Five metropolis announce Rs 37.68 billion budget

Five out of the six metropolitan cities in the country announced a budget of Rs 37.68 billion for the next fiscal year 2021-22, as Lalitpur failed to being the budget due to dispute.

The federal and provincial governments, according to the Constitutions and Fiscal Transfer Act have already brought the budget for the next fiscal year. According to the Fiscal Transfer Act, the local governments must bring the budget by Asar 10 (June 24), and most of the local governments, of the total 753 brought the budget by today.

Kathmandu metropolitan city has the largest budget of Rs 18.95 billion and Birgunj has the smallest one of Rs 3.55 billion for the next fiscal year, among the five that brought the budget today. The Biratnagar Metropolitan City has brought Rs 4.10 billion budget, of which it has allocated some 89 per cent to Rs 3.58 billion under capital heading.

Likewise, Pokhara has brought a budget of Rs 6.27 billion, of which it has allocated some 53 per cent for the capital expenditure. Bharatpur has brought a budget of Rs 4.81 billion for the next fiscal year. After the five years also, the local governments are largely dependent on grants from the federal governments and the provinces.

The Lalitpur metropolis has failed to bring budget due to internal dispute, though there is no opposition in the local level, there has been a lots of politics among them hindering the development activities. They have neither increased their capacity to spend capital budget nor the resource mobilisation to their full capacity. Rather they have been indulged in financial irregularities, and follow the bad practices of the federal government.

Almost all the Metropolitan cities have claimed to have primarily focused the budget in vaccination against coronavirus and other measures to combat the Covid-19 spread.

Government fails to meet revenue mobilisaion, spending targets

The government has failed to expedite the budget expenditure, and also failed to meet the revenue mobilisation target even in the five months.
Though the government has claimed to enhance the budget implementation capacity, it has been able to spend only 9.05 per cent of capital expenditure in the first five months of the current fiscal year, according to the Financial Comptroller General Office (FCGO).
According to the Financial Comptroller General Office, the government has managed to spend only Rs 37.49 billion or 9.05 per cent of the total Rs 408 billion budget allocated for capital expenditure for the current fiscal year 2019-20. Similarly, the government has till today spent Rs 246.92 billion – or 25.8 per cent – of the total Rs 957.10 billion recurrent budget. Recurrent expenditure is primarily the spending of the government on salaries of government staffers, social security and other expenses.
“Of the total budget of Rs 167.86 billion under Financing budget, the government has been able to spend Rs 14.17 billion or 8.44 per cent,” according to the FCGO. “The government’s total budget spending – including capital expenditure, financing and recurrent – during the five months of the current fiscal year stood at Rs 298.6 billion or 19.48 per cent of the total budget of Rs 1.53 trillion for the current fiscal year.”
The government – in the budget for the fiscal year 2019-20 – had announced that it would observe the current fiscal year as the year to implement budget. But the lethargic development expenditure hints at a slow pace of development activities also due to inefficient bureaucracy and age-old state machinery, despite the most powerful government in the history of Nepal. However, the Finance Ministry, as always, claimed to address the perennial problem of low capital spending through different measures. But the government measures – to accelerate the spending – have also failed to push for the capital expenditure.
The problem lies in project planning and execution, according to the experts, who blames the low budget spending to result of lack of proper project planning, weak policy execution capacity of the bureaucracy and weak project execution capacity of contractors. "The problem has become more serious as the bureaucracy has been highly politicised, and lacks meritocracy."
The Finance Ministry, however, claimed that budget implementation is dependent on cooperation and coordination among different ministries – especially the Physical Planning Ministry – and they have not been able to coordinate. The Finance Ministry also blames sluggish capital expenditure to the Public Procurement Act, which is under process to be reviewed to expedite the expenditure.

Government fails to meet tourism targets

The government has failed to meet major targets of the tourism sector in the 14th national plan.
According to Ministry of Culture, Tourism and Civil Aviation progress report, a total of 701,000 tourists visited Nepal in the fiscal year 2015-16. Based on the record, the government had – in the 14th periodic plan – set a target of bringing in 800,000 visitors in the fiscal year 2016-17, one million in 2017-18 and 1.2 million in the fiscal year 2018-19.
However, in the fiscal year 2016-17, only 753,002 tourists visited the country.
Likewise, the country received only 940,000 tourists in 2017-18 and 1.1 million visitors in 2018-19, according to a progress report – issued by the ministry today – that also revealed that the ministry also failed to meet foreign exchange earnings targets. “Based on the earnings of the fiscal year 2015-16 – that stood at $497 million – the periodic plan had set a target of earning $594 million in 2016-17, $800 million in 2017-18 and $1.08 billion in 2018-19.”
However, in the fiscal year 2016-17, the country received $510 million from the tourism sector, whereas in the fiscal year 2017-18 and in 2018-19, the country earned $620 million and $670 million, respectively, failing to meet the targets of all the three fiscal years.
Likewise, the ministry has also failed to meet the target – set in the 14th national plan – for duration of average stay per tourist. Based on the length of average stay in the fiscal year 2015-16 – tht was 12.4 days – the periodic plan had set a target of increasing the average stay per tourist to 13.5 days in the fiscal year 2016-17, 14 days in 2017-18 and 15 days in 2018-19. “Although the length of average stay reached 13.4 days in the fiscal year 2016-17, it dropped to 12.6 days in 2017-18 and slipped further to 12.4 days in the fiscal year 2018-19,” the report revealed.
The ministry has even failed to meet the target of per day expenses per tourist. According to the report, based on per day expenses per tourist in the fiscal year 2015-16 – that stood at $53 – the government had set a target of achieving per day expense of $55 per traveller in the fiscal year 2016-17, $58 in 2017-18 and $60 in 2018-19. “However, per day expense per tourist reached only $53 in the fiscal year 2016- 17, $54 in 2017-18 and dropped further to $44 in the fiscal year 2018-19.”
The drop in earnings has directedly affected the contribution of the tourism sector to the country’s gross domestic product (GDP), though it has not yet developed tourism satellite account to actually calculate the contribution of tourism sector to GDP.
In the fiscal year 2015-16, the tourism sector’s contribution to the GDP was 2.6 per cent, and based on this data, the government had set target to increase its contribution to the GDP to three per cent in the fiscal year 2016-17, 3.5 per cent in 2017-18 and four per cent in 2018-19. “However, in the fiscal year 2016-17, the tourism sector’s contribution to the GDP stood at 1.98 per cent, whereas in 2017-18 and 2018-19, the contribution went up to 2.05 per cent and 2.5 per cent, respectively, but without being able to meet the target,” the report revealed.