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Kathmandu Monday March 26, 2001 Chaitra 13, 2057.
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Current fiscal year budget implementation weak:
Report
Post Report
KATHMANDU, March 25 - The government presented the budget for the current
fiscal year almost a month and a half before the usual time last year, with high hopes of
effective implementation. However, the efficacy of the budget, as usual, proved rhetoric.
Despite an early initiation of budgetary estimations last year, which was
passed almost a month in advance before the actual announcement of the budget, budgetary
performance for the current fiscal year has not met the expectations.
Out of the total development expenditure envisaged by the government for the
current fiscal year, only 80 per cent is expected to be utilized, equal to the proportion
incurred in the last fiscal year.
The government had allocated Rs 48.10 billion for development purposes for
the current year, out of which actual cash outflow in the first six months of the year
stood at Rs 8.67 billion. Now, the revised estimate, according to the Mid-term Budget
Review Report, of development expenditure stands at Rs 38.83 only.
Even Finance Minster Dr Ram Sharan Mahat last week, while addressing the
donor agencies and state representatives, had conceded that the performance of the present
budget was below expectations. He had assured that the next budgetary performance will not
be weak.
According to high level officials at the Finance Ministry, the
less-than-expected accomplishment of the budget is primarily due to political instability
and weakness of the related authorities who actually spend the development budget.
"The laxity in delegating authority for carrying out development
projects is another reason that has contributed to the failure of the budgetary
expectations," he said. Even the report mentions that delay in approving projects and
imparting authority to development projects caused a slash-down in development expenses.
The report stresses on the need to increase the capacity of foreign aided
projects to expend the allocated funds. The budget had separated over 63 per cent of the
total development expenditure to such projects. However, of the total 810 sub-titles in
the budget, 510 of them foreign aided, expenses were made on only 186 sub-titles, the
report mentions.
The budget for the current fiscal year also could not perform well in the
areas of public resources management, economic reform programs and managerial capacity
enhancement.
The increase in the regular expenditure in the first six months of the
current fiscal year was also as high as 21.06 per cent. The cause of such an increase can
be attributed to massive raise in the salary of civil servants, in addition to, expenses
incurred as a result of increased outlay on social security and devaluation of rupee
resulting in higher payment for clearing interest on foreign loans.
In addition, the government’s allocation of Rs 1.45 billion for pension
for the current fiscal year would be inadequate, since Rs 1.63 billion was already
expended within the first six months of the year.
The government with aims to accelerate the process of economic reforms had
announced during the later part of last fiscal to initiate the implementation of the
second phase of reform programs that laid high emphasis on enhancing the performance of
the financial sector. However, the government’s efforts have pertained largely on the
management hand-over of two of the largest commercial banks only, performing sluggishly in
other areas.
Similarly, much remains to be achieved in the government’s third vision
of enhancing institutional capacity. Poverty alleviation programs, programs on enhancing
women’s rights and youth self-employment programs too did not fare well, which is
shown by the performance within the first six months.
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