Finance Ministry to increase development expenditure
KATHMANDU, FEB 23:
The Finance Ministry has revised the development expenditure projection upwards.
According to the current trend of development expenditure, the ministry has revised its estimation up to around Rs 56 billion from the current Rs 51.29 billion — according to the interim public expenditure arrangement — as development expenditure has been rising recently, said finance secretary Shanta Raj Subedi, here today.
The upward revision of development expenditure also means that the interim public expenditure arrangement that stood at Rs 351.93 billion also needs to be revised to Rs 370 billion, he said, adding that the government has to bring an adjustment to the current interim public expenditure arrangement soon.
The earlier arrangement earmarked the budget for programmes according to the actual spending of a fiscal year back but new projects in the current fiscal year have forced the Finance Ministry to revisit the expenditure.
The government has spent Rs 9.48 billion under development expenses in the seventh month of the current fiscal year 2012-13, said Subedi, adding that the government has spent Rs 101.58 billion under recurrent expenditure, Rs 9.48 billion under capital expenditure and Rs 10.20 billion under financial management to a total of Rs 121.90 billion by the seventh month (mid-February).
The government was under tremendous pressure as it had been able to spend only Rs 7.04 billion under development expenditure in the first six months (till mid-January). Subedi, however, claimed that the slow down in development expenditure is also due to the delay by respective ministries in approving programmes, apart from the wastage of the first four months of the current fiscal year in confusion on whether or not to bring a full-fledged budget.
Similarly, Subedi also clarified that there will be no liquidity problem in the market as the government is sending some Rs five billion to banks. “The ministry decided, two days back, to transfer pension amounting to Rs five billion to banks,” the finance secretary said, adding that the government treasury has Rs 45 billion, currently. “The transfer of Rs five billion to banks will help ease liquidity situation — though he claimed that there is no liquidity crunch in the market — that could also be due to a slow down in the growth rate of remittance inflow.”
By the seventh month, the country has received Rs 14.49 billion — Rs 11.71 billion grants and Rs 2.29 billion loans — foreign aid commitment, according to the ministry that has shown concern on rising imports and failure of import substitution due to which trade deficit has ballooned.
PM directs FM
Accepting that economic growth has squeezed, and inflation and trade deficit have increased, prime minister Dr Baburam Bhattarai asked the Finance Ministry on Friday to take serious note of them. Likewise, prime minister has asked the ministry to appoint chief executives, chairpersons and members of board of public enterprises as soon as possible, though all the appointments of his government have come under fire. He also asked NRB to increase lending to energy and agriculture sectors.
Source: THT
