Kathmandu, Mar. 15: Capital expenditure of the government has remained quite low also in the current fiscal year.
The capital expenditure stands at only 23.37 per cent in the first eight months of the current fiscal year (by March 13, 2025), according to the daily receipt and payment status report of the Financial Comptroller General Office under the Ministry of Finance.
Of Rs. 352.35 billion allocated under capital expenditure, only Rs. 82.33 billion has been spent in eight months of the current fiscal year, from July 16, 2024, to March 13, 2025.
During the review period, the rate of expenditure was poorer compared to the corresponding period of fiscal year 2023/24. The capital expenditure was at 26.89 per cent (Rs. 81.21 billion) of the total allocation of Rs. 302 billion in the first eight months of the fiscal year 2023/24.
Economist Dr. Chandra Mani Adhikari blamed the failure in expediting the development works for the poor expenditure of the capital budget.
The rate of capital expenditure is low in the first eight months of the current fiscal year which indicates that the government has failed to expedite the development works even when the budget was tabled in time, he said.
The sluggish pace of work in the national pride projects as well as other projects has resulted in the poor capital expenditure, he added.
The construction work, even on the mega projects, has been affected after the contractors were unable to get their dues of the completed works for a year, he said.
"Weak project preparation, lack of effective project monitoring and hurdles seen during the project implementation phase are major reasons for the low capital expenditure this year too," said Dr. Adhikari.
However, the recurrent expenditure of the government stood at 51.21 per cent (Rs. 584.12 billion) during the review period. The government has allocated Rs. 1,140.66 billion in the heading of recurrent expenditure for the current fiscal year.
Likewise, the government has spent Rs. 172.89 billion under the heading of financing in the first eight months of the current fiscal year. It is 47.07 per cent of the total allocation of Rs. 367.28 billion. During the review period, the government has spent Rs. 839.35 billion in total.
During the review period, the total income of the government stood at Rs. 738.82 billion. This is 50.2 per cent of the annual receipts target of the government.
Despite poor capital expenditure, the government budget has been in deficit in the first eight months of the current fiscal year due to higher expenditure than total income. The deficit has reached Rs. 100.53 billion during the review period.
The government has spent only 45.12 per cent in the first eight months of the total budget of Rs. 1,860.30 billion for the current fiscal year.
Revenue collection up by 12.7%
Similarly, the revenue of around Rs. 720.34 billion has been collected in the first eight months of the current fiscal year 2024/25.
According to the report, the revenue collection of the government during the review period stands at Rs. 720.34 billion, which is 50.75 per cent of the initial annual target (Rs. 1,419.30 billion).
Out of the total revenue collection, tax revenue stood at Rs. 638.79 billion or 49.74 per cent and non-tax revenue stood at Rs. 81.54 billion or 60.36 per cent of the annual target.
Of the total revenue collection target of Rs 1,419.30 billion, Rs. 1,284.20 billion is to be raised under tax revenue and Rs. 135.09 billion under non-tax revenue in the current fiscal year.
The government had collected revenue of Rs. 639 billion during the first eight months of the last fiscal year 2023/24.
During the review period, grants of only Rs. 9.16 billion have been received by the government. It is 17.51 per cent of the annual target of the government. The government has set an annual target of Rs. 52.32 billion grants for the current fiscal year. However, the government has received Rs. 9.31 billion under other recipients in the first eight months of the current fiscal year.
The revenue collection has increased by 12.71 per cent during the review period as compared to the same period last year.
Economist Dr. Adhikari said that the present growth rate of revenue collection is not satisfactory as the government has projected the growth of 20 per cent while presenting the annual budget.
"The revenue collection is being affected due to the inability to spend the budget. When the government budget expenditure becomes low, it will hit revenue collection," he said.