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Delayed budget hit dev expenditure: NPC report

KATHMANDU, NOV 07 -
The delayed budget presentation in the last fiscal year took a heavy toll on the development expenditure with some priority projects reporting negligible progress, both in physical and financial (spending) aspects.

A progress report prepared by the National Planning Commission (NPC) on last year’s budget said that only 70 percent of the capital expenditure was spent in 2010-11. The government had allocated Rs 129 billion as capital expenditure budget in the last fiscal year.

The fiscal year 2010-11 saw budget being presented after four months, which eventually led to the delay in the approval of projects and awarding of contracts.

“The capital expenditure last year was pathetic for a country that does not have enough resources, and even the limited resources have not been utilised properly,” said Dipendra Bahadur Kshetry, the vice-chairman of NPC.

He said the budget delay was mainly responsible for this, along with other “weaknesses”.

“This also paved the way for increased irregularities with a huge amount of the budget going to the projects at the end of the fiscal year,” he said.

The NPC report showed that some of the major programmes and projects of the last fiscal year saw sluggish budget expenditure. The report has categorised Melamchi Drinking Water Project, Road Improvement Project, Road Sector Expansion Programme, Kathmandu-Tarai Fast Track, Flood Induced Damage and Bridge Construction Programme, and the Upper Trishuli Hydropower Projects amongst those having a weak track record when it comes to spending.

The other programmes and projects with dismal spending record are related to electricty transmission line construction, Medical Drugs and Equipment Supply Programme, Nepal Food Crisis Address Programme and Rural Access Improvement and Decentralization Programme.

Such was the sluggish spending that some of the projects related to the power sector spent just three-four percent of their allocated budget.

The much-talked-about Chameliyagad Hydropower Project was able to spend just seven percent of the budget.

“Melamchi Project is an example that shows that budget allocation only for P1 projects does not help,” the report said.

Given the poor performance of important projects, Prime Minister Baburam Bhattarai on Sunday directed officials concerned to make arrangements of performance contract for heads of those projects from the next fiscal year. “They will be judged on the basis of their performance,” Bhattarai told top bureaucrats at the 24th meeting of the National Development Problem Solution Committee, which the PM heads.

The poor capital expenditure pattern of major development-related ministries illustrates the fact that work in the development projects remained poor. The Ministry of Physical Planning and Works that deals with major infrastructure projects could only spend Rs 21.59 billion of the total capital budget of Rs 35.23 billion.

Same is the case with the Ministry of Energy. It spent just Rs 14.05 billion in the last fiscal year of the capital budget worth Rs 24.65 billion, thanks to poor spending in major hydropower and transmission line projects.

The spending of the Ministry of Local Development also remained poor with just Rs 19.40 billion of the allocated capital budget of Rs 27.76 billion spent.



Capital expenditure of some ministries (Rs in billion)

Ministries    Budget     Spent     Unspent

Physical Planning    35.23    21.59    13.64

Local Development    27.76    19.40    8.36

Energy    24.65    14.05    10.6

Irrigation    8.40    7.18    1.22

Peace     4.70    3.12    1.58

Environment    2.74    1.16    1.58

Source: National Planning Commission

Posted on: 2011-11-08 09:20

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