By Ajay Chhetri, Kathmandu, Jan. 20: The capital expenditure recorded a sum of Rs. 51.8 billion in the first half of the current fiscal year (FY), marginally surpassing by Rs. 429.5 million the capital spending of the federal government in the same period of the previous FY.

The Financial Comptroller General Office (FCGO) data showed that the capital expenditure in the first half of the current fiscal year (FY) went up to Rs. 51.8 billion slightly up from Rs. 51.4 billion recorded in the same period of the previous FY.

However, the spent amount is not much encouraging in comparison to the target of the current FY. The government has set the target to spend Rs. 378.09 billion in the current FY. Meanwhile, the government has just been able to spend approximately 13.71 per cent of the annual target in the span of half of the period.

The proportion of the capital expenditure in this past six months indicates that it is challenging to catch up with the target set out for this FY also. It shows that the actual amount of spending in the current FY will also follow the similar trend of the past FYs.

The past data of the Nepal Rastra Bank (NRB) reveals the declining trend of capital expenses specifically after FY 2017/18. The annual capital expenditure in the FY 2017/18 was recorded Rs. 270.7 billion. But it declined thereafter. In 2018/19, it decreased by 10.8 per cent to Rs. 241.5 billion, in 2019/20, it dropped by 21.7 per cent to Rs. 189.1 billion. However, in 2020/21, it rose by 20.7 per cent to Rs. 228.3 billion. The trend reveals that capital spending has been unable to break the past record in the three consecutive FYs.       

In this regard, former finance minister Dr. Ram Sharan Mahat said that lack of good governance, limited capacity to trigger spending, overcapitalization, lack of feasibility study are some of the major constraints to enhancing the amount of capital expenditure. He suggested that the government should focus capital expenditure o infrastructure development, development of road and transportation, irrigation, hydroelectricity. He viewed that good governance and rule of law are prerequisites to scale up the capital expenditure.