Most of the ministries have failed to increase their capacity to spend capital budget but they demand more resources.
"The ministries have failed to spend capital expenditure," said finance secretary Krishnahari Baskota. "Of the total capital budget of Rs 72.61 billion that is meant for development works, the ministries have been able to spend only 30.87 per cent to Rs 22.42 billion by the end of eighth month," he said, adding that the trend has revealed that the ministries have low capacity to spend on development works.
If the government spending on development works could not be expedited, it would hit overall economic activities. "The spending on development works will not only create employment but brings dynamism in the economy," the finance secretary said, adding that the government has — during the mid-term evaluation of the budget for the current fiscal year — projected the capital spending to come down to Rs 65 billion from the total capital expenditure of Rs 72.61 billion mentioned in the budget for the current fiscal year.
According to a report of a committee led by Constituent Assembly member Narayan Dahal, the government must spend 60 per cent of the capital expenditure by the end of ninth month, and the remaining 30 per cent should be spent in the remaining three months of the fiscal year, and that too, in the last month, the government could not spend more than 20 per cent. "The committee has prescribed the ceiling of expenses to check misuse of the budget by spending on the last month without productivity," Baskota claimed.
However, the tradition has it that the government spends the entire remaining budget in the last month without any productivity.
There are eight ministries — education, local development, physical planning and construction, health, home, defence, agriculture and irrigation — that have budget of over Rs 10 billion. Similarly, some 13 ministries have budget of over Rs 1 billion.
Among the 13 ministries that have over Rs 1 billion budget, the Foreign Ministry has spent 37.24 per cent of its capital expenditure on cash basis and the Office of the Prime Minister has spent the least at 0.08 per cent of its capital expenses on cash basis, according to the latest data of the Finance Ministry.
Showing posts with label finance secretary. Show all posts
Showing posts with label finance secretary. Show all posts
Thursday, April 5, 2012
Friday, December 9, 2011
Nepal to get more support from Asian Development Fund
Based on the previous history of proper usages of resources, Nepal is eligible to receive more financial support from Asian Development Fund (ADF).
“Nepal is working towards minimising corruption and misuse of funds through different mechanisms like e-tendering and similar tools that will ensure the grants reach the targeted groups,” assured finance secretary Krishna Hari Baskota, addressing the donors, during the recent meeting of Asian Development Fund in Dhaka.
The country will be achieving tentative growth rate of five per cent, single digit inflation and is working towards increasing foreign currency reserve sufficient to bear the cost of import of service and goods for seven months, he said, adding that the sustained use of foreign aid has pushed Nepal closer to attaining majority of Millennium Development Goals (MDGs).
Along with an improved image on different frontiers and indicators like competitiveness will guarantee that the funds will not be misutilised, the finance secretary assured, pledging that Nepal is suitable to receive more financial assistance in future for its development works.
The country has, so far, received funds worth $1.3 billion from the Asian Development Fund that has been investing in infrastructure development, economic stability, governance, environmental issues, agriculture development, education, energy and other similar social and economic sectors contributing in improving living standard of Nepalis.
Nepal is fifth largest aid receiver from Asian Development Fund (ADF) which Bangladesh is the largest aid receiver with $3.2 billion.
However, donor countries asked the aid recipient countries to be more dependent on their internal sources for development works citing the contraction in their respective economies following the eminent recession. The meeting at Dhaka is the second round of tri-partite meeting between, Asian Development Bank (ADB), donor countries and the aid recipient countries.
The first round was conducted in Manila in September and the third one will once again be held in Manila in March 2011 that will decide the amount the donor countries will be providing to support the Asian developing countries.
Representatives from 28 donor countries including US, Japan, United Kingdom, Sweden, Norway, Germany, Australia, and France were present in the meeting along with the donor recipient countries including Nepal, Afganistan, Bang-ladesh, Mongolia, Solomon Islands and Vietnam.
“Nepal is working towards minimising corruption and misuse of funds through different mechanisms like e-tendering and similar tools that will ensure the grants reach the targeted groups,” assured finance secretary Krishna Hari Baskota, addressing the donors, during the recent meeting of Asian Development Fund in Dhaka.
