The supplementary budget is set to increase the 2017/2018 national budget by Sh22.3 billion from the approved Sh2.6 trillion.
The increase comprise a net increase in recurrent estimates of Sh52.9 billion and a net decrease of Sh30.6 billion in development expenditure.
The budget was necessitated by negative effects of the prolonged drought, agreed collective bargaining agreements in the education sector, expenditure on a repeat of the presidential election and a need to enhance free day secondary education.
According to the ad hoc committee on the first supplementary estimates for 2017/2018 financial year, the expenditure allocations or borrowing could be adjusted downwards during the financial year.
Inspite of the reductions, the committee has proposed an increase of Sh63.51 billion in the recurrent expenditure and a reduction of the total expenditure by Sh24.89 billion and an overall increment in the total budget for financial year 2017/2018 by Sh38.6 billion.
The committee, which presented their report on the supplementary budget in Parliament on Tuesday, attributed the likely reduction in the expenditure allocations to unfavorable economic conditions.
These conditions have seen growth projections reduced to a low of 5 per cent by various institutions including the World Bank and the National Treasury.
While appreciating the importance of expenditure cuts, the committee noted that the supplementary budget does not fully address the expected financing shortfalls.
“Extra ordinary times call for extraordinary measures, under the prevailing circumstances, expenditure cuts is necessary if not unavoidable particularly with regard to non-priority expenditure,” the committee’s chairperson Joseph Limo said.
Under the development expenditure, major reductions were mainly in the state department for planning and statistics and the National Constituency Development Fund which saw a combined reduction of Sh15.4 billion.
Sh6.7 billion was reduced from the digital literacy programme, and Sh7.5 billion for the LAPPSET project.
Others were Sh5 billion in the State Department for Infrastructure, Sh3.2 billion meant for the development of Leather Industrial Park and Special Economic Zones and Sh2.4 billion from the Parliamentary Service Commission.
The report notes that changes in the development budget are with respect to ongoing projects, some of which have contractual obligations that if breached could lead to payment of penalties as well as slowing down or complete stalling of the projects.
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