DEC 19 - Despite the annual budget coming on time, capital spending in the first five months of the current fiscal year remained dismal.
Out of the Rs 85.10 billion budget earmarked for capital spending for fiscal 2013-14, a sum of Rs 7.95 billion, or 9.34 percent of the total, has been spent so far.
Though capital spending is still 42.9 percent higher than in the previous fiscal year, government officials admitted that the spending was relatively low.
The Finance Ministry's latest statistics show almost all ministries having higher capital budget and dealing with infrastructure development have failed to expedite capital spending in the first five months.
Among these, the Ministry for Physical Infrastructure and Transport spent 10.43 percent of its capital budget, Irrigation Ministry 10.18 percent, Urban Development Ministry 9.57 percent, Local Development Ministry 8.38 percent and Energy Ministry 13 percent.
"Capital spending has slowed due to the occurrence of a series of festivals and the holding of the Constituent Assembly (CA) election," said Chiranjivi Nepal, the Finance Ministry's economic advisor. "We need to expedite spending to meet the targeted economic growth."
According to the Finance Ministry, there were 11 big projects whose spending was less than 1 percent in the review period. However, Finance Minister Shankar Prasad Koirala said the 5.5 percent economic growth could be achieved.
"The overall spending shows that the country's economy is on track to meet our envisaged 5.5 percent growth this fiscal year," said Finance Minister Shankar Prasad Koirala, addressing a periodic budget review on Wednesday.
According to the Ministry of Finance, the country's total spending in the first five months was up 47.8 percent year on year.
Expenditure during the review period amounted to Rs 120.39 billion, or 23.28 percent of the national budget of Rs 517.24 billion. In the first five months, recurrent expenditure amounted to Rs 103.52 billion, or 29.29 percent, of the allocated Rs 353.42 billion.
The ministry said the figure was 49.2 percent higher compared to the spending in the same period last year. Good performance in recurrent spending has been attributed to the funds spent for the CA election. The ministry estimated Rs 12 billion was spent for the election.
The Finance Ministry said the Home, Foreign Affairs, Health and Population and Labour and Employment ministries performed poorly in terms of budget implementation.
While the performance of Urban Development, Irrigation, Energy, Agriculture Development, Science and Technology, Youth and Sports, Peace and Reconstruction, Education, Defence and Federal Affairs and Local Development ministries was termed "satisfactory".
According to the Irrigation Ministry, the Sikta Irrigation Project, which is another national pride project, has missed its construction deadline as work on the main canal has been delayed due to a dispute with locals over compensation for their land. The project was targeted to be completed this year.
"Although we had targeted finishing the 35-km canal this year, work has been halted on the final section which is 1 km long," said Kamal Prasad Regmi, spokesperson for the ministry.
Locals from a section of the project site have rejected the compensation package announced earlier and are asking for more money.
"However, we are making some progress in the talks to resume work."
Regmi said that the ministry had proceeded with the bidding for the construction of a tunnel at the Bheri-Babai Irrigation Project. Meanwhile, construction of the intake at the Rani-Jamariya irrigation project will be started from this year. "We have targeted achieving 90 percent progress during this fiscal year," said Regmi.
The Ministry of Health and Population has said that it will implement the government announced insurance scheme in three districts from this fiscal. Similarly, The Ministry of Foreign Affairs said that it had been discussing the online passport submission system with the Home Ministry.
Meanwhile, the government has approved 77 different working procedures and directives including the interest subsidy guideline of the Agriculture Ministry to implement various projects.
However, the Finance Ministry has raised concern over the compensation the ministry has been distributing to farmers as being "too much". "Is it reasonable to distribute compensation to farmers if their crop fails?" asked Finance Secretary Shanta Raj Subedi.
He has requested the ministry to consider the issue before sending it to the Finance Ministry for its approval.
The Energy Ministry said that it was facing resource shortfalls of Rs 1.68 billion and Rs 420 million for the Chamaliya and Kulekhani projects respectively.
Energy Secretary Bishwa Prakash Pandit said that the Rs 400 million allocated for rural electrification was "peanuts" and urged the government to increase the amount.
"We have also approached the donor community, and they are positive about supporting us on the rural electrification project," Pandit said.
Source: ekantipur
