Government expenditure in 2014-15 dipped to 69.9 percent of the target due to the April 25 earthquake and traditional problems such as lack of project readiness and procurement-related delays, a report has said.

Expenditure-to-target ratio has been declining over the last three years, with the ratio coming down to 78.4 percent in 2013-14 from 82.6 percent in 2012-13, according to the Nepal Portfolio Performance Review (NPPR 2015) prepared by the Finance Ministry. “This shows government’s limited spending capacity,” said the ministry.

Speaking at 14th NPPR meet in Kathmandu on Friday, Finance Minister Ram Sharan Mahat said given the poor performance last year, budget implementation has been given high priority this fiscal year. The government has declared the current fiscal year as the ‘Budget Implementation Year’, announcing measure like performance of retention of key project staff, multi-year contracting of key road projects, removing the requirement for project approval from the National Planning Commission (NPC).

However, the government did not abide by its own announcement as the Finance Ministry asked other ministries to get their projects approved by the NPC right after the budget presentation.

NPC officials said many ministries are yet to get their projects approved.

Another concern pointed out in the report is almost a fourth of the total spending took place in the last month and 42.4 percent in the last quarter, raising questions over the quality of spending. As spending is done in last months, the quality is usually compromised.

Last year, 58.8 percent of the capital expenditure was made in last quarter. “This issue shows not only the lack of the absorptive capacity, but also structural issues concerning budget execution,” said the Finance Ministry.