Govt spending pattern must change: experts

Experts have expressed worry over the current trend of government spending. Proper amount and timeliness is essential on development spending, they added.

Time has come to change the trend and structure of government spending, said Chairperson of National Natural Resources and Fiscal Commission, Balanand Poudel, warning that if the current trend of dwindling capital expenditure and rising current expenditure continues, a serious crisis would emerge in 10 years. “Ratio of development expenditure and current expenditure was at equal number till 2054BS, while the current spending skyrocketed and capital spending shrank. Time has come to change the structure of government spending,” he underscored.

Paudel was making such observation during a discussion organized by the National Concern and Coordination Committee of National Assembly on Wednesday. The Committee held discussion with the National Planning Commission, and the NNRFC on the management of development projects.

Chair Paudel admitted that there was problem among three layers of government relating to use of national resources and distribution of revenue. He blamed the policy confusion behind this problem.

“An example here, huge chunk of budget is spent on education sector; big buildings are constructed, but there are few students. Quality education is elusive,” he said, adding that only investment is not enough but policy intervention is required to improve education quality.

On the occasion, Vice Chair of National Planning Commission (NPC), Dr Min Bahadur Shrestha, said the NPC was working for long term policy making, planning, monitoring and evaluation, coordination among different layers of governments and bodies, and research.

He said that the conditional grants and fiscal equalization grants were increased for the coming fiscal year. Shrestha also admitted that there was duplication on drinking water, roadway and other infrastructures.  Currently, the NPC is preparing for formulating periodic plan, which is required for planned development.

Categorization of development project, criteria and bases of categorization, fiscal federalism, implementation status of NPC’s recommendation, problems facing NPC and Fiscal Commission, challenges and future planning are underway.

In the discussion, Committee Chairperson Dil Kumari Rawal Thapa viewed there was no in-depth analyses on investment and return of national pride projects; budget allocation was random and guided by political influence; monitoring and evaluation was weak; non-coordination and cooperation among ministries and governments; non-implementation of fiscal discipline and arrears was growing. For these to be curbed, both the NPC and NNRFC must be serious, she underlined.

Similarly, Committee member Kumar Dasaudi viewed the federal government was holding small amount of budget even for the projects that can be carried out by the local levels.

Indu Kadariya wondered why the budget was not allocated equally. She expressed concern over power and influence guiding budget allocation. Other members of the committee questioned the role of district coordination committee, centralist mindset of government, ignorance to sub-national governments. Exhaustion of natural resources and violation of budget ceiling also featured in the discussion.