Stakeholders Raise Concerns Over Federal Budget's Effectiveness in Infrastructure Spending and Political Interference

Following the federal government’s unveiling of the budget for the fiscal year 2081/82, a spectrum of responses has emerged regarding the adequacy of allocations to various sectors and the capability of institutions to utilize the allocated funds effectively.

During a program organized by the Society of Infrastructure Journalist Nepal on Monday, stakeholders expressed concerns that, despite increased budget allocations for the infrastructure sector, the government’s spending capacity remains questionable. The event featured a discussion on 'Infrastructure and Construction in the Budget,' where speakers highlighted the chronic issue of underutilization of budgeted funds for infrastructure projects.

Gopal Prasad Sigdel, Secretary at the Ministry of Physical Infrastructure and Transport, acknowledged the need for both government bodies and construction entrepreneurs to enhance their capacity to utilize allocated budgets. He pointed out that frequent visits to the Finance Ministry for minor budget adjustments significantly hinder project spending. Sigdel called for granting authority to ministry secretaries to amend plans and programs independently, suggesting that such a change would improve budget utilization. He noted that his ministry was tasked with managing approximately Rs 250 billion, with nearly 95 percent allocated to prioritized projects. To incentivize better spending, Sigdel announced the introduction of awards for construction entrepreneurs.

Former government secretary Kishor Thapa expressed skepticism about the timely disbursement of funds to construction entrepreneurs despite the increased budget. He cautioned that the ministry's historically weak spending performance might persist, even with the higher budget.

Similarly, former secretary Arjun Jung Thapa highlighted political pressure and influence as significant obstacles to effective budget spending. He explained that political interference affects everything from project planning to budget allocation, leading to inefficient implementation. According to him, the random allocation of funds results in projects that require substantial budgets being underfunded, while others, unable to utilize their allocations, receive excess funds. This misallocation often necessitates budget transfers midway through the fiscal year.

Hari Bahadur Darlami, Chairman of the Nepal Engineers Association, raised concerns about the insufficient budget allocations for mega projects. Rabi Singh, Chairman of the Nepal Construction Entrepreneurs' Federation, criticized the budget, arguing that the Finance Minister had ignored recommendations from the private sector and business community.

The discussions underscored a consensus on the need for structural reforms to enhance budget spending efficiency, reduce political interference, and ensure timely and adequate funding for prioritized projects.