Ministry estimates 5pc rise in recurrent expenditure

KATHMANDU, APR 28 -

The Ministry of Finance (MoF) has estimated at least 5 percent increase recurrent expenditure in the next fiscal year.

The budget for this fiscal year has allocated Rs 266.71 billion under the recurrent expenditure head, while the ministry has projected the expenditure to be at Rs 280 billion next year.

At the parliamentary Finance and Labour Committee meeting on Friday, Finance Secretary Krishna Hari Baskota said any amount less than Rs 280 billion will not be enough to meet increasing recurrent expenditures. The National Planning Commission has already fixed the upper ceiling for next year’s budget at Rs 429 billion.

Saying that the incremental recurrent expenditures are alarming, Baskota said even an 18-20 percent rise in revenue collection next year will not be enough to meet the projected recurrent expenditure. The government has targeted to collect Rs 242 billion in revenues this year at an average growth rate of 20 percent.

The government categorises expenditure under three headings — recurrent, capital and financing. Recurrent expenditure

stands for administrative expenditure, capital for expenses allocated for development activities and financing is for the

government’s capital and share investment in public enterprises and other sectors for long-term benefits.

The government has been failing to increase capital expenditure, but recurrent expenditure has continuously surging in the last few years. As of the first nine months of the current fiscal year, capital expenditure has stood at just 32 percent on cash-flow basis, while recurrent expenditure has been 63 percent.

The finance secretary also said the government has received foreign aid commitments worth Rs 300 billion for the next fiscal year. This year’s budget has sought to receive Rs 100 billion from donors.

Also, the government does not have plans to increase domestic borrowing next fiscal year. “Domestic borrowing will not cross Rs 38 billion,” said Baskota. The current budget has planned raise domestic loans worth 37.41 billion.

According to Baskota, the new budget will focus on giving pace to economic dynamism to help meet the target of economic growth, generate employment opportunity and inclusive development. “The Youth-Self Employment Programme and the role of private sectors will also be promoted,” he said. During the interaction, lawmakers stressed on better capital budget expenditure, questioning the government’s failure to spend the budget despite timely budget presentation. Lawmaker Sher Bahadur

Pun said the government should create appropriate environment for not letting the capital budget to freeze. Another Lawmaker Ram Dhakal demanded that the government give priority to institutes related to agriculture research to promote the sector along with tourism and hydroelectricity.

Source: Kantipur