In Nepal, despite the practice of federalism being touted as essential for overall development, provinces are struggling to fully exercise their rights due to a lack of autonomy. The inadequacy of their capacity is also a significant concern, even after more than a decade of experimenting with federalism.
Over the past fifteen years, provinces have shown disappointing budget expenditure rates in their federalism journey. Within the current fiscal year, provinces have only managed to spend around 16% of their allocated budgets within the first six months. This low expenditure trend raises questions about the provinces’ efficiency in utilizing funds effectively.
According to the semi-annual publicized evaluation report, the annual budget expenditure of provinces falls short of the targeted 16-18%. For instance, the provincial governments had brought in a total budget of NPR 278.69 billion, yet by the end of last December, they had only utilized NPR 45.9 billion, indicating a significant gap in spending.
The budget expenditure in Province 2, commonly known as Madhes Pradesh, is notably weaker compared to other regions. Despite bringing in a budget of NPR 43.89 billion, the province only managed to spend NPR 2.46 billion by the same period. This means that the annual budget utilization rate in Province 2 stands at a mere 6.1%.
Ramesh Khatri, from Kansai Nepal News, brings attention to the concerning trend of low budget expenditure in Nepal’s provinces. He highlights the importance of provinces effectively utilizing their budgets to drive development initiatives and meet the needs of their citizens. Khatri emphasizes the necessity for provinces to enhance their financial management capabilities to ensure efficient resource allocation and spending.
—
Author: MAYA | HARUTO
Posted at: February 8, 2025 7:01 pm
