Dismal capital spending

The Himalayan Times

19 December 2019

Dismal capital spending

Nepal has been practicing the system of annual programme planning and budgeting for decades in more or less the same pattern. The Ministry of Finance (MoF) is the responsible authority of the government that formulates the yearly budget in close collaboration with the related line ministries and departments in line with the policy and guidelines prepared by the National Planning Commission (NPC). As outlined in the new constitution, the MoF has to present the annual budget by May 25 of each financial year to the Parliament for deliberation and approval. The government’s annual plan and budgets is approved once the overall deliberation on the programme and budget in the Parliament is completed.

Soon after the approval of the annual plan and budget, the MoF used to instruct other line ministries and departments to release the budget spending authority letter to their district-based offices. Now, the federal structure is in place for the last two years. All the provincial governments have to prepare their annual plan and budget accordingly. This system has further complicated the implementation of annual plan and budget especially the development projects, thus hampering the speedy process of development. Due to this cumbersome process, the level of capital budget spending continues to be dismal “Capital budget spending dismal 9.05 per cent in first five months” (THT, December 18, Page 1).

Unless the government enhances the capacity of bureaucrats to plan and execute the programmes and revisits its weak and slow bureaucratic process, timely and speedy implementation of development and infrastructure projects cannot be expected resulting in poor performance of the government. 

Rai Biren Bangdel

Maharajgunj