Although Finance Ministry officials expect this fiscal year’s capital
expenditure to be around 90 percent of the allocated budget, spending
in the first nine months suggests that achieving even that figure is
going to be a herculean task.
The government has been able to spend just 32 percent (Rs 18.79 billion) of the capital budget of Rs 58.22 billion on cash-flow basis over the review period.
Of the total capital budget of Rs 72.61 billion, Rs 58.22 billion is spent on cash flow basis, while rest of the amount has been planned to be spent under commodity assistance and direct funding from donors.
Finance Ministry officials are not contented with the present state capital spending, but say figures are encouraging compared to last year. “The actual expenditure could be much higher, as the stated figure does not include progress in ongoing work as payments are made only after completion of the work,” said Rajan Khanal, spokesperson for the Finance Ministry.
Significant progress has been made in major projects such as the Kathmandu-Tarai Fast Track, Mid-hill Highway, Sikta and Ranijamara irrigation project, according to Khanal. The ministry has been regularly holding talks with secretaries of various ministries to encourage them to ensure better capital expenditure. At a recent meeting with secretaries, Finance Minister Barsaman Pun warned that he would take the proposal for diverting the budget of ministries failing spend to the Cabinet.
The ministry’s record shows that major ministries having huge capital budget have failed to spend. For an instance, the Ministry of Physical Planning has been allocated Rs 34.5 billion capital budget, but has spent just Rs 8.5 billion as of the ninth month. The Ministry of irrigation has spent Rs 4 billion out of the
allocated Rs 9 billion, while the Ministry of Local Development has managed to spend just Rs 1.5 billion where as its allocation is Rs 7.5 billion.
The government has adopted a policy that projects failing to spend less than 60 percent budget in first nine months will not be sanctioned budget further. Also, they should have spent 80 percent of the budget as of 11th month to get the budget for the 12th.
“The Finance Ministry will stick to this policy and those not spending 60 percent budget as of the first nine months will not get additional budget as long as the minister or the secretary decides otherwise,” said Khanal.
On revenue collection front, the government missed the target by Rs 4 billion as of the ninth month. The collection over the period stood at Rs 172 billion against the target of Rs 176.2 billion.
The ministry’s statistics show revenue collection under customs duty, VAT and income tax exceeded the target, but collection under the excise duty, vehicle tax, registration charge and non-tax segments fell short of target.
The government has been struggling to raise non-tax revenue such as royalty and dividend from public enterprises as it has to give its own resources to cash-strapped public enterprises such as Nepal Oil Corporation.
Khanal said with the peace process heading towards conclusion which is expected to create more demand in the market, revenue collection is expected to improve.
Source: Kathmandu Post
The government has been able to spend just 32 percent (Rs 18.79 billion) of the capital budget of Rs 58.22 billion on cash-flow basis over the review period.
Of the total capital budget of Rs 72.61 billion, Rs 58.22 billion is spent on cash flow basis, while rest of the amount has been planned to be spent under commodity assistance and direct funding from donors.
Finance Ministry officials are not contented with the present state capital spending, but say figures are encouraging compared to last year. “The actual expenditure could be much higher, as the stated figure does not include progress in ongoing work as payments are made only after completion of the work,” said Rajan Khanal, spokesperson for the Finance Ministry.
Significant progress has been made in major projects such as the Kathmandu-Tarai Fast Track, Mid-hill Highway, Sikta and Ranijamara irrigation project, according to Khanal. The ministry has been regularly holding talks with secretaries of various ministries to encourage them to ensure better capital expenditure. At a recent meeting with secretaries, Finance Minister Barsaman Pun warned that he would take the proposal for diverting the budget of ministries failing spend to the Cabinet.
The ministry’s record shows that major ministries having huge capital budget have failed to spend. For an instance, the Ministry of Physical Planning has been allocated Rs 34.5 billion capital budget, but has spent just Rs 8.5 billion as of the ninth month. The Ministry of irrigation has spent Rs 4 billion out of the
allocated Rs 9 billion, while the Ministry of Local Development has managed to spend just Rs 1.5 billion where as its allocation is Rs 7.5 billion.
The government has adopted a policy that projects failing to spend less than 60 percent budget in first nine months will not be sanctioned budget further. Also, they should have spent 80 percent of the budget as of 11th month to get the budget for the 12th.
“The Finance Ministry will stick to this policy and those not spending 60 percent budget as of the first nine months will not get additional budget as long as the minister or the secretary decides otherwise,” said Khanal.
On revenue collection front, the government missed the target by Rs 4 billion as of the ninth month. The collection over the period stood at Rs 172 billion against the target of Rs 176.2 billion.
The ministry’s statistics show revenue collection under customs duty, VAT and income tax exceeded the target, but collection under the excise duty, vehicle tax, registration charge and non-tax segments fell short of target.
The government has been struggling to raise non-tax revenue such as royalty and dividend from public enterprises as it has to give its own resources to cash-strapped public enterprises such as Nepal Oil Corporation.
Khanal said with the peace process heading towards conclusion which is expected to create more demand in the market, revenue collection is expected to improve.
Source: Kathmandu Post
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