Govt capital expenditure falls short with only 40% of the allocated budget utilized in the first 11 months of the current FY

Published On: June 18, 2023 08:00 AM NPT By: Republica  | @RepublicaNepal

As a perennial problem, the government is likely to make unproductive expenditure in the eleventh hour this year too.

KATHMANDU, June 18: The government spent only 40.24 percent of the budget allocated for capital expenditure in the first 11 months of the current fiscal year (FY).

The records from the Financial Comptroller General Office (FCGO) show that the government spent Rs 153.08 billion during mid-July 2022 and mid-June this year. Out of the targeted amount of Rs 380.38 billion for this fiscal year, the government has been unable to utilize Rs 226.62 billion meant for the development of infrastructure.

Capital expenditure involves expenses made in infrastructure development, construction, and other sectors that help generate real capital in the country. The government's capital budget includes funds allocated for the purposes of executing civil works and purchasing land, buildings, furniture, vehicles, plants, and machinery.

Citing the low capital expenditure in previous years, a provision has been made through the constitution to allow the government to announce the budget statement one and a half months in advance. However, the government has routinely fallen short of the target.

After Prime Minister Pushpa Kamal Dahal assumed office on December 27, 2022, he issued 30-point directives to various ministries, asking them to expedite expenses on development projects. He even expressed his commitment to preparing a work schedule to effectively mobilize the monitoring team from the Office of the Prime Minister and Council of Ministers for this purpose. However, things have not changed this year either, with the government failing to materialize its plans into action.

Poor capital spending has almost been a perennial problem in the country. The government has been found speeding up expenses only at the last minute, which results in poor quality infrastructure built in a rush.

According to the FCGO, the capital expenditure in the last fiscal year was even more pathetic. During the review period of 2022/23, the government spent only 36.72 percent out of the allocated amount of Rs 378.09 billion.

But the last-hour expenditure by the government took the capital expenditure to 57.23 percent by the end of the fiscal year in 2022/23. It shows that Rs 77.54 billion, which made around 56 percent of the amount utilized in 11 months, was spent in just one month.

Ram Prasad Ghimire, Revenue Secretary at the Ministry of Finance, said the capital expenditure has marginally increased this year, which, however, is not sufficient to address the call to achieve thriving development. "To address the problem of slow capital expenditure, the government has made necessary policy arrangements for the next fiscal year," he added.

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