Government’s Rs 5 billion overdraft under scanner

The government has taken over Rs 5 billion overdraft in the last month of the fiscal year 2010-11.
The treasury had surplus of Rs 14.30 billion in the first 11 months, according to the central bank data but in the last one month, the government has spent all the surplus and also asked for the over draft from the central bank, the government's financial manager.
The central bank governor Dr Yubraj Khatiwada said that the government has taken overdraft but could not explain the surprising rise in government expenditure by the end of the fiscal year.
Tradition has it that the successive governments distribute budgets by the end of the fiscal year to their party cadres and constituencies.
According to the law, the government can take overdraft not exceeding total revenue mobilisation's five per cent of the last fiscal year. The government had mobilised Rs 179.90 billion revenue in the fiscal year 2009-10 exceeding the target of Rs 176.5 billion. In the fiscal year 2010-11, the government can take over draft of around Rs 8 billion. "However, it has to be transparent,' the Finance Ministry source, said, adding that the government has to justify the expenditure.The unexpected rise in the government expenditure and also only in the last month has raised eyebrows. "As recently the Finance Ministry has been involved in financial scams, the overdraft also should be thoroughly investigated," central bank board member Prof Dr Bishwhamber Pyakurel, said, adding that the high ranking bureaucracy should be held responsible.
Recently, the central bank had transferred Rs 1.84 billion to revenue headings in the directives of Finance Ministry. After the Public Accounts Committee's directives, the Finance Ministry has corrected its mistake.
According to the source, the government has not started any new project that needs massive investment in the last month of the fiscal year 2010-11 that could need a whopping Rs 20 billion.
The surplus of Rs 14.30 billion the government had till 11th month was enough for the outstanding expenditures, the source said, warning that the indiscipline on government expenditure will bring financial instability hurting the macroeconomic stability.