Kathmandu, October 9:

The government has not set in place any ‘budget monitoring mechanism’ for fiscal year 2006-07 despite such a promise by the finance minister in his budget speech.

It was the first time that the finance minister had announced plans for ‘a monitoring mechanism’ for budget implementation with a view to make budget expenditure effective and expedite development activities.

As per a senior government official, the ministry of finance has already authorised local bodies such as village development committees (VDCs) to spend Rs 500,000 in each

VDC across the country. However, VDCs will not get the additional Rs 500,000 without proper ‘plans and programmes’, says MoF official.

According to MoF official, no VDC has submitted a demand proposal asking for the additional amount yet as per the budget speech of the finance minister in fiscal year 2006-07 to give one million rupees to each VDC.

What is a matter of concern is that no mechanism has been established to monitor and review the expenses made by local bodies in which work is yet to be started by concerned ministries, according to a source at the MoF. Not only that, there is no budget

expenditure monitoring mechanism in ministries and government-owned institutions, says a source.

With this sort of ad-hoc mechanism, lack of transparency and accountability in government institutions, it is unlikely that any real improvement in regular expenditure or capital expenditure can be achieved.

The finance minister had also announced in the budget amounting to Rs 143.91 billion for the current fiscal year plans to focus on developing economic infrastructures, improving investment climate, increase investment in social sector, implement programmes for relief, rehabilitation and reconstruction and increase capital investment and productivity by containing consumption expenditures.

However, there are difficulties in every ministry to implement budget proposals and monitor the same due to lack of coordination among line ministries, follow up programmes and effective implementation strategies, says the government official.

At present, in more than 50 per cent VDCs, there are no secretaries, which is a real hindrance in budget implementation. Given such a context, the government will find it difficult to find proper mechanisms to spend budget allocations.