Kathmandu, April 27: More than five billion rupees allocated for the current fiscal year 2024/25 have been returned by various agencies, citing inability to spend the budget.
According to the Ministry of Finance, more budget has been returned under the capital expenditure heading than under the recurrent heading. An analysis by agencies shows that the Ministry of Energy, Water Resources and Irrigation, and the Millennium Challenge Account Nepal (MCA-Nepal) have returned the highest amounts.
According to Finance Ministry Information Officer Ambika Prasad Khanal, Rs 53.4 million was returned under the recurrent heading and Rs 5.0381 billion under the capital expenditure heading. In the recurrent heading, the Ministry of Communication and Information Technology returned Rs 9.5 million, the Ministry of Culture, Tourism, and Civil Aviation returned Rs 3.9 million, the Election Commission returned Rs 24.2 million, and the Ministry of Land Management, Cooperatives, and Poverty Alleviation returned Rs 15.8 million.
Under the capital expenditure heading, the Ministry of Energy, Water Resources and Irrigation returned the most, at Rs 2.3534 billion. MCA-Nepal returned about Rs 2 billion, according to Khanal. Other agencies returning capital budgets include the Ministry of Industry, Commerce and Supplies (Rs 367.8 million), the Ministry of Foreign Affairs (Rs 300 million), and the Office of the Auditor General (Rs 16.1 million).
According to the provisions of the Financial Procedures and Fiscal Responsibility Act and regulations, any budget allocated for a project or program that cannot be spent by the end of the month of Falgun (mid-March) — and is unlikely to be spent during the remaining fiscal year — must be returned to the Ministry of Finance by Chaitra 15 (around the end of March).
Last year, MCA-Nepal returned about 70 percent of its allocated budget; this year, it returned around 58 percent. There is uncertainty about whether American aid for the project, operated under U.S. grant assistance, will continue, and there remains a situation where the budget allocated by the government for this project remains unspent.
For the current fiscal year, MCA-Nepal was allocated Rs 13.36 billion. Out of this, Rs 9.9 billion was expected to come from grants from the Millennium Challenge Corporation (MCC), with the remaining Rs 3.4518 billion to be sourced internally. However, after MCA-Nepal failed to utilize the budget, about 58 percent of the amount expected from internal sources was also returned to the Ministry of Finance.
Not only in the current fiscal year but also in the previous fiscal year, MCA-Nepal’s spending was very low. Of the total budget allocated to MCA-Nepal for the previous fiscal year, only about 30 percent was spent, with the remaining 70 percent returned. The government had allocated Rs 10.8417 billion for MCA-Nepal projects last fiscal year, out of which Rs 7.607 billion was returned.
The inability to distribute compensation and complete land acquisition needed for transmission line construction was cited as the main reason for the failure to spend the budget as planned. #nepal #finance #budget #MCA_Nepal
