Kanchanjangha Tea Estate factory, Nepal. Photo: 
Kanchanjangha Tea Estate factory, Nepal. Photo: IMAGO / ZUMA Wire

Nepal’s economic alarm bells

Fiscal mismanagement and cronyism in Nepal have come under growing public scrutiny.

Every year, as the monsoon kicks in, there's a feverish spurt of road-building and infrastructural development across Nepal. It has nothing to do with preparing Nepal's notoriously accident-prone roads for the rains, but with a term that is peculiar to the country: asaare bikas. The Nepali fiscal year ends in the Hindu calendar month of Asaar (around mid-July), and since budgetary allocations under capital expenditures lapse at the end of the fiscal year, government departments rush to spend whatever they can before the fiscal year runs out.

This year, the government outdid all previous records by paying out NPR 14.72 billion (USD 116 million) to various departments on a single day in July for capital expenditure. Despite the splurge, only 57 percent of the allocated budget could be spent by the end of the fiscal year – in the first six months the figure was an astoundingly low 13 percent. One can guess what the condition of roads would be if the concerned department is spending most of its allocation in a single month.

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Himal Southasian