The country will be achieving tentative growth rate of five per cent, single digit inflation and is working towards increasing foreign currency reserve sufficient to bear the cost of import of service and goods for seven months, he said, adding that the sustained use of foreign aid has pushed Nepal closer to attaining majority of Millennium Development Goals (MDGs).
Along with an improved image on different frontiers and indicators like competitiveness will guarantee that the funds will not be misutilised, the finance secretary assured, pledging that Nepal is suitable to receive more financial assistance in future for its development works.
The country has, so far, received funds worth $1.3 billion from the Asian Development Fund that has been investing in infrastructure development, economic stability, governance, environmental issues, agriculture development, education, energy and other similar social and economic sectors contributing in improving living standard of Nepalis.
Nepal is fifth largest aid receiver from Asian Development Fund (ADF) which Bangladesh is the largest aid receiver with $3.2 billion.
However, donor countries asked the aid recipient countries to be more dependent on their internal sources for development works citing the contraction in their respective economies following the eminent recession. The meeting at Dhaka is the second round of tri-partite meeting between, Asian Development Bank (ADB), donor countries and the aid recipient countries.
The first round was conducted in Manila in September and the third one will once again be held in Manila in March 2011 that will decide the amount the donor countries will be providing to support the Asian developing countries.
Representatives from 28 donor countries including US, Japan, United Kingdom, Sweden, Norway, Germany, Australia, and France were present in the meeting along with the donor recipient countries including Nepal, Afganistan, Bang-ladesh, Mongolia, Solomon Islands and Vietnam.
Thursday, June 2, 2011
Urge to bring budget on time to sustain economy
At a time when there is less than a month left for the budget, a former bureaucrat suggested government and political parties not to follow last year's precedent and bring budget on time.
"Government's apathy towards fiscal policy might lead to 'economic accident' in the country," said former finance secretary Rameshwor Khanal here today.
"To sustain economy, propel development activities and boost confidence of public, the government must bring budget for the fiscal year 2011-12 before July 16," he said, adding that the delayed budget will not only lengthen liquidity crunch that is already hurting banks and financial institutions but also hurt economic growth.
The delayed budget in the current fiscal year has hurt economic growth that could have been better, had the budget come on time. The economic growth is projected at 3.47 per cent for the current fiscal year due to delayed budget that could not support development activities which would have helped capital formation.
"Development spending is key to economic growth," he said, adding that political instability and transition has made the development spending difficult. "But economic stability by bringing fiscal policy on time will boost public confidence and economic growth."
However, to bring budget on time, the government needs to work on fast track basis as the time is running out. "Now, time will not permit the government to go through regular parliamentary process," he said.
The finance minister should take all political parties in confidence and prepare a broader policy on key aspects of budget like exports diversification, market expand, import rationalisation, measures to contain price hike and financial problems to bring budget on time, according to Khanal.
The possibility of change in guard in the government has made budget uncertain, though National Planning Commission has already given a ceiling of Rs 381 billion for the budget of fiscal year 2011-12.
"Though a total of Rs 426 billion was sought by the ministries," said senior economic advisor of Finance Ministry Keshav Acharya.
To bring the budget on time, the government need not add new programmes as the current programmes -- that could help sustainable eionomic growth -- are under funded and could be prioritised in the next budget too, he said, adding populist budget will not help political parties in a long run.
In the current fiscal year too, the government had brought Special budget of Rs 110.21 billion on July 12 and again brought full budget of Rs 337.9 billion on November 20 -- four months later -- through ordinance.
"The country has still been suffering from delayed delayed budget," Khanal said. After the Constituent Assembly election, almost every year the budget has been delayed and one year, it took four months to get parliamentary approval, though budget was presented on time.
"Government's apathy towards fiscal policy might lead to 'economic accident' in the country," said former finance secretary Rameshwor Khanal here today.
"To sustain economy, propel development activities and boost confidence of public, the government must bring budget for the fiscal year 2011-12 before July 16," he said, adding that the delayed budget will not only lengthen liquidity crunch that is already hurting banks and financial institutions but also hurt economic growth.
