The private sector has strongly urged the government to adopt structured work plans with clear timelines to improve the historically poor performance of capital expenditure in Nepal. This call comes ahead of the presentation of the federal budget for the Fiscal Year 2025/26.
Submitting formal budget recommendations on Monday, the Nepal Chamber of Commerce (NCC) emphasized the need for improved capital spending mechanisms. NCC President Kamalesh Kumar Agrawal stressed that the government should evaluate capital expenditure on a quarterly basis to enhance accountability and effectiveness in the use of development funds.
Joining the call for reform, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and the Confederation of Nepalese Industries (CNI) also highlighted the persistent underperformance in capital spending as a major barrier to investment confidence. In recent pre-budget discussions, both organizations urged the government to prioritize the timely and effective utilization of public funds.
According to data from the Financial Comptroller General Office (FCGO), the government spent only around 61% of the Rs 302 billion allocated for capital projects in FY 2023/24. Alarmingly, Rs 50 billion of this was used in just the final month of the fiscal year. The trend continues this year: with only two months left, just 33.58% of the Rs 352.35 billion development budget has been spent.
The private sector warned that poor capital spending hampers infrastructure development, job creation, and broader economic growth. To counter this, FNCCI and CNI proposed that the government declare 2025–2035 as the “Investment Decade” to attract more foreign direct investment.
They also recommended that the upcoming budget focus on high-impact sectors such as agriculture, tourism, energy, employment, and production. In addition, the private sector called for stable policies, better governance, and the adoption of information technology to engage frustrated youth and foster entrepreneurship.
