Parliamentary Development Fund Included in Budget Through Indirect Means

May 26, Kathmandu – Once again this year, the ‘Parliamentary Development Fund’ program is being included in the budget through indirect means. As part of the preparatory process for the upcoming fiscal year’s budget, the government is requesting parliamentarians to submit development plans focused on their electoral constituencies, with the intent to include these in the budget.

According to officials from the Prime Minister and Council of Ministers’ office and the Ministry of Finance, the task of collecting project proposals from MPs was undertaken by the former Ministry of Urban Development (now the Ministry of Infrastructure Development). The officials describe this as a process to hear public demands and address them.

“Regardless of the party from which they were elected, people convey their demands to their MPs. Projects are collected based on these public needs,” said a government official. “It is inappropriate to interpret this differently.”

Under this program, directly elected MPs have submitted three strategic road and three bridge projects each, while proportional representation MPs submitted one prioritized project. No specific limit was set on the budget amount for each proposal.

Following the government’s request, Nepali Congress MP Yogesh Gauchan Thakali submitted six projects. “I submitted both new and existing projects totaling six,” Thakali said. “I directed that previously ongoing or slow projects be expedited.”

Previously, funds were allocated according to MPs’ project selections. The concept of the infrastructure development fund began during Sushil Koirala’s premiership in 2013. Subsequently, it was renamed as the Parliamentary Development Fund.

Over time, debates emerged about MPs’ primary roles, arguing that their focus should be lawmaking rather than demanding development projects. Consequently, the program name was changed again to the ‘Local Infrastructure Development Partnership Program.’

This program allocated a budget of NPR 60 million each for federal and provincial electoral areas. However, the practice of distributing funds among party workers under the guise of development invited continued criticism.

Following mounting criticism, then Finance Minister Bishnu Poudel eliminated the Parliamentary Development Fund allocations in the fiscal year 2021/22 budget, effectively terminating the program.

However, under pressure from MPs, then Finance Minister Dr. Prakash Sharan Mahat restored the fund in the 2023/24 budget.

Mahat allocated NPR 50 million each for parliamentary infrastructure development projects in electoral constituencies, amounting to a total allocation of NPR 13.75 billion for 275 MPs. Despite this, the program was not implemented.

A petition was filed against the Parliamentary Infrastructure Development Program in the Supreme Court. On August 22, 2023, the Constitutional Bench of the Supreme Court issued an interim order suspending the program, emphasizing jurisdictional issues of the National Planning Commission and ministries, the importance of distancing from vested interests, and adhering to standards of good governance and accountability.

Following the Supreme Court order, questions arose in Parliament. MPs Ramesh Lekhak, Shyamkumar Ghimire, Mahesh Bartola, Surya Thapa, and Ammar Bahadur Thapa faced legal action over allegations of opposing the court’s ruling. However, no decision was made within the fiscal year.

Despite the Supreme Court’s directive, MPs continue to press for the Parliamentary Development Fund, with projects being requested and allocated in the budget.

Former Finance Minister Bishnu Poudel had earlier prepared the budget by soliciting project proposals from MPs, including budgets in the range of millions for some projects.

Similarly, this time, the government is collecting project proposals from MPs for inclusion in the budget, although no specific budget ceiling has been set for these proposals.

Back in 2023, Prakash Sharan Mahat introduced guidelines stipulating that the federal government could approve projects above NPR 30 million, provincial governments those above NPR 10 million, and local governments projects under NPR 10 million. However, this procedure has yet to be implemented.

This means that MPs remain involved in selecting projects and overseeing budget implementation despite their legislative roles.

Contrary to Principles of Good Governance

According to sociology professor Dr. Deepesh Ghimire, two main reasons may explain why MPs continue to engage in development work.

First, there is not widespread public awareness that MPs’ primary responsibility is policymaking; people expect MPs to deliver roads and development projects.

Second, approximately 10% of the program funds were spent on administrative costs, which helped sustain the involvement of party workers.

Dr. Ghimire explained that even when projects selected by MPs were executed through consumer committees, party workers were often accommodated. “Previously, these programs served a dual purpose: MPs could claim credit for development while also supporting their party cadres,” he said.

However, Dr. Ghimire argues that continuing such projects is misguided.

“The role of MPs is to make laws and hold the government accountable. They must work within checks and balances,” he explained. “Engaging in tasks beyond their mandate contradicts good governance principles. This practice is inappropriate.”

He urged an end to these projects and encouraged both the government and MPs to focus on their proper responsibilities.

The current government emerged from the Janajati (Janajati Uprising) movement, which demanded good governance and the reduction of corruption. Subsequently, a strong government with a two-thirds majority was elected in the parliamentary elections.

Rastriya Swatantra Party parliamentary leader Walendra Shah (Balen) leads the powerful government, which now has no obstacle to implementing policy reforms.

Dr. Ghimire said, “If MPs are again given the authority to select projects, it would be contrary to principles of good governance. The government should refrain from proceeding in this direction as a step toward good governance.”

Opposition’s Policy Input Overlooked

Although the government has requested individual MPs to submit project proposals for the budget, it has not engaged in collective discussion with opposition parties.

Basana Thapa, Chief Whip of the Nepali Congress, stated, “Earlier, formal discussions with opposition parties used to take place, but this time there was none.”

She expressed hope that the opposition’s suggestions would help the government gain a broader understanding of issues. “The government will make decisions, but it is important to understand how to proceed,” she remarked.

Prime Minister Balen has held provincial consultations with MPs individually.

On March 30, he met with MPs from Koshi and Karnali Provinces; on March 31, with MPs from Sudurpashchim Province; on April 1, with MPs from Madhesh Province; on April 3, with MPs from Gandaki Province; and on April 6, with MPs from Lumbini Province.

He also met proportional representation MPs on April 18 to seek suggestions regarding current and upcoming fiscal year priorities.

The Prime Minister mainly requested MPs to focus on three things—

First – The government’s primary focus this year will be governance reforms; provide suggestions accordingly.

Second – Ensure equitable budget distribution and submit strategic projects.

Third – Coordinate to resolve urgent issues as needed.

The Prime Minister’s Office collects MPs’ project proposals and includes them in the budget based on priority.

However, CPN-UML Chief Whip Ain Mahar criticized that suggestions collected and projects requested through this process do not fulfill the genuine needs of the public.

“We need policy-level discussions on how to advance infrastructure and identify game-changing projects,” he said. “Opposition’s role is important in sectors such as education, health, and electrification.”

Mahar added, “The government has entirely ignored the opposition. They only ask us to submit three road and three bridge projects—is that all an MP is expected to do?” He further commented, “They have not inquired about all the problems in electoral constituencies and have limited the focus to road projects, which is disrespectful to MPs.”