Nepal | July 10, 2020

Capital spending at 35pc till mid-April

Government urged to clear bottlenecks at bureaucratic and contracting level

Himalayan News Service
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Kathmandu, April 16

With only three months left for fiscal year 2018-19 to end, capital spending of the government so far stands at a mere 34.87 per cent of the total allocation, reflecting the sluggish progress in development works during the year.

Against the anticipation that the current government — which is not only relatively stronger but is said to be more stable compared to the previous ones — would accelerate development works, the pace of development activities remains lethargic if the statistics of the Financial Comptroller General Office (FCGO) are anything to go by.

As per FCGO, the government has been able to spend only Rs 109 billion till April 15, or 34.87 per cent of Rs 313.9 billion allocated under capital expenditure for fiscal 2018-19.

Meanwhile, the annual report of the Office of the Auditor General (OAG) recently had also highlighted the lethargic progress of development projects, especially national pride projects in recent years.

Slow progress in government spending also means that the government is obliged to spend almost 65 per cent of the allocated budget in the next three months, which according to experts can promote haphazard spending of the budget and also raises questions on the quality of development projects carried out in the last three months.

Considering the slow spending, the government through the mid-term review of the budget had revised the capital budget downwards by 15 per cent to Rs 265.2 billion.

Though the current leadership seems to be serious in policy formation and development works, the crux to the low budget spending lies at the bureaucratic and base level, or among contractors, as per economist Swornim Wagle. “The bureaucratic and contracting mechanisms of the country have not improved in accordance with the ambitious talks at the leadership level. Unless our bureaucrats get serious and take responsibility, and other project hurdles are resolved, spending will not improve,” he added.

Similarly, the government’s failure to simplify existing procurement-related laws has also hindered project development and capital spending largely, as per him.

However, the government’s total budget spending, including capital expenditure, financing and recurrent, during the period stood at 47.36 per cent of the total budget of Rs 1.31 trillion for the ongoing fiscal.

The government spent Rs 466 billion as recurrent expenditure of the total allocated Rs 845.5 billion during the review period. The 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.

Likewise, the government was able to spend 30 per cent or Rs 46.4 billion on financing till mid-January out of the total allocated budget of Rs 155.7 billion for the ongoing fiscal.

A version of this article appears in print on April 17, 2019 of The Himalayan Times.

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