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PUBLIC EXPENDITURES 13


Table 3.1 Top 20 public expenditures in Nepal, by sector, 1999–2003 Total by sector


Rank Sector 1


2 3 4 5 6 7 8 9


Education


External loan payment Internal loan payment Miscellaneous Defense Police


Electricity


Road transportation Local development


10 Health 11 Irrigation


12 Drinking water 13 Agriculture


14 General administration 15 Forests


16 Communications


17 Constitutional bodies 18 Other social 19 Industry 20


Total Land reform and survey


(billions of rupees) 60,800


33,510 32,590 32,500 29,060 27,030 25,470 22,950 21,870 18,450 15,250 11,510 11,400 10,420 7,690 6,774 4,110 4,046 3,892 2,961


399,629


15.21 8.39 8.16 8.13 7.27 6.76 6.37 5.74 5.47 4.62 3.82 2.88 2.85 2.61 1.92 1.70 1.03 1.01 0.97 0.74


95.65


Source: Authors’ calculations from public expenditures data (World Bank 2007). Note: The top 20 public expenditures represent 95.65 percent of total expenditures over the period 1999–2003.


districts are shown as expenditures incurred in Kathmandu simply because the first-stage transfer of funds from the treasury was to an entity that was located in Kathmandu.


The relative weight of different sectors in total expenditure is further described in Table 3.2. In real terms, total per capita public expenditure in Nepal, in 1995 Nepal rupees (NPR), increased from NPR 3,971 in 1999 to NPR 5,606 in 2003. With respect to the financing of public expenditures, we see that although the proportion financed by internal revenue of the Govern- ment of Nepal as well as that financed by foreign grants increased over the period, the proportion of public expenditures financed by foreign grants fell by almost half. In the case of the per capita public expenditure on agri- culture, we find that although this did increase, from NPR 132 in 1999 to NPR 171 in 2001, it fell back to NPR 129 in 2003. Over the period, about two-thirds of the expenditure was financed by internal revenues and about a quarter by foreign loans. The contribution of foreign grants increased from about 4 percent in 1999 to 9 percent in 2003. The total expenditures on irrigation, on the other hand, fell over the period, from NPR 195 in 1999 to NPR 159 in 2003, which is perhaps a reflection of the decreasing expenditures on the


Share of total (percent)


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