Kathmandu September 17

The government in this fiscal too has been unable to invest its fund in capital formation programmes due to its low capacity to spend the capital budget. Like in the previous fiscal years, the government has failed to increase capital expenditure in the first two months of the current fiscal.

The share of capital expenditure in the government’s total expenditure during the review period stood at only 1.27 per cent of total allocated capital expenditure. Due to the slow progress of development projects the government has not been able to spend the budget allocated for capital expenditure.

According to the Financial Comptroller General Office (FCGO), the government has spent only Rs 4.27 billion in the first two months of this fiscal, out of the total allocated capital expenditure of Rs 335.17 billion, which is 26.2 per cent of total budget worth Rs 1278.99 billion.

Meanwhile, the government has spent Rs 119.18 billion during this period as recurrent expenditure, which is basically spending on non-capital formation programmes like salaries of government staffers, social security and other expenses. This amount is 14.83 per cent of total allocated recurrent expenditure worth Rs 803.53 billion.

Similarly, the government has spent 0.59 per cent or Rs 823 million on financing out of the total allocated budget of Rs 140 billion.

In the corresponding period of the last fiscal, the government had spent 0.59 per cent of the total allocated budget on capital expenditure. According to the FCGO, the government had spent 9.72 per cent or Rs 124.27 billion of its total budget under aforementioned headings during the first two months in last fiscal.

The government has removed the programme approval process of National Planning Commission through the current fiscal budget, which was often seen as one of the major reasons for the delay in the implementation of projects. However, there has been no improvement in this fiscal and capital expenditure has remained the same as in the earlier years.

Meanwhile, the government was able to collect revenue worth Rs 90 billion in this period, which is 12.33 per cent of the total revenue collection target of Rs 730 billion. However, the government missed the revenue collection target by Rs 5.67 billion in the first month of the current fiscal, with a shortfall witnessed under major tax headings like

customs tariff, value added tax (VAT), income tax and excise, among others.

The government’s revenue collection in the first month of this fiscal (mid-July to mid-August) stood at Rs 45.79 billion against the target of Rs 51.46 billion, according to the Revenue Division of the Ministry of Finance.

The government still has to finalise the actual data of revenue collection against its target for the second month.