Enhance Budget Spending

Within less than two weeks, the country will enter the new fiscal year with fresh policy, programmes and allocation of budget resources.  All three tiers of the government have already presented their details of estimated sources of income and expenditures. In principle, the annual budget sets out short-term and long-term goals that are met within given timeframe. It should reflect development aspirations of the citizens as well as the country’s ambition to achieve higher economic growth. However, formulating a balanced and realistic budget is quite challenging owing to the limited resources and rising public expectations. In our context, the government is obliged to unveil a budget that should ensure macro-economic stability, production and fair distribution of national resources.

The federal, provincial and local governments are poised to implement their budgets endorsed by their respective parliaments and councils. However, it is also time to assess the outcome and effectiveness of the budgets introduced last fiscal year. The annual outlay can be effectively implemented if the past shortcomings are well addressed. The effective mobilisation of budget has been an uphill task not only for the federal administration but also for the provinces that came into existence following the promulgation of the new constitution in 2015. As the vital sub-national agencies under the federal set-up, the provinces are supposed to fill the gap in the generation as well as distribution of resources so that no one is left out when it comes to the access to the basic amenities provided by the state. For this, the focus must be on the adequate capital spending that promotes the infrastructure development, job creation and social justice mechanism.

However, a news report published in this daily on Sunday shows that the provinces have spent around 44.4 per cent of their budgets on average and only one province has utilised more than 50 per cent of its annual budget. Koshi Province has spent 56.5 per cent of its total budget of Rs. 39.74 billion and Madhes Province only 31.29 per cent out of Rs. 46.88 billion by the end of the 11 months of the current fiscal year. Bagmati had the largest chunk of budget but its spending capacity is not encouraging. It has used 46.54 per cent out of Rs. 70.93 billion. Likewise, Lumbini province spent 49. 6 per cent, Gandaki 43 per cent, Sudurpaschim 43.74 per cent and Karnali 40 per cent of their annual budgets.  The worrying matter is the poor capital spending of all provinces. Koshi could spend 50.5 per cent of its total capital budget, Madhes just 33 per cent, Karnali 35 per cent, Bagmati, Sudurpaschim and Gandaki about 40 per cent, and Lumbini 47 per cent. 

The federal government often draws flak for low capital spending. The provinces have also suffered the similar problem. Like the federation, the provinces have witnessed frequent changes in the government leadership, which have negative consequences for their development endeavours. As the provinces are new administrative structures, they are yet to be fully equipped with technical manpower and civil servants. It is the responsibility of the centre to ensure the legal autonomy of provinces to recruit civil and security personnel for their full-fledged operation. The provinces need to strengthen institutional capacity to allocate resources for the implementation of transformative projects while developing expertise to prioritise projects and earmark budget for them. The provinces have to reduce their excessive dependency on the federal funds and demonstrate their mettle in identifying and generating resources on their own.