June 22: The practice of spending a large amount of budget at the end of the fiscal year has been repeated this year as well.
Within a span of just 4 days, the government earlier this week spent about Rs 14 billion under different headings. According to the government expenditure data from last Friday to Monday, a total budget of 13.87 billion was released. As in the previous fiscal years, this is a sign that a big budget is going to be spent in the last month of the current fiscal year as well.
According to the Finance Comptroller General's Office, which keeps track of the government's income and expenditure, since the last month of the current FY has already started, the pressure for disbursements of budget has started to increase.
As of Monday, the government's capital expenditure was only 40 per cent, while current expenditure was more than 74 per cent. In recent days, both the current and capital expenses are being spent more than in the previous months.
In order to stop the trend of spending development budget especially in the 11th hour, a mandatory provision was made in the constitution to announce the budget on the 15th of Jestha (May 29). On top of that, the parliamentary committees have repeatedly given instructions that no more than 10 per cent of the total budget can be spent in a month. However, the trend of spending excessive amounts of budget in the last month has not stopped.
In the past, when the budget was announced at the end of a fiscal year, it would take another three months to get the budget endorsed by the parliament. The selection of contractors and the compliance with the public procurement law would take another five months, and contracts would be awarded in the eighth month. Then the capital budget would be spent in the last month.
In order to prevent the same situation, even if there is a mandatory provision in the constitution to bring the budget on Jestha 15, there has been no improvement in the expenditure.
Since the trend of last-minute development did not stop, the Finance Committee and the Public Accounts Committee of the parliament have instructed the government not to spend more than 10 per cent of the budget in the last month of the year.
However, recent facts have shown that nothing from the constitution to the parliamentary committee could stop the 11th hour development. Around 20 to 25 per cent of the total budget is spent in the last month alone. As the same trend has been repeated this year too, serious questions have been raised about the functioning of the government.
MP and economist Dr Swarnim Wagh said that it is unfortunate that capital expenditure is only 45 per cent in the current fiscal year. He believes that even if the government makes some policy reforms in the upcoming budget, those policies will not make a fundamental difference and they will be purely ritualistic in nature.
Why was the development budget not spent before?
As in the previous budget, this year too, the Ministry of Finance had instructed that the contract process should be completed by the third month of the fiscal year.
Accordingly, in the action plans submitted by each ministry to the Prime Minister's Office and the details updated by the ministries in the Budget Information System (BIS), it was mentioned that all the contract processes will be completed by the first quarter. However, a senior official of the Ministry of Physical Infrastructure said that when the government agencies did not show readiness to prepare the tender documents in time, the budget expenditure was affected.
Budget deficit of Rs 3 billion
According to the government data, only 65.56 per cent of the allocated budget has been spent till June 15. During this period, the government's total income only covered the cost of paying salaries and allowances to the employees. There is a situation where the government has to look for a loan to pay the interest and principle of the loan.
According to the Finance Comptroller General's Office, in the 11th month of the current year, the government has spent Rs 877 billion, which was mostly spent on salaries and allowances of employees, while the government collected revenue of Rs 836 billion. The total expenditure of the government is Rs 1176 billion. Therefore, there is a budget deficit of around Rs 300 billion.
