July 11: The government’s expenditure system is still full of flaws.The constitution has a provision for the government to announce budget in advance on May 29 for a new fiscal year starting from mid-July so that the government has adequate time to implement the budget.

However, due to the failure of the state mechanism in the implementation of the budget, the practice of spending the budget only at the end of the fiscal year still persists.

Even after the transformation of the country into a federal democratic republic, there is no improvement in the habit of spending large sums of money in the eleventh hour, posing serious questions on how to improve the system.

The government made excessive payments of Rs 41.68 billion on Sunday, the last day for payments in the current fiscal year.

According to the data of the Financial Comptroller General Office (FCGO), Rs 19.99 billion under the heading of capital expenditure was released on Sunday before the government’s accounts were frozen. With this, the capital expenditure exceeded Rs 210 billion.

Although the government claimed that most of the contractors were paid on the last day, Ravi Singh, the chairman of the Federation of Contractors Association of Nepal (FCAN), said that the government still has to pay them more than Rs 50 billion.

Dhaniram Sharma, joint secretary of the Ministry of Finance said that all payments have already been made. He added that the payment may have been stopped only if the process has not been completed.

Expenses stand at about 1400 billion

In the current fiscal year (FY 2022/23), the government has spent about Rs 1400 billion. Similarly, Rs 18.44 billion was released on Sunday alone under the heading of current expenses. Gayatri Raman Khanal, information officer of the Financial Comptroller General Office, said that the budget expenditure will increase slightly as the government can spend on special circumstances until July 15. According to Khanal, this year's budget expenditure will be around Rs 1400 billion. Revising the initial estimate of Rs 1793 billion rupees in the current year, the then Finance Minister Bishnu Paudel had downsized the budget to Rs 15.49 trillion rupees. However, the government expenditure could not even meet the revised estimate.

Budget deficit highest ever

The budget deficit has reached an all-time high. As of Sunday, the government has spent Rs 1374 billion while the government's income is Rs 935 billion. To meet the budget deficit of Rs 439 billion, government raised public debt of Rs 380 billion, causing deficit of Rs 59 billion. Finance ministry officials said that the payments for the insufficient amount was done through overdraft.

Payment halted

The Financial Procedures and Financial Responsibility Regulations stipulate that spending should be done at least 1 week before the end of the fiscal year. Accordingly, all kinds of government payments for the current fiscal year have been stopped from 12 o'clock on Sunday night. Information officer Khanal said that the Financial Controller General Office froze the accounts of the federal, state and local levels since midnight on Sunday. According to Khanal, no amount was paid on Monday. No new payments will be made from the provincial and local levels for the rest of this month. Checks issued before July 9 however can be exchanged.