Government Yet to Spend Rs 435 Billion Budget with Two Months Left for Current FY to End

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Government Yet to Spend Rs 435 Billion Budget with Two Months Left for Current FY to End

KATHMANDU: With less than two months left for the current fiscal year (FY) to end, the government is yet to spend Rs 435 billion to meet the revised target of budget expenditure.

The government announced a budget of Rs 1751 billion for the current year and revised it to Rs 1530 billion in January through the mid-tern review of budget.

According to the Financial Comptroller General Office, the constitutional body that keeps track of government’s expenditure, the government has spent only Rs 1095 billion as of last Sunday.

With only two months remaining in the current fiscal year and signs of increasing political instability, questions have arisen about how the government will spend the rest of the budget.

Prime Minister Pushpa Kamal Dahal took the vote of confidence in the House of Representatives on Monday amid the obstruction of parliament by the main opposition Nepali Congress. Three governments have been formed in one year under the leadership of Prime Minister Dahal. Due to political instability, government spending is affected due to lack of timely decisions.

As the government has allocated a budget of Rs 1141 billion for the current expenses. After the mid-tern review, the estimate expenditure under this heading has been fixed at Rs 1007 billion. The FCGO has said that the government has already spent Rs 770 billion under the current expenses as of Sunday. According to the FCGO, the government has allocated 302 billion under the heading of capital expenditure for in the current fiscal year, but has spent only Rs 119 billion so far. According to the revised estimate, the government has to spend Rs 254 billion.

In Nepal, the capital expenditure for development works is mostly spent in the months of March, April, May and June. However, even at this period, the capital expenditure has not been much encouraging. According to the revised estimate, the government will have to spend Rs 135 billion under the heading of capital expenditure.

Similarly, a the government had allocated a budget of Rs 307 billion for financial management, which was revised to Rs 268 billion through the mid-tern review. According to the data of the FCGO, the government has already spent Rs 205 billion has under this heading as of Sunday.

Government officials are blaming each other for the lackluster expenditure. According to the Ministry of Finance, there is no reason to stop the expenditure as the Minister for Finance and the ministry have repeatedly instructed the secretaries of the related ministries and heads of agencies to increase the expenditure.

"Recently, the Finance Ministry instructed the Department of Roads to send a report on work progress along with recommendations to resolve the problems it faces. However, the department has not yet submitted its report," an official of the budget division of the Ministry of Finance told New Business Age.

According to him, no project and work has been stopped due to lack of budget.

However, the expenditure situation is not satisfactory.

Economist Bimal Koirala highlights that the unspent budget is due to errors in the government’s budget formulation process, lack of political will, and structural issues.

 “Due to errors in budgeting, there is no capital expenditure and no development. That is what has happened so far," he said. "The size of the budget has become an arbitrary number and the trend of reducing it through the mid-term review is not a good practice. The government should bring a realistic budget."

Koirala says that due to the fact that the government has not properly implemented the report of the Expenditure Review Commission, the problems have been persisting for years. "This situation will continue until the government identifies the problems in the budget spending system and takes initiatives to solve them," he said.




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