![Lumbini budget spending at a dismal 66.14%](https://en.himalpress.com/wp-content/uploads/2023/06/lumbini-1.jpg)
LUMBINI: Lumbini Province Government has managed to spend only 66.14% of its budget allocated for the fiscal year 2023/24.
The province government had allocated a budget of Rs 40.47 billion – Rs 23.25 billion for capital expenditure and Rs 17.22 billion for recurrent expenditure – for 2023/24.
A significant chunk of this budget was spent in the last month of the fiscal year. According to the Provincial Treasury Controlller’s Office, Lumbini, a whopping 18.8% of the total budget, or Rs 7.64 billion, was spent in the 24 days of the 12th month of the fiscal year, i.e., mid-June to mid-July. The office has said that budget implementation in the province appears low as payments have been stopped due to insufficient funds in the consolidated fund.
While the tradition of spending a large portion of the budget at the end of the fiscal year continues, Lumbini had to halt payments for major projects as the provincial government’s consolidated fund had been depleted. A failure to make payments in the current fiscal year means the province government will face an additional liability of at least Rs 2 billion in the coming year.
Hundreds of contractors have been affected as payments have been stopped since July 6. The consolidated fund has been emptied as the federal government has not provided an equalization grant to the provincial government. Also, the province’s revenue collection fell short of targets.
The federal government had allocated Lumbini Province Rs 8.14 billion as an equalization grant. However, the actual disbursement was only Rs 6.04 billion.
The province government had set a target to collect Rs 4.74 billion in internal revenue for the current fiscal year. It, however, could collect only 34.33% of the target, or Rs 1.63 billion, as of Monday.
Similarly, the provincial government had set a target of collecting Rs 1.25 billion in domestic debt. However, it did not materialize as the provincial government failed to bring necessary laws to mobilize domestic debt.
With the consolidated fund depleted, the Ministry of Economic Affairs and Planning sought details of pending payments for major projects from all 12 districts on Friday. Mahesh Pandey, an undersecretary at the ministry, said more than Rs 2 billion is needed for payments in various sectors including road construction, irrigation, and building construction.
Deepak Gyawali, chief of the Provincial Treasury Controller’s Office, said payments for completed works had to be stopped due to a lack of budget in the fund. “The total budget of the province was Rs 40.48 billion. However, only Rs 28 billion was accumulated in the fund from federal transfers, internal sources, and revenue sharing,” he added.