PM Dahal concerned over dismal state of capital expenditure

Published On: January 4, 2023 07:55 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Jan 3: Prime Minister Pushpa Kamal Dahal has expressed his concern over the ‘pathetic’ capital expenditure and the ailing status of the entire financial cycle of the country.

The newly appointed head of the government expressed his worry at a time when the country’s capacity for capital expenses is depleting year after year. Issuing a 30-point direction to the secretaries of various ministries on Tuesday, Premier Dahal said the state spent only 11 percent of the amount allocated for the development activities when around six months of the current fiscal year have passed.

“What are the causes behind the low capital expenditure? Who is to blame?” Dahal raised the questions. “If this problem is not solved now, when to do next,” Dahal further interrogated the high-ranking bureaucrats.

According to the Financial Comptroller General Office (FCGO), the government spent only Rs 33.9 billion in the first five months, out of the budget of Rs 380 billion allocated under the capital expenditure for the current fiscal year. It made out only nine percent of the amount allocated under the heading.

The poor capital spending has almost been a perennial problem of the country. The government has been found speeding up the expenses only in the last-minute, which results in the poor quality of the infrastructure built in a rush.

Capital expenditure involves expenses made in infrastructure development, construction and other sectors that help generate real capital in the country. The government’s capital budget includes funds allocated for the purposes of executing civil works and purchasing land, buildings, furniture, vehicles, plants and machinery.

Citing every year’s low capital expenditure in the past, a provision has been made through the constitution to allow the government to announce the budget statement one and a half months in advance. However, the government has routinely been falling short of the target.

According to Jagadish Chandra Pokharel, former vice-chairman of the National Planning Commission, defects in procurement process, inefficiency in project handling capacity of the implementing agencies and contractors taking more contracts than their capacity, are among the major reasons behind the delay in construction work and low capital expenditure.

PM Dahal also directed the government officials to bring proposals for reform measures if there is any problem at the policy level regarding the capital expense. He also expressed concerns over the existing problem in the overall financial administration of the government. “While there is a shortfall in meeting revenue collection target and low capital expenditure, there is a major problem of increasing arrears,” Dahal said.

The prime minister also asked the officials of the National Planning Commission (NPC) to prepare plans that include measures to expedite the expenditure of the development projects. He also directed the NPC to mark performance of the government officials, who fail to meet targets of revenue collection and development works, in their job appraisals.  

Slow delivery of public services and related hassles, poor outcomes of community schools, irregularities at the government-run hospitals and poor access of deprived people to free medical services and  increasing cases of corruption and poor public hearing system, were among the concerns of Prime Minister Dahal. He warned to take action against the officials overseeing road accidents, criminal cases and loan sharking if they fail to show any tangible outcome in the next three months.

Dahal said he will prepare a work schedule to effectively mobilize the monitoring team from the Office of the Prime Minister and Council of Ministers. 

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