Govt ups home reconstruction grant to Rs 400,000

Published On: January 25, 2018 08:30 AM NPT By: Republica  | @RepublicaNepal

Reduces age bar for elderly allowance from 70 to 65

KATHMANDU, Jan 25: The government on Wednesday decided to increase the housing reconstruction grants to be provided to  earthquake victims to Rs 400,000 from Rs 300,000. It also decided to reduce the age bar for the elderly allowance from 70 to 65 years. 

The decision to reduce the age bar will add Rs 7 billion to the government’s expenses, according to a source at the National Planning Commission. The current expense for this allowance is Rs 31 billion. 

A cabinet meeting held at Baluwatar decided to increase the housing grants from Rs 300,000 to Rs 400,000 for quake victims whose houses were damaged by the 2015 devastating earthquakes, informed Minister for Commerce Meen Bahadur Bishwakarma. This is the second time the housing grant for quake victims has been increased. Similarly, the government has also decided to increase by another Rs 100,000  the grant provided to  flood victims in various parts of the country. 

Up to 767,705 earthquake victims in  31 quake-affected districts have been identified as eligible for the housing grants. The cabinet decision adds an additional Rs 76 billion burden on the state. This comes at a time when the Ministry of Finance is mulling another donor conference to meet the funding gap  for  overall post-earthquake reconstruction. 

In September 2016, the Pushpa Kamal Dahal government  increased the housing grants from Rs 200,000 to Rs 300,000 . 

“The government is already struggling to manage funds for the distribution of the second tranche of Rs 150,000. Now, all of a sudden, the prime minister decides to increase the grant. The decision is not at all based on reality but is just for popularity’s sake,” said a highly-placed official at the National Reconstruction Authority. 

The official said  the government is already struggling to manage the money for  the second tranche of Rs 150,000. “As the first installment was Rs 50,000 , the government managed the funds. But now, for the second installment, the amount is Rs 150,000, which makes for a huge amount in total.  Due to the fund  crunch, we have been forced to arrange money for the second tranche through pooling  from other projects,” he added.  

The official said  the new decision is likely to affect the reconstruction work which had gathered  pace during the fiscal year. “We had barely finished all the paperwork and  managed to give momentum to the reconstruction work. And now, all the laws and regulations for grant distribution have to be reviewed. It may hamper the  reconstruction,” the official added. 

The official said that the decision has come at a time when the government  immediately needs to spend a huge amount  for the implementation of  federalism and also for  government employees seeking voluntary retirement. “The decision sounds good but  is likely to have serious implications in  coming days because the state coffers are in a critical state,” the official added. 

Last month, the government had to seek internal loans to pay regular salaries to  government employees, according to  Ministry of Finance officials.  

Likewise, the government also appointed chief administrative officers in all the seven provinces. The chief administrative officer is a secretary-level government employee.

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