Finance Minister Janardan Sharma has directed to increase the capital expenditure to 90% for the current fiscal year 2078-79.
Speaking at a program organized at the Ministry of Finance to review the budgets of the 10 ministries with high capital budget allocation till Falgun 24, Finance Minister Sharma directed to implement the budget such that 90% capital expenditure can be attained as aimed by the mid-term review.
'While the mid-term review of the budget had set a target of 90% capital expenditure, I am concerned that this target will not be met, but so far nothing has gone wrong. Let's all try, it isn't very difficult to reach our target," Sharma said.
Ministries with large capital budgets had reported that they had spent less and will not be able to spend a significant amount of money till the end of the fiscal year. Sharma then pledged that the Ministry of Finance would extend all possible assistance to increase the capital expenditure to 90%.
Minister Sharma said that it was a matter of concern that the progress of the ministry with high capital expenditure was not satisfactory. "Ministries with low capital expenditure allocation have seen high progress but ministries with the responsibility of increasing capital expenditure have not been able to spend. This is a matter of concern," he said.
He said that the ministry has been implementing government investment projects, foreign resource projects, and small projects in the budget but the citizens have not been able to witness visible development because of the ministries ignoring small projects.
The finance minister said that small-scale projects can be important to the public and they shouldn't be ignored. He also expressed concern over the delay in foreign resource projects due to lack of documentation, lack of knowledge about technology and policy issues.
Some ministries said that the lack of understanding about the deadline of the budgeted programs has added complexity to the implementation. "Some ministries still do not understand the budget program. They are not sure how long it will take to complete the program. 2 yearly programs have been kept under yearly projects," he said, "budgeting without research and preparation is responsible for this."
Sharma said that most ministries have started to be distracted from the budget program and have become confused between their responsibilities and those of the local levels. He said that he knows the federal ministry will take up to six months to formulate working procedures after keeping the budget with it instead of giving it to the local level and provinces to work on.
"Monasteries, temples are said to be built at the local level but the budget is kept at the center. Why do this? The budget should have been given to the local level," he said, "Make the budget in such a way that the agriculture budget will be given to municipalities and the drinking water project that will distribute water to 400-500 households will be given directly to the province."
He complained that the body which can not spend the budget has taken control of the file and prevented the province and local level from working on it.
Speaking on the occasion, Finance Secretary Madhu Kumar Marasini said that he was disappointed with the trend of weak capital expenditure. "The implementation of the existing budget has not even reached 20 percent, but the situation of demanding additional budget is dire," he said. Marasini suggested implementing the existing budget and not trying to work beyond the capacity by demanding an additional budget.
Instructions to correct weaknesses in upcoming budget formulation
As the problems seen in the budget program are the same, Finance Minister Sharma has instructed to correct all the weaknesses while preparing the next budget. Unveiling that the budget ceiling has been sent to all the ministries, he directed to submit the action plan first to improve the problems seen so far in the budget implementation instead of making and sending the program.
"Make the budget according to the ceiling. But first, discuss among yourselves the problems seen in budget implementation," Sharma said. He instructed ministries to send suggestions within a week that ensure the problems will not be repeated from now. He said that poverty alleviation and agriculture sector programs have failed due to a lack of improvement on these very issues.
"The program that started with the idea of eradicating poverty never reached the poor, and that program is over," he said, "Commercial Agriculture and Trade Project was implemented to increase agricultural production by increasing the capacity of farmers but even that did not reach real farmers. We have to be careful not to let this happen to our program again."
He directed the ministries to include the program in the budget only after studying and preparing. "Do a detailed feasibility study (DPR) to see what the potential of our big rivers could be. If you don't have money, we will pay, "he said, "Speed up the mapping work to expand roads upto the rural municipalities."