MANTHALI, Nov 17: The government is going to face cash crunch to distribute grants to the earthquake survivors whose houses were destroyed in the 2015 earthquakes.

While the government estimates that it would cost nearly Rs 300 billion to distribute the housing grants to those who lost their shelter in the earthquakes, it is going to face a shortage of nearly Rs 150 billion. 

The government is now mulling over approaching the World Bank along with other potential donors to secure additional financial support to meet the shortfall.

“The reconstruction work is moving rapidly. But, moving forward, we are going to face the shortage of resources. While it would cost Rs 300 billion, we already have Rs 150 billion. There is a shortfall of nearly Rs 150 billion,” said Minister for Finance, Yuba Raj Khatiwada, talking to a group of journalists following the inspection of reconstruction of nearly 63 houses at Gaikhura in Manthali of Ramechhap district.

“We are asking the World Bank to provide us additional resources for financing the reconstruction of private residential houses through their other available windows,” said Khatiwada. 

The government is distributing a total of Rs 300,000 per household to rebuild new houses. According to the Post Disaster Risk Assessment, 812,000 houses were destroyed by the earthquakes in 2015. This will cost the government a total of Rs 243.6 billion alone for providing the housing grants. Similarly, the government also provides Rs 100,000 to 61,891 earthquake survivors for the retrofitting of their houses damaged by the earthquakes.

The World Bank is a major donor to bankroll the reconstruction of private residential houses. The bank had raised its credit to Nepal by US$300 million in December last year from $200 credit in June 2015. This $500 million (approximately Rs 50 billion) comes in addition to $100 million for budget support to the Nepal government as a short-term financial support to accelerate and expand relief and recovery efforts.

Finance Minister Khatiwada said the shortage of resources would lead the government to tap into the budget of social sector. “The use of budget from social sector means that we will have less resource at our disposal to make progress in other social indicators,” said Minister Khatiwada. “Thus, we have requested for additional fund from the World Bank, which can provide funds from other windows,” he added. 

Though visiting World Bank’s Vice President for the South Asia Region, Hartwig Schafer, did not make any comment over Finance Minister Khatiwada’s request for additional fund, he said that he was happy to see the recent progress in reconstruction in Nepal. 

NRA officials, however, say the fund shortage will not immediately affect grants distribution. 

“It’s not that the cash crunch is going to immediately affect grants distribution,” said Manohar Ghimire, under secretary at the NRA. “But, as we distribute the second and third installments to more beneficiaries, there will be a shortage of funds,” said Ghimire, adding that they are holding discussions with multiple donor agencies to resolve the deficit. 

 
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