Sunday, December 25, 2016

Government sitting on a cash pile worth one-fifth of the total budget

The government is sitting on a cash pile worth one-fifth of the total budget which could build two Kathmandu-Tarai Fast Track Road projects.
Though the government coffer is bulging with cash due to its inability to spend, the government is planning to bring supplementary budget. As much as Rs 198 billion is lying idle in the central bank’s vault.
National Planning Commission (NPC) vice chair Min Bahadur Shrestha, however, said that the government needs an additional Rs 120 billion additional for programmes that Prime Minister Pushpa Kamal Dahal announced immediately after assuming office. "The government needs Rs 80 billion reconstruction grants for the earthquake victims as the PM has announced to increase the grants to Rs 300,000,” he said, adding that additional Rs 40 billion is needed for reconstruction of historical and heritage sites  as well as for other programs, including the deprived sector, announced by the PM Dahal. "But we have an option. Donors have some fund which they can lend us for that purpose."
Addressing the nation on September 9, Prime Minister Dahal made a raft of promises, including increasing housing grants for earthquake survivors by another Rs 100,000 to Rs 300,000.
The additional fund that the government needs will be generated without changing any tax rates as we have projected that revenue growth can match the budget deficit, Shrestha added. “The supplementary budget will not change any plans and programmes that the current budget has,” he emphasised.
Shrestha, however, said that NPC’s resource committee will sit and brainstorm on the resources and the final ceiling once the finance ministry asks it to prepare supplementary budget.
The finance ministry officials, however, claim that the supplementary budget is a political issue. “If the government decides, the ministry will have to bring the supplementary budget.”
But deputy prime minister and finance minister Krishna Bahadur Mahara has been repeatedly claiming that the government is bringing a supplementary budget to manage additional resources for the programmes that PM Dahal has announced.
On one hand the government is unable to spend the budget and on the other it is planning to bring supplementary budget, which has no rationale, said former chief advisor to the finance minister and senior economist Keshav Acharya. “Unless the government has mal-intention to dole out funds, there is no need to bring supplementary budget,” he opined, urging the government to spend the budget efficiently instead of bringing supplementary budget. “The government inefficiency will cost the country dear, as the country could not see any new job as the revenue has been sitting idle in the central bank vault."
The government led by K P Oli had brought Rs 1048.92 billion budget on May 28. However, the government has been able to spend only 20 per cent of the total budget by December 22 – almost five-and-a-half months in the fiscal year, according to the Financial Comptroller General’s Office (FCGO).
Of the total spent Rs 216.61 billion till December 22, only 8.06 per cent – or Rs 25.13 billion – is capital expenditure that is expected to create employment and help fuel long term economic and social development.

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