KATHMANDU, July 31: The government has announced that the World Bank has sanctioned Rs 4 billion for the Prime Minister's Employment Program, which was at risk of losing its unspent budget after the project’s term expired in June.

The Ministry of Labour, Employment and Social Security and the Ministry of Finance had requested the World Bank to extend the project. Shobha Kumari Pokharel, under secretary of the Prime Minister's Employment Program Secretariat, confirmed that the World Bank has agreed to give continuity to the program for another year, extending it until July 15, 2025.

This program has been operational since the FY 2018/19, supported by a World Bank loan of $120 million (equivalent to Rs 16.11 billion at the current exchange rate). However, as the government was not able to utilize the entire budget in the initial 4-year timeframe, the government requested more time to spend the remaining funds.

Under Secretary Pokharel mentioned that the funds are now available for use in the current fiscal year. The budget will primarily be used as wages for job creation, facilitating training as per labor market demands, and providing workplace-based skill development training to registered individuals. The goal is to offer 50 days of work and 50 days of training to equip participants with skills for future employment.

Approximately 796,000 individuals applied for jobs when the application process opened last February. However, the Prime Minister's Employment Program Secretariat indicated that only 52,000 people will be provided employment this year. Last year, 64,000 individuals were employed out of the targeted 60,000.

Under Secretary Pokharel pointed out that the reduced budget allocation of Rs 2.4 billion this year, down from Rs 2.38 billion last year, will make it challenging to create more jobs. The program, initiated by the government led by KP Sharma Oli in FY 2018/19, has faced criticism for utilizing substantial funds on petty tasks.

In its first year, the program was accused of spending billions of state funds on unproductive activities such as chasing monkeys, uprooting weeds, and driving cattle away. In response to these criticisms, the government announced plans to restructure the program in the previous year's budget.

Budget introduced by Former Finance Minister Dr. Prakash Sharan Mahat emphasized the need for modifications to create productive employment and improve labor market outcomes. The plan included providing minimum employment with workplace-based training for labor-intensive work at the local level and upgrading employment service centers to offer comprehensive services.

Although a committee was formed to restructure the program and a report was submitted, it has yet to be implemented. The current budget has allocated funds to the Prime Minister's Employment Program to provide employment to approximately 200,000 people for a minimum of 100 days in public construction and maintenance projects. However, there is no mention of program restructuring in the budget statement, leading to increased confusion.

Under Secretary Pokharel stated that while the task force has prepared a restructuring report, it is not feasible to implement the changes this year. The necessary preparations for restructuring should be completed this year and carried out from next year.

The effectiveness of the Prime Minister's Employment Program has been repeatedly questioned, putting pressure on the government to restructure it. A recent report prepared by the Office of the Auditor General highlighted that the program's sustainability has not been effective, with a focus on small infrastructure projects like road and cleaning drains, school playgrounds, and off-roads. The report suggests that the program should be conducted in partnership with local levels to ensure cost-sharing and ownership.