Govt bars vehicle purchases, freezes distributive programs to manage fund
KATHMANDU, Dec 14: The government has barred all ministries and government agencies from procuring vehicles, tightened foreign visits and also frozen about half a dozen distributive programs in a bid to make sure the money appropriated in the annual budget is sufficient for the fiscal year.
“No agencies can buy new vehicles from the budget allocated from government´s own sources. Programs like ´development based on people participation´, ´Karnali and surrounding area development program´ and ´backward Tarai-Madhesh special program´ too have been frozen,” said a senior official at the Ministry of Finance (MoF).
Likewise, in a bid to tighten spending, the government has also instructed all the government agencies to compulsorily acquire MoF´s prior approval while sending any official to foreign trip, study, overseas training, and seminar and workshops, among others.
The MoF has already issued circular to all government offices to inform them about the decisions. “They have been sternly instructed to adhere to this instruction; flouting it will draw stringent action,” the official said.
The government took a decision to this regard mainly after the budget announced amid political gridlock compelled it to limit spending for this fiscal year to Rs 351.76 billion -- an amount that is equal to what it spent in actual in the last fiscal year.
“Given the inflation, this amount is certain to fall short to finance even the last year´s programs. Hence, we had to resort to these measures,” said the MoF official.
The government was compelled to adopt those measures also because owing to the necessity to make new allocations for fresh elections of the CA and establishment of the new secretariat in the Nepal Army for integrating Maoist combatants, it has not allotted to the ministries even the amounts that they actually spent in the last fiscal year.
“Ministries this year have received budgets less by 12 to 28 percent from their last year´s actual spending. This is a pretty tight situation; unless prudently managed, the ministries will face serious financial problems in the days to come,” the official said.
While the situation clearly required the government to tighten spending, officials added the programs that have been frozen like ´development based on people participation´, ´Karnali and surrounding area development program´ and ´backward Tarai-Madhesh special program´ were meager distributive programs that aimed to serve political purposes of the ministers rather than making real contribution to the development of those areas or communities.
By freezing those programs, the government has generated spare money of more than a billion rupees.
Through such measures and seeking the ministries to drop low priority development programs, the government has set aside additional Rs 7 billion for holding elections and another Rs 3 billion for urban road expansion. “These funds have been kept under the ´miscellaneous´ heading,” according to the official.
The government has also separately allocated about Rs 3 billion each for holding elections and setting the new army secretariat.
Though the MoF has restricted ministries from procuring new vehicles from its allocations, officials clarified it, however, has allowed them to buy vehicles if the development projects that they are executing have separate donors´ allocations for such purchases.
“In order to make sure such procurement is already in the donors´ commitments, we have asked all the agencies to get our approval compulsorily before moving ahead with the procurement,” said the source.