Saturday, October 29, 2011

Government unable to spend on development activities

The government has spent Rs 36.76 billion, some Rs 10 billion less than the disbursement.
As always, the government spending revealed that it is spending more on salaries and administrative expenses rather than on development. It has spent Rs 34.14 billion under recurrent expenditure, Rs 1.10 billion under capital expenditure and Rs 1.52 billion under Financing head by October 7, according to Finance Ministry. More recurrent expenditure means government has failed in creation of assets.
However, the ministry has disbursed Rs 46.94 billion. "It shows the government's inability in spending on development activities," said a source at the Finance Ministry.
"During the first three months, the government may not be able to spend according to its projection but the spending picks up during the second half of the fiscal year," he said, adding that by the end of the fiscal year the spending goes beyond the control making it unproductive.
However, a study has revealed that the government spending has not been productive so far.
Going by the sectoral spending, government has spent 75 per cent of the total spending in 10 sectors, education, local development, defence and police, repayment of loans, health, road and transport, and electricity in the last fiscal year.
Of the total spending, education sector received the highest 17.76 per cent followed by local development at 11.76 per cent and repayment of loans 10.94 per cent, senior trainer at the Revenue Administration Training Centre Basu Sharma said, adding that higher the government spending, more problems in the sectors.
"Taking cue from the last fiscal year's spending, the government has to work hard on making the spending more productive this fiscal year," he suggested.
However, Prime Minister's Economic Advisor Rameshwor Prasad Khanal opined that the spending on education is not unproductive. "But due to excessive politicisation of teachers' union, the quality could be questionable," the former finance minister said.
According to the new classification of Finance Statistics, the total appropriation for recurrent expenditure — for salaries and other expenses — is proposed to be Rs 266.61 billion which is 69.27 per cent of the total outlay for the current fiscal year.
Similarly, the budget for 2011-12 has allocated Rs 72.61 billion for capital expenditure which is 18.86 per cent of the total budget.
Under the Financing head, Rs 25.38 billion (6.6 per cent) has been allocated for loan and share investment, and Rs 20.3 billion (5.27 per cent) for repayment of principals.

The spending
Recurrent expenditure — Rs 34.14 billion
Capital expenditure — Rs 1.10 billion
Financing head — Rs 1.52 billion
(Source: Finance Ministry)

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