Govt fails to spend resources for development works

The government failed to spend resources in the development works as capital expenditure tumbled by 15.9 percent to Rs 14.7 billion in the first eight months of the current fiscal year (FY) compared to the same period last year against an increment of 91 percent last year compared to the previous year.

The latest statistics published by Nepal Rastra Bank (NRB) has attributed the delay in budget presentation, absence of representatives in local bodies, delay in the formulation of programmes and directives regarding New Nepal Campaign, irregular power supply as some of major factors to the decline in the capital expenditure.

During the review period of this year, the budget remained at a surplus of Rs 11.3 billion in contrast to a deficit of Rs 7 billion in the corresponding period the last fiscal year.

"An impressive growth of resource mobilisation relative to the government expenditure accounted for such a budget surplus in the review period," said the Current Macroeconomic Situation published today by Nepal Rastra Bank (NRB).

During the first eight months of the current FY, the total government expenditure increased by 14.2 percent to Rs 91.8 billion compared to an increase of 32.5 percent in the corresponding period the previous year.

"The deceleration in such spending was mainly due to a decline in the capital expenditure - spending on development works," said the central bank.

Meanwhile, recurrent expenditure - spending on salaries and wages - increased by 20.1 percent to Rs 61.4 billion. In the corresponding period the last fiscal year, recurrent expenditure had increased by 19.2 percent.

In the review period, the government has a cash surplus of Rs 26.5 billion with the central bank.

Revenue mobilisation has also grown by 38.6 percent to Rs 84 billion compared to an increase of 26.2 percent in last fiscal year's corresponding period. The non-tax revenue has a huge contribution to the increase of revenue -- it grew by 96 percent to Rs 17.0 billion compared to an increase of 15.9 percent in the same period last fiscal.

The overall Balance of Payment (BoP) recorded a significant surplus of Rs 34.8 billion in comparison to a surplus of Rs 13.6 billion in the corresponding period the previous fiscal year.

The y-o-y increase in consumer price inflation rose to 13.1 percent in mid-March 2009 compared to 7.2 percent in mid-March 2008. The price hike was fueled by price hike in food and beverages group.

The y-o-y wholesale price inflation also increased to 12.3 percent in mid-March 2009 compared to a growth of 6.6 percent a year ago.

Similarly, the overall y-o-y salary and wage rate index also rose by 20.3 percent compared to a rise of 9 percent a year ago.

According to the central bank, in the first eight months, exports increased by 17.1 percent against a decline of 2.9 percent in the corresponding period last year. nepalnews.com May 05 09