वित्तीय समानीकरण अनुदान चार किस्तामा हस्तान्तरण हुने

तल्लो सरकारले प्राप्त गर्ने गरी विनियोजन भएको वित्तीय समानीकरण अनुदान चार किस्तामा हस्तान्तरण गरिने भएको छ । महालेखा नियन्त्रक सुमनराज अर्यालले कोष तथा लेखा नियन्त्रक कार्यालयहरुलाई चालु आर्थिक वर्ष २०७९÷०८० को बजेट कार्यान्वयन मार्गदर्शन पठाउँदै यस्तो जानकारी गराएका हुन् ।

उनका अनुसार वित्तीय समानीकरण अनुदानको एक चौथाइले हुन आउने रकम सम्बन्धित सञ्चित कोषमा यस वर्ष २ भदौ, १ कात्तिक, २ माघ र २ वैशाख गरी चार किस्तामा हस्तान्तरण गरिने भएको छ । त्यस अगाडि वित्तीय समानीकरण अनुदानबाट खर्च भएको रकमको विवरण सम्बन्धित कोष तथा लेखा नियन्त्रण कार्यालयमा पठाउनु पर्छ । यसरी विवरण पठाउनु पर्ने मिति भने १ कात्तिक, १ माघ, १ वैशाख र २०८० को साउन मसान्तलाई तोकिएको छ ।

महालेखा नियन्त्रक अर्यालका अनुसार सम्बन्धित स्थानीय तहले वित्तयि समानीकरणबाट खर्च भएको विवरण आएपछि मात्र सम्बन्धित तहको सञ्चित कोषमा रकम हस्तान्तरण गर्नुपर्छ ।

सरकारले चालु आर्थिक वर्ष २०७९÷८० मा ७ प्रदेशका लागि ६१ अर्ब ४३ करोड र ७ सय ५३ स्थानीय तहका लागि २ खर्ब ४० अर्ब ८९ करोड रुपैयाँ विनियोजन गरेको छ । यस्तो अनुदान स्थानीय तह र प्रदेशले आफूले बनाएको बजेट तथा कार्यक्रम मार्फत विना शर्त खर्च गर्न सक्छन् ।

सशर्त अनुदानको एक तिहाइ रकम २ भदौमा हस्तान्तरण

सशर्त अनुदानतर्फको एक तिहाइ रकम भने सम्बन्धित कोष तथा लेखा नियन्त्रक कार्यालयले सम्बन्धित प्रदेश वा स्थानीय तहको सञ्चित कोषमा २ भदौमा हस्तान्तरण गर्नुपर्ने भएको छ ।

वैदेशिक स्रोत समावेश भएको बजेटमा भने स्रोत फुकुवा चाहिने कार्यालयले उल्लेख गरेको छ । यस वर्ष सरकारले प्रदेशमा ५७ अर्ब १७ करोड र स्थानीय तहमा १ खर्ब ८३ अर्ब ७२ करोड रुपैयाँ गरी कुल २ खर्ब ४० अर्ब ८९ करोड रुपैयाँ सशर्त अनुदानमा छुट्याएको छ ।

समपूरक र विशेष अनुदान भने सरकारको स्वीकृत गरेको कार्यविधि बमोजिम प्रदेश र स्थानीय तहमा हस्तान्तरण हुने महालेखा नियन्त्रक कार्यालयले जनाएको छ । यस वर्ष प्रदेशमा ६ अर्ब ३० करोड र स्थानीय तहमा ७ अर्ब २७ करोड रुपैयाँ समपूरक अनुदान विनियोजन भएको छ । विशेष अनुदानका लागि प्रदेशमा ४ अर्ब ५६ करोड र स्थानीय तहमा ९ अर्ब १४ करोड रुपैयाँ विनियोजन भएको छ ।

खर्च नभएको रकम संघीय सञ्चित कोषमा फिर्ता गर्नुपर्ने

मार्गदर्शन अनुसार सशर्त, समपूरक र विशेष अनुदानको रकम आर्थिक वर्ष भित्र खर्च नभई बचत भएमा त्यस्तो रकम सोही आव भित्र संघीय सञ्चित कोषमा दाखिला गरिसक्नु पर्छ ।

सोही आवमा फिर्ता गर्न सम्भव नभए आव सुरु भएको १५ दिन भित्र फिर्ता गरिसक्नु पर्छ । त्यसरी फिर्ता नभएको अवस्थामा भने वित्तीय समानीकरणबाट फिर्ता नभएको रकम कट्टी गरेर बाँकी रकम मात्र सम्बन्धित प्रदेश र स्थानीय तहको खातामा हस्तान्तरण गरिने भएको छ ।

Government, World Bank concludes portfolio performance review

The joint portfolio review of the government and the World Bank concluded yesterday covering 27 ongoing World Bank-financed projects with a net commitment of $3.27 billion.

The concluding meeting was chaired by finance secretary Madhu Kumar Marasini and World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos in the presence of finance minister Janardan Sharma and vice chair of National Planning Commission (NPC) Dr Biswo Poudel.

Highlighting the perspective of general citizens on government projects, finance minister Sharma instructed the completion of projects within the stipulated time while maintaining quality. He also urged to utilize scientific tools and techniques for project implementation.

The concluding meeting was held at the Finance Ministry with a hybrid model consisting of in-person as well as virtual presence considering the health protocol. The meeting discussed on issues that remain unresolved at the line ministry level and of strategic importance which required high level attention.

The meeting also discussed the impacts of Covid-19 on project implementation that had led to delays. In addition, other generic implementation issues like weak capacity in project management especially at provincial and local levels, frequent turnover of civil servants, procurement delays, safeguard related issues, and slow disbursement were discussed.

Focusing on coordinated and joint efforts for delivering development impacts, finance secretary Marasini requested the participants to build a common understanding to improve the overall implementation environment of the projects.

The annual stocktaking exercise is organised to review the performance of ongoing projects, review implementation challenges, and identify measures to resolve such challenges collaboratively. Sectoral meetings that were organised with the relevant line ministries under the chair of respective secretaries discussed in depth key results achieved under each project, underlying issues and challenges, and agreed actions to resolve such issues.

The World Bank’s current project portfolio in Nepal covers energy, transport, earthquake housing reconstruction, education, health, social protection, environment, urban development, water and irrigation, agriculture and livestock, and public financial management sectors.

