Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s development spending remains critically slow in the current fiscal year, with capital expenditure yet to reach even 20 percent of the annual allocation by the end of Falgun, raising concerns about the government’s ability to implement infrastructure and growth-oriented projects.
According to the latest data released by the Financial Comptroller General Office, the federal government has spent only around 19 percent of the capital budget during the first eight months of the fiscal year, despite overall government expenditure nearing half of the annual allocation.
Nearly Half of the Budget Spent
For the current fiscal year, the Government of Nepal introduced a Rs 1.964 trillion national budget. By the end of Falgun, total government spending had reached Rs 926.58 billion, which is 47.18 percent of the annual budget.
However, the spending pattern shows a clear imbalance between recurrent expenses and development spending.
Out of the total allocation:
Current expenditure: Rs 1.18 trillion allocated, 54.37 percent spent
Capital expenditure: Rs 407.88 billion allocated, only 19.24 percent spent
Financing expenditure: Rs 375.24 billion allocated, 54.89 percent spent, equivalent to Rs 205.95 billion
The figures highlight Nepal’s persistent challenge of low capital budget utilization, a long-standing issue that slows infrastructure development and economic expansion.
Revenue Collection Also Under Pressure
Government revenue collection has also lagged behind expectations during the review period.
Data from the Financial Comptroller General Office shows that the government has collected Rs 765.10 billion in revenue by the end of Falgun, representing 49.89 percent of the annual target.
The government had set a revenue collection target of Rs 1.533 trillion for the fiscal year.
Tax Revenue Slightly Above Half of Target
Under tax revenue, the government aimed to collect Rs 1.325 trillion during the fiscal year. By the end of Falgun, authorities had managed to collect 51.04 percent of the annual tax target.
Meanwhile, non-tax revenue has performed more weakly. Out of the annual target of Rs 154.41 billion, only 45.78 percent has been collected so far.
Economists say the slow revenue growth reflects weak domestic demand, sluggish imports, and slower economic activity, all of which have affected government income.
Foreign Grants Also Lagging
Foreign grant inflows have also fallen behind expectations.
The government had targeted Rs 53.44 billion in foreign grants for the fiscal year, but only Rs 13.24 billion—or 24.78 percent of the annual target—has been received by the end of Falgun.
The latest figures underscore the continuing challenge faced by the government in boosting development spending while maintaining revenue growth, an issue that has significant implications for infrastructure expansion, economic growth, and fiscal management in Nepal.
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