Nepal | September 27, 2020

Govt yet to spend almost 50pc of development budget for 2018-19

Himalayan News Service
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Kathmandu, July 9

With just one week for the ongoing fiscal year to end, the government is yet to spend almost half of the development budget allocated for this year, thereby reflecting the inability of the ‘comparatively powerful’ government to expedite project development throughout the year.

The statistics maintained by the Financial Comptroller General Office (FCGO) show that the development budget expenditure of the government so far (till July 9) stands at 56.35 per cent or Rs 179.7 billion of the Rs 313.99 billion allocated for fiscal year 2018-19.

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 government’s failure to expedite project development and enhance its spending capacity.

But even if we go with this revised target, government is still to spend over Rs 85 billion within next one week to meet development expenditure target.

However, the government’s total budget spending, including capital expenditure, financing and recurrent, till today stands at 72.15 per cent of the total budget of Rs 1.31 trillion for the ongoing fiscal.

The government so far has been able to spend Rs 677.07 billion as recurrent expenditure of the total allocated Rs 845.45 billion during the review period. The recurrent expenditure is primarily the spending of the government on noncapital formation programmes such as salaries of government staffers, social security and other expenses.

Likewise, the government has been able to spend Rs 92.13 billion on financing till today, out of the total allocated budget of Rs 155.72 billion for the ongoing fiscal.

Economist Bishwo Poudel said that the slow spending of the budget is the result of lack of proper project planning, weak policy execution capacity of the bureaucracy and weak project execution capacity of contractors.

“Initially we thought that timely fiscal budget would enhance the spending capacity, but it did not, which proves that timely budget announcement has only marginal relationship with the government’s spending.

The problem lies in the project planning and execution capacity of Nepali bureaucrats,” said Poudel, adding that the government should also take necessary decisions to enhance the capacity of contractors.

As the government is obliged to spend a huge chunk of money at the end of the fiscal year, Poudel warned that the government should control haphazard spending.

A version of this article appears in print on July 10, 2019 of The Himalayan Times.

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