Spend Judiciously
THE newly-appointed Finance Minister Dr.
Ramsharan Mahat has sounded a big warning. Speaking at a seminar on Improvement in
Management of Public Expenditure jointly organised by the National Planning Commission
(NPC), the Finance Ministry and Public Expenditure Review Commission (PERC) on Tuesday, he
said that as revenues had not increased proportion to increasing public expenditures there
was a possibility of financial crisis taking place in the country. It is indeed true that
a country like Nepal has a great many demands, all needing to be fulfilled without delay.
In the consequent pressure, often the public expenditures are made not at all in
consonance with the revenues being generated. Living beyond one’s means then becomes
the order of the day, with all that it implies in terms of fiscal imbalance. It is not
that there is a no way out, and that public expenditure cannot be managed properly in
countries like Nepal. Indeed, public expenditure is very much possible to be managed in a
more disciplined manner. As Dr. Mahat suggested fiscal balance can be maintained by
mobilising internal resources to a maximum extent and reducing dependence of foreign
assistance. Though reduction in foreign aid dependence is easier said than done, there is
no reason why more internal resources cannot be generated with appropriate policies. This
is extremely important as there is much pressure on general expenditure due to the
developmental work needs and the task of maintaining law and order increasingly threatened
over the past years. It has also been seen in recent times that administrative
expenditures have a tendency of increasing. And then there is also the question of whether
the funds allocated for development have been productive. Dr. Mahat does not think the
money going into development works have been productive. This is a serious issue. The
scant resources that the country has should be utilised in the best manner possible. Every
rupee spent must give the maximum in return. A resource-strapped country like Nepal can
ill-afford to witness resources being frittered away without the expenditures making a
positive impact on the people’s lives—the end goal of public expenditures. One
way to maximise the available funds for fulfillment of the most pressing needs, is to
prioritise projects. There are a hundred and one ways of spending money. But when projects
are well-prioritised and the available limited funds are directed to the most important
projects, it makes much sense from both the economic and social justice points of view. I
other words, we must spend judiciously
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