KATHMANDU, June 24: The government which is struggling to manage funds for the recurrent expenditure is seriously looking for budget transfers to pay the remunerations of the civil servants.
In a fresh move, the Financial Comptroller General Office (FCGO) has asked the district treasury offices to manage the necessary funds for the remunerations via budget transfers. Forwarding a circular on Friday, the FCGO has delegated the authority to the district treasury offices for doing so.
“Given the fact that the government offices are asking for shortfall amounts to pay salaries to their employees after they spent the disbursed budget, funds can be transferred from one budget subhead to another,” reads the letter issued by the FCGO. The FCGO however has fixed the deadline of July 4 for such budget transfers.
Budget transfers mean moving funds from one program or project to another. In many cases, government agencies seek to adjust budgetary allocations after being unable to spend the earmarked money under the given headings.
The government is having a cash crunch to manage its immediate liabilities due to a heavy fall in revenue collection during the nationwide lockdown that has almost stagnated business activities in the country. Last week, speaking at the federal parliament, Finance Minister Yuba Raj Khatiwada said that the government currently needs an average of Rs 40 billion a month to meet its mandatory liabilities that have to be settled immediately.
Khatiwada said that the government is collecting hardly half the amount from revenue sources. According to him, the government is even looking to transfer the money from various funds into its treasury and to mobilize its fixed deposits to meet its liabilities.
Economist Keshab Acharya said it is probably the first time that the government is seeking the support of budget transfers to pay remunerations to its employees. “Though it is obvious for the government to go for such action during a crisis, it is not appropriate to have budget transfers to meet basket expenses,” said Acharya.
Acharya stressed the prudent reallocation of financial resources even during the difficult situations. “For instance, if the budget transfers are done by curtailing the maintenance funds of a project, it will affect the operation of development activities even in future,” he said.