Nepal | November 27, 2020

Govt’s capital expenditure still sluggish

Only 17.68pc of Rs 313.9 billion allocated spent in first half of fiscal

Sujan Dhungana
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Illustration: Ratna Sagar Shrestha/ THT

Kathmandu, January 15

Development projects that are crucial in driving the economy are unlikely to witness desirable progress this year owing to the sluggish capital spending of the government.

Though the government, which is relatively stronger and more stable compared to the previous ones, had said that proper execution of the budget would be its top priority, it has failed to walk the talk if the statistics of the Financial Comptroller General Office are anything to go by.

FCGO statistics show that the government has managed to spend merely 17.68 per cent of the total allocated budget under capital expenditure in the first six months of the current fiscal, thereby signalling the fragile spending of the government.  Of the Rs 313.9 billion allocated for capital expenditure for fiscal 2018-19, capital spending stood at only Rs 55.5 billion or 17.68 per cent till yesterday.

However, the government’s total budget spending, including capital expenditure, financing and recurrent, during the period stood at 28.57 per cent of the total budget of Rs 1.31 trillion for the ongoing fiscal.

The government has spent Rs 296.5 billion as recurrent expenditure of the total allocated Rs 845.5 billion during the review period. The recurrent expenditure is primarily the spending of the government on non-capital formation programmes such as salaries of government staffers, social security and other expenses. Likewise, the government has been able to spend 15.24 per cent or Rs 23.7 billion on financing till mid-January out of the total allocated budget of Rs 155.7 billion for the ongoing fiscal.

“Low budget spending is not a new thing in Nepal and will not improve unless the government, especially the Ministry of Finance, comes up with a proper budget execution plan and implements it,” said an industrialist on condition of anonymity, adding that sluggish spending adds pressure on the government to spend more towards the last couple of months of the fiscal year raising questions over the quality of expenditure of the budget.

The government has been able to collect revenue worth Rs 520 billion in the first six months of the fiscal 2018-19, which is 55 per cent of the revenue collection target of Rs 945 billion for this fiscal, as per FCGO.


A version of this article appears in print on January 16, 2019 of The Himalayan Times.

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