The programme ‘Public Expenditure System in Federal Structure: Opportunities and Challenges’ was jointly organised by Public Expenditure Review Commission (PERC), and South Asia Watch on Trade, Economics and Environment (SAWTEE) to discuss the complexities of public expenditure in the fledgling federal system, especially in the context of agricultural development.
Dr. Dilli Raj Khanal, Chairman of PERC, pointed out that one of the biggest reasons for the mismanaged public expenditure was the tendency of starting projects without proper readiness in terms of planning, which created complications during implementation leading to unspent budget allocation. Khanal emphasised on spending substantial amount of time on planning and preparedness which would then ensure effective implementation.
Dr. Posh Raj Pandey, Executive Chairman, SAWTEE also cautioned that Nepal’s current expenditure allocation had been growing since some time and increased number of administrative units would further add to it. He pointed out that growing fiscal anarchism were shown by tendency of allocating budget without figuring out the sources of funds and projects being launched without completing necessary pre-requisites. Lack of preparation causes projects to suffer cost and time over-run making the administration inefficient, he said. He cautioned that lack of accountability in maintaining budgetary discipline may lead to provincial and local level governments replicating similar tendencies compromising their absorptive capacity.
Participants included representatives of federal and provincial governments, including secretaries, joint secretaries and representatives of municipal and rural councils who also shared their experiences. They emphasised that the lack of sufficient personnel and procedural confusion had created problem in service delivery thus creating inefficiency. Having a transition plan for distribution of fiscal responsibilities from federal to lower levels could have made the transition smoother. Similarly, they also urged the federal government to set up a centralised and uniform accounting and reporting information technology for efficient and integrated system.