The world economy currently has been hit hard by Covid-19 and the worst is yet to come since the pandemic is already impacting the global markets.
The movement of the markets across the globe mirror the uncertainties that persists all over the world, including Nepal.
In such a situation where majority of the countries are providing relief packages to their citizens, the Government of Nepal seems to undergo difficulties to provide relief packages on account of the inadequate revenue.
Nepali citizens are losing hope as a result of the weak performance of the government and situation like these make it even worse.
Government expenditure is always separated into capital expenditure and recurrent expenditure.
Capital expenditure is used for development such as building schools or hospitals and recurrent expenditure is all other payments for goods and services excluding capital assets such as employee wages and interest payments.
To meet the eligibility criteria, the vehicle must be at least 12 years old, should not be in operating condition and the cost of maintenance should be more than 25% of the cost price of the respective vehicle.
We continue to wonder how and where the government makes its expenditure but rarely focus on how spending can be managed especially recurrent expenditure.
Let us look at the government’s recurrent expenditure which does not seem to grab people’s attention. According to the civil service act, a four-wheeled vehicle facility is only granted to secretaries, joint secretaries and chief secretaries of government services.
Whereas, motorbikes can be purchased for under-secretaries in case there is an adequate budget in the office. The facility of car/jeep for under-secretaries, however, is only for pick up and drop service where one vehicle must be shared among numerous staff.
But in reality, most of the under-secretaries of government offices are getting an individual four-wheeled vehicle. Most of the powerful ministries are providing individual four-wheeled vehicle facilities along with a driver to every under-secretary working there.
This, in fact, is unethical and against the law. As a result of the said action, the government has spent Rs. 19 Arab, 17 Crores, and 83 lakhs in the last 3 years to purchase vehicles.
Apart from the cost price of vehicles, there are various daily expenditures such as salary for drivers, maintenance cost and fuel. It is never too late to make a new start overcoming the previous mistakes.
Savings in these small areas of every office can lead to saving a lot of money which can be utilized to spend in necessary sectors.
Now that we know the reality, if the government starts to provide these facilities only for the ones who are supposed to get it, a lot of vehicles will be left unused.
These vehicles can be utilized in various ways. The first option is to auction and sell vehicles. However, to conduct an auction, a study committee must approve the eligibility of the vehicle to be kept in the auction.
To meet the eligibility criteria, the vehicle must be at least 12 years old, should not be in operating condition and the cost of maintenance should be more than 25% of the cost price of the respective vehicle.
There are numerous vehicles with the GoN eligible to be sold through auction. These vehicles can be a source of income for the government.
A 10 or 20 percent of the salary can be deducted to be paid for the car and after the payment has been completed the ownership of the car will be passed on to the said government official.
However, as an alternative to auction and motto to reduce government expenditure, the Office of the Prime Minister and Council of Ministers has brought a new provision through which government offices are encouraged to provide old unused vehicles to local units if the local units are capable of using it by spending on its maintenance.
For example, if a municipality spends 6 lakhs for the maintenance of an unused vehicle instead of purchasing a new vehicle, it can save a significant amount of money. The good news is, most of the government office has started implementing this provision instead of conducting auctions.
Apart from the auction and the new provision, the old unused government vehicles can be a valuable resource for students of the Council for Technical Education and Vocational Training (CTEVT).
Every year, the CTEVT purchases old vehicles for their students to conduct experiments in it. Hence, instead of purchasing one, the government can give the unused old vehicles to the institute. This will help save money on one hand and contribute to the growing brilliant minds of the country on the other hand.
Recurrent expenditure, if utilized more efficiently can save the government a significant amount of capital. Taxpayers always want their money to be spent properly and hence care more about how much the government is spending as capital expenditure i.e. develop works.
Recurrent expenditure is manageable if the government pays attention to unethical and unlawful spending. A few suggestions to manage recurrent expenditure are:
Follow the law regarding which government staff is entitled to four-wheel vehicles.
Timely maintenance of vehicles should be conducted.
Vehicles can be transferred to municipality offices instead of straight auction.
Urge government staff to build a sense of ownership and take proper care of all government resources.
Besides, a new provision can be passed by the government to facilitate the purchase of a new car to the newly appointed joint secretary.
The provision could include that the joint secretary will have to use the same car for the rest of their government service.
Additionally, if the joint secretary wishes to keep the car after retirement, the payment shall be deducted every month from the salary.
A 10 or 20 percent of the salary can be deducted to be paid for the car and after the payment has been completed the ownership of the car will be passed on to the said government official.
This will cause the purchase of vehicles to decrease hence decreasing recurrent expenditure because joint secretaries and secretaries will not be able to purchase new vehicles despite their transfer to a different department of the government.
The vehicle will receive proper maintenance as government officials will feel a sense of ownership and thus will prevent the purchase of new vehicles which again decreases recurrent expenditure.
This kind of provision can be implemented for other government equipment along with vehicles to reduce and manage recurrent expenditure.
(With inputs from Swastik Aryal)
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