"While the Covid-19 pandemic has impacted the pace of development works in Nepal, we are encouraged by the government’s efforts to strengthen implementation and deliver results amid the pandemic’s challenges," World Bank country director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos. "The pandemic has also provided an opportunity to recalibrate our approach to improve project implementation and capital spending, whereby our projects deliver timely results for the benefit of Nepalis."

The portfolio review was attended by secretaries, joint secretaries, and director generals from related ministries and departments, National Planning Commission (NPC), Financial Comptroller General Office (FCGO), and representatives from the World Bank and project teams.

Can Poudel revive economy?

 Bishnu Prasad Paudel has been appointed finance minister for the second time.

First time, when he was finance minister, the country was going through undeclared economic blockade imposed by India – after the declaration of Constitution – also in the immediate aftermath of devastating earthquakes that shook the country. And the economy was in tatters. 

But this time, the whole world is facing crisis due to coronavirus. Nepal obviously has been hit hard – despite the earlier finance minister Dr Yub Raj Khatiwada’s unacceptance – and the economy is again in tatters, this time the worst compared to in 2015. The economy is on the brink of recession amid a deadly Covid-19 pandemic.

The then finance minister Dr Khatiwada brought the budget for the current fiscal year – during the lockdown time that was imposed on March 24 to contain the spread of coronavirus till 120 days – as if the country is going through normal times. However, neither the last fiscal year’s budget could be implemented nor the current fiscal year’s budget will be implemented. And at this time, Prime Minister KP Sharma Oli has appointed Poudel as the finance minister on October 14. Can Poudel dare to revive the economy?

“Of course, Poudel can revive the economy, if he dares to come out of party polity, and think of the country,” according to senior economist Dr Chanrdmani Adhikari. “Extreme remedy is necessary to cure extreme disease,” he said, adding that the conventional remedy does not work on newer challenges. “Can Poudel dare to revive the economy depends on how accurately he diagnoses the disease?”

The government is short of resources, to fight the pandemic, he said, adding that maintaining the financial balance should be his the top priority as revenue is tanking due to a slump in economic activities amid the outbreak of coronavirus and subsequent containment measures imposed by the government. 

According to the Financial Comptroller General Office (FCGO), the government has been able to mobilise Rs 172.37 billion in revenue till October 17. But, during the period, the government spent Rs 182.85 billion in recurrent expenses – mainly the salaries and administrative cost – putting pressure on government treasury. The revenue mobilisation against the gross domestic product (GDP) in the last fiscal year declined after witnessing an ascending trend for 10 years, according to the Finance Ministry. Revenue to GDP ratio stood at 21.07 per cent, down from 23.99 per cent of GDP in the previous fiscal year.

Due to resources constraints Poudel’s predecessor Dr Khatiwada could not bring any stimulus package – through the budget for the current fiscal year – to rescue the economy, neither the central bank – though the Monetary Policy – rescue the private sector. The private sector – battered by the coronavirus and containment measures including lockdowns – want a relief and stimulus package from the government. Those who have lost their livelihoods and incomes are asking the government to support them. The government has neither been supportive to the private sector nor create employment and demand in the market. Will Poudel dare to create demand in the market, and help create employment?

Not only the revenue is shrinking but also external loan and grant due to global pandemic that has bleed the global economy red. The development partners are also facing economic crises, and it is less likely for them to come to Nepal’s rescue, though some of the multilateral agencies, including the World Bank (WB) and Asian Development Bank (ADB), have already helped Nepal. “Thus the government is borrowing from the domestic market – domestic borrowing – early in the current fiscal year to pay the salaries to the government employees, which is very unlikely,” Adhikari said, adding that raising domestic debt has its own limits. “There is a ceiling on domestic borrowing, and the government cannot collect more than Rs 225 billion in domestic debt.”

High domestic borrowing means higher interest rates, and crowding out private sector investment that is a must to give a push to the dipping economy.

Apart from the coronavirus crisis Poudel also faces the pressure from his own party to be populist by distributing the resources to the politically motivates programmes like his predecessor Dr Khatiwada. “Poudel has to find a balance between his party’s populist temptation, and medium as well as long-term economic development aspiration of the country,” Dr Adhikari said. “Can he dare to go against his party’s populist temptation?”

The 120-day lockdown and prohibitory orders have already resulted in massive closure of businesses with widespread job losses making millions jobless. “The four-month-long lockdown imposed to contain the spread of Covid-19 forced 61 per cent of businesses to close down completely, causing a dire effect on the economy by rendering tens of thousands of people jobless and disrupting the production and supply chain,” according to a survey released by the central bank in August.

The survey also revealed that 22.5 per cent of employees were laid off by businesses of the manufacturing and service sectors, and two-thirds of the laid-off employees were either working on a contract basis or were hired temporarily. Likewise, Sectors like tourism, aviation; micro, small and medium enterprises; and the transport sector suffered badly. Informal sector jobs have also been lost amid reduced economic activities.

On top of these economic problems, Poudel also has to face the humanitarian crisis. He has to find ways to prevent the country from facing an unprecedented humanitarian crisis. The crisis could be fought, if Poudel dare to cut down unnecessary expenses as prescribed by Public Expenditure Review Commission led by Dilli Raj Khanal. “The Commission recommended a number of measures to reduce administrative expenditure including shutting down various government offices,” Dr Adhikari said, adding that the government has not taken any step towards cutting down the unnecessary expenses. “The government, instead of cutting unnecessary expenses, is completely indulged in corruption in the time of coronavirus crisis.”

Could the newly appointed finance minister Poudel dare to reduce facilities enjoyed by the lawmakers and those holding constitutional posts, suspending the lawmaker-led Local Infrastructure Development Partnership Programme and controlling corruption.

In extraordinary situations, extraordinary measures are necessary, and Poudel needs to dare it.

Government fails to meet revenue mobilisation target of first quarter

 The government has failed to meet the revenue mobilisation target of the first quarter due to slower economy because of the coronavirus impact.

The government has been able to mobilise only Rs 172.36 billion revenue – some 17 per cent of the targeted amount – in the first quarter of the current fiscal year that ended today, though the revenue amount is close to the first quarter of the last fiscal year. In the first quarter of the last fiscal year, the government had been able to mibilise Rs 190 billion in revenue, according to the Financial Comptroller General Office (FCGO). “The revenue government earned during mid-July to mid-October – the first quarter of the current fiscal year – is just Rs 18 billion less than the last year’s first quarter’s realisation of Rs 190 billion.”

