Haphazard spending in the last week of fiscal year

Govt spent Rs 34.46 billion in capital expenditure in the last week of 2015/16 The government has spent Rs 34.46 billion in capital expenditure in the past eight days which is around 50 percent of the development budget spent in the rest of the fiscal year. Accumulated development spending till July 7 was Rs 75.39 billion, according to the finance ministry. Economic experts say that eleventh hour spending does not make real contribution to the economy. “Such haphazard spending only drives inflation. It neither creates job and demand for industrial products, nor facilitates capital formation,” economist Bishwambher Pyakuryal said. The economy is projected to grow by less than one percent in the current fiscal year. Development activities were hit by 20-week unofficial blockade imposed by India. No significant progress was seen in implementation of development programs even after the blockade as lifted. Though the government is celebrating Fiscal Year 2015/16 as 'Budget Implementation Year', it hasn't been implemented in practice. Pyakuryal is also perplexed at the way that the government is handling money. “These eleventh hour spending contradicts with the government's act of mobilizing huge fund from the market through different financial instruments,” added Pyakuryal. Capital spending stood at only 28 percent of the targeted Rs 208 billion till mid-June. But spending figures increased by 22 percentage points in the last 30 days of the fiscal year, according to Financial Comptroller General Office. Average daily spending was only Rs 210 million before July 8. Thereafter, it jumped to Rs 4.33 billion. The government spent Rs 7 billion on Friday (till office time) - the last day of the fiscal year - alone. The government spent Rs 347 billion in recurrent expenditure which is 71.67 percent of the target. A source at the Ministry of Finance (MoF) said spending figures started increasing after the government started to dole out funds in different headings. “Anyone approaching the ministry with project ideas or programs has walked away with the funds,” a finance ministry official said, seeking anonymity as he is not authorized to talk to media. “Funds were doled out through fund transfer between budget headings after the budget for the new fiscal year was tabled,” the official added. Huge pile of cash in government treasury might have encouraged ministers and highly-ranked government officials to distribute funds haphazardly. The government had cash reserve of more than Rs 200 billion until a month ago. GOVT MEETS REVENUE TARGET The government has managed to meet revenue targets despite slowdown in economic activities due to border obstructions. According to finance ministry officials, the government has mobilized Rs 470 billion from different revenue headings which is 99.13 percent of the target. Source: Republica