Situation of budget spending and revenue mobilization

Government spending weaker than last year

Published On: June 16, 2019 07:18 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 15: Despite being a two-thirds majority government, the government seems to be weaker in terms of spending the budget this year compared to previous years. 

Last year, Prime Minister KP Oli had said that as last year’s budget was not completely spent, that would work as a base year. He had said that development works would go rapidly this year. However, the work now is slower than last year. 

The spending on areas including current, financial management expenses, and revenue collection is slower till mid-June of this fiscal year, compared to the corresponding period last fiscal year. 
Finance Minister Yubaraj Khatiwada had said that this would be the year for stringent law enforcement, in lack of which many development works were not carried out. However, the Prime Minister has not been speaking in this regard as expected. 

According to the Financial Comptroller General Office, this year the government has spent Rs 149 billion in capital expenditure till June 13, whereas it had spent Rs 159 billion last year in the corresponding period. 

Finance Minister Khatiwada had said that 86.5 percent of the budget would be spent before June 1 this year during the budget announcement last year. 

To meet the target of Khatiwada, government has to spend 38 percent of the amount allocated for capital expenditure. The government has spent only 47 percent in the first 11 months of the current fiscal year. 

This year the government has targeted to spend Rs 300 billion in capital expenditure. To reach this target, government has to spend Rs 165 billion in the next one month. The expenditure couldn’t go as expected. 

According to the Financial Comptroller General Office, not only capital expenditure but current expenditure is also less than last year. Last year, the government had spent Rs 618 billion till mid-June, whereas this year the government has spent only Rs 607 billion in the corresponding period. 
Similarly, the government has spent less this year in financial management as well. This year, the government has spent 65 billion, whereas it had spent Rs 77 billion last year. 

Minister Khatiwada had ambitiously set the revenue target during in the budget speech of the current fiscal year. Though he had said to increase the revenue by 34 percent, revenue has increased by only 20 percent, which means the government has collected less revenue this year compared to last year. 

The government has mobilized Rs 617 billion this year till mid-June, which is less by Rs 8 billion from last year’s corresponding figure. It is learnt that the Finance Ministry is responsible for less revenue collection.

Till now, unstable governments were always blamed for not doing the development works properly. However, this assumption has come under question because the situation remains the same even with a stable government which has already brought budgets for two fiscal years. The government has also enjoyed comparatively less hindrances from the opposition parties. 

This gives a lot of room for the public to believe the government mechanism is very weak. High officials of the Finance Ministry keep saying that the concerned ministries should be active in spending the budget. 

“The work of the Finance Ministry is to give funds. To work or not to work on project is the responsibility of the concerned ministries,” a high official from the ministry said. “The ministers and secretaries of the concerned ministries should be working diligently to spend the budget. Otherwise, there will be only excuses and no work.”

He also said that as the Finance Minister does not come from a political background and is not of an imposing character, the secretaries of the concerned ministries are reluctant to listen to him. 

 Finance Ministry officials say that the failure to handover projects to provincial and local levels in the current fiscal year has also affected the spending under capital expenditure. The central government still holds on to many medium and small-scale projects, which were to be handed over to provincial and local levels, they state.


Leave A Comment