The government has revised the target of revenue mobilisation down to Rs 1.01 trillion for the current fiscal year 2020-21, down from Rs 1.11 trillion of the last fiscal year due to possible impact of coronavirus on economy. 

The businesses were completely closed for four months from March 24 hurting the economy. However, after the government itself felt the heat and came short for even to pay salary to the government employees, the government was forced to end the lockdown. The government requested the private sector to resume business activities by strictly following the health and safety protocols. However, the rising coronavirus cases failed the government assumption of economic revival as expected. The closure of industries and businesses made more than 569,653 people lose their jobs, though the then finance minister Dr Yub Raj Khatiwada had been claiming of not very big impact on economy. 

According to the FCGO, the government has spent some 4.26 per cent to Rs 15 billion capital expenditure earmarked for the first quarter. Generally, the first quarter witnesses very less capital expenditure in any fiscal year.

The government is under heavy financial pressure as the revenue mobilisation has been tightly matching the recurrent expenditure and capital expenditure. “Unlike past fiscal years, the government is borrowing from the domestic market from the first quarter,” a Finance Ministry source informed, adding that the mismatch will be balanced by the domestic borrowing.

Government goes bankrupt

Though, incumbent finance minister Dr Yuba Raj Khatiwada – issuing a whitepaper two years ago intending to tarnish the earlier government’s image – claimed that the government coffer was empty and the economic indicators were worse, he has finally succeeded to empty the treasury and worsen the economic indicators further, by himself.
As Khatiwada presented his third budget in a row – the only second lucky finance minister to do so after 1990 – the government has no money to pay salary to its employees because of its failure in mobilising the revenue. “The government is having a cash crunch to manage immediate liabilities due to a shortage in revenue mobilisation also because of nationwide lockdown imposed since last 82 days,” a senior government employee at the Finance Ministry confirmed.
The government has imposed nationwide lockdown since March 24 that has stagnated all the businesses activities across the country. The government needs around Rs 40 billion – every month – to meet mandatory liabilities like regular salary to its employees, but it has been able to mobilise around Rs 15 billion from the major source – customs offices – only in a month, according to the Finance Ministry official. The government coffer has only around Rs 50 billion at present, which is enough for the salary of next month, which is the last month of the current fiscal year,” he said, adding that from the first month of the next fiscal year, the government will not be able to pay regular salaries to its staff also due to Supreme Court move to restrict the government to collect tax during the lockdown. “The Supreme Court has issued interim order to the government not to push the private sector for tax during the lockdown and allow them 30 days after the lockdown, is fully relaxed, to clear tax dues.”
The Finance Ministry has, however, moved to the Supreme Court to vacate the interim order as it will fail to pay salary, if it is not allowed to mobilise tax this month. The government imposed a nationwide lockdown on March 24, closing industries, businesses, suspending ground and air travel, and has asked to pay tax within June 21. Some entrepreneurs went to Apex Court asking an interim order against the Inland Revenue Department (IRD) – under the Finance Ministry – diktat.
According to the Financial Comptroller General’s Office (FCGO), the revenue mobilisation as of today stands at only 58 per cent of the target that is Rs 1.11 billion. Although the government keeps high hopes on gathering a significant amount in taxes in the final month of the fiscal year, it is likely to face a huge shortfall due to Supreme Court’s interim order this time.
The government has an option to transfer the money from various funds into its treasury to meet its necessary liabilities including salary for government workers, pensions for retired employees, social security allowance for the elderly and disadvantaged groups, and payments to be made for internal and external loans.
Citing the adverse situation in revenue mobilisation, the government expects to receive Rs 299.50 billion from external debt and Rs 225 billion from domestic borrowing mainly to meet the recurrent expenditure. But the government capacity to absorb the external debt is limited due to structural and procedural problems, whereas more domestic borrowing will squeeze private sector’s capacity to borrow hurting the economic growth. “Likewise, borrowing to pay salary to the government employees will also send a wrong message as the private sector is also not able to pay salary to its employees,” the official said, adding that more domestic borrowing – for administrative purposes – could also result in an exorbitant rise in market prices.
While presenting his third budget on May 28, Khatiwada claimed that the government will be able to mobilise Rs 827 billion revenue, contain inflation under 7 per cent, and achieve 7 per cent economic growth.

Trade deficit drops but government struggles to meet revenue target

Though, the trade deficit has decreased – as it has wished – it failed to meet the revenue mobilisation putting the Finance Ministry under pressure to manage resources.
The Department of Customs data reveals that the trade deficit – in the first five months of the current fiscal year – has widened by only 6.3 per cent to Rs 533.64 billion as the export jumped by around 27 per cent to Rs 47.61 billion, whereas imports fell by 4 per cent to Rs 581.25 billion. “Processed soybean oil and palm oil have knocked juice, jam and footwear off the list of largest exports to India, pushing the exports up,” the department data reveals. However, Nepal does not produce any soybean or palm oil, and traders import crude oils from Brazil, Argentina, Ukraine, Indonesia, Australia and other countries which they process and export to India without paying a penny in tariffs.
Under the South Asian Free Trade Area (SAFTA) agreement, zero tariffs are levied on goods exported from underdeveloped countries like Nepal, and Nepali traders have been importing crude palm oil from third countries by paying minimum customs duty, and then exporting the finished product to India free of customs duty.
The government, but, failed to meet revenue mobilisation target also due to low imports as the revenue from imported goods shrank by Rs 6 billion between mid-July and mid-December. The department's data reveals that the government collected import taxes worth Rs 150.81 billion, down by Rs 5.52 billion from Rs 156.33 billion collected during the same period last year.
The government has set a target of collecting 45 per cent of the total targeted tax revenue through tariff on imported goods. In the first five months, customs offices collected only 34 per cent of the annual target to collect Rs 447.59 billion from import tariffs. “Out of the total import taxes, the government has targeted to collect Rs 196.62 billion in value added tax (VAT), Rs 187.30 billion in customs and Rs 63.67 billion in excise imposed on the imported goods. But according to Financial Comptroller General Office (FCGO) data, the overall tax mobilisation – as of December – stood at a mere 31.24 per cent of the targeted tax revenue of more than Rs 1 trillion.
In the last fiscal year 2018-19, the government had set revenue collection target at Rs 945 billion, which was later revised to Rs 860 billion. However, the government even missed the revised target by almost Rs 25 billion, according to the FCGO data.
And this fiscal year too, finance minister will fail to meet revenue mobilisation target also due to his own policy to discourage imports of luxury items and automobiles.

