Government spends less on development works

Nearly half the fiscal year has lapsed without any major development works in the country.
According to data from the finance minsitry, in the first five months - till December 15 - of this fiscal year 2008-09, the government spent very little on development works while administrative expenses multiplied by eight times as against development expenses during the period.
The government spent Rs 4.87 billion under capital expenditure - that is development works during the period, said the finance ministry. In contrast, the government spent Rs 32.33 billion under recurrent expenditure which is routine expenses and mainly administrative expenses that include expenses of foreign trips by ministers and their salaries.
The increase in administrative costs directly pushes consumer prices up. "Theoretically, the increase in administrative expenses means increase in consumer prices," said Dr Shanker Sharma, former vice-chairman of National Planning Commission (NPC), the government think-tank.
"Ideally, prices will go up but it also depends on last year's development works' expenses during the same period," he said adding that development spending for this fiscal year's five months was unsatisfactory.
The government has made tall promises of infrastructure development but till the half of the fiscal year, there has been no 'visible' development work by the Maoist-led government.
To top that, consumer price index is skyrocketing, as according to Nepal Rastra Bank (NRB) the year-on-year inflation was at 14.5 per cent in the first four months against 6.3 per cent in the same period the last fiscal. There seems no end in sight to the price hike as transporters have not yet reduced transportation charges though fuel price in the domestic market went down thrice since October.
Including the principal amount of Rs 6.32 billion as loan paid, the total government expenditure stands at Rs 43.53 billion - three per cent less than in the first five months of last fiscal year.
The government has released Rs 54.1 billion - Rs 40.7 billion for administrative expenses, Rs 6.77 billion for development works and Rs 7.16 billion for foreign loan repayment - during the period. The amount is 1.2 per cent less than allotted to the ministries for the same period last fiscal year, said the finance ministry.
The government is yet to spent around Rs 11 billion of the total released amount. "The government has not spent the total released amount of Rs 54.1 billion," said Shankar Prasad Adhikari, spokesperson at the finance ministry.