The delayed budget in the current fiscal year has hurt economic growth that could have been better, had the budget come on time. The economic growth is projected at 3.47 per cent for the current fiscal year due to delayed budget that could not support development activities which would have helped capital formation.
"Development spending is key to economic growth," he said, adding that political instability and transition has made the development spending difficult. "But economic stability by bringing fiscal policy on time will boost public confidence and economic growth."
However, to bring budget on time, the government needs to work on fast track basis as the time is running out. "Now, time will not permit the government to go through regular parliamentary process," he said.
The finance minister should take all political parties in confidence and prepare a broader policy on key aspects of budget like exports diversification, market expand, import rationalisation, measures to contain price hike and financial problems to bring budget on time, according to Khanal.
The possibility of change in guard in the government has made budget uncertain, though National Planning Commission has already given a ceiling of Rs 381 billion for the budget of fiscal year 2011-12.
"Though a total of Rs 426 billion was sought by the ministries," said senior economic advisor of Finance Ministry Keshav Acharya.
To bring the budget on time, the government need not add new programmes as the current programmes -- that could help sustainable eionomic growth -- are under funded and could be prioritised in the next budget too, he said, adding populist budget will not help political parties in a long run.
In the current fiscal year too, the government had brought Special budget of Rs 110.21 billion on July 12 and again brought full budget of Rs 337.9 billion on November 20 -- four months later -- through ordinance.
"The country has still been suffering from delayed delayed budget," Khanal said. After the Constituent Assembly election, almost every year the budget has been delayed and one year, it took four months to get parliamentary approval, though budget was presented on time.
Monday, February 28, 2011
Cracking whip on inflation a key challenge
The government is facing challenges to crack whip on rising inflation, boost exports and substitute the imports, according to the mid-term evaluation of the budget for the current fiscal year 2010-11.
Though the budget has tragetted to contain the inflation at seven per cent, the rising prices of vegetables, sugar, sweets and fruits alongwith the upward revision of petroleum products have fuelled the price hike to 11.3 per cent, said deputy prime minister and finance minister Bharat Mohan Adhikari here today.
However, the price hike is due to non-economic reasons like cost push factors and supply disorder, said finance secretary Rameshwor Prasad Khanal. "The price hike can be brought down only by increasing the prouction," he said, adding that the delayed budget for the fiscal year has hit the economy hard.
"The delayed budget has forced us with no choice than to bring a new budget by mid-April incorporating the new government's visions," Adhikari, said, adding that the budget was prepared by the coalition government of Nepali Congress and CPN-UML but with changed scenario, the present coalition government also has its aspirations that needs to be addressed.
"The new budget could incorporate the new coalition's aspirations," he said, adding, "despite improvement in law and order situation due to less bandh and strikes, the base of exports could not be expanded making it a greatest challenge for the government.
"The core competency of the country has been reducing due to regular power outage," Khanal said, adding that it has pulled the economic growth rate to 4.5 per cent.
"If we can grow by 4.5 per cent in such an adverse condition, we can easily achieve double digit growth in normal condition," he added.
The government has mobilised Rs 110.40 billion revenue and Rs 8.50 domestic borrowing by the first week of Falgun (end February), the finance minister said, adding that the government has received Rs 52.85 billion foreign aid commitment by the six months and Rs 64.07 billion more is in pipeline making it to a total of over Rs 110 billion foreign aid commitment by the end of the fiscal year.
However, the government expenditure is expected to be lesser than target. "The capital expenditure is expected to be around Rs 110 billion, though Rs 129 billion has been allocated," he said, revising the recurrent expenditure also to Rs 179.09 billion from the budget's target of Rs 190.31 billion.
The dealyed budget has reduced the capacity of the government speding, Adhikari added. "The total government expenditure has been revised to be at around Rs 307.23 billion."
The delayed budget has also hurt the overall economic indicators, Khanal said, adding that it could be a lesson for the next fiscal years.
