MoF to expedite development expenditure

KATHMANDU:

In a bid to expedite development expenditure, the Ministry of Finance (MoF) has asked various ministries to submit their programmes by the end of this week to readjust the budget from the previous allocation.

After receiving the programmes from the respective ministries, MoF will reallocate the budget to programmes that have been moving ahead steadily but are in a situation where work could be halted due to lack of resources. Based on the proposed programmes, MoF will allow the ministries to spend budget to complete well performing projects earlier.

The Fiscal Act also allows ministries to reallocate up to 25 per cent of their budget as per their requirement. But it is mandatory to take approval from the MoF to reallocate more than 25 per cent of the budget.

MoF has also inspected each ministry to identify the constraints that have been holding back ministries in spending development expenditure. During the recently held consultative meeting with the project chiefs, MoF directed them to adopt multi-annual bidding process to the extent allowed by the mid-term expenditure framework. MoF has expected multi-year bidding that started from this year will help accelerate expenditure in coming fiscals.

“We have been facilitating and encouraging the ministries to increase expenditure,” said Ramsharan Pudasaini, chief of Monitoring and Evaluation Division under the MoF.

Till the end of the nine months of this fiscal, the government’s capital expenditure stood at a mere 26.89 per cent of its total target of Rs 116.76 billion, as per the Financial Comptroller General Office. Sluggish capital expenditure is a concern for the government because cost of development projects escalate due to delay in finishing projects on schedule.

On the other hand, the country can achieve high economic growth by attracting private investment if it is able to accelerate development expenditure.

Though government has domestic resources to finance development projects and does not have to fulfil various obligations when projects are financed by donors — due to which projects are delayed — it has not been able to expedite development works. Currently, domestic resources cover around 78 per cent of the capital budget.

The MoF had asked the ministries to submit their programmes for budget readjustment by April 13 because the parliamentary committees — Finance Committee, Agriculture and Water Resource Committee and Development Committee — had directed the government to not transfer funds after the end of the third quarter of the fiscal year.

MoF Budget Division Chief Baikuntha Aryal said MoF will not entertain proposals after this week. After reallocation of funds, secretaries and project officers of respective projects (where fund is reallocated) will meet in Monitoring Committee meeting led by finance minister. -

Source: THT