Ministries capital spending below par

KATHMANDU, MAY 12 -

They are responsible for the country’s major development work, and account for 71 percent of the country’s total capital budget. Yet, their spending has been disappointing so far this fiscal year.

Capital expenditure of the five ministries — Physical Infrastructure and Transport, Urban Development, Irrigation, Health and Population, and Peace and Reconstruction — has been below par.

According to the Finance Ministry’s data, spending of Physical Infrastructure and Transport; Urban Development; and Health and Population ministries has been at a meager 26 percent, 27 percent and 32 percent, respectively. The spending of the Irrigation Ministry in the first nine-month reached 40 percent of its total capital budget.

As of mid-April, total capital expenditure amounted to Rs 18.7 billion, or 28 percent of the budget allocation, according to the Finance Ministry.

The government has earmarked Rs 66.13 billion under the capital budget this fiscal year through the recently introduced “adjusted full budget”.

Despite consistent poor capital expenditure record, the government increased the capital budget by Rs 16 billion under the assumption that expenditure would pick up in the last trimester.

According to the Ministry of Physical Infrastructure, 26 percent capital expenditure is normal compared to the spending of past years. “As per our latest progress report, the ministry has spent nearly Rs 10 billion,” said Tulasi Prasad Sitaula, secretary of the Physical Infrastructure Ministry.

He said based on the ongoing work, the ministry would be a spending of 80-85 percent of the total capital budget allocated. The government has allocated Rs 20 billion to the ministry for the current fiscal year.

According to Health Secretary Dr Praveen Mishra, his ministry’s capital spending is higher than what the Finance Ministry has reported.

“As of now, we have spent 48 percent of the capital budget allocation, and it will touch 80 percent by the end of the fiscal year,” said Mishra. “The delay in the issuance of cheque for the consignment of the ordered goods could be one of the reasons that the actual spending has been nominal.” The government has allocated Rs 22 billion to the ministry.

At a review meeting at the Finance Ministry on Friday, Finance Secretary Shanta Raj Subedi urged the ministries to make timely and effective utilisation of their capital budget, stating that low spending could hit the overall economy.

“Besides, it could affect employment generation, development work, and result in liquidity risk crisis, among others,” Subedi said.

Secretaries from these ministries were invited to discuss progress made on P1, P2 and P3 projects, and also shortcomings they were facing.

During the meeting, secretaries of these five ministries urged the government to increase the budget to some of the projects that are facing funds crunch.

They said delay in approval of donor-funded projects by donors has also affected timely spending. They suggested the Finance Ministry to simplify the budget release process from the Office of the Auditor General and the Office of the Financial Comptroller General.

Source: The Kathmandu Post