The revelation comes at a time when Finance Secretary Santa Raj Subedi has publicly stated that capital expenditure this year will surpass that of last fiscal year. [break]
While announcing the full budget for the fiscal year 2012/13 on April 9, Finance Minister Shankar Prasad Koirala had instructed all ministries to roll out Priority One development projects within 10 days of receiving the authority to make use of funds.
As per this instruction, executers of Priority One projects had to submit necessary documents at the National Planning Commission (NPC) within April 21.
But till the deadline, only 18 applications were filed at the NPC, a top government advisory body responsible for formulation of the country´s development plans and policies.
“Of these, six were approved, while the rest are in the process of being approved or lack required documents,” a high-ranking NPC official told Republica.
The NPC has received more applications since the expiry of the deadline as well, but the number, according to the official, is very low. “In total, they represent one-fourth to one-fifth of total projects that had to seek NPC approval,” the official said, citing unavailability of exact figures, but indicating capital spending may not increase in the last three months of the current fiscal year.
As the government is reeling under pressure of delayed project implementation process, the NPC has revealed another disappointing fact: most of the projects endorsed by the NPC since the launch of full budget do not have traits of giving a boost to development activities, like road and other construction projects that create mass employment.
“Budget approved for most of the projects so far are recurrent in nature, with spending focused on activities like administrative reforms of various bodies that report to the finance ministry,” the official said.
Earlier, the Asian Development Bank had also predicted that expenditure under public construction, such as building of roads, bridges, airports and other productive assets, which registered a negative growth of 16.6 percent in first half of this fiscal year, may not pick up as expected this year.
The main reason for low spending as cited by the multilateral donor agency was delay in launch of full budget. Other reasons were: late submission of budget release request for majority projects, delay in approval of annual expenditure programs, interruption in procurement process, and delay in payment for completed works and submission of accounting records, among others.
NPC officials also agree with the ADB´s views. “Projects need to file application for budget release within 15 days of receiving the authority to make use of funds. But they take months to do so. Against such backdrop, how can capital expenditure increase,” the NPC official wondered.
The government has allocated Rs 66.1 billion for capital spending for this fiscal year. The amount allocated for this fiscal year is only 16.3 percent of the total budget, as against 18.9 percent in the last fiscal year and 38.3 percent a year before that.
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