Finance Minister Khatiwada worried as ministries fail to spend development budget

Finance Minister Yuba Raj Khatiwada is worried that the budget he presented for the current fiscal year will not be fully spent.

The half-yearly review by the Finance Ministry has projected that that expenditure will not be in accordance to the target set by the budget.

The estimated expenditure is generally amended after review of the expenditure in six months. Estimated expenditure was reduced to Rs 1.046 trillion after six months from the original Rs 1.279 trillion even in the last fiscal year.

While the governments in the past cited sluggish expenditure to political transition, drafting of constitution and political problems, the current government with two-third majority does not have such excuses.

Finance Ministry officials fear that the economic growth rate will also not be as high as expected as both the revenue target and estimated development expenditure are unlikely to be met. Low public expenditure hits economic growth rate.

Minister Khatiwada is most worried about lack of development expenditure despite the finance minister not having significant role in capital expenditure.

“The finance minister does not have much role to play in expenditure and capital mobilization apart from that in the context of revenue generation,” a ministry official told Setopati. “But the finance minister does have moral responsibility for implementation of the budget.”

Authorization for expenditure is granted immediately after the budget is passed, and the ministries can also transfer the allotted budget from one head to the another within the same ministry. Onus for implementation of the programs and expenditure of the development budget is, therefore, on the ministries concerned. The Finance Ministry can only request and not direct the ministries concerned to spend the allocated budget.

The finance minister can be blamed only for failing to provide additional budget if the originally allocated budget does not suffice. The Finance Ministry has already provided additional budget of over Rs 8 billion in the six months for Kaligandaki corridor, Bheri Babai, Gautam Buddha International Airport and Pushpa Lal Highway.

The fear about failure in spending the allocated development budget is mainly due to three ministries that have been given the largest proportion of development budget. “We must be careful that the expenditure will mainly be made in the 12th month even if the targeted expenditure is met,” Minister Khatiwada said during the review program.

The Ministry of Physical Infrastructure and Transport, that was allocated 29 percent of the total development budget (Rs 93 billion), has been able to spend just Rs 22 billion.

The ministry’s excuse of confusion about implementation of federalism and lack of structure at the lower levels cannot be accepted as most of the projects this ministry received budget for have been contracted for multiple years, and most of such projects are implemented by the federal government.

Similarly, the Ministry of Energy, Water Resources and Irrigation that was allocated 13 percent of the total development budget (Rs 40 billion), has been able to spend just Rs 8 billion. Similarly, the Prime Minister’s Office that received Rs 58 billion in the name of National Reconstruction Authority (NRA) has been able to spend just Rs 10 billion.

The Ministry of Water Supply that received Rs 17 billion has been able to spend just Rs 910 million in the first six months. The Ministry of Urban Development that received Rs 17 billion has been able to spend just Rs 3 billion while the health and federal affairs ministries that received Rs 7 billion and Rs 8 billion respectively have also spent just Rs 1 billion each in the first six months.

Officials at the Finance Ministry claim that spending has been abysmal as the ministries have ignored the repeated review meetings held by Finance Minister Khatiwada for implementation of the budget.

“Secretaries from the ministries attend such meetings and they report to their respective ministers. But the ministers do not listen to the request of finance minister no matter how many review meetings are held,” a Finance Ministry official pointed.



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