Nepal | July 13, 2020

Capital budget spending dismal 9.05 per cent in first five months

Himalayan News Service
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Kathmandu, December 17

Like in the previous years, the government has failed to enhance its budget implementation capacity, as it has been able to achieve merely 9.05 per cent of capital expenditure progress in the first five months of the ongoing fiscal.

Graphic: THT Online

Though the government, through the budget for 2019-20 fiscal, had announced that it would observe the ongoing fiscal as the year to implement projects, the lethargic expenditure of development budget hints at a slow pace of development activities in the country.

According to statistics maintained by the Financial Comptroller General Office, the government has managed to spend only Rs 37.49 billion or 9.05 per cent of the total Rs 408 billion budget allocated for capital expenditure for fiscal 2019-20.

At a glance

Particulars Target Spending Per cent
Recurrent Rs 957.10bn Rs 246.92bn 25.8
Capital Rs 408bn Rs  37.49bn 9.05
Financing Rs 167.86bn Rs 14.17bn 8.44
Source: FCGO

Though the government, especially the Ministry of Finance, has been saying it will address the perennial problem of low capital spending through different measures, none of its measures have been able to accelerate the spending.

“Budget implementation is dependent on cooperation and coordination among different ministries and the MoF alone cannot expedite the pace of spending,” said Uttar Kumar Khatri, spokesperson for MoF.

He added that the country’s capital expenditure would continue to be sluggish unless the Public Procurement Act was amended. “The act is in the process of being reviewed.”

FCGO’s statistics also show that the government has been able to spend Rs 14.17 billion or 8.44 per cent on financing of the total allocated budget of over Rs 167 billion for the ongoing fiscal.

The government has managed to spend nearly Rs 247 billion under recurrent expenditure till today
of the total allocated Rs 957 billion. Recurrent expenditure is primarily the spending of the government on non-capital formation programmes, such as salaries of government staffers, social security and other expenses.

However, the government’s total budget spending, including capital expenditure, financing and recurrent, during the period stood at Rs 298.6 billion or 19.48 per cent of the total budget of Rs 1.53 trillion for the ongoing fiscal year.

Experts have been saying that the government will not be able to accelerate capital budget spending unless a proper budget implementation plan is introduced and implemented.

“The problem lies in project planning and execution. We need to first enhance the capacity of our bureaucrats to plan and execute,” said economist Biswo Poudel, adding that slow spending of the budget is the result of lack of proper project planning, weak policy execution capacity of the bureaucracy and weak project execution capacity of contractors.

A version of this article appears in print on December 18, 2019 of The Himalayan Times.

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