Only 12.37 per cent or Rs 129.72 billion of the total budget of Rs 1,048.9 billion was spent in the first quarter (mid-July to mid-October) of current fiscal 2016-17, as the capital expenditure remained low like in the previous years.
The government has been failing to increase capital expenditure — the money that goes into development works and merely 3.42 per cent of the annual allocation of Rs 311.95 billion was spent during the review period, according to Financial Comptroller General Office (FCGO).
Though the government has aimed to achieve high growth of 6.5 per cent by accelerating development works and post-earthquake reconstruction, which is a major priority of the fiscal budget, implementation in the first quarter has not been encouraging.
Normally, capital expenditure remains low in first quarter compared to other quarters as the government entities take few months to settle the procurement process and award contracts.
“The capital expenditure is expected to rise in the coming months as the physical progress of the development projects gathers pace,” said Kewal Prasad Bhandari, deputy financial comptroller general. Only Rs 10.67 billion of the
capital budget was spent in the review period.
Last year, too, a large chunk of capital budget worth Rs 91.27 billion remained unspent because of the unfavourable situation caused by the supply line disruptions for four-and-a-half months in the last fiscal. Slow progress of development projects has been raising the cost of the projects.
In the review period, the government spent Rs 117.95 billion in salary payment of civil servants, grants to local bodies and debt servicing under recurrent expenditure heading. As per FCGO, 19.11 per cent of the total annual allocation under recurrent expenditure heading was spent. The fiscal budget has allocated Rs 617.16 billion for recurrent expenditure.
Of the Rs 119.81 billion earmarked for financing provision, the government spent 0.92 per cent on investment in state-owned enterprises and for principal repayment.
On the brighter side, the government has collected 22.45 per cent of the annual revenue collection target in the review period. The government collected Rs 127.04 billion in the first quarter against the target of Rs 565.9 billion for this fiscal.
A version of this article appears in print on October 18, 2016 of The Himalayan Times.