Nepal | July 03, 2020

Provinces spend less than 5pc of allocated budget

Pushpa Raj Acharya
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Kathmandu, October 28

Provincial governments have been slower than the federal government in spending the allocated budget in the first quarter of this fiscal.

As per the Financial Comptroller General Office, provinces have spent 0.62 per cent of the budget which is the lowest to a maximum of 4.27 per cent of their total budget presented for fiscal 2018-19.

In comparison, expenses of the federal government in the review period stood at 15 per cent of the total budget, as per FCGO.

Provincial governments presented ambitious budget for this fiscal, but the expense of the first quarter shows they sorely lack implementation capacity.

First quarter expenditure
Province Budget Expenses
Province 1 Rs 35.94bn Rs 539.27m
Province 2 Rs 29.78bn Rs 247.59m
Province 3 Rs 35.61bn Rs 1.5bn
Province 4 Rs 24bn Rs 281.07m
Province 5 Rs 28.9bn Rs 700.05m
Province 6 Rs 28.282bn Rs 176.57m
Province 7 Rs 25.6bn Rs 369.84m

Karnali Province spent the lowest, a mere 0.62 per cent of the annual budget worth Rs 28.282 billion in the first quarter, whereas Province 3 spent the highest among all seven provincial governments — 4.27 per cent of the annual budget of Rs 35.61 billion.

Kewal Prasad Bhandari, secretary at the Ministry of Economic Affairs and Planning, said expenditure of provincial governments in the first quarter was mainly regular administrative expenses, grants transferred to local bodies and expenses on preparation of bidding documents and study of development projects.

In terms of budget expenses in the first quarter, Province 5 stood second with expenditure of 2.42 per cent of the annual budget worth Rs 28.9 billion followed by Province 1 with 1.5 per cent of the annual budget of Rs 35.9 billion, as per FCGO.

Likewise, Province 7 and Gandaki Province (Province 4) have spent 1.44 per cent and 1.17 per cent of the annual budget worth Rs 25.6 billion and Rs 24 billion, respectively.  Similarly, Province 2 has spent Rs 247.59 million or 0.83 per cent of the allocated budget worth Rs 29.78 billion.

Nirmal Hari Adhikari, chief of the budget division of the Ministry of Finance, said that the provinces must raise expenses to avail the equalisation grant earmarked in the fiscal budget.

The federal government transfers the equalisation grants to subnational governments on the basis of expenses in every quarter following the transfer of one-fourth of the grant at the beginning of the fiscal, as per Adhikari.


A version of this article appears in print on October 29, 2018 of The Himalayan Times.

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