Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: With only one month left in Nepal’s fiscal year 2081/82, the government’s capital expenditure remains sluggish, reaching just 40% of the allocated budget. Of the NPR 352 billion earmarked for capital projects, only NPR 143 billion has been spent from August 2024 to May 2025, according to the Ministry of Finance. This marks a decline from last year’s 42% expenditure over the same 11-month period.
In contrast, recurrent spending, including administrative costs, grants, and interest payments on loans, has surged to 75%. Out of the NPR 1.14 trillion allocated for recurrent expenses, NPR 851 billion has been utilized. Financial management expenditure, covering public debt repayment and loans to public enterprises, has also risen significantly, with NPR 287 billion (78%) of the NPR 367 billion budget spent so far.
Revenue collection, however, remains a concern. The government targeted NPR 1.419 trillion in revenue but collected only NPR 1.283 trillion by May 2025, achieving 68.98% of the goal. This shortfall, combined with low capital spending, raises questions about the government’s ability to meet infrastructure and development targets.
The slow pace of capital expenditure reflects delays in project implementation, while high recurrent and financial spending indicates a focus on non-productive areas. Economists warn that persistent underperformance in revenue collection and capital spending could hinder Nepal’s economic growth and development goals. As the fiscal year closes, the government faces pressure to accelerate project execution and improve fiscal discipline to meet its budgetary objectives.
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