Government spends only 14 percent of capital budget in first half «

Government spends only 14 percent of capital budget in first half

Jan 14, The government has been able to spend only 14 percent in the first half of the current fiscal year.
According to the Financial Comptroller General’s Office, the government has spent Rs 47 billion or 14 percent of the total target capital budget of Rs 335 billion – allocated for the current fiscal year 2017-18 – by the end of six months. The government’s failure to spend in time particularly in development works like infrastructure projects has been a repeated phenomenon largely due to bureaucratic inefficiency.
Delay in construction of critical physical infrastructure projects that are essential to put Nepal on higher economic growth trajectory by helping capital formation in the future and employment creation currently is going to hit the economic growth target as well.
Though, the capital spending in the first half of this fiscal year is higher than in the same period of the last fiscal year, it had been expected to expedite due to formation of local governments and three layers of elections. Also the budget of the current fiscal year 2017-18 was introduced and approved before the starting of the current fiscal year and ministries, this year, were allowed to spend the budget without seeking permission of the National Planning Commission (NPC) unlike earlier years.
In the last fiscal year, the government had spent around Rs 35 billion or only 11 percent of the annual capital budget by the end of the six months.
The capital expenditure includes spending on civil works, and purchase of land, building, furniture, vehicles, plants and machinery, among others. In a country like Nepal with huge infrastructure gap, low capital spending creates a binding constraint on economic growth, delaying the process of raising the living standard of people and sharing prosperity.