Two-third majority government wastes yet another year, fails to boost economy

Despite being historically powerful and two-third majority government, KP Sharma Oil government wasted yet another year as economy failed to gather steam.
The past 12 months of the year 2019 have neither witnessed a remarkable achievement in economy nor in governance, despite the government has set an ambitious target of 8.5 per cent economic growth for the fiscal year 2019-20. Economic indicators are not so encouraging, though this is the second year of the incumbent government that has been making tall claims – of making Prosperous Nepal,  Happy Nepali – ever since it came to power.
First thing first, the budget implementation – as always – remains lethargic, policy implementation continued to be fragile and business environment not so impressive, and the most dangerous part is private sector is fast losing confidence.
Finance Minister Dr Yuba Raj Khatiwada had defended the slow economic growth in the last fiscal year 2018-19 citing that the government throughout the year was focused on developing regulatory framework in line with federalism and the needs of the business community. He has to, however, find another excuse for the current fiscal year for not being able to meet the ambitious growth target of 8.5 per cent, as the economy seems not moving in the right direction to achieve his own target despite his tall claims of focusing on effective budget implementation, development activities and economic growth.
As always, the government failed to accelerate capital budget spending, which will directly hit the capital formation in the coming years too. According to Financial Comptroller General Office (FCGO), the government has, as of today, been able to spend only a mere 10.24 per cent – of Rs 408 billion capital budget –allocated for the current fiscal year 2019-20.
Likewise, the national pride projects including Gautam Buddha International Airport, Upper Tamakoshi Hydropower Project and Melamchi Drinking Water Supply Project expected to be completed within 2019 are yet to be completed. However, it also offers a hope for the next year 2020 as they are nearing completion.
The lifeline of Nepali economy, remittance has also witnessed a slowdown – in the five months of the current fiscal year – as it has dropped compared to the remittance inflow in the last fiscal year. Though, the number of outbound migration of the Nepali workers increased, remittance witnessed a fall by 2.3 per cent to Rs 304.97 billion until mid-November against an increase of 36.4 per cent in the same period of the last fiscal year, according to the central bank data. However, Nepal is still one of the highest remittance recipients in the world with remittance inflow comprising almost equal to 30 per cent of GDP.
Though, the government claimed to have brought some reforms, Global Competitive Report 2019 published by the World Economic Forum in October has ranked Nepal 108th out of 141 economies as Nepal is the worst performer in South Asia in terms of competitiveness.
Likewise, the share market has also not been performing well since Oli appointed Dr Yuba Raj Khatiwada as the finance minister. The share market failed to boost the investors' confidence as the market is under bearish trend since last two years.
Yet another mainstay of Nepali economy, the tourism sector has also not been performing well. The tourist arrivals, though has seen improvement, the count could not surpass last year, which will hit the Visit Nepal Year 2020 also.
Despite gloomy picture, there are some ray of hopes in the late months of 2019 as the trade deficit narrowed – though it seems not sustainable – and Balance of Payments (BoP) position remained in surplus of Rs 27.29 billion till mid-November against a deficit of Rs 57.33 billion in the same period of the last fiscal year. “The total trade deficit narrowed down by 8.9 per cent to Rs 414.02 billion in the four months of current fiscal year 2019-20, though such deficit had expanded 37.8 per cent in the same period of last fiscal year,” according to the central bank data that reveals that merchandise exports increased by 23.9 per cent to Rs 36.28 billion compared to an increase of 11 per cent a year ago, while merchandise imports decreased by 6.9 per cent to Rs 450.3 billion against an increase of 35.8 per cent in the same period of the last fiscal year.
The government has claimed that it introduced many policies to improve the business environment in the country but investors are still suspicious over effective implementation of the policies apart from a number of contradictory policies on tax issues that have discouraged the business community. Though, Nepal improved its ranking by six positions to the 94th position – out of 190 economies across the world – in Doing Business Report 2020 against 110th position in 2019, the private sector is losing confidence due to government’s anti-private sector move. 
Despite the political stability – that the private sector craved for in last 3 decades – the two-third majority government is creating fear in the business community instead of instilling confidence by also using government machinery to seek ransom from private sector.
 The private sector is more hesitant and losing confidence gradually due to various restrictive policies of the government that have provisions of imprisonment even for minor mistakes, apart from ransom seeking attitude, one of the prominent business person said, adding that despite stable government and reliable supply of electricity, the business community has hold all the investment plans recently.
Likewise, the government has also failed to crack whip on inflation as the consumer price inflation (CPI) stood at 5.76 per cent in mid-November compared to 4.15 per cent during the same period in the last fiscal year.
The economy, however, grew by 7.1 per cent in the last fiscal year, the third continuous year that the economy has expanded by over 6 per cent. And the economy is poised to expand by around 6 per cent in the current fiscal year, according to projections of development partners including World Bank (WB), Asian Development Bank (ADB) and the International Monetary Fund (IMF).
Despite government’s effort to bring in notable amount of foreign investment, in the fiscal year 2018-19, Nepal received Rs 13.07 billion in FDI against the pledged Rs 24.99 billion. Likewise, as against FDI commitment of Rs 55.73 billion in the fiscal year 2017-18, Nepal was able to see only Rs 17.51 billion in actual investment. Nepal, however, received investment commitments worth Rs 10.76 billion in the first three months of the current fiscal year, up from Rs 4.8 billion during the same period last year.

