Govt spending miserably low
KATHMANDU:
The government’s inability to spend even 50 per cent of the annual budget till the end of the third quarter of this fiscal year has raised questions over its planning mechanism, which appears to be riddled with ad hoc decision making.
Various government bodies spent only Rs 241.81 billion, or 46.75 per cent, of Rs 517.24 billion allocated to them between mid-July 2013 and mid-April 2014, show the latest statistics of the Financial Comptroller General Office. The lower spending was reported due to the inability of various government bodies to make maximum use of recurrent, capital and financing budget allotted to them.
“Such a low spending indicates that most of the budgetary programmes are being framed on an ad hoc basis without comprehensive implementation plans,” Ministry of Finance Spokesperson Ram Sharan
Pudasaini told The Himalayan Times. “If we continue to frame budgetary programmes just for the sake of it, then resources that can be put to better use and achieve greater outcomes will continue to get locked up in the state treasury, stalling development process.”
As of April 4, Rs 79.45 billion was sitting idle in state coffers due to shortfall in demand for money by government bodies. The size of funds that has piled up in the state treasury is equivalent to that of annual capital budget of Rs 85.10 billion.
“When such a large amount is left unused, how can the country achieve its economic growth target, create additional job opportunities and reduce the poverty level?” Pudasaini questioned.
Official data show that the government used only Rs 196.61 billion, or 55.63 per cent, of Rs 353.42 allocated for recurrent spending in the first nine months of the current fiscal. This was because of the inability of various ministries to fully utilise the funds they were appropriated.
The Ministry of Education, for instance, was allotted the largest chunk of recurrent budget of Rs 80.74 billion. But it used only Rs 49.99 billion in the nine-month period. The Ministry of Federal Affairs and Local Development, on the other hand, used only 53 per cent of Rs 42.97 billion in recurrent budget allotted to it, while the Ministry of Health and Population spent only 48 per cent of the allocated recurrent budget of Rs 25.25 billion.
Since recurrent budget in Nepal is not only dominated by salaries, and includes grants extended to different autonomous and local bodies to develop various physical infrastructure, timely use of this money is essential to promote development.
The capital spending pattern is even worse.
Most of the money allotted for capital expenditure goes towards building road networks, power transmission lines, and irrigation and hydropower projects, among others, which are considered crucial for job creation and the country’s development. Yet, the government was able to utilise only Rs 26.26 billion, or 30.86 per cent of the annual capital budget of Rs 85.10 in the nine-month period.
Here, the Ministry of Physical Planning, Works and Transport Management is seen as the biggest cause of the problem. It was allocated the largest chunk of capital budget of Rs 30 billion for this fiscal. But till the end of the third quarter, it used only Rs 8.88 billion, or 30 per cent, of the funds it was appropriated.
Similar is the case with the Ministry of Irrigation, which was able to use only 38 per cent of allotted capital budget of Rs 11.40 billion in the nine-month period, while the Ministry of Urban Development could not even use 30 per cent of Rs 7.94 billion allotted to it.
“These are some of the crucial ministries that help in raising capital spending. But since their performance this year has not been up to the mark, it is time we restructure budgeting mechanism and come up with programmes that are implementable,” Pudasaini said.
“Also, we need to ask public enterprises like Nepal Electricity Authority to frame realistic budgetary plans and programmes, as their inability to make use of money has resulted in lower spending of funds allocated for financing provisions.”
The government had allocated Rs 78.72 billion for financing provisions this fiscal. This money is used to repay principal amount of domestic and foreign debt, and make investments in and extend loans to state-owned enterprises. In the nine-month period, only Rs 18.94 billion funds allocated for financing provisions was used.
Source: THT
