BIJAY DAMASE

KATHMANDU: The trend of spending billions of rupees at the end of the fiscal year has continued this year as well. Despite constitutional provisions aiming to make budget expenditures effective from the start of the fiscal year, large sums of money are still being irregularly transferred toward the end of the year. This practice is often referred to as ‘Asare’ development, or the development in the last month of the fiscal year.

According to the Financial Comptroller General Office (FCGO), which keeps the records of government’s income and expenditure, state agencies spent up to Rs 6 billion rupees daily in the Nepali month of Jestha (mid-May to mid-June). For instance, on May 16 alone, the government disbursed a budget of Rs 6.47 billion on a single day. This high rate of spending has continued on most of the days since then.

In the month of Baishakh (mid-April to mid-May), the Ministry of Finance approved the transfer of approximately Rs 2.5 billion for 30 projects, primarily under the Ministries of Energy, Water Resources and Irrigation, Physical Infrastructure and Transport, Defense, and Urban Development.

These include budget transfer of Rs 85 million for the Babai Irrigation Project from the Budhi Ganga Hydropower Project and Rs 71.18 million for the Mahakali irrigation project, Rs 30.4 million for the Department of Water and Meteorology, and Rs 20 million for the community-managed agriculture sector projects as well as river control.

Significant amounts were also transferred to the Ministry of Defense, including Rs 384.4 million to a military base and Rs 73.34 million to the Directorate General of Military Air Force. The Ministry of Urban Development transferred Rs 199.6 million for the intensive urban program.

The latest report from the Office of the Auditor General indicates that Rs 95.29 billion were transferred in FY 2079/80, representing 5.31 percent of the total budget. Notably, Rs 23.1 billion were transferred in the month of Asar (mid-June to mid-July) alone, with Rs 13.82 billion transferred in the last week of the review month.

A senior official from the Ministry of Finance revealed that more than 10 percent of the total expenditure has been transferred so far this year. Funds are often reallocated from unspent programs to those driven by political interests, leading to increased fund transfers.

Rule 30 of the Financial Procedures and Financial Accountability Regulations, 2077, mandates that payments must be made and expenses accounted for at least 7 days before the fiscal year ends. However, ministries have been found spending contrary to these rules. The Auditor General’s report recommends adhering to the approved program schedule and recording expenditures properly.

Additionally, Rule 32 of the Financial Procedures and Financial Accountability Regulations, 2077, prohibits fund transfers until the end of the first quarter of the fiscal year. Yet, Rs 33.15 billion were transferred during the first quarter of last year, violating this rule.

Former Chief Secretary Bimal Koirala emphasizes the need for the government to uphold financial discipline. He argues that reckless spending at the end of the year undermines policy rules and suggests that funds should only be transferred for essential projects, including those of national pride and transformative significance.