The Small Development Program Scheme of the Indian Embassy in Nepal will be included in the budgetary system from the upcoming fiscal year as per the conditions in the renewed agreement.
Chief of the International Economic Cooperation Coordination Division at the Finance Ministry Joint Secretary Kewal Prasad Bhandari said while the Indian Embassy had been directly investing up to Rs 50 million in each project under the scheme in the past, it will now be done through the budgetary system of Nepal.
"The constitution has a provision requiring transparent mobilization of foreign assistance, received on the basis of national needs and priorities, through the budgetary system, and the two countries have agreed accordingly," Bhandari stated. "We are formulating the process and procedure. The implementation framework will be prepared with consent of the two sides."
The decision to renew the scheme in a way to spend the amount through the budgetary system was taken by the erstwhile Sher Bahadur Deuba government. The Deuba government ending the earlier system allowing the Indian Embassy to select projects under the scheme had taken decision to incorporate the investment in the budgetary system as per the constitutional provision.
Leaders and lawmakers earlier used to submit proposals to the Indian Embassy which would select the projects and also implement them itself. The Indian Embassy would only inform the Finance Ministry about such projects.
Bhandari added that the scheme has been renewed with conditions that the proposals for the projects will now be submitted to the Finance Ministry which would select projects from the proposals and then inform the embassy about that.
"We have yet to decide about the implementing body. We are also discussing whether to allow the local bodies to implement," Bhandari added.
The agreement allowing the Indian Embassy to directly invest up to Rs 30 million in each project under the scheme was signed in 2003 when Surya Bahadur Thapa was the prime minister (PM).
CPN (Maoist Center) leader and former foreign minister Narayan Kaji Shrestha opines that the agreement was signed to please the Indian establishment during the direct rule of the then king Gyanendra.
The ceiling for each project to be selected under the scheme was raised to Rs 50 million when Baburam Bhattarai was PM.
The last agreement had expired in August, 2017. The then Deuba government had refused to renew the agreement stating that new working procedure will have to be formulated for implementation of such foreign assistance as per the new constitution and federal structure.
