SEJON holds policy dialogue; stakeholders warn instability undermines public spending

KATHMANDU: The Society of Economic Journalists‑Nepal (SEJON) organised a policy dialogue on the utility of public expenditure and improvement of service delivery on Friday. Stakeholders warned that political instability has undermined the effectiveness of Nepal’s public spending.

Minister for Industry, Commerce and Supplies Anil Kumar Sinha, the chief guest, joined Finance Secretary Dr Ghanshyam Upadhyaya, Financial Comptroller General Shobhakanta Poudel and Public Expenditure Review Commission member Suresh Pradhan at the event.

During a discussion on public procurement and service delivery, Minister Sinha questioned the priority, utility and quality of public spending, saying large annual expenditures on development, social security and services have failed to produce tangible improvements for citizens. “Expenditure without prioritised plans and clear results neither satisfies citizens nor strengthens the economy,” he said, adding that the necessity and justification of some budget heads cannot be proven.

Minister Sinha said the utility of public spending and the quality of service delivery are directly linked to citizens’ daily lives, trust in the state and the effectiveness of democracy. “Roads are built but are not long‑lasting and durable,” he said, calling this a sign of poor utility and quality of spending rather than a lack of funds. He blamed misuse of public expenditure, weak governance and poor utilisation for rising grievances and said the protest on September 8 was a result of those failures.

To make the economy dynamic, Sinha said efforts must start with lower‑level entrepreneurs and work upwards, warning of cartels and distortions at higher levels. He urged voters to choose representatives who will listen to experts, saying, “Let’s develop a culture of listening to experts and give up the tendency of becoming an expert only after sitting in the chair.” He also criticised budgets that favour short‑term political gains over long‑term needs, capital formation and job creation.

Finance Secretary Dr Ghanshyam Upadhyaya said the government is focused on the proper utilisation of public money and achieving concrete results. “There is no shortage of money in Nepal; the main challenge is how to utilise it properly,” he said, adding that economic issues have been deprioritised amid frequent political changes.

Upadhyaya noted that Nepal faced five major economic shocks in the past decade — the Covid19 pandemic, the 2015 earthquake, the blockade, major natural disasters and the recent Gen‑Z movement in September 2025 — yet maintained positive growth except for the year after Covid pandemic. He said the average growth rate during this period was 4.8% and 4.6% last year, and argued that Nepal could reach an average of 7% if political stability is maintained.

He highlighted gains in the energy sector, saying power production has risen from 500 MW to over 4,000 MW and that about 1,000 MW is being added each year, supporting economic growth. Upadhyaya identified job creation as a major challenge, noting that 500,000–600,000 new workers enter the labour force annually and many are forced to seek work abroad.

Economist Dr Dilliraj Khanal, Chairperson of Public Expenditure Review Commission, warned that Nepal’s public expenditure structure is becoming distorted and misaligned with the constitution and the Sustainable Development Goals. He said there is a deep imbalance between planning, budget and development priorities.

Khanal cited shifts in budget shares: general public services rose from 18.9% in fiscal year 2011/12 to 42.9% in FY 2022/23; the economic affairs sector fell from 23.3% to 17.5%; health dropped from 7.8% to 4.2%; and education fell from 21% in FY 2011/12 to 11.27% in FY 2022/23 and 10.95% in FY 2023/24. He said social security’s share rose from 3.6% to 16.2% but achievements remain weak.

Dr Khanal criticised the tendency to concentrate expenditures in the final month and week of the fiscal year, saying this undermines effectiveness and quality. He warned that narrowing fiscal space, falling grants and rising internal debt require large investments for reconstruction and recovery, and quoted a World Bank finding that, under current project management, some large projects could take more than 40 years to complete.

Concluding that the problems are systemic and structural, he pointed to weak governance, lack of transparency and accountability, corruption and inadequate monitoring as root causes. He recommended a time‑bound roadmap for reconstruction and recovery, cutting unproductive spending, refocusing resources on education and health, transparent reconstruction and programmes linking youth to employment and skills.

A panel discussion followed Dr Khanal’s presentation, with Financial Comptroller General Shova Kanta Poudel, Public Expenditure Review Commission member Suresh Pradhan and NYEF executive committee member Vedika Murarka representing the private sector sharing views.

The programme also included a fellowship graduation in public finance management; certificates were distributed to participants who completed the seven‑month fellowship. More than 100 policymakers, officials and sector representatives attended the event.