Budget implementation

Spending on development less than 4% in first 90 days

Published On: October 19, 2016 09:12 AM NPT By: Republica  | @RepublicaNepal

Change in government, transfer of key staff blamed

KATHMANDU, Oct 18: Progress in capital spending by the government has gone down this year with only 3.37 percent of the budget allocated for the purpose spent in the first ninety days, or first quarter, of this fiscal year.

A total of Rs 10.70 billion out of the allocated Rs 311 billion has been spent in the first quarter, according to the website of the Financial Comptroller General Office. 

This is probably the lowest progress in recent years as average spending on the development sector stood at a range of 9 to 12 percent in the corresponding periods the in past years, except in the last fiscal year which was affected by an Indian blockade and the 2015 earthquakes.

Monthly spending was also as low as about 1 percent or Rs 3.1 billion. 

The budget was tabled on May 28, the date required by the constitution, and approved before the fiscal year started in mid-July.

Former Finance Secretary Krishna Hari Baskota said the progress achieved this first quarter was one of the lowest on record. 

“Spending progress this year has been very low. The average spending progress in the first quarter used to be somewhere between 9 percent and 12 percent,” Baskota said, adding that the change in government was the major reason. 

“The government that tabled the budget is gone and the finance minister, the finance secretary and the vice-chairman of the National Planning Commission are new and the budget implementation didn’t get priority,” Baskota added. 

About a dozen government secretaries have been transferred since the new government took power in August. The secretaries who proposed the budget allocations are not in the same ministries and officials say this was also a reason behind the delay in budget implementation.

Overall spending was only 12.4 percent of the total budget of Rs 1,048 billion. The growth target 6 percent. 

Talking to Republica, Finance Minister Krishna Bahadur Mahara said the ministry will focus on expediting budget implementation and will meet the target.  

“Excuses about delays in capital spending won’t be entertained,” Mahara said. Effective monitoring will be in place for expediting budget spending, he said.

Growth contracted to 3 percent and 0.7 percent in the previous two fiscal years respectively with the 2015 earthquakes followed by the Indian blockade cited as the major reasons. 

Government officials also say they fear action by the Commission for the Investigation of Abuse of Authority (CIAA) if they make quick decisions in project implementation. “Project officials are hesitant in making quick decisions on issues dealing with finances and this is a factor behind the delay in spending,” an official at the Ministry of Physical Infrastructure and Transport said seeking anonymity.

Officials at the Ministry of Finance have a different view on this and say project managers and secretaries at the ministries implementing the development works should take responsibility as they have not discharged their duties despite signing performance contracts.

“Not a single secretary and project manager has ever been transferred for low performance and there is inaction,” a source at MoF privy to information on these projects said, also requested anonymity. 

Review meetings on spending, which are organized every month, have been mere rituals as secretaries and project managers blame one or another factor for the delay in work but are not serious in addressing the problem. 

Recurring strikes and problems in land acquisition are the major excuses used, in addition to the feared intervention of the CIAA, among others.

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