Kathmandu Post

MONEY»

Delayed projects to lose funds to those going good

KATHMANDU, JAN 10 -
The National Planning Commission (NPC) has introduced a policy under which the budget for delayed projects can be transferred to projects making good progress in a bid to stimulate sluggish capital expenditure immediately.

After projects that have lost their budget to other projects are revived, funding will be made available to them by transferring it from another heading, according to the NPC.

NPC vice-chairman Dipendra Bahadur Kshetry said that the NPC introduced such a policy recently for the time being in order to boost the capital expenditure as

the development expenditure has not been encouraging so far.

He said that the NPC has already sent its policy to various ministries including the Ministry of Physical Planning and Works having abundant allocations for development projects.

“Such a policy is necessary to better utilise resources to ensure that there is no shortage of budget for major projects while discouraging the tendency of dillydallying,” said Kshetry.

As of the first five months of the current fiscal year, there has been capital expenditure of just Rs 3.95 billion out of the allocated Rs 72.61 billion, according to the Financial Comptroller General’s Office (FCGO). This is, however, a provisional figure for 68 districts that include most major revenue collecting districts, according to the FCGO.

Kshetry said that the NPC’s policy would enable ministries to spend the budget on projects that are performing well from projects whose contracts are yet to be awarded. However, projects not starting work should not have a problem receiving the allocated amount later.

According to the NPC, the road project connecting Besisahar and Chame, the district headquarters of Manang, has been complaining of a budget shortage. Likewise, the road project connecting Gamgadhi of Mugu is also facing a budget crunch. “They can be completed if the necessary resources are allocated under the policy issued by the NPC,” said Kshetry.

This policy will help projects having multi-year contracts. As per the existing provision too, the secretary of a ministry reserves right to transfer up to 25 percent of the budget of the project for which additional budget is required, from other headings except from the heading with committed obligation such as salary and allowance for employees.

However, the transfer of additional budget needs the approval of the Finance Ministry. The government has the policy of not transferring budget allocated to first priority (P1) projects and that allocated to districts of the Karnali zone.

Lok Darsha Regmi, chief of the budget division at the Finance Ministry, said that the ministry could permit such diversion within the criteria set by the law. He, however, said re-allocating the budget of one project to another was a complicated issue as political interests are also connected with each project.

Finance Minister Barsha Man Pun has also made it clear on many occasions that the government will divert the budget to projects where work is moving ahead in full swing from those that have failed to start work.

Posted on: 2012-01-11 08:58

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