November 19: Although the coalition government has presented a budget replacement bill in line with its common minimum programme to accelerate the pace of development, its implementation has been very weak.

In the first four months of the current Fiscal Year (FY 2021/22), the pace of development has been weaker than during the peak of pandemic. In the first quarter of the current fiscal year, capital expenditure has is only 5 percent.

According to the Financial Comptroller General’s Office, the capital expenditure stands at Rs 20.79 billion which is only 4.73 percent of the total development budget. This year's capital expenditure is lower than the expenditure during the previous year when the Covid-19 pandemic was widespread.

In the first quarter of FY 2020/21, the capital expenditure was 8.34 percent. This is more than double the expenditure made in the current year. To meet the target this year, 95 percent of the allocated budget will have to be spent in the remaining eight months.

Initially, Rs 439 billion was allocated for development works for the current fiscal year. However, after the change of government, the budget for development works was downsized by Finance Minister Janardan Sharma through the replacement bill to Rs 378 billion.

According to the Financial Comptroller General’s Office, 17.61 percent of the allocated budget has been spent in the first four months. However, most of the money spent falls under the current expenditure that includes salary and allowance of government employees. A budget of Rs 1.632 trillion has been allocated for this fiscal year.

Out of Rs 1.03 trillion allocated for current expenditure, Rs 233 billion or 23.26 percent has been spent so far.

Despite the weak spending, the finance minister continues tall promises regarding reforms in spending system. No matter who is the  finance minister, reforming the expenditure system remains a major issue. Looking at the state of capital expenditure in the first four months of the last four fiscal years, the pace of development seems to be slowing down.

In the first four months of FY 2075/76, only Rs 29.83 billion was spent. Government data shows that Rs 24.81 billion was spent in the subsequent fiscal year 2076/77. During the review period of FY 2077/78, such expenditure was Rs 29.44 billion while the capital expenditure was only Rs 20.78 billion.

Even on the last day of the first quarter, Finance Minister Sharma was busy in high-level discussions to increase spending. Chief Secretary Shankar Das Bairagi, Finance Secretary Madhu Kumar Marasini, and secretaries and representatives of various ministries had attended the discussion initiated by the finance minister.

Discussions were held on the current procurement law, issues in achieving the target of capital expenditure, state of institutional coordination, and financial discipline. No matter how active Finance Minister Sharma seems to be, the low capital expenditure, as a result, indicates that the pace of development work is poor. Likewise, the results show that government officials did not follow his instructions.

A report prepared by the Public Expenditure Review Commission formed by the government three years ago has been kept secret and has not been implemented effectively.