Karnali Provincial Government Faces Criticism as Budget Implementation Hits Record Low

The Karnali Provincial government’s budget implementation has taken a hit, with only 7.11 per cent of the allocated funds utilized in the first four months of the current fiscal year (from July 16 to November 16). Despite stern directives from Chief Minister Raj Kumar Sharma earlier this year, the government has struggled to effectively allocate and spend its budget.

The government had presented a budget of Rs. 33.37 billion for the fiscal year 2023/24, but shockingly, only Rs. 2.37 billion has been spent during the review period. This stands in stark contrast to the previous fiscal year, where the government under Jeevan Bahadur Shahi had spent 7.63 per cent of the budget (approximately Rs. 2.50 billion) during the same period.

Chief Minister Raj Kumar Sharma, in a set of 61-point instructions issued on January 31, 2023, had emphasized the need for quick execution of tasks and resolving issues hindering budget implementation. Despite these directives, the current fiscal year’s budget execution has been poor.

Critics have pointed out that the provincial government, despite lacking financial resources of its own, has consistently struggled to implement the annual budget received from the federal government. With over Rs. 31.63 billion still unspent, concerns are rising about the government’s ability to utilize the remaining budget effectively.

Of particular concern is the development expenditure, where only 5.29 per cent (Rs. 842 million) of the allocated Rs. 19.57 billion has been spent so far. Stakeholders argue that the provincial government’s lack of reform in the implementation of the development budget raises questions about the structural efficiency of the system itself.

The Provincial Treasury Controller Office reveals that only 11.11 per cent of the budget under the recurrent heading has been spent. Critics argue that the government’s apparent indifference to the implementation of the development budget suggests a focus on meeting salary and allowance obligations, turning it into a financial burden on the province.

Minister for Economic Affairs and Planning of Karnali Province, Bedraj Singh, acknowledged the shortcomings in budget implementation, stating, “We will discuss identifying the weaknesses and improve them.” As the government faces mounting criticism, the challenge ahead lies in addressing these issues and ensuring more effective fiscal management in the remaining eight months of the fiscal year.