All seven provincial governments fail to spend required budget

Published On: February 25, 2024 08:10 PM NPT By: Dilip Paudel

KATHMANDU, Feb 25: At a time when there are complaints that the provincial structure has only increased the burden of expenses for the country, questions have been raised on the capacity of the provincial governments to work. All the seven provincial governments have failed to spend their budgets. Not being able to spend the budget means not being able to work as needed, say experts.

According to the half-yearly evaluation report released by the Ministry of Finance recently, Madhesh Province has spent only 6.68 percent of its budget in the six months of the current fiscal year 2023/24. In the half-yearly review, the provincial government's ability to spend has been seen to be very weak.

According to the Financial Comptroller General's Office, only Rs 43.25 billion has been spent in six months out of the budget allocation of Rs 280.11 billion by seven provincial governments. This is only 15.44 percent of the total budget of the provincial governments. In six months, the federal government has spent 32.75 percent of the budget. In this way, the expenditure of the provincial governments is less than half compared to the federal. However, the expenditure of the federal government is also disappointing.

The government is not able to spend due to the lack of coordination between government agencies, lack of manpower, employees hesitating to proceed with the file due to the fear of irregularities, unstable government etc. National Natural Resources and Fiscal Commission (NNRFC) Chairman Balananda Poudel said that since the provincial governments’ expenditures are very low, efficiency should be increased. "In some places there have been complaints about the work being done but people not being paid," said Poudel, "It seems that the spending capacity should be increased."

Non-expenditure of funds means that the development work has not moved forward as planned or expewcted. Although the total expenditure of all seven provinces is 15.44 percent, the capital expenditure is even weaker. In the past six months, the provincial governments have been able to spend only 11.44 percent of the capital expenditure which is also known as the development budget. The Secretary of Madhesh Province, Ram Krishna Pudasaini said that due to the delay in development work, the expenditure was low. "The provincial government is worried that even though the budget came on time, it could not be spent," he said.

Despite the formation of seven provincial governments with the adoption of federalism, they have been criticized for not being able to prove their worth and relevance through work. Although the federal government has been saying that it has given many of its powers to the provincial governments, the chief ministers of the provinces have failed to show their competence.

Among the seven provinces, Madhesh Province is the weakest in terms of spending capacity. During this period, Madhesh government made only 6.68 percent of expenditure. Only Rs 2.94 billion of the total budget of Rs 44.11 billion has been spent in Madhesh Province.

The highest expenditure of 20.87 percent was in Koshi province. This is only 11.88 percent less than the expenditure of the federal government. Only Rs 7.66 billion of the total budget of Rs 36.74 billion has been spent by the Koshi Province government. The Bagmati government has spent only 16.98 percent. Of the allocation of Rs 62.70 billion in this province, only Rs 10.64 billion has been spent.

Similarly, the Gandaki Province government has spent 16.53% of the allocation of Rs 33.42 billion, i.e. Rs 5.52 billion. The Lumbini Province government has spent only Rs 7.48 billion, which is 18.50 percent of the total budget of Rs 40.47 billion.

Likewise, the Karnali Province government has spent Rs 4.38 billion, which is 13.13 percent of the total budget of Rs 33.37 billion. Similarly, the Sudurpaschim Province government has spent Rs 4.59 billion, which is 15.71 percent of the total budget of Rs 29.26 billion.

Even when the provincial governments implement small schemes, problems arise. This is due to the provincial governments’ failure to develop a comprehensive plan before budget implementation, resulting in no expenditure.

Dr Khimlal Devkota, an expert in federalism, asserted that the provincial government needs to change its working style. He stated, "Blaming the lack of staff and the law is not going to work. The budget spending structure needs to be made more active." He emphasized the importance of implementing a plan by creating a calendar specifying the tasks to be completed in each month.


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