KATHMANDU, July 15

Finance Minister Ram Sharan Mahat on Wednesday called on secretaries of all the ministries to extend spending authority to agencies under their purview on the first day of the next fiscal year to give a boost to public spending.

“The Ministry of Finance always extends authority to all the ministries to start spending funds allocated through the budget on the first day of every fiscal year. But other ministries fail to do so which leads to delay in disbursement of funds,” Mahat told ‘Post Budget Discussion Programme’ organised jointly by the Ministry of Finance and the Society of Economic Journalists-Nepal here on Wednesday.

Mahat’s instruction comes at a time when the government has declared fiscal year 2015-16 as ‘Budget Implementation Year’.

“Recently, we introduced a new provision to expedite budget implementation, under which multi-year projects will be automatically entitled to funds every year. This means they will not have to request for budget every year. This provision also allows them to initiate procurement process for, say, three years at once. Also, such projects need not seek National Planning Commission’s approval every year,” the minister said.

The government also plans to introduce a policy of ‘reward and punishment’ in civil service from next fiscal and revise work performance evaluation method.

“If the project chief, chief finance officer and other key officials working for projects get a score of above 80 per cent, they will not be transferred during the entire project implementation period,” Mahat had said while unveiling the budget for fiscal year 2015-16 on Tuesday.

However, programmes and projects that fail to use less than 50 per cent of the allocated funds in first eight months of the fiscal year will be asked to surrender the budget. Such funds will be reallocated for projects that are in need of funds.

These measures, Mahat hopes, would enhance government’s capital spending capacity, which has always remained low and has emerged as the biggest speed bump on the way of putting the country on a higher growth trajectory.

In the current fiscal year, the government is expected to make use of only 74 per cent of Rs 116.75 billion allocated for capital spending.

The government always lags behind in full utilisation of the capital budget due to lack of project readiness — mainly delay in land acquisition process and production of procurement plans. Delay in budget approval process and release of budget at various stages have also affected capital spending. Other reasons include weak project planning and implementation capacity.