Capital spending down 10pc

KATHMANDU, Feb 9: Delayed announcement of budget has cost the development works dearly, as the government in the first half of 2010/11 recorded a net 10 percent drop in capital spending compared to the same period last year.



If this is bad news for the people aspiring for development dividend, worse is: the confusion over the fate of the present budget at a juncture when capital spending was expected to pick up has threatened to hurt the development process throughout the year.[break]



“Capital spending during the first six months stood at mere Rs 13.56 billion. The figure is down from Rs 14.53 billion spent in the same period last year,” said Bodh Raj Niraula, joint secretary at the Ministry of Finance. He even portrayed the grim picture of government spending over the first half of the current fiscal year.



Unfortunately, the possibility of any sharp raise in capital spending over the remaining months too appear slim as the government has not yet initiated the steps to endorse the present budget, announced through ordinance, from the parliament.



Going by the existing law, the government will need to get the ordinance passed from the parliament by Feb 15.



“And to attain that, a proposal to this connection should have been tabled at the parliament by Wednesday. Sadly, that has been missed,” said a source, raising doubt over the continuity of the present budget.



Niraula said that the capital spending will soar only if the new government announced policies and programs and gave continuity to the present budget.



“If not, the whole process will derail, affecting overall development works,” he admitted.



Given the situation, Ministry of Finance has pushed for the new government to give continuity to the present budget.



However, the CPN-UML and UCPN (Maoist), the coalition that elected the new Prime Minister, have formed an eight-member taskforce to formulate new policies and programs. They have also agreed to form another taskforce of economists to formulate the budget as per the proposed policies and programs.



The Prime Minister´s Office (PMO) too on Tuesday circulated a directive to all the ministries, asking them to submit program and policies for the new budget by Thursday.



“Clearly, the new government is not interested in giving continuity to the present budget. If it did not change its mindset, the country could lose one precious year of development opportunity,” said the source.

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