status of people. Thus a uniform constituency development program of any sort only breeds inequality and injustice. For instance, Rs 35 million would be a big amount for a remote area while it may be insignificant for an urban settlement. 

Influenced elections 
Parliamentarians getting to wantonly spend public money also undermines the sanctity of democratic elections. Competitive democracy may turn into syndicated democracy in which members of parliament can use public money to win votes in elections. Many political candidates are going to compete in provincial and federal election with big sums of public money. This is unfair. 

The government of Nepal has allocated Rs 30 million in the name of electoral constituency development program in F/Y 2017/18, to be spent in full discretion of 601 MPs while another Rs 72 million has been allocated in the name of electoral constituency infrastructure special program, to be also spent on priorities set by individual MPs. But this kind of funding has become irrelevant now. The government has already formed electoral constituency determination committee (and it has already submitted its final report) and also set the date for election of central and provincial parliaments.

There will be upper house, lower house and provincial parliament after these elections. If this program continues after election, this will get unmanageable. But it is also almost impossible to spend the funds allocated for these programs before the election. Once there are elected federal and provincial parliaments, the budgets allocated for 601 members and 240 electoral constituencies will become irrelevant. Thus this is the right time to stop this program. 

Members of federal parliament should focus on budget oversight and policy making rather than involving themselves in day to day budget implementation work. Provincial parliamentarians might need to closely observe infrastructure development but they should also primarily behave as policy makers. They should support provincial government in right allocation and utilization of funds with proper oversight, but should resist from spending money of their own accord. Otherwise the kind of political transformation and state restructuring Nepalis have been pining for will remain a mirage. 

The author works at Nepal Red Cross Society. The views are personal 

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