With only a month remaining in the fiscal year 2024/25, the government has managed to spend just 40.7 percent of its originally allocated capital expenditure budget—underscoring persistent challenges in effective budget execution.
Data from the Financial Comptroller General Office (FCGO) shows that by mid-June, only Rs 143.39 billion of the original Rs 352.35 billion earmarked for capital spending had been utilized.
Despite two downward revisions to the capital budget—first during the mid-term review (to Rs 299.5 billion) and again during the announcement of the upcoming fiscal year's budget—capital expenditure remains far below expectations.
Finance Minister Bishnu Paudel, in his budget speech on May 29, projected that only 83.4 percent of the original capital budget would be spent by the end of the fiscal year. But current figures suggest the government is unlikely to meet even that scaled-down estimate.
Analysts say the situation reflects a recurring pattern: sluggish expenditure throughout most of the year, followed by a last-minute spending spree. This backloaded approach not only hampers the timely implementation of development projects but results in work of poor quality, besides boosting corruption, they say.
Last fiscal year, the government spent only 63.47 percent of its capital budget, and similar trends are repeating this year, despite consistent increases in both revenue and expenditure targets.
On the revenue front, collection in the first 11 months has shown some improvement over last year but still lags behind target. As of June 14, total revenue reached Rs 1,027 billion—falling short by 16.78 percent compared to the target of Rs 1,234 billion, according to the Finance Ministry. This marks a year-on-year increase of Rs 88 billion from Rs 939 billion collected in the same period last fiscal.
Foreign grants have also fallen significantly short. The government has received only Rs 17.09 billion, far below the initially projected Rs 52.32 billion for the year.
The government now expects to mobilize total revenue of Rs 1,267.39 billion by the end of the fiscal year—a 17.1 percent increase from last year. Revised estimates for foreign grants and loans stand at Rs 34.89 billion and Rs 169.6 billion, respectively.
With the fiscal year ending on July 16, observers warn that without structural reforms in budget implementation and procurement processes, underperformance in capital expenditure will continue to undermine Nepal’s development goals.
(With inputs from RSS)
