KATHMANDU, Nov 2: The government’s budget implementation for the current fiscal year 2083/84 has been slow. Three and a half months into the fiscal year, capital expenditure, which directly supports infrastructure and development projects, has reached just 6.83% of the annual allocation. Overall government spending stands at 19.65% of the total budget.
The government had announced a 100-point governance reform action plan aimed at accelerating economic activity, but budget implementation remains weak. As of November 14, the government had spent Rs 417.42 billion out of its total annual budget of Rs 2.124 trillion.
According to figures from the Financial Comptroller General Office, the government has spent only Rs 29.46 billion of the Rs 431.10 billion allocated for capital expenditure. This represents 6.83% of the annual allocation, leaving 93.17% of the development budget unspent.
Slow budget implementation during the early months of the fiscal year has been a recurring problem in Nepal. The failure of capital spending to pick up pace this year has raised questions about the government's governance reform plan and the performance of government ministries.
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In the budget presented to the federal parliament on May 29, Finance Minister Dr Swarnim Wagle allocated Rs 1.270 trillion for recurrent expenditure, Rs 431.10 billion for capital expenditure and Rs 422.64 billion for financial management.
Of the total budget, recurrent expenditure accounts for 59.8%, capital expenditure for 20.3% and financial management for 19.9%.
By November 14, the government had spent Rs 305.21 billion on recurrent expenditure, equivalent to 24.02% of the allocation. Spending under financial management stood at Rs 82.74 billion, or 19.58%.
The figures show that spending on development projects is lagging well behind regular administrative expenses and financial obligations.
Gokul Bastola, joint financial comptroller general and spokesperson for the office, attributed the slow implementation partly to natural disasters. He said devastating floods in the Bhotekoshi and Trishuli rivers in Rasuwa on August 26, followed by floods and landslides in the Kaligandaki and Budhigandaki areas, disrupted budget implementation during its initial phase.
Bastola expects spending to accelerate after the Tihar and Chhath festivals.
However, natural disasters are not the only reason for low capital expenditure. Delays in project selection and preparation, incomplete detailed project reports (DPRs), land acquisition disputes, prolonged procurement procedures, poor performance by construction contractors and payment bottlenecks remain longstanding obstacles.
Failure to spend funds allocated for infrastructure raises the risk of delays in road, bridge, drinking water and irrigation projects. It also raises concerns about the effectiveness of public spending and the government's ability to complete development projects on schedule.
Budget implementation was also sluggish in the previous fiscal year, 2082/83. Towards the end of the year, more than a dozen ministries had recorded capital expenditure of less than 30%. Budget freezes, procurement delays and inadequate project preparation were identified as major reasons for the low spending.
With the same problems recurring this year, the government faces the risk of repeating the familiar practice of rushing to spend large portions of its budget towards the end of the fiscal year.
