Karnali Province Struggles with Budget Execution as Spending Remains Sluggish

Surkhet. The Karnali Province government spent 1.5546 billion, or 4.57 percent of its total budget, throughout the month of Chaitra.

While the pace of budget implementation was weak until the end of Falgun, spending picked up slightly with the arrival of Chaitra. However, the provincial government has failed to significantly improve its overall budget expenditure.

According to Account Officer Lalit Thapa of the Provincial Comptroller's Office, the government allocated a budget of 32.996655 billion for the current fiscal year (082/083), of which 8.0362 billion had been spent by the end of Chaitra, representing 24.21 percent of the total budget.

By the end of Falgun, the government had spent 6.4816 billion. This data on budget implementation is weaker than in previous fiscal years.

In the previous fiscal year, more than 25 percent of the budget had been spent by this time.

• Details of the government's total budget expenditure until the end of Chaitra

Source: Provincial Comptroller's Office

Why is development budget implementation weaker than before?

By the third quarterly review of the last fiscal year, i.e., by the end of Chaitra, the provincial government had implemented 20 percent, or 3.9324 billion, of the total development budget. In the current fiscal year, only 17.16 percent, or 3.4287 billion, has been implemented during the same review period.

The implementation of the development budget has been a major challenge since the establishment of Karnali Province. Development budget implementation is currently at its weakest in the last 3/4 fiscal years.

The government had an annual capital budget of 19.9827 billion for the current fiscal year. Throughout the month of Chaitra, the government implemented 4.19 percent, or 837.3 million, of the total capital budget.

In contrast, the recurrent budget for salaries and allowances has been spent at nearly 36.10 percent. While the administrative machinery and ministers are receiving regular salaries and benefits, there is little focus on implementing the development budget.

The Ministry of Physical Infrastructure and Urban Development, which holds the largest capital budget, has only implemented 18.33 percent, or 1.9711 billion, in 9 months, despite having an annual capital budget of 10.7314 billion.

Another development ministry, Energy and Water Resources, has only been able to implement 22.41 percent, or 796.7 million. This ministry has an annual capital budget of over 3.55 billion.

While government employees and ministers often blame movements and elections, Chief Minister Yamlal Kandel has expressed frustration, stating that the bureaucracy responsible for implementing the budget is not doing its job.

According to sources close to him, the weak budget implementation is also due to the removal of the quotation system. 'That was an irregularity and it was removed, which is why 30 percent of the budget is not spent and is returned,' Kandel has been saying. 'For example, when a 50 million project is contracted for 35 million, 15 million is returned. Previously, there was a tradition of distributing that amount in the district under the name of quotations. That made the expenditure look higher.'

The Chief Minister's Office estimates that at least 1.5 billion will be returned to the state treasury this year in this manner.

Chief Minister Kandel says that the expenditure percentage looks low because arbitrary spending has been stopped. He has repeatedly directed officials to increase the pace of budget implementation while staying within the rules.

During the budget implementation review program until the end of Falgun, he warned ministers and employees to improve their pace, but they have been ignoring Kandel's instructions.

According to sources close to the Chief Minister, the Chief Secretary has not allowed most of the work to be done. He had even told the ministers and employees that if they could not work, they should think about it in time.

'Your old style of working is not fit at all, end that trend,' Kandel said angrily. 'The progress of budget expenditure has been weak so far, relevant ministries and agencies should improve their performance immediately, this is my instruction.'

Kandel has stated that ministers and secretaries must now answer the question of why the budget could not be implemented effectively. He also said that development work has been affected due to the old working style.

He added, 'Improve your old style, learn to work in a new way, the people want results.'