Funds pile up due to slow government spending
KATHMANDU, SEP 28 -
The government is sitting on Rs 50 billion as of mid-September in a clear reflection of its failure to spend funds despite the timely presentation of the budget this fiscal year.
According to Nepal Rastra Bank (NRB), the government treasury holds Rs 36.51 billion from this fiscal year, and an additional Rs 13.52 billion from the previous two fiscal years.
“The government’s failure to spend resources has resulted in the accumulation of funds in the treasury,” said a senior NRB official.
During the first two months of the current fiscal year, recurrent expenditure has surged while capital expenditure has been low.
According to the Finance Ministry, a total of Rs 19.08 billion was spent under the recurrent heading during the review period, which is a rise of 31 percent year on year.
On the other hand, capital expenditure has remained poor at just Rs 420 million, which is a rise of just 9 percent compared to the review period last year. “Besides low expenditure, higher revenue collection and more foreign aid also led to funds piling up in the government treasury,” said Ram Sharan Pudashaini, spokesperson of the ministry.
According to the ministry, revenue collection during the first two months reached Rs 45.36 billion and foreign aid amounted to Rs 7.54 billion with loans of only Rs 300 million. The ministry said that the amount of foreign aid received during the two months was 192 percent higher year on year.
Meanwhile, delays in approving projects also affected the pace of spending. Despite a timely budget presentation, the ministries are yet to get their projects okayed by the National Planning Commission (NPC), although the Finance Ministry had asked them to do so within two weeks of the budget ’s presentation.
Pudashaini, who also heads the monitoring and evaluation division at the ministry, said that around 90 percent of the projects had been approved by the NPC and 5 percent were being processed. The approvals took longer than the Finance Ministry had expected, he added.
The government’s failure to spend resources on time, caused by delays in budget presentation and endorsement, has hindered completion of development goals in recent years.
Political instability, that has engulfed the country since the formation of the first Constituent Assembly, led to delays in budget presentation and endorsement, and subsequently slowed down spending. During the last fiscal year when the annual budget was only presented in the ninth month, capital expenditure reached Rs 52.95 billion against the target of Rs 66.13 billion, according to the ministry.
Source: The Kathmandu Post
