Government capital spending dismal yet againThe government has spent only 57 percent of the budget allocated for development purposes as the current fiscal year draws closer
The government has spent only 57 percent of the budget allocated for development purposes as the current fiscal year draws closer. Like usual, the last hour spending has also continued this year and some government officials are still optimistic that capital spending will cross 80 percent in one week. The new fiscal year begins July 17.
Last March, speaking at a parliamentary Finance Committee meeting, Finance Secretary Rajan Khanal had informed lawmakers that the government was optimistic that capital expenditure this year would reach 85 percent. However, the current development spending is abnormally low.
Last fiscal year 2017-18, capital expenditure stood at 79.74 percent, which was the highest since 2012-13 when spending reached 82.56 percent.
According to Financial Comptroller General Office, as of Tuesday, the government has spent Rs184.98 billion against Rs313.99 billion allocated for capital spending or the budget set aside for infrastructure development.
Based on government statistics from the last five years, around 40 percent of the allocated amount is usually spent in the last month of every fiscal year. This time though, the government needs to spend 28 percent (Rs87.91 billion) in just one week if it is to meet the 85 percent target claimed by the Finance Secretary.
Until Tuesday, the government has spent 72.8 percent of the total allocated budget of Rs1.31 trillion. The recurrent expenditure however has reached 80.47 percent.
Citing the slow expense pattern, the government in March revised the total budget allocation at Rs1.2 trillion, out of which the recurrent expenditure and capital expenditure were expected to reach 92.3 percent and 86.5 percent respectively.
The underlying problem is not only with capital expense, but also with the government’s revenue collection. As of Tuesday, the government has collected revenue worth Rs672 billion against its revised target of Rs860 billion.
Uttar Kumar Khatri, spokesperson of the Finance Ministry reiterated that the capital expenditure will cross 80 percent of the allocated amount. Khatri said as the fiscal year end approaches, development activities have been speeding up.
“The ministry is now receiving bills for settlement on a daily basis for payment of the completed work,” he said.
Khatri also claimed that the government would be near its revised target in the revenue collection too. “In the next one week, the amount to be collected in value added tax is expected to allow the government to meet its targeted revenue collection,” he said.
Although a provision has been made through the constitution to allow the government to announce the budget statement one and a half months in advance, the government has routinely been falling short of the target when it comes to capital expenditure. The rush for construction work in the last quarter of the fiscal year every time has put to question the quality of the built infrastructure.
According to the 56th annual report of the Office of the Auditor General, government agencies spent Rs222.83 billion during mid June-mid July of 2017-18.