Nepal collects Rs 1.11 trillion in revenue as FY nears end, Capital spending stuck below 35%

KATHMANDU: With just 19 days remaining before the end of the current fiscal year, the Government of Nepal has collected Rs 1.11 trillion in revenue, achieving only 75.17 percent of its annual target, while capital expenditure on development projects has remained below 35 percent, highlighting continued challenges in budget execution.

According to the latest data released by the Office of the Financial Comptroller General (OFCG), the government had collected Rs 1.112 trillion (Rs 11,12,48,46,00,000) in revenue as of Friday.

The government has set an ambitious revenue collection target of Rs 1.48 trillion for the current fiscal year. To meet that target, it must mobilize an additional Rs 367.51 billion over the remaining 19 days, requiring an average daily revenue collection of approximately Rs 19.34 billion.

Tax revenue drives collections

Tax revenue continues to account for the largest share of government income.

Against the annual target of Rs 1.325 trillion in tax revenue, the government has collected Rs 1.010 trillion, equivalent to 76.20 percent of the target.

Non-tax revenue has also shown moderate progress. Out of the targeted Rs 154.41 billion, the government has collected Rs 102.32 billion so far.

However, foreign grants have significantly underperformed. The government had expected to receive Rs 53.44 billion in grants during the fiscal year but has received only Rs 24.11 billion, achieving just 45.11 percent of the annual target.

The government has also generated Rs 6.50 billion under other receipt categories.

As a result, Nepal’s total government receipts have reached Rs 1.143 trillion, representing 74.54 percent of the annual target.

Government spending reaches over Rs 1.40 trillion

On the expenditure side, total government spending has reached Rs 1.405 trillion, or 71.53 percent of the allocated annual budget.

The government spent Rs 5.36 billion on Friday alone, according to OFCG data.

Recurrent expenditure, which covers salaries, social security payments, administrative costs, and routine government operations, has performed relatively strongly.

Out of the annual recurrent expenditure allocation of Rs 1.181 trillion, the government has already spent Rs 949.76 billion, achieving 80.42 percent of the target.

Capital expenditure remains a major concern

Capital expenditure—used primarily for infrastructure development, public construction projects, and long-term investments—continues to remain the weakest component of budget implementation.

The government had allocated Rs 407.89 billion for capital spending in the current fiscal year. However, only Rs 142.24 billion has been spent so far, representing just 34.87 percent of the annual allocation.

The low level of capital spending reflects Nepal’s longstanding challenge of delayed project implementation, slow procurement processes, and a tendency for public agencies to concentrate development spending in the final weeks of the fiscal year.

Economists have repeatedly warned that such end-of-year spending patterns reduce the efficiency and quality of public investment while limiting the intended economic stimulus from government infrastructure projects.

Financial management spending exceeds 83%

Spending under the financial management category, which mainly includes repayment of domestic and external debt principal and interest obligations, has reached 83.41 percent of the annual target.

Against an allocation of Rs 375.24 billion, the government has already spent Rs 312.99 billion under this heading.

Revenue pressure intensifies

With less than three weeks left in the fiscal year, the government faces mounting pressure to improve revenue mobilization while accelerating development spending.

Meeting the remaining revenue target would require collection levels substantially higher than the average daily performance recorded throughout the fiscal year, making it increasingly difficult for the government to fully achieve its annual fiscal objectives.

The latest figures also reinforce a familiar pattern in Nepal’s public finances, where recurrent and debt-related expenditures continue to outpace capital investment, raising concerns over the pace of infrastructure development, economic growth, and the overall effectiveness of public spending.