FinMin seeks fund transfer of Rs 100b ahead of elections

  • Chief Secretary Somlal Subedi opposes the proposal
- ANIL GIRI, Kathmandu
Finance Ministry cannot reallocate funds earmarked for capital expenditure to cover recurrent cost

Feb 23, 2017-Over Rs 100 billion proposed budget transfer for new programmes by Finance Minister Krishna Bahadur Mahara during a recent Cabinet meeting has landed in controversy.

Two Parliamentary panels--the Public Accounts Committee and International Relations and Labour Committee--on Wednesday sought details of the proposed programmes proposed by the Finance Ministry.

During Monday’s Cabinet meeting, Finance Minister Mahara proposed either to allow him to bring supplementary budget or pave the way for the ministry to bring new programmes. The proposal was opposed by Chief Secretary Somlal Subedi.

Opposing Mahara’s proposal in the Cabinet, Subedi is learnt to have said it was not possible to increase the size of the budget at a time when capital expenditure has been failing to meet the target.

“I put forth my views during the Cabinet meeting that it is impossible to dole out government funds for new programmes and that budget size cannot be increased. Instead, we should focus on improving our spending mechanism to expedite capital expenditure and quality of development works,” said Subedi.

Finance Minister Mahara had proposed to release money for quake victims and some other projects and programmes in various districts representing the top political leaders.

In the meeting, Mahara had proposed either to allow the government to bring supplementary budget or allow him to introduce new programmes by raising funds for other sources. During the Cabinet meeting, Chief Secretary Subedi had to remind the government of the Financial Procedures Rules 2007 where ministry secretaries or department heads can reallocate up to 25 percent of funds from one expenditure topic to the other within their bodies on their own. 

But to reallocate more funds, they need to get Finance Ministry’s nod. “This is only possible in old programmes and projects, not for new ones, Subedi is learnt to have told the meeting.  

The Finance Ministry can transfer up to 10 percent of funds from the budget head of one ministry to the budget head of other ministry. However, it cannot reallocate funds earmarked for capital expenditure to cover recurrent cost. But Mahara’s proposal was to create new funds for capital expenditure.

On Wednesday, the International Relations and Labour Committee of Parliament formed a 13-member taskforce to study the amendment to the programmes included in the budget and transfer of budgetary funds proposed by the Finance Ministry. 

Rajan Bhattarai, a lawmaker, said: “We are extremely concerned over government’s proposal to spend over Rs 100 billon on new projects which are beyond the budget’s red book. The reallocation of fund is an extremely serious case and we will not allow the government to do it.”

In the meeting, lawmakers expressed concerns over the transfer of fund allocated for national pride project to other projects.

The taskforce will study the complaints that the budget earmarked for the programmes by the erstwhile government through the budget statement had been extensively transferred to other headings. The committee president Prabhu Saha is the taskforce coordinator.

Parliamentary Public Accounts Committee member Ram Hari Khatiwada said that the committee has sought details of the fund transfer proposed by the current government and fund transferred by the then KP Oli government.  “It was found that the KP Oli government had transferred over Rs 25 billion for various programmes and projects,” said Khatiwada.

In the parliamentary committee meeting on Wednesday, Finance Ministry official told lawmakers that spending the amount allocated under the capital expenditure was the first priority. 

“On the one hand, there is situation of low capital expenditure while on the other, there is demand of huge amount of funds for a number of new programmes. Till now, around Rs 300 billion has been asked for new programmes. It seems we’re failing to priorities programmes while formulating the budget,” said Madhu Marasini, chief of Budget and Programme Division at the Finance Ministry. 

He however clarified that the ministry has been giving approval for budget transfer only on the basis of priority and necessity, while remaining within the parameters of budget regulation. 

Published: 23-02-2017 08:03

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