MoF to allocate budget for only feasible projects
KATHMANDU, June 10:
The government is preparing to include only feasible projects in the upcoming budget to end the perennial problem of fund transfer.
"The government will include only those projects that have completed detailed feasibility study in the budget,” Baikuntha Aryal, chief of budget division at the Ministry of Finance, said, adding that they will not allocate funds without proper study of the projects.
The finance ministry has already directed line ministries to submit only the practical projects.
However, ministries are piling pressure to allocate adequate resources for impracticable projects, according to officials of National Planning Commission (NPC).
Minister for Energy Radha Gyawali has asked for additional budget of Rs 35 billion under the heading of capital expenditure to implement hydropower projects. But the projects being implemented by her ministry will be able to spend hardly Rs 20 billion in 2014/15. The government has fixed budget ceiling for energy ministry at Rs 26 billion in the upcoming fiscal year.
“If the finance ministry goes on allocating fund as per the demand, there would be an absolute need to transfer fund into other headings,” a highly placed source at NPC told Republica. The source further added that it would be difficult for donor supported projects in particular to get disbursement after the transfer of fund into another heading.
The energy ministry is only a case in point. There are various projects of similar nature with different ministries.
Govinda Raj Pokharel, vice chairman of NPC, said the practicing of fixing budget ceiling for line ministries is not practical enough in regard to implementation of development projects. “The government should allocate funds only for projects, which are bankable, have completed detailed feasibility, and are ready for implementation,” added Pokharel. “We should allocate more funds for such development projects which give timely results.”
Ministries have been demanding more fund because the Financial Procedural Act gives them the authority to transfer up to 25 percent budget on similar headings. Fund transfer has become the last resort for the line ministries to raise capital expenditure. Ministries can transfer up to 25 percent of the budget after taking permission from the finance ministry.
Aryal said ministries are demanding more funds without creating environment for timely implementation of the projects. “We are thoroughly studying the projects submitted by the ministries,” he said.
In the past years, the government used to give funds as per the demand of the ministries.
“Ministries have asked for budget to construct building even though they are yet to procure land for the purpose,” Aryal said, adding, “We will only allocate budget for projects that are ready for implementation.”
Budget presentation in parliament often gets delayed due to political reasons. This time, opposition parties have been obstructing parliament meeting since May 30 - the very first day of the budget session. The next meeting for pre-budget discussion has been called for Wednesday.
Source: Republica
