Government spends only 40% of development expenditure

Kathmandu, June 17: It is yet another year with poor capital expenditure. In 11 months, the government spent only 40 per cent of allocated funds. Only one month left before the fiscal year comes to an end, the government needs to spend whopping 60 per cent of the capital budget of Rs. 352.35 billion in 30 days. 

This indicates a significant shortfall in planned development activities and investments. 

The daily receipt and payment status report of the Financial Comptroller General Office under the Ministry of Finance shows that the government spent Rs. 143.38 billion as of June 14, last day of the first 11 months of the current fiscal year. This is only 40.69 per cent of the total allocation.

The government has allocated a budget of Rs. 352.35 billion under the capital expenditure for the current fiscal year 2024/25.

The expenses of capital expenditure have been reduced by 4 percentage points during the review months of the current fiscal year as compared to same period last fiscal year. The government had spent Rs. 134.97 billion by mid-June 2025. This was 44.68 per cent of the total allocation for the development project.

The government had spent only 63.47 per cent of the total capital budget during the last fiscal year.

In the last 13 years, an average of 67.80 per cent has been spent under capital headings.

Economist Keshab Acharya blamed the failure in expediting the development works for the poor expenditure of the capital budget.

The rate of capital expenditure in 11 months of the current fiscal year is very poor which indicates that the government has failed to expedite the development works even when the budget was tabled in time, he said.

"Lack of project monitoring from the concerned authorities, including Ministry of Finance and National Planning Commission is a major reason behind poor status of the expenditure. In my view, the spending capacity for development projects will not improve until and unless project monitoring is strengthened," Acharya told The Rising Nepal.

He said that although the capital expenditure has been around 40 per cent so far, it will reach around 65 per cent by the end of the current fiscal year due to the payment of pending bills and the tendency to work at the last minute. 

Every year, the government speeds up its capital expenditure only in the last days of the Fiscal Year. 

"The scenario of increasing expenditure in the last period since long is sure to be seen this year as well. This is not good for the nation in terms of expenditure and quality because the quality of development work is not good during the monsoon," he added.

Meanwhile, the recurrent expenditure of the government stood at 74.66 per cent (Rs. 851.58 billion) during the review period. 

The government has allocated Rs. 1,140.66 billion under the heading of recurrent expenditure for the current fiscal year.

Likewise, the government has spent Rs. 287.97 billion under the heading of financing in the first 11 months of the fiscal year. That is 78.41 per cent of the total allocation of Rs. 367.2 billion. 

Budget deficit reaches Rs. 238.58 billion

Meanwhile, budget deficit of the government has reached about Rs. 238.58 billion during the first 11 months of the current fiscal year 2024/25.

During the review period, the total income of the government stood at Rs. 1,044.36 billion against the total budget expenditure of Rs. 1,282.94 billion. 

The total income of the government stood at 70.97 per cent of the annual receipts target and expenditures stood at 68.96 per cent of annual budget.

The government is forced to rely on debt to meet its expenses because its income cannot cover its expenses.

The government introduced a budget of Rs. 1,860.30 billion for the current fiscal year 2024/25. 

Revenue mobilisation up

In the meantime, revenue of around Rs. 1,015.69 billion has been collected in the first 11 months of the current fiscal year 2024/25.  This is 71.56 per cent of the annual revenue mobilization target of Rs. 1,419.30 billion for the current fiscal year.

The revenue collection has increased by 10.5 per cent (Rs. 96.5 billion) during the review period as compared to same period last fiscal year. The government had collected revenue of Rs. 919.19 billion by June 14, 2024.

Out of the total, tax revenue stood at Rs. 917.62 billion or 71.45 per cent of the annual target and non-tax revenue stood at Rs. 98.07 billion or 72.6 per cent of the total annual target.

Of the total revenue collection target of Rs 1,419.3 billion, there is a target to collect Rs. 1,284.2 billion under tax revenue and Rs. 135.09 billion under non-tax revenue in the current fiscal year.

During the review period of the current fiscal year 2024/25, the government has received a grant amount of Rs. 17.08 billion. The government has set a target to receive Rs. 52.32 billion in grants in the current fiscal year.  Similarly, the government has obtained Rs. 11.58 billion under other receipts in the first 11 months of the current fiscal year.