Secys told to expedite spendingPrime Minister KP Sharma Oli has instructed ministries whose spending has remained at 20 percent to accelerate their spending.
Prime Minister KP Sharma Oli has instructed ministries whose spending has remained at 20 percent to accelerate their spending.
With just two and a half months to go for the closure of the current fiscal, PM Oli on Saturday invited the secretaries of various ministries and instructed them to speed up expenditure.
According to secretaries present in the meeting, PM Oli sought reasons for poor capital expenditure and asked why some of the projects having adequate budget failed to spend the allocated money. Most of the secretaries blamed the border blockade as the major reason for poor capital spending.
Then, PM Oli sought “notable improvement” in capital spending in remaining months. “Expressing concern about low capital expenditure so far, the prime minister instructed the secretaries to speed up road, bridge and electricity project works,” said Suman Sharma, secretary at the Ministry of Energy.
The Ministry of Energy, which has so far spent only 28 percent of the capital budget, has projected its capital expenditure to go up to 80 percent this fiscal.
Most of the budget meant for energy projects is spent through the Nepal Electricity Authority (NEA), but a dispute between NEA Managing Director Mukesh Kafle and the then energy minister Radha Gyawali had affected the spending
“With the dispute over legitimacy of incumbent Managing Director Mukesh Kafle already settled, the NEA can now take important decisions, which will help expedite spending,” said Sharma.
During the meeting, most of the secretaries had projected that their ministries could spend capital budget in the range of 60-70 percent, according to a secretary present at the meeting. “The Ministry of Finance had projected the capital expenditure of 75 percent this fiscal,” he said.
“Most of the secretaries were of the view that most of the spending takes places in the last four months and payment of expenditure made in first and second four months also take place at the same time, hence expenditure figure will grow,” said Prem Rai, secretary at the Ministry of Culture, Tourism and Civil Aviation.
Mid-Term Review of the budget 2015-16 has mentioned that over the last seven years, the trend has it that over 70 percent of actual capital expenditure takes place in the last four months. “This trend is likely to continue this year too.”
Though the government declared the current fiscal “Budget Implementation Year”, development activities were severely affected by shortages of fuel and construction materials due to four-and-half-month-long border blockade and trade disruptions.
Rai said that construction works in most of the development projects under it have resumed after the end of the blockade.
“But there is no sign that Tribhuvan International Airport Upgradation Project will resume any time soon as a case has been filed at the court preventing the contractor to use sands from Pashupati Area,” said Rai.
Despite achieving just 30 percent capital budget so far, Agriculture Secretary Uttam Kumar Bhattarai said they have targeted 80 percent spending at the end of fiscal. “Following the usual trend of spending in last quarter, we can achieve the target,” said Bhattarai.
However, concerns have been raised over the quality of works while spending in haste in the last months of fiscal.
Due to failure to spend on the part of the government, its treasury still has Rs 170 billion unspent, according to Nepal Rastra Bank, which is the highest over last four-five years. Jagadish Chandra Pokharel, former vice-chairman of the National Planning Commission, said it was the abnormal year for Nepal with Gorkha Earthquake and prolonged blockade, but blaming them only for poor expenditure would not help the cause.
“There is a tendency to allocate budget to politically motivated projects in the last quarter of the fiscal year to accelerate spending,” said Pokharel, adding that such tendency must be avoided while diverting the resources for better performing large infrastructure projects.