Government aims to spend 85pc of capital budget

KATHMANDU:

The government has vowed to expedite capital expenditure by providing sufficient funds to well performing development projects and has asked the concerned agencies to extend multi-year contracts.

Speaking during the mid-term review programme of fiscal budget 2014-15, Finance Minister Ram Sharan Mahat said that well performing projects should not have to halt their works due to lack of resources.

As the government is being widely criticised for to its inefficiency in spending development budget, which stood at merely 12.6 per cent in the six months of the fiscal year, finance minister, today, promised to spend 85 per cent of the total capital budget by the end of the fiscal (mid-July).The government has earmarked Rs 116.75 billion under the heading of capital expenditure for this fiscal. “Contracts of majority of development projects have already been awarded and the weather is also favourable for the construction works,” said Mahat, adding, “Capital expenditure is expected to gather speed in the second half of the fiscal.”Mahat, however, stated that lack of preparations related to the projects and budget allocation in ad hoc basis are the major challenges in achieving desired output. The government is doing the groundwork for necessary impetus. Besides, the government has targeted to spend 90.35 per cent of the total budget of Rs 618.10 billion by

revising the expenditure target of current expenditure (92 per cent) and financing (85 per cent).

The government also revised the growth target to five per cent from six per cent earlier.“Due to huge fall in summer crops production (mainly paddy) we’ve revised our growth target. Economy is projected to grow by five per cent this year,” Mahat stated, adding, the country recorded economic growth of over five per cent last fiscal after six consecutive years.

Though the government has been receiving more foreign aid commitments, it has been failing to fully utilise the aid due to lack of absorptive capacity. The government has expected to mobilise 74.91 per cent of the foreign grants and 52.54 per cent of the foreign loans due to sluggish capital expenditure.

The finance minister also informed that the ministry is drafting nine Bills and is in the process of forwarding other crucial Bills like Foreign Investment and Technology Transfer Bill, Industrial Enterprises Bill to the parliament. As a part of economic reform, the fiscal budget has announced of bringing new legislations and amending old ones to create conducive business environment in the country.

In the programme, National Planning Commission (NPC) Vice Chairman Govinda Raj Pokharel said ministries are not sending programmes for approval despite frequent follow-ups by the NPC.

Source:  THT