According to Financial Comptroller General's Office (FCGO), the government has been able to spend only Rs 21.51 billion, or just 10.30 percent of development expenditure, by February 25.
Though only 135 days are remaining in the fiscal year, which ends in mid-July, the government is still to spend Rs 187.35 billion. This means that the government will have to spend Rs 1.39 million ever day if it wants to meet the target of development spending.
Ram Sharan Mahat, finance minister of the erstwhile government led by Sushil Koirala, had allocated Rs 208.87 billion for development spending for 2015/16.
However, the post-earthquake dilemma and Indian blockade after the promulgation of constitution on September 20, which created shortage of fuel, made the government technically unable to spend any of the development expenses.
Under pressure to up spending, Office of the Prime Minister and Council of Ministers on Friday directed secretaries of all the ministries to accelerate development spending. In the meeting chaired by Prime Minister K P Sharma Oli, Chief Secretary Som Lal Subedi directed secretaries of concerned ministries to report him about development expenses made now onwards on a fortnightly basis, according to a secretary who attended the meeting.
“Though the Chief Secretary has directed us to report him every fortnight, it is very difficult to increasing development spending,” the secretary said, adding that the situation has not normalized even though the blockade has been lifted. "Development projects are still facing shortage of fuel."
Mahat had presented a budget of Rs 819.47 billion for 2015/16 on July 14, 2015. He had allocated Rs 484.27 billion for recurrent expenditure like salary payment of civil servants, grants to local bodies and interest payment; Rs 208.88 billion for capital expenditure like spending on civil works and purchase of land, building, furniture, vehicles, plants and machinery; and Rs 126.32 billion for financing provision like lending to state-owned enterprises and principal repayment.
He had also allocated Rs 91 billion for reconstruction of structures damaged by the devastating earthquakes of April and May. But the incumbent government and National Reconstruction Authority (NRA) have already declared that the reconstruction works will only start after April 25, marking the first anniversary of the devastating earthquake.
The government is under tremendous pressure to kick-start stalled development projects as the fiscal year is coming to an end in just four-and-a-half months.
Earlier, on Thursday, ADB president Takehiko Nakao had asked Prime Minister Oli and Minister for Finance Bishnu Poudel to accelerate the pace of investment for reconstruction and other development programs in order to achieve economic growth potential of 7 percent to 8 percent per annum in the medium term. "Nepal's public capital spending has been low at an average of 3.5 percent of gross domestic product (GDP) over the last five years compared to the 8 percent to 12 percent required to fill the critical infrastructure gap within a decade," he had said.
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