ADB_book_18 April.qxp - Himalayan Document Centre - icimod

Some funding arrangements made by thegovernment for natural resource management aresummarized below.National Level FundingThe Ministry of Finance disburses funds on the basisof the approved annual budget. Reviewing thedevelopment outlay from 1985 to 2002, there is anincreasing trend towards funding sectors likeagriculture, forestry, water resources, mining, andlocal development. About 14% of the total budget hasbeen allocated to these sectors for the Tenth Plan(2002–2007) period. The budget outlay is severaltimes more in the water resources, electricity, andirrigation sectors than the environment in generaland forest management in particular.About NRs 11 million were allocated to theenvironment sector from 1985 to 1990. For the TenthPlan period, about NRs 111 million have beenallocated for environmental activities in the country,about 0.05% of the total proposed developmentoutlays of NRs 234,030 million (Figure 10.1).The Tenth Plan identified a number of environmentalactivities and prioritized them. The firstpriority programs included pollution control andprevention, environmental impact assessment, andenvironmental awareness raising. The second priorityprojects included urban parks, land use planning,environmental standards, and monitoring. MOEST isresponsible for implementing these programs.Similar funds have been allocated for theconservation, development, and management offorests and protected areas. Next to forest relatedactivities, land and watershed degradation is ofmajor concern in the sustainable management ofnatural resources. These activities receivecomparatively larger budgetary allocation.The development budget allocations for theforestry sector indicate higher Government fundingthan grants from bilateral and multilateral agencies(Figure 10.2). The Government’s policy has been todiscourage taking loans in the forestry sector and toincrease recycling of the funds generated throughmanagement of protected areas and through thesustainable use of forest resources. Nevertheless,foreign assistance in the form of grants has increasedfrom FY2001 onwards. The Department of Forest,which has a countrywide institutional network,receives funds both from the Government and fromdonors to carry out various forestry activities (Figure10.3). In the mean time the funds required formanagement of protected areas come from thenational consolidated fund.Budget allocations for plant resourcesmanagement, and forest survey and research arevery low, indicating inadequate attention to theseFigure 10.1: Development Outlay in Major Sectors(1985–2007)Source: 7th–10th Five Year Plan documentsFigure 10.2 Program Cost in the Natural ResourceManagement SectorSource: Ministry of Forest and Soil Conservation recordsFigure 10.3: Budget Allocation for Different Programs inthe Forestry SectorSource: Ministry of Forest and Soil Conservation records144 Environment Assessment of Nepal : Emerging Issues and Challenges