The government this fiscal year allocated Rs 66.1 billion for capital expenditure-money spent on development activities like building of road, irrigation projects and hydropower plants that have the ability to create hundreds of thousands of jobs. [break]
Of this, only Rs 22.49 billion was used till Tuesday, unaudited report of the Financial Comptroller General Office showed.
The tepid pace of capital spending was reported at a time when the Ministry of Finance is expecting utilization of over 90 percent of the budget allocated for capital expenditure this fiscal year.
“The poor performance is the result of inability to introduce a full budget on time, as many projects didn´t receive adequate funds till the launch of a complete fiscal policy (on April 9),” Janma Jay Regmi, finance ministry spokesperson, told Republica. “We hope the spending will increase in the remaining two months of the current fiscal year.”
It is the custom in the country for capital expenditure to shoot up in the last quarter of every fiscal year, as many ministries spring to action only after being reminded that time is passing away. As a result, approvals for projection implementation are not taken on time and there are delays in tender document preparation and contract handover, which ultimately limit fund flow.
To exert pressure on concerned authorities, Finance Secretary Santa Raj Subedi last Friday instructed key ministries to increase capital spending citing expenditure shortfall would dampen public sentiment, affect job creation and revenue collection, create liquidity strains and make the economy less vibrant.
“It appears the pressure put on by the finance ministry is gradually working as we are receiving greater number of applications for project approval,” a high-ranking official of the National Planning Commission (NPC) told Republica on condition of anonymity.
The NPC, a top government advisory body responsible for formulation of the country´s development plans and policies, has so far approved around 60 projects related to infrastructure only since the introduction of full budget, the official said.
“Irrigation projects like Rani Jamara Kulariya and Sikta, Mid-hills Highway and Jajarkot-Dunai road project are making good utilization of funds,” the official further said.
“We hope more projects will demand additional funds in the coming days because of removal of the spending ceiling that previously barred projects from spending more than 40 percent of the annual budgetary allocation in the final quarter of the fiscal year and more than 20 percent of the annual budgetary allocation in the last month of the fiscal year.”
Despite this, the official expressed doubts over finance ministry´s claim to meet the target of utilizing over 90 percent of budget allocated for capital expenditure this fiscal year.
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