Department of Revenue Investigation moves to court against Varun Beverages

The Department of Revenue Investigation (DRI) has today filed a case against Varun Beverages Nepal charging the multinational company of evading tax of Rs 649.60 million through the use of fake value added tax (VAT) invoices.
Filing a case at Kathmandu District Court today against seven former and present directors of the multinational company, the department has sought around Rs 1.95 billion in principal and penalties. “The department is seeking to recover Rs 649.60 million in principal, along with a fine that is double the principal amount or nearly Rs 1.30 billion, from the company,” the department informed, adding that it has also urged the court to consider up to three year jail term, according to the a provision in the Revenue Leakage Investigation and Control Act-1995. “The department filed a case against Amit Gupta, Ravikanta Jaipuriya, Rohit Kohli, Prabin Kumar Agrawal, Vinod Kumar Singh and Ashok Kumar and the company itself.”
The multinational company Varun Beverages has been in the business of carbonated and non-carbonated beverage products including Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon and Mountain Dew in Nepal. The company operates plants in Kathmandu and Nawalparasi districts. Last year, Varun Beverages invested Rs 2.39 billion in a second production plant at Ramgram-10 of Nawalparasi district. In the fiscal year 2017-18, the multinational company earned a net profit of Rs 4.83 billion. It has been operating in six countries including Nepal, India and China.
The department has investigated the multinational company for four months on a tip-off that the company was engaged in VAT bill scam amounting to millions. According to the section 4 (A) and (B) of Revenue Leakage Investigation and Control Act-1995, the department has already seized the bank guarantee of Rs 1.60 billion of Varun Beverages before the case was filed at the Kathmandu District Court.
During the investigation, the department discovered that the company had been issuing fake VAT bills while conducting business with its business partners between fiscal years 2013-14 and 2018-19, the department claimed, suspecting that the multinational company has evaded VAT amount worth Rs 253.40 million and Rs 396.15 million in income tax and dividend during the five years. “The Rs 1.95 billion that the department is trying to recover is by far the largest amount in terms of VAT bill scam.”
Lately, the government has been failing to meet the VAT target since the beginning of the current fiscal year putting the Finance Minister under tremendous pressure. The department – under the Finance Ministry – has been active in investigation of fake VAT bills as one of the key resources of the government earnings, VAT has been witnessing regular fall. The VAT and income tax shortfall in the first four months of the current fiscal year 2019-20 stood at around Rs 21 billion, according to the Financial Comptroller General’s Office (FCGO). “The government – during the first four months between mid-July and mid-November – has collected Rs 104 billion revenue, which is 83.2 per cent of the target.”
Of the annual revenue mobilisation target of Rs 506 billion for the current fiscal year, the target for the first four months was Rs 125 billion but the government witnessed a shortfall of around Rs 21 billion.
With the government getting tough with tax evaders, the department has intensified its drive against defrauding firms. Thus, the department has registered 28 cases against 76 individuals related to VAT and income tax scams and sought recovery of Rs 10.29 billion in principal and fines in the first four months of the current fiscal year. Likewise, the department has filed cases against 515 individuals on VAT and income tax scams – till date – and sought nearly Rs 37 billion in principal and penalties, along with three-year imprisonment of the accused.
Meanwhile, the government is also in the process of amending the Revenue Leakage Investigation and Control Act-1995 to curb tax evasion and money laundering. The amended act has already been passed by the lower house of parliament.

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.

Some 21 local bodies yet to present budget for current fiscal year

Against repeated direction – by Ministry of Federal Affairs and General Administration and Financial Comptroller General Office – to present their budget on time, some 21 local governments are yet to present their budget for the current fiscal year 2019-20.
Despite repeatedly circular to the local governments to present their budget, the 21 local bodies – 2 from Province 1, 8 from Province 2, 4 from Province 3, 2 from Province 5 and 5 from Karnali Province mostly village municipalities and few municipalities – have failed to present their budget even after more than four-and-a-half months of the current fiscal year. Apart from village municipalities the four municipalities – 2 from Kapilvastu and 1 each from Sarlahi district and Udayapur district – have failed to present their budget so far.
According to the Intergovernmental Fiscal Management Act, the local bodies must to present their budget by Asadh 25 (July 10). But according to the Financial Comptroller General Office (FCGO)’s latest report, some 21 local bodies have still not presented their fiscal policy. Most of the local bodies are facing internal conflicts in budget allocation apart from lack of trained manpower to formulate the budget.
As the local bodies have failed to present their budget, they have also not been able to receive the grant assistance from the federal government.
However, according to the Ministry of Federal Affairs and General Administration also, only 732 out of 753 local governments have presented their budget so far. The local governments cannot spend or mobilise revenue without presenting budget, which means those 21 local bodies do not have any money to spend for this fiscal year, though they have been spending and mobilising revenue on thoe own, which is not only illegal but also unconstitutional. “Thus, the 21 local bodies are utilising their budgetary expenses from the first tranche of the budget, which is automatically sent to their respective accounts after the fiscal year begins,” the ministry confirmed, adding that the heads of village municipalities and municipalities are still negotiating with Ministry of Federal Affairs and General Administration and Financial Comptroller General Office for a possible way out. “They are using their budget under ‘extraordinary’ or ‘emergency’ title only.”
However, inability to present the budget, will not be pardoned as the FCGO will put such budgetary expenses under the heading of arrears, according to the FCGO.

Government spends only 6 per cent of capital expenditure

The government failed to expedite the capital budget expenditure and spent only 6.05 per cent of the total budget – in the first four months of the current fiscal year – despite need of huge cost for the federal structure to sustain.
Of the total Rs 408 billion capital budget for the current fiscal year, the government has spent only Rs 24.71 billion from mid-July to mid-November, according to Financial Comptroller General Office (FCGO).
The government bodies are usually busy devising plans and preparing for developing procurement procedures during the initial days of every fiscal year but decreasing spending capacity of the government, age-old bureaucracy and corrupt governance contributed to the low spending of the capital budget.
In the last fiscal year too, the government failed to spend, as it was able to spend 73.4 per cent of the total development budget. “The low spending in the first trimester will put the government under tremendous pressure this fiscal year too,” according to an official in the Finance Ministry. The last minute spending in the development works means only to meet the spending target but the quality of the work is always under question.
Last year, the government had spent only 35 per cent of the total capital budget of Rs 313.99 billion, while 16.4 per cent of the budget was spent in the last one week alone raising the question of the quality of the work.
The 56th annual report of the FCGO also showed that the government had spent 40 per cent of the total capital budget of Rs 108 billion in the last month of the fiscal year 2017-18. The last month and last week spending is, though financial crime, the two-third majority powerful and stable government of Prime Minister KP Sharma Oli has failed to boost the spending let alone meet the revenue mobilisation target.
The Constitution mandates a government to bring the budget before one-and-a-half months in advance, which will help approve the budget from the parliament before the fiscal year begins. But the constitutional provision also failed to expedite the capital expenditure.
Though, the finance minister Dr Yuba Raj Khatiwada has been defending the worst performance saying that the government’s focus has been diverted to the other actions, the failure is also attributed to the lack of preparations of the projects before budgeting. The government has brought Rs 1.53 trillion budget for the current fiscal year 2019-20. “Of the total Rs 957 billion recurrent budget, the government has spent 20.57 per cent in the four months of the current fiscal year,” according to the FCGO.

