Unable To Spend
Nepal’s economic sclerosis is often attributed to the instability and chicanery at the highest layers of politics and administration. This is true, but there lie other inconvenient truths, too. It is also the incompetence and inefficiency of the state agencies to spend the allocated budget to the development sector in time. The country continues to fare badly when it comes to utilising a huge chunk of the budget earmarked for fueling the economy that has been suffering from low investment, corruption, inefficiency and labour unrest. Low utilisation of the fiscal budget poses a big challenge to the national economy. This was acknowledged by none other than the secretary at the Ministry of Finance. Shanta Raj Subedi, Finance Secretary, the other day disclosed that the ministry’s all-out efforts to give impetus to development projects through the timely disbursement of budget came a cropper in the first two months of the current fiscal year 2017/18. According to him, the ministry beavered away at spending the money set aside for new and pending projects. It expedited monitoring of the projects, held consultations with the line ministries, provided the budget of idle projects to the efficient ones and disbursed adequate amounts of money to the pride projects. However, these endeavours did not yield desired results. Apparently, the government failed to set up a labour bank, prime the pump for the sick industries and fromalise the informal economy. Many of the state-owned enterprises are dysfunctional owing to political interference, trade unionism and inapt management. They obviously lack professional insight, competent human resources and responsibility on the part of employees. They badly need revamping without political meddling and parochial interest. Likewise, it requires big efforts at the policy and budgetary level to bring the informal sector into mainstream economy.
It is estimated that around 90 per cent of the workforce is involved outside the formal economy, which has caused harm to the workers and employees as well as the country’s revenue. If this large portion of the workforce enters the formal economy, this will naturally come into the taxation system, thereby boosting the state’s coffers. The informal workers will also benefit from the legal rights related to their recruitment and facilities as mentioned in the main law of the land. Despite the lackluster budget performance, the ministry claimed that it had formulated an economic policy to timely address the challenges of underdevelopment and underutilisation of budget. It has created a project readiness filter that enables the government to allocate budget to only those projects that are feasible and likely to get completed within the stipulated timeframe. The creation of a mechanism to pick a viable and quality product is good. But there are other important measures that the government and bureaucrats should take together. Like the need of a stable government, there should also be a stable bureaucracy. The tendency to transfer experts and employees assigned to implement given projects must be discouraged. There should be harmonious relations between the politicians and bureaucrats in order to have better coordination between the line ministries and agencies to give momentum to development works. The concerned ministers and top officials should do everything to boost the confidence of the people involved in project implementation. Transparency and accountability are other important elements essential for curbing corruption at both levels – policy and fiscal transactions.