Govt’s capital spending shows improvement

Kathmandu, Oct 23: Government’s capital expenditure for October has significantly improved, according to the daily budgetary situation report of the Financial Comptroller General Office (FCGO).

The development expenditure witnessed a momentous growth this month and reached 7.20 per cent on October 22 from 2.61 per cent on September 29.

According to the treasury operation agency under the Ministry of Finance (MoF), the development expenditure was just 2.07 per cent on September 19. FCGO is responsible for overseeing all government expenditures against budget and tracking revenue collection.

It said that the sudden increment in the expenditure was the ‘Dashain effect’ as the government paid the money to the contractors.

Spokesperson of the FCGO Jagannath Devkota said that it was a regular phenomenon, and capital expenditure witnessed a sudden jump during Dashain every year.

However, the MoF maintained that the government’s expenditure capacity had also improved.

“Dashain is not the onlyreason for the increment in capital expenditure. Work at development projects is gradually picking speed. First two months of the fiscal year were consumed in preparatory works and the capital expenditure will increase in the next months,” said Sishir Kumar Dhungana, Revenue Secretary at the MoF.

According to him, a huge amount of grant money sent to the local and provincial governments is counted as recurrent expenditure but a significant part of it is used for developmental projects.

It means that the actual capital expenditure could be higher than 7.20 per cent as reported.

In addition to this, there is no proper reporting system for the newly formed local governments, which makes it difficult to track the exact expenditure made at the local units.

“The Treasury Single Account (TSA), a system built to report and track the budgetary activities of the government, is being implemented only to the provincial level, and the local governments have no reporting system,” said Dhungana.

He said that the government was improving the monitoring system with the introduction of digital technology for the real time monitoring and assessment of the development performance.

The MoF is also mulling to enhance the capacity of the governments at all levels regarding expenditure framework development and expenditure capacity improvement.

The FCGO said that the total budget expenditure till Monday was 15.20 per cent with recurrent expenditure 20.66 per cent and financing 1.67 per cent.

Similarly, the government collected Rs. 231.85 billion revenue, which is about 24.52 per cent of the annual target for the FY 2018/19.

Published in The Rising Nepal daily on 24 October 2018.