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Kathmandu Thursday December 27, 2001 Paush 12, 2058.
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Unplanned security expenses exceed Rs 500m in one month
By Prem Khanal
KATHMANDU, Dec 26
– The non-budgetary security expenditures caused by the declaration of the
State of Emergency has already exceeded more than Rs. 500 million, leaving the government
with no option but to slash down the expenditures on other topics.
Though the total budget
allocated for security purposes was Rs. 10.31 billion in this fiscal year, it has already
exceeded by more than Rs. 500 million, a highly placed source at the Ministry of Finance
(MOF) told The Kathmandu Post today. "Going by this trend, the overall security
budget could surge up to Rs. 15 billion at the end of the current fiscal year."
This extra budgetary
expenditure occurred in the last one month, after the government declared the emergency
and began to spend without any proper plans, the source said.
The sources, however,
said that the MOF is still not in the position to pin point the exact security budget
required for the rest of the current fiscal year. "We have received various security
expenditure proposals but it is too early to comment on the specific size of this budget
due to which we are facing difficulties in preparing supplementary budget," the
Ministry sources added.
The MOF is in the final
stage of preparing the supplementary budget, which could be announced by mid-January.
"We have almost finished all the necessary procedures and the final budget can be
produced within a week of notice once the security budget is finalised," he said.
The proposed
supplementary budget will raise the limitation of internal borrowing set by the bill to
raise internal debt. The bill for the current fiscal year has authorised the government to
raise Rs 9 billion at the maximum. "Given the situation, the limit of the internal
borrowing would be raised and some of the development expenditures would be diverted
towards the regular expenditures to finance the growing security expenses," said the
source.
Plunging revenue is
another main cause for the widening mismatch between expenditures and sliding government
revenues, creating a major problem to the national economy. Experts point that the revenue
growth rate for the current fiscal year could remain at around 8 per cent against over 18
per cent witnessed last year.
Continued decrease in
import, which contributes one third of the total revenue and the decrease in excise duty
collection due to record-low production of liquors are the major causes for poor
performance of the revenue collection.
The government in its
budget for the current fiscal year had targeted to accumulate Rs. 60.25 billion, which is
around Rs. 11 billion more than the proposed regular expenditure.
"With the
increased security expenses, the total regular expenditure could go to around Rs 55
billion, which could be equal to the overall revenue collection if we achieve 8 per cent
revenue growth rate," a Ministry official said requesting anonymity.
MOF sources also said
the budget division of the ministry has asked the revenue division to recommend necessary
steps to curb the slumping revenue collection and to present a possible amount of
collection in the changed context. The revenue division has also been asked to examine
other potential areas for additional revenues.
Besides searching new
sources of revenue collection and seeking more foreign assistance, the government has also
started to take measures to cut its own expenditures.
"We have already
issued necessary direction to the entire Offices of Finance Comptroller to cut expenses by
25 per cent in solely government finance projects," said Dr. Madhav Prasad Ghimire,
Chief of the Budgetary Division of the Ministry. "However, such cuts will be limited
to 10 per cent in the case of the public health related expenditures."
Beside the flat cut of
25 per cent in the overall expenditure, the government has also taken some tough measures
to slash in its regular expenditures. The budget allocation to the least priority
development projects has already been frozen and the foreign visits by the government
employees have already been cut down.
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