Nepal | January 16, 2021

Capital spending dismal at fag end of fiscal

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  • Only 31 per cent development budget spent
  • Average expenditure in previous years 60pc


While the fiscal year is coming to an end in a month, the capital expenditure of the government for this year is certain to be the worst ever, firstly due to the low spending capacity of the government and secondly due to the nationwide lockdown imposed to check the spread of COVID-19 since the third week of March.

As per the statistics maintained by the Financial Comptroller General Office, the government has managed to spend merely 31.15 per cent of the total allocated capital budget worth Rs 408 billion for fiscal 2019-20 till today.

Officials at the Ministry of Finance themselves say that the development budget spending for this year will be the worst ever.

“Though the capital budget spending was about to gather pace, development expenditure has been halted completely since March owing to the spread of the coronavirus and the government’s changed priority towards combating the pandemic. It is quite certain that capital expenditure this year will remain below 50 per cent of the allocation,” said Uttar Kumar Khatri, spokesperson for MoF, adding that annual capital expenditure in previous years had averaged at more than 60 per cent.

The government had managed to spend over 75 per cent development budget in the previous fiscal year.

Former finance secretary Rameshwor Khanal said the government should have put effective policies in place to ensure that development expenditure was boosted from the beginning of the fiscal year.

“We have the trend of spending budget generally during later months under pressure. This year, the government could not do so as COVID-19 gripped the entire country and the economy,” said Khanal, adding that the government should now focus on accelerating development works by taking necessary precautions against the coronavirus.

However, the government has managed to spend Rs 672.25 billion or 70.24 per cent of Rs 957.1 billion allocated under the recurrent expenditure heading.

Similarly, Rs 86.2 billion or 51.36 per cent of Rs 167.85 billion allocated under the financing heading has been spent so far.

A version of this article appears in e-paper on June 17, 2020, of The Himalayan Times.

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