Government spends almost three quarter of capital expenditure at year-end
The consecutive governments – since the last six years – have been spending, about three-fourths of total capital expenditure in the last trimester.
The delayed and hasty spending at the year end has not only deteriorated the quality of the development works but also wasted the taxpayers money.
The government had spent 73 per cent of the total capital budget at the tail end of the fiscal year since 2008-09, according to the chief of the budget division Baikuntha Aryal.
The last minute spending rush was also due to delayed presentation of the budget almost every year after the Constituent Assembly (CA) election in 2008.
Prolonged political transition and instability also hit the successive government’s annual financial plan bringing the capital budget spending to the lowest level.
Likewise, in the fiscal year 2007-08, when there was a consensus government and the budget was presented on time, only 57 per cent of the capital expenditure was done in the last trimester.
However, the first CPN Maoist-led government – after the CA polls – presented the budget on September 19, 2008, two months after the beginning of the fiscal year.
The budget was presented four months late in the fiscal year 2010-11 and some nine months late in the fiscal year 2012-13. In the last fiscal year 2012-13, some 75 per cent of the capital budget was spent in the last four months.
The delayed budget presentation further delays the budget execution leaving no time for the implementation, Aryal said, stressing the need to bring early budget to expedite the capital budget.
Meanwhile, the government has been able to spend 31 per cent – as of mid-April 2014 the current fiscal year – of the capital expenditure, according to the data of Financial Comptroller General’s Office.
Delayed budget that pushes programme approval coupled with poor performance of contractors, ineffective monitoring, obstruction by locals and political forces, budget allocation to projects before land acquisition and detailed designing and supply-driven projects are key challenges to the effective and efficient capital spending, he added.
From this fiscal year the Finance Ministry has started digitalised budget system, where the line ministries can file online budgetary requirements and upload their proposed programmes. The ministries submit their programmes and activities to Finance Ministry and National Planning Commission (NPC) and get them approved before the budget is presented.
Likewise, the government is bringing Fiscal Responsibility Act that is also expected to help expedite capital spending that is key to generate rural employment and capital formation.