Though the budget has tragetted to contain the inflation at seven per cent, the rising prices of vegetables, sugar, sweets and fruits alongwith the upward revision of petroleum products have fuelled the price hike to 11.3 per cent, said deputy prime minister and finance minister Bharat Mohan Adhikari here today.
However, the price hike is due to non-economic reasons like cost push factors and supply disorder, said finance secretary Rameshwor Prasad Khanal. "The price hike can be brought down only by increasing the prouction," he said, adding that the delayed budget for the fiscal year has hit the economy hard.
"The delayed budget has forced us with no choice than to bring a new budget by mid-April incorporating the new government's visions," Adhikari, said, adding that the budget was prepared by the coalition government of Nepali Congress and CPN-UML but with changed scenario, the present coalition government also has its aspirations that needs to be addressed.
"The new budget could incorporate the new coalition's aspirations," he said, adding, "despite improvement in law and order situation due to less bandh and strikes, the base of exports could not be expanded making it a greatest challenge for the government.
"The core competency of the country has been reducing due to regular power outage," Khanal said, adding that it has pulled the economic growth rate to 4.5 per cent.
"If we can grow by 4.5 per cent in such an adverse condition, we can easily achieve double digit growth in normal condition," he added.
The government has mobilised Rs 110.40 billion revenue and Rs 8.50 domestic borrowing by the first week of Falgun (end February), the finance minister said, adding that the government has received Rs 52.85 billion foreign aid commitment by the six months and Rs 64.07 billion more is in pipeline making it to a total of over Rs 110 billion foreign aid commitment by the end of the fiscal year.
However, the government expenditure is expected to be lesser than target. "The capital expenditure is expected to be around Rs 110 billion, though Rs 129 billion has been allocated," he said, revising the recurrent expenditure also to Rs 179.09 billion from the budget's target of Rs 190.31 billion.
The dealyed budget has reduced the capacity of the government speding, Adhikari added. "The total government expenditure has been revised to be at around Rs 307.23 billion."
The delayed budget has also hurt the overall economic indicators, Khanal said, adding that it could be a lesson for the next fiscal years.
Wednesday, February 2, 2011
Mid-Hill highway to be completed by 2013
In about two years time, Kathmandu will be connected to Biratnagar through the Mid-Hill Highway as the highway -- popularly known as Lokmarga -- will be ready for the vehicular movement.
"We expect the vehicular movement on the highway by 2013 January," said finance secretary Rameshwor Prasad Khanal, after returning from the field trip of Khurkot-Ghurmi stretch of the highway that is motorable but needs black-topping.
"The Khurkot-Ghurmi 60-km section of the Mid-Hill Highway has been opened in fifteen months," he said, adding that it will be black-topped by the end of next fiscal year.
"Similarly, the track of Ghurmi-Chatara 134-km section -- probably the last section -- will also be opened in another 15 months," he added.
The current fiscal year's budget has allocated Rs 1.21 billion for the opening of the track. "But the budget will not be problem," finance secretary said, assuring that the government is ready to allocate needed budget for the highway that is expected to bring a massive socio-economic and cultural changes in the millions of the lives of the people in the mid-hills. "Around seven million people will be connected to the national road network after the completion of the highway," according to him.
The 1,750-km long mid-hill highway project is one of the major physical infrastructure projects that will link 25 districts from Chiyo Bhanjyang of Panchthar district in the east to Jhulaghat of Baitadi district in the west.
The highway also passes through Kavre, Kathmandu, Pokhara and Baglung districts.
It is also expected to open new possibilities in the western hills for entrepreneurs. Similarly, the highway could to developed further more road network through North to South interconnecting it, after the completion.
A total of Rs 43.38 billion has been estimated for the construction -- including the cost for blacktopping, track opening, construction of 48 bridges and culverts and pavement works -- of the highway.
The 1,750-km-long highway will add some 600-km of new road and will upgrade and use 1,100-km of existing roads. However, unlike most of the existing roads in the hills, this highway will have double-lane.
According to the Department of Roads, as of 2007, the total length of roads stands across the country at 19,207 km.
