Kathmandu, March 7
Stating that the government will not be able to spend the resources allocated in the fiscal budget 2017-18, the Ministry of Finance (MoF) has brought down the expenditure target to Rs 1,082.99 billion from Rs 1,278.99 billion unveiled in the beginning of the fiscal year.
The revised spending target during the mid-term review of the budget is 84.67 per cent of the budget unveiled in the beginning of the fiscal.
The mid-term review of the budget has also revised down the growth target from 7.2 per cent to six per cent, reasoning reduction in production of paddy, damages caused by the floods, and slackness in development activities due to elections.
According to the MoF, expenditure under recurrent heading is expected to hover around Rs 738 billion or 91.96 per cent of the allocation. Likewise, the government has also revised down the development expenditure target for fiscal-end to Rs 234.62 billion, which is 70 per cent of the allocation. Under the financing heading, resources allocated for principal and interest repayment of foreign loans and to inject capital in state-owned enterprises will hover around Rs 109.42 billion or 78 per cent of the initial allocation for the current fiscal year.
The mid-term review of the budget has laid emphasis on compelling the agencies that have not started works to surrender their budget from mid-March.
Speaking during the mid-term review of the budget, Finance Minister Yubraj Khatiwada said that fiscal discipline is the primary agenda of the government and that this government will be more austere and put its entire efforts on bringing efficiency in works and execution of projects to make the taxpayers aware of tangible changes.
He talked about removing duplication in social security allowances for senior citizens, disabled and single women, among others. The finance minister further said that the government is also mulling over changing the social security schemes in terms of cash benefit and financial assistance in targeted areas for the poor, with health insurance, education for children, food at fair prices, among other possible schemes.
“While we were more liberal in the past in terms of providing social security schemes, we have to manage them in the best possible way,” said Finance Minister Khatiwada.
As MoF is under pressure to manage the resources due to budget deficit of Rs 48.61 billion against its estimation to carry over cash surplus of Rs 102.73 billion of last fiscal through this fiscal budget, the finance minister clearly said that the government will no longer give continuity to ‘guarantee of resources’ to any project.
“We will drop the projects that are in the preliminary stage and those that are underway will be modified and implemented.”
Finance Minister Khatiwada also urged the Financial Comptroller General Office (FCGO) for prompt release of payments to contractors after handing over development projects to encourage contractors to expedite the works.
“I do not understand the logic behind issuing cheques at the end of the fiscal year as this has a tendency of having an adverse impact on development works.”
Finance Minister Khatiwada also spoke about controlling rampant under-invoicing at the customs point. Stating that there is a huge mismatch between growth of import and customs revenue, he said, “There is no meaning to raiding the outlets in Durbarmarg unless we control under-invoicing at customs point and I have instructed the customs officials to revise the reference price of goods and ensure proper valuation so that the problems being witnessed now can be resolved once and for all,” said the finance minister.
The government is all set to unveil the whitepaper of the country’s economy to reveal the actual situation. To move towards a higher growth trajectory of seven to eight per cent, according to the finance minister, the country should bring in capital from abroad as the country’s national savings are inadequate to meet the requirement of resources.
The MoF, in this regard, will allow banks and financial institutions to bring funds from foreign banks in the form of line of credit and create an environment to attract foreign direct investment. Dispelling concerns of foreign capital crowding out domestic resources in the public sphere, Finance Minister Khatiwada said that the government will ensure this does not happen.
A version of this article appears in print on March 08, 2018 of The Himalayan Times.