People´s development aspiration had already hit the jolt when the government, amid political wrangling over the budget, capped its capital spending target for this fiscal year at Rs 51.34 billion. For, the target in itself was less than last year´s allocations by almost Rs 24 billion and this year´s total demand placed by different ministries by around Rs 44 billion.[break]
“Now, to the dismay of the people and country as a whole, our assessment is the government will not be able to spend even this lowered allocations,” said a senior official at the National Planning Commission (NPC).
Officials at the Ministry of Finance (MoF) referring to past trend, which shows government has always missed the (capital) spending target by almost a quarter, even predicted that the spending this year might not even cross Rs 40 billion.
Officials attributed three major reasons behind drawing such a conclusion.
First major deterrent to capital spending is the government this year has made budgetary allocations without clear citation of due sources of fund, something which had never happened in the past. Referring to elections and other cost, it has further allotted to the ministries an amount which is less than their last year´s actual spending by 12 to 28 percent.
As the budget received by each ministry is already less, both MoF and NPC have asked the ministries to work out capital spending only after allotting enough fund for salary and other recurrent spending with due inflation adjustment.
“This is sure to compel them to allocate lower capital budget than what they spent in the last year,” said the MoF source, adding that the actual allocations under capital budget this year is going to be less than what the government announced in the budget.
Secondly, even as the five months of the fiscal year has already passed, the ministries have continued to drag feet to get their P1 projects endorsed by the NPC.
Getting NPC´s approval is crucial to kick start the implementation of development projects. Any laxness in getting NPC´s approval on time eventually slows development spending. Hence, government in its Working Procedures has asked the Ministries to complete the formalities with NPC within 15 days of receiving spending authority from the MoF.
“However, none of them have complied with the law even as almost a month has already passed since the MoF delegated such authority,” said a senior NPC official.
The commission has so far endorsed only two projects: one is related with development of detailed project report (DPR) of Budi Gandaki Hydropower Project and the other is an irrigation project, informed Gopi Nath Mainali, NPC joint who looks after infrastructure development.
Few Ministries such as Ministry of Environment (MoE) and Ministry of Women, Children and Social Welfare (MoWCSW) did forward a few programs for approval, but NPC volleyed them back because they had not fulfilled the due procedures.
In the previous years, the Ministries used to already get the programs endorsed, complete the tender process and start implementation by now, that is the start of the sixth month of the fiscal year.
“Capital spending used to pick up substantially by this time and by the end of the seventh month, we even used to complete the budget´s mid-term review and start transferring funds to best performing programs from those recording dismal spending,” said another NPC official. “But such situation is unlikely this year,” he added.
Even if the Ministries rushed now, officials said they will need at least two months to complete the tender process, and can start implementing the projects in the third month only. Meaning, Ministries can commence development works only from the end of the eighth month this fiscal year.
“Mind that even this calculation is based on very optimistic scenario. Normally, that does not happen in our case,” said the source.
Officials attributed the Ministries´ slackness in getting approval of NPC to two reasons. Firstly, they said, the Ministries assigned to develop their own budget are themselves facing difficulty in finalizing their respective capital budget.
“Second is; there is already talks among parties over change of government and given that the oppositions have clearly said they will disown the present budget and will come up with new one, many officials do not feel the need to rush through to kick start the projects,” said the source.
Third factor that has set in gloom in the development front is; upcoming fresh elections of constituent assembly.
The government has vowed to hold elections by April 2013, and the president too has put his weight behind it. “Experiences show, development works never gather momentum during election year as a large number of officials get engaged in the election,” said the MoF official.
As the elections has been arranged for the 9th month of the fiscal year, officials do not believe the government will seriously concentrate on speeding up development spending for the last two months of the fiscal year that it will have after the elections.
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