Government revises economic growth target down

The government has revised economic growth target down by 1.49 percentage points to 7.01 per cent from its ambitious target of 8.5 per cent for the current fiscal year, according to a report published by the Finance Ministry.
Though the government has set 8.5 per cent growth target for the current fiscal year through the budget for fiscal year 2019-20, the slowdown in the economy has forced the Finance Ministry to revisit the growth target to downwards.
The World Bank (WB) – in its report ‘South Asia Economic Focus’ published last month – projected the economy to grow by 6.5 per cent, whereas Asian Development Bank (ADB) has projected the growth rate at 6.3 per cent. The International Monetary Fund (IMF) has also projected the economic growth rate to be around 6.5 per cent in the current fiscal year.
Thus, the revised growth rate, however, is still higher than the estimations made by international development partners including WB, ADB and IMF.
The public spending – which is not better than last fiscal year – not so promising agriculture production – that contributed to around one third to the economy – deceasing remittance inflow coupled with government’s inability to mobilise revenue are some of the reasons that economy is slowing down. “On top of the economic slowdown, the private sector is fast losing the confidence on the stable and two-third majority government in the history of Nepal,” according to an investor, who said that despite increased investment in infrastructure, capital expenditure is far below the level needed to achieve the ambitious growth target.
According to Financial Comptroller General Office (FCGO), the government has been able to spend only Rs 18.36 billion – in the first three months of the fiscal year – which is just 4.41 per cent of Rs 408 billion allocated for the capital expenditure, for the current fiscal year.
In the last fiscal year 2018-19, economy was expanded by 7 per cent due to better agriculture output, especially better paddy production. “Agriculture production contributes to 27 per cent to the country's GDP,” according to Economic Survey 2018-19, when the economy posted a growth of 6.81 per cent.
“Likewise, the economy grew by 6.3 per cent in the fiscal year 2017-18,” according to the Central Bureau of Statistics (CBS) that revealed that economy grew by 7.74 per cent in the fiscal year 2016-17, largely due to good harvest based on better moonsoon and reconstruction drive after the devastating earthquake that has pulled the economy down to around 1 per cent.

Government fails to earn and spend

As usual, the government has not been able to spend the capital budget, despite being the historically strong and two-third majority. The government has neither been able to mobilise the revenue unlike during the uncertain fiscal years, which sometimes saw two governments in one fiscal year.
Despite the government’s repeated commitment to expedite capital expenditure, the government has been able to spend only 4.41 per cent of the capital expenditure in the first quarter of the current fiscal year 2019-20, according to the Financial Comptroller General Office (FCGO). “The government has been able to spend only Rs 18.37 billion in capital budget, out of the total Rs 408 billion capital expenditure for the current fiscal year,” the FCGO data reveals, adding that the allocation for the capital expenditure accounts for 26.6 per cent of the total budget of Rs 1,532.97 billion for the current fiscal year 2019-20. “The government has been able to spend 16.38 per cent of recurrent budget in the first quarter.”
The government spent Rs 156.73 billion – out of the Rs 957.1 billion recurrent expenditure for the current fiscal year – in the first quarter. “The aggregate spending of the budget including recurrent, capital and financing stands at 11.61 per cent,” according to the data.
The incumbent government has been vowing to boost the capital spending in the current fiscal year by introducing various measures, though the underspending of the capital budget has been a perennial problem. The government also failed to spend capital budget compared to the same period of the last fiscal year 2018-19 too. According to the FCGO, the government had spent 7.2 per cent to Rs 22.6 billion of the capital budget that stood at Rs 313.99 billion in the last fiscal year. “The government had been able to spend only 75 per cent of the total capital budget in the last fiscal year.”
The focused mainly on drafting and revising laws as required after the constitution promulgation, apart from setting up institutions in the federal set up, confusion over jurisdiction of projects, and delay in staff adjustment have been attributed to the poor capital expenditure.
But the finance minister Dr Yuba Raj Khatiwada said that the capital expenditure tends to remain weak in the first quarter as spending units draw contract and bidding plans during this period. “But the government will boost the expenditure,” he said, pleadging to meet the capital spending target.
The large chunk of the expenditures will be made in the second half of the fiscal year, raising the question about the quality of the spending.
Likewise, the government has also failed to mobilise revenue. “The government has been able to mobilise 16.43 per cent to Rs 182 billion revenue in the first quarter of the current fiscal year,” the FCGO data revealed, adding that the government has targeted to mobilise Rs 1.1 trillion revenue for the current fiscal year.
The government has suffered a revenue shortfall of Rs 70 billion – some 28 per cent below the target for the first quarter of the current fiscal year due to slump in imports and the government’s failure to raise adequate revenue through domestic economic activities.
According to the Financial Comptroller General Office (FCGO), the government has mobilised Rs 182.7 billion in the first quarter of the ecurrent fiscal year. The Finance Ministry had targeted to mobilise Rs 252 billion in the first quarter.
Department of Customs and the Inland Revenue Department – both failed significantly in revenue mobilisation. The customs office was given a target of Rs 132 billion but the government has been able to mobilise only Rs 93 billion, whereas the Inland Revenue Department has been able to mobilse only Rs 80.60 billion, against its target of Rs 92.70 billion.
The government has set an ambitious annual revenue growth target of 35 per cent for the current fiscal year.
The fall in imports that declined by 1.2 per cent caused by a slump in the import of fuel, gold, silver, cement clinkers, aircraft parts and polythene granules hit the revenue mobilisation, according to the Department of Customs. The FCGO data also revealed that the government faced revenue shortfall of 114.34 billion in the last fiscal year too.

