March 22: The government is preparing to donwsize the budget of the Prime Minister Employment Programme (PMEP) initiated by the then Prime Minister KP Sharma Oli-led government.

The government is under pressure to lower the budget for distribution-oriented programmes for the upcoming fiscal year (FY 2079/80). Therefore, the government decided to cut the budget for the PMEP due to resource crunch.

According to the Ministry of Labor, Employment and Social Security, the National Planning Commission has reduced the ceiling for this programme. Director of the PM Employment Programme and joint secretary of the ministry, Danduraj Ghimire confirmed that the ceiling has been reduced. He said that the ministry has given the maximum limit for spending in such projects run with the assistance of the World Bank. 

The NPC has fixed a ceiling of Rs 3.70 billion for the PM Employment Programme. 

In the current fiscal year (FY 2078/79), the government had allocated Rs 12 billion for the PM Employment Programme along with Youth Employment Transformation Initiative (YETI) project run with support from the World Bank. For the next fiscal year, the government can spend a maximum of  Rs 7.5 billion for these projects. 

“The funds provided by the World Bank have been declining, so the ceiling may have come down. There is little chance of a budget increment for these programmes,” Ghimire told New Business Age.  

KP Sharma Oli-led government had signed an agreement with the World Bank to avail loan for the ‘YETI’ project to support the PM Employment Programme. Accordingly, the World Bank has already provided concessional loans of $120 million or Rs 14 billion. 

The World Bank agreed to provide the loan for four years. Under this heading, the World Bank has given a loan of Rs 7 billion for the current fiscal year, while the government has allocated Rs 5 billion for the PM Employment Programme.  

However, the government has been able to spend only Rs 350 million in the first seven months of the current fiscal year under this programme. The PMEP is a project run at the local level. The budget needs to be transferred to the account of the local units. But the programme is not being run effectively even though eight months have already elapsed in the current fiscal year.

Last year, around 176,000 people received employment under this programme while the officials at the ministry have been saying that more people will get employment this year.  However, labour expert Ganesh Gurung says that the government has not been able to implement the programme effectively.

The government could have made a difference by providing employment to the people through the PMEP when the economy was battered by the Covid-19 pandemic. But that didn’t happen, says Gurung.