KATHMANDU, Jan 15: The government has not made any significant progress to meet its capital expenditure target in the first half of the current fiscal year (FY 2024/25).
The data released by the Financial Comptroller General Office (FCGO) shows that the government had set a target to spend a total of Rs 352.35 billion in capital expenditure, but the government spent only Rs 56.93 billion for development projects from mid-July 2024 to mid-January 2025. This constitutes just 16.16 percent of the total target.
The dismal capital expenditure has been a perennial problem almost every year. In the FY 2023/24, the government spent around 61 percent of the allocated amount of Rs 302 billion for the entire year. Of the amount spent, Rs 50 billion was exhausted just in the last one month.
The low capital expenditure is having a profound impact on the economy. Construction and infrastructure projects play a key role in boosting the economy and creating employment. However, in the current situation, the immobility of the construction sector, delays in payment to contractors, and procedural complications have created obstacles in these projects.
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Since the government is unable to make capital expenditure on time, financial management has become a challenge. It seems that only Rs 312.8 million have been spent on an average out of Rs 965.3 million meant to be spent daily. If this situation persists, the long-term development projects may be adversely affected.
Experts say that in order to make the capital expenditure effective, the government should collaborate with the construction industry to streamline the payment process, remove procedural complications, and address problems such as labor shortage. Only through such reforms will the path be paved to ensure capital expenditure according to the targets and make the economy dynamic.
According to the FCGO, the government has fallen short in both capital expenditure and overall government spending. The government had set a target to spend Rs 1.860 trillion throughout the year. But, within half a year, only an expenditure equivalent to Rs 667.60 billion has been spent. This is only 35.89 percent of the total target set for the current fiscal year.
As of now, the government has been able to spend 39.63 percent of the budget allocated for recurrent expenditure in the current fiscal year. The government had set a target to spend Rs 1.140 trillion more on recurrent expenditure. However, by the end of the first half of the fiscal year (as of mid-January), only Rs 452 billion has been spent, according to the FCGO.
Meanwhile, the government has collected revenue worth Rs 559 billion, which was only 84 percent of the targeted amount. The government has set the target to collect revenue of Rs 672 billion for the first half of the current FY.
Although the realized revenue was not on par with the targeted amount, the revenue generated was however Rs 63 billion more than that of the amount generated in the corresponding period in the last FY. According to the FCGO, the collected revenue was 13 percent more.
The government achieved impressive revenue collection particularly in the past month. During mid-December and mid-January this FY, the government generated revenue of Rs 160 billion.
In the first half, 589 large taxpayers alone contributed revenue of Rs 115 billion to the state coffers. The individuals carrying out transactions of more than Rs 1 billion a year have been defined as large taxpayers.