Government and World Bank take stock of project portfolio

The joint government and World Bank portfolio review concluded today covering 24 World Bank-financed projects with a total commitment of $ 2.35 billion. The concluding meeting was chaired by finance minister Dr Yuba Raj Khatiwada and World Bank country director for Nepal, Sri Lanka and the Maldives in the South Asia Region, Idah Z Pswarayi-Riddihough.
Of the 24 projects, some 20 are investment projects worth about $ 1.78 billion, three Programme for Results operations worth about $468 million and one Development Policy Credit worth about $100 million spread across energy, transport, earthquake housing reconstruction, education, health, social protection, water and irrigation, agriculture and livestock and public financial management sectors, according to a press note issued by the multilateral development partner.
“The government acknowledges the support of the World Bank and its assistance to Nepal’s development priorities,” finance minister Dr Khatiwada said, adding that the review is an opportunity to learn from and apply good practices across the different sectors while chalking out a roadmap for project delivery to ensure that development finance received for Nepal is utilized most productively.
Prior to the concluding meeting of the portfolio review, a three-day sectoral review was organised on September 9 to September 11 under the chair of the secretaries of the concerned line ministries. The annual stocktaking exercise is organised to review the performance of ongoing projects, assess the impact of federal transition and project restructuring, review procurement and disbursement performance and discuss implementation challenges.
“The World Bank celebrates 50 years of the first International Development Association (IDA) credit to Nepal this year and we are indeed proud to be a trusted partner in Nepal’s development agenda,” World Bank country director for Nepal, Sri Lanka and the Maldives in the South Asia Region Idah Z Pswarayi-Riddihough, said, adding that the World Bank is encouraged by the successful implementation of projects in Nepal and look forward to working with the government to address implementation bottlenecks for effective and timely completion of projects for the benefit of the people of Nepal.
Following the review, a memorandum of understanding (MoU) was signed between the Finance Ministry and the World Bank identifying an action plan by sector for improving the portfolio performance of projects, specific actions to improve implementation environment under the new federal structure and a tentative portfolio pipeline for fiscal year 2019-20 and fiscal year 2020-21. The portfolio review was attended by authorities from related ministries and departments, National Planning Commission (NPC), FCGO, Office of the Auditor General, Nepal Rastra Bank (NRB), World Bank (WB) and project teams.

Government misses revenue mobilisation target

The government has missed its revenue mobilisation target for the current fiscal year 2018-19 despite revising the target downside.
The government had set revenue mobilisation target at Rs 945 billion (Rs 831 billion from federal government and Rs 114 billion from local and provincial governments) for the current fiscal year that ended today. But, the Finance Ministry had later revised the revenue mobilisation target down to Rs 860 billion. The government failed to meet the revised target too as it missed the revised target by more than Rs 25 billion, according to Financial Comptroller General Office (FCGO).
The government has been able to mobilise only Rs 835 billion revenue in the current fiscal year by the end of today evening, according the FCGO that revealed that the revenue mobilisation fell short of the target in excise duty, customs and VAT pulling the overall revenue mobilisation down.
The ministry had targeted to mobilise Rs 209.7 billion from income tax whereas income tax mobilisation was limited to Rs 190 billion only, the FCGO data revealed. The shortfall in income tax means the economic activities has been limited and the employment creation has been failed.
Likewise, the government has been able to mobilise almost Rs 155 billion in customs duty against the target of Rs 164 billion, also due to drop in imports of luxury items including the automobile because of government’s stricter policy towards auto imports.
The government also missed the VAT mobilisation target by Rs 10 billion as it has been able to collect only Rs 240 billion against the target of Rs 250 billion for the current fiscal year.
Likewise, the government also missed the excise duty collection target by Rs 3.38 billion to Rs 121.5 billion against the target of Rs 124.88 billion from excise duty. 

Government yet to spend almost 50 per cent of development budget

The all powerful government in the history of Nepal has failed to expedite the development activities as half of the development budget is yet unspent even as the current fiscal year draws closer.
The incompetent and highly politicised bureaucracy and ‘communist’ government – despite the two-third majority – has been able to spend only 56.35 per cent to Rs 179.7 billion – out of the Rs 313.99 billion allocated for fiscal year 2018-19 – by today July 9, according to the Financial Comptroller General Office (FCGO).
The Finance Ministry has revised the capital expenditures downwards to Rs 265.20 billion through the mid-term budgetary review for the current fiscal year 2018-19. Due to government’s failure to enhance its spending capacity, it is still to spend over Rs 85 billion within next one week to meet even the downward revised development expenditure target. “
Last fiscal year 2017-18, capital expenditure stood at 79.74 per cent, which was the highest since 2012-13 when the spending has touched 82.56 per cent.
The FCGO data also reveals that the government has spent a total of – including capital expenditure, financing and recurrent – 72.15 per cent of the budget of Rs 1.31 trillion. The government has spent Rs 677.07 billion recurrent expenditure – out of the total allocated Rs 845.45 billion – whereas it has spent Rs 92.13 billion on financing – out of the total Rs 155.72 billion – till today.
Lack of proper project planning, weak policy execution capacity of the bureaucracy and weak project execution capacity of contractors have been, though, blamed for the lack of spending capacity of the comparatively stronger government, the government is still hopeful that the budget spending could reach upto 80 per cent in a week due to last minute payments. As a result, the last hour ‘irresponsible’ spending trend will also continue this year making the government hopeful of spending around 80 per cent by July 16, the last date of the current fiscal year.
Along with the abnormally low capital budget spending, the low revenue mobilisation exposes the government inefficiency. As of today, the government has been able to mobilise only Rs 672 billion against its target of Rs 831 billion, though it claimed to meet the target in a week.

Half of capital budget yet to be spent, and in 10 days?

