Seven months into fiscal year 2082/83 BS, the government’s budget performance appears sluggish. Fresh data from the Financial Comptroller General Office show that revenue collection has reached only 44 per cent of the annual target, while total expenditure stands at around 40 per cent. Of the Rs 1,964 billion national budget, just over Rs 801 billion had been spent by mid-February. The fiscal engine is moving far too slowly for an economy in urgent need of momentum. A closer look at the figures highlights the imbalance. Current expenditure has reached nearly 48 per cent of its target, indicating that the government is largely keeping pace with salaries, pensions and routine administrative costs. Capital expenditure, however, tells a different story. Only 15.62 per cent of the development budget has been utilised so far — just Rs 63.7 billion out of an allocation of Rs 407.8 billion. Revenue performance also remains below expectations. The government has collected about Rs 682 billion, with tax revenue reaching roughly 45 per cent of its target and non-tax revenue slightly lower. Foreign aid inflows are the weakest component, at just 24 per cent of the annual goal.
Recurrent spending spikes, capex rising steadily
This pattern is not new. Nepal’s budget cycle has long been characterised by slow spending in the first half of the fiscal year, followed by a surge as deadlines approach. While the government machinery continues to function, development projects fail to gain traction because funds are not disbursed when needed. When capital expenditure remains as low as it is now, the broader economy suffers — construction activity slows, job creation weakens and businesses struggle.Several factors contribute to this slowdown. Many projects are not ready for implementation at the start of the fiscal year, with ministries lacking approved designs, land acquisition or adequate preparation. Frequent transfers of project officials disrupt continuity. Limited foreign aid and supply chain constraints further hamper smooth execution.
Yet corrective action remains possible. Ministries must ensure that projects are fully prepared before the budget is announced. Having implementation-ready projects could save months of delay. Streamlining procurement processes and strengthening oversight are equally important. Online tracking of bids and payments could reduce bottlenecks and enhance transparency. The Ministry of Finance should also set quarterly capital expenditure targets and enforce accountability. If the economy is to regain momentum in the coming months, capital spending must accelerate. Priority should be given to projects that can be completed within the fiscal year, including roads, irrigation schemes and small hydropower projects. Timely budget formulation and execution are essential. Only when allocations translate into tangible outcomes will economic activity pick up. At present, the figures offer little encouragement and should serve as a wake-up call for the government.
