Capex gathers pace in fifth month of fiscal
Kathmandu, December 17
The government’s capital expenditure has gathered pace in the fifth month of this fiscal to 7.33 per cent of the total annual allocation of Rs 311.95 billion as compared to a mere 4.76 per cent in the fourth month of this fiscal.
As per data unveiled by the Financial Comptroller General Office (FCGO), the government’s overall budget expenditure stood at 19.74 per cent of the total allocation of Rs 1,048.92 billion in the review period.
Though capital expenditure has gone up when compared to the previous months, the government’s spending is still slow and it needs a big push to achieve the desired result, according to Madhu Kumar Marasini, budget division head at the Ministry of Finance (MoF).
After the disappointing performance of ministries in the first quadrimester, the MoF has taken a few steps to accelerate the development budget expenditure.
“Ministries authorised to mobilise a large chunk of the development budget, such as the Ministry of Physical Infrastructure and Transport, Ministry of Federal Affairs and Local Development, Ministry of Health and Ministry of Energy, among others have been instructed to expedite big ticket projects.”
More importantly, MoF recently told the ministries that they would have to surrender the unspent budget of particular projects with nil performance till mid-March of this fiscal. MoF has barred ministries from starting procurement works in the last quarter of the fiscal owing to possibility of delivery of substandard works and potential misuse of funds.
As per Marasini, projects performing well will get additional funds on top of the allocated budget to complete the project on time, but those that have not even started the procurement process by mid-March would need to surrender the budget mandatorily.
“The move is to ensure that any project showing good progress is not stalled due to lack of funds,” he said. Recently, the MoF released Rs 5.37 billion to the Ministry of Energy to support its initiative to end the power outage in Kathmandu Valley and other major load centres.
The government announced the budget one-and-a-half months ahead of the start of this fiscal year 2016-17 to execute the budget properly, as the delay in approval of budget from the Parliament was identified as one of the major obstacles in properly implementing the budget in the previous fiscal. Still, the government was unable to accelerate development works.
As the country has been relying on foreign assistance — which contributes around 30 per cent in the total budget — to finance development projects, delay in implementation of the projects has also been affecting realisation of donor’s assistance.
The government spent Rs 169.73 billion for payment of salary of civil servants, in grants to local bodies and debt servicing under recurrent expenditure heading. The recurrent expenditure is also relatively slow because the amount spent in the review period was only 27.5 per cent of the total allocation Rs 617.16 billion for this fiscal.
Of the Rs 119.81 billion earmarked for financing provision in current fiscal 2016-17, the government spent 12.05 per cent on investment in state-owned enterprises and for principal repayment.
But on a bright side, the government collected Rs 208.71 billion revenue in the first five months of this fiscal, which is 36.88 per cent of the total annual collection target of Rs 565.9 billion.