Bijay Damase
July 18: Political instability, economic crisis and inflation have taken toll on development and construction works of the country. The country witnessed budget announcement by two finance ministers in just one fiscal year while the pace of development could not gain momentum due to the incompetence of the government.
The then finance minister Bishnu Poudel had announced a budget through ordinance on May 29, 2021 for the last fiscal year which concluded on July 16. However, a mandamus order by the Supreme Court to reinstate the parliament dissolved by the then government led by KP Sharma Oli led to the downfall of Oli government. Then, a new government’s finance minister Janardan Sharma introduced a replacement budget stating that the government would spend 10 percent of the allocated capital budget every month. However, the government failed to work as per its commitment.
According to the Office of the Auditor General, the government had allocated a budget of Rs 378.9 billion for capital expenditure in the fiscal year 2021/22 but was able to spend only 216.37 billion which is 57.23 percent of the allocated budget.
Data released by the Office of the Auditor General has revealed that the government spent as much as Rs 79 billion in the last month (mid-June to mid-July) of the last fiscal year.
The government’s capital expenditure which was Rs 137 billion in mid-June increased to Rs 216 billion in mid-July. The government was under pressure to spend towards the end of the fiscal year as it did not pay much attention in spending budget in the starting period.
The capital expenditure of the government in the last fiscal year was the weakest in the past decade except for the spending during the Covid-19 period.
The government’s capital expenditure in FY 2013/14 was 75 percent which increased to 84 percent in FY 2016/17 before plunging to 74 percent (FY 2014/15) and 58 percent (FY 2015/16). The government’s capital expenditure then increased to 86 percent in the next fiscal year (FY 2018/19). It then dropped to 46 percent during the pandemic era in FY 2019/20 before rising to 64 percent in FY 2020/21.
The government has always failed in spending budget. Although the government signs work execution agreements with the officials who spend budget, such agreements have hardly yielded any results. The government has stopped signing such agreements after the onset of Covid-19 due to which the work execution of the government officials have been affected due to lack of evaluation.
Former Vice Chairman of the National Planning Commission Dr Pushparaj Kandel terms the government’s failure to spend capital budget as its ‘incompetence’. He argues that the capital budget could not be spent because the government failed to create a conducive environment for spending the budget.
According to Kandel, the development works have slumped due to various reasons including the transfer of civil servants , government’s lack of interest to control inflation and its failure to take the construction entrepreneurs in confidence.
Deputy Auditor General Navaraj Dhungana blames political instability, inflation and construction holiday announced by the contractors as the main reasons for the poor spending of capital budget.
According to Dhungana, although the government amended the Public Procurement Act, it did so quite late thereby affecting the construction works. The construction entrepreneurs are yet to collect Rs 5 billion from the Department of Roads and Rs 20 billion from other government agencies.
The government’s policy is also to blame for the poor capital spending. The government has been amending the Public Procurement Regulation time and again to address the problems of construction entrepreneurs but this has created instability. The government amended the reculation for the 12th time just last month. The same regulation has been amended 7 times in the last 3 years.
