February 21, 2017 11:15 AM NPT
Finance Krishna Bahadur Mahara (center, left), Finance Secretary Shanta Raj Subedi (center, right) and other government officials participate in the Mid-Term Budgetary Review Program at the Ministry of Finance in Singha Durbar, Kathmandu, on Monday.
KATHMANDU, Feb 21: The Ministry of Finance has revised the budget downwards, based on the current dismal spending trend, to Rs 935.88 billion for the current fiscal year.
Though the earlier government had brought Rs 1048.92 billion budget for the current fiscal year, poor implementation capacity of the government agencies has forced the ministry to revise the budget downwards. But despite their eroding capacity to increase development spending, various ministries have sought an additional Rs 276.90 billion budgetary demand which is around 30 percent of the total budget of the current fiscal year.
Addressing the Mid-Term Budgetary Review Program in Kathmandu on Monday, Deputy Prime Minister and Minister for Finance Krishna Bahadur Mahara said that various ministries have asked extra budget from the finance ministry. “Instead of facilitating implementation of ongoing projects, the ministries have been asking for additional budget which is not a healthy practice,” he said, adding that the finance ministry, however, has been able to mobilize resources efficiently. “The ministry had set revenue target in the first half of 2016/16 at Rs 258.74 billion. It managed to mobilize Rs 277.57 billion in the period which 107.92 percent of the target,” he added.
Mahara further said that the encouraging revenue mobilization, which became possible due to various programs lunched to plug revenue leakage holes, has forced the ministry to revise it annual revenue target to Rs 579.30 billion.
He also accepted that despite early budget -- that was brought some 45 days ahead of the fiscal year -- the budget implementation has not been satisfactory due to procedural hurdles. Mahara, however, reiterated to transfer the unspent budget to the projects that have been performing better and are in need of more resources.
“The budget of low-spending National Pride Projects will be transferred to other National Pride Projects that have performing better,” Finance Secretary Shanta Raj Subedi explained, adding that the transfer will be done according to the law.
Inefficient bureaucracy, procedural hurdles, lack of carrot and stick policy, and ad hoc budget preparation process are blamed for low capital spending that could have contributed to not only in employment generation but also in economic development in the long-run. “The government will transfer the budget to projects that can help capital formation and employment generation and give impetus to economic growth,” he added.