Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government only spent 40.24% of the budget designated for capital expenditures in the first 11 months of the current fiscal year (FY).
The Financial Comptroller General Office (FCGO) reports that between mid-July 2022 and mid-June of this year, the government spent Rs. 153.08 billion. Out of the targeted sum of Rs 380.38 billion for this fiscal year, the government has not been able to use Rs 226.62 billion intended for infrastructure development.
Expenses incurred in the construction, infrastructure development, and other industries that contribute to the nation’s production of real capital are referred to as capital expenditures.
The capital budget of the government includes funds allotted for carrying out public works projects and purchasing real estate, furnishings, vehicles, plants, and machinery.
The constitution contains a clause that permits the government to release the budget statement 1.5 months in advance, citing the low capital expenditure in previous years. The government, though, has frequently fallen short of the goal.
Prime Minister Pushpa Kamal Dahal issued 30-point directives to various ministries after taking office on December 27, 2022, requesting that they expedite spending on development projects.
In order to effectively mobilize the monitoring team from the Office of the Prime Minister and Council of Ministers for this purpose, he even expressed his commitment to developing a work schedule. The government’s failure to put its plans into action, though, hasn’t made a difference this year either.
Poor capital spending has nearly always been a problem in the nation. Government spending has been observed to be accelerated only at the last minute, resulting in hurriedly constructed infrastructure of poor quality.
The FCGO claims that the capital expenditure during the previous fiscal year was even more pitiful. Only 36.172% of the Rs 378.09 billion allocated by the government were spent during the review period of 2022–2023 (review period).
However, the government’s last-minute spending increased capital expenditure to 57.23 percent by the end of the fiscal year in 2022–2023. It demonstrates that Rs 77.54 billion, or roughly 56 percent of the sum used in 11 months, was spent in just one month.
The Ministry of Finance’s Revenue Secretary, Ram Prasad Ghimire, stated that although capital expenditures have slightly increased this year, they still fall short of what is required to achieve thriving development.
“The government has made necessary policy arrangements for the next fiscal year to address the problem of slow capital expenditure,” he continued.
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