Govt under pressure to manage expenses necessary for day-to-day operations

Published On: October 17, 2023 08:30 AM NPT By: Republica | @RepublicaNepal

Govt breaches fiscal discipline to pay festival allowance to its employees

KATHMANDU, Oct 17: The government is under pressure to manage necessary amounts to meet the day-to-day liabilities under the headings of recurrent expenditure amid pretty low revenue collection.

According to the Financial Comptroller General Office, the country’s budget balance hit a negative of Rs 46 billion as of Sunday of this fiscal year. The government spent Rs 268 billion compared to the revenue of Rs 222 billion as of Sunday.

The government expenditure in the third month of the current fiscal year already stood 30 percent higher than the amount spent during the period between mid-July and mid-September. The government has sustained more pressure also due to its obligation to provide festive allowance to the civil servants.

In the past one month alone, the government spent Rs 117 billion under the recurrent expenditure. It accounts for over 10 percent out of Rs 1.140 trillion allocated for the salary, administrative costs and grants to the local bodies for the fiscal year 2023/24.

According to the Ministry of Finance (MoF), a large portion of the released amount was used to pay the Dashain allowance to the civil servants. In addition, the spending was made also on social security and to release the first installment of the grants that the government provides to the local governments.

The MoF is even found breaching its own guidelines while managing the necessary payments. Earlier on September 22, the MoF had asked the FCGO not to release payments more than the limit of the quarterly allocated budget. The ministry had stated that the limit for quarterly spending was maintained for effective implementation of budget and cash management.

The ministry however was found to have altered its own decision in the letter that it sent to the FCGO on Thursday. “The budget ceiling is not applicable in case the expenditure is targeted for salary, allowance and food purchase,” reads the letter issued by MoF.

According to an official of the MoF, the ministry seems panicked to manage necessary expenditure and has violated its own rules. “It will raise the issue of fiscal discipline by the apex financial institution,” the source said.