With just 2 months left in fiscal year, Nepal spends only 34% of development budget

The trend of sluggish development spending has persisted into the current fiscal year 2081/82 BS, as the government has managed to utilise only 34.16% of the allocated development budget with just two months remaining in the fiscal calendar.

According to the latest data, the government had earmarked Rs 352.35 billion for capital expenditure this fiscal year. However, by the end of Baisakh (mid-May), only Rs 120 billion had been spent.

In the same period last fiscal year, 37% of the development budget had been utilized. Typically, the government accelerates capital spending in the final two months—Jestha and Asar—a practice often criticised as “Asare development” due to rushed and inefficient implementation.

To meet this year’s development budget target, the government would need to spend an additional Rs 231.97 billion in the remaining two months. That would require a monthly outlay of Rs 115.98 billion or a daily spending rate of Rs 3.86 billion. Currently, the daily average stands at just Rs 400 million.

In contrast, recurrent expenditure has reached 67.79% of its target. Out of the Rs 1.14 trillion allocated for recurrent spending, the government has already spent Rs 773.22 billion in the first ten months.

Overall, including current, capital, and financial management expenditures, the total government spending has reached Rs 1.157 trillion—only 62.24% of the total budget allocation of Rs 1.860 trillion for the year.

In the financial management category, which covers debt servicing and investments, Rs 264.28 billion has been spent in the first ten months, meeting 71.96% of the target. Notably, more funds have been allocated this year to financial management than to capital expenditure.

Revenue collection falls short of target

Meanwhile, revenue collection continues to fall significantly short of target. Only 64.99% of the annual revenue goal has been achieved in ten months. The government had aimed to collect Rs 1.419 trillion in revenue this year, but has so far gathered only Rs 922.43 billion.

Tax revenue stands at 64.55% of the target, while non-tax revenue has reached 69.2%. Foreign grants are even lower, with just 24.26%—Rs 12.69 billion—collected out of the targeted Rs 52.32 billion by the end of Baisakh.

Budget deficit exceeds Rs 211 Billion

The government has recorded a total income of Rs 946.33 billion from revenue, non-tax sources, and foreign grants. However, expenditures have reached Rs 1.157 trillion, resulting in a budget deficit of over Rs 211.55 billion. To bridge this gap, the government will need to resort to borrowing.

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