Nepal | September 24, 2020

Capital spending at 73 pc in 2018-19

Experts urge enhancing capacity of bureaucrats, contractors

Himalayan News Service
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Kathmandu, July 16

With the new fiscal year to begin from Wednesday, the government has been able to spend merely 73.4 per cent of the development budget in fiscal year 2018-19, which ends today.

As per statistics maintained by the Financial Comptroller General Office (FCGO), the government has been able to spend Rs 230.4 billion by today evening during the fiscal year or 73.4 per cent of the Rs 313.99 billion development budget allocated for 2018-19.

Though the government has been claiming to have simplified public procurement process and other policies to boost spending on development works, inability of the government to spend more than 26 per cent of the allocated capital expenditure has reflected problems in government spending and sluggish progress in development works throughout fiscal 2018-19. Moreover, the sluggish spending has also reflected the inability of the ‘comparatively powerful’ government to expedite project development throughout the year.

The Ministry of Finance (MoF) had revised downwards the capital budget for the ongoing fiscal to Rs 265.20 billion through the mid-term review report of the budget for fiscal year 2018-19 following the government’s failure to expedite project development and enhance its spending capacity. Meanwhile, the government has also failed to meet the revised capital expenditure too.

However, the government’s total budget spending, including capital expenditure, financing and recurrent, in the fiscal year 2018-19 stands at 82.34 per cent of the total budget of Rs 1.31 trillion for the fiscal year.

The government, in 2018-19, has been able to spend Rs 711.3 billion as recurrent expenditure of the total allocated Rs 845.45 billion during the review period. The recurrent expenditure is the spending of the government on non-capital formation programmes such as salaries of government staffers, social security and other expenses.

Likewise, the government has been able to spend Rs 141 billion on financing in 2018-19, out of the total allocated budget of Rs 155.72 billion for the ongoing fiscal.

Citing that the mounting pressure to spend a huge amount of the budget at the end of fiscal year will promote haphazard spending and also affect project development, experts have suggested the government to improve the bureaucratic and contracting mechanisms in Nepal in a bid to ensure effective capital budget expenditure.

Similarly, they have also stressed on the need to focus on project planning and policy execution to expedite projects and improve spending of the government.

“The government should invest in enhancing the capacity of Nepali bureaucrats and also contractors. Lessons should be learnt to ensure effective spending in the new fiscal year and thereafter,” said Bishwo Poudel, an economist.

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

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