Finance ministry asks ministries not to seek budget for projects without proper preparations

KATHMANDU: The Ministry of Finance (MoF) on Monday asked the ministries concerned to take prudent measures while formulating the budget document to be forwarded to the MoF by March 28.

One of the major concerns expressed by the MoF was to adopt austerity measures and curtail unproductive expenses like those for purchase of vehicles while proposing the budget by the government agencies. This has been a matter of talk almost every year, however, there has been no success in this regard as the government bodies have failed to abide by fiscal discipline.

In the past years too, most government bodies would not include purchase of vehicles in their main budget documents. But later on they would try to get the amount approved under non-budget headings to purchase new vehicles. More often than not, such works are done by transferring money allocated under capital expenses, said an official of MoF under the condition of anonymity.

“As vehicle purchase is also considered under capital expenditure, the ministries have been found transfering the unused budget allocated for the project construction to purchase new vehicles,” the source said. “This also helps the government offices to enlarge the volume of capital expenditure.”

According to the 57th Report of the Office of Auditor General (OAG) based on the audit of 5,619 government offices in fiscal year 2018/19, the federal government spent Rs 5.86 billion on the purchase of vehicles. Though Rs 1.44 billion was originally allocated for the purchase of vehicles in the fiscal year, the real spending jumped by 406 percent. “After the allocated amount fell short of purchasing vehicles, the government transferred funds from other headings,” reads the report published in July 2020.

The government statistics show that the government makes out only around 80 percent of the capital expenses every year. This year too, the government has been able to spend only 22.58 percent in the first eight months out of the allocated Rs 352.91 billion in the capital expenditure.

The government statistics from the last five years shows that around 40 percent of the capital expenditure is usually made in the last month of every fiscal year. Most of the last-hour expenses are made for the purchase of vehicles and rampant construction works that result in poor quality work.

In Monday’s meeting, the MoF also asked the government ministries not to increase office expenses, estimate budget based on work progress and not to include in the lists those projects whose preliminary studies are yet to be done.

Last November, the government also enforced a separate standard on public expenditure targeting to check the unproductive expenses in government offices. “If the government shows strong commitment to implement provisions of the standard, the unrewarding expenses can be controlled to some extent,” the MoF official said.

Republica