… rationalisation measures and other factors impede utilisation
The country has spent Nu 9.9 billion (B) as capital expenditure in the first half of the fiscal year 2022-23, according to the budget performance report for the second quarter of the fiscal year.
This makes up about 24 percent of the total capital budget for the fiscal year, which has been revised to Nu 41.83B.
The capital budget saw an upward revision by 8.05 percent which is equivalent to Nu 3.36B as compared to the approved budget of Nu 38.47B.
According to the report, the capital budget saw an increase because of the incorporation of a Nu 3.25B external grant, Nu 79.8 million (M) from internal receipts, and Nu 13.52M as loan funding.
It also added that Nu 22.36M has been appropriated from the current to capital budget as permissible under the Financial Rules and Regulations.
Despite the capital budget seeing an increase of 29 percent from the same period in the previous fiscal year 2021-22, its spending dropped by 7 percent.
The capital budget’s spending in the first half of the previous fiscal year was Nu 10.6B.
The report stated that the capital budget utilisation saw a decrease because of a moratorium on procurement of government vehicles, rationalisation measures put in place to reduce expenditure on training, and delay in initiating the programmes and activities after the completion of the procurement process.
Expenditure on training and awareness fell 21 percent to Nu 760.13M compared to the same period of the previous fiscal year.
There was also a slash in the budget for the procurement of furniture and equipment by 86 percent to Nu 46.5M from Nu 343.33M in the first half of the previous year.
At the same time, the budget for the procurement of the pool vehicles also saw a decrease of 73 percent to Nu 68.78M.
The budget for the procurement of plants and equipment was also reduced by 50 percent to Nu 574.7M.
Finance Minister Namgay Tshering in an earlier interview said that the new constructions that come as capital expenditure is on hold in the fiscal year because there is no benefit out of the expenditure or investment with inflation.
Capital expenditures boost the economy’s capacity for production. It refers to money that is spent on long-term investments like building roads, buildings, and others.
The government had prioritised capital expenditure over current expenditure and accordingly allocated more capital than the current budget.
With the revised current budget of Nu 36.52B, an increase of 0.48 percent in the fiscal year, the total budget stands at Nu 78.35B.
The increase in current expenditure was mainly attributed to supplementary incorporation under the budget of thromdes and National Seed Center from its internal revenue.
In the first half of the fiscal year, the government spent Nu 16.85B, which is over 45 percent of the total current budget.
Current expenditures are mandatory expenses that keep the administration going from day-to-day, such as rent, utility bills, and office supplies.
For salary and wages, the government has spent Nu 10.3B. This was an increase of 13 percent compared to the same period in the previous year.
Operations and management saw a decrease of 8 percent to Nu 3.45B, with subsidies and grants down by 38 percent at Nu 1.29B.
Not compromising the mandatory expenses, Lyonpo Namgay Tshering said that the government has to look for curtailing the controllable expenses to observe more prudence by spending limited domestic resources judiciously.
The fiscal balance as a percentage of gross domestic product of Nu 203.45B has remained the same at 11.25 percent.