"We expect the vehicular movement on the highway by 2013 January," said finance secretary Rameshwor Prasad Khanal, after returning from the field trip of Khurkot-Ghurmi stretch of the highway that is motorable but needs black-topping.
"The Khurkot-Ghurmi 60-km section of the Mid-Hill Highway has been opened in fifteen months," he said, adding that it will be black-topped by the end of next fiscal year.
"Similarly, the track of Ghurmi-Chatara 134-km section -- probably the last section -- will also be opened in another 15 months," he added.
The current fiscal year's budget has allocated Rs 1.21 billion for the opening of the track. "But the budget will not be problem," finance secretary said, assuring that the government is ready to allocate needed budget for the highway that is expected to bring a massive socio-economic and cultural changes in the millions of the lives of the people in the mid-hills. "Around seven million people will be connected to the national road network after the completion of the highway," according to him.
The 1,750-km long mid-hill highway project is one of the major physical infrastructure projects that will link 25 districts from Chiyo Bhanjyang of Panchthar district in the east to Jhulaghat of Baitadi district in the west.
The highway also passes through Kavre, Kathmandu, Pokhara and Baglung districts.
It is also expected to open new possibilities in the western hills for entrepreneurs. Similarly, the highway could to developed further more road network through North to South interconnecting it, after the completion.
A total of Rs 43.38 billion has been estimated for the construction -- including the cost for blacktopping, track opening, construction of 48 bridges and culverts and pavement works -- of the highway.
The 1,750-km-long highway will add some 600-km of new road and will upgrade and use 1,100-km of existing roads. However, unlike most of the existing roads in the hills, this highway will have double-lane.
According to the Department of Roads, as of 2007, the total length of roads stands across the country at 19,207 km.
Monday, January 24, 2011
Government to open apartments for expats
There is some good news for the expat community living in Nepal if the government consolidates its preliminary plan to loosen its policy on real estate. The government is planning to ‘let foreigners buy apartments’ in Nepal.
“The plan is in its preliminary phase,” said Finance Secretary Rameshwor Khanal. “The government has floated an idea of letting the foreigners buy human-erected property.”
The move is aimed at giving momentum to the construction sector, one of the growth sectors in recent times. “However, the government is conscious about socio-cultural fabric and potential market collapse in case of mass selling and exit of foreigners,” said Khanal, adding, opening the sector for foreigners ‘to buy apartments’ is one of the ways that can make the construction sector dynamic.
As per existing laws, a foreigner is not allowed to buy land, house or apartments in Nepal as citizenship is a must to buy such immoveable property. Though, the market last year witnessed a boom in the construction sector in the wake of increased demand for housing and apartments, this year it has seen a sluggish growth. “The stagnation proves that last year’s boom was more speculative than intrinsic demand,” added Khanal.
However, construction is one of the sectors with competitive advantage with the potential to create more jobs, and it also contributes to economic growth.
The Central Bureau of Statistics has also predicted construction sector’s increased contribution, 6.62 per cent, to the gross domestic product (GDP) in the last fiscal, compared to a previous fiscal year, due to increase of construction activities by both the government and private sector. For Nepalis, housing traditionally is a social security and a basic need.
“There is no exact data of demand for apartments, though, there is still a growing demand for housing,” said Om Rajbhandary, Managing Director of Comfort Housing. “About 279,000 housing units will be required in next 10 years,” said Rajbhandary, adding, the Kathmandu Valley alone requires around 40,300 units ever year, apart from one million houses that need maintenance.
The need of housing is more in the urban areas. Due to various reasons, the urban area is expanding by 5.6 per cent annually. The Kathmandu Valley alone has 54.5 per cent of the urban population while that of Nepal stands at 15 per cent.
But the class that is in need of housing units the most lacks the purchasing power. “Until that class strengthens its purchasing power, the sector needs fresh capital injection to keep its momentum,” said Khanal. “Allowing foreigners to buy apartments could keep the sector alive and kicking.”
The private developers are major players in the construction sector, and the government has also tried to fulfil the demand through announcing Janata Awas (people’s housing) in its last fiscal budget.
