EDITORIAL: Budget unspent
The lack of exacting accountability has been the major reason why bureaucrats have always been acting too slowly
The government has been perennial very weak in utilizing the capital budget and every year a significant portion of it remains unspent.
Even much of the spent part is haphazardly spent towards the closing weeks of the fiscal year fearing budget freeze with the onset of the new fiscal year.
Politicians and bureaucrats have long blamed one thing or another for this permanent state of affairs and they have from time to time pledged to minimize the size of the unspent budget, which is directly related to development activities, in future.
Not years but decades have passed but the grim situation remains unchanged. The current year’s estimates for the national budget were presented one and a half months ahead of the commencement of the fiscal year.
The people had been promised that this step would greatly improve budget spending.
Now we are into the sixth month of the fiscal year. But the relevant data are worrying, because just 10.14 per cent of the capital allocations have been spent so far. About 90 per cent of the budget has to be spent as yet. That is an almost impossible task.
Bureaucrats and politicians have started blaming one or another culprit for this, except for themselves. The total capital expenditure as of January 8 stood at Rs. 31.65 billion out of the total capital budget of Rs. 311.95 billion.
According to the Ministry of Finance, the low capital expenditure is due to the low performance of big projects. It says the performances of top ten ministries enjoying 72 per cent of the capital budget stood at just 13 per cent during the review period.
But why the early announcement of the national budget has not made any difference as against the official pledges of the past years is yet to be explained by the government. If the early budget announcement cannot improve the situation, who should take responsibility for this inefficiency?
Moreover, alongside the top ten ministries’ utilization rate of 13 per cent, the overall capital budget utilization rate is slightly over 10 per cent, so how can only the top ten ministries be blamed? The problem generally applies to all government agencies.
But they are currently engaged in passing the buck rather than taking their shares of responsibility. The National Planning Commission (NPC) is being blamed for the delay of four months in approving the projects.
Then it must have delayed the post-quake reconstruction on which only three per cent of the budget has been spent. The CEO of the National Reconstruction Authority (NRA) has just been sacked for ‘unsatisfactory’ performance. But given the data released by the MoF, all other line ministries and agencies are similarly responsible.
Should there not be an investigation into why this low budget utilization has happened and who should be held accountable? This lack of exacting accountability and punishing the guilty has been the major reason why bureaucrats have always been acting too slowly.
Nobody had stopped the government and its agencies concerned from taking all necessary measures to minimize delays in budge approval and other necessary processes.
With such low budget spending, the government should stop talking of development at least for some time.
The government is mulling over consulting the Public Service Commission to increase the retirement age for civil servants from 58 to 60 years.
The present provision requiring civil servants to retire when they reach the age of 58 means that more fresh graduates would be able to get jobs in the coveted civil services. By increasing the retirement age to 60 years would deprive them of such jobs for two years.
The age for retirement was fixed at 58 in 1992. However, now the life expectancy of the Nepali people has increased substantially over the years.
Moreover, by increasing the age for retirement would benefit the country as this would reduce the burden of the pension that the government doles out.
About 5000 civil servants retire every year on an average that lead to the increment of the pension funds by nearly Rs. 20 million every two years. At present, the state is paying about Rs. 26 billion as pension to about 2,50,000 retired civil servants every year.
Should the retirement age limit be set at 60 years the government would be required to provide about Rs. 30 billion as pension.
Increasing the age for retirement would benefit the country through more experienced civil servants.