Spending on priority projects down

- Post Report, Kathmandu
The government spent 22.37 percent of the allocated budget for first priority projects in the first half of the fiscal year

Feb 23, 2016-The rate of spending on first priority projects is lower compared to second priority projects during the first half of the fiscal year. 

The government spent 22.37 percent of the allocated budget for first priority projects while spending on second priority projects reached 25.09 percent of the budget, the Mid-Term Review of the Budget for the current fiscal year said. Spending on third priority projects amounted to 2.07 percent of the allocated amount. 

According to the report, 326 first priority (P1) projects, 120 second priority (P2) projects and 22 third priority (P3) projects are being implemented in the current fiscal year. 

The government has set aside Rs707.14 billion for P1 projects, Rs83.68 billion for while P2 projects and Rs28.63 billion for P3 projects. 

“The percentage of spending on P1 projects is lower than that on P2 projects, and spending has not happened as per priority,” the report states.

Planning expert Pushpa Lal Shakya said that ministries were permitted to spend the budget for P2 projects directly while they are required to get the approval of the National Planning Commission (NPC) for P1 projects. “The longer time taken for P1 projects might have resulted in a higher rate of spending for P2 projects,” he said. 

According to Shakya, who also served as the joint secretary at the NPC, there is a greater number of P1 projects, and disruptions in the supply of fuel and construction materials also affected spending as progress was slowed. Disregarding the difference in the rate of spending across all three categories of projects, what is common to all of them is that expenditure has gone down during the first half of this year compared to last year. Rabindra Nath Shrestha, joint secretary at the Ministry of Physical Infrastructure and Transport, said that fuel shortages brought construction work to a halt for four to five months after the blockade. “Gasoline is needed to run dozers and excavators and also for blasting, but almost all the development projects could not get it,” he said. According to Shrestha, contractors also became reluctant to continue work at the projects as prices of construction materials soared. However, expenditure is expected to rise in the future as the blockade has been lifted. “Even in normal times, the first half of the fiscal year is taken up by contract management. This year, the construction work started a month late, but spending will speed up as projects move forward,” said Shrestha.


Published: 23-02-2016 08:39

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