Nepal | July 09, 2020

Editorial: Poor capital spending

The Himalayan Times
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The government’s inability to spend the money allocated for public capital expenditure means it is snatching away people’s jobs instead of creating them

It makes little sense only to be allocating a large chunk of the budget for public capital expenditure if the government is unable to spend it. This has been a recurring phenomenon in Nepal year after year, and the government doesn’t have a clue as to how to get over it. In the first four months of this fiscal year, only 6 per cent of the Rs 408 billion allocated by the central government for capital spending has been utilised. The provincial and local governments too are faring no better on this front. Low public capital spending affects many sectors, not the least construction activity, which is one of the biggest employment generators in the country. Demand for construction materials, like cement and steel, usually sees an upswing immediately after the big festivals of Dashain and Tihar, fueled by the private sector and households, but it has shown no vigour this year despite a fall in prices. A slowdown in construction activity has a chain reaction, from drop in sales of construction materials and unavailability of work in the country to fall in consumption and poorer revenue collection, which ultimately spells disaster for the overall economy.

The government is perhaps not very worried by the low public capital spending in the first four months of the fiscal, as this has always been the case at this time of the year. But then, it is also a fact that the government has never been able to spend its capital expenditure fully. And the haste with which it tries to spend as much as possible of the capital expenditure budget towards the end of the fiscal year often leads to shoddy and unprofessional construction work. The government would do well to study and analyse the economic indicators and see what is causing the slowdown in construction activity, given that cement factories are reporting huge drops in their sales and profit margins. Some cement factories are reporting upto 25 per cent drop in sales. Nepal’s economic growth has averaged 6.9 per cent annually in the last three years against a growth of 4 per cent for almost 45 years preceding 2016-17. Nepal cannot afford to see its growth rate slip at a time when it is striving to become a developing country from a least developed one in the next few years and a middle income nation in the next one decade.

A country’s budget is the largest employer of people anywhere in the world, which the private sector utilises by bagging project contracts to generate millions of jobs for the citizens. Thus the government’s inability to spend the money allocated for capital expenditure means it is snatching away people’s jobs instead of creating them. Had the government been able to spend its capital budget fully, it would have not only improved our gross domestic product but also retained many of the hundreds of thousands of our youth who go abroad annually to toil in some foreign land under harsh conditions to eke out a living. The government cannot afford to take business as usual and must redouble its efforts to improve public capital spending through prudent measures. Let the remaining eight months have a different story to tell in the way the largely unused allocation for capital expenditure is spent.

Toilet designs

Marking the seventh World Toilet Day-2019, Kathmandu Metropolitan City (KMC) on Tuesday made pubic 20 designs of public toilets that can be constructed at suitable locations in the city. The designs allow one to three persons to answer nature’s call at a time. KMC officials have also envisioned a provision of an attached bathroom to each of the public toilets. The new toilets are being built with a view to meeting Sustainable Development Goal-6 that promises sanitation for all by 2030.

KMC’s population has reached more than 2 million, and there are only 62 public toilets, mostly at the bus parks, and, among them, only 28 are usable while the rest need repairs. Providing public sanitation with a provision of minimum facilities is a challenging task in our society. Those who operate the public toilets only care about raising fees from the public for using them. Instead of constructing new public toilets, it would be better to repair the old ones by adding modern facilities to them along with the simple provision of running water all the time. Recently, KMC declared the city an open defecation free zone without having adequate number of public toilets in place. It looks like it put the cart before the horse.

A version of this article appears in print on November 21, 2019 of The Himalayan Times.

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