Average spending on each development project jumps by 33 per cent to Rs 1.3 billion

Kathmandu, June 10

The government will be spending Rs 1.3 billion on average on every development project or programme in the next fiscal year, up 33 per cent than in the current financial year, data prepared by the National Planning Commission show.

The government is rolling out a total of 484 development projects and programmes in the fiscal year 2016-17. This number is 3.4 per cent higher than in the current fiscal year.

“Number of projects and budget allocation for various projects have gone up because the government has set economic growth rate target of 6.5 per cent for the next fiscal year. To achieve this target higher spending in development activities is a must,” an official of the Ministry of Finance (MoF) said on condition of anonymity.

As usual, the government has classified various development projects and programmes as Priority One (P1), Priority Two (P2) and Priority Three (P3). A total of 353 projects and programmes that will be implemented in the next fiscal have been categorised as P1, 113 projects and programmes as P2, and 18 projects and programmes as P3.

To roll out all these projects, the government has allocated a budget of Rs 612.1 billion, which is 58.4 per cent of the total budget of Rs 1,048.9 billion earmarked for the next fiscal year. This budget, however, does not include funds earmarked for big-ticket projects categorised as ‘national pride’.

The government’s budget allocation for different development projects and programmes has been continuously increasing over the years.

In fiscal year 2013-14, for instance, the government allocated Rs 241.6 billion for P1, P2 and P3 projects and programmes. In the fiscal year 2014-15, a budget of Rs 287.2 billion was earmarked for similar projects and programmes. And in current fiscal, a budget of Rs 445.9 billion was allotted for different P1, P2 and P3 projects and programmes.

Despite these allocations, a huge chunk of budget remains unutilised till the end of the fiscal years, largely because of low fund absorptive capacity of many projects and programmes.

“If the government fails to come up with an effective implementation plan soon, the problem of budget underutilisation will continue to persist in the next fiscal year as well. But we hope the MoF will come up with an action plan on project and programme implementation by the end of this fiscal year,” said the official.

Of different projects and programmes that the government is implementing in the next fiscal year, the biggest chunk of budget has been allocated for the post-earthquake reconstruction and rehabilitation works.

The government is planning to spend a total of Rs 140.7 billion for this purpose in the next fiscal year, up from Rs 91 billion in budget allocation for projects and programmes related to post-quake reconstruction and rehabilitation in the current fiscal year.

The government has also earmarked a budget of Rs 83.7 billion for implementation of projects and programmes related to local development in the next fiscal year. Next in the league table is the physical infrastructure, which will receive funds of Rs 77.5 billion in the financial year 2016-17, followed by energy and drinking water and sanitation sectors, which will receive Rs 47.7 billion and Rs 32.5 billion, respectively.