KATHMANDU, JULY 30
With the fiscal year 2021-22 set to end in mid-July, the government has yet again failed to spend adequate capital budget allocated for development projects. So far, the government has spent just 39.96 per cent of its allocated capital budget.
As of Wednesday, the government has spent Rs 151 billion out of the allocated budget of Rs 378.09 billion for fiscal 2021-22, according to the Financial Comptroller General Office (FCGO). It means the government needs to spend over Rs 15 billion daily by mid-July to reach the set target.
The lack of spending has further affected the liquidity crunch in the banks, experts say.
Similarly, the government has spent Rs 866.9 billion or 81.38 per cent of the allocated Rs 1.06 trillion in recurrent expenditure and Rs 91.37 billion or 48.24 per cent of Rs 189.4 billion, which was allocated for financing expenditure.
As always, the government has been unable to improve its working mechanism to spend the allocated budget. As per the FCGO, the government has so far spent 67.94 per cent of the total budget of Rs 1.63 trillion allocated for fiscal year 2021-22.
According to Federation of Nepalese Chambers of Commerce and Industries (FNCCI) President Shekhar Golchha, the lack of liquidity in banks is one of the major problems for the country's economy at hand, putting business and industries at grave risk.
"With lack of spending from the government, the shortage of liquidity has been aggravated further," Golchha said. "In addition, with July being the time for paying taxes, more liquidity will get stuck in treasury, which can further dampen the economic situation."
He shared that the economic situation of the country could be improved if the spending were done effectively, adding that the capital could be used in the process of economic recovery by parking it at a commercial bank.
Golchha said, "Although there have been shortcomings from the government as well as the private sector in increasing the capital spending, there is also a need to look closely and make amendments to the Public Procurement Act."
According to him, the practice of handing over tenders to the lowest bidder must end and contractors must be selected through a standard criteria in order to avoid low capital spending in the future.
Similarly, the government has collected Rs 970.45 billion or 82.2 per cent of the targeted revenue of Rs 1.18 trillion so far. Of the total revenue, Rs 899.15 billion was collected in taxes, Rs 71.30 billion in non-taxes. Likewise, Rs 13.83 billion has been collected from grants while Rs 43.76 billion has been collected from other receipts.
A version of this article appears in the print on July 1, 2022, of The Himalayan Times.
