Over Rs 5bn unspent budget from various bodies goes back to state treasury

KATHMANDU: More than Rs 5 billion of budget from various bodies has been returned to the state treasury, as the funds remained unspent.

The majority of refunded budget comes from capital expenditures. Among the agencies returning the largest amounts are the Ministry of Energy, Water Resources and Irrigation (MoEWRI) and the Millennium Challenge Account Nepal Development Committee (MCA-Nepal).

According to Ambika Prasad Khanal, Information Officer at the Ministry of Finance (MoF), Rs 53.4 million was refunded under general expenditures, while Rs 5.03 billion was returned under capital expenditures.

Under capital expenditures, the Ministry of Communications and Information Technology refunded Rs 9.5 million, the Ministry of Culture, Tourism and Civil Aviation refunded Rs 3.9 million, the Election Commission refunded Rs 24.02 million, and the Ministry of Land Reforms, Cooperatives and Poverty Alleviation refunded Rs 15.8 million.

The MoEWRI refunded Rs 2.35 billion, while MCA-Nepal returned around Rs 2 billion.

Other bodies returning unspent capital expenditure budgets include the Ministry of Industry, Commerce and Supplies (Rs 367.08 million), the Ministry of Foreign Affairs (Rs 300 million), and the Office of the Auditor General (Rs 16.01 million).

As per the provisions of the Economic Procedure and Financial Responsibility Act and Regulations, unspent budgets allocated for any plan or programme by mid-March, and still unutilised during the remaining fiscal year, must be returned to the MoF by the third week of April. MCA-Nepal returned about 58% of its budget this year, following a 70% return last year.

There is uncertainty over whether US assistance will continue for this US government-funded project, while the budget allocated by the Nepalese government remains unspent. For the current fiscal year, MCA-Nepal had received Rs 13.36 billion in budgetary allocation, of which Rs 9.9 billion was to be funded by the Millennium Challenge Corporation (MCC), and Rs 3.45 billion sourced domestically.

MCA-Nepal, however, failed to utilise the allocated budget, returning approximately 58% of it to the MoF. Weak expenditure performance was also observed last fiscal year, during which MCA-Nepal spent only 30% of its allocated budget, returning 70%.

The government had allocated Rs 10.84 billion for the last fiscal year for projects under MCA-Nepal, of which Rs 7.6 billion was returned. Delays in compensation distribution and land acquisition for power transmission line construction have been attributed as the primary reasons for failing to meet spending targets.

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