KATHMANDU, April 25: With an allocated fund of Rs 1.38 billion for the current fiscal, the Nepal Army (NA) is taking initiatives to reform its Welfare Fund policies.
Under the new initiative, Chief Chhatra Man Singh Gurung has proposed reforms in the Welfare Fund activities under two headings: Macro and micro. General Gurung has directed a review of the governing policies and regulations of the Nepal Army Welfare Fund and to suggest critical changes required for the overall benefit of the fund.
“A realization has seeped in that reform in welfare fund activities is required,” Brigadier General Purna Chandra Thapa, Director of Welfare Planning, said.
At the conceptual level (macro), NA is planning to evaluate the existing human resource of the fund and their competencies for fund management and recommend various capacity development programs and solutions for any HR gaps in the office.
Another scope of the reform would be a review of the overall structure of the fund and assess the effectiveness of the existing fund operation modality.
“The idea is to bring forth a most efficient working modality for the fund,” Thapa added.
In addition, NA is to diagnose the fund´s existing investment and return. In this, it will now disperse Rs 14 billion principal amount in banks that offer the highest rate of interest. NA has also adopted “low risk” strategy for investment. Due to this policy, NA will not immediately invest in the Upper Tamakoshi.
“Although the government sought an investment from Army in Upper Tamakoshi, the welfare fund cannot afford to take that risk,” Brigadier General Ramindra Chhetri said.
Chhetri, who is also the NA spokesperson, said, “Over the years, the number of beneficiaries and scholarships have been increasing. Also due to inflation, the fund is stressed.” Sixty percent of the Fund is deposited in foreign currency account, which fetches NA low interest.
UN peacekeeping missions are the greatest source of income for the fund. While NA men serving as peacekeepers contribute to the fund (22 percent ceiling is imposed by the law), the reimbursement that it receives from the UN for purchase of equipments, vehicles and weapons added to the swelling of the fund.
“The reimbursement is received through Nepal´s UN mission office in New York and is deposited in NA´s account in Nepal,” Thapa informed.
NA spends approximately Rs 220 million in health service and insurance to the retired and serving officials, another Rs 230 million in education for its five schools and one college with Rs 40 million in scholarships. Some 300,000 officials are beneficiaries of the fund at present and a couple is entitled a maximum of Rs 500,000 worth insurance. The amount can go up to one million rupees in cases of serious injury.
The families of those achieving martyrdom is given anywhere between Rs 25,000 to Rs 100,000.
NA´s total audited expenditure was Rs 953 million last year with interest amount of Rs 610 million. This year it expects Rs 850 million in interest. While it paid Rs 90 million tax to the state last year, this year it estimates to pay a minimum Rs 120 million.
The Army Welfare Fund Operation and Management Committee headed by the NA Chief comprise of the PM as the patron and Defense Minister as the co-patron. The prime minister and army chief nominate two retired and two serving officials from NA in the committee. It also has one joint-secretary each from finance and defense ministries as members and one director of welfare planning as the secretary.
NA claims 90% will be recovered from NDB
Meanwhile, Nepal Army has withdrawn Rs 1.8 million out of the total Rs 180 million deposited at the troubled Nepal Development Bank (NDB).
Brigadier General Thapa said, “We are hoping that at least 90 percent of the amount will be recovered.”