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KATHMANDU, June 15: The government spent only 40.7 percent of the budget allocated for development projects with only a month left for the completion of the current fiscal year.
According to the records maintained by the Financial Comptroller General Office (FCGO), the government spent only Rs 143.39 billion out of the targeted Rs 352.35 billion on capital expenditure in the first 11 months of FY 2024/25. It shows that the government has to spend over Rs 200 billion in just one month if it aims to meet the target.
It has been a perennial problem of slow capital expenditure by almost every government. Although the government most of the time makes around 60 percent under the headings with the fiscal year end, the majority of expenditure is made in the last month, resulting in poor quality infrastructure and misuse of the country’s financial resources.
Diversifying Government Revenue
According to the FCGO, there was nominal growth in the capital expenditure in the review period this year compared to the same period of the last FY. In the first 11 months of last FY, the government spent Rs 134.97 billion, an increase of Rs 8.42 billion, under the heading.
As per economists, the slow capital expenditure adversely affects the cash flow, which hits the generation of employment opportunities and the targeted economic growth. Economist Keshab Acharya said the government has to focus on allocating the required budget with priority to selective national pride projects to complete them within the stipulated time frame rather than distributing funds for a large number of projects if it has to achieve meaningful utilization of the development budget.
Likewise, there has been a modest improvement in the federal government's revenue in the review period, which however shows a large gap persisting between the government's targets and actual revenue generation. According to the FCGO, the government revenue increased by 11 percent to Rs 1.044 trillion compared to Rs 919.19 billion in the corresponding period last year.
The amount received by the government made up only 70.99 percent out of the targeted amount of Rs 1.471 trillion. The government needs to collect over Rs 300 billion in just one month if it has to accomplish its annual target.
In foreign grants, the government received Rs 17.09 billion against its annual target of Rs 52.32 billion. In the corresponding period last year, only Rs 2.75 billion was generated under the heading.
Likewise, the government exhausted Rs 287.97 billion for financial management which includes repayment of debt and interest amount on public borrowings. The amount stood at Rs 223.50 billion in the 11-month period last year.
