KATHMANDU, Jan 14: The government has not made significant progress towards its capital expenditure target in the current fiscal year 2024/25 as half of the year has passed. The target was to spend a total of Rs 352.35 billion in capital expenditure, but from mid-July to mid-January (Shrawan to Poush), only Rs 56.93 billion could be spent. This constitutes just 16.16 percent of the total target.
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.
A Disappointing Picture of Capital Expenditure
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 on time, 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.
The data released by the Financial Comptroller General Office (FCGO) shows that the government has fallen short in both capital expenditure and overall government spending. According to the data, the government had set a target to spend Rs 1.860 trillion throughout the year. So, 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. For the current fiscal year, the government 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.
