September 22: As usual, the government’s capital expenditure has remained poor in the current fiscal year. Although the government had allocated more than Rs 300 billion as capital budget for this year, , the expenditure as of September 20 was only Rs 8.49 billion, which is only 2.81 percent of the allocated budget. The government's target was to spend more than Rs 10 billion in the capital budget by this period of the current fiscal year.
The government did not make procedures and guidelines for the capital expenditure in the current fiscal year. As a result, it has not been able to spend the development budget effectively.
In order to facilitate capital expenditure, a constitutional provision was made to announce the budget well ahead of the new fiscal year on May 29. The new fiscal year begins in mid-July. Although the tradition of bringing the budget a month and a half before the start of the fiscal year was initiated to address the complaint that capital expenditure could not be made due to the late announcement of budget, there hasn’t been any improvement in the working style of the government and civil servants.
In order to spend the capital budget according to the target, internal preparations should be completed and bids for infrastructure projects should be invited, but no such preparation is seen from the government agencies.
Minister for Finance himself has not made public the implementation plans that he expressed his commitment to.
Due to lack of budget expenditure, the income of the government has also declined. According to the Finance Comptroller General's Office, the government has collected Rs 154.23 billion in revenue as of mid-September this year. This is Rs 87.8 billion less than the revenue collection in the corresponding period of last fiscal year.
This year, the government is yet to receive foreign grants. The government’s revenue collection target this year is Rs 1422 billion.
Looking at the data of the last eight years, the government does not seem to have spent the capital budget enthusiastically in any year. The data of government’s development expenditure provided by the Ministry of Finance shows that there is a tendency to spend a large part of the budget at the end of the year. From the year 2073 to 2080, 85 percent of the budget allocated by the government under the capital expenditure has not spent in any year.
Former Vice Chairman of the National Planning Commission Dr Pushpa Raj Kandel says that there is a need for comprehensive reforms in the government’s spending system. He said that if the concept of Project Bank is implemented properly as suggested by the Public Expenditure Review Commission, there will be many improvements.