Government's Rs 2.40 Billion Cash Transfer Highlights Ongoing Budget Reallocation Practices
In a span of one month, from mid-April to mid-May, the government executed cash transfers totaling Rs 2.40 billion, according to the Ministry of Finance (MoF). These funds were reallocated across 30 projects primarily under the Ministry of Energy, Water Resources and Irrigation, the Ministry of Physical Infrastructure and Transport, the Ministry of Defence, and the Ministry of Urban Development. Notably, more than Rs 10 million designated for capital expenditure was redirected to other sub-heads during this period.
Budget transfers involve shifting funds from one designated program or project to another, a common practice when government agencies struggle to utilize their earmarked funds. Historically, the government spends approximately 70 percent of its capital expenditure annually, often exaggerating their spending capacity with last-minute expenditures as the fiscal year ends.
The Office of the Auditor General's (OAG) annual report reveals extensive budget transfers, citing around Rs 200 billion in the fiscal year 2021/22—an amount nearly equal to the total allocated for development projects that year. The OAG highlights these transfers as a significant source of bureaucratic irregularities.
During the recent mid-April to mid-May period, additional funds totaling around Rs 3 billion were allocated to various authorities, predominantly within the Ministry of Defence and the Ministry of Energy, Water Resources and Irrigation. The National Priority Project Sunkoshi-Marin Diversion Multipurpose Project received the largest allocation, with an additional Rs 1.40 billion. The Army Headquarters received Rs 384.4 million, while its directorate was allocated Rs 73.4 million. The Ministry of Urban Development obtained Rs 353.6 million for the construction of special buildings, and the Ministry of Energy, Water Resources and Irrigation received an additional Rs 121.7 million for flood control measures.
To curb unnecessary expenses at the end of the fiscal year, the Financial Comptroller General Office (FCGO) has prohibited all three tiers of government from making last-minute expenditures. In response, the MoF typically maximizes budget transfers before the FCGO's deadline, a pattern observed annually.
