Nepal | July 06, 2020

Govt urged to allocate budget scientifically

Himalayan News Service
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Kathmandu, February 15

The government has been recommended to promote ‘systematic and scientific’ allocation of its budget in a bid to ensure effective public expenditure at the federal, provincial and local levels.

Submitting its report to the government today, the Public Expenditure Review Commission led by senior economist Dilli Raj Khanal, outlined that the input-based allocation of budget over performance-based budgetary allocation approach is the crux to ineffective public expenditure of the government and urged the government to address this issue through effective policy measures.

“We have followed trend of allocating budget haphazardly without any research on projects. This trend has to be ended and budget should be allocated based on project’s viability and necessity,” said Khanal.

Similarly, the commission has also suggested the government to develop a strong mechanism to ensure that public expenditures are made evenly throughout the year. “A majority of our public expenditures (capital expenditure and current expenditure) are made towards the last couple of months of the fiscal year. Such trend has to be stopped and all responsible watchdogs of the government have to effectively monitor the project, its progress and budget disbursement,” added Khanal.

Likewise, commission has also recommended government to classify types of projects that should remain at national level and projects that need to be developed through provincial and local levels. “We still have confusion over what nature of projects should different levels of the government promote and develop.”

Citing that a large chunk of funds and aid is still disbursed through off-budgetary system, commission in its report has stated that promoting all sorts of expenditures via the government’s budgetary system is crucial for effective public expenditure.

The report has also suggested institutional reforms at different levels of the government and the need to maintain budgetary discipline.

Meanwhile, Minister for Finance Yubaraj Khatiwada on receiving the report, said that the government will gradually implement the recommendations of the commission.

A version of this article appears in print on February 16, 2019 of The Himalayan Times.

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