“The plan is in its preliminary phase,” said Finance Secretary Rameshwor Khanal. “The government has floated an idea of letting the foreigners buy human-erected property.”
The move is aimed at giving momentum to the construction sector, one of the growth sectors in recent times. “However, the government is conscious about socio-cultural fabric and potential market collapse in case of mass selling and exit of foreigners,” said Khanal, adding, opening the sector for foreigners ‘to buy apartments’ is one of the ways that can make the construction sector dynamic.
As per existing laws, a foreigner is not allowed to buy land, house or apartments in Nepal as citizenship is a must to buy such immoveable property. Though, the market last year witnessed a boom in the construction sector in the wake of increased demand for housing and apartments, this year it has seen a sluggish growth. “The stagnation proves that last year’s boom was more speculative than intrinsic demand,” added Khanal.
However, construction is one of the sectors with competitive advantage with the potential to create more jobs, and it also contributes to economic growth.
The Central Bureau of Statistics has also predicted construction sector’s increased contribution, 6.62 per cent, to the gross domestic product (GDP) in the last fiscal, compared to a previous fiscal year, due to increase of construction activities by both the government and private sector. For Nepalis, housing traditionally is a social security and a basic need.
“There is no exact data of demand for apartments, though, there is still a growing demand for housing,” said Om Rajbhandary, Managing Director of Comfort Housing. “About 279,000 housing units will be required in next 10 years,” said Rajbhandary, adding, the Kathmandu Valley alone requires around 40,300 units ever year, apart from one million houses that need maintenance.
The need of housing is more in the urban areas. Due to various reasons, the urban area is expanding by 5.6 per cent annually. The Kathmandu Valley alone has 54.5 per cent of the urban population while that of Nepal stands at 15 per cent.
But the class that is in need of housing units the most lacks the purchasing power. “Until that class strengthens its purchasing power, the sector needs fresh capital injection to keep its momentum,” said Khanal. “Allowing foreigners to buy apartments could keep the sector alive and kicking.”
The private developers are major players in the construction sector, and the government has also tried to fulfil the demand through announcing Janata Awas (people’s housing) in its last fiscal budget.
Thursday, March 11, 2010
ADB grants loan to Nepal for power
Asian Development Bank (ADB) has agreed to provide a loan assistance of Rs 4714 million and a grant assistance of Rs 326 million totaling about Rs 5,040 million to the government for the implementation of Energy Access and Effiecncey Improvement Project.
The agreements to this effect were signed between the government and the ADB at the Ministry of Finance today. The agreement was signed by Rameshwore Prasad Khanal, finance secretary and Barry Hitchcock country director, ADB Kathmandu on behalf of their respective institutions.
The project consists of three main categories that is Energy Access, Clean Energy and Capacity Building with seven components facilitating access to clean energy, energy access, quality enhancement, clean energy improvement, Supply side energy efficiency improvement, energy efficiency in lightening, renewable energy for street light and capacity building. The major project activators include construction of middle Marshyangdi-Damauli-Marshyangdi TL, construction of second circuit of BUtwal - Kohalpur TL, construction and expansion of Chapali and Matatirtha grid sub stations, installation of capacitor banks, construction of primary distribution sub stations and switching stations. Similarly rehabilitation of two small scale hydropower plants, distribution of about one million CFLSs, installation of 1000 solar and solar winds streetlights, and providing expert services to Nepal Electricity Authority (NEA).
This project will support the government long term vision to provide universal coverage using grid based and off grid supplies by 2027. It is hoped that the proposed loan and grant assistances will address the urgent needs attributed to the electricity supply crisis in Nepal, to a large extent. IN the short term the transmission network strengthening will add capacity by increasing evacuation of power from hydropower stations in the mid western region and allow increased energy imports across the eastern border and in the medium term, it will allow cross border energy trade. Moreover, the project will also lead to improve the financial performance of NEA. The NEA is the implementing agency and the project is expected to be completed by September 30, 2014.
In the mean time, the project agreements related to the project were also signed by Jivendra Jha, managing director NEA and Barry Hitchcock country director, ADB, Kathmandu.
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