Minister for Industry, Commerce and Supplies Anil Sinha has said that it is not enough to increase public expenditure, but citizens should be able to experience quality services through it. Stating that the usefulness of public expenditure, service improvement, citizens' trust in the state and the effectiveness of democracy are directly linked, he warned that citizen dissatisfaction will increase if economic governance is weak.

At the 'Policy Dialogue Program for Effectiveness of Public Expenditure and Service Delivery Improvement' organized by the Society of Economic Journalists of Nepal (SEJON), Minister Sinha said that there are widespread complaints that the citizens have not been able to feel the benefits of the resources collected by the state through taxes, fees and international assistance even though they are spent on education, health, infrastructure, social security and administrative services.

'There are schools, but questions are being raised about the quality of education, there are hospitals, but the question remains whether service access and treatment are effective,' he said, 'Roads have been built, but there is always doubt about their long-term sustainability.'

According to him, the problem is not a lack of resources, but the lack of utility of expenditure, implementation capacity and good financial governance. He said that the misuse of public expenditure, lack of proper utilization and weak transparency have increased dissatisfaction and its reflection was also seen in the 'Genji Andolan' seen on Bhadra 23.

Minister Sinha gave an example of how small businessmen and low-level entrepreneurs continued to run the market and supply even during a few days when the state presence was weak, and said that the real foundation of Nepal's economy is at that level. 'Even when the state was not visible, small businessmen who went to the market carrying vegetables and opened shops kept the economy running,' he said, 'there are many things we need to learn from that.'

He also said that while moving to the upper levels, cartels, distortions and vested interests were dominating and that this raised questions about the achievements of the economy. Stating that the current government formed against the backdrop of the Gen-G movement is committed to maintaining economic governance and transparency, he said that he was also introspecting on whether he could work according to that commitment.

Minister Sinha pointed out three main aspects regarding the challenges of public expenditure. First, priority setting - the budget tends to focus on short-term political gains rather than the needs of the nation, capital formation and job creation; second, accountability and transparency - the obligation to inform the citizens about where, how and for what results every rupee spent was used; third, service effectiveness - increasing the budget without digital technology, process simplification and capacity building of human resources will not bring the expected results.

He said that the recently released electronic book on local level public finance management is useful and expressed his belief that it will help identify areas for improvement in budget allocation and expenditure. He also said that factual and responsible journalism will alert the government and help in policy formulation and budget reform.

At the program, Comptroller General Shobha Kant Poudel said that there are structural reasons for public expenditure not being as effective as expected. 'Expenditure in unproductive sectors is increasing, there is no political stability and the structure of expenditure on social security has not been reviewed,' he said.

Commenting on the private sector, Comptroller General Shobha Kant Poudel said that there is a widespread tendency to hold project licenses. 'Even though privatization and economic liberalization have been said, only a limited number of individuals and households are in power. Resources are limited to a few institutions,' he said, 'The government formed after the Gen-G protests has cut unnecessary expenses. The political leadership and staff mechanism need to work with high morale and responsibility. There is a gap between what we say and what we do. Economic reform is not possible without investment and resource mobilization in the productive sector.'

Public Expenditure Review Commission member Suresh Pradhan opined that the basis of the expenditure system itself is weak. 'There are no clear criteria for expenditure. It is not clear how the budget is made, what is the basis for making it. Not looking at the criteria for allocation and expenditure is the biggest problem today,' he said.