The historically strong and stable government led by Prime Minister KP Sharma Oli has miserably failed to expedite the development budget as it is yet to spend more than half of the development budget – allocated for the current fiscal year – but there is less than half-a-month to end the fiscal year.
The government has spent only 48.89 per cent or Rs 154.38 billion, out of the total Rs 313.99 billion development budget for the fiscal year 2018-19, till today – June 20 – according to Financial Comptroller General Office (FCGO).
Though, the Finance Ministry had revised the capital budget for this fiscal year downwards to Rs 265.20 billion – some 15.5 per cent down from the previous allocated capital budget of Rs 313.99 billion – through the mid-term budgetary review due to its failure to boost capital formation programmes and tepid progress of development projects, the development budget spending stands at 71 per cent, of the revised allocation also. However, it could not be called legal as the figure is not approved by the Parliament. The development budget figure of Rs 313.99 billion is approved by the Parliament, and is legal, whereas the revised data is only for the reference of the Finance Ministry.
According to the FCGO, the government has been able to spend – including capital expenditure, financing and recurrent – some 64.12 per cent of the total budget of Rs 1.31 trillion for the current fiscal year 2018-19.
The government has spent Rs 619.29 billion as recurrent expenditure – of the total Rs 845.45 billion – till today, the FCGO data revealed. The recurrent expenditure is primarily the spending of the government on non-capital formation programmes like salaries of government staffers, social security and other expenses, though some of the development projects also get budget through recurrent budget.
Likewise, the government has spent some 44.74 per cent to Rs 69.66 billion – out of the total allocated budget of Rs 155.72 billion – on financing till today, according to the FCGO data. Financing is primarily the interest served for the domestic and foreign borrowings.

Average daily capital spending drops to Rs 41 million

Despite the two-third majority stable government, the capital spending has dropped down. Though, this is the time for paying bills of large amounts – mostly submitted by the contractors against works done in February and March – the government has spent only Rs 41 million in an average in the last 11 days, according to Financial Comptroller General Office (FCGO).
Though, the contractors have been blaming the government for withholding their payment without any valid reason, the government has only spent Rs  458 million capital expenditure in the past 11 days, which is is against the trend, as government payments would speed up in the months from May to June, during the last trimester. Of the total capital expenditure of Rs 313 billion, capital spending hovers below 40 per cent till date, while only two months for the fiscal year to end.
Not only the capital spending, the government has not been able to spend recurrent expenses, which are meant for regular salaries and adminitsrtive works, too. The government has spent Rs 724 billion, according to the FCGO.
The government has not made payments against works at Gautam Buddha International Airport, different sections of Mid-Hill Highway and other road projects bringing the development works to a halt as the contractors are cash strapped at this moment," said former president of Federation of Contractors Association of Nepal (FCAN) Jayaram Lamichhane. “The government has to immediately pay an estimated Rs 72 billion to contractors and different parties related to development projects,” he said, adding that lack of payment has been affecting their work, while banks and financial institutions have been facing further liquidity crunch and shortage of lendable cash. “It seems the Finance Minister is not aware of this gloomy picture of project management.”
While releasing mid-term report of the budget for the current fiscal year in March, Finance Minister Dr Yubaraj Khatiwada had said that he could not do much toward making timely payments to contractors though he had been receiving several complaints on the matter.

Government manipulates revenue mobilisation data

The two-third majority communist government has manipulated revenue mobilisation data, though it has been boasting of a brisk mobilisation.
Financial Comptroller General Office (FCGO) – considered as the government treasury – has been found to be inadvertently producing inflated revenue mobilisation data because of double counting, may be on government's direct order or may not be. AS the government has transferred earlier chief of FCGO for revealing the real data, the error could be orchestrated to show the better government performance.
The erroneous reporting on revenue mobilisation has been revealed after the FCGO stated that the government had mobilised Rs 520 billion revenue in the first half of the current fiscal year. The experts were surprised because it was 21 per cent more than the government’s own revenue mobilisation target of Rs 429 billion for the six-month period  -- from mid-July to mid-January – but the central bank, which also tracks the government’s revenue collection, said that it has mobilised Rs 414.3 billion that is only 96.4 per cent of the revenue target. The government has missed its revenue mobilization target – for the first six months of the current fiscal year – by 3.4 per cent in the first six months of the current fiscal year.
It is said that the FCGO has failed to present accurate statistic because of double calculation of fund transferred to divisible fund.
Since the beginning of the current fiscal year – as the country has entered into the federal system – the central government has been sharing 30 per cent of value added tax (VAT and another 30 per cent of inland excise duty with provinces and local bodies as part of the policy to financially empower sub-national governments and institutionalise fiscal federalism. The portion of VAT and inland excise duty dedicated to provinces and local bodies is parked in the divisible fund.
Although the amount deposited in the divisible fund is also a part of federal government’s revenue, the FCGO has initially kept it separate, which means the FCGO’s system had to deduct the amount kept in the divisible fund from the federal government’s gross revenue mobilisation. But it seems the FCGO has not been deducting the fund, counting it double and presenting the inflated figure 'to please the government', which is more conservative that the democratic government.
However, the FCGO claimed that it is revising the revenue mobilisation figure from the beginning of the current fiscal year.
The FCGO provides daily updates on government’s income and expenditure through its website.

Capital expenditure still sluggish

The two-third majority government also failed to drive the development expenditures and followed the footsteps of earlier governments as the first six months – of the current fiscal year – witnessed a sluggish capital spending.
Though the stable government has been repeatedly claiming proper execution of the budget would be its top priority, it has failed to walk the talk as the government has managed to spend only 17.68 per cent of the total capital expenditure in the first six months of the current fiscal year, according to the Financial Comptroller General Office (FCGO) statistics. In the six months of the last fiscal year 2017-18, the government had spent 14.35 per cent of the capital expenditure.
"Of the Rs 313.9 billion allocated for capital expenditure for the current fiscal year 2018-19, the capital spending stood at only Rs 55.5 billion or 17.68 per cent till yesterday, the last day of the six months," the FCGO report reads, adding that the government’s total budget spending – including capital expenditure, financing and recurrent – stood at 28.57 per cent of the total budget of Rs 1.31 trillion for the current fiscal year. Likewise, the government has spent Rs 296.5 billion as recurrent expenditure – spending on non-capital formation programmes like salaries of government staffers, social security and other expenses – of the total allocation of Rs 845.5 billion.
Likewise, the government has been able to spend 15.24 per cent or Rs 23.7 billion on financing till mid-January out of the total allocated budget of Rs 155.7 billion for the current fiscal year.
The government has been able to mobilise revenue worth Rs 520 billion in the first six months of the fiscal year 2018-19, which is 55 per cent of the revenue target of Rs 945 billion for this fiscal year, according to the FCGO statistics. "The government maintains a budgetary surplus of Rs 144.2 billion as of six months."