Nepal | January 16, 2021

Capital spending at 28 per cent in first 10 months

Himalayan News Service
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Kathmandu, May 14

With just two months left for the fiscal year to end, the government has managed to spend merely 27.97 per cent of the allocated capital budget.

As per the statistics maintained by the Financial Comptroller General Office (FCGO), capital expenditure in the first 10 months of fiscal year 2019-20 stands at Rs 114.1 billion or 27.97 per cent of Rs 408 billion allotted as capital budget for this fiscal year.

As a result of the government’s failure to expedite project works and development activities in the initial months of the current fiscal year and also as development activities have halted due to the COVID-19 pandemic in recent months, the capital budget spending during this fiscal year has been very low, as per economists.

“The government could not break the tradition of wise capital budget spending from the beginning months of the fiscal year and waited to spend them in the third quarter of the fiscal year like in previous years. However, all the development activities have been affected in the third quarter of this fiscal which halted development works and the spending of allocated development budget,” said Kushum Shakya, head of the Central Department of Economics at Tribhuvan University (TU).

As the country is under a lockdown and development and construction activities have been completely affected, Shakya opined that the government will miss its development budget spending target significantly this year.

As a result of slow pace of development activities in the initial months and the coronavirus pandemic in the later months of this fiscal year, the government’s development expenditure is likely to be even lower compared to the development budget that was spent in fiscal 2014-15 when the country witnessed a devastating earthquake and in 2015-16 due to supply disruption in the southern border.

The government was able to spend 70 per cent of the total earmarked capital budget in fiscal year 2014-15 and 56.3 per cent of the allocated capital budget in fiscal 2015-16.

Shakya suggested the government to focus on budget implementation and project works from the starting months of next fiscal year to improve the development budget spending. “As the government has said it will focus on existing mega projects for the next fiscal year over new projects, the capital budget spending in the next fiscal year is likely to be high at the end of the year,” she said. “However, the government should ensure that allocated development budget is spent from the beginning months of the next fiscal year itself.”

Meanwhile, the government has been able to spend 59.78 per cent of Rs 957.1 billion recurrent budget allocated for fiscal 2019-20 in the first 10 months, while 44.23 per cent of Rs 167.8 billion allocated under financing has been spent so far.


A version of this article appears in e-paper on May 15, 2020, of The Himalayan Times.

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